As filed with the Securities and Exchange Commission on December 18, 2020

 

File No. 000-_______



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10

 


 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934

 

 

W TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

04-3021770

(I.R.S. Employer

Identification No.)

9440 Santa Monica Boulevard, Suite 301,

Beverly Hills, California

(Address of principal executive offices)

90210

(Zip Code)

 

Registrant’s telephone number, including area code: (424) 522-9977

 

Securities to be registered pursuant to Section 12(b) of the Act: None

 

Securities to be registered pursuant to Section 12(g) of the Act:

 

Common Stock, par value $0.0001 per share

Title of Class

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

TABLE OF CONTENTS

 

   

Page

Cautionary Statement Concerning Forward-Looking Statements

3
     

Item 1.

Business

3
     

Item 1A.

Risk Factors

8
     

Item 2.

Financial Information

14
     

Item 3.

Properties

16
     

Item 4.

Security Ownership of Certain Beneficial Owners and Management

16
     

Item 5.

Directors and Executive Officers

17
     

Item 6.

Executive Compensation

18
     

Item 7.

Certain Relationships and Related Transactions, and Director Independence

18
     

Item 8.

Legal Proceedings

19
     

Item 9.

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

19
     

Item 10.

Recent Sales of Unregistered Securities

20
     

Item 11.

Description of Registrant’s Securities to be Registered

20
     

Item 12.

Indemnification of Directors and Officers

23
     

Item 13.

Financial Statements and Supplementary Data

23
     

Item 14.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

23
     

Item 15.

Financial Statements and Exhibits

F-1

 

 

 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

 

Some of the statements contained in this registration statement on Form 10 (this “Registration Statement”) of W Technologies, Inc. (the “Company”, “we”, “our” or “W Technologies”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this registration statement, forward-looking statements are generally identified by the words such as “anticipate”, “plan”, “believe”, “expect”, “estimate”, and the like. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. A reader, whether investing in the Company’s securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this Registration Statement. Important factors that may cause actual results to differ from projections include, for example:

 

 

the success or failure of management’s efforts to implement the Company’s business plan;

 

 

the ability of the Company to fund its operating expenses;

 

 

the ability of the Company to compete with other companies that have a similar business plan;

 

 

the effect of changing economic conditions impacting our plan of operation; and

 

 

the ability of the Company to meet the other risks as may be described in future filings with the Securities and Exchange Commission.

 

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Registration Statement to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of our public disclosure practices.

 

Item 1. Business.

 

We were originally incorporated in Nevada in 1986. We reincorporated in Massachusetts in 1987 and reincorporated in Delaware in May 1996 as IMSCO Technologies, Inc. In 2001, we changed our name to Global Sports and Entertainment, Inc. In 2002, we changed our name to GWIN, Inc. We changed our name to Winning Edge International, Inc. in 2006 and in 2007, we changed our name to W Technologies, Inc.

 

In February 2020, as a result of a change in our management, we transitioned our business model to the sales and distribution of medical-related devices and supplies. On April 20, 2020, we executed a letter of intent for the exclusive global rights to a proprietary technology designed to remove viruses owned by a company located in Germany. After extensive and careful due diligence of the technology, on June 8, 2020, we announced that we decided not to proceed with this transaction and terminated the letter of intent. The Company is now exploring other opportunities.

 

On November 6, 2019, we entered into an agreement (the “11/6/19 Agreement”) with Mid Atlantic Capital Associates, Inc. (“MACA”) pursuant to which MACA would acquire a controlling equity interest in the Company through certain transactions. By Letter Agreement dated December 7, 2020 (the “12/7/20 Agreement”), the 11/6/19 Agreement was replaced in full. The 12/7/20 Agreement provides that (i) the Company would assign a new note of the Company, of which $399,832 is principal and interest of $173,400 (the “Note”) to MACA; (ii) the Company will cancel certain preferred stock of the Company; (iii) the Company would issue 550,000 restricted shares of common stock of the Company, valued at $275,000; (iv) the Company would issue a convertible note for $40,753 to MACA in repayment of expenses paid by MACA (the “Expense Note”), and (v) the Company would issue 500,000 shares of newly designated Series F Preferred Stock of the Company (the “Series F Stock”) to MACA. Subsequent to the execution of the 12/7/20 Agreement, the Company and MACA amended some of the terms of the 12/7/20 Agreement by oral agreement.  Pursuant to such agreements, on December 9, 2020, the Company filed Certificates of Withdrawal with the Secretary of State of the State of Delaware to withdraw the Certificates of Designation for the Company’s Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, as no shares of any such series of preferred stock remained outstanding. On December 10, 2020, the Company designated 1,000,000 shares of its preferred stock as the Series F Convertible Preferred Stock (the “Series F Stock”).  Each share of the Series F Stock is convertible into 200 shares of common stock, subject to customary adjustments for stock splits, etc., and has a number of votes equal to the number of shares of common stock into which it is convertible, voting with the common stock together as one class, which currently results in all 1,000,000 shares of Series F Stock having 200 million votes. On December 11, 2020, all 1,000,000 shares of Series F Stock were issued and sold to MACA for total consideration of $100. Following this sale, MACA has the ability, through its ownership of Series F Stock, to elect directors of its choosing and thus is able to control the direction of the Company. The Series F Stock also participates in distributions with the common stock on an as-converted basis.  The shares of common stock as referenced in clause (iii) above were issued to Daniel Belanger as representative of certain current and prior shareholders.

 

3

 

On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker.

 

The Expense Note was issued, as described above.  In connection with these transactions, but prior to their full consummation, on February 21, 2020, Mikael Lundgren became the sole officer and director of the Company.

 

Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for so long as it is subject to those requirements.

 

The Company is a shell company in that it has no or nominal operations and either no or nominal assets. At this time, the Company’s purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive of the Company’s virtually unlimited discretion to search for and enter into potential business opportunities.

 

Although there is no guarantee that a merger with a private, operating business would result in any benefit to our current or future shareholders, the Company believes there exists a potential benefit to the shareholders from the consummation of such a merger or acquisition. For example, our common stock may become more attractive to the financial community, resulting in an increased share price and/or greater liquidity. Moreover, if all of the preconditions of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), are met, including the introduction of an operating business, current restricted shareholders may be able to utilize Rule 144 for the sale of their shares. Currently, Rule 144 is not available as further described below in Risk Factors. There is no guarantee that any of these possible benefits will come to fruition.

 

Other perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock.

 

Negotiations with any merger candidate are expected to focus on the percentage of the Company which the target company shareholders would acquire in exchange for all of their shareholdings in the target company. Depending upon certain factors, such as the target company’s assets and liabilities, the Company’s current shareholders will most likely hold a substantially lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires an operating business with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company’s then shareholders. Management does not expect to negotiate a cash payment in exchange for the outstanding shares held by non-affiliates.

 

In applying the foregoing criteria, none of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Company’s limited capital available for investigation, we may not discover or adequately evaluate adverse facts about the opportunity to be acquired. In addition, we will be competing against other entities that possess greater financial, technical and managerial capabilities for identifying and completing business combinations.

 

We may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

 

We would not be obligated nor does management intend to seek pre-approval by our shareholders prior to entering into a transaction.

 

4

 

The Company intends to promote itself privately. The Company anticipates that the selection of a business opportunity in which to participate will be complex and risky. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes), for all shareholders, and other factors.

 

There are different situations for private companies which may make a reverse merger more attractive to an operating private company than filing its own registration statement on Form 10. It takes significant time and effort just to be able to learn to file the necessary documents through the EDGAR database, especially if the operating company has not invested in filing software to streamline the process, which is expensive. We believe that small companies are usually in a hurry to raise capital and some investors require that the private companies they invest in are or become Securities and Exchange Commission (“SEC”) reporting. This is because some investors desire to have an exit strategy and a reverse merger with a Form 10 shell company is perceived to be one step closer to liquidity. It should be noted that if a public shell company consummates a reverse merger with a private operating company, the company will be required to file a Current Report on Form 8-K within four days of the transaction and that the Form 8-K will need to include audited financial statements of the private operating company and pro forma financial statements giving effect to the business combination.

 

The Company has, and will continue to have, little or no capital with which to provide the owners of business opportunities with any significant cash or other assets. As of July 31, 2020, the Company’s fiscal year end, the Company had a cash balance of $0. Management believes that the Company will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time of completing such initial registration. The owners of the business opportunities will, however, incur significant legal and accounting costs in connection with the acquisition of a business opportunity, including the costs of preparing Current Reports on Form 8-K, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and agreements and related reports and documents. The Exchange Act specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which include providing audited financial statements to be included within the numerous filings relevant to complying with the Exchange Act. The Company has not conducted market research and is not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity.

 

The analysis of new business opportunities will be undertaken by, or under the supervision of, our officers and directors, or successor management, with such outside assistance as they may deem appropriate. The Company intends to concentrate on identifying preliminary prospective business opportunities, which may be brought to our attention through present associations of the Company’s officers and directors. In analyzing prospective business opportunities, the Company will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. The Company will not acquire or merge with any company for which audited financial statements are not available.

 

MACA has the ability, through its ownership of Series F preferred stock, to elect directors of its choosing and thus, is able to control the direction of the Company. Accordingly, MACA will have substantial flexibility in identifying and selecting a prospective new business opportunity. In reviewing business opportunities, management will also consider such factors as: (a) potential for growth, indicated by new technology, anticipated market expansion or new products; (b) competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; (c) strength and diversity of management, either in place or scheduled for recruitment; (d) capital requirements and anticipated availability of required funds, to be provided by the registrant or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; and (e) the extent to which the business opportunity can be advanced considering the availability of both human and economic capital.

 

5

 

The foregoing criteria are not intended to be exhaustive and there may be other criteria that the Company may deem relevant.

 

In evaluating a prospective business combination, we will conduct as extensive a due diligence review of potential targets as possible given the lack of information which may be available regarding private companies, our limited personnel and financial resources and the relative inexperience of our management with respect to such activities. We believe there are many companies and professionals with significantly more experience than our management that also are seeking business combination targets.

 

We expect that our due diligence will encompass, among other things, meetings with the target business’s incumbent management and inspection of its facilities, as necessary, as well as a review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, including but not limited to attorneys, accountants, consultants or other such professionals. At this time, the Company has not specifically identified any third parties that it may engage. The costs associated with hiring third parties as required to complete a business combination may be significant and are difficult to determine as such costs may vary depending on a variety of factors, including the amount of time it takes to complete a business combination, the location of the target company, and the size and complexity of the business of the target company.

 

Our limited funds and the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a target business before we consummate a business combination. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoters, owners, sponsors or others associated with the target business seeking our participation.

 

The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. The amount of time it takes to complete a business combination, the location of the target company, and the size and complexity of the business of the target company, whether current stockholders of the Company will retain equity in the Company, the scope of the due diligence investigation required, the involvement of the Company’s auditors in the transaction, possible changes in the Company’s capital structure in connection with the transaction, and whether funds may be raised contemporaneously with the transaction are all factors that determine the costs associated with completing a business combination transaction. The time and costs required to complete a business combination can be estimated once a business combination target has been identified. Any costs incurred with respect to the evaluation of a prospective business combination that is not ultimately completed will result in a loss to us.

 

The Company does not intend to obtain funds in one or more private placements to finance the operation of any acquired business opportunity until such time as the Company has successfully identified such a merger or acquisition.

 

Management intends to devote such time as it deems necessary to carry out the Company’s affairs. We cannot project the amount of time that our management will actually devote to our plan of operations.

 

The Company intends to conduct its activities so as to avoid being classified as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”) and therefore to avoid application of the costly and restrictive registration and other provisions of the 1940 Act and the regulations promulgated thereunder.

 

Government Regulations

 

As a public company, we will be subject to the reporting requirements of the Exchange Act, which include the preparation and filing of current, quarterly and annual reports on Forms 8-K, 10-Q and 10-K, respectively. The Exchange Act specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which include providing audited financial statements to be included within the numerous filings relevant to complying with the Exchange Act.

 

6

 

The Company is a Blank Check Company

 

At present, the Company is a blank check company with no revenues and the Company has no specific business plan or purpose other than to seek new business opportunities or to engage in a merger or acquisition with an unidentified company. As a blank check company, any offerings of our securities would need to comply with Rule 419 under the Securities Act. The provisions of Rule 419 apply to every registration statement filed under the Securities Act by a blank check company. Rule 419 requires that the blank check company filing such registration statement to deposit the securities being offered and proceeds of the offering into an escrow or trust account pending the execution of an agreement for an acquisition or merger. In addition, the registrant is required to file a post-effective amendment to the registration statement containing the same information as found in a Form 10 registration statement upon execution of an agreement for such acquisition or merger. The rule provides procedures for the release of the offering funds in conjunction with the post effective acquisition or merger. The Company has no current plans to engage in any such offerings.

 

Acquisition Opportunities

 

MACA has the ability, through its ownership of Series F preferred stock, to elect directors of its choosing and thus, is able to control the direction of the Company. As a result, management will have substantial flexibility in identifying and selecting a prospective new business opportunity. In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. It may also acquire stock or assets of an existing business. On the consummation of a transaction, it is probable that the present management and shareholders of the Company will no longer be in control of the Company. In addition, the Company’s directors may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of the Company’s shareholders or may sell their stock in the Company. Moreover, management may sell or otherwise transfer his interest in the Company to new management who will then continue the Company business plan of seeking new business opportunities.

 

It is anticipated that any securities issued in any reorganization would be issued in reliance upon an exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Company may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after the Company has successfully consummated a merger or acquisition.

 

The Company will participate in a business opportunity only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require some specific representations and warranties by all of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after such closing, will outline the manner of bearing costs, including costs associated with the Company’s attorneys and accountants, will set forth remedies on default and will include miscellaneous other terms.

 

The Company does not intend to provide its security holders with any complete disclosure documents or audited financial statements concerning an acquisition or merger candidate and its business prior to the consummation of any acquisition or merger transaction. In the event a proposed business combination involves a change in majority of directors of the Company, the Company will file and provide to stockholders a Schedule 14F-1, which shall include, information concerning the target company, as required. The Company will file a current report on Form 8-K, as required, within four business days of a business combination which results in the Company ceasing to be a shell company. This Form 8-K will include complete disclosure of the target company, including audited financial statements.

 

The present stockholders of the Company will likely not have control of a majority of the voting securities of the Company following a reorganization transaction. As part of such a transaction, all or a majority of the Company’s directors may resign and one or more new directors may be appointed without any vote by stockholders.

 

7

 

The Company has not expended funds on and has no plans to expend funds or time on product research or development.

 

Competition

 

The Company will remain an insignificant participant among the firms which engage in acquisition opportunities. There are many established venture capital and financial concerns which have significantly greater financial and personnel resources and technical expertise than the Company. In view of the Company’s combined extremely limited financial resources and limited management availability, the Company will continue to be at a significant competitive disadvantage compared to the Company’s competitors which are also in the business of seeking opportunities to engage in a merger or acquisition with other companies.

 

Employees

 

The Company currently has no employees. The business of the Company will be managed by its officers and directors and such officers or directors which may join the Company in the future, and who may become employees of the Company. The Company does not anticipate a need to engage any fulltime employees at this time.

 

Item 1A. Risk Factors.

 

RISK FACTORS

 

The following are certain risk factors that could affect our business, financial condition and results of operations. The risks that are highlighted below are not the only ones that we face. You should carefully consider each of the following risks and all of the other information contained in this Registration Statement.

 

We have a recent history of operating losses and expect to incur additional losses in the future until we realize commercial revenues.

 

We have sustained cumulative losses through the fiscal years ended July 31, 2020 and 2019. For the fiscal years ended July 31, 2020 and 2019, we reported comprehensive losses of $165,248 and $178,714, respectively. The accumulated deficit as of July 31, 2020 was $44,095,689. Our audit firm indicated in its opinion for the fiscal years ended July 31, 2020 and 2019 that there is a substantial risk that we will not be able to continue as a going concern. Our losses have had, and will continue to have, an adverse effect on our financial condition. Any failure to achieve and maintain profitability will continue to have an adverse effect on our financial condition and results of operations and may affect our ability to continue as a going concern.

 

MACA has a controlling interest in our company, which gives MACA the right to direct the company.

 

MACA has a controlling equity interest the Company through its ownership of Series F preferred shares, each of which has voting rights of 200 votes per share. MACA has the ability, through its ownership of Series F preferred shares, to elect directors of its choosing and thus, is able to control the direction of the Company. MACA’s interests may diverge from those of the other stockholders and this divergence may have a significant impact on our company.

 

We only have one member of our senior management team who also serves as our sole director.

 

Our senior management team consists of our Chief Executive Officer. He also serves as our sole director. We would benefit from having a board of directors that could bring additional perspective and knowledge. Lacking that perspective and experience will make it difficult to execute our growth plan. If our Chief Executive Officer was to leave the Company, this could adversely affect our business and the results of operations.

 

In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these employees exists. New members of management must have significant industry expertise when they join us or engage in significant training which, in many cases, requires significant time before they achieve full productivity. If we fail to attract, train, retain, and motivate our key personnel, our business and growth prospects could be adversely affected.

 

8

 

Furthermore, we are dependent upon our management team to oversee our operations. There can be no assurance that our management team will successfully achieve our business objectives. In the event these persons are ineffective, our business and results of operations could be adversely affected.

 

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may decline.

 

As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. In addition, we are required to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"). The process of designing, implementing, and testing the internal control over financial reporting required to comply with this obligation is time consuming, costly and complicated.

 

We will continue to incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

 

As a public company, we will continue to incur significant legal, accounting and other expenses, including costs associated with public company reporting requirements. We will also continue to incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC or other regulators. These rules and regulations may also make it difficult and expensive for us to obtain directors' and officers' liability insurance. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.

 

The COVID-19 pandemic may cause significant disruption to our business plan.

 

On January 20, 2020, the World Health Organization ("WHO") announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the "COVID-19 outbreak") and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID- 19 outbreak as a pandemic, based on the rapid increase in global exposure.

 

The full impact of the COVID-19 outbreak continues to evolve. We are actively monitoring the impact on our business plan. Given the daily evolution of the COVID-19 outbreak and the global attempts to curb its spread, the Company is not yet able to fully estimate the effects of the COVID-19 outbreak. Additionally, the COVID-19 outbreak could have a continued adverse impact on economic and market conditions generally and trigger a period of global economic slowdown, which would impair the Company's ability to raise needed funds and to continue as a going concern.

 

The Company has limited assets and no present source of revenues. The Company is dependent upon the financial support of MACA.

 

At present, our business activities are limited to seeking potential business opportunities. Due to our limited financial and personnel resources, there is only a limited basis upon which to evaluate our prospects for achieving our intended business objectives. We have only limited resources and have no operating income, revenues or cash flow from operations. MACA is providing us with funding, on an as needed basis, necessary for us to continue our corporate existence and our business objective to seek new business opportunities, as well as funding the costs, including professional accounting fees, of registering our securities under the Exchange Act and continuing to be a reporting company under the Exchange Act. We have no written agreement with MACA to provide any interim financing for any period. In addition, we will not generate any revenues unless and until we enter into a new business. As of July 31, 2020, we had no cash.

 

Management has broad discretion over the selection of our prospective business.

 

Any person who invests in our securities will do so without an opportunity to evaluate the specific merits or risks of any potential new prospective business in which we may engage. As a result, investors will be entirely dependent on the broad discretion and judgment of management in connection with the selection of a prospective business. The business decisions made by our management may not be successful.

 

9

 

Stockholders will not receive disclosure or information regarding a prospective business.

 

As of the date of this Registration Statement, we have not yet identified any prospective business or industry in which we may seek to become involved and at present we have no information concerning any prospective business. Management is not required to and will not provide shareholders with disclosure or information regarding prospective business opportunities. Moreover, a prospective business opportunity may not result in a benefit to shareholders or prove to be more favorable to shareholders than any other investment that may be made by shareholders and investors.

 

There is no active market for our common stock and accordingly, our stock is illiquid and may remain so.

 

Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. Accordingly, our stock is illiquid and may remain so.

 

We have not specified an industry for new prospective business opportunities and accordingly, risks associated with a specific business cannot be ascertained.

 

There is no basis for shareholders to evaluate the possible merits or risks of potential new business opportunities or the particular industry in which we may ultimately operate. To the extent that we effect a business combination with a financially unstable entity or an entity that is in its early stage of development or growth, including entities without established records of revenues or income, we will become subject to numerous risks inherent in the business and operations of that financially unstable company. In addition, to the extent that we effect a business combination with an entity in an industry characterized by a high degree of risk, we will become subject to the currently unascertainable risks of that industry. A high level of risk frequently characterizes certain industries that experience rapid growth, including internet companies. Although management will endeavor to evaluate the risks inherent in a particular new prospective business or industry, there can be no assurance that we will properly ascertain or assess all such risks or that subsequent events may not alter the risks that we perceive at the time of the consummation of any new business opportunity.

 

Our management could have future conflicts of interest in determining business opportunities.

 

Our management is not required to, nor will they, commit full time to our affairs. As a result, pursuing new business opportunities may require a greater period of time than otherwise. Management is not precluded from serving as an officer or director of any other entity that is engaged in business activities similar to those of the Company. Management is not currently an officer and director of any competing entities, but could become so in the future.

 

In the event that prior to the Company consummating a merger or acquisition, management becomes associated with another substantially similar entity, they will have a conflict of interest. Such conflict would result in a conflict of interest in determining to which entity a particular business opportunity should be presented. In general, officers and directors of a Delaware corporation are required to present certain business opportunities to a corporation for which they serve as an officer of director. In the event that our management has multiple business affiliations, he may have similar legal obligations to present certain business opportunities to multiple entities. In the event that a conflict of interest shall arise, management will consider factors such as reporting status, availability of audited financial statements, current capitalization and the laws of jurisdictions. In particular, management will likely present a business opportunity to an entity he controls that is current in its reporting obligations and has records sufficient to perform an audit. Moreover, management will likely present an opportunity to an entity he controls that is domiciled in Delaware or another state that management believes has well known corporate laws in the business community, prior to an entity domiciled in a less well known state. Further, management will consider the current capitalization of an entity they control in offering a business opportunity to such entity. In particular, management will consider whether they believe that the entity would be more attractive to an operating business following a change in capitalization such as a reverse split or decrease or increase in authorized capital stock. If several business opportunities or operating entities approach management with respect to a business combination, management will consider the foregoing factors as well as the preferences of the management of the operating company. In the event that all factors appear equal, management will likely present an operating company with a choice of blank check companies and defer to such operating company’s preference.

 

10

 

Management believes that operating companies will consider such factors as outstanding shares, outstanding shares held by non-affiliates, number of shareholders, reporting history, if any, outstanding liabilities or potential liabilities, tax losses, outstanding SEC comments, regulatory history, the name of an entity and the state of domicile of an entity. This list is not exclusive and the management of an operating company may have a preference for an entity for reasons that we cannot determine in advance. However, management will act in what it believes will be in the best interests of the shareholders of the Company. The Company shall not enter into a transaction with a target business that is affiliated with management. Moreover, in the event a business opportunity is presented to another entity controlled by management, management will continue to actively seek business opportunities for the Company.

 

In addition, conflicts of interest create the risk that management may have an incentive to act adversely to the interests of other non-management stockholders, if any. A conflict of interest may arise between management’s personal pecuniary interest and its fiduciary duty to stockholders.

 

There are many blank check companies with which the Company will compete to attract business opportunities.

 

The Company expects to encounter intense competition from other entities seeking to pursue new business opportunities. Many of these entities are well-established and have extensive experience in identifying new prospective business opportunities. Many of these competitors possess greater financial, technical, human and other resources than we do. Based upon our limited financial and personnel resources, we may lack the resources as compared to those of many of our potential competitors.

 

Potential risks of an acquisition or merger with a foreign company.

 

If we enter into a business combination, acquisition or merger with a foreign concern, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, capital investment, resource self-sufficiency and balance of payments positions and in other respects.

 

The Company may require additional financing to maintain its reporting requirements and administrative expenses.

 

The Company has no revenues and is dependent upon the willingness of MACA to fund the costs associated with the reporting obligations under the Exchange Act, and other administrative costs associated with our corporate existence. We may not generate any revenues unless and until the commencement of new business operations. We believe that management will continue to provide sufficient funds to pay accounting and professional fees and other expenses to fulfill our reporting obligations under the Exchange Act until we commence business operations. Through the date of this Registration Statement, MACA has made a capital investment of $100,000. In the event that our available funds from our management and affiliates prove to be insufficient, we will be required to seek additional financing. Our failure to secure additional financing could have a material adverse effect on our ability to pay the accounting and other fees in order to continue to fulfill our reporting obligations and pursue our business plan. We do not have any arrangements with any bank or financial institution to secure additional financing and such financing may not be available on terms acceptable and in our best interests. We do not have any written agreement with our affiliates to provide funds for our operating expenses.

 

State blue sky registration; potential limitations on resale of securities.

 

The holders of our shares of common stock and those persons, who desire to purchase our stock in any trading market that might develop, should be aware that there may be state blue-sky law restrictions upon the ability of investors to resell our securities. Accordingly, investors should consider the secondary market for the Company’s securities to be a limited one.

 

It is the present intention of the Company’s management, after the commencement of new business operations and the development of a secondary trading market for our shares, to seek coverage and publication of information regarding our Company in an accepted publication manual which permits a manual exemption. The manual exemption permits a security to be distributed in a particular state without being registered if the Company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuer’s officers and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities.

 

11

 

The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin.

 

Rule 144 Related Risk

 

A person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding a sale, (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time of sale.

 

Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

 

      ●     1% of the total number of securities of the same class then outstanding; or

             

      ●     the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

 

provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

 

Restrictions on the Reliance of Rule 144 by Shell Companies or Former Shell Companies

 

The use of Rule 144 is prohibited for the resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met:

 

      ●     The issuer of the securities that was formerly a shell company has ceased to be a shell company;

             

      ●     The issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

             

      ●     The issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and

             

      ●     At least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company.

 

As a result, it is likely that pursuant to Rule 144, stockholders who receive our restricted securities in a business combination will not be able to sell our shares without registration until one year after we have completed our initial business combination.

 

Rule 145 Related Risks

 

Affiliates of a target company who receive registered shares in a Rule 145 business combination transaction, and who do not become affiliates of the acquirer, will be able to immediately resell the securities received by them into the public markets without registration (except for affiliates of a shell company as discussed in the following section). However, those persons who are affiliates of the acquirer, and those who become affiliates of the acquirer after the acquisition, will still be subject to the Rule 144 resale conditions generally applicable to affiliates, including the adequate current public information requirement, volume limitations, manner-of-sale requirements for equity securities, and, if applicable, a Form 144 filing.

 

12

 

Application of Rule 145 to Shell Companies

 

Public resales of securities acquired by affiliates of acquirers and target companies in business combination transactions involving shell companies will continue to be subject to restrictions imposed by Rule 145. If the business combination transaction is not registered under the Securities Act, then the affiliates must look to Rule 144 to resell their securities (with the additional Rule 144 conditions applicable to shell company securities). If the business combination transaction is registered under the Securities Act, then affiliates of the acquirer and target company may resell the securities acquired in the transaction, subject to the following conditions:

 

      ●     The issuer must meet all of the conditions applicable to shell companies under Rule 144;

             

      ●     After 90 days from the date of the acquisition, the affiliates may resell their securities subject to Rule 144’s volume limitations, adequate current public information requirement, and manner-of-sale requirements;

 

      ●     After six months from the date of the acquisition, selling security-holders who are not affiliates of the acquirer may resell their securities subject only to the adequate current public information requirement of Rule 144; and

             

      ●     After one year from the date of the acquisition, selling security-holders who are not affiliates or the acquirer may resell their securities without restriction.

 

We believe we will be considered a “smaller reporting company” and will be exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.

 

Rule 12b-2 of the Exchange Act a “smaller reporting company” means an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

 

a) Had a public float of less than $250 million; or

 

b) Had annual revenues of less than $100 million and either:

 

a. No public float; or

 

b. A public float of less than $700 million.

 

Whether an issuer is a smaller reporting company is determined on an annual basis.

 

As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.

 

Provisions of our certificate of incorporation, as amended, and bylaws may delay or prevent a take-over which may not be in the best interests of our shareholders.

 

Provisions of our certificate of incorporation, as amended (“Certificate of Incorporation”) and bylaws may be deemed to have anti-takeover effects, which include, among others, when and by whom special meetings of our shareholders may be called, and may delay, defer or prevent a takeover attempt. In addition, our Certificate of Incorporation authorizes the issuance of shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors in their sole discretion. Our board may, without shareholder approval, issue shares of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

 

13

 

We have never paid dividends on our common stock and have no plans to do so in the future.

 

Holders of shares of our common stock are entitled to receive such dividends as may be declared by our board of directors. To date, we have paid no cash dividends on our shares of common stock and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock.

 

Item 2. Financial Information.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following presentation of management’s discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s consolidated financial statements, the accompanying notes thereto and other financial information appearing elsewhere in this Registration Statement. This section and other parts of this Registration Statement contain forward-looking statements that involve risks and uncertainties. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements.

 

Overview

 

We were originally incorporated in Nevada in 1986. We reincorporated in Massachusetts in 1987 and reincorporated in Delaware in May 1996 as IMSCO Technologies, Inc. In 2001, we changed our name to Global Sports and Entertainment, Inc. In 2002, we changed our name to GWIN, Inc. We changed our name to Winning Edge International, Inc. in 2006 and in 2007, we changed our name to W Technologies, Inc.

 

In February 2020, as a result of a change in our management, we transitioned our business model to the sales and distribution of medical-related devices and supplies. On April 20, 2020, we executed a letter of intent for the exclusive global rights to a proprietary technology designed to remove viruses owned by a company located in Germany. After extensive and careful due diligence of the technology, on June 8, 2020, we announced that we decided not to proceed with this transaction and terminated the letter of intent. The Company is now exploring other opportunities.

 

On November 6, 2019, we entered into an agreement (the “11/6/19 Agreement”) with Mid Atlantic Capital Associates, Inc. (“MACA”) pursuant to which MACA would acquire a controlling equity interest in the Company through certain transactions. By Letter Agreement dated December 7, 2020 (the “12/7/20 Agreement”), the 11/6/19 Agreement was replaced in full. The 12/7/20 Agreement provides that (i) the Company would assign a new note of the Company, of which $399,832 is principal and interest of $173,400 (the “Note”) to MACA; (ii) the Company will cancel certain preferred stock of the Company; (iii) the Company would issue 550,000 restricted shares of common stock of the Company, valued at $275,000; (iv) the Company would issue a convertible note for $40,753 to MACA in repayment of expenses paid by MACA (the “Expense Note”), and (v) the Company would issue 500,000 shares of newly designated Series F Preferred Stock of the Company (the “Series F Stock”) to MACA. Subsequent to the execution of the 12/7/20 Agreement, the Company and MACA amended some of the terms of the 12/7/20 Agreement by oral agreement.  Pursuant to such agreements, on December 9, 2020, the Company filed Certificates of Withdrawal with the Secretary of State of the State of Delaware to withdraw the Certificates of Designation for the Company’s Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, as no shares of any such series of preferred stock remained outstanding. On December 10, 2020, the Company designated 1,000,000 shares of its preferred stock as the Series F Convertible Preferred Stock (the “Series F Stock”).  Each share of the Series F Stock is convertible into 200 shares of common stock, subject to customary adjustments for stock splits, etc., and has a number of votes equal to the number of shares of common stock into which it is convertible, voting with the common stock together as one class, which currently results in all 1,000,000 shares of Series F Stock having 200 million votes. On December 11, 2020, all 1,000,000 shares of Series F Stock were issued and sold to MACA for total consideration of $100. Following this sale, MACA has the ability, through its ownership of Series F Stock, to elect directors of its choosing and thus is able to control the direction of the Company. The Series F Stock also participates in distributions with the common stock on an as-converted basis.  The shares of common stock as referenced in clause (iii) above were issued to Daniel Belanger as representative of certain current and prior shareholders.

 

On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker.

 

14

 

The Expense Note was issued, as described above. In connection with these transactions, but prior to their full consummation, on February 21, 2020, Mikael Lundgren became the sole officer and director of the Company.

 

Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

 

The Company is a shell company in that it has no or nominal operations and either no or nominal assets. At this time, the Company’s purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive of the Company’s virtually unlimited discretion to search for and enter into potential business opportunities.

 

Although there is no guarantee that a merger with a private, operating business would result in any benefit to our current or future shareholders, the Company believes there exists a potential benefit to the shareholders from the consummation of such a merger or acquisition. For example, our common stock may become more attractive to the financial community, resulting in an increased share price and/or greater liquidity. Moreover, if all of the preconditions of Rule 144 promulgated under the Securities Act of 1933 are met, including the introduction of an operating business, current restricted shareholders may be able to utilize Rule 144 for the sale of their shares. Currently, Rule 144 is not available as further described below in Risk Factors. There is no guarantee that any of these possible benefits will come to fruition.

 

Results of Operations and Known Trends or Future Events

 

For the quarterly period ended October 31, 2020 and fiscal year ended July 31, 2020, we have neither engaged in any operations nor generated any revenues. We will not generate any operating revenues until we are able to execute our business plan and secure the rights to offer products to the market. There has been no significant change in our financial and no material adverse change has occurred since the date of our audited financial statements.

 

On May 15, 2018, the Company sold 50% of its inventory to a third party through execution of a promissory note receivable totaling $15,000. The promissory note receivable carries zero interest, with a one-year term, and has no conversion rights. Terms of the promissory note receivable were amended upon default by the borrower as of May 15, 2019, the original maturity date. The Company amended and extended the promissory note receivable’s maturity date to May 15, 2020 in an effort to work with the borrower’s ability to repay the amount due us. Subsequent to extending the promissory note’s maturity date, and upon several attempts to collect the outstanding obligation from the borrower, the Company no longer considers it collectible. The Company has opted to elect to write-off this debt as a loss on settlement of note receivable on the statement of operations for the twelve months ended July 31, 2020.

 

As of the quarterly period ended October 31, 2020 and fiscal year ended July 31, 2020, the promissory note receivable had an outstanding balance owed to the Company of $0 and $0, respectively.

 

Liquidity and Capital Resources

 

Our liquidity needs have been satisfied through the sale of convertible notes. On July 31, 2020, we issued a Convertible Promissory Note to an investor in exchange for $40,573 cash consideration advanced for operating expenses incurred during the twelve months ended July 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of July 31, 2021, renewable by the lender.

 

On October 31, 2020, we issued a Convertible Promissory Note to an investor in exchange for $43,890 cash consideration advanced for operating expenses incurred during the three months ended October 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of October 31, 2021, renewable by the lender. We will continue to require additional capital to pay operating expenses.

 

We will continue to require additional capital to pay operating expenses.

 

15

 

Going Concern

 

We have only generated minimal revenues since inception, have sustained operating losses since inception, and we have a substantial accumulated deficit of $(44,186,067) at October 31, 2020. These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time. Our continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its ability to obtain capital from third parties.

 

Off-balance Sheet Arrangements

 

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

 

Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our audited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

 

Item 3. Properties.

 

For our corporate offices, we utilize shared office space at 9440 Santa Monica Boulevard, Suite 301, Beverly Hills, California, 90210. This office space is provided to us at no charge by MACA.

 

Item 4. Security Ownership of Certain Beneficial Owners and Management.

 

The following table sets forth certain information regarding beneficial ownership of our common stock as of December 16, 2020, by:

 

 

Each director and each of our Named Executive Officers,

 

 

All executive officers and directors as a group, and

 

 

Each person known by us to be the beneficial owner of more than 5% of our outstanding common stock.

 

As of December 16, 2020, there were 3,355,016 shares of our common stock outstanding.

 

The number of shares of common stock beneficially owned by each person is determined under the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days after December 16, 2020, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.

 

16

 

Name and Address of Beneficial Owner

 

Amount and Nature of Beneficial Ownership

   

Percent of Class

 

Named Executive Officers and Directors:

               

Mikael Lundgren

    0       0.0 %

All executive officers and directors as a group (1 person)

    0       0.0 %
                 

5% Stockholders:

               

Daniel Belanger 

14-4625 Grand Blvd. 

Montreal, QC Canada H4B 271

    550,000       16.4 %

Fotis Andrianakos

449 Lake Shore Rd.

Baconsfield, OC H9W 4J4 Canada

    237,931       7.1 %

Arkea Direct Bank Options/Equities Omnibus Account

100 Boulevard du Souverain

1170 Bruxelles

    225,001       6.7 %

Triad Residential Trust

449 Lakeshore Rd.

Beaconsfield, OC H9W 4J4

    200,000       6.0 %

B. R. Rodriguez-Grullon

665 Rue Sabrina

Laval, OC H7R 0B1

    185,133       5.5 %

 

MACA Transaction

 

On November 6, 2019, we entered into an agreement (the “11/6/19 Agreement”) with MACA pursuant to which MACA would acquire a controlling equity interest in the Company through certain transactions. By Letter Agreement dated December 7, 2020 (the “12/7/20 Agreement”), the 11/6/19 Agreement was replaced in full. The 12/7/20 Agreement provides that (i) the Company would assign a new note of the Company, of which $399,832 is principal and interest of $173,400 (the “Note”) to MACA; (ii) the Company will cancel certain preferred stock of the Company; (iii) the Company would issue 550,000 restricted shares of common stock of the Company, valued at $275,000; (iv) the Company would issue a convertible note for $40,753 to MACA in repayment of expenses paid by MACA (the “Expense Note”), and (v) the Company would issue 500,000 shares of newly designated Series F Preferred Stock of the Company (the “Series F Stock”) to MACA. Subsequent to the execution of the 12/7/20 Agreement, the Company and MACA amended some of the terms of the 12/7/20 Agreement by oral agreement.  Pursuant to such agreements, on December 9, 2020, the Company filed Certificates of Withdrawal with the Secretary of State of the State of Delaware to withdraw the Certificates of Designation for the Company’s Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, as no shares of any such series of preferred stock remained outstanding. On December 10, 2020, the Company designated 1,000,000 shares of its preferred stock as the Series F Convertible Preferred Stock (the “Series F Stock”).  Each share of the Series F Stock is convertible into 200 shares of common stock, subject to customary adjustments for stock splits, etc., and has a number of votes equal to the number of shares of common stock into which it is convertible, voting with the common stock together as one class, which currently results in all 1,000,000 shares of Series F Stock having 200 million votes. On December 11, 2020, all 1,000,000 shares of Series F Stock were issued and sold to MACA for total consideration of $100. Following this sale, MACA has the ability, through its ownership of Series F Stock, to elect directors of its choosing and thus is able to control the direction of the Company. The Series F Stock also participates in distributions with the common stock on an as-converted basis.  The shares of common stock as referenced in clause (iii) above were issued to Daniel Belanger as representative of certain current and prior shareholders.

 

On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker.

 

The Expense Note was issued, as described above. In connection with these transactions, but prior to their full consummation, on February 21, 2020, Mikael Lundgren became the sole officer and director of the Company.

 

Item 5. Directors and Executive Officers.

 

The following table sets forth the names, ages, positions and dates of appointment of our current directors and executive officers.

 

Name

Age

Position

Date Appointed

Mikael Lundgren

39

Chief Executive Officer and sole Director

February 2020

 

17

 

Mr. Mikael Lundgren sits on the board of directors as the Company’s sole director and also serves as our Chief Executive Officer. He was appointed in February 2020. Prior to that time, Mr. Lundgren provided consulting services. In addition, Mr. Lundgren served as an advisor to Royal Deals Abu Dhabi since 2016. Since March 2020, he has also served as a director at United Hunter Oil and Gas, a company focused on the exploration and production of oil. Mr. Lundgren graduated from Lund University with an LLM.

 

Our directors are elected to serve until the next annual meeting of shareholders and until their respective successors will have been elected and will have qualified. Officers are not elected for a fixed term of office but hold office until their successors have been elected. Our sole director is not a party to any arrangement or understanding pursuant to which he was or is to be elected as a director.

 

Mr. Lundgren has not been involved in any negative legal proceedings as enumerated in Item 401(f) of Regulation S-K either in the past 10 years.

 

Item 6. Executive Compensation.

 

2020 Summary Compensation Table

 

The following table sets forth information with respect to the compensation awarded or paid to our named executive officers during the fiscal years ended July 31, 2020 and 2019 (collectively, the “named executive officers”) for all services rendered in all capacities to us in fiscal 2020 and 2019.

 

Name and Principal Position

 

Year

   

Salary

($)

   

Bonus

($)

   

Stock

Awards

($)

   

Option

Awards

($)

   

Non-Equity

Incentive Plan Compensation

($)

   

Nonqualified Deferred Compensation Earnings

($)

   

All Other Compensation

($)

   

Total

($)

 
Mikael Lundgren   2020     $ 50,000 (1)     0       0       0       0       0       0     $ 50,000  
Chief Executive Officer   2019     $ 0       0       0       0       0       0       0     $ 0  

 

 

(1)

No compensation has been paid to date to Mr. Lundgren and the Company has not entered into a compensation agreement with Mr. Lundgren. As compensation for Mr. Lundgren’s services as Chief Executive Officer, we are accruing annual compensation of $120,000 as of March 1, 2020 at a rate of $10,000 per month. We will continue to accrue his compensation at a monthly rate of $10,000 going forward.

 

There are no outstanding options, warrants or equity awards.

 

Director Compensation

 

The Company’s directors are not compensated for their services as directors of the Company. As discussed above, as compensation for Mr. Lundgren’s services as Chief Executive Officer, we are accruing annual compensation as of March 1, 2020 at a rate of $10,000 per month. For the fiscal year ended July 31, 2020, we accrued an aggregate of $50,000 for such services. We will continue to accrue his compensation at a monthly rate of $10,000 going forward.

 

Item 7. Certain Relationships and Related Transactions, and Director Independence.

 

Related Party Transactions

 

For its corporate offices, the Company utilizes shared office space at 9440 Santa Monica Boulevard, Suite 301, Beverly Hills, California 90210. This office space is provided to us at no charge by MACA.

 

Mr. Mikael Lundgren sits on the board of directors as the Company’s sole director and also serves as the Company’s Chief Executive Officer. As compensation for his services, we are accruing annual compensation of $120,000 as of March 1, 2020 at a rate of $10,000 per month. We will continue to accrue his compensation at a monthly rate of $10,000 going forward. Accrued compensation for years ended July 31, 2020 and 2019 was $50,000 and $0, respectively.

 

On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker.

 

18

 

Director Independence

 

The Company is not listed on any exchange that requires director independence requirements, or any exchange at all at this time. We have not established our own definition for determining whether our director and nominees for directors are “independent” nor have we adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though Mr. Lundgren, our sole director, would not be deemed to be “independent” under any applicable definition given that he is an officer of the Company.

 

Item 8. Legal Proceedings.

 

There are no pending or threatened legal or administrative actions pending or threatened against us that we believe would have a material effect on our business.

 

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

 

Market Information.

 

Our common stock is quoted on the OTC Pink tier of the OTC Markets Group under the symbol “WTCG.” The OTC Market is a computer network that provides information on current “bids” and “asks,” as well as volume information.

 

The following table sets forth the range of high and low closing bid quotations for our common stock for each of the periods indicated as reported by the OTC Markets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

 

   

Bid Prices

 
   

Low

   

High

 

FISCAL 2018

               
                 

First Quarter (August 1, 2017 to October 31, 2017)

  $ 0.0100     $ 0.1000  

Second Quarter (November 1, 2017 to January 31, 2018)

  $ 0.0100     $ 0.0500  

Third Quarter (February 1, 2018 to April 30, 2018)

  $ 0.0260     $ 0.1000  

Fourth Quarter (May 1, 2018 to July 31, 2018)

  $ 0.0230     $ 0.0896  
                 

FISCAL 2019

               
                 

First Quarter (August 1, 2018 to October 31, 2018)

  $ 0.0211     $ 0.0500  

Second Quarter (November 1, 2018 to January 31, 2019)

  $ 0.0221     $ 0.0488  

Third Quarter (February 1, 2019 to April 30, 2019)

  $ 0.0200     $ 0.1000  

Fourth Quarter (May 1, 2019 to July 31, 2019)

  $ 0.0410     $ 0.1000  
                 

FISCAL 2020

               
                 

First Quarter (August 1, 2019 to October 31, 2019)

  $ 0.0150     $ 0.0410  

Second Quarter (November 1, 2019 to January 31, 2020)

    0.0160       0.0844  

Third Quarter (February 1, 2020 to April 30, 2020)

    0.0310       0.4501  

Fourth Quarter Ended (May 1, 2020 to July 31, 2020)

    0.0637       0.2300  

 

On December 14, 2020, the closing bid price of our common stock as reported on the OTC Pink was $0.35. As of July 31, 2020, there were approximately 449 holders of record of our common stock, including multiple beneficial holders at depositories, banks and brokers listed as a single holder in the street name of each respective depository, bank or broker.

 

Dividend Policy 

 

We have never declared or paid cash dividends on our capital stock, and we currently have no plans to do so. Our current policy is to retain all of our earnings to finance future growth, pay down our existing indebtedness and repurchase our common stock. The existing covenants under certain of our credit facilities also place limits on our ability to issue dividends and repurchase stock.

 

19

 

Item 10. Recent Sales of Unregistered Securities.

 

On July 31, 2020, the Company issued a Convertible Promissory Note to MACA in exchange for $40,573 cash consideration advanced for operating expenses incurred during the twelve months ended July 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of July 31, 2021, renewable by the lender.

 

On October 31, 2020, the Company issued a Convertible Promissory Note to an investor in exchange for $43,890 cash consideration advanced for operating expenses incurred during the three months ended October 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of October 31, 2021, renewable by the lender.

 

On December 10, 2020, the Company issued 550,000 shares of the Company’s common stock to Daniel Belanger as representative of certain current and prior shareholders.

 

On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker.

 

We believe the offer, sale and issuance of the above securities were exempt from registration under the Securities Act under Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated thereunder because the issuance of securities to the recipient did not involve a public offering.

 

Item 11. Description of Registrant’s Securities to be Registered.

 

General

 

Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Our common stock does not have cumulative voting rights. Holders of our Common Stock representing a majority of the voting power of our capital stock issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our certificate of incorporation. Although there are no provisions in our certificate of incorporation or by-laws that may delay, defer or prevent a change in control, our board of directors (the “Board”) is authorized, without stockholder approval, to issue shares of Preferred Stock that may contain rights or restrictions that could have this effect. Holders of Common Stock are entitled to share in all dividends that the Board, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the Common Stock. Holders of our Common Stock have no pre-emptive rights and no conversion rights, and there are no redemption provisions applicable to our Common Stock.

 

The Company has 10,000,000,000 authorized shares of common stock, $0.0001 par value per share and 50,000,000 authorized shares of preferred stock, $0.0001 par value per share. At July 31, 2020, there were 120,000 Series A Preferred Shares issued and outstanding, and 25,000,000 Series E Preferred Shares issued and outstanding. At December 16, 2020. there were 120,000 Series A Preferred Shares issued and outstanding, and 1,000,000 Series F Preferred Shares issued and outstanding. All of our outstanding shares of common stock are fully paid and nonassessable.

 

Election of Directors

 

The holders of shares of common stock shall appoint the members of our board of directors. Each share of common stock is entitled to one vote. 

 

20

 

Dividends

 

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our board of directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our board of directors may deem relevant.

 

Anti-Takeover Effects of Provisions of the Delaware General Corporation Law and our Certificate of Incorporation and Bylaws

 

Provisions of the DGCL and our certificate of incorporation and bylaws could make it more difficult to acquire us by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and takeover bids that our board of directors may consider inadequate and to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in improved terms for our stockholders.

 

Delaware Anti-Takeover Statute

 

We are subject to Section 203 of the DGCL. Subject to certain exceptions, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for three years following the date the person became an interested stockholder, unless the interested stockholder attained such status with the approval of our board of directors or unless the business combination is approved in a prescribed manner.

 

Section 203 of the DGCL generally defines a “business combination” to include, among other things, any merger or consolidation involving us and the interested stockholder and the sale of more than 10% of our assets.

 

In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our voting stock or any entity or person associated or affiliated with or controlling or controlled by such entity or person.

 

Amendments to Our Certificate of Incorporation 

 

Under the DGCL, the affirmative vote of a majority of the outstanding shares entitled to vote thereon and a majority of the outstanding stock of each class entitled to vote thereon is required to amend a corporation’s certificate of incorporation. Under the DGCL, the holders of the outstanding shares of a class of our capital stock shall be entitled to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the certificate of incorporation, if the amendment would:

 

 

increase or decrease the aggregate number of authorized shares of such class;

 

 

increase or decrease the par value of the shares of such class; or

 

 

alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely.

 

If any proposed amendment would alter or change the powers, preferences or special rights of one or more series of any class of our capital stock so as to affect them adversely, but shall not so affect the entire class, then only the shares of the series so affected by the amendment shall be considered a separate class for the purposes of this provision.

 

Vacancies in the Board of Directors

 

Our bylaws provide that, subject to limitations, any vacancy occurring in our board of directors for any reason may be filled by a majority of the remaining members of our board of directors then in office, even if such majority is less than a quorum. Each director so elected shall hold office until the expiration of the term and until his successor shall be duly chosen.

 

21

 

Special Meetings of Stockholders 

 

Under our bylaws, a special meeting of stockholders (other than a special meeting for the election of directors), unless otherwise prescribed by statute, may only be called by the board and may be called at any time by the board. At any special meeting, only such business may be transacted as is related to the purpose(s) of such meeting set forth in the notice thereof given pursuant to the terms of the bylaws or in any waiver of notice thereof, each pursuant to the terms of the bylaws. Under the DGCL, written notice of any special meeting must be given not less than 10 nor more than 60 days before the date of the special meeting to each stockholder entitled to vote at such meeting.

 

No Cumulative Voting 

 

The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors unless our certificate of incorporation provides otherwise. Our certificate of incorporation does not provide for cumulative voting.

 

Description of our Preferred Stock

 

The Company has 50,000,000 authorized shares of preferred stock, $0.0001 par value per share. At July 31, 2020, there were 120,000 Series A Preferred Shares issued and outstanding, and 25,000,000 Series E Preferred Shares issued and outstanding. At December 16, 2020. there were 120,000 Series A Preferred Shares issued and outstanding, and 1,000,000 Series F Preferred Shares issued and outstanding.

 

The 120,000 Series A preferred shares were issued to a former officer and director who donated the Series A preferred shares to a charity. Each share of Series A preferred stock has one vote being equal to the voting rights of common stock. The Series A preferred stock is convertible on a one-for-one basis. As the time to convert the Series A preferred stock has elapsed, the Series A preferred stock is basically without any value.

 

Each share of Series F preferred stock has a number of votes equal to the number of shares of common stock of the Company into which such share of Series F preferred stock is then convertible and votes together with the common stock, or any class thereof, as applicable, on such matter for as long as the share of Series F preferred stock is issued and outstanding. The Series F preferred stock is not entitled to vote on any matter on which solely another class of preferred stock is entitled to vote as a separate class.

 

Each share of Series F preferred stock is convertible into 200 shares of common stock at the election of the holder.

 

Holders of Series F preferred stock are entitled to receive such dividends and other distributions, on shares of Series F preferred Stock as and when paid on the common stock, payable on the Series F preferred stock on an as-converted basis.

 

Limitations on Directors’ Liability; Indemnification of Directors and Officers

 

Our Certificate of Incorporation and bylaws contain provisions indemnifying our directors and officers to the fullest extent permitted by law. In addition, as permitted by Delaware law, our Certificate of Incorporation provides that no director will be liable to us or our stockholders for monetary damages for breach of certain fiduciary duties as a director. The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of certain fiduciary duties as a director, except that a director will be personally liable for:

 

 

any breach of his or her duty of loyalty to us or our stockholders;

 

acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law;

 

the payment of dividends or the redemption or purchase of stock in violation of Delaware law; or

 

any transaction from which the director derived an improper personal benefit.

 

This provision does not affect a director’s liability under the federal securities laws.

 

Our bylaws provide that we shall indemnify our directors, officers, employees and agents to the fullest extent permitted by the DGCL. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, we understand that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

22

 

 

Item 12. Indemnification of Directors and Officers.

 

The DGCL and our Certificate of Incorporation and bylaws provide for indemnification of our directors and officers for liabilities and expenses that they may incur in such capacities. In general, directors and officers are indemnified with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the registrant and, with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to believe were unlawful.

 

Our Certificate of Incorporation provides that no director shall be personally liable to us or to our stockholders for monetary damages for breach of fiduciary duty as a director, except that the limitation shall not eliminate or limit liability to the extent that the elimination or limitation of such liability is not permitted by the DGCL as the same exists or may hereafter be amended.

 

Our by-laws further provide for the indemnification of our directors and officers to the fullest extent permitted by Section 145 of the DGCL, including circumstances in which indemnification is otherwise discretionary. A principal effect of these provisions is to limit or eliminate the potential liability of our directors for monetary damages arising from breaches of their duty of care, subject to certain exceptions. These provisions may also shield directors from liability under federal and state securities laws.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

Item 13. Financial Statements and Supplementary Data.

 

The information required by this item is contained under Item 15 of this Registration Statement (and the financial statements referenced therein). That section is incorporated herein by reference.

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

23

 

Item 15. Financial Statements and Exhibits.

 

(a) Financial Statements

 

INDEX TO FINANCIAL STATEMENTS

 

 

Page

Report of Independent Registered Public Accounting Firm for the fiscal years ended July 31, 2020 and 2019

F-2

Balance Sheets as of July 31, 2020 and 2019

F-3

Statements of Operations for the fiscal years ended July 31, 2020 and 2019

F-4

Statements of Cash Flow for the fiscal years ended July 31, 2020 and 2019

F-5

Statements of Changes to Stockholders Equity (Deficit) for the fiscal years ended July 31, 2020 and 2019

F-6

Notes to Financial Statements

F-7

 

 

F-1

 

PICTURE1.JPG

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of W Technologies, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of W Technologies, Inc. (“the Company”) as of July 31, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the two years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years ended July 31, 2020 and 2019, respectively, in conformity with accounting principles generally accepted in the United States of America.

 

Consideration of the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a loss from operations and an accumulated deficit. It also intends to fund operations through future financing, of which no assurance can be given that the Company will be successful in raising such capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Slack & Company CPAs LLC

 

We have served as the Company’s auditor since 2020

December 18, 2020

 

F-2

 

W TECHNOLOGIES, INC.

BALANCE SHEET

(Audited)

 

   

July 31,

2020

   

July 31,

2019

 
                 

ASSETS

               

Cash and cash equivalents

  $ -     $ -  

Inventory

    -       15,000  

Note receivable

    -       15,000  

Total Current Assets

    -       30,000  
                 

TOTAL ASSETS

  $ -     $ 30,000  
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

LIABILITIES

               

Accrued expenses

    50,000       15,000  

Accrued interest

    176,722       128,029  

Convertible notes payable

    440,405       399,832  

Derivative Liability

    184,382       173,400  

Total Current Liabilities

    851,509       716,261  
                 

TOTAL LIABILITIES

    851,509       716,261  
                 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

Preferred stock, $0.0001 par value, 50,000,000 shares authorized;

               

    Series A – 120,000 shares issued and outstanding

    12       12  

    Series E – 25,000,000 shares issued and outstanding

    2,500       2,500  

Common stock, $0.0001 par value, 10,000,000,000 shares

  authorized, 2,805,016 shares issued and outstanding at

  July 31, 2020 and July 31, 2019 respectively

    281       281  

Additional paid in capital

    43,291,637       43,291,637  

Treasury stock

    (50,250 )     (50,250 )

Accumulated deficit

    (44,095,689 )     (43,930,441 )

TOTAL STOCKHOLDERS’ DEFICIT

    (851,509 )     (686,261 )

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

  $ 0     $ 30,000  

 

The accompanying notes to the financial statements are an integral part of these statements.

 

 

W TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

(Audited)

 

   

Year Ended July 31,

 
   

2020

   

2019

 
                 

REVENUE

               

Revenues, net

  $ -     $ -  
                 

OPERATING EXPENSES

               

Selling, general and administrative

    96,068       24,561  
                 

OPERATING LOSS

    (96,068 )     (24,561 )
                 

OTHER INCOME (EXPENSE)

               

Gain on extinguishment of debt

    5,495       45,946  

Loss on settlement of note receivable

    (15,000 )     -  

Loss on change in derivatives

    (10,982 )     (173,400 )

Interest expense

    (48,693 )     (26,699 )
                 

LOSS BEFORE INCOME TAXES

    (165,248 )     (178,714 )
                 

PROVISION FOR INCOME TAXES

    -       -  
                 

NET LOSS

  $ (165,248 )   $ (178,714 )
                 

Net Loss Per Share: Basic and Diluted

  $ (0.06 )   $ (0.06 )
                 

Weighted Average Number of Shares Outstanding: Basic and Diluted

    2,805,016       2,805,016  

 

The accompanying notes to the financial statements are an integral part of these statements.

 

 

W TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

(Audited)

 

   

Year Ended July 31,

 
   

2020

   

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

               

Net loss

  $ (165,248 )   $ (178,714 )

Adjustments to reconcile net loss to net cash used in operating activities:

               

Loss on change in derivatives

    10,982       173,400  

Gain on extinguishment of debt

    (5,495 )     (45,946 )

Change in current assets and liabilities

               

  Note receivable

    15,000       -  

  Inventory

    15,000       -  

  Accrued expenses

    35,000       -  

  Accrued interest

    48,693       26,699  

NET CASH USED IN OPERATING ACTIVITIES

    (46,068 )     (24,561 )
                 

NET CASH PROVIDED BY INVESTING ACTIVITIES

     -        -  
                 

CASH FLOWS FROM FINANCING ACTIVITIES:

               

  Convertible note payable

    40,573       -  

  Advances, net

    5,495       24,561  

NET CASH PROVIDED BY FINANCING ACTIVITIES

    46,068    

24,561

 
                 

NET CHANGE IN CASH

  $ -     $ -  
                 

Cash and Cash Equivalents – Beginning of Period

  $ -     $ -  
                 

Cash and Cash Equivalents – End of Period

  $ -     $ -  

 

The accompanying notes to the financial statements are an integral part of these statements. 

 

 

W TECHNOLOGIES, INC.

STATEMENT OF CHANGES TO STOCKHOLDERS’ EQUITY (DEFICIT)

(Audited)

 

   

Series A Preferred

   

Series D Preferred

   

Series E Preferred

     

Common Stock

   

Additional Paid-In

Capital ($)

   

Treasury

Stock ($)

   

Deficit ($)

   

Total ($)

 
   

Shares

   

Amount ($)

   

Shares

   

Amount ($)

   

Shares

   

Amount ($)

   

Shares

   

Amount ($)

                 

Balance July 31, 2018

    120,000       12       -       -       25,000,000       2,500       2,805,016       281       43,291,637       (50,250 )     (43,751,727 )     (507,547 )
                                                                                                 

Net loss for the period

    -       -       -       -       -       -       -       -       -       -       (178,714 )     (178,714 )

Balance July 31, 2019

    120,000       12       -       -       25,000,000       2,500       2,805,016       281       43,291,637       (50,250 )     (43,930,441 )     (686,261 )
                                                                                                 

Net loss for the period

    -       -       -       -       -       -       -       -       -       -       (165,248 )     (165,248 )

Balance July 31, 2020

    120,000       12       -       -       25,000,000       2,500       2,805,016       281       43,291,637       (50,250 )     (44,095,689 )     (851,509 )

 

The accompanying notes to the financial statements are an integral part of these statements.

 

 

W TECHNOLOGIES, INC.

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2020

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

W Technologies, (the "Company") was incorporated in the State of Nevada in 1986 as IMSCO Technologies. We reincorporated in Massachusetts in 1987 and then we reincorporated in Delaware in 1996. In 2001 we changed our name to Global Sports and Entertainment, Inc. On August 22, 2002 we changed our name to GWIN, Inc. Then on September 22, 2006 we changed our name to Winning Edge International, Inc. On October 2, 2007 we became W Technologies, Inc.

 

The Company transitioned its business model to the sales and distribution of medical-related devices and supplies. A change in our management initiated this change in our business model in February 2020. On April 20, 2020, the Company received a proposed Letter of Intent for the exclusive and global rights to a proprietary technology designed to remove viruses. After extensive and careful due diligence of the German company warranting the technology of the devices, on June 8, 2020, the Company announced that it decided not to proceed with this transaction. 

 

Going forward, the Company will continue to identify and execute upon investment opportunities including medical equipment for the sanitation of medical devices and/or systems.

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has only generated minimal revenues since inception, has sustained operating losses since inception, and has a substantial accumulated deficit of $(44,095,689) at July 31, 2020. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.  The Company’s continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its ability to obtain capital from third parties.  No assurance can be given that the Company will be successful in these efforts.  

 

Management plans to identify adequate sources of funding to provide operating capital for continued growth.

 

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Principals of Consolidation

 

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

 

Cash and Cash Equivalents

 

The Company accounts for cash and cash equivalents under FASB ASC 305, “Cash and Cash Equivalents”, and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 

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.

 

Deferred Income Taxes and Valuation Allowance

 

The Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at July 31, 2020 or 2019, respectively.

 

Financial Instruments

 

The Company’s balance sheet includes certain financial instruments: primarily accounts payable, accruals and debt obligations. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

 

ASC 820, “Fair Value Measurements and Disclosures,” 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 that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

 

Level 1 -

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

Level 2 -

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

Level 3 -

Inputs that are both significant to the fair value measurement and unobservable.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2020 and 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

The Company has embedded derivatives associated with its convertible debt of $184,382 measured at fair value at June 30, 2020.

 

   

June 30, 
2020

   

Quoted Prices in Active Markets for Identical Assets

(Level 1)

   

Significant Other Observable Inputs

(Level 2)

   

Significant Unobservable Inputs

(Level 3)

 

Derivative liability

                          $ 184,382  
                                 

Total

                          $ 184,382  

 

The Company has embedded derivatives associated with its convertible debt of $173,400 measured at fair value at June 30, 2019.

 

   

June 30, 
2019

   

Quoted Prices in Active Markets for Identical Assets

(Level 1)

   

Significant Other Observable Inputs

(Level 2)

   

Significant Unobservable Inputs

(Level 3)

 

Derivative liability

                          $ 173,400  
                                 

Total

                          $ 173,400  

 

Related Parties

 

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

 

 

Stock-Based Compensation

 

FASB ASC 718 “Compensation – Stock Compensation,” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Recently Issued Accounting Pronouncements

 

There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

 

Reclassifications

 

Certain prior year balances have been reclassified to conform to current year presentation.

 

Subsequent events

 

The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued (Note 11).

 

NOTE 4 – NOTE RECEIVABLE

 

On May 15, 2018, the Company sold 50% of its inventory to a third party through execution of a promissory note receivable totaling $15,000. The promissory note receivable carries zero interest, with a one-year term, and has no conversion rights.

 

Terms of the promissory note receivable were amended upon default by the borrower as of May 15, 2019; the original maturity date. The Company amended and extended the promissory note receivable’s maturity date to May 15, 2020 in effort to work with the borrower’s ability to repay the amount due us.

 

Subsequent to extending the promissory note’s maturity date, and upon several attempts to collect the outstanding obligation from borrower, the Company no longer considers it collectible. The Company has opted to elect to write-off this debt as a loss on settlement of note receivable on the statement of operations for the twelve months ending July 31, 2020.

 

As of July 31, 2020, and 2019, the promissory note receivable had an outstanding balance owed to the Company of $0 and $15,000, respectively.

 

NOTE 5 – ADVANCES

 

Prior to July 31, 2020, the Company was advanced approximately $51,441 by a former related party. The consideration advanced did not have any supporting paperwork, agreement, or formal documentation to substantiate an organized claim. Due to this, Management’s inability to substantiate the proper documentation associated with the advances described above, and lack of any collection effort(s) from outside party(s) or entity(s) asserting an interest in the consideration provided, the Company chose to write these advances off in the current period as a gain on extinguishment of debt for $5,495 and $45,746 during the twelve months ended July 31, 2020 and 2019, respectively. At July 31, 2020 and 2019, outstanding advances payable were $-0- in both periods, respectively.

 

 

NOTE 6 – CONVERTIBLE NOTES PAYABLE

 

On June 25, 2015, the Company issued a Convertible Promissory Note (“New Note”) to an investor for $399,832. The New Note succeeds two notes issued originally in September 2006, and it superseded the terms of the September 2006 Notes pursuant to an agreement dated June 25, 2015. Terms of the New Note provide for a conversion option into common shares at a discount of 20% off-market, a weighted average interest rate of approximately 7% annual interest (payable to investor), and an original maturity date of June 25, 2016; renewable by investor. As of July 31, 2020, and 2019, the New Note was in default. As of the date of this Report, this New Note was re-issued in November 2020 with a new maturity date in 2021 (see Note 11). The balance of the New Note as of July 31, 2020 and 2019 was $399,832 at the end of both periods, respectively. Derivative gain (expense) and corresponding liability associated to this New Note was $1,111 and ($173,400) for the twelve months ending and as of July 31, 2020 and 2019, respectively. Accrued unpaid interest associated with the New Note as of July 31, 2020 and 2019 was $176,722 and $128,029, respectively. Interest expense incurred for the twelve months ending July 31, 2020 and 2019 on the New Note was $46,693 and $26,699, respectively.

 

On July 31, 2020 the Company entered into a Convertible Promissory Note with an investor in exchange for $40,573 cash consideration advanced for operating expenses incurred during the twelve months ended July 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of July 31, 2021; renewable by the lender. Balance of the Convertible Promissory Note as of July 31, 2020 and 2019 was $40,573 and $-0-, respectively. Derivative expense and corresponding liability associated to this Convertible Promissory Note agreement was $12,093 and $0 for the twelve months ending and as of July 31, 2020 and 2019, respectively. Interest expense incurred during the twelve months ended July 31, 2020 and 2019 on the Convertible Promissory Note was $-0- for both periods, respectively.

 

NOTE 7 – INVENTORY

 

Contemporaneous with the change in management on February 21, 2020 and a new business strategy, the new management found it prudent to shed itself of the remaining inventory asset.

 

Considering that this technology-based asset is in excess of five years it was rendered nearly obsolete. In addition, based upon the non-collectability of the Note Receivable referenced in Note 4, representing the remaining 50% of the original asset acquired by the Company in 2014, management found it justifiable to remove the asset in its entirety as the asset was incapable of being valued in a justifiable manner.

 

Inventory totals as of July 31, 2020 and 2019 were $-0- and $15,000, respectively. Inventory is recorded at the lower of cost or fair market value.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

For its corporate offices, the Company utilizes shared office space at 9440 Santa Monica Boulevard, Suite 301, Beverly Hills, California, 90210.

 

Mr. Mikael Lundgren sits on the board of directors as the Company’s sole director and also serves as the Company’s Chief Executive Officer. As compensation for his services we are accruing annual compensation of $120,000 as of March 1, 2020 at a rate of $10,000 per month. We will continue to accrue his compensation at a monthly rate of $10,000 going forward. Accrued compensation for years ended July 31, 2020 and 2019 was $50,000 and $0, respectively.

 

NOTE 9 – SHAREHOLDERS’ EQUITY

 

The Company has 10,000,000,000 authorized common shares with a par value of $0.0001 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.

 

There were 2,805,016 common shares issued and outstanding at July 31, 2020 and 2019, respectively.

 

 

Preferred Stock

 

The Company has 50,000,000 authorized preferred shares with a par value of $0.0001 per share. There are Preferred Series A, and Preferred Series E outstanding. At July 31, 2020 there were 120,000 Series A Preferred Shares issued and outstanding; and 25,000,000 Series E Preferred Shares issued and outstanding.

 

The Series A Preferred (“A Preferred”) were issued to a former officer/director who donated the A Preferred to a charity. The A Preferred has one vote for share of A Preferred being equal to the voting rights of common stock. The A Preferred is convertible on a one to one ratio, as aforesaid. Presently, the time to convert the A Preferred has elapsed so the A Preferred is basically without any value.

 

The 25,000,000 shares of Series E Preferred (“E Preferred”) has voting rights on an as converted basis. Each share of E Preferred has 60 votes per share. Each E Preferred is convertible into common stock on a one for one basis. The E Preferred will be acquired by MACA as described in Note 11 below. See Note 11 for the terms of the acquisition.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

Litigation, claims and assessments

 

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters as of July 31, 2020 or 2019, respectively.

 

NOTE 11 – SUBSEQUENT AND OTHER EVENTS

 

On April 20, 2020 the Company has transitioned into the product sales and distribution market via a Letter of Intent (LOI) for the exclusive and global rights to a proprietary technology designed to remove viruses. After extensive and careful due diligence of the German company warranting the technology of the devices, on June 8, 2020, the Company announced that it decided not to proceed with this transaction and terminated the LOI. The Company is now exploring other opportunities.

 

On November 6, 2019, we entered into an agreement (the “11/6/19 Agreement”) with MACA pursuant to which MACA would acquire a controlling equity interest in the Company through certain transactions. By Letter Agreement dated December 7, 2020 (the “12/7/20 Agreement”), the 11/6/19 Agreement was replaced in full. The 12/7/20 Agreement provides that (i) the Company would assign a new note of the Company, of which $399,832 is principal and interest of $173,400 (the “Note”) to MACA; (ii) the Company will cancel certain preferred stock of the Company; (iii) the Company would issue 550,000 restricted shares of common stock of the Company, valued at $275,000; (iv) the Company would issue a convertible note for $40,753 to MACA in repayment of expenses paid by MACA (the “Expense Note”), and (v) the Company would issue 500,000 shares of newly designated Series F Preferred Stock of the Company (the “Series F Stock”) to MACA. Subsequent to the execution of the 12/7/20 Agreement, the Company and MACA amended some of the terms of the 12/7/20 Agreement by oral agreement.  Pursuant to such agreements, on December 9, 2020, the Company filed Certificates of Withdrawal with the Secretary of State of the State of Delaware to withdraw the Certificates of Designation for the Company’s Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, as no shares of any such series of preferred stock remained outstanding. On December 10, 2020, the Company designated 1,000,000 shares of its preferred stock as the Series F Convertible Preferred Stock (the “Series F Stock”).  Each share of the Series F Stock is convertible into 200 shares of common stock, subject to customary adjustments for stock splits, etc., and has a number of votes equal to the number of shares of common stock into which it is convertible, voting with the common stock together as one class, which currently results in all 1,000,000 shares of Series F Stock having 200 million votes. On December 11, 2020, all 1,000,000 shares of Series F Stock were issued and sold to MACA for total consideration of $100. Following this sale, MACA has the ability, through its ownership of Series F Stock, to elect directors of its choosing and thus is able to control the direction of the Company. The Series F Stock also participates in distributions with the common stock on an as-converted basis.  The shares of common stock as referenced in clause (iii) above were issued to Daniel Belanger as representative of certain current and prior shareholders.

 

On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker.

 

The Expense Note was issued, as described above. In connection with these transactions, but prior to their full consummation, on February 21, 2020, Mikael Lundgren became the sole officer and director of the Company.

 

F-12

 

Consolidated Financial Statements

 

Table of Contents

Page

  

  

Financial Statements:

  

  

  

Consolidated Balance Sheets at October 31, 2020 and October 31, 2019 (Unaudited)

F-14

  

  

Consolidated Statements of Operations for the Three Months Ended October 31, 2020 and  October 31, 2019 (Unaudited)

F-15

  

  

Consolidated Statements of Cash Flows for the Three Months Ended October 31, 2020 and  October 31, 2019 (Unaudited)

F-16

  

  

Consolidated Statements of Changes in Stockholders’ Deficit for the Three Months Ended October 31, 2020 (Unaudited) 

F-17

  

  

Notes to Consolidated Financial Statements

F-18

 

F-13

 

W Technologies, Inc. 

CONSOLIDATED BALANCE SHEETS

 

   

OCTOBER 31, 2020

   

OCTOBER 31, 2019

 
           

(Unaudited)

 

ASSETS

               

Current Assets:

               

   Cash

  $ -     $ -  

   Inventory

            15,000  

   Note Receivable-current portion

            15,000  

      Total Current Assets

            30,000  
                 

TOTAL ASSETS

  $ -     $ 30,000  
                 

LIABILITIES AND STOCKHOLDERS’ EQUTIY (DEFICIT)

               
                 

LIABILITIES

               

Current Liabilities:

               

 Accrued Expenses

    83,500       15,000  

 Accrued Interest Payable

    187,713       -  

 Note Payable

    43,889       45,946  

 Convertible Notes Payable (Note 6) 

    440,405       537,174  

 Shareholder Loan

    1,998       -  

   Derivative Liability

    184.382       -  

       Total Current Liabilities

    941,887       598,120  
                 

TOTAL LIABILITIES

    757,505       598,120  
                 

STOCKHOLDERS’ EQUITY (DEFICIT)

               

   Preferred Stock, $.0001 par value, 50,000,000 shares authorized

      Series A- 120,000 Issued and Outstanding at October 31, 2020 and October 31, 2019 respectively

    12       60  

   Series E – 25,000,000 Issued and Outstanding at October 31, 2020 and October 31, 2019 respectively see (Note 11)

    2,500       2,500  

   Common Stock, $.0001 par value 10,000,000,000 shares authorized 2,805,016 Issued and Outstanding at October 31, 2020 and October 31, 2019 respectively 

    281       281  

   Additional paid-in-capital

    43,291,637       43,291,637  

  Treasury Stock

    (50,250 )     (50,250 )

  Accumulated deficit

    (44,186,067 )     (43,812,300 )

     Total Stockholders’ Equity (Deficit)

    (941,887 )     (568,120 )
                 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

  $ -     $ 30,000  

 

The accompanying notes are an integral part of these financial statements.

 

F-14

 

W Technologies, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

For The Three Months Ended October 31, 2020 and 2019

(Unaudited) 

 

   

2020

   

2019

 

REVENUES:

  $ -     $ -  

Cost of Revenue

    -       -  

Gross Profit

    -       -  
                 

OPERATING EXPENSES:

               

General & Administrative

    1,015       3,900  

Computer systems

    896       -  

Legal fees

    21,045       -  

Officer compensation

    30,000       -  

Professional fees 

    12,650       -  

Travel and entertainment

    11,500       -  

Transfer Agent fees

    2,281       -  

Total Operating Expenses

    79,387       3,900  

Net operating income/(loss)

    (79,387 )     (3,900 )
                 

OTHER INCOME (EXPENSE)

               

Finance and interest fees

    (10,991 )     (9,478 )

Amortization of debt discount

            -  

Changes in derivative liability

            -  

Loss from extinguish of debt

            -  

Total other Income/(Expense)

    (10,991 )     (9,478 )

NET INCOME/(LOSS)

  $ (90,378 )   $ (13,378 )
                 

Basic and Diluted Income/(Loss) per Common Share

  $ (.0322 )   $ (0.005 )

Weighted Average Number of Common Shares Outstanding

    2,805,016       2,805,016  

 

The accompanying notes are an integral part of these financial statements.

 

F-15

 

W Technologies, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Three Months Ended October 31, 2020 and 2019

(Unaudited)

 

   

2020

   

2019

 
                 

CASH FLOWS FROM OPERATING ACTIVITIES

               

Net loss for the period

  $ (90,378 )   $ (13,378 )

Adjustments to reconcile net loss to net cash provided

               

By operating activities:

               

Changes in operating assets and liabilities

               

Increase/ (decrease) in accounts payable

            -  

Increase/ (decrease) in accrued expenses

    33,500       3,900  

Increase/ (decrease) in accrued interest payable

    10,991       9,478  

   Net cash used in operating activities

    45,887       -  
                 

   Net cash provided by (used in) investing activities

    -       -  
                 

CASH FLOWS FROM FINANCING ACTIVITIES

               

Proceeds  from convertible notes payable

    43,889       -  

Proceeds  shareholder loan

    1,998       -  

   Net cash provided by (used in) financing activities

    45,887       -  
                 

Net increase (decrease) in cash and cash equivalents

    -       -  
                 

Cash and cash equivalents - beginning of period

    -       -  
                 

Cash and cash equivalents - end of period

  $ -     $ -  

 

The accompanying notes are an integral part of these financial statements.

 

F-16

 

W Technologies, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

For The Three Months Ended October 31, 2020

 

    Preferred  Series A    

Preferred Series E

    Common Stock    

Additional

Paid-In

    Treasury     Accumulated          
   

Shares

   

Value

   

Shares

    Value    

Shares

   

Amount

   

Capital

   

 Stock

    Deficit     Total  
                                                                                 

Balance – July 31, 2018 (Unaudited)

    120,000     $ 12       25,000,000     $ 2,500       2,805,516     $ 281       43,291,637       (50,250 )     (43,751,727 )     (507,547 )
                                                                                 

Net Income/(Loss) July 31, 2019

                                                                    (178,714 ))     (178,714 )
                                                                                 

Balance – July 31, 2019(Unaudited)

    120,000     $ 12       25,000,000     $ 2,500       2,805,516     $ 281       43,291,637       (50,250 )     (43,930,441 )     (686,261 )
                                                                                 

Net Income/(Loss) July 31, 2020

                                                                    (165,248 )     (165,248 )
                                                                                 

Balance – July 31, 2020 (Unaudited)

    120,000     $ 12       25,000,000     $ 2,500       2,805,516     $ 281       43,291,637       (50,250 )     (44,095,689 )     (851,509  
                                                                                 

Net Income/(Loss) October 31, 2020

                                                                    (90,378 )     (90,378 )
                                                                                 

Balance – October 31, 2020

    120,000     $ 12       25,000,000     $ 2,500       2,805,516     $ 281       43,291,637       (50,250 )     (44,186,067 )     (941,887 )

 

The accompanying notes are an integral part of these financial statements.

 

F-17

 

W TECHNOLOGIES, INC.

 

NOTES TO THE FINANCIAL STATEMENTS

 

October 31, 2020

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

W Technologies, (the "Company") was incorporated in the State of Nevada in 1986 as IMSCO Technologies. We reincorporated in Massachusetts in 1987 and then we reincorporated in Delaware in 1996. In 2001 we changed our name to Global Sports and Entertainment, Inc. On August 22, 2002 we changed our name to GWIN, Inc. Then on September 22, 2006 we changed our name to Winning Edge International, Inc. On October 2, 2007 we became W Technologies, Inc.

 

The Company transitioned its business model to the sales and distribution of medical-related devices and supplies. A change in our management initiated this change in our business model in February 2020. On April 20, 2020, the Company received a proposed Letter of Intent for the exclusive and global rights to a proprietary technology designed to remove viruses. After extensive and careful due diligence of the German company warranting the technology of the devices, on June 8, 2020, the Company announced that it decided not to proceed with this transactions.

 

Going forward, the Company will continue to identify and execute upon investment opportunities including medical equipment for the sanitation of medical devices and/or systems.

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has only generated minimal revenues since inception, has sustained operating losses since inception, and has a substantial accumulated deficit of $(44,186,087) at October 31, 2020. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its ability to obtain capital from third parties. No assurance can be given that the Company will be successful in these efforts.

 

Management plans to identify adequate sources of funding to provide operating capital for continued growth.

 

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation 

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

F-18

 

Use of Estimates 

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Principals of Consolidation 

 

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

 

Cash and Cash Equivalents 

 

The Company accounts for cash and cash equivalents under FASB ASC 305, “Cash and Cash Equivalents”, and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 

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.

 

Deferred Income Taxes and Valuation Allowance 

 

The Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at October 31, 2020 or 2019, respectively.

 

Financial Instruments 

 

The Company’s balance sheet includes certain financial instruments: primarily accounts payable, accruals and debt obligations. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

F-19

 

ASC 820, “Fair Value Measurements and Disclosures,” 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 that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1 -

 

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 -

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of October 31, 2020 and 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

The Company has embedded derivatives associated with its convertible debt of $184,382 measured at fair value at June 30, 2020.

 

    Quoted Prices in  
         

Active Markets for

Identical Assets

   

Significant Other

Observable Inputs

   

Significant

Unobservable Inputs

 
   

June 30, 2020

   

(Level 1)

   

(Level 2)

   

(Level 3)

 

Derivative liability

                          $ 184,382  
                                 

Total

                          $ 184,382  

 

The Company has embedded derivatives associated with its convertible debt of $173,400 measured at fair value at June 30, 2019.

 

    Quoted Prices in  
         

Active Markets for

Identical Assets

   

Significant Other

Observable Inputs

   

Significant

Unobservable Inputs

 
   

June 30, 2019

   

(Level 1)

   

(Level 2)

   

(Level 3)

 

Derivative liability

                          $ 173,400  
                                 

Total

                          $ 173,400  

 

F-20

 

Related Parties 

 

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

 

Stock-Based Compensation 

 

FASB ASC 718 “Compensation – Stock Compensation,” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “Equity – Based Payments to Non-Employees.” Measurement of share based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Recently Issued Accounting Pronouncements 

 

There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

 

Reclassifications 

 

Certain prior year balances have been reclassified to conform to current year presentation.

 

Subsequent events 

 

The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued (Note 11).

 

NOTE 4 – NOTE RECEIVABLE

 

On May 15, 2018, the Company sold 50% of its inventory to a third party through execution of a promissory note receivable totaling $15,000. The promissory note receivable carries zero interest, with a one-year term, and has no conversion rights.

 

Terms of the promissory note receivable were amended upon default by the borrower as of May 15, 2019; the original maturity date. The Company amended and extended the promissory note receivable’s maturity date to May 15, 2020 in effort to work with the borrower’s ability to repay the amount due us.

 

Subsequent to extending the promissory note’s maturity date, and upon several attempts to collect the outstanding obligation from borrower, the Company no longer considers it collectible. The Company has opted to elect to write-off this debt as a loss on settlement of note receivable on the statement of operations for the twelve months October 31, 2020.

 

As of October 31, 2020 and 2019, the promissory note receivable had an outstanding balance owed to the Company of $0 and $15,000, respectively.

 

F-21

 

NOTE 5 – ADVANCES

 

Prior to October 31, 2020, the Company was advanced approximately $51,441 by a former related party. The consideration advanced did not have any supporting paperwork, agreement, or formal documentation to substantiate an organized claim. Due to this, Management’s inability to substantiate the proper documentation associated with the advances described above, and lack of any collection effort(s) from outside party(s) or entity(s) asserting an interest in the consideration provided, the Company chose to write these advances off in the current period as a gain on extinguishment of debt for $5,495 and $45,746 during the twelve months ended July 31, 2020 and 2019, respectively. At October 31, 2020 and 2019, outstanding advances payable were $-0- in both periods, respectively.

 

NOTE 6 – CONVERTIBLE NOTES PAYABLE

 

On June 25, 2015, the Company issued a Convertible Promissory Note (“New Note”) to an investor for $399,832. The New Note succeeds two notes issued originally in September 2006, and it superseded the terms of the September 2006 Notes pursuant to an agreement dated June 25, 2015. Terms of the New Note provide for a conversion option into common shares at a discount of 20% off-market, a weighted average interest rate of approximately 7% annual interest (payable to investor), and a original maturity date of June 25, 2016; renewable by investor. As of July 31, 2020 and 2019, the New Note was in default. As of the date of this Report, this New Note was re-issued in November 2020 with a new maturity date in 2021 (see Note 11). The balance of the New Note as of July 31, 2020 and 2019 was $399,832 at the end of both periods, respectively. Derivative gain (expense) and corresponding liability associated to this New Note was $1,111 and ($173,400) for the twelve months ending and as of July 31, 2020 and 2019, respectively. Accrued unpaid interest associated with the New Note as of July 31, 2020 and 2019 was $176,722 and $128,029, respectively. Interest expense incurred for the twelve months ending July 31, 2020 and 2019 on the New Note was $46,693 and $26,699, respectively.

 

On July 31, 2020 the Company entered into a Convertible Promissory Note with an investor in exchange for $40,573 cash consideration advanced for operating expenses incurred during the twelve months ended July 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of July 31, 2021; renewable by the lender. Balance of the Convertible Promissory Note as of July 31, 2020 and 2019 was $40,573 and $-0-, respectively Derivative expense and corresponding liability associated to this Convertible Promissory Note agreement was $12,093 and $0 for the twelve months ending and as of July 31, 2020 and 2019, respectively. Interest expense incurred during the twelve months ended July 31, 2020 and 2019 on the Convertible Promissory Note was $-0- for both periods, respectively.

 

NOTE 7 – INVENTORY

 

Contemporaneous with the change in management on February 21, 2020 and a new business strategy, the new management found it prudent to shed itself of the remaining inventory asset.

 

Considering that this technology-based asset is in excess of five years it was rendered nearly obsolete. In addition, based upon the non-collectability of the Note Receivable referenced in Note 4, representing the remaining 50% 0f the original asset acquired by the Company in 2014, management found it justifiable to remove the asset in its entirety as the asset was incapable of being valued in a justifiable manner.

 

Inventory totals as of October 31, 2020 and 2019 were $-0- and $15,000, respectively. Inventory is recorded at the lower of cost or fair market value.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

For its corporate offices, the Company utilizes shared office space at 9440 Santa Monica Boulevard, Suite 301, Beverly Hills, California, 90210.

 

Mr. Mikael Lundgren sits on the board of directors as the Company’s sole director and also serves as the Company’s Chief Executive Officer. As compensation for his services we are accruing annual compensation of $120,000 as of March 1, 2020 at a rate of $10,000 per month. We will continue to accrue his compensation at a monthly rate of $10,000 going forward. Accrued compensation for the three months ended October 31, 2020 and 2019 was $30,000 and $0, respectively.

 

F-22

 

NOTE 9 – SHAREHOLDERS’ EQUITY

 

The Company has 10,000,000,000 authorized common shares with a par value of $0.0001 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.

 

There were 2,805,016 common shares issued and outstanding at October 31, 2020 and 2019, respectively.

 

Preferred Stock 

 

The Company has 50,000,000 authorized preferred shares with a par value of $0.0001 per share. There are Preferred Series A, and Preferred Series E outstanding. At July 31, 2020 there were 120,000 Series A Preferred Shares issued and outstanding; and 25,000,000 Series E Preferred Shares issued and outstanding.

 

The Series A Preferred (“A Preferred”) were issued to a former officer/director who donated the A Preferred to a charity. The A Preferred has one vote for share of A Preferred being equal to the voting rights of common stock. The A Preferred is convertible on a one to one ratio, as aforesaid. Presently, the time to convert the A Preferred has elapsed so the A Preferred is basically without any value.

 

The 25,000,000 shares of Series E Preferred (“E Preferred”) has voting rights on an as converted basis. Each share of E Preferred has 60 votes per share... Each E Preferred is convertible into common stock on a one for one basis. The E Preferred will be acquired by MACA as described in Note 11 below. See Note 11 for the terms of the acquisition.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

Litigation, claims and assessments

 

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters as of October 31, 2020 or 2019, respectively.

 

NOTE 11 – SUBSEQUENT AND OTHER EVENTS

 

On November 6, 2019, we entered into an agreement (the “11/6/19 Agreement”) with Mid Atlantic Capital Associates, Inc. (“MACA”) pursuant to which MACA would acquire a controlling equity interest in the Company through certain transactions. By Letter Agreement dated December 7, 2020 (the “12/7/20 Agreement”), the 11/9/19 Agreement was replaced in full. The 12/7/20 Agreement provides that (i) the Company would assign a new note of the Company, of which $399,832 is principal and interest of $173,400 (the “Note”) to MACA; (ii) the Company will cancel certain preferred stock of the Company; (iii) that the Company would issue 550,000 restricted shares of common stock of the Company, valued at $275,000; (iv) the issuance of a convertible note for $40,753 to MACA in repayment of expenses paid by MACA (the “Expense Note”), and (v) the issuance of 500,000 shares of newly designated Series F Preferred Stock of the Company (the “Series F Stock) to MACA. Subsequently to the execution of the 12/7/20 Agreement, the Company and MACA amended some of the terms of the 12/7/20 Agreement by oral agreement.  Pursuant to such agreements, on December 9, 2020, the Company filed Certificates of Withdrawal with the Secretary of State of the State of Delaware to withdraw the Certificates of Designation for the Company’s Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Preferred Stock  and Series E Preferred Stock, as no shares of any such series of preferred stock remained outstanding. On December 10, 2020, the Company designated 1,000,000 shares of its preferred stock as the Series F Convertible Preferred Stock (the “Series F Stock”).  Each share of the Series F Stock is convertible into 200 shares of common stock, subject to customary adjustments for stock splits, etc., and has a number of votes equal to the number of shares of common stock into which it is convertible, voting with the common stock together as one class, which currently results in all 1,000,000 shares of Series F Stock having 200 million votes. On December 11, 2020, all 1,000,000 shares of Series F Stock were issued and sold to MACA for total consideration of $100. Following this sale, MACA has the ability, through its ownership of Series F Stock, to elect directors of its choosing and thus is able to control the direction of the Company. The Series F Stock also participates in distributions with the common stock on an as-converted basis.  The shares of common stock as referenced in clause (iii) above were issued to Daniel Belanger as representative of certain current and prior shareholders, and the Note and the Expense Note were assigned or issued, as applicable as described above. In connection with these transactions, but prior to their full consummation, on February 21, 2020, Mikael Lundgren became the sole officer and director of the Company. 

 

 

(b) Exhibits

 

The following documents are filed as exhibits hereto:

 

Exhibit Number   Exhibit Description
     
3.1   Certificate of Incorporation, as amended, of the registrant.
     
3.2   Amended and Restated Bylaws of the registrant.
     
4.1   Convertible Note issued on June 25, 2015.
     
4.2   Convertible Note issued on July 31, 2020.
     
4.3   Convertible Promissory Note dated October 31, 2020.
     
4.4   Convertible Promissory Note dated December 16, 2020.
     

10.1

 

Letter Agreement dated November 6, 2019 by and between the registrant and Mid Atlantic Capital Associates, Inc.

     
10.2   Letter Agreement dated December 7, 2020 by and between the registrant and Mid Atlantic Capital Associates, Inc.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  W TECHNOLOGIES, INC.
   
   
Date: December 18, 2020

By: /s/ Mikael Lundgren               

Name: Mikael Lundgren

Title: Chief Executive Officer

 

 

 

   

 

25

EXHIBIT 3.1

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 02:30 PM 05/16/1996

960143099 2624Sl4

 

 

 

CERTIFICATE OF INCORPORATION

 

OF

 

IMSCO TECHNOLOGIES, INC.

 

Pursuant to the provisions of the Delaware General Corporation Law, the undersigned, being the sole incorporator of the Corporation, hereby certifies and sets forth as follows:

 

FIRST:          The name of the corporation is IMSCO Technologies, Inc. (the “Corporation”) .

 

SECOND:     The address, including the street, number, city and county, of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the city of Wilmington, in the county of New Castle; and the name of the registered agent of the corporation in the State of Delaware at such address is The Corporation Trust Company.

 

THIRD:         The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

 

FOURTH:     The aggregate number of shares of capital stock which the Corporation shall have authority to issue is SIXTEEN MILLION (16,000,000), of which FIFTEEN MILLION (15,000,000) shall be shares of Common Stock, $.0001 par value per share, and ONE MILLION (1,000,000) shares of Preferred Stock, $.0001 par value per share .

 

FIFTH:          The Corporation is to have perpetual existence.

 

SIXTH:         The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

 

SEVENTH:   No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 1 74 if the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit.

 

EIGHTH:      Every director and officer of the Corporation shall be indemnified by the Corporation against any and all

 

 

 

judgments, fines, amounts paid in settling or otherwise disposing of actions or threatened actions, and expenses in connection therewith, incurred by reason of fact that he was a director or officer of the corporation or any other corporation of any kind, domestic or foreign, which he served in any capacity at the request of the Corporation, to the full extent that such indemnification may be lawful under the Delaware General Corporation Law. Expenses so incurred by any such person in defending a civil or criminal action or proceeding shall likewise at his request be paid by the Corporation in advance of the final disposition of such action or proceeding to the full extent that such advancement of expenses may be lawful under said laws.

 

The Undersigned, being the incorporator, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly has hereunto set my hands this 16th day of May, 1996.

 

 

 

/s/ Rachele A. David                         

 

Rachele A. David

 

c/o Campbell & Fleming, P.C.

 

250 Park Avenue

 

New York, New York 10177

 

 

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 04:30 PM 07/12/1996

960204S79 - 2624514

 

 

 

 

 

 

 

 

CERTIFICATE OF AGREEMENT OF MERGER 

 

THIS AGREEMENT OF MERGER (the “Merger Agreement”) is made and entered into this 9th day of July, 1996 by and among IMSCO TECHNOLOGIES, INC., Delaware corporation (“Technologies”) AND IMSCO, INC., a Massachusetts corporation (“Imsco”), with reference to the following facts:

 

A.     Technologies is a corporation incorporated, existing, and in good standing under the laws of the State of Delaware. Technologies' authorized capital consists of 15,000,000 shares of Common Stock , $.0001 par value, of which 3,000,000 shares will be issued and outstanding immediately prior to the filing hereof (the “Technologies Common''). and 1.000.000 shares of Preferred Stock. $.0001 par value, none of which are issued and outstanding. All of such shares are collectively referred to herein as the ''Technologies Shares.”

 

B.      Imsco is a corporation incorporated, existing, and in good standing under the laws of the Commonwealth of .Massachusetts Imsco’s authorized capital consists of 3,000,000 shares of Common Stock, $.001 par value, of which 3,000,000 are issued and outstanding (the “Imsco Common'').

 

C      Technologies and Imsco (the “Constituent Corporations'') deem it desirable and in their mutual best interests to merge into a single corporation (the “Merger”) and to have Technologies as the surviving corporation (the “Surviving Corporation”).

 

E.      The Boards of Directors of Technologies and Imsco, and the stockholders of Technologies and Imsco, have adopted resolutions approving the Merger Agreement.

 

NOW, THEREFORE, on the basis of the foregoing facts are in consideration of' the mutual covenants and agreements set forth herein, the parties hereto agree as follows:

 

l.      Merger. At the .Effective Date of the Merger (as hereinafter defined), Imsco shall be merged with and into Technologies under the laws of the State of Delaware, whereupon the separate existence of Imsco shall cease and Technologies. as the Surviving Corporation, shall succeed without other transfer, to all the rights and properties of Imsco and shall be subject to all the debts and liabilities of the Imsco in the same manner as if Technologies had incurred them.

 

2.     Filing and Effective Date. The Surviving Corporation shall file a copy of this Merger Agreement with the Delaware Secretary of State (the “Secretary of State”) pursuant to Section 252 of the Delaware General Corporation Law. The effective time of the Merger (the “Effective Date”) shall be the time at which a copy of the Merger Agreement is filed with the Delaware Secretary of State.

 

3.      Certificate of Incorporation. The Certificate of Incorporation of Technologies at the Effective Date shall be the Certificate of Incorporation of the Surviving Corporation.

 

4.      Bylaws. The Bylaws of Technologies at the Effective Date shall be the Bylaws of the Surviving Corporation.

 

 

 

5.     Conversion of Shares. The manner of converting the shares of each of the Constituent Corporations shall be as follows:

 

(a)     Upon consummation of the Merger, each outstanding share of Imsco Common shall be automatically converted into one share of Technologies Common.

 

(b)     The conversion of Imsco Common as provided by this Agreement shall occur automatically at the Effective Date without action by the holder thereof. Each holder of such shares may tender their original share certificate or certificates to Technologies' corporate secretary, and upon receipt of such certificates, Technologies shall deliver and exchange therefor a new Technologies share certificate representing the appropriate number of shares of Technologies Common to which such holder shall be entitled as set forth above.

 

6.     Further Assurances. Each of the parties shall take or cause to be taken all actions, and do or cause to be done all things necessary, proper or advisable to effectuate the Merger.

 

7.     Intended Tax Effects. This Agreement is intended as a plan of reorganization within the meaning of Section 368 of the Internal Revenue Code.

 

8.     Counterparts. The Merger Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

 

 

IN WITNESS WHEREOF, the parties hereto have caused the Merger Agreement to be duly executed by their respective Presidents and Secretaries, who have been duly authorized to do so by the required votes of their respective stockholders.

 

 

IMSCO TECHNOLOGIES, INC.

IMSCO, INC.

a Delaware corporation

a Massachusetts corporation

 

 

 

 

By /s/ Sol L. Berg                            

By /s/ Sol L. Berg                            

President

President

Sol L. Berg

Sol L. Berg

 

 

By /s/ Gloria Berg                            

By /s/ Gloria Berg                            

Secretary

Secretary

Gloria Berg

Gloria Berg

 

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:01 AM 06/26/2001

010311405 - 2624514

 

 

CERTIFICATE OF CORRECTION OF

 

CERTIFICATE OF INCORPORATION

 

OF

IMSCO TECHNOLOGIES, INC.

 

 

It is hereby certified that :

 

1.     The name of the corporation (hereinafter called the “Corporation”) is IMSCO Technologies, Inc.

 

2.     The Certificate of Incorporation of the Corporation. which was filed by the Secretary of State of Delaware on May 16, 1996, is hereby corrected as permitted by Sections 103(f) of the General Corporation Law of the State of Delaware.

 

3.     The defect to be corrected in said instrument is as follows: it has been discovered that the description of the powers of the Board of Directors of the Corporation with respect to the Preferred Stock contained in the Article Fourth was omitted.

 

4.      The following sets forth the corrected Article Fourth in its entirety:

 

Fourth. “The total number of shares of capital stock which the Corporation shall have authority to issue is: Sixteen Million (16,000,000) shares of which Fifteen Million (15,000,000) shall be shares of Common Stock par value $.0001 per share (the “Common Stock'') and One Million (1,000,000) shares of preferred stock par value $.0001 per share (the “Preferred Stock”).

 

The shares of Preferred Stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to and imposed upon the Preferred Stock or any series therof with respect to any wholly unissued series of Preferred Stock. The Preferred Stock of the Corporation shall be issued by the Board of Directors of the Corporation in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations restrictions as the Board of Directors of the Corporation may determine, from time to time.” 

 

Signed on June 25, 2001

 

 

/s/ Timothy J. Keating                                            

 

Timothy J. Keating, Chief Executive Officer

 

 

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:00 AM 06/26/2001

010311403 - 2624514

 

 

CERTIFICATE OF RENEWAL AND REVIVAL OF

CERTIFICATE OF INCORPORATION

OF

IMSCO TECHNOLOGIES, 1NC.

 

It is hereby certified that:

 

1.     The name of the corporation (hereinafter called the “Corporation”) is IMSCO Technologies, Inc.

 

2.     The corporation was organized under the provisions of the General Corporation Law of the State of Delaware. The date of filing of its original certificate of incorporation with the Secretary of State of the State of Delaware is May 16, 1996.

 

3. The address, including the street, city, and county, of the registered office of the Corporation in the State of Delaware and the name of the registered agent at such address are as follows: Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, County of New Castle.

 

4.     The Corporation hereby procures a renewal and revival of its certificate of incorporation, which became inoperative by law on March 1, 1998 for failure to file annual reports and non-payment of taxes payable to the State of Delaware.

 

5.     The certificate of incorporation of the Corporation, which provides for and will continue to provide for, perpetual duration, shall, upon the filing of this Certificate of Renewal and Revival of the Certificate of Incorporation in the Department of State of the State of Delaware, be renewed and revived and shall become fully operative on February 28, 1998.

 

6.     This Certificate of Renewal and Revival of the Certificate of Incorporation is filed by authority of the duly elected directors as prescribed by Section 312 of the General Corporation Law of the Stale of Delaware.

 

Signed on June 25, 2001

 

 

 

/s/ Timothy J. Keating                                            

 

Timothy J. Keating, Chief Executive Officer

 

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:00 AM 07/ 05/ 2001

010311403 - 2624514

 

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

 

OF

 

SERIES B AND SERIES C CONVERTIBLE PREFERRED STOCK 

($0.0001 PAR VALUE PER SHARE)

 

OF

 

IMSCO TECHNOLOGIES, INC.

 

 

Pursuant to Section 151(g) of the

General Corporation Law of the

State of Delaware

 

 

 

Timothy J. Keating, Chief Executive Officer and Secretary, of IMSCO Technologies, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware,

 

DOES HEREBY CERTIFY :

 

FIRST: The Certificate of Incorporation (the “Certificate of Incorporation”) of the Corporation authorizes the issuance of 1,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”), in one or more series.

 

SECOND: A resolution providing for and in connection with the issuance of the Preferred Stock was duly adopted by the Board of Directors pursuant to authority expressly conferred on the Board of Directors by the provisions of the Certificate of Incorporation as aforesaid, which resolution provides as follows:

 

RESOLVED: that the Board of Directors, pursuant to authority expressly vested in it by ARTICLE 4 of the Certificate of Incorporation (the “Certificate of Incorporation”) of Imsco Technologies, Inc. (the “Corporation”), hereby authorizes the issuance of two series of convertible preferred stock of the Corporation and hereby establishes the voting powers, designations, preferences and relative, participating, optional and other rights, and the qualifications, limitations and restrictions appertaining thereto in addition to those set fo11h in such Certificate of Incorporation (or otherwise provided by law) as follows (the following, referred to hereinafter as “this resolution” or “this Certificate of Designations”, is to be filed as part of a Ce1tificate of Designations under Section 151(g) of the General Corporation Law of the State of Delaware):

 

 

 

1.     General

 

(a)     Designation and Number. The designations of convertible preferred stock created by this resolution shall be Series B Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series B Preferred Stock”), and Series C Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series C Preferred Stock”). The number of shares of Series B Preferred Stock which the Corporation shall be authorized to issue shall be eight hundred fifty thousand (850,000) shares, and the number of shares of Series C Preferred Stock which the Corporation shall be authorized to issue shall be one hundred fifty thousand (150,000) shares

 

(b)     Priority. The Series C Preferred Stock shall, with respect to rights on liquidation, dissolution or winding up, as a group, rank senior to all other equity securities of the Corporation, including the Series B Preferred Stock and the Common Stock and any other series or class of the Corporation 's Preferred or Common Stock and be entitled to the Liquidation Preference, now or hereafter authorized. The Series B Preferred Stock shall, with respect to rights on liquidation, dissolution or winding up, rank (i) on a parity with the Common Stock (as if the Series 8 Preferred Stock had been converted into Common Stock), and (ii) junior to any other class of Preferred Stock established after the Original Issue Date by the Board of Directors of the Corporation the terms of which expressly provide that such class will rank senior, as to liquidation rights or otherwise, to the Series B Preferred Stock (collectively referred to as “Senior Securities”).

 

2.     Certain Definitions.

 

(a)     For purposes of this Certificate of Designations , the following terms shall have the meanings indicated below:

 

Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of California are authorized or obligated by law or executive order to close.

 

Board of Directors” means the Board of Directors of the Corporation.

 

Common Stock” means the Corporation 's Common Stock, as presently authorized by the Certificate of Incorporation and as such Common Stock may hereafter be changed or for which such Common Stock may be exchanged after giving effect to the terms of such change or exchange (by way of reorganization , recapitalization , merger, consolidation or otherwise).

 

Junior Stock” shall mean any capital stock of the Corporation, including without limitation the Common Stock, ranking junior to either the Series B or Series C Preferred Stock, as the case may be, with respect to dividends, distribution in liquidation or any other preferences,

rights and powers.

 

Liquidation Preference” shall mean with respect to the Series C Preferred Stock $31.25 per share of Series C Preferred Stock plus any accrued and unpaid dividends on such shares.

 

Original Issue Date” shall mean the first date on which shares of Series B or Series C Preferred Stock, as the context requires, are issued.

 

 

 

Person” or “person” means an individual, corporation, partnership, limited liability company, firm, association, joint venture, trust, unincorporated organization, government, governmental body, agency, political subdivision or other entity.

 

Preferred Stock” means the Corporation's Preferred Stock, as presently authorized by the Certificate of Incorporation and as such Preferred Stock may hereafter be changed or for which such Preferred Stock may be exchanged after giving effect to the terms of such change or exchange (by way of reorganization, recapitalization, merger, consolidation or otherwise).

 

Senior Securities” shall have the meaning set forth in Section l(b) above.

 

Subsidiary”, with respect to any Person, means any corporation, association or other entity controlled by such Person. For purposes of this definition “control”, with respect to any Person, shall mean possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

 

(b)     The words “hereof”, “herein” and “hereunder” and other words of similar import refer to this Certificate of Designations ac; a whole and not to any particular Section or other subdivision.

 

(c)     References herein to the Certificate of Incorporation include such Certificate as amended by this Certificate of Designations.

 

3.     Voting Rights.

 

(a)     General. Except as may be required by law,

 

(i)     the holders of Series B and Series C Preferred Stock shall have full voting rights and powers, and they shall be entitled to vote on all matters as to which holders of Common Stock shall be entitled to vote, voting together with the holders of Common Stock as one class; and

 

(ii)     each holder of shares of Series B and Series C Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Series B or Series C Preferred Stock would be converted (based on the Conversion Rate then in effect) on the record date for the vote which is being taken. Fractional votes shall not, however, be pe1mitted and any fractional voting rights resulting from the above formula (after aggregating all shares of Common Stock into which shares of Series B or Series C Preferred Stock held by each holder would be converted, assuming an automatic conversion under SECTION 5(a)) shall be rounded upward to the nearest whole number.

 

(b)     Actions Not Requiring Holders' Consent. The Corporation in its sole discretion may without the vote or consent of any holders of the Series B or Series C Preferred Stock amend or supplement this Certificate of Designations:

 

(i)     to cure any ambiguity, defect or inconsistency which does not adversely affect the rights of the holders of Series B or Series C Preferred Stock; or

 

 

 

(ii) to make any change that would provide any additional rights or benefits to all the holders of the Series B or Series C Preferred Stock, other than additional rights or benefits that would impar the senior rights of the Series C Preferred Stock set forth herein.

 

(c)     Meetings; Communications The holders of shares of Series B and Series C Preferred Stock shall be entitled to receive in the same manner and at the same times as the holders of the Common Stock, notice of all meetings of stockholders of the Corporation and all communications sent by the Corporation to its stockholders.

 

4.     Dividend Rights.

 

(a)     General. If any dividends or other distributions (including, without limitation, any distribution of cash, indebtedness, assets or other property, but excluding any dividend payable in shares of its common stock) on Common Stock are so permitted and declared, such dividends shall be paid pro rata to the holders of the Common Stock and the Series B and Series C Preferred Stock. The holders of the Series B and Series C Preferred Stock shall receive a dividend in an amount that would be payable to such holder assuming that such shares had been converted on the record date for determining the stockholders of the Corporation entitled to receive payment of such dividends into the maximum number of shares of Common Stock into which such shares of Preferred Stock are then convertible as provided in Section 5; provided, however, that if the Corporation declares and pays a dividend on the Common Stock consisting of Common Stock to which the anti-dilution adjustment in subparagraph (i) of Section 5(e) is applicable and for which an adjustment thereunder is made, then no such dividend will be paid to holders of Series B or Series C Preferred Stock, and in lieu thereof the anti-dilution adjustment in subparagraph (i) of Section 5(e) shall apply. No dividends shall he paid or declared and set apart for payment on the Common Stock unless and until dividends of at least the same per share amount (assuming the Series B and Series C Preferred Stock had been converted into Common Stock) have been, or contemporaneously are, paid or declared and set apart for payment on the Series B and Series C Preferred Stock. Holders of the Series B and Series C Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of the dividends as herein described . Series B Preferred Stock shall rank junior , as to dividends, to any other class of Preferred Stock established after the Original Issue Date by the Board of Directors of the Corporation the terms of which expressly provide that such class will rank senior, as to dividends to the Series B and Series C Preferred Stock.

 

(b)     Senior Securities. If at any time any dividends on Senior Securities shall be in default, in whole or in part, no dividend shall be paid or declared and set apart for payment on the Series B Preferred Stock or Common Stock unless and until all accumulated and unpaid dividends with respect to the Senior Securities, including the full dividend for the then-current dividend period , shall have been paid or declared and set apart for payment, without interest.

 

5.     Conversion of Series B and Series C Preferred Stock into Common Stock.

 

(a)     Automatic Conversion of Series B Preferred Stock. All shares of Series B Preferred Stock then outstanding shall automatically convert without any further action of the holders thereof into shares of Common Stock at the Conversion Rate immediately upon (i) the filing of an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware after the Original Issue Date to (a) increase the authorized shares of Common Stock

 

 

 

to fifty million (50,000,000), (b) increase the authorized shares of Preferred Stock to five million (5,000,000) and (c) change the name of the Corporation to Global Sports & Entertainment, Inc. or such other name acceptable to the management of the Corporation and (ii) the approval and effectiveness of a one for four reverse stock split of the outstanding shares of Common Stock of the Corporation ((i) and (ii) collectively referred to herein as the “Series B Trigger Events”).

 

(b)     Automatic Conversion of Series C Preferred Stock. All shares of Series C Preferred Stock then outstanding shall automatically convert without any further action of the holders thereof into shares of Common Stock at the Conversion Rate immediately upon the earlier of (i) the third anniversary of Original Issue Date of the Series C Preferred Stock, or (ii) the completion of the Corporation's next public offering with gross offering proceeds of not less than $25,000,000.

 

(c)     Optional Conversion of Series C Preferred Stock. Each share of Series C Preferred Stock shall be convertible at any time, at the option of the holders thereof, into fully paid and nonassessable shares of Common Stock at the Conversion Rate.

 

(d)     Number of shares of Common Stock Issuable upon Conversion. The number of shares of Common Stock to be issued upon conversion of shares of any Series B or Series C Preferred Stock shall be issued at the rate (the “Conversion Rate”) of 125 (the “Conversion Rate Factor”) shares of Common Stock for every one share of Series B or Series C Preferred Stock (without giving effect to the contemplated 1 for 4 reverse stock split referred to in Section 5(a) above). The Conversion Rate shall be subject to adjustment from time to time in accordance with subpart (e) of this Section 5.

 

(e)     Antidilution Adjustments. The Conversion Rate shall be adjusted from time to time in certain cases as follows:

 

(i)     Dividend, Subdivision, Combination or Reclassification of Common Stock. If the Corporation shall, at any time or from time to time, (a) declare a dividend on the Common Stock payable in shares of its capital stock (including Common Stock), (b) subdivide the outstanding Common Stock, (c) combine the outstanding Common Stock into a smaller number of shares, or (d) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing corporation), then in each such case, the Conversion Rate in effect at the time of the record date for such dividend or at the effective date of such subdivision, combination or reclassification shall be adjusted to that rate which will permit the number of shares of Common Stock into which the Preferred Stock may be converted to be increased or reduced in the same proportion as the number of shares of Common Stock are increased or reduced in connection with such dividend, subdivision, combination or reclassification. Any such adjustment shall become effective immediately after the record date of such dividend or the effective date of such subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. In the event, if a dividend is declared, such dividend is not paid, the Conversion Rate shall be adjusted to the Conversion Rate in effect immediately prior to the record date of such dividend.

 

(ii)     Mergers, Consolidations and Other Reorganizations. In the event of any capital reorganization of the Corporation, any reclassification of the stock of the Corporation

 

 

 

 

(other than a change in par value or from no par value to par value or from par value to no par value or as a result of a stock dividend or subdivision, split-up or combination of shares), any consolidation or merger of the Corporation, or any sale, lease, conveyance to another person of the property of the Corporation pursuant to which the Corporation's Common Stock is conve1ied into other securities, cash or assets, each share of Series B and Series C Preferred Stock shall after such reorganization, reclassification, consolidation, merger or conveyance be convertible into the kind and number of shares of stock or other securities or property of the Corporation or of the corporation resulting from such consolidation or surviving such merger to which the holder of the number of shares of Common Stock deliverable (immediately prior to the time of such reorganization, reclassification, consolidation or merger) upon conversion of such share of Series B or Series C Preferred Stock would have been entitled upon such reorganization, reclassification, consolidation, merger or conveyance. The provisions of this clause shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers or conveyances.

 

(iii)     Additional Adjustment for the Series C Preferred Stock Based on the Issuance of Additional Common Stock. If the Corporation shall, at any time or from time to time, directly or indirectly, sell or issue shares of Common Stock (regardless of whether originally issued or from the Corporation 's treasury), or rights, options, warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Common Stock (excluding shares issued in any of the transactions described in SECTION 5(e)(i) or (ii)) at a price per share (“Sale Price”) of Common Stock (determined, in the case of rights, options, warrants or convertible or exchangeable securities, by dividing (X) the total consideration received or receivable by the Corporation in consideration of the sale or issuance of such rights, options, warrants or convertible or exchangeable securities, plus the total minimum consideration payable to the Corporation upon exercise or conversion or exchange thereof, by (Y) the total maximum number of shares of Common Stock covered by such rights, options, warrants or convertible or exchangeable securities) lower than $0.1875 per share (without giving effect to the contemplated 1 for 4 reverse stock split referred to in SECTION 5(a) above) (“Base Price”) (the Base Price shall be adjusted to reflect stock splits, reorganizations and the like), then the Conversion Rate for the Series C Preferred Stock shall be increased by multiplying the Conversion Rate Factor by a fraction the numerator of which is the Base Price and the denominator of which is the Sale Price. If the Corporation shall sell or issue shares of Common Stock for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then in determining the Sale Price and the “consideration” received or receivable by or payable to the Corporation shall be determined in good faith by the Board of Directors. The determination of whether any adjustment is required under this SECTION 5(e)(iii) by reason of the sale and issuance of rights, options, warrants or convertible or exchangeable securities and the amount of such adjustment, if any, shall be made only at the time of such issuance or sale and not at the subsequent time of issuance or sale of Common Stock upon the exercise of such rights to subscribe or purchase; provided, however, that if such rights, options, warrants or convertible or exchangeable securities shall expire without exercise prior to any conversion of the Preferred Stock pursuant to Section 5, then any adjustment made under this SECTION 5(e)(iii) with respect thereto shall be reversed.

 

(v) Fractional Shares. Notwithstanding any other provision of this Certificate of Designations, the Corporation shall not be required to issue fractions of shares upon conversion of any shares of Preferred Stock or to distribute certificates which evidence

 

 

 

fractional shares. In lieu of fractional shares of Common Stock, the Corporation shall round upward any fractional shares of Common Stock to the nearest whole number

 

6.     Liquidation, Dissolution or Winding Up.

 

(a)     Except as otherwise provided in subpart (b) below, in the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, before any distribution or payment to holders of Junior Stock or Series B Preferred Stock may be made, the holder of each share of Series C Preferred Stock shall be entitled to be paid an amount equal to the Liquidation Preference of such share. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, and after the payment in full of the Liquidation Preference to the holders of the Series C Preferred Stock, the holders of the Series B Preferred Stock and Series C Preferred Stock shall participate with the holders of the Common Stock on distributions or payments in proportion to their holdings assuming that such shares of Preferred Stock had been converted, on the record date for determining the stockholders entitled to receive distributions or payments, into the maximum number of shares of Common Stock into which such shares of Preferred Stock are then convertible as provided in Section 5.

 

(b)     It upon any liquidation, dissolution or winding up of the Corporation, the assts of the Corporation available for distribution to the holders of the Series C Preferred Stock, as a group, shall be insufficient to permit payment of the Liquidation Preference payable in full to the holders of such series, then all of the assets available for distribution to holders of such series shall be distributed among and paid to such holders ratably in proportion to the amounts that would be payable to such holders if such assets were sufficient to permit payment in full. A consolidation or merger of the Corporation into or with another corporation or corporations in which the Corporation is not the successor, or the sale of all or substantially all of the assets of the Corporation to another corporation or any other entity, shall not be deemed a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6.

 

7.     Notices. Except as otherwise expressly provided herein, all notices, requests, demands, consents and other communications hereunder shall be in writing and shall be delivered personally, sent by reputable express courier services (charges prepaid) or sent by registered or certified mail, return receipt requested, postage prepaid and shall be deemed to have been given when so delivered, sent or deposited in the U.S. mail (i) to the holder of a share of Series B or Series C Preferred Stock, at the holder's address as it appears in the records of the Corporation or at such other address as any such holder may otherwise indicate in a written notice delivered to the Corporation or (ii) to the Corporation, at its principal executive offices or at such other address as the Corporation may otherwise indicate in a written notice delivered to each holder of shares of Series B and Series C Preferred Stock. All such notices, requests, demands, consents and other communications shall be deemed to have been received two (2) days after so delivered, sent or deposited . Whenever any notice is required to be given hereunder, such notice shall be deemed given and such requirement satisfied only when such notice is delivered or, if sent by facsimile, when received, unless otherwise expressly specified or permitted by the terms hereof.

 

8.     Payment. All amounts payable in cash with respect to the Series B and Series C Preferred Stock shall be payable in United States dollars at the principal executive

 

 

 

office of the Corporation or, at the option of the Corporation, by check mailed to such holder of the Series B or Series C Preferred Stock at its address set forth in register of holders of Series B and Series C Preferred Stock maintained by the Corporation. Any payment on the Series B and Series C Preferred Stock due on any day that is not a Business Day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such due date.

 

9.     Exclusion of Other Rights. Except as may otherwise be required by law, the shares of Series B and Series C Preferred Stock shall not have any voting powers, references and relative, participating, optional or other special rights, other than those specifically set forth in this Certificate of Designations (as such Certificate of Designations may be amended as permitted herein from time to time) and in the Corporations Certificate of Incorporation. The shares of Series B and Series C Preferred Stock shall have no preemptive or subscription rights.

 

10.     Headings of Subdivisions. The headings of the various subdivisions hereof a.re for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

 

11.     Severability of Provisions. If any voting powers, preferences and relative, participating. optional and other special rights of the Series B and Series C Preferred Stock and qualifications, limitations and restrictions thereof set forth in this Certificate of Designations (as it may be amended from time to time as permitted herein) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other voting powers, preferences and relative, participating, optional and other special rights of Series 8 and Series C Preferred Stock .and qualifications, limitations and restrictions thereof set forth in this Certificate of Designations (as so amended) which can be given effect without the invalid, unlawful or unenforceable voting powers, preferences and relative. participating, optional and other special rights of Series B and Series C Preferred Stock and qualifications, limitations and restrictions thereof shall, nevertheless, remain in full force and effect, and no voting powers .preferences and relative, participating. optional or other special rights of Series B and Series C Preferred Stock and qualifications, limitations and restrictions thereof herein set forth shall be deemed dependent upon any other such voting powers, preferences and relative, participating. optional or other special rights of Series B and Series C Preferred Stock and qualifications, limitations and restrictions thereof unless so expressed herein

 

IN WITNESS WHEREOF, IMSCO Technologies, Inc. has caused this Certificate of Designations to be signed by its duly authorized Chief Executive Officer and its Secretary this 5th day of July, 2001 .

 

 

  IMSCO TECHNOLOGIES, INC.
     
     

 

By:

/s/ Timothy J. Keating                                   

   

Timothy J. Keating,

   

Chief Executive Officer and Secretary

 

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:00 AM 07/06/2001

010327776 - 2624514

 

 

CERTIFICATE OF CORRECTION OF

CERTIFICATE OF DESIGNATIONS PREFERENCES AND RIGHTS

 

OF

 

SERIES B AND SERIES C CONVERTIBLE PREFERRED STOCK ($0.0001 PAR VALUE PER SHARE)

 

OF

 

IMSCO TECHNOLOGIES , INC.

 

 

It is hereby certified that:

 

1.      The name of the corporation (hereinafter called the “corporation) is Imsco Technologies. Inc.

 

2.     The Certificate of Designations, Preferences and Rights of Series B and Series C Convertible Preferred Stock of the corporation, which was filed by the Secretary of State of Delaware on July 5, 2001, is hereby corrected.

 

3.     The inaccuracy to be corrected in said instrument is as follows:

 

In Section 2(a), the definition of “Liquidation Preference” incorrectly states chat the preference is $31.25 per share of Series C Preferred Stock plus any accrued and unpaid dividends on such shares.

 

4.     The portion of the instrument incorrected form is as follows:

 

Liquidation Preference” shall mean with respect to the Series C Preferred Stock $23.4375 per share of Series C Preferred Stock plus any accrued and unpaid dividends on such shares.

 

 

Signed on: July 6, 2001

 

/s/ Timothy J. Keating                                      

Timothy J. Keating, President

 

 

 

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 01:31 PM 08/27/2001

010422661 - 2624514

 

 

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION 

OF

IMSCO TECHNOLOGIES, INC.

 

 

IMSCO Technologies, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “Corporation''), does hereby certify:

 

I. That by Unanimous Written Consent of the Board of Directors of the Corporation, resolutions were duly adopted setting forth proposed amendments of the Certificate of Incorporation of the Corporation, declaring said amendments to be advisable and calling a meeting of the stockholders of the Corporation for consideration, thereof. The resolution setting forth the proposed amendments is as follows:

 

RESOLVED, that the Certificate of Incorporation of the Corporation shall be amended as follows:

 

Article FIRST of the Corporation's Certificate of Incorporation is amended to read in its entirety as follows:

 

FIRST:     The name of the corporation is Global Sports & Entertainment, Inc.(the “Corporation”).”

 

Article FOURTH of the Corporation's Certificate of Incorporation is amended to read in its entirety as follows:

 

FOURTH : This Corporation is authorized to issue two classes of shares designated respectively “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 5,000,000 and each such share shall have a par value of $.0001. Every four (4) shares of Common Stock outstanding on the effective date of this amendment shall be automatically converted into one (1) shares of Common Stock and in lieu of fractional shares, each share so converted shall be rounded up to the next highest number of full shares of Common Stock. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution . or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.”

 

 

 

 

II.     That thereafter, pursuant to resolution of its board of directors. a special meeting of the stockholders of the Corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendments.

 

III.     That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF. the undersigned hereby duly executes this Certificate of Amendment hereby declaring and certifying under penalty of perjury that this is the act and deed of the Corporation and the facts herein stated are true, this 27th day of August, 2001 .

 

 

IMSCO TECHNOLOGIES, INC.

 

By: /s/ Douglas R. Miller                                       

       Douglas R. Miller, President

 

 

 

 

 

 

 

STATE of DELAWARE

CERTIFICATE of AMENDMENT of

CERTIFICATE of INCORPORATION

  

First: That at a meeting of the Board of Directors of Global Sports & Entertainment. Inc.   resolutions were duly adopted setting forth a proposed amendn1ent of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows;

 

Resolved, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered “First” so that, as amended, said Article shalt be and read as follows:

 

FIRST: The name of the corporation is GWIN. Inc. (the “Corporation”

 

Second: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.

 

Third: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

Fourth: That the capital of said corporation shall not be reduced under or by reason of said amendment.

 

 

 

       /s/ Douglas Miller                                

 

By: Douglas Miller

 

Title: President

 

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:00 AM 08/22/2002

020532 710 - 2624514

 

 

 

POLLET, RICHARDSON & PATEL

A Law Corporation

10900 Wilshire Boulevard

Suite 500

Los Angeles, California 90014

Telephone (310) 208-1182

Fax (310) 208-1154

 

 

FACSIMILE TRANSMITTAL LETTER

 

 

Dear Sir or Madam:

 

Global Sports & Entertainment, Inc. hereby release the name “GWIN Inc.” to Incorporating Services effective immediately.

 

 

 

Very truly yours,

 

/s/ Douglas R. Miller          

 

Douglas R. Miller

 

President

 

 

EX_218233IMG001.JPG

 

 

 

STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

OF CERTIFICATE OF INCORPORATION

 


A corporation or organized and existing under and by virtue of the General Corporation Law of the State of Delaware:

 

DOES HEREBY CERTIFY:

 

FIRST: That at meeting of the Board of Directors of GWIN, Inc. resolutions were duly adopted setting forth the proposed amendment of the Certificate of Incorporation of said Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:

 

RESOLVED: that the Certificate of Incorporation of this corporation be amended by changing the Article, and it hereby is, amended to restate Article 4 to read in full as follows: “The total number of shares of capital stock which GWIN, Inc. has the authority to issue is l00,000,000 shares of common stock of a par value of .001 dollar each.”

 

SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was dully called and held upon notice in accordance with section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statue were voted in favor of the amendment.

 

THIRD: That said amendment was duly adopted in accordance with the provisions of Sections and 242 of the General Corporation. Law of the State of Delaware.

 

FORTH: That the capital of the Corporation shall not be reduced under or by reason of said amendment.

 

IN WITNESS WHEREOF, GWIN Inc. has caused this certificate to be signed by Jeffrey Johnson, its Chief Financial Officer. this 1st day of September, 2003.

 

 

By: /s/ Jeffrey Johnson                                

   
 

Title: Chief Financial Officer                      

   
 

Name: Jeffrey Johnson                                

 

 

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

Delivered 03:58 PM 09/24/2003

FILED 03:58 PM 09/24/2003

SRV 030615828 - 2624514 FILE

  

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 06:10 PM 03/09/2004

FILED 05:59 PM 03/09/2004

SRV 040177438 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

GWIN, INC.

a Delaware Corporation

 

 

GWIN, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

 

DOES HEREBY CERTIFY:

 

FIRST: That at a meeting of the Board of Directors of GWIN, Inc. resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:

 

RESOLVED: That the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered ''Fourth” so that, as amended said Article shall be and read as follows:

 

“FOURTH: This Corporation is authorized to issue two classes of shares designated respectively “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 150,000,000 and each such share shall have a par value of $.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 5,000,000 and each such share shall have a par value of $.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.”

 

SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation law of the state of Delaware at which

 

 

 

 

meeting the necessary number of shares as required by statute were voted in favor of the amendment.

 

THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, GWIN, Inc. has caused this certificate to be signed by Jeff Johnson, its Chief Financial Officer, thjs 9th day of March 2004.

 

 

 

 

GWIN, INC.

   
 

By: /s/ Jeff Johnson                                     

 

      Name: Jeff Johnson

 

      Title: Chief Financial Officer

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 04 :16 PM 08/03/2006

FILED 04 :16 PM 08/03/2006

SRV 060730553 - 2624514 FILE

 

 

CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS

 

OF

 

SERIES A CONVERTIBLE PREFERRED STOCK

 

($0.0001 PAR VALUE PER SHARE)

 

OF

 

GWIN, INC.

 

Pursuant to Section 151(g) of the

General Corporation Law of the

State of Delaware

 

Jeff Johnson, Chief Financial Officer of Gwin, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the Delaware General Corporation Law,

 

DOES HEREBY CERTIFY:

 

FIRST: The Certificate of Incorporation (the “Certificate of Incorporation”) of the Corporation authorizes the issuance of 5,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”), in one or more series.

 

SECOND: A resolution providing for and in connection with the issuance of the Preferred Stock was duly adopted by the Board of Directors pursuant to authority expressly conferred on the Board of Directors by the provisions of the Certificate of Incorporation as aforesaid, which resolution provides as follows:

 

RESOLVED: that the Board of Directors, pursuant to authority expressly vested in it by ARTICLE FOURTH of the Certificate of Incorporation (the “Certificate of Incorporation”) of Gwin, Inc. (the “Corporation”), hereby authorizes the issuance of one series of convertible preferred stock of the Corporation and hereby establishes the voting powers, designations, preferences and relative, participating, optional and other rights, and the qualifications, limitations and restrictions appertaining thereto in addition to those set forth in such Certificate of Incorporation (or otherwise provided by law) as follows (the following, referred to hereinafter as “this resolution” or “this Certificate of Designation”, is to be filed as part of a Certificate of Designation under Section 151(g) of the Delaware General Corporation Law:

 

 

1.

General.

 

(a)     Designation and Number. The designation of convertible preferred stock created by this resolution shall be Series A Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series A Preferred Stock”). The number of shares of Series A Preferred Stock which the Corporation shall be authorized to issue shall be Four Hundred Sixty Two Thousand Two Hundred Twenty-Two (462,222) shares.

 

 

 

(b)     Priority. The Series A Preferred Stock shall, with respect to rights on liquidation, dissolution or winding up, rank (i) on a parity with the Common Stock (as if the Series A Preferred Stock had been converted into Common Stock), and (ii) junior to any other class of Preferred Stock established after the Original Issue Date by the Board of Directors of the Corporation, the terms of which expressly provide that such class will rank senior, as to liquidation rights or otherwise, to the Series A Preferred Stock (collectively referred to as “Senior Securities”).

 

 

2.

Certain Definitions.

 

(a)     For purposes of this Certificate of Designation, the following terms shall have the meanings indicated below:

 

Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of Nevada are authorized or obligated by law or executive order to close.

 

Board of Directors” means the Board of Directors of the Corporation.

 

Common Stock” means the Corporation's Common Stock, par value $0.0001 per share, as presently authorized by the Certificate of Incorporation and as such Common Stock may hereafter be changed or for which such Common Stock may be exchanged after giving effect to the terms of such change or exchange (by way of reorganization, recapitalization, merger, consolidation or otherwise).

 

Conversion Rate” has the meaning set forth in Section 5 (b) herein.

 

Original Issue Date” means the first date on which shares of Series A Preferred Stock are issued.

 

Person” or “person” means an individual, corporation, partnership, limited liability company, firm, association, joint venture, trust, unincorporated organization, government, governmental body, agency, political subdivision or other entity.

 

Preferred Stock” means the Corporation's Preferred Stock, as presently authorized by the Certificate of Incorporation and as such Preferred Stock may hereafter be changed or for which such Preferred Stock may be exchanged after giving effect to the terms of such change or exchange (by way of reorganization, recapitalization, merger, consolidation or otherwise).

 

Sale” means the consolidation or merger of the Corporation into or with another corporation or corporations in which the Corporation is not the successor, or the sale of all or substantially all of the assets of the Corporation to another corporation or entity.

 

Senior Securities” has the meaning set forth in Section I (b) above.

 

Series A Preferred Stock” has the meaning set forth in Section l(a) herein.

 

Subsidiary'', with respect to any Person, means any corporation, association or other entity controlled by such Person. For purposes of this definition “control'', with respect to any

 

 

 

Person, shall mean possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

 

(b)     The words “hereof”, “herein” and “hereunder” and other words of similar import refer to this Certificate of Designation as a whole and not to any particular Section or other subdivision.

 

(c)     References herein to the Certificate of Incorporation include such certificate as amended by this Certificate of Designation .

 

 

3.

Voting Rights.

 

(a)     General. Except as may be required by law,

 

(i)     the holders of Series A Preferred Stock shall have full voting rights and powers, and they shall be entitled to vote on a11 matters as to which holders of Common Stock shall be entitled to vote, voting together with the holders of Common Stock as one class; and

 

(ii) holders of shares of Series A Preferred Stock shall be entitled to cast, for each share of Series A Preferred Stock, a number of votes equal to two hundred fifty (250) shares of Common Stock.

 

(b)     Actions Not Requiring Holders' Consent. The Corporation, in its sole discretion may, without the vote or consent of any holders of the Series A Preferred Stock, amend or supplement this Certificate of Designation:

 

(i)     to cure any ambiguity, defect or inconsistency which does not adversely affect the rights of the holders of Series A Preferred Stock; or

 

(ii)     to make any change that would provide any additional rights or benefits to all the holders of the Series A Preferred Stock.

 

(c)     Meetings: Communications. The holders of shares of Series A Preferred Stock shall be entitled to receive in the same manner and at the same times as the holders of the Common Stock, notice of all meetings of stockholders of the Corporation and all communications sent by the Corporation to its stockholders.

 

 

4.

Dividend Rights.

 

(a)     General. If any dividends or other distributions (including, without limitation, any distribution of cash, indebtedness, assets or other property, but excluding any dividend payable in shares of its common stock) on Common Stock are so permitted and declared, such dividends shall be paid pro rata to the holders of the Common Stock and the Series A Preferred Stock. The holders of the Series A Preferred Stock shall receive a dividend in an amount that would be payable to such holder assuming that such shares had been converted on the record date for determining the stockholders of the Corporation entitled to receive

 

 

 

payment of such dividends into the maximum number of shares of Common Stock into which such shares of Preferred Stock are then convertible as provided in Section 5. No dividends shall be paid or declared and set apart for payment on the Common Stock unless and until dividends of at least the same per share amount (assuming the Series A Preferred Stock had been converted into Common Stock) have been, or contemporaneously are, paid or declared and set apart for payment on the Series A Preferred Stock. Holders of the Series A Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of the dividends as herein described. Series A Preferred Stock shall rank junior , as to dividends, to any other class of Preferred Stock established after the Original Issue Date by the Board of Directors of the Corporation the terms of which expressly provide that such class will rank senior, as to dividends to the Series A Preferred Stock.

 

(b) Senior Securities. If at any time any dividends on Senior Securities shall be in default, in whole or in part, no dividend shall be paid or declared and set apart for payment on the Series A Preferred Stock or Common Stock unless and until all accumulated and unpaid dividends with respect to the Senior Securities, including the full dividend for the then-current dividend period, shaJl have been paid or declared and set apart for payment, without interest.

 

 

5.

Conversion of Series A Preferred Stock into Common Stock.

  

(a)     Automatic Conversion of Series A Preferred Stock. All shares of Series A Preferred Stock then outstanding shall automatically convert without any further action of the holders thereof into shares of Common Stock at the Conversion Rate (as defined below) immediately upon the earlier of (i) thirty-six (36) months after the Original Issue Date, (ii) at the option of the holders thereof or (iii) upon the Sale of the Corporation.

 

(b)     Number of Shares of Common Stock Issuable Upon Conversion. The number of shares of Common Stock to be issued upon conversion of shares of any Series A Preferred Stock shall be issued at the rate of ten (10) shares of Common Stock for every one share of Series A Preferred Stock (the “Conversion Rate”).

 

6.     Liquidation, Dissolution or Winding Up. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred Stock shall participate with the holders of the Common Stock on distributions or payments in proportion to their holdings assuming that such shares of Preferred Stock had been converted, on the record date for determining the stockholders entitled to receive distributions or payments, into the maximum number of shares of Common Stock into which such shares of Preferred Stock are then convertible as provided in Section 5.

 

7.     Notices. Except as otherwise expressly provided herein, all notices, requests, demands, consents and other communications hereunder shall be in writing and shall be delivered personally, sent by reputable express courier services (charges prepaid) or sent by registered or certified mail, return receipt requested, postage prepaid and shall be deemed to have been given when so delivered, sent or deposited in the U.S. mail (i) to the holder of a share of Series A Preferred Stock, at the holder's address as it appears in the records of the Corporation or at such other address as any such holder may otherwise indicate in a written notice delivered to the Corporation or (ii) to the Corporation, at its principal executive offices or at such other

 

 

 

 

address as the Corporation may otherwise indicate in a written notice delivered to each holder of shares of Series A Preferred Stock. All such notices, requests, demands, consents and other communications shall be deemed to have been received two (2) days after so delivered, sent or deposited. Whenever any notice is required to be given hereunder, such notice shall be deemed given and such requirement satisfied only when such notice is delivered or, if sent by facsimile, when received, unless otherwise expressly specified or permitted by the terms hereof.

 

8.     Payment. Any amounts payable in cash with respect to the Series A Preferred Stock shall be payable in United States dollars at the principal executive office of the Corporation or, at the option of the Corporation, by check mailed to such holder of the Series A Preferred Stock at its address set forth in the register of holders of Series A Preferred Stock maintained by the Corporation. Any payment on the Series A Preferred Stock due on any day that is not a Business Day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such due date.

 

9.     Exclusion of Other Rights. Except as may otherwise be required by law, the shares of Series A Preferred Stock shall not have any voting powers, preferences and relative, participating, optional or other special rights, other than those specifically set forth in this Certificate of Designation (as such Certificate of Designation may be amended as permitted herein from time to time) and in the Corporation's Certificate of Incorporation. The shares of Series A Preferred Stock shall have no preemptive or subscription rights.

 

10.     Headings of Subdivisions. The headings of the various subdivisions hereof are for convenience of reference only and shaJJ not affect the interpretation of any of the provisions hereof.

 

11.     Severability of Provisions. If any voting powers, preferences and relative, participating, optional and other special rights of the Series A Preferred Stock and qualifications, limitations and restrictions thereof set forth in this Certificate of Designation (as it may be amended from time to time as permitted herein) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other voting powers, preferences and relative, participating, optional and other special rights of Series A Preferred Stock and qualifications, limitations and restrictions thereof set forth in this Certificate of Designation (as so amended) which can be given effect without the invalid, unlawful or unenforceable voting powers, preferences and relative, participating , optional and other special rights of Series A Preferred Stock and qualifications, limitations and restrictions thereof shall, nevertheless, remain in full force and effect, and no voting powers, preferences and relative, participating, optional or other special rights of Series A Preferred Stock and qualifications, limitations and restrictions thereof herein set forth shall be deemed dependent upon any other such voting powers, preferences and relative, participating, optional or other special rights of Series A Preferred Stock and qualifications, limitations and restrictions thereof unless so expressed herein.

 

 

 

 

IN WITNESS WHEREOF, GWIN, INC. has caused this Certificate of Designation to be signed by its duly authorized Chief Financial Officer this 3rd day of August, 2006.

 

 

 

GWIN, INC.

   
 

By: /s/ Jeff Johnson                                     

 

       Jeff Johnson,

 

       Chief Financial Officer

 

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 02:17 PM 09/18/2006

FILED 02 :17 PM 09/18/2006

SRV 060857967 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT 

TO CERTIFICATE OF INCORPORATION

OF GWIN, INC., A DELAWARE CORPORATION

 

GWIN, Inc. (the “Corporation”), organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “GCLD”) does hereby certify:

 

FIRST: That by unanimous written consent of the Board of Directors (the “Directors”) of the Corporation, resolutions were duly adopted setting forth a proposed amendment to the Certificate of Incorporation of said Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders, or written consent in lieu thereof, of said Corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:

 

RESOLVED, that the Certificate of Incorporation of the Corporation shall be amended by changing the first sentence of Article FOURTH thereof such that, as amended, the first sentence of said Article FOURTH shall be and read as follows:

 

“FOURTH : This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively . The total number of shares of Common Stock this Corporation is authorized to issue is 750,000,000 and each such share shall have a par value of $0.000 l, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 5,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.”

 

SECOND: That thereafter, pursuant to resolution of Directors, a principal stockholder who collectively holds in excess of fifty percent (50%) of the Corporation's shares of voting capital stock executed a written consent in lieu of a special meeting in accordance with Section 222 of the GCLD; the necessary number of shares as required by statute was voted in favor of the amendment.

 

THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the GCLD.

 

FOURTH: That the capital of the Corporation shall not be reduced under or by reason of said amendment.

 

 

 

 

 

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed this 18th day of September, 2006.

 

By: /s/ Douglas R. Miller            

      Authorized Officer

 

Title: President

Name: Douglas R. Miller

 

 

 

 

 

CERTIFICATE OF AMENDMENT

TO CERTIFICATE OF INCORPORATION

OF GWIN, INC., A DELAWARE CORPORATION

 

GWIN, Inc. (the “Corporation”), organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “GCLD”) does hereby certify:

 

FIRST: That by unanimous written consent of the Board of Directors (the “Directors”) of the Corporation, resolutions were duly adopted setting forth a proposed amendment to the Certificate of Incorporation of said Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders, or written consent in lieu thereof, of said Corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:

 

RESOLVED , that the Certificate of Incorporation of the Corporation shall be amended by changing the first sentence of Article FIRST thereof such that, as amended, the first sentence of said Article FIRST shall be and read as follows:

 

“FIRST: The name of the Corporation (hereinafter called the “Corporation”) is Winning Edge International, Inc.”

 

SECOND: That thereafter, pursuant to resolution of Directors, a principal stockholder who collectively holds in excess of fifty percent (50%) of the Corporation's shares of voting capital stock executed a written consent in lieu of a special meeting in accordance with Section 222 of the GCLD; the necessary number of shares as required by statute was voted in favor uf the amendment.

 

THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the GCLD.

 

FOURTH: That the capital of the Corporation shall not be reduced under or by reason of said amendment.

 

 

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed this 22nd day of September, 2006.

 

 

By: /s/ Douglas R. Miller               

      Authorized Officer

 

Title: President

Name: Douglas R. Miller

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 04:29 PM 10/02/2007

FILED 04:23 PM 10/02/2007

SRV 071076704 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT

TO THE CERTIFICATE OF INCORPORATION

OF

WINNING EDGE INTERNATIONAL, INC.

 

Pursuant to the provisions of Section 242 of the General Corporation Laws of the State of Delaware (the “GCLD”), Winning Edge International, Inc., organized and existing under and by virtue of the GCLD, hereinafter referred to as the “Corporation,” hereby certifies and adopts the following Certificate of Amendment to its Certificate of Incorporation:

 

FIRST:     The name of the Corporation is Winning Edge International, Inc.

 

SECOND:     Pursuant to a resolutions adopted by the board of directors of the Corporation and approved by its shareholders, the Certificate of Incorporation of the Corporation shall be amended by changing the first sentence of Article FIRST thereof such that. as amended, the first sentence of said Article FIRST shall be and read as follows:   

 

“FIRST: The name of the Corporation (hereinafter called the “Corporation”) is W Technologies,

 

THIRD:     Except as otherwise expressly amended hereby, the Certificate of Incorporation of the Corporation shall remain in full force and affect

 

FOURTH: By executing this Certificate of Amendment to the Certificate of Incorporation, the president and secretary of the Corporation do hereby certify that on July 24, 2007, the foregoing amendment to the Certificate of Incorporation of Winning Edge International, Inc. was authorized and approved pursuant to Section 222 of the GCLD by the vote of the majority of the Corporation's shareholders and the directors of Winning Edge International, loc. unanimously approved the amendment and name change.

 

FIFTH: That said amendment was duly adopted in accordance with the provisions of Section 242 of the GCLD.

 

SIXTH: That the capital of the Corporation shall not be reduced under or hy reason of said amendment.

 

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed this 2nd day of October 2007.

 

 

DATED this 2nd day of October 2007

 
 

/s/ Doug Miller                                  

 

Doug Miller, President

   
   
 

/s/ Jeff Johnson                                  

 

Jeff Johnson, Secretary

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 07:01 PM 04/14/2010

FILED 07:01 PM 04/14/2010

SRV 100385227 - 2624514 FILE

 

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

OF THE

SERIES D PREFERRED STOCK

($0.001 Par Value Per Share)

OF

W TECHNOLOGIES, INC.

 

The undersigned , a duly authorized officer of W Technologies, Inc., a Delaware corporation, and hereinafter referred to as the “Company”), DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors of the Company (the “Board”) by unanimous written consent on January 31, 2010:

 

WHEREAS. the Company has Five Million (5,000,000) shares of preferred stock authorized; and

 

WHEREAS, the Company has previously designated Four Hundred Sixty-two Thousand Two Hundred Twenty-two (462,222) shares of preferred stock as Series A Preferred Stock, Eight Hundred Fifty Thousand (850,000) shares of preferred stock as Series B Preferred Stock and One Hundred Fifty Thousand (150,000) shares of preferred stock as Series C Preferred Stock; and

 

WHEREAS, that effective January 31, 2010, the Board approved the designation of Series D convertible preferred stock, $0.0001 par value per share, (“Series D Preferred Stock”), to consist of Sixty-seven (67) shares; and

 

WHEREAS no shares of Series D Preferred Stock have been issued and the Board has determined that it is in the best interests of the Company to create the powers, designations, preferences and relative, participating, optional and other special rights for the Series D Preferred Stock set forth herein.

 

RESOLVED that the Series D Preferred Stock shall have the following powers, designations, preferences and relative, participating, optional and other special rights:

 

SECTION 1- DESIGNATION AND RANK

 

1.01     Designation. This resolution shall provide for a single series of preferred stock, the designation of which shall be “Series D Preferred Stock”, $0.0001 par value per share. The number of authorized shares constituting the Series D Preferred Stock is Sixty-seven (67) shares.

 

1.02     Rank. With respect to the payment of dividends and other distributions on the capital stock of the Company, including the distribution of the assets of the Company upon liquidation, the Series D Preferred Stock shall rank pari passu with the Common Stock on an “as converted” basis, junior as to the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock and senior to all other series of preferred stock.

 

 

 

SECTION 2 - DIVIDED RIGHTS

 

2.01     Dividends or Distributions. Each share of Series D Preferred Stock shall be entitled to receive dividends or distributions on his share of Series D Preferred Stock on an “as converted” basis as provided in Section 4 hereof when and if dividends are declared on the Common Stock by the Board. Dividends shall be paid in cash or property, as determined by the Board.

 

 

SECTION 3 - LIQUIDATION RIGHTS

 

3.1.     Liquidation Preference. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “Liquidation”), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock, the holders of Series D Preferred Stock shall be entitled to receive out of the assets of the Company , whether such assets are capital, surplus or earnings, an amount equal to One percent (1%) of the total amount of such assets per share of Series D Preferred Stock (the “ Liquidation Amount “) plus all declared and unpaid dividends thereon, for each share of Series D Preferred Stock held by them.

 

3.2.     Pro Rata Distribution. If, upon any Liquidation, the assets of the Company shall be insufficient to pay the Liquidation Amount, together with declared and unpaid dividends thereon, in full to all holders of Series D Preferred Stock, then the entire net assets of the Corporation shall be distributed among the holders of the Series D Preferred Stock, ratably in proportion to the full amounts to which they would otherwise be respectively entitled. and such d1stnbutions may be made in cash or in property taken at its fair value (as determined in good faith by the Company's Board of Directors), or both, at the election of the Company 's Board of Directors.

 

3. 3.     Merger, Consolidation or Reorganization. For purposes of this Section 3, a Liquidation shall be deemed to be occasioned by or to include the merger. consolidation or reorganization of the Company into or with another entity through one or a series of related transactions, or the sale, transfer or lease of all or substantially all of the assets of the Company.

 

 

SECTION 4 - CONVERSION RIGHTS

 

4.01     Conversion. Subject to the limitations set forth herein below, each share of Series D Preferred Stock shall be convertible (the “Conversion Rights”), at -the option of the holder thereof at any time and from time to time, into One percent (1%) of the issued and outstanding shares of the Company' s Common Stock (“Conversion Shares”) at the time of the conversion . The shares of Common Stock received upon conversion shall be fully paid and non-assessable shares of Common Stock.

 

4.02     Adjustments. The Conversion Rights of the Series D Preferred Stock as described in Section 4.01 above shall be adjusted from time to time as follows:

 

 

 

 

(a)     In the event of any reclassification of the Common Stock or recapitalization involving Common Stock (including a subdivision, or combination of shares or any other event described in this Section 4.02) the holder of Series D, Preferred Stock shall thereafter be entitled to receive, and provision shall be made therefore in any agreement relating to the reclassification or recapitalization, upon conversion of the Series D Preferred Stock, the kind and number of shares of Common Stock or other securities or property (including cash) to which such holder of Series D Preferred Stock would have been entitled if he had held the number of shares of Common Stock into which the Series D Preferred Stock was convertible immediately prior to such reclassification or recapitalization; and in any such case appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holder of the Series D Preferred Stock, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares, other securities, or property thereafter receivable upon conversion of the Series D Preferred Stock. An adjustment made pursuant to this subparagraph (a) shall become effective at the time at which such reclassification or recapitalization becomes effective.

 

(b)     In the event the Company shall declare a distribution payable in securities of other entities or persons, evidences of indebtedness issued by the Company or other entities or persons, assets (excluding cash dividends) or options or rights not referred to in Section 4.02(a) above, the holder of the Series D Preferred Stock shall be entitled to a proportionate share of any such distribution as though he was the holder of the number of shares of Common Stock of the Company into which his shares of Series D Preferred Stock are convertible as of the record date fixed for the determination of the holders of shares of Common Stock of the Company entitled to receive such distribution or if no such record date is fixed, as of the date such distribution is made.

 

4.03     Procedures for Conversion.

 

(a)     In order to exercise the Conversion Rights pursuant to Section 4. 01 above, the holder shall deliver an irrevocable written notice of such exercise to the Company at its principal office. The holder shall, upon the conversion of Series D Preferred Stock in accordance with this Section 4, surrender the certificate representing such share of Series D Preferred Stock to the Company, at its principal office, and specify the name or names in which the holder wishes the certificate or certificates for shares of Common Stock to be issued. In case the holder shall specify a name or names other than that of the Investor, such notice shall be accompanied by payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof) payable upon the issuance of shares of Common Stock in such name or names. As promptly as practicable, and, if applicable, after payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof), the Company shall deliver or cause to be delivered certificates representing the number of validly issued, fully paid and non-assessable shares of Common Stock to which the holder shall be entitled. Such conversion, to the extent permitted by law, shall be deemed to have been effected as of the date of receipt by the Company of any notice of conversion pursuant to this Section 4.03(a), upon the occurrence of any event specified therein. Upon conversion of a share of Series D Preferred Stock, such share shall cease to

 

 

 

constitute a share of Series D Preferred Stock and shall represent only a right to receive shares of Common Stock into which it bas been converted.

 

(b)     Beginning six (6) months following the date hereof, the Company shall at all times reserve and keep available out of its authorized Coon Stock the full number of shares of Common Stock of the Company issuable upon the conversion of the share of Series D Preferred Stock. In the event that the Company does not have a sufficient number of shares of authorized but unissued Common Stock necessary to satisfy the full conversion of shares of Series D Preferred Stock, then the Company shall call and hold a meeting of the stockholders within thirty (30) days of such occurrence for the sole purpose of increasing the number of authorized shares of Common Stock. The Board shall recommend to stockholders a vote in favor of such proposal and shall vote all shares held by them, in proxy or otherwise, in favor of such proposal. This remedy is not intended to limit the remedies available to the holder of the Series D Preferred Stock, but is intended to be in addition to any other remedies, whether in contract, at law or in equity.

 

4.04 Notices of Record Date. In the event that the Company shall propose at any time: (i) to declare any dividend or distribution upon any class or series of capital stock, whether in cash, property, stock or other securities; (ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or (iii) to merge or consolidate with or into any other corporation, or to sell, !.case or convey all or substantially all of its property or busine ss, or to liquidate, dissolve or wind up the in connection with each such event, the Company shall mail to the holder of Series D Preferred Stock: at least twenty (20) days' prior written notice of the date on which a record shall be taken for such dividend or distribution (and specifying the date on which the holders of the affected class or series of capital stock shall be entitled thereto) or for determining the rights to vote, if any, in respect of the matters referred to in clauses (ii) and (iii) in this Section 4.04, and in the case of the matters referred to in this Section 4.04 (ii) and (iii), written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction (and specify the date on which the holders of shares of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event) and the Company shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Company has given the first notice provided for herein or sooner than ten (10) days after the Company has given notice of any material changes provided for herein.

 

4.5 Limitations of Conversion. The Conversion Rights Specified herein shall be subject to the fol1owing limitations:

 

(i) The holders of the shares of Series D Preferred Stock may exercise their Conversion Rights at any time; and

 

(ii) No holder of the shares of Series D Preferred Stock shall be entitled to convert the Series A Preferred Stock to the extent, but only to the extent, that such conversion would,

 

 

 

upon giving effect to such conversion, cause the aggregate number of shares of Conm1on Stock beneficially owned by such holder to exceed 9.99% of the outstanding shares of Common Stock following such conversion (which provision may be waived by such holder by written notice from such holder to the Company, which notice shall be effective 61 days after the date of such notice).

 

 

SECTION 5 - VOTING RIGHTS

 

5.01     General. Except as other\\.rise provided herein or required by law, the holders of Series D Preferred Stock and the holders of Common Stock shall vote together and not as separate classes and the Series D Preferred Stock shall be counted on an “as converted”

basis.

 

SECTION 6- MISCELLANEOUS

 

6.01     Headings of Subdivisions. The headings of the various Sections hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

 

6.02     Severability of Provisions. If any right, preference or limitation of the Series D Preferred Stock set forth herein (as this resolution may be amended from time to time) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights. preferences and limitations set forth in this resolution (as so amended) which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

 

6.03     Stock Transfer Taxes. The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of the share of Series D Preferred Stock or shares of Common Stock or other securities issued on account of Series D Preferred Stock pursuant hereto or certificates representing such shares or securities.

 

6.04     Transfer Agent. The Corporation may appoint, and from time to time discharge and/or replace, a transfer agent of the Series D Preferred Stock. Upon any such appointment or discharge of a transfer agent, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the holder of record of Series D Preferred Stock.

 

6.05     Transferability. Subject to any transfer restriction agreements that may be entered into by the holder of Series D Preferred Stock, the Series D Preferred Stock shall be transferable by the holder, provided that such transfer is made m compliance with applicable federal and state securities laws.

 

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by Wayne Allyn Root, its President, as of the 31st day of January, 2010.

 

 

 

W Technologies, Inc.

   
 

By: /s/ Wayne Allyn Root                        

 

Wayne Allyn Root, President

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 07:27 PM 04/19/2010

FILED 07:27 PM 04/19/2010

SRV 100399237 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT 

OF 

CERTIFICATE OF INCORPORATION 

OF 

W TECHNOLOGIES, INC.

 

 

W Technologies, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify:

 

FIRST. That by Unanimous Written Consent of the Board of Directors of the Corporation, Resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendments is as follows:

 

RESOLVED, that the Certificate of Incorporation of the Corporation be amended by changing the Article thereof numbered “Fourth” so that, as amended, said Article shall be and read as follows:

 

FOURTH: This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and ''Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 750,000,000 and each such share shall have a par value of $0.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 5,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors. is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series: to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

 

Every thirty-five (35) shares of Common Stock outstanding on the effective date of this amendment shall be automatically converted in one (1) share of Common Stock and, in lieu of fractional shares, each share so converted shall be rounded up to the next highest number of full shares of Common Stock.”

 

 

 

 

SECOND. That thereafter, pursuant to resolution of its board of directors, a special meeting of the stockholders of the Corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.

 

THIRD. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

FOURTH. This Amendment shall be effective on May 20, 2010.

 

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 17th day of April, 2010.

 

 

 

By: /s/ Wayne Allyn Root                                            

   
 

Title: Chairman and Chief Executive Officer

   
 

Wayne Allyn Root

 

 

 

CERTIFICATE OF AMENDMENT

TO THE CERTIFICATE OF INCORPORATION

OF

W TECHNOLOGIES

 

Pursuant to the provisions o Section 242 of the General Corporation Laws of the State of Delaware (the “GCLD”), W Technologies, Inc., organized and existing under and by virtue of the GCLD, hereunder referred to as the “Corporation,” hereby certifies and adopts the following Certificate of Amendment to its Certificate of Incorporation:

 

FIRST: The name of the Corporation is W Technologies, Inc.

 

SECOND: Pursuant to resolutions adopted by the board of directors of the Corporation and approved by its shareholders, the Certificate of Corporation of Incorporation of the Corporation shall be amended as follows: Add new paragraph to article 4:

 

On the February 28, 2011 or the effective date of this Certificate of Amendment whichever is later, the Corporation shall affect a reverse split in its issued an outstanding shares of Common Stock so that the shares currently issued and outstanding shall be reverse split, or consolidated, on a 1-for-200 basis, and stockholders shall receive one share of the Corporation’s post-split Common Stock $0.001par value, for each 200 shares of Common stock, $0.0001 par value, held by them prior to the reverse split. No stockholder of record on December 31, 2010, the record date, shall receive less than 100 shares of the Corporation’s common stock, as a result of such reverse stock split. No scrip or fractional shares will be issued in connection with the reverse split and any fractional interests will be rounded to the nearest whole share. The reverse split will not result in any modification of the rights of stockholders, and will have no effect on the stockholders’ equity in the Corporation except for a transfer from stated capital to additional paid-in capital. All shares returned to the Corporation as a result of the reverse split will be canceled and returned to the status of authorized and unissued shares. Except as specifically provided herein, the Corporation’s Certificate of Incorporation shall remain unmodified and shall continue in full force and effect.

 

THIRD: Except as otherwise expressly amended hereby, the Certificate Incorporation of the Corporation shall remain in full force and effect.

 

FOURTH: by executing this Certificate of Amendment to the Certificate of Incorporation, the president and secretary of this Corporation do hereby certify that on December 31, 2011, the foregoing amendment to the Certificate of Incorporation of W Technologies, Inc. was authorized and approved pursuant to Section 222 of the GCLD by the vote of the majority of the Corporation’s shareholders and the directors of W Technologies, Inc. unanimously approved the amendment and name change.

 

FIFTH: That said amendment was duly adopted in accordance with the provisions of section 242 of the GCLD.

 

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed this 1st day of February, 2011.

 

 

DATED: this 1st day of February, 2011

By: /s/ Wayne Root                                 

   
 

Wayne Root, CEO/Secretary

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 12:01 PM  02/18/2011

FILED 12:01 PM  02/18/2011

SRV 110178988 - 2624514 FILE

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 06:30 PM 07/29/2011

FILED 06:06 PM 07/29/2011

SRV 110874862 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

W TECHNOLOGIES, INC.

 

 

W Technologies, Inc., a corporation duly organized and existing wider the General Corporation Law of the State of Delaware (the “Corporation”), docs hereby certify:

 

FIRST. That by Unanimous Written Consent of the Board of Directors of the Corporation, Resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration. The resolution setting forth the proposed amendments to increase the number of authorized shares of Preferred Stock is as follows:

 

NOW, THEREFORE, IT IS HEREBY RESOLVED, that the Certificate of Incorporation shall be amended to read as follows:

 

FOURTH:     This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 750,000.000 and each such share shall have a par value of $0.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.”

 

SECOND. That thereafter, pursuant to resolution of its board of directors, by written consent of the stockholders of the Corporation in accordance with the General Corporation Law of the State of Delaware, the necessary number of shares as required by statute were voted in favor of the amendment.

 

THIRD. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 28th day of July, 2011.

 

 

 

By: /s/ Craig Crawford            7/28/2011   

   
 

Title: Chairman of the Board

   
 

Name: Craig Crawford

 

 

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 11: 06 AM 12/ 19/2011

FILED 10:22 AM 12/19/2011

SRV 111306815 - 2624514 FILE

  

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

OF THE

SERIES E PREFERRED STOCK

($0.0001 Par Value Per Share)

OF

W TECHNOLOGIES, INC.

 

 

The undersigned, a duly authorized officer of W Technologies, Inc., a Delaware corporation, and hereinafter referred to as the “Company”), DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors of the Company (the “Board”) by unanimous written consent on July 30, 2011:

 

WHEREAS, the Company has Fifty Million (50,000,000) shares of preferred stock authorized; and

 

WHEREAS, the Company has previously designated Four Hundred Sixty-two Thousand Two Hwidred Twenty-two (462,222) shares of preferred stock as Series A Preferred Stock, Eight Hundred Fifty Thousand (850,000) shares of preferred stock as Series B Preferred Stock, One HW1dred Fifty Thousand (150,000) shares of preferred stock as Series C Preferred Stock and Sixty-seven (67) shares of preferred stock as Series D Preferred Stock; and

 

WHEREAS, that effective July 30, 2011,the Board approved the designation of Series E convertible preferred stock, $0.0001 par value per share, (“Series E Preferred Stock”), to consist of Twenty-five Million (25,000,000) shares; and

 

WHEREAS, no shares of Series E Preferred Stock have been issued and the Board has determined that it is in the best interests of the Company to create the powers, designations, preferences and relative participating, optional and other special rights for the Series E Preferred Stock set forth herein.

 

RESOLVED that the Series E Preferred Stock shall have the following powers, designations, preferences and relative, participating, optional and other special rights:

 

SECTION 1- DESIGNATION AND RANK

 

1.01     Designation. This resolution shall provide for a single series of preferred stock, the designation of which shall be “Series E Preferred Stock”, $0.0001 par value per share. The number of authorized shares constituting the Series E Preferred Stock is Twenty-five Million (25,000,000) shares.

 

1.02     Rank. Except as provided elsewhere in the Certificate, with respect to the payment of dividends and other distributions on the capital stock of the Company, including the distribution of the assets of the Company upon liquidation, the Series E Preferred Stock shall rank pari passu with the Common Stock on an “as converted” basis, junior as to the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock and senior to all other series of preferred stock.

 

 

 

 

SECTION 2 - DIVIDEND RIGHTS

 

2.01     Dividends or Distributions. Each share of Series E Preferred Stock shall be entitled to receive dividends or distributions on his share of Series E Preferred Stock on an “as converted” basis as provided in Section 4 hereof when and if dividends are declared on the Common Stock by the Board. Dividends shall be paid in cash or property, as determined by the Board.

 

 

SECTION 3 - LIQUIDATION RIGHTS

 

3.01.     Liquidation Preference. Upon any liquidation, dissolution, or winding up of thc Company, whether voluntary or involuntary (collectively, a “ Liquidation “), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock except for Series D Preferred Stock, the holders of Series E Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or earnings, an amount equal to $0.001 per share of Series E Preferred Stock (the “Liquidation Amount “) plus all declared and unpaid dividends thereon, for each share of Series E Preferred Stock held by them.

 

3.02.     Pro Rata Distribution. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “ Liquidation “), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock except for Series D Preferred Stock, the holders of Series E Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or earnings, an amount equal to $0.001 per share of Series E Preferred Stock (the “Liquidation Amount “) plus all declared and unpaid dividends thereon, for each share of Series E Preferred Stock held by them. respectively entitled and such distributions may be made in cash or in property taken at its fair value (as determined in good faith by the Company's Board of Directors), or both, at the election of the Company's Board of Directors.

 

3.03.     Merger, Consolidation or Reorganization.  For purposes of this Section 3, a Liquidation shall be deemed to be occasioned by or to include the merger, consolidation or reorganization of the Company into or with another entity through one or a series of related transactions, or the sale, transfer or lease of all or substantially all of the assets of the Company.

 

 

SECTION 4 - CONVERSION RIGHTS

 

4.01     Conversion. Subject to the limitations set forth herein below, each share of Series E Preferred Stock shall be convertible (the “Conversion Rights”), at the option of the holder thereof at any time and from time to time, beginning on April 15, 2013, into One (1) share of the Company's Common Stock (“Conversion Shares”) at the time of the conversion. The shares of Common Stock received upon conversion shall be fully paid and non-assessable shares of Common Stock.

 

4.02     Adjustments. The Conversion Rights of the Series E Preferred Stock as described in Section 4.01 above shall be adjusted from time to time as follows:

 

 

 

 

(a)     In the event of any reclassification of the Common Stock or recapitalization involving Common Stock (including a subdivision, or combination of shares or any other event described in this Section 4.02) the holder of Series E Preferred Stock shall thereafter be entitled to receive, and provision shall be made therefore in any agreement relating to the reclassification or recapitalization, upon conversion of the Series E Preferred Stock., the kind and number of shares of Common Stock or other securities or property (including cash) to which such holder of Series E Preferred Stock would have been entitled if he had held the number of shares of Common Stock into which the Series E Preferred Stock was convertible immediately prior to such reclassification or recapitalization; and in any such case appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holder of the Series E Preferred Stock, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares, other securities, or property thereafter receivable upon conversion of the Series E Preferred Stock. An adjustment made pursuant to this subparagraph (a) shall become effective at the time at which such reclassification or recapitalization becomes effective.

 

(b)     In the event the Company shall declare a distribution payable in securities of other entities or persons, evidences of indebtedness issued by the Company or other entities or persons, assets (excluding cash dividends) or options or rights not referred to in Section 4.02(a) above, the holder of the Series E Preferred Stock shall be entitled to a proportionate share of any such distribution as though he was the holder of the number of shares of Common Stock of the Company into which his shares of Series E Preferred Stock are convertible as of the record date fixed for the determination of the holders of shares of Common Stock of the Company entitled to receive such distribution or if no such record date is fixed, as of the date such distribution is made.

 

4.03     Procedures for Conversion.

 

(a)     In order to exercise the Conversion Rights pursuant to Section 4.01 above, the holder shall deliver an irrevocable written notice of such exercise to the Company at its principal office. The holder shall, upon the conversion of Series E Preferred Stock in accordance with this Section 4, surrender the certificate representing such share of Series E Preferred Stock to the Company, at its principal office, and specify the name or names in which the holder wishes the certificate or certificates for shares of Common Stock to be issued. In case the holder shall specify a name or names other than that of the Investor, such notice shall be accompanied by payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof) payable upon the issuance of shares of Common Stock in such name or names. As promptly as practicable, and, if applicable, after payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof), the Company shall deliver or cause to be delivered certificates representing the number of validly issued, fully paid and non-assessable shares of Common Stock to which the holder shall be entitled . Such conversion, to the extent permitted by law, shall be deemed to have been effected as of the date of receipt by the Company of any notice of conversion pursuant to this Section 4.03(a), upon the occurrence of any event specified therein. Upon conversion of a share of Series E Preferred Stock, such share shall cease to

 

 

 

constitute a share of Series E Preferred Stock and shall represent only a right to receive shares of Common Stock into which it has been converted.

 

(b)     Beginning as of the date hereof, the Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock of the Company issuable upon the conversion of the share of Series E Preferred Stock. In the event that the Company does not have a sufficient number of shares of authorized but unissued Common Stock necessary to satisfy the full conversion of shares of Series E Preferred Stock, then the Company shall call and hold a meeting of the stockholders

within thirty (30) days of such occurrence for the sole purpose of increasing the number of authorized shares of Common Stock. The Board shall recommend to stockholders a vote in favor of such proposal and shall vote all shares held by them, in proxy or otherwise, in favor of such proposal. This remedy is not intended to limit the remedies available to the holder of the Series E Preferred Stock, but is intended to be in addition to any other remedies, whether in contract, at law or in equity.

 

4.04 Notices of Record Date. In the event that the Company shall propose at any time: (i)     to declare any dividend or distribution upon any class or series of capital stock, whether in cash, property, stock or other securities; (ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or (iii) to merge or consolidate with or into any other corporation, or to sell, lease or convey all or substantially all of its property or business, or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall mail to the holder of Series E Preferred Stock: at least twenty (20) days• prior written notice of the date on which a record shall be taken for such dividend or distribution (and specifying the date on which the holders of the affected class or series of capital stock shall be entitled thereto) or for determining the rights to vote, if any, in respect of the matters referred to in clauses (ii) and (iii) in this Section 4.04, and in the case of the matters referred to in this Section 4.04 (ii) and (iii), written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction (and specify the date on which the holders of shares of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event) and the Company shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Company has given the first notice provided for herein or sooner than ten (10) days after the Company has given notice of any material changes provided for herein.

 

4.05 Limitations of Conversion. The Conversion Rights specified herein shall be subject to the following limitations:

 

 

(i)

The holders of the shares of Series E Preferred Stock may exercise their Conversion Rights at any time after April 15, 2013; and

 

 

(ii)

No holder of the shares of Series E Preferred Stock shall be entitled to convert the Series A Preferred Stock to the extent, but only to the extent, that such conversion would,

 

 

 

upon giving effect to such conversion, cause the aggregate number of shares of Common Stock beneficially owned by such holder to exceed 4.99% of the outstanding shares of Common Stock following such conversion (which provision may be waived by such holder by written notice from such holder to the Company, which notice shall be effective 61 days after the date of such notice).

 

SECTION 5 - VOTING RIGHTS

 

5.01     General. Except as otherwise provided herein or required by law, the holders of Series E Preferred Stock and the holders of Common Stock shall vote together and not as separate classes and the Series E Preferred Stock shall be counted on an “as converted” basis times Forty (40).

 

SECTION 6- MISCELLANEOUS

 

6.01     Headings of Subdivisions. The headings of the various Sections hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

 

6.02     Severability of Provisions. If any right, preference or limitation of the Series E Preferred Stock set forth herein (as this resolution may be amended from time to time) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth in this resolution (as so amended) which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

 

6.03     Stock Transfer Taxes. The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of the share of Series E Preferred Stock or shares of Common Stock or other securities issued on account of Series E Preferred Stock pursuant hereto or certificates representing such

shares or securities.

 

6.04     Transfer Agent. The Corporation may appoint, and from time to time discharge and/or replace, a transfer agent of the Series E Preferred Stock. Upon any such appointment or discharge of a transfer agent, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the holder of record of Series E Preferred Stock.

 

6.05     Transferability. Subject to any transfer restriction agreements that may be entered into by the holder of Series E Preferred Stock, the Series E Preferred Stock shall be transferable by the holder, provided that such transfer is made in compliance with applicable federal and state securities laws.

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by Ronald Costa, its President, as of the 12th day of December, 2011. 

 

 

W Technologies, Inc.

   
   
 

By:                                                                  

 

       Ronald Costa

 

       President

 

 

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by Ronald Costa, its President, as of the 12th day of December, 2011.

 

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Ronald Costa                                       

 

       Ronald Costa

 

       President

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 11:06 AM 12/19/2011

FILED 11:06 AM 12/19/2011

SRV 111307067 - 2624514 FILE

 

 

AMENDED AND RESTATED

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

OF THE

SERIES A PREFERRED STOCK

($0.0001 Par Value Per Share)

OF

W TECHNOLOGIES, INC.

 

 

The undersigned, a duly authorized officer of W Technologies, Inc., a Delaware corporation, and hereinafter referred to as the “Company”), DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors of the Company (the “Board”) by unanimous written consent on December 12, 2011:

 

WHEREAS, the Company has Fifty Million (50,000,000) shares of preferred stock authorized ; and

 

WHEREAS, the Company has previously designated a Series A Preferred Stock, $0.0001 par value per share, (“Series A Preferred Stock”), consisting of 462,222 shares; and

 

WHEREAS, there are currently 462,222 shares of the Series A Preferred Stock issued and outstanding; and

 

WHEREAS, effective December 12, 2011, the Board of the Directors of the Company and the holder of all of the issued and outstanding shares of Series A Preferred Stock approved a resolution amending and restating the Certificate of Designation for the Series A Preferred Stock such that the Series A Preferred Stock shall have the following powers, designations, preferences and relative, participating, optional and other special rights:

 

SECTION 1- DESIGNATION AND RANK

 

1.01     Designation. This resolution shall provide for a single series of preferred stock, the designation of which shall be “Series A Preferred Stock”, $0.0001 par value per share. The number of authorized shares constituting the Series A Preferred Stock is Four Hundred Sixty-two Thousand Two Hundred Twenty-two (462,222) shares.

 

1.02     Rank. Except as provided elsewhere in the Certificate, with respect to the payment of dividends and other distributions on the capital stock of the Company, including the distribution of the assets of the Company upon liquidation, the Series A Preferred Stock shall rank pari passu with the Common Stock on an “as converted” basis.

 

SECTION 2 - DIVIDEND RIGHTS

 

2.01     Dividends or Distributions. Each share of Series A Preferred Stock shall be entitled to receive dividends or distributions on his share of Series A Preferred Stock on an “as converted” basis as provided in Section 4 hereof when and if dividends are

 

 

 

 

declared on the Common Stock by the Board .Dividends shall be paid in cash or property, as determined by the Board.

 

 

 

 

SECTION 3 - LIQUIDATION RIGHTS

 

3.01     Liquidation Preference. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “ Liquidation “), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock except for Series D Preferred Stock, the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or earnings, an amount equal to $1.00 per share (the “Liquidation Amount “) plus all declared and unpaid dividends thereon, for each share of Series A Preferred Stock held by them.

 

3.02     Pro Rata Distribution. If, upon any Liquidation, the assets of the Company shall be insufficient to pay the Liquidation Amount, together with declared and unpaid dividends thereon, in full to all holders f Series A Preferred Stock, then the entire net assets of the Corporation shall be distributed among the holders of the Series A Preferred Stock, ratably in proportion to the full amounts to which they would otherwise be respectively entitled and such distributions may be made in cash or in property taken at its fair value (as determined in good faith by the Company's Board of Directors), or both, at the election of the Company's Board of Directors.

 

3.03     Merger, Consolidation or Reorganization. For purposes of this Section 3, a Liquidation shall be deemed to be occasioned by or to include the merger, consolidation or reorganization of the Company into or with another entity through one or a series of related transactions, or the sale, transfer or lease of all or substantially all of the assets of the Company.

 

SECTION 4 - CONVERSION RIGHTS

 

4.01     Conversion. Subject to the limitations set forth herein below, each share of Series A Preferred Stock shall be convertible (the “Conversion Rights”), at the option of the holder thereof at any time and from time to time, into that number of shares of the Company's Common Stock which shall be equal to the sum of One Dollar ($1.00), based upon the greater of (i) $0.01 or (ii) the Closing Bid Price, as quoted by OTC Markets, Inc. for the last business day prior to the the date of the notice of conversion given by the holder to the Company. The shares of Common Stock received upon conversion (“Conversion Shares”) shall be fully paid and non-assessable shares of Common Stock; provided, however, that no partial Conversion Shares shall be issued and any partial Conversion Shares shall be rounded up to the next full number of Conversion Shares.

 

4.02     Adjustments. The Conversion Rights of the Series A Preferred Stock as described in Section 4.01 above shall be adjusted from time to time as follows:

 

 

 

(a)     In the event of any reclassification of the Common Stock or recapitalization involving Common Stock (including a subdivision, or combination of shares or any other event described in this Section 4.02) the holder of Series A Preferred Stock shall thereafter be entitled to receive, and provision shall be made therefore in any agreement relating to the reclassification or recapitalization, upon conversion of the Series A Preferred Stock, the kind and number of shares of Common Stock or other securities or property (including cash) to which such holder of Series A Preferred Stock would have been entitled if he had held the number of shares of Common Stock into which the Series A Preferred Stock was convertible immediately prior to such reclassification or recapitalization; and in any such case appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holder of the Series A Preferred Stock, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares, other securities, or property thereafter receivable upon conversion of the Series A Preferred Stock. An adjustment made pursuant to this subparagraph (a) shall become effective at the time at which such reclassification or recapitalization becomes effective.

 

(b)     In the event the Company shall declare a distribution payable in securities of other entities or persons, evidences of indebtedness issued by the Company or other entities or persons, assets (excluding cash dividends) or options or rights not referred to in Section 4.02(a) above, the holder of the Series A Preferred Stock shall be entitled to a proportionate share of any such distribution as though he was the holder of the number of shares of Common Stock of the Company into which his shares of Series A Preferred Stock are convertible as of the record date fixed for the determination of the holders of shares of Common Stock of the Company entitled to receive such distribution or if no

such record date is fixed, as of the date such distribution is made.

 

4.03     Procedures for Conversion.

 

(a)     In order to exercise the Conversion Rights pursuant to Section 4.01 above, the holder shall deliver an irrevocable written notice of such exercise to the Company at its principal office. The holder shall, upon the conversion of Series A Preferred Stock in accordance with this Section 4, surrender the certificate representing such share of Series A Preferred Stock to the Company, at its principal office, and specify the name or names in which the holder wishes the certificate or certificates for shares of Common Stock to be issued. In case the holder shall specify a name or names other than that of the Investor, such notice shall be accompanied by payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof) payable upon the issuance of shares of Common Stock insuch name or names. As promptly as practicable, and, if applicable, after payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof), the Company shall deliver or cause to be delivered certificates representing the number of validly issued, fully paid and non-assessable shares of Common Stock to which the holder shall be entitled. Such conversion, to the extent permitted by law, shall be deemed to have been effected as of the date of receipt by the Company of any notice of conversion pursuant to this Section 4.03(a), upon the occurrence of any event specified therein. Upon conversion of a share of Series A Preferred Stock, such share shall cease to constitute a share of Series A Preferred Stock and shall represent only a right to receive shares of Common Stock into which it has been converted.

 

 

 

(b)     Beginning as of the date hereof, the Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock of the Company issuable upon the conversion of the share of Series A Preferred Stock. In the event that the Company does not have a sufficient number of shares of authorized but unissued Common Stock necessary to satisfy the full conversion of shares of Series A Preferred Stock, then the Company shall call and hold a meeting of the stockholders

within thirty (30) days of such occurrence for the sole purpose of increasing the number of authorized shares of Common Stock. The Board shall recommend to stockholders a vote in favor of such proposal and shall vote all shares held by them, in proxy or otherwise, in favor of such proposal. This remedy is not intended to limit the remedies available to the holder of the Series A Preferred Stock, but is intended to be in addition to any other remedies, whether in contract, at law or in equity.

 

4.04  Notices of Record Date. In the event that the Company shall propose at any time: (i) to declare any dividend or distribution upon any class or series of capital stock, whether in cash, property, stock or other securities; (ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or (iii) to merge or consolidate with or into any other corporation, or to sell, lease or convey all or substantially all of its property or business, or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall mail to the holder of Series A Preferred Stock: at least twenty (20) days' prior written notice of the date on which a record shall be taken for such dividend or distribution (and specifying the date on which the holders of the affected class or series of capital stock shall be entitled thereto) or for determining the rights to vote, if any, in respect of the matters referred to in clauses (ii) and (iii) in this Section 4.04, and in the case of the matters referred to in this Section 4.04 (ii) and (iii), written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holder in writing of the final approval of such transaction . The first of such notices shall describe the material terms and conditions of the impending transaction (and specify the date on which the holders of shares of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event) and the Company shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than ten (10) days after the Company has given the first notice provided for herein or sooner than ten (10) days after the Company has given notice of any material changes provided for herein.

 

4.05  Limitations of Conversion. The Conversion Rights specified herein shall be subject to the following limitations:

 

(i)     The holders of the shares of Series A Preferred Stock may exercise Conversion Rights at any time beginning January I, 2013; provided that no more than 5,000 shares of Series A Preferred Stock may be converted in any calendar month for a period of 24 months commencing as of January 2013; and

 

(ii)    No holder of the shares of Series A Preferred Stock shall be entitled to convert the Series A Preferred Stock to the extent, but only to the extent, that such conversion would,

 

 

 

upon giving effect to such conversion, cause the aggregate number of shares of Common Stock beneficially owned by such holder to exceed 4.99% of the outstanding shares of Common Stock following such conversion (which provision may be waived by such holder by written notice from such holder to the Company and the consent of the Board of Directors of the Company to such waiver, which notice shall be effective 61 days after the date of such notice).

 

SECTION 5 - VOTING RIGHTS

 

5.01     General. Except as otherwise provided herein or required by law, the holders of Series A Preferred Stock and the holders of Common Stock shall vote together and not as separate classes and each share of the Series A Preferred Stock shall be counted as one (1) vote.

 

SECTION 6- MISCELLANEOUS

 

6.01     Headings of Subdivisions. The headings of the various Sections hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

 

6.02     Severability of Provisions. If any right, preference or limitation of the Series A Preferred Stock set forth herein (as this resolution may be amended from time to time) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth in this resolution (as so amended) which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

 

6.03     Stock Transfer Taxes. The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of the share of Series A Preferred Stock or shares of Common Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities.

 

6.04     Transfer Agent. The Corporation may appoint, and from time to time discharge and/or replace, a transfer agent of the Series A Preferred Stock. Upon any such appointment or discharge of a transfer agent, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the holder of record of Series A Preferred Stock.

 

6.05     Transferability. Subject to any transfer restriction agreements that may be entered into by the holder of Series A Preferred Stock, the Series A Preferred Stock shall be transferable by the holder, provided that such transfer is made in compliance with applicable federal and state securities laws.

 

 

 

IN WITNESS WHEREOF, the Company has caused this Amended and Restated Certificate of Designations to be signed by Ronald Costa, its President, as of the 12th day of December, 2011.

 

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Ronald Costa           

 

       Ronald Costa

 

       President

 

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:02 PM 04/23/2013

FILED 12:59 PM 04/23/2013

SRV 130469976 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF 

W TECHNOLOGIES, INC.

 

 

W Technologies, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “'Corporation “), does hereby certify:

 

FIRST. That by Unanimous Written Consent of the Board of Directors of the Corporation, Resolutions were duly adopted setting forth a proposed amendment of the certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendments is as follows:

 

RESOLVED, that the Certificate of Incorporation of the Corporation be amended by changing the Article thereof numbered “'Fourth” so that, as amended, said Article shall be and read as follow is:

 

FOURTH:     This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue j s 750,000,000 and each such share shall have a par value of $0.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 5,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences. privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series. to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

 

Every Five Thousand (5,000) shares of Common Stock outstanding on the effective date of this amendment shall be automatically converted in one (1) share of Common Stock and, in lieu of fractional shares, each share so converted shall be rounded up to the next highest number of full shares of Common Stock.”

 

SECOND. That thereafter, pursuant to resolution of its board of directors, by Written Consent of the holders of a majority of the issued and outstanding voting shares of the Company's stock the amendment \Vas approved in accordance with Section 228 of the General Corporation Law of the State of Delaware.

 

 

 

 

THIRD. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

FOURTH. This Amendment shall be effective on May 20, 2013.

 

 

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 17th day of April, 2013.

 

 

By: /s/ Ronald Costa                               

   
 

Title: President

   
 

Name: Ronald Costa

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:27 PM 02/26/2014

FILED 01:17 PM 02/26/2014

SRV 140244446 - 2624514 FILE

 

 

STATE OF DELAWARE CERTIFICATE OF CORRECTION 

 

 

W Technologies, Inc.                         , a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware.

 

DOES HEREBY CERTIFY:

 

1.

The name of the corporation is W Technologies, Inc.     .

 

2.

That a Certificate of                          Amendment to Certificate of Incorporation                       

                                             (Title of Certificate Being Corrected)

 

 

was filed by the Secretary of State of Delaware on April 23, 2013                                             

and that said Certificate requires correction as permitted by Section 103 of the

General Corporation Law of the State of Delaware.

 

3.

The inaccuracy or defect of said Certificate is: (must be specific)

 

 

A typographical error in that 5,000,000 authorized

shares of preferred stock should have been 50,000,000.

 

 

4.

Article Fourth     of the Certificate is corrected to read as follows:

 

[Please see attachment]

 

 

 

IN WITNESS WHEREOF, said corporation has caused this Certificate of Correction

this 26th     day of February     , A.D. 2014 .

 

 

By: /s/ Gary Koelsch                      

 

Authorized Officer

   
 

Name: Gary Koelsch

 

Print or Type

   
 

Title: President

 

 

 

 

FOURTH:     This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and “Preferred Stock” and. referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 750,000,000 and each such share shall Have a par value of $0.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 50,000,000 and each such share shall have a par value of or $0.0001. Th Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting !any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.”

 

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 02:09 PM 12/ 03/2014

FILED 02: 02 PM 12/ 03/2014

SRV 141481251 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

W TECHNOLOGIES, INC.

 

 

 

W Technologies, Inc. a corporation duly organized and exi$ti.ng under the General Corporation. .Law of the State of Delaware (the “Corporation”). does hereby certify:

 

FIRST. That by Unanimous Written Consent of the Board of Directors of the Corporation, Resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration. The resolution. setting forth the proposed amendments to increase the number of authorized shares of Common Stock is as follows:

 

NOW, THEREFORE IT IS HEREBY RESOLVED that the Certificate of Incorporation shall be amended to read as follows:

 

“FOURTH: This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and “'Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares. respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 2,000,000,000 and each such share shall have a par value of $0.0001 and the total number of shares of Preferred Stock this Corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may.be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares. constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the

issue of shares of that series.”

 

SECOND. That thereafter, pursuant to resolution of its board of directors by written consent of the stockholders of the Corporation in accordance with the General Corporation Law of the State of Delaware, the necessary number of shares as required by statute were voted in favor of the amendment.

 

THIRD. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 14th day of November, 2014.

 

 

 

By: /s/ Gary Koelsch                     

   
 

Title: President

   
 

Name: Gary Koelsch

 

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:26 PM 12/29/2014

FILED 01:17 PM 12/29/2014

SRV 141592886 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT OF

CERTIFICATE OF INCORPORATION

OF

W TECHNOLOGIES, INC.

 

 

W Technologies, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the «Corporation”), dues hereby certify:

 

FIRST. That by Unanimous Written Consent of the Board of Directors of the Corporation, Resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration. The resolution setting forth the proposed amendments to increase the number of authorized shares of Common Stock is as follows:

 

NOW, THEREFORE, IT IS HEREBY RESOLVED, that the Certificate of Incorporation shall be amended to read as follows:

 

“FOURTH”:      This Corporation is authorized to issue two (2) classes of shares designated respectively “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively . The total number of shares of Common Stock this Corporation is authorized to issue is 10,000,000,000 and each such share shall have a par value of $0.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.”

 

SECOND. That thereafter pursuant to resolution of its board of directors, by written consent of the stockholders of the Corporation, in accordance with the General Corporation Law of the State of Delaware, the necessary number of shares as required by statute were voted in favor of the amendment

 

THIRD. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware .

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 22nd day of December, 2014.

 

 

 

By: /s/ Gary Koelsch                           

   
 

Title: President

   
 

Name: Gary Koelsch

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 04:44 PM 02/12/2015

FILED 04:14 PM 02/12/2015

SRV 150190578 - 2624514 FILE

 

 

AMENDED AND RESTATED

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

OF THE

SERIES E PREFERRED STOCK

($0.0001 Par Value Per Share)

OF

W TECHNOLOGIES, INC.

 

The undersigned, a duly authorized officer of W Technologies, Inc., a Delaware corporation, and hereinafter referred to as the “Company”), DOES HEREBY CERTIFY that the following resolutions were duly adopted by the Board of Directors of the Company (the “Board”) by unanimous written consent on February 11, 2015 and being filed with the Delaware Secretary of State pursuant to Delaware General Corporation Law Section 242:

 

WHEREAS, the Company has Fifty Million (50,000,000) shares of preferred stock authorized; and

 

WHEREAS, the Company has previously designated Four Hundred Sixty-two Thousand Two Hundred Twenty-two (462,222) shares of preferred stock as Series A Preferred Stock, Eight Hundred Fifty Thousand (850,000) shares of preferred stock as Series B Preferred Stock, One Hundred Fifty Thousand ($150,000) shares of preferred stock as Series C Preferred Stock and Sixty-seven (67) shares of preferred stock as Series D Preferred Stock; and

 

WHEREAS, WHEREAS, the Company has previously designated a Series E Preferred Stock, $0.0001 par value per share, (“Series A Preferred Stock”), consisting of 25,000,000 shares; and

 

WHEREAS, there are currently 25,000,000 shares of the Series E Preferred Stock issued and outstanding; and

 

WHEREAS, effective February 11, 2015, the Board of the Directors of the Company and the holder of all of the issued and outstanding shares of Series E Preferred Stock approved a resolution amending and restating the Certificate of Designation for the Series E Preferred Stock such that the Series E Preferred Stock shall have the following powers, designations, preferences and relative, participating, optional and other special rights:

 

SECTION l - DESIGNATION AND RANK

 

1.01     Designation. This resolution shall provide for a single series of preferred stock, the designation of which shall be “Series E Preferred Stock”, $0.0001 par value per share. The number of authorized shares constituting the Series E Preferred Stock is Twenty-five Million (25,000,000) shares.

 

1.02     Rank. Except as provided elsewhere in the Certificate, with respect to the payment of dividends and other distributions on the capital stock of the Company, including the distribution of the assets of the Company upon liquidation, the Series E

 

 

 

Preferred Stock shall rank pari passu with the Common Stock on an “as converted” basis, junior as to the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock and senior to all other series of preferred stock.

 

SECTION 2 - DIVIDEND RIGHTS

 

2.01.     Dividends or Distributions. Each share of Series E Preferred Stock shall be entitled to receive dividends or distributions on his share of Series E Preferred Stock on an “as converted” basis as provided in Section 4 hereof when and if dividends are declared on the Common Stock by the Board. Dividends shall be paid in cash or property, as determined by the Board.

 

 

SECTION 3 LIQUIDATION RIGHTS

 

3.01.     Liquidation Preference. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (collectively, a “Liquidation”), before any distribution or payment shall be made to any of the holders of Common Stock or any other series of preferred stock except for Series D Preferred Stock, the holders of Series E Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital, surplus or earnings, an amount equal to $0.001 per share of Series E Preferred Stock (the “ Liquidation Amount “) plus all declared and unpaid dividends thereon, for each share of Series E Preferred Stock held by them.

 

3.02.     Pro Rata Distribution. If, upon any Liquidation, the assets of the Company shall be insufficient to pay the Liquidation Amount, together with declared and unpaid dividends thereon, in full to all holders of Series E Preferred Stock, then the entire net assets of the Corporation shall be distributed among the holders of the Series E Preferred Stock, ratably in proportion to the full amounts to which they would otherwise be respectively entitled and such distributions may be made in cash or in property taken at its fair value (as determined in good faith by the Company's Board of Directors), or both, at the election of the Company' s Board of Directors.

 

3.03.     Merger, Consolidation or Reorganization. For purposes of this Section 3, a Liquidation shall be deemed to be occasioned by or to include the merger, consolidation or reorganization of the Company into or with another entity through one or a series of related transactions, or the sale, transfer or lease of all or substantially all of the assets of the Company.

 

 

SECTION 4 - CONVERSION RIGHTS

 

4.01     Conversion. Subject to the limitations set forth herein below, each share of Series E Preferred Stock shall be convertible (the “'Conversion Rights”), al the option of the holder thereof at any time and from time to time, beginning on April 15, 2013. into One (1) share of the Company's Common Stock (“Conversion Shares'') at the time of the conversion. The shares of Common Stock received upon conversion shall be fully paid and non-assessable shares of Common Stock.

 

 

 

4.02     Adjustments. The Conversion Rights of the Series E Preferred Stock as described in Section 4.01 above shall be adjusted from time to time as follows:

 

(a)     In the event of any reclassification of the Common Stock or recapitalization involving Common Stock (including a subdivision, or combination of shares or any other event described in this Section 4.02) the holder of Series E Preferred Stock shall thereafter be entitled to receive, and provision shall be made therefore in any agreement relating to the reclassification or recapitalization, upon conversion of the Series E Preferred Stock, the kind and number of shares of Common Stock or other securities or property (including cash) to which such holder of Series E Preferred Stock would have been entitled if he had held the number of shares of Common Stock into which the Series E Preferred Stock was convertible immediately prior to such reclassification or recapitalization; and in any such ca-;e appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holder of the Series E Preferred Stock, to the end that the provisions set forth herein shall thereafter be applicable. as nearly as reasonably may be, in relation to any shares, other securities, or property thereafter receivable upon conversion of the Series E Preferred Stock. An adjustment made pursuant to this subparagraph (a) shall become effective at the time at which such reclassification or recapitalization becomes effective.

 

(b)     In the event the Company shall declare a distribution payable in securities of other entities or persons, evidences of indebtedness issued by the Company or other entities or persons, assets (excluding cash dividends) or options or rights not referred to in Section 4.02(a) above, the holder of the Series E Preferred Stock shall be entitled to a proportionate share of any such distribution as though he was the holder of the number of shares of Common Stock of the Company into which his shares of Series E Preferred Stock are convertible as of the record date fixed for the determination of the holders of shares of Common Stock of the Company entitled to receive such distribution or if no such record date is fixed, as of the <late such distribution is made.

 

4.03     Procedures for Conversion.

 

(a)     ln order to exercise the Conversion Rights pursuant to Section 4.01 above, the holder shall deliver an irrevocable written notice of such exercise to the Company at its principal office. The holder shall, upon the conversion of Series E Preferred Stock in accordance with this Section 4, surrender the certificate representing such share of Series E Preferred Stock to the Company, at its principal office, and specify the name or names in which the holder wishes the certificate or certificates for shares of Common Stock to be issued. In case the holder shall specify a name or names other th.an that of the Investor, such notice shall be accompanied by payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof) payable upon the issuance of shares of Common Stock in such name or names. As promptly as practicable, and, if applicable, after payment of all transfer taxes (if transfer is to a person or entity other than the holder thereof), the Company shall deliver or cause to be delivered certificates representing the number of validly issued, fully paid and non-assessable shares of Common Stock to which the holder shall be entitled. Such conversion, to the extent permitted by law, shall be deemed to have been effected as of the date of receipt by the Company of any notice of

 

 

 

conversion pursuant to this Section 4.03(a), upon the occurrence of any event specified therein. Upon conversion of a share of Series E Preferred Stock. such share shall cease to constitute a share of Series E Preferred Stock and shall represent only a right to receive shares of Common Stock into which it has been converted.

 

(b)     Beginning as of the date hereof, the Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock of the Company issuable upon the conversion of the share of Series E Preferred Stock. In the event that the Company does not have a sufficient number of shares of authorized but unissued Common Stock necessary to satisfy the ful1 conversion of shares of Series E Preferred Stock, then the Company shall call and hold a meeting of the stockholders within thirty (30) days of such occurrence for the sole purpose of increasing the number of authorized shares of Common Stock. The Board shall recommend to stockholders a vote in favor of such proposal and shall vote all shares held by them, in proxy or otherwise, in favor of such proposal. This remedy is not intended to limit the remedies available to the holder of the Series E Preferred Stock, but is intended to be in addition to any other remedies, whether in contract, at law or in equity.

 

4.04    Notices of Record Date. In the event that the Company shall propose at any time: (i) to declare any dividend or distribution upon any class or series of capital stock, whether in cash, property, stock or other securities; (ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or (iii) to merge or consolidate with or into any other corporation, or to sell, lease or convey all or substantially all of its property or business, or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall mail to the holder of Series E Preferred Stock: at least twenty (20) days' prior written notice of the date on which a record shall be taken for such dividend or distribution (and specifying the date on which t11e holders of the affected class or series of capital stock shall be entitled thereto) or for determining the rights to vote, if any, in respect of the matters referred to in clauses (ii) and (iii) in this Section 4.04, and in the case of the matters referred to in this Section 4.4     (ii) and {iii), written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction (and specify the date on which the holders of shares of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event) and the Company shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Company has given the first notice provided for herein or sooner than ten (10) days after the Company has given notice of any material changes provided for herein.

 

4.05     Limitations of Conversion. The Conversion Rights specified herein shall be subject to the following limitations:

 

(i) The holders of the shares of Series E Preferred Stock may exercise their Conversion Rights at any time after April 15, 2013; and

 

 

 

(ii) No holder of the shares of Series E Preferred Stock shall be entitled to convert the Series A Preferred Stock to the extent, but only to the extent, that such conversion would, upon giving effect to such conversion, cause the aggregate number of shares of Common Stock beneficially owned by such holder to exceed 4.99% of the outstanding shares of Common Stock following such conversion (which provision may be waived by such holder by written notice from such holder to the Company, which notice shall be effective 61 days after the date of such notice).

 

 

SECTION 5 - VOTING RIGHTS

 

5.01     General. Except as otherwise provided herein or required by law, the holders of Series E Preferred Stock and the holders of Common Stock shall vote together and not as separate classes and the Series E Preferred Stock shall be counted on an “as converted” basis times Sixty (60).

 

SECTION 6- MISCELLANEOUS

 

6.01     Headings of Subdivisions. The headings of the various Sections hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof

 

6.02     Severability of Provisions. If any right, preference or limitation of the Series E Preferred Stock set forth herein (as this resolution may be amended from time to time) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth in this resolution (as so amended) which can be given effect without the invalid, unlawful or w1enforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

 

6.03     Stock Transfer Taxes. The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of the share of Series E Preferred Stock or shares of Common Stock or other securities issued on account of Series E Preferred Stock pursuant hereto or certificates representing such

shares or securities.

 

6.04     Transfer Agent. The Corporation may appoint, and from time to time discharge and/or replace, a transfer agent of the Series E Preferred Stock. Upon any such appointment or discharge of a transfer agent, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the holder of record of Series E Preferred Stock.

 

6.05     Transferability. Subject to any transfer restriction agreements that may be entered into by the holder of Series E Preferred Stock, the Series E Preferred Stock shall be transferable by the holder, provided that such transfer is made in compliance with applicable federal and state securities laws.

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by Gary Koelsch, its President, as of the 11th day of February, 2015.

 

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Gary Koelsch                       

 

      Gary Koelsch

 

      President

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 02:18 PM 02/19/2015

FILED 02 :16 PM 02/19/2015

SRV 150223345 - 2624514 FILE

 

 

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION 

OF

W TECHNOLOGIES, INC.

  

W Technologies, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify:

 

FIRST. That by Unanimous Written Consent of the Board of Directors of the Corporation, Resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendments is as follows:

 

RESOLVED, that the Certificate of Incorporation of the Corporation be amended by changing the Article thereof numbered “Fourth” so that, as amended, said Article shall be and read as follows:

 

“FOURTH:     This Corporation is authorized to issue two (2) classes of shares designated “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this Corporation is authorized to issue is 10,000,000,000 and each such share shall have a par value of $0.0001, and the total number of shares of Preferred Stock this Corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.0001. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

 

Every One Thousand (1,000) shares of Common Stock outstanding on the effective date of this amendment shall be automatically converted in one (1) share of Common Stock and, in lieu of fractional shares, each share so converted shall be rounded up to the next highest number of full shares of Common Stock.”

 

SECOND. That thereafter, pursuant to resolution of its board of directors, by Written Consent of the holders of a majority of the issued and outstanding voting shares of the Company's stock the amendment was approved in accordance with Section 228 of the General Corporation Law of the State of Delaware.

 

 

 

THIRD. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

 

FOURTH. This Amendment shall be effective on March 6, 2015.

 

 

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 16th day of February, 2015.

 

   
 

By: /s/ Gary Koelsch         

 

Name: Gary Koelsch

 

Title: President

 

 

 

 

 

STATE OF DELAWARE CERTIFICATE FOR REVIVAL OF CHARTER

 

The corporation organized under the laws of the State of Delaware, the charter of which was voided for non-payment of taxes and/or for failure to file a complete annual report, now desires to procure a revival of its charter pursuant to Section 312 of the General Corporation Law of the State of Delaware, and hereby certifies as follows:

 

1.     The name of the corporation is W TECHNOLOGIES, INC.                                and, if different, the name under which the corporation was originally incorporated.

 

2.     The Registered Office of the corporation in the State of Delaware is located at 1013 Centre Road, Suite 403-B                                    (street),

in the City of Wilmington          ,  County of  New Castle              Zip Code 19805    . The name of the Registered Agent at such address upon whom process against this Corporation may be served is Vcorp Services, LLC                      . 

 

3.     The date of filing of the Corporation's original Certificate of Incorporation in Delaware was 5/16/1996                                     .

 

4.     The corporation desiring to be revived and so reviving its certificate of incorporation was organized under the laws of this State.

 

5.     The corporation was duly organized and carried on the business authorized by its charter until the  1       day of March          A.D. 2016     , at which time its charter became inoperative and void for non-payment of taxes and/or failure to file a complete annual report and the certificate for revival is filed by authority of the duly elected directors of the corporation in accordance with the laws of the State of Delaware.

 

 

 

By:            /s/ Serge Mersilian                  

 

                Authorized Officer

   
   
 

Name:    Serge Mersilian, President                          

                         Print or Type

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 11:27 AM 10/30/2018

FILED 11:27 AM 10/3012018

SR 20187387978 - File Number 2624514

 

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:32 AM 12/10/2020

FILED 10:32 AM 12/10/2020

SR 20208611107 - File Number 2624514

 

 

CERTIFICATE OF WITHDRAWAL OF CERTIFICATE OF DESIGNATION,

PREFERENCES, AND RIGHTS OF

SERIES B CONVERTIBLE PREFERRED STOCK

OF

W Technologies, Inc.

 

a Delaware corporation

 

W Technologies, Inc., a Delaware corporation (the “Corporation”), DOES HEREBY CERTIFY:

 

That, pursuant to authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) and pursuant to the provisions of Section 151 of Title 8 of the Delaware Code, the Board of Directors (“Board”), by unanimous written consent of the Board dated December 10, 2020, adopted resolutions eliminating the designation and the relative powers, preferences, rights, qualifications, limitations and restrictions of the Corporation's Series B Convertible Preferred Stock, and these composite resolutions eliminating the designation and relative powers, preferences, rights, qualifications, limitations and restrictions of such Series B Convertible Preferred Stock are as follows:

 

WHEREAS, the Board of Directors of the Corporation has previously adopted resolutions providing for the designation, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions thereof, of 850,000 shares of the Corporation's Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) as the Series B Convertible Preferred Stock (the “Series B Preferred Stock”) pursuant to the Certificate of Designations, Preferences and Rights of Series B and Series C Convertible Preferred Stock ($0.0001 Par Value per share), filed with the Secretary of State of the State of Delaware on July 5, 2001 (the “Series B Certificate);

 

WHEREAS, no shares of Series B Preferred Stock are outstanding and no such shares of Series B Preferred Stock shall be issued in the future and Board of Directors of the Corporation deems it to be in the best interests of the Corporation and its stockholders to withdraw the Series B Certificate and return the shares of preferred stock previously designated as Series B Preferred Stock to authorized preferred stock available for designation and issuance in accordance with the Certificate of Incorporation, pursuant to a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Stock;

 

NOW THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate

 

 

 

 

 

 

of Incorporation of the Corporation, the Board of Directors of the Corporation hereby withdraws the Series B Certificate and returns the previously designated shares of Series B Preferred Stock to their status as authorized preferred stock available for designation and issuance as determined by the Board of Directors of the Corporation, and that the officers of the Corporation, and each acting singly, are hereby authorized, empowered and directed to file with the Secretary of State of the State of Delaware a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Stock in such form as the officers of the Corporation may deem necessary, and to take such other actions as such officers shall deem necessary or advisable to carry out the purposes of this resolution; and be it

 

FURTHER RESOLVED, that when such certificate of withdrawal becomes effective upon acceptance of the Secretary of State of the State of Delaware, it shall have the effect of eliminating from the Corporation's current Certificate of Incorporation all matters set forth in the Series B Certificate with respect to the Series B Preferred Stock. 

 

 

 

 

[Signature page follows]

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Withdrawal to be signed by and attested by its duly authorized officers this 10th day of December, 2020.

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Mikael Lundgren                       

 

Name: Mikael Lundgren

 

Title: Chief Executive Officer

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:32 AM 12/10/2020

FILED 10:32 AM 12/ 10/2020

SR 20208611116 - File Number 2624514

 

 

CERTIFICATE OF WITHDRAWAL OF CERTIFICATE OF DESIGNATION,

PREFERENCES, AND RIGHTS OF

SERIES C CONVERTIBLE PREFERRED STOCK

OF

W Technologies, Inc.

 

a Delaware corporation

 

W Technologies, Inc., a Delaware corporation (the “Corporation”), DOES HEREBY CERTIFY:

 

That, pursuant to authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) and pursuant to the provisions of Section 151 of Title 8 of the Delaware Code, the Board of Directors (“Board”), by unanimous written consent of the Board dated December 10, 2020, adopted resolutions eliminating the designation and the relative powers , preferences, rights, qualifications, limitations and restrictions of the Corporation's Series C Convertible Preferred Stock, and these composite resolutions eliminating the designation and relative powers, preferences, rights, qualifications, limitations and restrictions of such Series C Convertible Preferred Stock are as follows:

 

WHEREAS, the Board of Directors of the Corporation has previously adopted resolutions providing for the designation, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions thereof, of 150,000 shares of the Corporation's preferred stock as the Series C Convertible Preferred Stock (the “Series C Preferred Stock”) pursuant to the Certificate of Designations, Preferences and Rights of Series B and Series C Convertible Preferred Stock ($0.0001 Par Value per share) filed with the Secretary of State of the State of Delaware on July 5, 2001 (the “Series C Certificate);

 

WHEREAS, no shares of Series C Preferred Stock are outstanding and no such shares of Series C Preferred Stock shall be issued in the future and Board of Directors of the Corporation deems it to be in the best interests of the Corporation and its stockholders to withdraw the Series C Certificate and return the shares of preferred stock previously designated as Series C Preferred Stock to authorized preferred stock available for designation and issuance in accordance with the Certificate of Incorporation, pursuant to a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series C Convertible Preferred Stock;

 

NOW THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate

 

 

 

of Incorporation of the Corporation, the Board of Directors of the Corporation hereby withdraws the Series C Certificate and returns the previously designated shares of Series C Preferred Stock to their status as authorized Preferred Stock available for designation and issuance as determined by the Board of Directors of the Corporation, and that the officers of the Corporation, and each acting singly, are hereby authorized, empowered and directed to file with the Secretary of State of the State of Delaware a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series C Convertible Preferred Stock in such form as the officers of the Corporation may deem necessary, and to take such other actions as such officers shall deem necessary or advisable to carry out the purposes of this resolution; and be it

 

FURTHER RESOLVED, that when such certificate of withdrawal becomes effective upon acceptance of the Secretary of State of the State of Delaware, it shall have the effect of eliminating from the Corporation's current Certificate of Incorporation all matters set forth in the Series C Certificate with respect to the Series C Preferred Stock.

 

 

 

[Signature page follows}

 

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Withdrawal to be signed by and attested by its duly authorized officers this 10th day of December, 2020.

 

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Mikael Lundgren                            

 

Name: Mikael Lundgren

 

Title: Chief Executive Officer

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:32 AM 12/10/2020

FILED 10:32 AM 12/10/2020

SR 202086 11118 - File Number 2624514

 

 

CERTIFICATE OF WITHDRAWAL OF CERTIFICATE OF DESIGNATION,

PREFERENCES, AND RIGHTS OF

SERIES D PREFERRED STOCK

OF

W Technologies, Inc.

 

a Delaware corporation

 

W Technologies, Inc., a Delaware corporation (the “Corporation”), DOES HEREBY CERTIFY:

 

That, pursuant to authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) and pursuant to the provisions of Section 151 of Title 8 of the Delaware Code, the Board of Directors (“Board”), by unanimous written consent of the Board dated December 10, 2020, adopted resolutions eliminating the designation and the relative powers, preferences, rights, qualifications, limitations and restrictions of the Corporation's Series D Preferred Stock, and these composite resolutions eliminating the designation and relative powers, preferences, rights, qualifications, limitations and restrictions of such Series D Preferred Stock are as follows:

 

WHEREAS, the Board of Directors of the Corporation has previously adopted resolutions providing for the designation, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions thereof, of 67 shares of the Corporation's preferred stock as the Series D Preferred Stock (the “Series D Preferred Stock”) pursuant to the Certificate of Designations , Preferences and Rights of the Series D Preferred Stock ($0.001 [sic] Par Value per share), filed with the Secretary of State of the State of Delaware on April 14, 2010 (the “Series D Certificate);

 

WHEREAS, no shares of Series D Preferred Stock are outstanding and no such shares of Series D Preferred Stock shall be issued in the future and Board of Directors of the Corporation deems it to be in the best interests of the Corporation and its stockholders to withdraw the Series D Certificate and return the shares of preferred stock previously designated as Series D Preferred Stock to authorized preferred stock available for designation and issuance in accordance with the Certificate of Incorporation, pursuant to a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series D Preferred Stock;

 

NOW THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate

 

 

 

of Incorporation of the Corporation, the Board of Directors of the Corporation hereby withdraws the Series D Certificate and returns the previously designated shares of Series D Preferred Stock to their status as authorized Preferred Stock available for designation and issuance as determined by the Board of Directors of the Corporation, and that the officers of the Corporation, and each acting singly, are hereby authorized, empowered and directed to file with the Secretary of State of the State of Delaware a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series D Preferred Stock in such form as the officers of the Corporation may deem necessary, and to take such other actions as such officers shall deem necessary or advisable to carry out the purposes of this resolution; and be it

 

FURTHER RESOLVED, that when such certificate of withdrawal becomes effective upon acceptance of the Secretary of State of the State of Delaware, it shall have the effect of eliminating from the Corporation's current Certificate of Incorporation all matters set forth in the Series D Certificate with respect to the Series D Preferred Stock

 

 

 

[Signature page follows]

 

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Withdrawal to be signed by and attested by its duly authorized officers this 10th day of December, 2020.

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Mikael Lundgren                     

 

Name: Mikael Lundgren

 

Title: Chief Executive Officer

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:32 AM 12/10/2020

FILED 10:32 AM 12/10/2020

SR 20208611119 - File Number 2624514

 

 

 

CERTIFICATE OF WITHDRAWAL OF CERTIFICATE OF DESIGNATION,

PREFERENCES, AND RIGHTS OF

SERIES E PREFERRED STOCK

OF

W Technologies, Inc.

 

a Delaware corporation

 

W Technologies, Inc., a Delaware corporation (the “Corporation”), DOES HEREBY CERTIFY:

 

That, pursuant to authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) and pursuant to the provisions of Section 151 of Title 8 of the Delaware Code, the Board of Directors (“Board”), by unanimous written consent of the Board dated December 10, 2020, adopted resolutions eliminating the designation and the relative powers , preferences, rights, qualifications, limitations and restrictions of the Corporation's Series E Preferred Stock, and these composite resolutions eliminating the designation and relative powers, preferences, rights, qualifications, limitations and restrictions of such Series E Preferred Stock are as follows:

 

WHEREAS, the Board of Directors of the Corporation has previously adopted resolutions providing for the designation, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions thereof, of 25,000,000 shares of the Corporation's preferred stock as the Series E Preferred Stock (the “Series E Preferred Stock”) pursuant to the Certificate of Designations, Preferences and Rights of the Series E Preferred Stock ($0.0001 Par Value per share), filed with the Secretary of State of the State of Delaware on December 19, 2011, as amended by the Amended and Restated Certificate of Designations, Preferences and Rights of the Series E Preferred Stock ($0.0001 Par Value per share), filed with the Secretary of State of the State of Delaware on February 12, 2015 (as so amended, the “Series E Certificate);

 

WHEREAS, no shares of Series E Preferred Stock are outstanding and no such shares of Series E Preferred Stock shall be issued in the future and Board of Directors of the Corporation deems it to be in the best interests of the Corporation and its stockholders to withdraw the Series E Certificate and return the shares of preferred stock previously designated as Series E Preferred Stock to authorized preferred stock available for designation and issuance in accordance with the Certificate of Incorporation, pursuant to a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series E Preferred Stock; and

 

 

 

 

NOW THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate of Incorporation of the Corporation, the Board of Directors of the Corporation hereby withdraws the Series E Certificate and returns the previously designated shares of Series E Preferred Stock to their status as authorized preferred stock available for designation and issuance as determined by the Board of Directors of the Corporation, and that the officers of the Corporation, and each acting singly, are hereby authorized, empowered and directed to file with the Secretary of State of the State of Delaware a Certificate of Withdrawal of the Certificate of Designation, Preferences and Rights of the Series E Preferred Stock in such form as the officers of the Corporation may deem necessary, and to take such other actions as such officers shall deem necessary or advisable to carry out the purposes of this resolution; and be it

 

FURTHER RESOLVED, that when such certificate of withdrawal becomes effective upon acceptance of the Secretary of State of the State of Delaware, it shall have the effect of eliminating from the Corporation's current Certificate of Incorporation all matters set forth in the Series E Certificate with respect to the Series E Preferred Stock.

 

[Signature page follows]

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Withdrawal to be signed by and attested by its duly authorized officers this 10th day of December, 2020.

 

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Mikael Lundgren                       

 

Name: Mikael Lundgren

 

Title: Chief Executive Officer

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:52 PM 12/10/2020

FILED 01:52 PM 12/10/2020

SR 20208615039 - File Number 2624514

 

 

 

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF

SERIES F CONVERTIBLE PREFERRED STOCK

OF

W Technologies, Inc.

a Delaware corporation

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, the undersigned Chief Executive Officer of W Technologies, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby file this Certificate of Designations of Preferences and Rights of Series F Convertible Preferred Stock (this “Certificate of Designations”) and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation's Certificate of Incorporation, and pursuant to Section 151 of the General Corporation Law of the State of Delaware and in accordance with the provisions of the resolution creating a series of the class of the Corporation's authorized Preferred Stock designated as Series F Convertible Preferred Stock, as follows:

 

FIRST: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 10,000,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”) and 50,000,000 shares of preferred stock, par value $0.000 I per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation, by resolution or resolutions, at any time and from time to time, to divide and establish any or all of the unissued shares of Preferred Stock not then allocated to any series into one or more series and, without limiting the generality of the foregoing, to fix and determine the designation of each such share, the number of shares which shall constitute such series and certain preferences, limitations and relative rights of the shares of each series so established.

 

SECOND: By unanimous written consent of the Board of Directors of the Corporation dated December 10, 2020, the Board of Directors designated 1,000,000 shares of the Preferred Stock as Series F Convertible Preferred Stock, par value $0.0001 per share (the “Series F Preferred Stock”), pursuant to a resolution providing that a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

 

SERIES F CONVERTIBLE PREFERRED STOCK

 

Section 1.     Powers and Rights of Series F Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series F Convertible Preferred Stock, par value $0.0001 per share of the Corporation (the “Series F Preferred Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other

 

 

 

special rights, and qualifications, limitations and restrictions, if any, of the Series F Preferred Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series F Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of shares of Series F Preferred Stock shall be referred to as a “Series F Holder.”

 

(a)     Number and Stated Value. The number of authorized shares of the Series F Preferred Stock is one million (1,000,000) shares.

 

(b)     Vote. Other than as set forth in Section l(g) and Section l(h), each share of Series F Preferred Stock shall have a number of votes equal to the number of shares of common stock, par value $0.0001 per share, of the Corporation (the “Common Stock”) into which such share of Series F Preferred Stock is then convertible (following any adjustments thereto as set forth herein), and shall vote together with the Common Stock, or any class thereof, as applicable, on such matter for as long as the share of Series F Preferred Stock is issued and outstanding. The Series F Preferred Stock shall not have be entitled to vote on any matter on which solely another class of Preferred Stock of the Corporation is entitled to vote as a separate class.

 

(c)     Conversion. Each share of Series F Preferred Stock shall be convertible into shares of Common Stock (the “Conversion Shares”) as set forth herein and subject to the conditions as set forth herein.

 

 

(i)

Timing of Conversion. Each share of Series F Preferred Stock shall be convertible into Conversion Shares at the election of the applicable Series F Holder at any time.

 

 

(ii)

Number of Conversion Shares. Each share of Series F Preferred Stock shall be initially be convertible into a 200 Conversion Shares (the “Conversion Ratio”), with such Conversion Ratio being subject to adjustment as set forth herein.

 

 

(iii)

Adjustment. The Conversion Ratio shall be subject to proportional and equitable adjustments following the date hereof for splits, combinations or stock dividends relating to the Common Stock, or combinations, recapitalization, reclassifications, extraordinary distributions and similar events that occur on or after the date hereof. By way of example and not limitation, in the event of forward split of the Common Stock following the date hereof, in which each share of Common Stock is converted into two shares of Common Stock, the Conversion Ratio shall be increased by 100%, such that each share of Series F Preferred Stock shall be convertible into 400 shares of Common Stock; and in the event of a reverse split of the Common Stock following the date hereof in which each two shares of Common Stock are converted into one share of Common Stock, the Conversion Ratio shall be reduced by 50%, such that each share of Series F Preferred Stock shall be convertible into 100shares of Common Stock. The adjustments as set forth in this Section 1(c)(iii) shall be undertaken each time an event as set forth in this Section l(c)(iii) occurs.

 

 

(iv)

Conversion Election. A Series F Holder shall effect conversions pursuant to this Section l(c) by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Series F Notice of Conversion”). Each Series F Notice of Conversion shall specify the number of shares of Series F Preferred Stock

 

 

 

 

to be converted, the number of shares of Series F Preferred Stock owned prior to the conversion at issue, the number of shares of Series F Preferred Stock owned subsequent to the conversion at issue, the number of shares of Common Stock to be received, and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Series F Holder delivers such Series F Notice of Conversion to the Corporation (such date, the “Series F Conversion Date”). If no Series F Conversion Date is specified in a Series F Notice of Conversion, the Series F Conversion Date shall be the date that such Series F Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Series F Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Series F Notice of Conversion form be required. The calculations and entries set forth in the Series F Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Series F Preferred Stock, a Series F Holder shall not be required to surrender any certificate(s) representing the shares of Series F Preferred Stock to the Corporation unless all of the shares of Series F Preferred Stock represented thereby are so converted, in which case such Holder shall deliver any certificate representing such shares of Series F Preferred Stock promptly following the Series F Conversion Date at issue. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such Series F Holder a certificate or certificates for the number of Conversion Shares to which such Series F Holder shall be entitled as aforesaid or shall record the applicable Series F Holder as the holder of the applicable Conversion Shares in the books and records of the Corporation. Such conversion shall be deemed to have been made on the Series F Conversion Date, and the person or persons entitled to receive the Conversion Shares shall be treated for all purposed as the record holder or holders of such shares of Common Stock as of such date. All shares of Series F Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive dividends and to vote, shall immediately cease and terminate on the Conversion Date, except only the right of the holders thereof to receive Conversion Shares in exchange therefor. Neither the shares of Series F Preferred Stock nor any Conversion Shares shall be required to be certificated, but may be certificated at the election of the Corporation.

 

 

(v)

Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series F Preferred Stock. As to any fraction of a share which the Series F Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock.

 

 

(vi)

Transfer Taxes and Expenses. The issuance of Series F Conversion Shares on conversion of Series F Preferred Stock shall be made without charge to any Series F Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Series F Conversion Shares, provided that the

 

 

 

Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Series F Conversion Shares upon conversion in a name other than that of the Series F Holders of such shares of Series F Preferred Stock and the Corporation shall not be required to issue or deliver such Series F Conversion Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

(d)     Dividends. Series F Holders shall be entitled to receive, and the Corporation shall pay, such dividends and other distributions, on shares of Series F Preferred Stock as and when paid on the Common Stock, payable on the Series F Preferred Stock on an as-converted basis (i.e., assuming that the Series F Preferred Stock was otherwise convertible at such time).

 

(e)     No Preferences upon Liquidation. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntarily or involuntarily, a merger or consolidation of the Corporation wherein the Corporation is not the surviving entity, or a sale of all or substantially all of the assets of the Corporation, the Series F Preferred Stock shall not be entitled to receive any distribution of any of the assets or surplus funds of the Corporation but shall participate with the Common Stock on any such distributions on an as-converted basis (i.e., assuming that the Series F Preferred Stock was otherwise convertible at such time).

 

(f)     Participation. The Series F Preferred Stock shall participate in any distributions or payments to the holders of the Common Stock on an as-converted basis, but shall not participate in any distributions to any other classes of Preferred Stock of the Corporation other than those made to such other classes of Preferred Stock which are convertible into shares of Common Stock and which are entitled to such distributions or payments on an as-converted basis (i.e., assuming that the Series F Preferred Stock was otherwise convertible at such time).

 

(g)     Amendment. The Corporation may not, and shall not, amend this Certificate of Designations without the prior written consent or approval of Series F Holders holding a majority of the Series F Preferred Stock then issued and outstanding, in which vote each share of Series F Preferred Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series F Holders.

 

(h)      Issuance of Additional Shares of Series F Preferred Stock. Following the time at which any shares of Series F Preferred Stock have been issued by the Corporation, the Corporation may not, and shall not, issue any additional shares of Series F Preferred Stock without the prior written consent or approval of Series F Holders holding a majority of the Series F Preferred Stock then issued and outstanding, in which vote each share of Series F Preferred Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series F Holders

 

 

 

Section 2.     Miscellaneous.

 

(a)    Legend. Any certificates representing the Series F Preferred Stock shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

(b)     Lost or Mutilated Series F Preferred Stock Certificate. If the certificate for the Series F Preferred Stock held by the holder thereof (each, a “Series F Holder”) shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series F Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

 

(c)     Interpretation. If the Series F Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

(d)     Waiver. Any waiver by the Corporation or the Series F Holder of a breach of any provision of this Certificate of Designations shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designations. The failure of the Corporation or the Series F Holder to insist upon strict adherence to any term of this Certificate of Designations on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designations. Any waiver must be in writing.

 

(e)     Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount

 

 

 

deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

 

IN WITNESS WHEREOF, W Technologies, Inc. has caused this Certificate of Designations to be signed by a duly authorized officer on this 10th day of December, 2020.

 

 

 

W Technologies, Inc.

   
   
 

By: /s/ Mikael Lundgren                       

 

Name: Mikael Lundgren

 

Title: Chief Executive Officer

 

 

 

 

 


Annex A

Series F Notice of Conversion


 

(To be executed by a Series F Holder in order to convert shares of Series F Preferred Stock)

 

Subject to the terms and conditions of the Certificate of Incorporation of W Technologies, Inc., a Delaware corporation (the “Corporation”), the undersigned hereby elects to convert the number of shares of Series F Convertible Preferred Stock, par value $0.0001 per share (the “Series F Preferred Stock”) of the Corporation indicated below into shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Corporation, according to the conditions hereof, as of the date written below.

 

Conversion calculations:

 

 

     

Date to Effect Conversion:

   
     

Number of shares of Series F Preferred Stock held prior to conversion:

   
     

Number of shares of Series F Preferred Stock to be converted:

   
     

Number of shares of Common Stock to be issued:

   
     

Number of shares of Series F Preferred Stock held subsequent to conversion:

   
     

Address for Delivery:

   
     
     
     
     

Series F Holder Name:

   

Signature:

   

By:

   

Title (if applicable):

   

 

 

 

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 09:14AM 12/14/2020

FILED 09:14 AM 12/14/2020

SR 20208636905 - File Number 2624514

 

 

 

CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION OF 

W Technologies, Inc.

 

W Technologies, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:

 

1.     The name of the corporation is W Technologies, Inc. The date of the filing of its Certificate of Incorporation with the Secretary of State of the State of Delaware was May 16, 1996 (as amended to date, the ''Certificate of Incorporation”).

 

2.     This Certificate of Amendment to Certificate of Incorporation (this “Certificate of Amendment”) amends the provisions of paragraph “SIXTH” of the Certificate of Incorporation to add the following as the last sentence thereto:

 

In the furtherance and not in limitation of the powers conferred by statute and subject to the immediately following proviso, the Board of Directors of the Corporation is expressly authorized to adopt, repeal, rescind, alter or amend in any respect the bylaws of the Corporation (the “Bylaws”); provided that, notwithstanding the forgoing, the Bylaws may also be adopted, repealed, rescinded, altered or amended in any respect by the stockholders of the Corporation, but only by the affirmative vote of the holders of not less than fifty- one percent (51%) of the voting power of all outstanding shares of voting stock, regardless of class and voting together as a single voting class.

 

3.     The remaining provisions of the Certificate of Incorporation not affected by the aforementioned amendments shall remain in full force and shall not be affected by this Certificate of Amendment.

 

4.     This Certificate of Amendment was duly adopted by the Board of Directors of the Corporation on December 11, 2020 and by the stockholders of the Corporation on December 11, 2020 in accordance with the applicable provisions of Sections 141, 228 and 242 of the General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer this 11th day of December, 2020.

 

 

 

 

By: /s/ Mikael Lundgren                          

 

Name: Mikael Lundgren

 

Title: Chief Executive Officer

 

 

 

EXHIBIT 3.2

 

AMENDED AND RESTATED BYLAWS OF

W Technologies, Inc.

a Delaware corporation

 

Adopted December 15, 2020

 

1.

Offices. W Technologies, Inc. (the “Corporation”) may have an office or offices, and keep the books and records of the Corporation, except as may otherwise be required by applicable law, at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or the business of the Corporation may require.

 

2.

Meetings of Stockholders.

 

 

2.1.

Annual Meetings. The annual meetings of stockholders for the election of directors and for such other business as may be stated in the notice of the meeting shall be held at such time and date and place as the Board, by resolution, shall determine and as set forth in the notice of the meeting and shall be held at such place, either within or without the State of Delaware. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day.

 

 

2.2.

Deferred Meeting for Election of Directors, etc. If the annual meeting of stockholders for the election of directors and the transaction of other business is not held within the time specified in Section 2.1, the Board shall call a special meeting of stockholders for the election of directors and the transaction of other business as soon thereafter as convenient.

 

 

2.3.

Other Special Meetings. A special meeting of stockholders (other than a special meeting for the election of directors), unless otherwise prescribed by statute, may only be called by the Board and may be called at any time by the Board. At any special meeting of stockholders, only such business may be transacted as is related to the purpose(s) of such meeting set forth in the notice thereof given pursuant to Section 2.5 or in any waiver of notice thereof given pursuant to Section 2.6.

 

 

2.4.

Fixing Record Date. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a date as of the record date for any such determination of stockholders. Such date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting nor more than sixty (60) days prior to any other action. If no such record date is fixed:

 

 

(a)

The record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if no notice is given or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

 

 

(b)

The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is expressed;

 

1

 

 

(c)

The record date for determining stockholders for any purpose other than those specified in Sections 2.4(a) and Section 2.4(b) shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

When a determination of stockholders entitled to notice of, or to vote at, any meeting of stockholders has been made as provided in this Section 2.4, such determination shall apply to any adjournment thereof, unless the Board fixes a new record date for the adjourned meeting.

 

 

2.5.

Notice of Meetings of Stockholders; Location. Except as otherwise provided in Section 2.4 and Section 2.6, whenever under any provision of the Delaware General Corporation Law (as the same may be amended and supplemented from time to time, and including any successor provision thereto, the “DGCL”), the Certificate of Incorporation of the Corporation (as the same may be amended, supplemented and/or restated from time to time, the “Certificate”) or these Bylaws, stockholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose(s) for which the meeting is called. Except as otherwise provided by any provision of the DGCL, a copy of the notice of any meeting shall be given, personally or by mail, not less than 10 nor more than 60 days before the date of the meeting, to each stockholder entitled to notice of, or to vote at, such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States Mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice required by this Section 2.5 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken and, at the adjourned meeting, any business may be transacted that might have been transacted at the meeting originally called. If, however, the adjournment is for more than 60 days or if, after the adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. The Board may designate the place of meeting for any meeting of Stockholders. If no designation is made by the Board, the place of meeting shall be the principal executive offices of the Corporation. The Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by the DGCL

 

 

2.6.

Waivers of Notice. Whenever notice is required to be given to the stockholders under any provision of the DGCL, or the Certificate or these Bylaws, a written waiver thereof, signed by a stockholder entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a stockholder at a meeting shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.

 

2

 

 

2.7.

Quorum of Stockholders; Adjournment; Postponement. The holders of a 33.33% of the voting power, present, in person or represented by proxy, shall be necessary and sufficient to constitute a quorum for the transaction of any business at such meeting, except where otherwise provided by any provision of the DGCL. When a quorum is once present to organize a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders. The Chairman, or the holders of a majority of the shares of stock present in person or represented by proxy at any meeting of stockholders, including an adjournment meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Any previously scheduled meeting of stockholders may be postponed, and any previously scheduled special meeting of Stockholders may be canceled, by the Board upon public notice given prior to the time previously scheduled for such meeting of stockholders.

 

 

2.8.

Voting; Proxies.

 

 

(a)

Unless otherwise provided in the Certificate, every stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of capital stock standing in his name on the record of stockholders determined in accordance with Section 2.4. If the Certificate provides for more or less than one vote for any share on any matter, every reference in these Bylaws or any provision of the DGCL, to a majority or other proportion of stock shall refer to such majority to other proportion of the votes of such stock. The provisions of the DGCL shall apply in determining whether any shares of capital stock may be voted and the persons, if any entitled to vote such shares, but the Corporation shall be protected in treating the persons in whose names shares of capital stock stand on the record of stockholders as owners thereof for all purposes.

 

 

(b)

In any uncontested election of directors, each person receiving a majority of the votes cast shall be deemed elected. For purposes of this paragraph, a ‘majority of the votes cast’ shall mean that the number of votes cast ‘for’ a director must exceed the number of votes cast ‘against’ that director (with ‘abstentions’ and ‘broker non-votes’ not counted as a vote cast with respect to that director). In any contested election of directors, the persons receiving a plurality of the votes cast, up to the number of directors to be elected in such election, shall be deemed elected. The Board may, but need not, establish policies and procedures regarding the nomination, election and resignation of directors, which policies and procedures may: (i) include a condition to nomination by the Board for election or re-election as a director that an individual agree to tender, if elected or re-elected, an irrevocable offer of resignation conditioned on: (A) failing to receive the required vote for re-election at the next meeting at which such person would face re-election and (B) acceptance of the resignation by the Board, (ii) require: (A) if one exists, the Corporation’s nominating and governance committee or other committee designated by the Board (the “Nominating and Governance Committee”) to make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken and (B) the Board to act on the Nominating and Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it

 

3

 

 

 

within 90 days, to the extent practicable, from the date of the certification of the election results. A “contested election” is one in which: (i) the Secretary receives a notice that a Stockholder has nominated a person for election to the Board in compliance with the advance notice requirements for stockholder nominees for director set forth in Section 2.9 and (ii) such nomination has not been withdrawn by such stockholder on or before the 10th day before the Corporation first mails its notice of meeting for such meeting to the stockholders. An “uncontested election” is any election other than a contested election. All elections of directors shall be by written ballot unless otherwise provided in the Certificate.

 

 

(c)

As to each matter submitted to a vote of the stockholders (other than the election of directors), except as otherwise provided by law or by the Certificate or by these Bylaws, such matter shall be decided by a majority of the votes cast on such matter.

 

 

(d)

In voting on any other question on which a vote by ballot is required by law or is demanded by any stockholder entitled to vote (other than election of directors), the voting shall be by ballot. Each ballot shall be signed by the stockholder voting or by his proxy and shall state the number of shares voted. Every stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person(s) to act for him by proxy. Any proxy to be used at a meeting of stockholders must be delivered to the Secretary of the Corporation or his or her representative at the principal executive offices of the Corporation at or before the time of the meeting. The validity and enforceability of any proxy shall be determined in accordance with the provisions of the DGCL. The Chairman shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting.

 

 

2.9.

Nomination of Directors. Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for election as directors. Nominations of persons for election to the Board may be made at a meeting of stockholders at which directors are to be elected only (a) by or at the direction of the Board or (b) by any stockholder of the Corporation entitled to vote for the election of directors at a meeting who complies with the notice procedures set forth in Section 2.10.

 

 

2.10.

Notices of Business or Nominations for Director.

 

 

(a)

For director nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder, a stockholder’s notice must include the following information and/or documents, as applicable: (A) the name and address of the stockholder giving the notice, as they appear on the Corporation’s books, and of the beneficial owner of stock of the Corporation, if any, on whose behalf such nomination or proposal of other business is made (such beneficial owner, the “Beneficial Owner”); (B) representations that, as of the date of delivery of such notice, such stockholder is a holder of record of stock of the Corporation and is entitled to vote at such meeting and intends to appear in person or by proxy at such meeting to propose and vote for such nomination and any such other business; (C) as to each person whom the stockholder proposes to nominate

 

4

 

 

 

for election or re-election as a director (a “Stockholder Nominee”): (1) all information relating to such Stockholder Nominee that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (as amended from time to time, the “Exchange Act”) or any successor provision thereto, including such Stockholder Nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected and to being named in the Corporation’s proxy statement and form of proxy if the Corporation so determines, (2) a statement whether such Stockholder Nominee, if elected, intends to tender, promptly following such Stockholder Nominee’s election or re-election, an irrevocable offer of resignation effective upon such Stockholder Nominee’s failure to receive the required vote for re-election at the next meeting at which such Stockholder Nominee would face re-election and upon acceptance of such resignation by the Board; and (3) such other information as may be reasonably requested by the Corporation; (D) as to any other business that the stockholder proposes to bring before the meeting: (1) a brief description of such business, (2) the text of the proposal (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend these Bylaws, the text of the proposed amendment) and (3) the reasons for conducting such business at the meeting; and (E) in all cases: (1) the name of each individual, firm, corporation, limited liability company, partnership, trust or other entity (including any successor thereto, a “Person”) with whom the stockholder, any Beneficial Owner, any Stockholder Nominee and the respective affiliates and associates (as defined under Regulation 12B under the Exchange Act or any successor provision thereto) of such stockholder, Beneficial Owner and/or Stockholder Nominee (each of the foregoing, including, for the avoidance of doubt, the Stockholder, Beneficial Owner and/or Stockholder Nominee, a “Stockholder Group Member”) either is acting in concert with respect to the Corporation or has any agreement, arrangement or understanding (whether written or oral) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy given to such Person in response to a public proxy solicitation made generally by such Person to all holders of common stock of the Corporation) or disposing of any capital stock of the Corporation or to cooperate in obtaining, changing or influencing the control of the Corporation (except independent financial, legal and other advisors acting in the ordinary course of their respective businesses) (each Person described in this clause (1), including each Stockholder Group Member, a “Covered Person”), and a description, and, if in writing, a copy, of each such agreement, arrangement or understanding, (2) a list of the class, series and number of shares of capital stock of the Corporation that are beneficially owned or owned of record by each Covered Person, together with documentary evidence of such record or beneficial ownership, (3) a list of all derivative securities (as defined in Rule 16a-1 under the Exchange Act or any successor provision thereto) and other derivatives or similar arrangements to which any Covered Person is a counterparty and relating to any shares of capital stock of the Corporation, a description of all economic terms of all such derivative securities and other derivatives or similar arrangements and copies of all agreements and other documents relating to each of such derivative securities and other derivatives or similar arrangements, (4) a list of all transactions by any Covered Person

 

5

 

 

 

involving any shares of capital stock of the Corporation or any derivative securities (as defined under Rule 16a-1 under the Exchange Act or any successor provision thereto) or other derivatives or similar arrangements related to any shares of capital stock of the Corporation entered into or consummated within 60 days prior to the date of such notice, (5) details of all other material interests of each Covered Person in such nomination or proposal or shares of capital stock of the Corporation (including any rights to dividends or performance-related fees based on any increase or decrease in the value of such shares of capital stock) and (6) a representation as to whether any Covered Person intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to, in the case of a nomination or nominations, at least the percentage of the Corporation’s outstanding capital stock reasonably believed by the Covered Person to be sufficient to elect the nominee or nominees proposed to be nominated by the stockholder and, in the case of a proposal, holders of at least the percentage of the Corporation’s outstanding capital stock required to elect any Stockholder Nominee or approve such proposal (such representation, the “Solicitation Representation”).

 

 

(b)

A notice delivered by or on behalf of any Stockholder under this Section 2.10 shall be deemed to be not in compliance with this Section 2.10 and not be effective if: (x) such notice does not include all of the information, documents and representations required under this Section 2.10, (y) after delivery of such notice, any information or document required to be included in such notice changes or is amended, modified or supplemented, as applicable, prior to the date of the relevant meeting and such information and/or document is not delivered to the Corporation by way of a further written notice as promptly as practicable following the event causing such change in information or amendment, modification or supplement, as applicable, and in any case where such event occurs within 45 days of the date of the relevant meeting, within five business days after such event or (z) any Covered Person does not act in accordance with the representation set forth in the Solicitation Representation; provided, however, that the Board shall have the authority to waive any such non-compliance if the Board determines that such action is appropriate in the exercise of its fiduciary duties.

 

 

(c)

Notwithstanding Section 2.10(b), in the event that the number of directors to be elected to the Board is increased effective at the next annual meeting and there is no Public Announcement (as defined below) specifying the size of the increased Board made by the Corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.10 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such Public Announcement is first made by the Corporation and such notice otherwise complies with the requirements of this Section 2.10. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the

 

6

 

 

 

annual meeting is advanced by more than 30 days, or delayed by more than 90 days, from such anniversary date, or if no annual meeting was held in the preceding year, notice by a stockholder to be timely must be so delivered not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting and the 10th day following the day on which the Public Announcement of the date of such meeting is first made by the Corporation. In no event shall the Public Announcement of an adjournment or postponement of an annual meeting commence a new time period for the giving of a Stockholder’s notice as described in this Section 2.10.

 

 

(d)

“Public Announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, Section 14 or Section 15(d) of the Exchange Act or any document delivered to all Stockholders (including any quarterly income statement).

 

 

2.11.

Selection and Duties of Inspectors at Meeting of Stockholders. The Board, in advance of any meeting of stockholders, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at such meeting may and, on the request of any stockholder entitled to vote thereat shall, appoint one or more inspectors. In case any person appointed fails to appear or act, the vacancy may be filled by appointment made by the Board in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspector(s) shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and shall do such acts as are proper to conduct the election or vote with fairness to all stockholders. On the request of the person presiding at the meeting or any stockholder entitled to vote thereat, the inspector(s) shall make a report in writing of any challenge, question or matter determined by him or them and execute a certificate of any fact found by him or them. Any report or certificate made by the inspector(s) shall be prima facie evidence of the facts stated and of the vote as certified by him or them.

 

 

2.12.

Organization. At every meeting of stockholders, the Chief Executive Officer or, in the absence of the Chief Executive Officer, a President or a Vice President, and in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on age, present) shall act as chairman of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting, respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, may be chosen by a majority of the voting power, which includes the voting power which is present in person or represented by proxy and entitled to vote at the meeting.

 

 

2.13.

Order of Business. The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present, in person or represented by proxy and entitled to vote at the meeting.

 

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2.14.

Action Without Meeting. Unless otherwise provided by the Certificate, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting, may be taken without a meeting, without prior notice and without a vote if a consent in writing setting forth the action so taken is signed by the stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such action at a meeting, then that proportion of written consents is required. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date the earliest dated consent is delivered to the Corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed herein. An electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section 2.14 to the extent permitted by law. Any such consent shall be delivered in accordance with the DGCL. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing or electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date of such meeting had been the date that written consents signed by a sufficient number of stockholders or members to take the action were delivered to the Corporation as provided by law.

 

 

2.15.

Copies, Etc. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing

 

3.

Directors.

 

 

3.1.

Number and Term. Except as provided by any provision of the DGCL, the number of directors shall initially be one (1) or such other number of persons as the majority of the full Board, by resolution, may from time to time determine. The directors shall, except for filling vacancies (whether resulting from an increase in the number of directors, resignations, removals or otherwise), be elected at the annual meeting of the stockholders and each director shall be elected to serve until his successor is elected and qualifies. Directors need not be stockholders. No decrease in the number of directors constituting the Board shall shorten the term of any incumbent director. The members of the Board shall elect a chairman of the Board (the “Chairman”) by a vote of a majority vote of all directors (which may include the vote of the person so elected).

 

 

3.2.

Resignations. Any director, member of a committee or other officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein and, if no time be specified, at the time of its receipt by the Chief Executive Officer or Secretary. The acceptance of a resignation shall not be necessary to make it effective.

 

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3.3.

Vacancies. Except as set forth in Section 3.4, if the office of any director, member of a committee or other officer becomes vacant (whether resulting from an increase in the number of directors, resignations, removals or otherwise), the remaining directors in office, though less than a quorum, by a majority vote, may appoint any qualified person to fill such vacancy, who shall hold office for the unexpired term and until his successor shall be duly chosen.

 

 

3.4.

Removal. Any director(s) may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of the voting power of the issued and outstanding stock entitled to vote, at a special meeting of the stockholders called for that purpose and the vacancies thus created may be filled, at the meeting held for the purpose of removal, by the affirmative vote of a majority in interest of the stockholders entitled to vote.

 

 

3.5.

Increase or Decrease of Number. The number of directors may be increased or decreased only by the affirmative vote of a majority of the directors, though less than a quorum. Any newly created directorships may be filled in the same manner as a vacancy.

 

 

3.6.

Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as otherwise provided by applicable law or by the Certificate. If any such provision is made in the Certificate, the powers and duties imposed upon the Board by applicable law shall be exercised or performed to such extent and by such person or persons as shall be provided in the Certificate. The Board shall exercise all of the powers of the Corporation except such as are by law, or by the Certificate of the Corporation or by these Bylaws, conferred upon or reserved to the stockholders.

 

 

3.7.

Conference Call. Members of the Board or any committee designated by such Board may participate in a meeting of the Board or such committee by means of telephone conference or similar communication equipment by means of which all persons participating in the meeting can hear each other and participation pursuant to this Section 3.7 shall constitute presence at such meeting.

 

 

3.8.

Committees. The Board may, by resolution(s) passed by a majority of the whole Board, designate one or more committees, each committee to consist of one (1) or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member or such committee or committees, the member or members thereof present at any such meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these Bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, but no such committee shall have the power or authority in reference to amending the Certificate, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these Bylaws of the Corporation and, unless the resolution, these Bylaws or the Certificate expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.

 

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3.9.

Meetings. Meetings of the Board, regular or special, may be held at any place within or without the State of Delaware.

 

 

(a)

On the day when, and at the place where, the annual meeting of stockholders for the election of directors is held, and as soon as practicable thereafter, the Board may hold its annual meeting, without notice of such meeting, for the purposes or organization, election of officers and transaction of other business. The annual meeting of the Board may be held at any other time and place specified in a notice given as provided in this Section 3.9 for special meetings of the Board or in a waiver of notice thereof.

 

 

(b)

Regular meetings of the directors may be held without notice at such place and time as shall be determined from time to time by resolution of the directors.

 

 

(c)

Special meetings of the Board may be called by the Chief Executive Officer or by the Secretary on the written request of any two or more directors on at least ten (10) days’ notice to each director and shall be held at such place(s) as may be determined by the directors, or as shall be stated in the call of the meeting.

 

 

(d)

Anything in these Bylaws or in any resolution adopted by the Board to the contrary notwithstanding, notice of any meeting of the Board need not be given to any director who submits a signed waiver of such notice, whether before or after such meeting, or who attends such meeting without protesting, prior thereto or at its commencement, the lack of notice to him.

 

 

3.10.

Quorum. A majority of the directors in office from time to time shall constitute a quorum for the transaction of business. If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained and no further notice thereof need be given, other than by announcement at the meeting which shall be so adjourned.

 

 

3.11.

Compensation. Unless otherwise restricted by the Certificate, the Board shall have the authority to fix the compensation of the directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or paid a stated salary or paid other compensation as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed compensation for attending committee meetings.

 

 

3.12.

Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if a written consent thereto is signed by all members of the Board, or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee.

 

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3.13.

Telephone Meeting. Any one or more members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such meeting.

 

 

3.14.

Annual Report. As soon as practicable after the close of each fiscal year, a report of the business and affairs of the Corporation to the shareholders shall be made under the direction of the Board, unless the Board determines, in its reasonable discretion, that such a report is not reasonably required.

 

4.

Officers.

 

 

4.1.

Officers. The Board may elect or appoint a Chief Executive Officer and such other officers as it may determine. The Board may designate one or more Vice Presidents as Executive Vice Presidents and may use descriptive words or phrases to designate the standing, seniority or area of special competence of the Vice Presidents elected or appointed by it. Each officer shall hold his office until his successor is elected and qualified or until his earlier death, resignation or removal in the manner provided in Section 4.2. Any two or more offices may be held by the same person. The Board may require any officer to give a bond or other security for the faithful performance of his duties, in such amount and with such sureties as the Board may determine. All officers as between themselves and the Corporation shall have such authority and perform such duties in the management of the Corporation as may be provided in these Bylaws or as the Board may from time to time determine.

 

 

4.2.

Removal of Officers. Any officer elected or appointed by the Board may be removed by the Board with or without cause. The removal of an officer without cause shall be without prejudice to his contract rights, if any. The election or appointment of an officer shall not of itself create contract rights.

 

 

4.3.

Resignations. Any officer may resign at any time by notifying the Board, the Chief Executive Officer or the Secretary in writing. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any.

 

 

4.4.

Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in these Bylaws for the regular election or appointment to such office.

 

 

4.5.

Compensation. Salaries or other compensation of the officers may be fixed from time to time by the Board. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that he is also a director.

 

 

4.6.

Chief Executive Officer. The Chief Executive Officer shall have general supervision and direction of the business and affairs of the Corporation, subject to control of the Board, and shall report directly to the Board, and shall have supervisory responsibility over officers operating and discharging their responsibilities. The Chief Executive Officer shall perform all such other duties which are commonly incident to the capacity of Chief Executive Officer or which are delegated to him or her by the Board.

 

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4.7.

President. The President shall have general supervision and direction of the business and affairs of the Corporation as directed by the Chief Executive Officer. The President shall, if present, preside at all meetings of the stockholders. He may, with the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer, sign certificates for shares of the Corporation. He may sign and execute, in the name of the Corporation, deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law otherwise to be signed or executed, and, in general, he shall perform all duties incident to the office of President and such other duties as from time to time may be assigned to him by the Board. If there is no President, the Chief Executive Officer shall perform the President’s functions.

 

 

4.8.

Principal Financial Officer. The Principal Financial Officer shall perform all the powers and duties of the office of the principal financial officer and in general have overall supervision of the financial operations of the Corporation. The Principal Financial Officer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine. If there is no Principal Financial Officer, the Chief Executive Officer shall perform the Principal Financial Officer’s functions.

 

 

4.9.

Executive Vice Presidents. At the request of the President or, in his absence, at the request of the Board, the Executive Vice Presidents shall (in such order as may be designated by the Board or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of the President and, so acting, shall have all the powers of and be subject to all restrictions upon the President. Any Executive Vice President may also, with the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer, sign certificates for shares of the Corporation, may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments authorized by the Board, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law otherwise to be signed or executed, and shall perform such other duties as from time to time may be assigned to him by the Board or the President.

 

 

4.10.

Secretary. The Secretary, if present, shall act as Secretary of all meetings of the stockholders and of the Board and shall keep the minutes thereof in the proper book(s) to be provided for that purpose; he shall see that all notices required to be given by the Corporation are duly given and served; he may, with the Chief Executive Officer or a Vice President, sign certificates for shares of the Corporation; he shall be custodian of the seal of the Corporation, if any, and may seal with the seal of the Corporation or a facsimile thereof, if any, all certificates for shares of capital stock of the Corporation and all documents; he shall have charge of the stock ledger and also of the other books, records and papers of the Corporation relating to its organization and management as a Corporation and shall see that the reports, statements and other documents required by law are properly kept and filed; and shall, in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board or the Chief Executive Officer. If there is no Secretary, the Chief Executive Officer shall perform the Secretary’s functions.

 

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4.11.

Treasurer. The Treasurer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation; receive and give receipts for monies due and payable to the Corporation from any sources whatsoever; deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with these Bylaws; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositories of the Corporation signed in such manner as shall be determined in accordance with any provisions of these Bylaws, and be responsible for the accuracy of the amounts of all monies to disbursed; regularly enter or cause to be entered in books to be kept by him or under his direction full and adequate account of all monies received or paid by him for the account of the Corporation; have the right to require, from time to time, reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the Chief Executive Officer or the Board, whenever the Chief Executive Officer or the Board, respectively, shall require him so to do, an account of the financial conditions of the Corporation and of all his transactions as Treasurer; exhibit at all reasonable times his books of account and other records to any of the directors upon application at the office of the Corporation where such books and records are kept; and, in general, perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Chief Executive Officer or the Board; and he may sign with the Chief Executive Officer or a Vice President certificates for shares of the capital stock of the Corporation. If there is no Treasurer, the Chief Executive Officer shall perform the Treasurer’s functions.

 

 

4.12.

Assistant Secretaries and Assistant Treasurers. Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Board or the Chief Executive Officer. Assistant Secretaries and Assistant Treasurers may, with the Chief Executive Officer or a Vice President, sign certificates for shares of the Corporation.

 

 

4.13.

Additional Matters. The Chief Executive Officer, the President and the Principal Financial Officer of the Corporation shall have the authority to designate employees of the Corporation to have the title of Vice President, Assistant Vice President, Assistant Treasurer, Assistant Controller or Assistant Secretary. Any employee so designated shall have the powers and duties determined by the officer making such designation. The persons upon whom such titles are conferred shall not be deemed officers of the Corporation unless elected by the Board.

 

5.

Contracts, Checks, Drafts, Bank Accounts, etc.

 

 

5.1.

Execution of Contracts. The Board may authorize any officer, employee or agent, in the name and on behalf of the Corporation, to enter into any contract or execute and satisfy any instrument, and any such authority may be general or confined to specific instances, or otherwise limited.

 

 

5.2.

Loans. The Chief Executive Officer or any other officer, employee or agent authorized by these Bylaws or by the Board may effect loans and advances at any time for the Corporation from any bank, trust company or other institutions or from any firm, corporation or individual and for such loans and advances may make, execute and deliver promissory notes, bonds or other certificates or evidence of indebtedness of the Corporation and, when authorized by the Board to do so, may pledge and hypothecate or transfer any securities or the property of the Corporation as security for any such loans or advances. Such authority conferred by the Board may be general or confined to specific instances or otherwise limited.

 

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5.3.

Checks, Drafts, etc. All checks, drafts and other orders for the payment of money out of the funds of the Corporation and all notes or other evidence of indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board.

 

 

5.4.

Deposits. The funds of the Corporation not otherwise employed shall be deposited from time to time to the order of the Corporation in such banks, trust companies or other depositories as the Board may select or as may be selected by an officer, employee or agent of the Corporation to whom such power may from time to time be delegated by the Board.

 

6.

Stocks and Dividends.

 

 

6.1.

Certificates Representing Shares. The shares of the Corporation shall be represented by certificates in such form (consistent with the provisions of the DGCL) as shall be approved by the Board. Such certificates shall be signed by the Chief Executive Officer or the President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be sealed with the seal of the Corporation or a facsimile thereof, if any. The signatures of the officers upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or its employees. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may, unless otherwise ordered by the Board, be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

 

 

6.2.

Transfer of Shares. Transfers of shares of capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof or by his duly authorized attorney appointed by a power of attorney duly executed and filed with the Secretary or a transfer agent of the Corporation and on surrender of the certificate(s) representing such shares of capital stock properly endorsed for transfer and upon payment of all necessary transfer taxes. Every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled”, with the date of cancellation, by the Secretary or an Assistant Secretary or the transfer agent of the Corporation. A person in whose name shares of capital stock shall stand on the books of the Corporation shall be deemed the owner thereof to receive dividends, to vote as such owner and for all other purposes as respects the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until such transfer shall have been entered on the books of the Corporation by an entry showing from and to whom transferred.

 

 

6.3.

Registered Stockholders and Addresses of Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of capital stock to receive dividends and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of capital stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by applicable law. Each stockholder shall designate to the Secretary or transfer agent of the Corporation an address at which notices of meetings and all other corporate notices may be given to such person, and, if any stockholder fails to designate such address, corporate notices may be given to such person by mail directed to such person at such person’s post office address, if any, as the same appears on the stock record books of the Corporation or at such person’s last known post office address or as otherwise provided by applicable law.

 

14

 

 

6.4.

Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place(s) as may be determined from time to time by the Board.

 

 

6.5.

Lost, Destroyed, Stolen and Mutilated Certificates. The holder of any shares shall immediately notify the Corporation of any loss, destruction, theft or mutilation of the certificate representing such shares and the Corporation may issue a new certificate to replace the certificate alleged to have been lost, destroyed, stolen or mutilated. The Board may, in its discretion, as a condition to the issue of any such new certificate, require the owner of the lost, destroyed, stolen or mutilated certificate, or his legal representatives, to make proof satisfactory to the Board of such loss, destruction, theft or mutilation and to advertise such fact in such manner as the Board may require, and to give the Corporation and its transfer agents and registrars, or such of them as the Board may require, a bond in such form, in such sums and with such surety or sureties as the Board may direct, to indemnify the Corporation and its transfer agents and registrars against any claim that may be made against any of them on account of the continued existence of any such certificate so alleged to have been lost, destroyed, stolen or mutilated and against any expense in connection with such claim.

 

 

6.6.

Regulations. The Board may make rules and regulations as it may deem expedient, not inconsistent with these Bylaws or with the Certificate, concerning the issue, transfer and registration of certificates representing shares of its capital stock.

 

 

6.7.

Restriction on Transfer of Stock. A written restriction on the transfer or registration of transfer of capital stock of the Corporation, if permitted by the provisions of the DGCL, and noted conspicuously on the certificate representing such capital stock, may be enforced against the holder of the restricted capital stock of any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the certificate representing such capital stock, a restriction, even though permitted by the provisions of the DGCL, as the same may be amended and supplements, shall be ineffective except against a person with actual knowledge of the restriction. A restriction on the transfer or registration of transfer of capital stock of the Corporation may be imposed either by the Certificate or by an agreement among any number of stockholders or among such stockholders and the Corporation. No restriction so imposed shall be binding with respect to capital stock issued prior to the adoption of the restriction unless the holders of such capital stock are parties to an agreement or voted in favor of the restriction. Except to the extent that the corporation has obtained an opinion of counsel acceptable to the corporation that transfer restrictions are not required under applicable securities laws, or has otherwise satisfied itself that such transfer restrictions are not required, all certificates representing shares of the corporation shall bear a legend on the face of the certificate, or on the reverse of the certificate if a reference to the legend is contained on the face, which reads substantially as follows:

 

15

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

 

 

6.8.

Dividends, Surplus, etc. Subject to the provisions of the Certificate and of law, the Board:

 

 

(a)

may declare and pay dividends or make other distributions on the outstanding shares of capital stock in such amounts and at such time to times as, in its discretion, the conditions of the affairs of the Corporation shall render advisable;

 

 

(b)

may use and apply, in its discretion, any of the surplus of the Corporation in purchasing or acquiring any shares of capital stock of the Corporation, or purchase warrants therefor, in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidence of indebtedness; and

 

 

(c)

may set aside from time to time out of such surplus or net profits such sum(s) as, in its discretion, it may think proper, as a reserve fund to meet contingencies, or for equalizing dividends or for the purpose of maintaining or increasing the property or business of the Corporation, or for any other purpose it may think conducive to the best interests of the Corporation.

 

7.

Miscellaneous.

 

 

7.1.

Seal. The Board shall have the power by resolution to adopt, make and use a corporate seal and to alter the form of such seal from time to time.

 

 

7.2.

Fiscal Year. The fiscal year of the Corporation shall be determined, and may be changed, by resolution of the Board.

 

 

7.3.

Books and Records. The Corporation shall: (1) Keep as permanent records minutes of all meetings of its stockholders and the Board, a record of all actions taken by the stockholders or the Board without a meeting, and a record of all actions taken by a committee of the Board exercising the authority of the Board on behalf of the Corporation; (2) Maintain appropriate accounting records; (3) Maintain a record of its stockholders, in a form that permits preparation of a list of the names and addresses of all stockholders, in alphabetical order by class of shares showing the number and class of shares held by each; provided, however, such record may be maintained by an agent of the Corporation; (4) Maintain its records in written form or in another form capable of conversion into written form within a reasonable time; and (5) Keep a copy of the following records at its principal office: (a) the Certificate as currently in effect; (b) these Bylaws and all amendments thereto as currently in effect; (c) the minutes of all meetings of stockholders and records of all action taken by stockholders; (d) without a meeting, for the past three years; (e) the Corporation’s financial statements for the past three years; (f) all written communications to stockholders generally within the past three years; (g) a list of the names and business addresses of the current Directors and officers; and (h) the most recent annual report delivered to the Delaware Secretary of State.

 

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7.4.

Forum Selection; Attorneys Fees. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) an action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. If any action is brought by any party against another party, relating to or arising out of these Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action. For purposes of these Bylaws, the term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of counsel to the Corporation and any other parties asserting a claim as set forth in the initial paragraph of this Section 7.4, which may include printing, photocopying, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection any judgment obtained in any such proceeding. The provisions of this Section 7.4 shall survive the entry of any judgment, and shall not merge, or be deemed to have merged, into any judgment.

 

 

7.5.

Subject to Law and Certificate of Incorporation. All powers, duties and responsibilities provided for in these Bylaws, whether or not explicitly so qualified, are qualified by the provisions of the Certificate and applicable law.

 

 

7.6.

Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used at any time unless otherwise restricted by the Board or a committee thereof.

 

 

7.7.

Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

 

 

7.8.

Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

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8.

Indemnification; Insurance.

 

 

8.1.

Indemnification in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation. Subject to Section 8.3 and Section 8.10, the Corporation shall, to the fullest extent permitted by the DGCL and applicable Delaware law as in effect at any time, indemnify, hold harmless and defend any person who: (i) was or is a director or officer of the Corporation or was or is a director or officer of a direct or indirect wholly owned subsidiary of the Corporation, and (ii) was or is a party or is threatened to be made a party to, or was or is otherwise directly involved in (including as a witness), any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person was or is a director or officer of the Corporation or any direct or indirect wholly owned subsidiary of the Corporation, or was or is serving at the request of the Corporation as a director, officer, employee, partner, member or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, whether the basis of such proceeding is alleged action in an official capacity or in any other capacity, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea or nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

 

 

8.2.

Indemnification in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 8.3 and Section 8.10, the Corporation shall indemnify, hold harmless and defend any person who: (i) was or is a director or officer of the Corporation or was or is a director or officer of a direct or indirect wholly owned subsidiary of the Corporation, and (ii) was or is a party or is threatened to be made a party to, or was or is otherwise directly involved in (including as a witness), any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person was or is a director or officer of the Corporation or any direct or indirect wholly owned subsidiary of the Corporation, or was or is serving at the request of the Corporation as a director, officer, employee, partner, member or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, and whether the basis of such action, suit or proceeding is alleged action in an official capacity or in any other capacity, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action

 

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or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Courts in the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court in the State of Delaware or such other court shall deem proper.

 

 

8.3.

Authorization of Indemnification. Any indemnification or defense under this Section 8 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination,: (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding set forth in Section 8.1 or Section 8.2 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

 

 

8.4.

Good Faith Defined. For purposes of any determination under Section 8.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on good faith reliance on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 8.4 shall mean any other corporation or any partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which such person was or is serving at the request of the Corporation as a director, officer, employee, partner, member or agent. The provisions of this Section 8.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be.

 

19

 

 

8.5.

Expenses Payable in Advance. Expenses, including attorneys’ fees, incurred by a current or former director or officer in defending any action, suit or proceeding described in Section 8.1 or Section 8.2 shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Section 8.

 

 

8.6.

Non-exclusivity of Indemnification and Advancement of Expenses. The indemnification, defense and advancement of expenses provided by or granted pursuant to this Section 8 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate, any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 8.1 or Section 8.2 shall be made to the fullest extent permitted by applicable law. The provisions of this Section 8 shall not be deemed to preclude the indemnification of, or advancement of expenses to, any person who is not specified in Section 8.1 or Section 8.2 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL or otherwise.

 

 

8.7.

Insurance. The Corporation may purchase and maintain insurance on behalf of any person who was or is a director, officer, employee or agent of the Corporation, or a direct or indirect wholly owned subsidiary of the Corporation, or was or is serving at the request of the Corporation, as a director, officer, employee, partner, member or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify, hold harmless or defend such person against such liability under the provisions of this Section 8.

 

 

8.8.

Certain Definitions. For purposes of this Section 8, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who was or is a director, officer, employee or agent of such constituent corporation, or was or is serving at the request of such constituent corporation as a director, officer, employee, partner, member or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Section 8 with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Section 8, references to “fines” shall include any excise taxes assessed on a person with respect of any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Section 8.

 

20

 

 

8.9.

Survival of Indemnification and Advancement of Expenses. The indemnification, defense and advancement of expenses provided by, or granted pursuant to, this Section 8 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

 

8.10.

Limitation on Indemnification. Notwithstanding anything contained in this Section 8 to the contrary, except for proceedings to enforce rights to indemnification and defense under this Section 8 (which shall be governed by Section 8.11(b)), the Corporation shall not be obligated under this Section 8 to indemnify, hold harmless or defend any director, officer, employee or agent in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board.

 

 

8.11.

Contract Rights.

 

 

(a)

The obligations of the Corporation under this Section 8 to indemnify, hold harmless and defend a person who was or is a director or officer of the Corporation or was or is a director or officer of a direct or indirect wholly-owned subsidiary of the Corporation, including the duty to advance expenses, shall be considered a contract between the Corporation and such person, and no modification or repeal of any provision of this Section 8 shall affect, to the detriment of such person, such obligations of the Corporation in connection with a claim based on any act or failure to act occurring before such modification or repeal.

 

 

(b)

If a claim under Section 8.1, Section 8.2 or Section 8.5 is not paid in full by the Corporation within 90 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 45 days, the person making such claim may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. To the fullest extent permitted by applicable law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, such person shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by such person to enforce a right to indemnification hereunder (but not in a suit brought by such person to enforce a right to an advancement of expenses) it shall be a defense, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that such person has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its Stockholders) to have made a determination prior to the commencement of such suit that indemnification of such person is proper in the circumstances because such person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its Stockholders) that such person has not met such applicable standard of conduct, shall create a presumption that such person has not met the applicable standard of conduct or, in the case of such a suit brought by such person, be a defense to such suit.

 

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8.12.

Indemnification Agreements. Without limiting the generality of the foregoing, the Corporation shall have the express authority to enter into such agreements as the Board deems appropriate for the indemnification of present or future directors and officers of the Corporation in connection with their service to, or status with, the Corporation or any other corporation, entity or enterprise with whom such person is serving at the express written request of the Corporation.

 

9.

Amendments. These Bylaws may be altered or repealed and Bylaws may be made at any annual meeting of the stockholders or at any special meeting thereof, if notice of the proposed alteration or repeal of Bylaw or Bylaws to be made be contained in the notice of such special meeting, by the affirmative vote of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereat, or by the affirmative vote of a majority of the Board at any regular meeting of the Board, or at any special meeting of the Board, if notice of the proposed alteration or repeal, or Bylaw or Bylaws to be made, be contained in the notice of such meeting.

 

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EXHIBIT 4.1

 

 

ASSIGNMENT OF

CONVERTIBLE PROMISSORY NOTE

OF

W TECHNOLOGIES, INC.

 

FOR VALUE RECEIVED, the receipt of which is acknowledged, the undersigned (the “Assignor”), the original and present holder of those certain Convertible Promissory Notes of W Technologies, Inc., dated September 11, 2006, in the original principal amount of Three Hundred Fifty-Five Thousand dollars ($355,000.00), and September 21, 2006 in the original principal amount of Three Hundred Thousand dollars ($300,000.00) (collectively, the "Notes"), which, including accrued interest thereon, total Six Hundred Thirty Seven Thousand Six Hundred Twenty Two ($637,622.00), as of September 16, 2014, of which $343,246.00 is currently past due and subject to conversion as per Replacement Note dated October 29, 2014 issued by W. Technologies, Inc. to the following assignee.

 

JMZ Alliance Group, Inc.

1108 Kane Concourse

206 Bay Harbor Islands, FL 33154

 

 

IN WITNESS WHEREOF, the Assignor has caused this Assignment to be executed as of the 30th day of October, 2014

 

CSI Business Finance, Inc.

 

By: /s/ James E. Shipley                         

James E. Shipley, President

 

 

Accepted and Agreed:

 

Assignee:

JMZ Alliance Group, Inc.

By:   EX_218066IMG001.JPG     

Managing Partner

 

Acknowledged by:

 

W. Technologies, Inc.

 

By: /s/ Gary Koelsch                                      

Gary Koelsch, President

 

 

 

DEBT PURCHASE AGREEMENT

 

This Debt Purchase Agreement (the “Agreement”) made as of this 29th day of October, 2014, by and between JMZ Alliance Group Inc (the “Buyer”) and CSI Business Finance Inc (the “Seller”).

 

 

1.

PURCAHSE AND SALE OF THE CONVERTIBLE NOTE

 

Upon the terms and conditions herein contained, at the Closing (as herein after defined), the Seller hereby sells, assigns and transfers to the Buyer and the Buyer agrees to purchase from the Seller the “Transferred Rights” of the Seller and all rights thereto, free and clear of all liens, claims, pledges, mortgages, restrictions, obligations, security interest and encumbrances of any kind, nature and description. Transferred Rights shall mean all rights with respect to $25,000 in principal (the “Assigned Portion”) under that convertible promissory note in the amount of $355,000 issued by W Technologies, Inc. (“Borrower” or “Company”) on September 11, 2006, a true and correct copy which has been provided to JMZ Alliance Group Inc. (the “Note”). By its signatures hereto the Borrower accepts the assignment of the Transferred Rights to Buyer and agrees that Buyer may convert the Transferred Rights into shares of the Company’s common stock.

 

 

2.

CONSIDERATION

 

The purchase price for the Assigned Portion of the Note shall be the Buyer’s payment of $25,000 (the “Purchase Price”) to the Seller.

 

 

3.

CLOSING

 

The closing of the transaction contemplated by this Agreement (the “Closing”) shall take place simultaneously with the delivery of the Purchase Price via wire transfer of immediately available funds against the assignment of the Note. The funds will be wired as set forth in Exhibit A.

 

 

4.

REPRESENTATIONS AND WARRANTIES OF SELLER The Seller hereby represents and warrants to the Buyer as follows:

 

4.1 Status of the Seller and the Note. The Seller is the beneficial owner of the Note, and the Note is free and clear of all mortgages, pledges, restrictions, liens, charges, encumbrances, security interests, obligations or other claims. The Note is currently outstanding and Seller is informed by Company that the Note represents a bona fide debt obligation of the Company.

 

4.2 Authorization; Enforcement. (i) Seller has all requisite corporate power and authority to enter into and perform the Agreement and to consummate the transactions contemplated hereby and to sell each Note, in accordance with the terms hereof, (ii) the execution and delivery of this Agreement by the Seller and the consummation by it or the transactions contemplated hereby (including, without limitation, the sale of the Note to the Buyer) have been duly authorized by the Seller and no further consent or authorization of the Seller or its members is required, (iii) this Agreement has been duly executed and delivered by the Seller, and (iv) this Agreement constitutes a legal, valid and binding obligation on of the Seller enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

 

4.3 No Conflicts. The execution, delivery and performance of this Agreement by the Seller and the consummation by the Seller of the transactions contemplated herby (including, without limitation, the same of the Note to the Buyer) will not (i) conflict with or result in a violation of any provision of its certificate of formation or other organizational documents, or (ii) violate or conflict with or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, note, bond, indenture or other instrument to which Seller are a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self regulatory organizations wo which Seller are subject) applicable to Seller or the Note is bound or affected. The Seller is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof.

 

4.4 Title, Rule 144 Matters. Seller has good and marketable title to the Note, free and clear of all liens, restrictions, pledges and encumbrances of any kind. Seller is not an “affiliate” of the Company, as that term is defined in Rule 144 of the Securities Act of 1933, as amended (the “1933 Act”), as such Buyer will be able to track the holding period of the Seller.

 

 

 

4.5 Consent of the Company.

 

The Company as evidence by its signature at the foot of this Agreement, herby represents and warrants that, upon delivery to the Company of the Note, the Company shall promptly cause to be issued to and in the name of Buyer one or more new executed Notes in the aggregate amount of $25,000.00 but otherwise having the sale terms (including, but not necessarily limited to, referring to the original issue date) as in the Note. The Note may contain the same restrictive legend as provided in the original Note, but no stop transfer order. The Note is currently outstanding in the entire amount stated and represents a bona fide debt obligation of the Company.

 

The signature by the Company also represents the Company’s agreement to treat Buyer as a party to , and having all the rights of the Seller with respect to the Transferred Rights.

 

 

5.

PREPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS OF THE BUYER. The Buyer hereby represents warrants and acknowledges to the Seller as follows:

 

5.1 Sophisticated Investor. The Buyer has sufficient knowledge and experience of financial and business matters, is able to evaluate the merits and risks of the partial purchase of the Note and has had substantial experience in previous private and public purchases of securities.

 

5.2 Authorization; Enforcement. (i) Buyer has all requisite corporate power and authority to enter into and perform the Agreement and to consummate the transactions contemplated hereby and to purchase each Note, in accordance with the terms hereof, (ii) the execution and delivery of this Agreement by the Buyer and the consummation by it of the transactions contemplated hereby (including, without limitation, the purchase of the Note by the Buyer) have been duly authorized by the Buyer and no further consent or authorization of the Buyer or its members is required, (iii) this Agreement has been duly executed and delivered by the Buyer, and (iv) this Agreement constitutes a legal, valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

 

5.3 No Conflicts. The execution, delivery and performance of this Agreement by the Buyer and the consummation by the Buyer or the transactions contemplated hereby will not (i) conflict with or result in a violation of any provision of its certificate of formation or other organizational document, or (ii) violate or conflict with or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, note, bond, indenture or other instrument to which Buyer is a party, or (iii) result in a violation of any law, rule regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self regulatory organizations to which Buyer is subject) applicable to Seller or the Note is bound or affected. The Buyer is not required to obtain any consent authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof.

 

MISCELLANEOUS.

 

6.1 Binding Effect; Benefits. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors and permitted assigns. Except as otherwise set forth herein, this Agreement may not be assigned by any party hereto without the prior written consent of the other party hereto. Except as otherwise set forth herein, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by any reason of this Agreement.

 

6.2 Notices. All notices, requests, demands and other communications which are required to be or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person, or transmitted by telecopy or telex, or upon receipt after dispatch by certified or registered first class mail, postage prepaid, return receipt requested, to the party to whom the same is so given or made, at the following addresses (or such others as shall be provided in writing hereafter):

 

 

(a)

If to the Buyer to:

 

JMZ Alliance Group Inc

 

 

 

 

(b)

If to the Seller to:

 

CSI Business Finance Inc

 

 

6.3 Entire agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, oral and written between the parties hereto with respect to the subject matter hereof,

 

6.4 Further Assurances. After the Closing, at the request of either party, the other party shall execute acknowledge and deliver, without further consideration, all such further assignments, conveyances, endorsements, deeds, powers of attorney, consents and other documents and take such other act on as may be reasonably requested to consummate the transactions contemplated by this Agreement.

 

6.5 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not be deemed to be part of this Agreement or to affect the meaning or interpretation of this Agreement.

 

6.6 Counterparts. This Agreement may be executed in any number of counterparts and by Facsimile, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

 

6.7 Governing law. This Agreement shall be construed as to both validity and performance and enforced in accordance with and governed by the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

 

6.8 Severability. If any term or provision of this Agreement hall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of the Agreement shall be valid and enforced to the fullest extent permitted by law.

 

6.9 Amendments. This Agreement may not be modified or changed except by an instrument or instruments in writing executed by the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly executed as of the date first above written.

 

Accepted and agreed:

 

JMZ Alliance Group Inc.

 

 

EX_218066IMG001.JPG

Title: Director

 

 

Seller:

 

CSI Business Finance Ind.

 

EX_218066IMG002.JPG

Title: Pres.

 

 

W Technologies, Inc.

 

EX_218066IMG003.JPG

Title: President

 

 

 

THE SECURITIES HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933” ACT)

 

$25,000.00

 

REPLACEMENT NOTE – ORIGINALLY ISSUED IN THE AMOUNT OF $355,000 ON SEPTEMBER 11, 2006

 

W TECHNOLOGIES, INC.

8% CONVERTIBLE REDEEMABLE NOTE

DUE October 29th, 2015

 

 

FOR VALUE RECEIVED, W Technologies, Inc. (the “Company”) promises to pay to the order JMZ Alliance Group Inc and its authorized successors and permitted assigns (“Holder”), the aggregate principal face amount of Thirty thousand dollars exactly (U.S. $25,000.00) on October 29th, 2015 (“Maturity Date”) and to pay interest on the principal amount outstanding here-under at the rate of 8% per annum commencing on October 29th, 2014. The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable 1108 KANE CONCOURSE 206 BAY HARBOR ISLANDS, FL 33154 US, initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, 10 the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

 

This Note is subject to the following additional provisions:

 

1. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith.

 

2. The Company shall be entitled to withhold from all payments any amounts required to be

 

 


PROMISSORY NOTE

 

$355,000  

 September 11, 2006

 

FOR VALUE RECEIVED, the undersigned, GWINInc., a Delaware corporation (the “Company”), promises to pay to CSI Business Finance, Inc., a Florida corporation (“Lender” and together with the Company, the “Parties” and each a “Party”), the principal sum of Three Hundred Fifty-Five Thousand Dollars ($355,000) plus interest pursuant to the following terms:

 

1.  Maturity. The face amount of this Promissory Note (this “Note”) plus any and all interest accrued hereon shall become payable and due on June 30, 2007 (the “Maturity Date”) .

 

2.  Interest. Interest shall accrue on the outstanding principal balance hereof at a rate equal to one and one half percent (1.5%) per month. Interest shall be (a) calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law and (b) paid monthly in cash, commencing on October 1, 2006 on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date) to Lender at 109 North Post Oak Lane, Suite 422, Houston, Texas 77024 or at another address as Lender shall specify in writing.

 

3.  Security Agreements. This Note is secured by a Pledge and Escrow Agreement (the “Pledge Agreement”), of even date herewith, by and among the Company, Lender and the Escrow Agent; an Insider Pledge and Escrow Agreement (“Insider Pledge Agreement”), of even date herewith, by and among the Company, Lender, Wayne Allyn Root and the Escrow Agent; a Security Agreement (the “Security Agreement”), of even date herewith, by and between the Company and Lender; and a Subsidiary Security Agreement (the “Subsidiary Security Agreement”) by and between Lender and Global SportsEDGE, Inc., a wholly-owned subsidiary of the Company.

 

4.  Methods of PaymentThis Note may be voluntarily prepaid, without penalty or premium, in whole or in part, at any time and from time to time. Any prepayment must include all accrued interest on the principal being paid through the date of prepayment.

 

5.  Waiver and Consent. To the fullest extent permitted by law and except as otherwise provided herein, the Company waives demand, presentment, protest, notice of dishonor, suit against or joinder of any other person, and all other requirements necessary to charge or hold the Company liable with respect to this Note.

 

6.  Costs, Indemnities and Expenses. In the event of default as described herein, the Company agrees to pay all reasonable fees and costs incurred by Lender in collecting or securing or attempting to collect or secure this Note, including reasonable attorneys’ fees and expenses, whether or not involving litigation, collecting upon any judgments and/or appellate or bankruptcy proceedings. The Company agrees to pay any documentary stamp taxes, intangible taxes or other taxes which may now or hereafter apply to this Note or any payment made in respect of this Note, and the Company agrees to indemnify and hold Lender harmless from and against any liability, costs, attorneys’ fees, penalties, interest or expenses relating to any such taxes, as and when the same may be incurred.

 

 

 

W TECHNOLOGIES Inc.

 

UNANIMOUS CONSENT IN LIEU OF A SPECIAL

MEETING OF DIRECTORS OF

W TECHNOLOGIES, INC

 

The under signed, being all of the directors of W Technologies, INC a corporation of the State of Delaware, (the “Corporation”), do hereby authorize and approve the actions set forth in the following resolutions without the formally of convening a meeting and do hereby consent to the following actions of this Corporation, which actions are hereby deemed affective as of the date hereof:

 

RESOLVED: That officers of this Corporation are authorized and directed to amend and restate a $25,000.00 portion of a $355,000 note issued to CSI Business Finance Inc. on September 11th 2006 into a replacement promissory note to JMZ Alliance Group INC., in the amount of $25,000 to provide conversion features equal to a discount of 65% to the lowest price for the 45 trading days prior to conversion, as well as 8% interest and become due and payable on October 29th, 2015; and

 

RESOLVED FURTHER, that each of the officers of the Corporation be, and they hereby are authorized and empowered to execute and deliver such documents, instruments and papers and to take any and all other action as they or any of them may deem necessary or appropriate of the purpose of carrying out the intent of the foregoing resolutions and the transactions contemplated thereby; and that the authority of such officers to execute and deliver any such documents, instruments and paper and to take any such other action shall be conclusively evidenced by their execution and delivery thereof or their taking thereof.

 

The undersigned, by affixing their signatures hereto, do hereby consent to, authorize and approve the foregoing actions in their capacity as a majority of the direction of W Technologies, Inc.

 

 

/s/ Gary Koelsch                                   

Gary Koelsch – President/CFO

 

 

 

 

DECLARATION OF JAMES E. SHIPLEY

 

James E. Shipley declares and says:

 

1.     I became CEO of CSI Business Finance, Inc. (hereinafter “CSIBFI”) in May, 2012.

 

2.     I have searched and reviewed the business records of CSIBFI form 2006 to the present for the purpose of giving this declaration. To the extent that documents identified and facts stated hereafter pre-date May, 2012, they are the product of that search and represent the full quantum of information available to me relevant to the subject matter of this declaration. To the extent that documents identified and facts stated hereafter post-date April, 2012, I state the following facts of my of knowledge and if called upon to do so I could, and would, testify competently thereto.

 

3.     On September 11, 2006 CSIBFI lent the sum of $355,000 to GWIN, Inc., a Delaware corporation (now known as W Technologies, Inc.). That loan was evidenced by a Promissory Note of the same date, a copy of which I attach hereto, mark Exhibit “A” and incorporate herein by reference.

 

4.     On September 21, 2006 CSIBFI lent the sum of $300,000 to GWIN, Inc., a Delaware corporation (now known as W Technologies, Inc.). That loan was evidenced by a Promissory Note of the same date, a copy of which I attach hereto, mark Exhibit “B” and incorporate herein by reference.

 

5.     On January 26, 2010 CSIBFI and W Technologies, Inc. (hereinafter “WTech”) entered into a letter agreement extending the due date of Exhibits “A” and “B” and adding a stock conversion feature to both notes. I attach hereto, mark Exhibit “C” and incorporate herein by reference a copy of that letter agreement.

 

6.     On April 1, 2011 CSIBFI and WTech agreed to modify Exhibits “A” and “B” so as to prevent any one owner of either from converting to a number of common shares

 

 

 

 


NOTE PURCHASE AGREEMENT

 

This Note Purchase Agreement (this "Agreement") is entered into as of the 25th day of June, 2015 by and among CSI Business Finance Inc., a Nevada Corporation, represented by James E Shipley, its president, having full authority to execute this agreement as he so declares (the "Seller"), and Serge Mersilian, an individual resident of France (the "Buyer") and W Technologies, a Delaware corporation, hereinafter, represented by Ronald Costa, its Chairman, having full authority to execute this agreement as he so declares, (the "Company").

 

RECITALS:

 

WHEREAS, the Seller is the holder of certain Promissory Notes in the original principal amount of $355,000 issued by the Company dated September 11, 2006 and another Note in the original amount of$300,000 issued by the Company dated September 21, 2006 (the "W-Tech Note(s)"), a copy of which is attached hereto as Exhibit A (the "Note").

 

WHEREAS, the current principal balance on the September 11, 2006 W-Tech Note is $203,700 and the current principal balance on the September 21, 2006 W-Tech Note is $203,700 which is confirmed and acknowledged by the Company, for which the Chairman confirms in an affidavit attached as Exhibit B (the "Chairman' s Affidavit").

 

WHEREAS, the Buyer desires to purchase, and the Seller desires to sell and transfer to the Buyer, the W-Tech Notes and all the rights and privileges attached to them, on the terms and conditions hereinafter set forth;

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

Recitals. The above recitals are true and correct and are incorporated herein, in their entirety, by this reference.

 

Purchase and Sale of the Note.

 

(a)     The Seller hereby agrees to sell, transfer, assign and deliver the W-Tech Notes to Buyer, and Buyer hereby agrees to purchase the W-Tech Notes from the Seller, in consideration of the sum of

 

Forty-Seven Thousand Dollars Five Hundred (US$47,500.00) for the September 11th, 2006 W-Tech Note,

 

and

 

Forty-Seven Thousand Dollars Five Hundred (US$47,500.00) for the September 21th, 2006 W-Tech Note. Together (the "Purchase Price").

 

(b)     The Escrow Agent acknowledges having received an initial deposit of Ten Thousand Dollars (US $10,000.00), which shall be remitted to Seller at Closing.

 

 

 

(c)     

Upon the last signatory consenting and apposing his signature and returning this Agreement to all Parties, the Buyer shall deliver to the Escrow Agent the balance of the Purchase Price.
 

(d)     Upon reception of the balance on the Purchase Price by the Escrow Agent, the Seller shall deliver to the Buyer, the original copy or a signed true and correct copy of the Promissory Notes, Amendments, Certifications and Opinions Exhibit C (together "Closing Documents") thereof.

 

(e)     Upon reception of the Closing Documents and signed Share Purchase Agreement between C.H. Mornas Foundation and Ronald Costa, for the purchase of 25,000,000 series E convertible preferred shares to the Escrow Agent, the latter is instructed to remit the balance owing of the Purchase Price in the manner provided by (the "Closing"). In this regard the parties acknowledge that prior to the Closing the Escrow Agent was instructed to release the sum of $5,000 from funds deposited with him, $2,600 of which was paid to OTC Markets, Inc. to reinstate the Company's service agreement therein and $2,400 of which was disbursed pursuant to the instructions of Tim Connolly. A total of $102,585 has been deposited by or for the benefit of the Buyer with the Escrow Agent for use in this transaction. The balance owing of the Purchase Price to the Seller to be remitted by the terms of this subparagraph is the sum of $92,585 and shall be remitted as follows: the sum of $92,585 shall be paid by the Escrow Holder directly, by wire transfer, to Corporate Strategies LLC for the benefit of Seller.

 

Acknowledgement and Consent. The Company hereby acknowledges and consents to the sale by the Seller and the purchase by Buyer of the W-Tech Notes as set forth in Section 2 above along with all the rights and privileges attached thereto as so described in the June 19, 2012, Agreement between the Company and Seller, attached hereto as Exhibit D, along with a the document trail, adjoined in reference.

 

4.     Representations of Buyer. Buyer hereby represents and warrants to the Seller that this Agreement shall constitute the legal, valid, and binding obligations of Buyer enforceable against Buyer in accordance with the terms hereof except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium, or other similar laws related to or affecting the enforcement of creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

 

5.     Representations of the Seller. The Seller represents and warrants to Buyer:

 

(a)     The Seller is the legal and beneficial owner of the W-Tech Notes, free and clear of any security interest, mortgage, pledge, encumbrance, lien or any other restriction on transfer, other than such restrictions which arise under the Securities Act of 1933, as amended, and applicable state securities laws, rules or regulations, except as noted herein. The Parties acknowledge that the W-Tech Notes and all of their proceeds have been previously pledged to Corporate Strategies LLC, Merchant Bankers ("CSI") and Timothy J. Connolly ("TJC"). Buyer,

 

 

 

 

on the one side, and CSI and TJC, on the other side, shall enter into an agreement after Closing to affect the release of said pledge and its related security agreement.
 

(b)     The execution and delivery of this Agreement has been duly and validly authorized by all necessary actions, and shall constitute the legal, valid, and binding obligations of the Seller enforceable against the Seller in accordance with the terms hereof except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium, or other similar laws related to or affecting the enforcement of creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

 

(c)     The W-Tech Notes are valid and binding upon the Company.

 

(d)     Neither the execution or delivery of this Agreement, nor any other instrument or agreement contemplated hereunder does or will, with or without the giving of notice, lapse of time or both, (i) violate, conflict, with or constitute a default under any term or provision of (A) any agreement to which the Seller is a party or by which his or its assets or properties are bound, or (B) any judgment, decree, order, statute, injunction, rule, or regulation of a governmental entity applicable to the Seller, or by which his or its assets or properties are bound, or (ii) result in the creation of any lien or encumbrance against the Seller or any its assets or properties (other than as provided herein).

 

Representations of the Company. The execution and delivery of this Agreement has been duly and validly authorized by all necessary actions, and shall constitute the legal, valid, and binding obligations of the Company enforceable against the Company in accordance with the terms hereof except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium, or other similar laws related to or affecting the enforcement of creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

 

Representations of the Company and the Seller. The Company and the Seller represent and warrant to Buyer that (i) Seller is not deemed an " affiliate" of the Company as defined in Rule 144(a)(l) under the Securities Act of 1933 and has not been an "affiliate" within one year of date hereof and (ii) there are no known restrictions under Rule 144 that would prevent the issuance of shares of common stock of the Company for debt conversions and the Company shall fully and promptly cooperate in all aspects of any future conversions of the debt and the issuance of free trading securities in lieu of debt payments to buyer under Rule 144.

 

Governing Law. This Agreement shall be construed in accordance with the laws of the Province of Quebec, Canada applicable to contracts made and performed within the Province of Quebec , without regard to principles of conflicts of law.

 

Notices. All notices and other communications under this Agreement (except payment) shall be in writing and shall be sufficiently given if sent to the Buyer, the Seller or the Company, as the case may be, by hand delivery, private overnight courier, with acknowledgement of receipt, or by certified mail, return receipt requested, as follows:

 

 

 

If to Seller:

 

CSI Business Finance, Inc.

16458 Bolsa Chica Rd. #419

Huntington Beach, CA 92649

     

If to the Buyer:

 

John Bracaglia, Esq

On Behalf of Serge Marselian

10450 Verville

Montreal QC. H3L 3E5

     

If to the Company:

 

W Technologies Inc.

5122 Bolsa Ave., Suite 109

Huntington Beach, CA 92649

     

If to the Escrow Agent:

 

Robert Huston, Esq

10 Jetty Drive

Corona del Mar, CA 92625

 

 

or to such other address as any of them, by notice to the others may designate from time to time. Time shall be counted to, or from, as the case may be, the date of such delivery in person, by overnight courier, or five (5) business days after such mailing.

 

Entire Agreement; Amendment and Waiver. This Agreement and the Note contain the entire understanding between the parties hereto, and supersede any prior agreements and understandings between them, with respect to the subject matter of this Agreement. Except as otherwise provided herein, this Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Seller, the Buyer and the Company No provision hereof may be waived other than in a written instrument executed by the waiving party.

 

Binding on Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective successors and assigns, except that this Agreement shall be assignable only as expressly provided herein.

 

Further Assurances. The parties hereto shall execute and deliver all such documents, provide all such information and take or forbear from taking all such actions as may be necessary or appropriate to effectuate the purposes of this Agreement.

 

Counterparts. This Agreement may be executed in one or more counterparts (including by means of facsimile signature pages or signature pages delivery by electronic transmission in portable document format (pdf)), all of which taken together will constitute one and the same agreement.

 

** Signature Page Follows **

 

 

 

 

IN WITNESS WHEREOF, the Company, the Buyer and the Seller have caused this Agreement to be duly executed and delivered as of the date first above written.

 

 

THE SELLER:

 

CSI BUSINESS FINANCE INC.

 

 

By:   /s/ James E Shipley                       

James E Shipley

 

 

THE COMPANY:

 

W TECHNOLOGIES INC.

 

 

By:  /s/ Ronald Costa                            

Ronald Costa, Chairman

 

 

THE BUYER:

 

 

By:                                                        

Serge Mersilian

 

 

THE ESCROW AGENT:

 

 

By:  /s/ Robert Huston                          

Robert Huston

 

 

 

 

 

 

EXHIBIT 4.2

 

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

 

Amount Note : $40,573.00

Issue Date: July 31, 2020

 

 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, W TECHNOLOGIES, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Mid Atlantic Capital Associates Inc, a Canadian corporation, or registered assigns (the “Holder”) the sum of $40,573.00 together with any interest as set forth herein, on July 31, 2021 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence accruing on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by prepayment). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I.     CONVERSION RIGHTS

  

1.1      Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III), each in respect of the remaining outstanding amount of this Note to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion

 

1

 

Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

 

1.2     Conversion Price.   The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean by the Market Price (as defined herein). “Market Price” means the average of the lowest two (2) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, less 20 % discount to market. “Trading Price” means, for any security as of any date, the closing price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

1.3     Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved seven times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time initially 1,000,000 shares)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4     Method of Conversion.

 

(a)     Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

 

(b)     Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless in the case of a Mandatory Conversion or the entire unpaid principal amount of this Note is otherwise so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. 

 

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(c)     Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(d)     Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

 

(e)     Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $100 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, and interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

 

1.5      Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

 

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

1.6     Effect of Certain Events.

 

(a)     Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

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(b)     Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)     Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

1.7     Prepayment. This Note may not be prepaid by the Holder without the prior written consent of the Borrower.

 

ARTICLE II.      CERTAIN COVENANTS

 

2.1     Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

ARTICLE III.      EVENTS OF DEFAULT

 

If any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1     Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

 

3.2     Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written

 

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announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3     Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

 

3.4     Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Agreement.

 

3.5     Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6     Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.7     Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

3.8     Failure to Comply with the Exchange Act. If Borrower becomes subject to the Exchange Act, the Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.9     Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.10   Cessation of Operations.     Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.11    Financial Statement Restatement.     The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.12     Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.13     Cross-Default.  Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

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Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein).  UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. 

 

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

ARTICLE IV.     MISCELLANEOUS

 

4.1     Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2     Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower:

 

W TECHNOLOGIES, INC.

9440 Santa Monica Boulevard, Suite 301

Beverly Hills, CA 90210

 

Attn: Mikael Lundgren, Chief Executive Officer

Email:      mg.l.@me.com

 

               If to the Holder

:

MID ATLANTIC CAPITAL ASSOCIATES, INC.

405 Kings Road

London U.K. SW100BB

 

Attn: Charles Flynn, Executive Officer

E-mail: cdflynn@hotmail.com

 

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4.3     Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4     Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

 

4.5     Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

4.6     Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of California or in the federal courts located in the Central District of California. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7     Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.8     Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

  

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed as of the date above written.

 

W TECHNOLOGIES, INC.

 

 

By: /s/ Mikael Lundgren                         

Mikael Lundgren

Chief Executive Officer

 

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EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of W TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of December 16, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

 

[ ]

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

 

[ ]

The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

_______________________________________________

________________________________

________________________________

Attention: Certificate Delivery

E-mail: __________________________

 

Date of conversion:      _____________

Applicable Conversion Price:      $____________

Number of shares of common stock to be issued

     pursuant to conversion of the Notes:      ______________

Amount of Principal Balance due remaining

     under the Note after this conversion:         ____________

 

________________________________________________

 

By: _____________________________

Name: __________________________

Title:    Chief Executive Officer

Date: ____________________

 

 

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EXHIBIT 4.3

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

 

Amount Note : $43,890.00

Issue Date: October 31, 2020

 

 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, W TECHNOLOGIES, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Mid Atlantic Capital Associates Inc, a Canadian corporation, or registered assigns (the “Holder”) the sum of $43,890.00 together with any interest as set forth herein, on December 16, 2023 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence accruing on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by prepayment). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I.     CONVERSION RIGHTS

  

1.1      Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III), each in respect of the remaining outstanding amount of this Note to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion

 

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Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

 

1.2     Conversion Price.   The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean by the Market Price (as defined herein). “Market Price” means the average of the lowest two (2) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, less a 20% discount to market. “Trading Price” means, for any security as of any date, the closing price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

1.3     Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved seven times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time initially 1,000,000 shares)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4     Method of Conversion.

 

(a)     Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

 

(b)     Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless in the case of a Mandatory Conversion or the entire unpaid principal amount of this Note is otherwise so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. 

 

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(c)     Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(d)     Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

 

(e)     Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $100 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, and interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

 

1.5      Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

 

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

1.6     Effect of Certain Events.

 

(a)     Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

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(b)     Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)     Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

1.7     Prepayment. This Note may not be prepaid by the Holder without the prior written consent of the Borrower.

 

ARTICLE II.      CERTAIN COVENANTS

 

2.1     Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

ARTICLE III.      EVENTS OF DEFAULT

 

If any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1     Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

 

3.2     Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written

 

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announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3     Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

 

3.4     Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Agreement.

 

3.5     Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6     Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.7     Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

3.8     Failure to Comply with the Exchange Act. If Borrower becomes subject to the Exchange Act, the Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.9     Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.10   Cessation of Operations.     Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.11    Financial Statement Restatement.     The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.12     Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.13     Cross-Default.  Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

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Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein).  UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. 

 

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

ARTICLE IV.     MISCELLANEOUS

 

4.1     Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2     Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower:

 

W TECHNOLOGIES, INC.

9440 Santa Monica Boulevard, Suite 301

Beverly Hills, CA 90210

 

Attn: Mikael Lundgren, Chief Executive Officer

Email:      mg.l.@me.com

 

               If to the Holder

:

MID ATLANTIC CAPITAL ASSOCIATES, INC.

405 Kings Road

London U.K. SW100BB

 

Attn: Charles Flynn, Executive Officer

E-mail: cdflynn@hotmail.com

 

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4.3     Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4     Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

 

4.5     Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

4.6     Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of California or in the federal courts located in the Central District of California. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7     Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.8     Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

  

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed as of the date above written.

 

W TECHNOLOGIES, INC.

 

 

By: /s/ Mikael Lundgren                        

Mikael Lundgren

Chief Executive Officer

 

 

 

 

 

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EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of W TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of December 16, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

 

[ ]

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

 

[ ]

The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

_______________________________________________

________________________________

________________________________

Attention: Certificate Delivery

E-mail: __________________________

 

Date of conversion:      _____________

Applicable Conversion Price:      $____________

Number of shares of common stock to be issued

     pursuant to conversion of the Notes:      ______________

Amount of Principal Balance due remaining

     under the Note after this conversion:         ____________

 

________________________________________________

 

By: _____________________________

Name: __________________________

Title:    Chief Executive Officer

Date: ____________________

 

 

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EXHIBIT 4.4

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

 

Amount Note : $573,232.00

Issue Date: December 16, 2020

 

 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, W TECHNOLOGIES, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Mid Atlantic Capital Associates Inc, a Canadian corporation, or registered assigns (the “Holder”) the sum of $573,232.00 together with any interest as set forth herein, on December 16, 2023 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence accruing on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by prepayment). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I.     CONVERSION RIGHTS

  

1.1      Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III), each in respect of the remaining outstanding amount of this Note to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion

 

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Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

 

1.2     Conversion Price.   The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean by the Market Price (as defined herein). “Market Price” means the average of the lowest two (2) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

1.3     Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved seven times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time initially 2,500,000 shares)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4     Method of Conversion.

 

(a)     Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

 

(b)     Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless in the case of a Mandatory Conversion or the entire unpaid principal amount of this Note is otherwise so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. 

 

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(c)     Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(d)     Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

 

(e)     Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $100 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, and interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

 

1.5      Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

 

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

1.6     Effect of Certain Events.

 

(a)     Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

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(b)     Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)     Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

1.7     Prepayment. This Note may not be prepaid by the Holder without the prior written consent of the Borrower.

 

ARTICLE II.      CERTAIN COVENANTS

 

2.1     Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

ARTICLE III.      EVENTS OF DEFAULT

 

If any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1     Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

 

3.2     Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written

 

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announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3     Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

 

3.4     Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Agreement.

 

3.5     Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6     Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.7     Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

3.8     Failure to Comply with the Exchange Act. If Borrower becomes subject to the Exchange Act, the Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.9     Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.10   Cessation of Operations.     Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.11    Financial Statement Restatement.     The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.12     Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.13     Cross-Default.  Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

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Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein).  UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. 

 

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

ARTICLE IV.     MISCELLANEOUS

 

4.1     Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2     Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower:

 

W TECHNOLOGIES, INC.

9440 Santa Monica Boulevard, Suite 301

Beverly Hills, CA 90210

 

Attn: Mikael Lundgren, Chief Executive Officer

Email:      mg.l.@me.com

 

               If to the Holder

:      

MID ATLANTIC CAPITAL ASSOCIATES, INC.

405 Kings Road

London U.K. SW100BB

 

Attn: Charles Flynn, Executive Officer

E-mail: cdflynn@hotmail.com

 

 

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4.3     Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4     Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

 

4.5     Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

4.6     Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of California or in the federal courts located in the Central District of California. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7     Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.8     Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

  

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed as of the date above written.

 

W TECHNOLOGIES, INC.

 

 

By: /s/ Mikael Lundgren                        

Mikael Lundgren

Chief Executive Officer

 

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EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of W TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of December 16, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

 

[ ]

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

 

[ ]

The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

_______________________________________________

________________________________

________________________________

Attention: Certificate Delivery

E-mail: __________________________

 

Date of conversion:      _____________

Applicable Conversion Price:      $____________

Number of shares of common stock to be issued

     pursuant to conversion of the Notes:      ______________

Amount of Principal Balance due remaining

     under the Note after this conversion:         ____________

 

________________________________________________

 

By: _____________________________

Name: __________________________

Title:    Chief Executive Officer

Date: ____________________

 

 

8

 

EXHIBIT 10.1

 

CONFIDENTIAL

 

Revised Letter of Intent

 

 

November 4, 2019

 

Mr. Serge Mersilian, President

W. TECHNOLOGIES, INC.

5122 Bolsa Avenue, Suite 109

Huntington Beach, CA 92649

 

Re: Acquisition Offer for Purchase and of Notes Series E Preferred Stock of W. Technologies, Inc. (the “Company”)

 

Dear Mr. Mersilian:

 

This Letter of Intent will evidence our intent in respect of the proposed acquisition (“Acquisition”) by Mid Atlantic Capital Associates, Inc. (“MACA”) of two convertible promissory notes of the Company, dated September 11, 2006 and September 21, 2006 (collectively “Notes”), currently owned by Sarkis Sarkissian (“Sarkissian”) and of all of the outstanding shares of the Series E Preferred Stock (“Preferred”) owned by the C.H. Mornas Foundation (“Mornas”). The principal terms and conditions of the Acquisition are as follows:

 

 

1.

Transfer of Ownership and Consideration. Pursuant to the Acquisition, Sarkissian shall assign the Notes to MACA and Mornas shall assign the Preferred to MACA in exchange for [a] a three (3) year promissory notes (“Closing Note”) in the aggregate amount of $250,000, and [ii] restricted shares of the common stock of the Company valued at $125, 000 [“Shares”], all at the Closing, as defined below. The Closing Note will be due 90 days from the Closing unless extended for an additional 90 days (“New Due Date”) by MACA for the payment of an extension fee of $25,000 [“Extension Fee”]. The Extension Fee shall be paid on the New Due Date when the Closing Note is paid.

 

 

2.

Escrow. Upon execution of the Purchase Agreement (as defined below), Sarkissian and Mornas shall deposit all of [a] the Notes will assignment documents attached, [b] the certificate[s] for the Mornas Preferred with stock powers attached, and [c] the executed issuance documents for the Shares, into the escrow to be described in the Purchase Agreement. Concurrently therewith, MACA shall deliver the Closing Note into such escrow. Once MACA is satisfied that all such documents are in escrow, MACA will deliver $5,000 US directly to Sarkissian for legal expenses.

 

 

3.

Closing Conditions. The proposed Acquisition is subject to and conditioned upon each of the following:

 

 

(a)

Due Diligence Period. MACA shall have, in its judgment, satisfactorily completed its due diligence review of the Company, the Notes, the Preferred and the Certificate of Incorporation as amended. MACA will begin due diligence until upon full execution of the LOI.

 

 

 

 

(b)

Purchase Agreement. MACA, the Company and each of Sarkisian and Mornas shall have negotiated and executed a binding purchase agreement (the “Purchase Agreement”) in respect of the proposed Acquisition prior to November 15, 2019. The Purchase Agreement and other ancillary transaction documents will be drafted by counsel to MACA and will be in a form acceptable to the Company, Sarkissian and to Mornas. The Purchase Agreement will contain customary representations, warranties and indemnities of the parties.

 

 

(c)

Audited Financial Statements [“AFS”]. Within 45 days after the Closing date which is to be selected by all Parties, the Company shall deliver to MACA the AFS of the Company for the two (2) fiscal years ended July 31, 2019 [“Audit”] and an unaudited financial statements as October 31, 2019 and as of the date of Closing, MACA will be responsible for the full payment of all cost of the Audit except for costs for the participation of personnel of the Company. The Audit shall begin when this LOI has been executed in full by the Parties. Except for the Notes, the Preferred and the Series A Preferred Stock [“Series A PS”], any other Convertible Securities with voting and/or conversion rights shall be terminated voided or all the provisions for voting and/or conversion rights shall be removed from the Convertible Securities.

 

 

(d)

Approvals. All necessary governmental and other material third-party approvals, consents and waivers shall have been obtained. In addition, the closing of the transaction shall be subject to receipt of the final approval of the MACA Board of Directors.

 

 

(e)

Prior to the execution of the Purchase Agreement. MACA shall have determined to its sole satisfaction that except for the Series A PS, there are no other notes, preferred shares, warrants, rights or any other securities of the Company outstanding which have any conversion rights whatsoever. With respect to the Series A PS, we are relying on the statements of Sarkissian and another Company representative, that the Series A PS will never cause MACA any problems.

 

 

(f)

Within five (5) days of the execution of the Letter of Intent, the Company shall appoint a new Board of Directors, of three people, two of which shall be persons designated by MACA. The new Board shall be kept fully informed about the status of any and all shares of Convertible Securities and the Series A Preferred to ensure the provisions of paragraph 3(e) are implemented. Control and ownership of all of the Notes, the Series E Preferred, the Series A Preferred and all Convertible Securities is a condition precedent to the Closing of this transaction.

 

 

4.

Payment of Liabilities. After the Closing, the current officers and directors of the Company shall continue to be responsible for all liabilities of the Company set forth in or disclosed in the Audit which were not otherwise known by or disclosed to MACA [“Undisclosed liabilities”] or listed in the unaudited statement delivered after the Closing and dated as of the date of the Closing. Undisclosed Liabilities not set forth on any such books and records or otherwise described in writing to MACA or which became known to MACA for any reason after the Closing, shall be deducted by MACA from the proceeds from the Closing Note described in paragraph 2 above.

 

2

 

 

5.

Pre-Closing Covenants. The parties hereto will use their reasonable best efforts to obtain all necessary third-party and governmental consents, approvals and waivers (including all certificates, permits, licenses and approvals required in connection with the Acquisition). The Company will operate its business in the ordinary course of business consistent with past practice.

 

 

6.

Closing. The closing (“Closing”) of the transactions contemplated by the Purchase Agreement will occur on or before December 15, 2019.

 

 

7.

Exclusivity. MACA and the Sellers shall in good faith endeavor to negotiate the terms of the definitive Purchase Agreement during the period of exclusive negotiations to expire on the Termination Date (as defined below) (The “Exclusivity Period”). The Exclusivity Period will note commence upon execution of the LOI. Once the Exclusivity Period begins until it terminates, Sellers will negotiate exclusively with MACA and will note (whether directly or indirectly through any other person or entity) solicit, encourage, engage in any discussion with, or provide any information to any person or entity (other than the Sellers and or the Company or its representatives) concerning any merger, sale of substantial assets of the Company or purchase or sale of any capital stock of the Company or any similar transaction involving the Company or any portion thereof. As the term “Termination Date” means March 1st, 2020 or such earlier or later date as may be mutually agreed upon by the Company and the Parties in writing.

 

 

8.

Confidentiality. Each of the Sellers and Buyer will keep confidential all information (i) related to a potential transaction or (ii) obtained by it in respect of the other in connection with this Letter of Intent, and will use such information solely in connection with the transactions contemplated hereby and if the transactions contemplated hereby are not consummated, each will destroy, without retaining a copy thereof, any schedules, documents, or other written information obtained from the other in connection with this Letter of Intent and the transactions contemplated hereby. Notwithstanding the foregoing provisions of this paragraph, no party hereto shall be required to keep confidential or destroy any information which (i) is known or available through other lawful sources not bound by a confidentiality agreement with the disclosing party, (ii) is or becomes publicly known through no fault of the receiving party or its agents, (iii) is required to be disclosed pursuant to an order or request of a judicial authority or governmental entity (provided the disclosing party is given reasonable prior notice) or (iv) is developed by the receiving party independently of the disclosure by the disclosing party.

 

 

9.

Expenses. Sellers shall each bear the fees and expenses incurred by them, and MACA shall bear the fees and expenses incurred by it, including the Company Audit expenses and expenses in connection with the negotiation, preparation, execution, and delivery of this Letter of Intent and the Purchase Agreement and the consummation of the transactions contemplated thereby.

 

 

10.

Public Announcements. There will be no disclosure of the Acquisition or this Letter of Intent until the Closing has occurred. Thereafter, all press releases and public announcements relating to the Acquisition will be agreed to and prepared jointly by the Company and MACA.

 

3

 

 

11.

Counterparts. This Letter of Intent may be executed in multiple counterparts which, when taken together, shall represent a fully executed Letter of Intent.

 

 

12.

Expiration. This Letter of Intent will expire at 5:00 P.M. Los Angeles, CA time on October 31, 2019 if not executed by Sellers and the Company and delivered to MACA prior to such time.

 

 

13.

Letter of Intent. It is understood and agreed that this Letter of Intent is not a binding or legally enforceable agreement and imposes no obligations upon the parties hereto and that the rights and obligations of the parties hereto in respect of the proposed Acquisition will be set forth only if and when an Acquisition Agreement in mutually acceptable form is executed and delivered by the parties hereto. Notwithstanding the preceding sentence the parties intend that the covenants contained in this Letter of Intent in Sections (Sec. 9 – Expenses: Expense Reimbursement), (Sec. 10 – Public Announcements), (Sec. 13 – Letter of Intent), (Sec. 14 – Governing Law), and (Sec. 15 – Prior Communications; No Oral Modifications), shall be enforceable and biding.

 

 

14.

Governing Law. This Letter of Intent shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts-of laws rules thereof.

 

 

[The remainder of this page intentionally left blank]

 

 

4

 

 

15.

Prior Communications; No Oral Modifications. This Letter of Intent supersedes all prior understandings, agreements, and representations between the seller of the Company and MACA, whether written or oral in respect of the subject matter hereof. This Letter of Intent may not be modified other than in a writing executed by all parties and stating its intent to modify or supersede this Letter of Intent.

 

 

16.

Expiration. This Letter of Intent shall expire at 5pm PST on Friday, November 1, 2019.

 

If the foregoing accurately sets forth our understanding, please so indicate by signing and dating this Letter of Intent in the space provided below and returning an executed copy of this Letter of Intent to the undersigned.

 

MID ATLANTIC CAPITAL ASSOCIATES, INC.

 

By: /s/ Charles Flynn                                     

Charles Flynn, President

 

AGREED AND ACCEPTED

(As of the date first written above):

 

W. TECHNOLOGY, INC.

 

 

By:                                                                 

       Serge Mersilian, President and CEO

 

 

                                                                       

     Sarkis Sarkissian, Individually

 

 

C.H. MORNAS FOUNDATION

 

 

 

 

5

 

 

15.

Prior Communications; No Oral Modifications. This Letter of Intent supersedes all prior understandings, agreements, and representations between the seller of the Company and MACA, whether written or oral in respect of the subject matter hereof. This Letter of Intent may not be modified other than in a writing executed by all parties and stating its intent to modify or supersede this Letter of Intent.

 

 

16.

Expiration. This Letter of Intent shall expire at 5pm PST on Friday, February 7th, 2020.

 

 

Signature page follows.

 

The remainder of this page intentionally left blank.

 

If the foregoing accurately sets forth our understanding, please so indicate on behalf of COMPANY by signing and dating this Letter of Intent in the space provided below and returning an executed copy of this Letter of Intent to the undersigned.

 

 

MID ATLANTIC CAPITAL ASSOCIATES, INC.

 

By: /s/ Charles Flynn                                     

Charles Flynn, President

 

AGREED AND ACCEPTED

(as of the date first written above):

 

 

 

 

W. TECHNOLOGY, INC.

 

By: /s/ Serge Mersilian                                  

       Serge Mersilian, President and CEO

 

 

/s/ Sarkis Sarkissian                                       

     Sarkis Sarkissian, Individually

 

C.H. MORNAS FOUNDATION

 

By:

 

6

 

 

14.

Governing Law. This Letter of Intent shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts-of laws rules thereof.

 

 

15.

Prior Communications; No Oral Modifications. This Letter of Intent supersedes all prior understandings, agreements, and representations between the seller of the Company and MACA, whether written or oral in respect of the subject matter hereof. This Letter of Intent may not be modified other than in a writing executed by all parties and stating its intent to modify or supersede this Letter of Intent.

 

 

16.

Expiration. This Letter of Intent shall expire at 5pm PST on Friday, November 1, 2019.

 

 

Signature page follows.

 

The remainder of this page intentionally left blank.

 

If the foregoing accurately sets forth our understanding, please so indicate on behalf of COMPANY by signing and dating this Letter of Intent in the space provided below and returning an executed copy of this Letter of Intent to the undersigned.

 

 

MID ATLANTIC CAPITAL ASSOCIATES, INC.

 

By: /s/ Charles Flynn                                     

Charles Flynn, President

 

AGREED AND ACCEPTED

(as of the date first written above):

 

 

W. TECHNOLOGY, INC.

 

By: /s/ Serge Mersilian                                  

       Serge Mersilian, President and CEO

 

 

                                                                       

     Sarkis Sarkissian, Individually

 

C.H. MORNAS FOUNDATION

 

 

 

 

 

 

EXHIBIT 10.2

 

CONFIDENTIAL

 

LETTER AGREEMENT

 

 

December 7, 2020

 

Mikael Lundgren

W. TECHNOLOGIES

5122 Bolsa Avenue, Suite 109

Huntington Beach, CA 92649

 

Re: Acquisition of W. Technologies, Inc., the “Company”.

 

Dear Mr. Lundgren:

 

The original Letter of Intent dated November 4, 2019 (“Old LOI”), is herby replaced in full by this Letter Agreement and the Old Note is void and of no further force or effect. The Old LOI originally contemplated the acquisition (the “Acquisition”) by Mid Atlantic Capital Associates, Inc., (“MACA”), of two convertible promissory notes of the Company, dated September 11, 2006 and September 21, 2006 collectively (“Notes”) allegedly owned by Sarkis Sarkissian (“Sarkissian”) and of all of the outstanding shares of the Series E Preferred Stock (“Preferred”) owned of record by the C.H. Mornas Foundation (“Mornas”). Subsequent thereto, it was determined that as a result of due diligence by MACA, certain provisions/terms of the Old LOI need to be revised as hereinafter set forth. Daniel Belanger (“Daniel”) as representative of Certain Current and Prior Shareholders of the Company, concurs in such changes. The Old Note is restated in full as follows:

 

1.     Transfer of Ownership and Consideration: Pursuant to the Acquisition, the Company shall assign a new Note of which $399,832 is principal and $173,400 is interest to MACA [the “New Note”], as the old Notes were cancelled and reissued in the name of MACA as at July 31, 2020, in exchange for (i) the cancellation of the Preferred, (ii) the issuance of 550,000 restricted shares of the common stock of the Company valued at $275,000 (“Shares”), (iii) the issuance of a convertible note for $40,573 in repayment for expenses paid by MACA [the “Expenses Note”], and (iv) the issuance of 500,000 Shares of Series F Preferred Stock.

 

2.     Section 2 of the Old LOI is deleted in full.

 

3     Closing Conditions: The proposed Acquisition is subject to and conditioned upon each of the following:

 

 

(a)

Due Diligence Period. MACA shall have in its judgment, satisfactorily completed its due diligence review of the Company, the Notes, the Preferred and the Certificate of Incorporation as amended. MACA began its due diligence until upon full execution of the Old LOI.

 

Section 3(b) of the Old LOI is deleted in its entirely.

 

 

(c)

Audited Financial Statement [“AFS”]: The AFS of the Company for the two (2) fiscal years ended July 31, 2020 [“Audit”] and, unaudited financial statements as October 31, 2020. Expect for Notes and the Series A Preferred Stock (“Series A PS”) all other Convertible

 

 

 

 

 

Securities existing before July 31, 2020 with voting and or conversion rights shall be terminated, voided or all of the provisions for ending and/or conversion rights shall be removed from the Convertible Securities.

 

 

(d)

Approvals. All necessary governmental and other material their-party approvals, consents and waivers shall have been obtained. In addition, the closing of the transaction shall be subject to receipt of the final approval of the W Tech Board of Directors.

 

 

(e)

Daniel acknowledges that except for the Series A PS, the New Note, the Expenses Note, there are no other notes preferred shares, warrants, rights, or any other securities of the Company currently outstanding which have any convertible rights whatsoever. With respect to the cancellation of the Preferred the Company and its Management are relying on statements Daniel made to the Company with respect to the issuance thereof.

 

 

(f)

The Company has approved a new Board of Directors of one person designated by MACA.

 

4.     Payment of Liabilities. After the Closing, Daniel, on behalf of certain prior officers and directors of the Company, shall continue to be responsible for all liabilities of the Company set forth in as disclosed in the Audit which were not otherwise known by or disclosed to MACA (“Undisclosed Liabilities”) or are listed in the unaudited financial statement at October 31, 2020. Undisclosed Liabilities not set forth on any such books and records or otherwise described in writing to MACA or which become known to MACA for any reason after the Closing by the cancellation of a portion of the Shares delivered under Section 1 hereof.

 

Section 5 of the Old LOI is deleted in its entirety.

 

6.     Closing. The closing (“Closing”) of the transactions contemplated by the Acquisition Agreement will occur on or about December 10, 2020.

 

7.     Confidentiality. Each of the Sellers and Buyer will keep confidential all information (i) related to a potential transaction or (ii) obtained by it in respect of the other in connection with this Letter of Intent and will use such information solely in connection with the transactions contemplated hereby, and if the transactions contemplated hereby are not consummated, each will destroy, without retaining a copy thereof, any schedules, documents, or other written information obtained from the other in connection with this LOI and the transactions contemplated hereby. Notwithstanding the foregoing provisions of this paragraph, no party hereto shall be required to keep confidential or destroy any information which (i) is known or available through other lawful sources not bound by a confidentiality agreement with the disclosing party, (ii) is or becomes publicly known through no fault of the receiving party or its agents, (iii) is required to be disclosed pursuant to an order or request of a judicial authority or governmental entity (provided the disclosing party is given reasonable prior notice) or (iv) is developed by the receiving party independently of the disclosure by the disclosing party.

 

8.     Expenses. Sellers shall bear the fees and expenses incurred by it, and MACA shall bear the fees and expense incurred by it, including the Company Audit expenses and expenses in connection with the negotiation, preparation, execution, and delivery of the Letter of Agreement.

 

2

 

9.     Public Announcements. There will be no disclosure of the Acquisition of this Letter of Intent until the Closing has occurred. Thereafter all press releases and public announcements relating to the Acquisition will be agreed to and prepared jointly by the Company and MACA.

 

10.     Counterparts. This Letter Agreement may be executed in multiple counterparts which, when taken together, shall represent a fully executed Letter of Intent.

 

11.     Expiration. This Letter Agreement will expire at 5:00 P.M. Los Angeles, CA time on January 31, 2020, if not closed.

 

12.     Governing Law. This Letter Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts-of law rules thereof.

 

Section 13 of the Old LOI is deleted in its entirety.

 

14.     Prior Communications; No Oral Modifications. This Letter Agreement supersedes all prior understandings, agreements, and representations between the Company and MACA, whether written or oral, in respect of the subject matter hereof. This Letter Agreement may not be modified other than in a writing executed by all parties and stating its intent to modify or supersede this Letter Agreement.

 

15.     Expiration. This Letter Agreement shall expire January 31, 2021.

 

If the foregoing accurately sets forth our understanding, please so indicate by signing and dating this Letter of Intent in the space provided below and returning an executed copy of this Letter of Intent to the undersigned.

 

Very truly yours.

 

MID ATLANTIC CAPITAL ASSOCIATES, INC.

 

By: /s/ Charles Flynn                           

Charles Flynn, President

 

 

AGREED AND ACCEPTED

(as of the date first written above):

 

W TECHNOLOIGES, INC.

 

By: /s/ Mikael Lundgren                     

Mikael Lundgren, President & CEO

 

/s/ Daniel Belanger                              

Daniel Belanger, Individually and on behalf of

Certain Current or Prior Shareholders of the Company

 

 

 

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