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.