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

 

Commission file number ______

 

MESO NUMISMATICS, INC.

(Exact Name of Registrant as specified in its charter)

 

Nevada   88-0492191
(State of Incorporation)   (IRS Employer ID No.)

 

3265 Johnson Avenue, Suite 213
Riverdale, NY 10463
(Address of principal executive offices)

 

(800) 889-9509
(Registrant’s telephone number, including area code)

 

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

 

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

 

Common Stock, $0.001 par value per share

(Title of each class to be so registered)

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting 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

 

The cross-reference table below identifies where the items required by Form 10 can be found in the statement.

 

Item No.   Item Caption   Page
1   Business   1
1A   Risk Factors   6
2   Financial Information   12
3   Properties   20
4   Security Ownership of Certain Beneficial Owners and Management   20
5   Directors and Executive Officers   21
6   Executive Compensation   22
7   Certain Relationships and Related Transactions, and Director Independence   23
8   Legal Proceedings   23
9   Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters   24
10   Recent Sale of Unregistered Securities   26
11   Description of Registrant’s Securities to be Registered   29
12   Indemnification of Directors and Officers   31
13   Financial Statements and Supplementary Data   F-1
14   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   32
15   Financial Statements and Exhibits   32

 

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EXPLANATORY NOTE

 

You should rely only on the information contained in this registration statement or in a document referenced herein. We have not authorized anyone to provide you with any other information that is different. You should assume that the information contained in this registration statement is accurate only as of the date hereof except where a different specific date is set forth.

 

As used in this registration statement, unless the context otherwise requires, the terms the “Company,” “Registrant,” “we,” “us,” “our,” or “Meso” refer to Meso Numismatics, Inc., a Nevada corporation.

 

FORWARD-LOOKING STATEMENTS

 

Except for statements of historical fact, some information in this document contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. The statements that contain these or similar words should be read carefully because these statements discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able accurately to predict or control. Further, we urge you to be cautious of the forward-looking statements which are contained in this registration statement because they involve risks, uncertainties and other factors affecting our operations, market growth, service, products and licenses. The factors listed in the sections captioned “Risk Factors” and “Description of Business,” as well as other cautionary language in this registration statement and events in the future may cause our actual results and achievements, whether expressed or implied, to differ materially from the expectations we describe in our forward-looking statements. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements in this registration statement are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial position. Since our common stock is considered a “penny stock,” we are ineligible to rely on the safe harbor for forward-looking statements provided in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

 

WHERE YOU CAN FIND MORE INFORMATION ABOUT US

 

When this registration statement becomes effective, we will begin to file reports, proxy statements, information statements and other information with the United States Securities and Exchange Commission (the “SEC”). You may read and copy this information, for a copying fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document retrieval services, and at the Web site maintained by the SEC at http://www.sec.gov.

 

When this registration statement is effective, we will make available, through a link to the SEC’s Web site, electronic copies of the materials we file with the SEC (including our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, the Section 16 reports filed by our executive officers, directors and 10% stockholders and amendments to those reports). To receive paper copies of our SEC filings, please contact us by mail addressed to Investor Relations, Meso Numismatics, Inc, 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463.

 

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Item 1. Business.

 

General Information

 

Our business address is 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. Our phone number is (800) 889-9509. The information contained in, or that can be accessed through, our website is not part of this registration statement.

 

History

 

The Company was originally founded in 1999 as Spectrum Ventures LLC, a private company, registered in Tacoma, WA, for the purpose of developing, marketing and selling voice over IP products and services. I n 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals. On November 21, 2016 the Company (formerly known as Pure Hospitality Solutions, Inc. a Nevada corporation) entered into an agreement with Meso Numismatics, Corp., a Florida corporation. The respective Boards of Directors of the Pure Hospitality Solutions, Inc. and Meso Numismatics, Corp., at that time, determined that it was advisable and to the advantage of and the best interests of Pure Hospitality Solutions, Inc. and its shareholders and Meso Numismatics, Corp. and its stockholders that Meso Numismatics, Corp. merge with and into Pure Hospitality Solutions, Inc. (the “Merger”). It was at that time that the Company acquired common control of Meso Numismatics, Corp. and the assets there held. At the completion of the Merger, Meso Numismatics Corp. ceased to exist. In September of 2018 the Company effected a name change and changed its name from Pure Hospitality Solutions, Inc. to Meso Numismatics, Inc.

 

Led by the Company’s Chief Executive Officer, an avid numismatist, the goal of the Company is to generate continuous, scalable and growing revenues from the sale of its coins, paper currency, bullion and medals, while also teaching those interested in learning about numismatics. The Company intends to produce numismatic whitepapers in addition to holding seminars throughout the region. Within the U.S. operations, the Company regularly visits coin shows and other dealers throughout the country, providing information about the Meso region. The Company regularly acquires new customers through this approach, by bringing inventory that certain dealers do not have regular access to. The Company regularly engages in transactions with other numismatic dealers and brings U.S. numismatic goods back to the Meso region for sale, while simultaneously making sales in the U.S. This ‘Ox Cart Phenomenon’, which is essentially the efficient use of a transport and distribution vehicle, helps the Company keep its first-mover, on-the-ground advantage within the industry. Items are sent from Costa Rica to the U.S. and merchandise is simultaneously sent from the U.S. to Costa Rica, creating multiple sales streams.

 

Recent Developments

 

Name Change and Symbol Change

 

Effective September 26, 2018 the Company changed its name from Pure Hospitality Solutions, Inc. to Meso Numismatics, Inc. All references to the “Company” or “Pure Hospitality Solutions” or “PNOW” in this Registration Statement on Form 10 refer to Meso Numismatics, Inc., unless stated otherwise. Further, in connection with changing its name, the Company changed its trading symbol to MSSV.

 

A 1:1000 reverse stock split of the Common Stock (the “Reverse Stock Split”) was effected on September 26, 2018 for shareholders of record as of September 26, 2018. The number of authorized shares remains unchanged. All share and per share information in this Registration Statement on Form 10 have been retroactively adjusted for all periods presented, unless otherwise indicated, to give effect to the Reverse Stock Split, including the financial statements and notes thereto.

 

Overview

 

Meso Numismatics, Inc., has established a growing numismatics operation Meso Numismatics focuses on the Central American Caribbean region with a concentration of products surrounding Mesoamerica (Mexico to Panama).

 

Having locations in Costa Rica and Florida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals from Costa Rica, to be sold in the U.S. and around the world. Likewise, the Company also imports such products back to Costa Rica, to be sold throughout the local markets.

 

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The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin from Latin America, or a banknote with an error from the United States. All inventory is carefully screened by management, then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company’s inventory is sent to the Numismatic Guaranty Corporation for authentication and grading. For all banknotes, the Company utilizes the services of Paper Money Guaranty, LLC for authentication and grading, both Florida-based companies. Once graded, the inventory is sent to the Company’s Florida-based location prior to being sent to one of the Company’s many customers around the world.

 

We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on the Google Play Store, as well as the Apple App Store . The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.

 

Meso continues to acquire rare inventory at market rates, from throughout the Meso Region (including Central America and the Caribbean). The inventory is then sent for authentication and grading, followed by said items being sold throughout Meso’s sales outlets. This includes an eBay store with up to, but not limited to, $50,000 in items for sale at any one time. For some of the Company’s rarer inventory, items are sent to major auction houses around the world for sale.

 

Coins / Medals

 

The Company’s inventory is comprised of roughly 50% coins / medals and 50% paper money. The Company has a meticulous process for the acquisition and sales process for each coin item. The Company specializes in coins from the Meso region, but also acquires coins and medals from elsewhere around the world.

 

The process starts by visiting local shops and establishments throughout the Meso region to gather information about the coins that Company’s management is considering for acquisition. Once an item has been selected, it is paid for, then packaged and sent from Meso’s Costa Rica location to the Company’s Florida location. From there, the merchandise is once again examined, then sent to NGC (the Numismatic Guaranty Corporation) for grading and authentication. After approximately three weeks, the items are sent back to Meso’s Florida location for storage, safekeeping and subsequent distribution to its respective destinations.

 

Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Some pieces are also sent back to Costa Rica for trading, some are sold on eBay and some go to auction powerhouses around the globe.

 

Meso also acquires ungraded coins / medals from eBay, as well as at specialty shops throughout the Meso region and during certain U.S. shows. Those items are taken through the same aforementioned process.

 

Paper Money

 

As indicated above, paper money makes up approximately 50% of Meso’s inventory. The process of acquiring paper money almost mirrors that of coins / medals.

 

Meso’s management often visits local banks and central banks throughout the Meso region. Management selects banknotes within bundles, aiming to acquire rare and exceptional notes. This includes RADARS (the same serial number back-and-forth), errors and uncirculated rarities.

 

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The note is then sent from Costa Rica to Florida for grading and authentication. For this service, the Company utilizes the Paper Money Guaranty, which is expected to examine the note in great detail, then offers a grade for its condition. The note is encased, then sent back to Meso’s Florida location for distribution to its final destination. Similarly to coins, management inspects each note, then decides whether it will be sold on eBay, at a specialty auction, or traded for other merchandise in the Meso Region.

 

Similar to coins, Meso also purchases ungraded notes on eBay or at other stores, has them graded through the same process, then decides where to sell it at the end.

 

Industry Overview

 

Numismatics itself is the study or collecting of currency, including but not limited to paper money, coins, medals, tokens and other objects. Numismatics is often associated with stamp collecting, philately, and is equally as popular when it comes to hobbies around the world.

 

The numismatic industry is a multi-billion-dollar market that continues to grow year-over-year. Estimates provided by PNG (The Professional Numismatists Guild) placed the U.S. rare coin market at between $3.4 and $3.8 billion in 2017.

 

At the forefront of the numismatic industry is NGC (The Numismatics Guaranty Corporation) and PMG (The Paper Money Guaranty). These two organizations, with locations around the world, are responsible for the majority of authenticating and grading various forms of currency. Since its inception in 1987, NGC has graded more than 42 million coins, with 61% representing the US, 16% representing Asia, $13% representing Europe, and, a combined 8% representing Africa, South America and Australia.

 

Growth Strategy

 

According to an article published in a May 2017 edition of The Economist, the global numismatic market has a value between $5 Billion and $8 Billion per year. It has been noted that out of all the global numismatic sales around the world, the United States is responsible for roughly 85% of the market, further depicted in the chart below. We believe we can capture market share in the U.S. market and we believe we are well positioned to take advantage of, As indicated by the following chart, the Company has the opportunity for growth within the U.S. and the Latin American region as well. The Company has the opportunity for growth within the Latin American region as well. The Company also expects to perform outreach and educate Latin America and Australia about the value of numismatics.

 

 

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Many Latin American countries postal services are difficult to navigate due to political unrest and corruption. We believe we have an advantage by having boots on the ground in Costa Rica, and associates throughout all of Latin America, which affords us the opportunity to procure almost any type of item and safely have it graded and then sold.

 

Successful importation and exportation of merchandise between Central America and the United States is crucial for the Company. Being able to acquire inventory at reduced costs, then selling the items for healthy profits, once graded, continues to be the key to growth.

 

The Company anticipates organic growth as well growth through acquisitions, as the right opportunities present themselves. The Company has and will continue to reinvest capital in new inventory, further supporting its long-term goal of becoming a recognized, global numismatic brand. Possible future acquisitions include websites / social media pages, in addition to physical numismatic businesses that could become available. These acquisitions could be solely of a company’s inventory, or their physical location and assets as well.

 

Further, the Company anticipates monetization of its mobile application in 2019. This could be through the use of third-party advertisements, or charging for the application to future users. Management is still working to define the best course of action for maximum monetization of its mobile application.

 

Competitive Strengths

 

Technology

 

To our knowledge, Meso Numismatics has the only banknote scanner on the market. The technology, mostly utilized by numismatists, quickly assesses all the information about a banknote and almost instantly displays the information, along with a replica banknote from the database.

 

The Meso App, available on the Google Play Store and the Apple App Store, is expected to eventually be transitioned into a platform to buy, sell, and trade banknotes. Monetization is expected come from advertisers displaying banner ads, as well as transactional fees from the sales of items. The Company also has the ability, although it does not do so yet, to charge the user for general use of the App.

 

Location

 

Meso Numismatics has office locations in San Jose, Costa Rica and Boca Raton, Florida. Having dual locations, especially in these two areas in particular, is extremely advantageous to the Company.

 

The Costa Rican location of Meso is pivotal for the Company. Management in this location is able to obtain some items, below-market prices due to relationships made within the industry. While a US collector must pay for an item (usually with a premium) plus shipping and handling, having management on the ground allows the Company to acquire items without the extra costs. Management also has relationships with dealers throughout the region and trades / exchanges merchandise for better items. The majority of the Company’s inventory originates in Costa Rica, then is shipped to Florida for grading and authentication.

 

The Boca Raton location of Meso is almost as pivotal as the Costa Rican location, as the leading grader and authenticator of merchandise (PMG and NGC) also has locations in Florida. Merchandise is sent from Costa Rica to Boca Raton. Once inventoried, merchandise is sent to PMG or NGC for grading and authenticating. Once complete, the inventory is returned to the Boca Raton location where it is safely housed and distributed to its final location. Having this location allows the Company to ship items globally at significantly lower rates than shipping from Costa Rica.

 

Management

 

The Management of Meso Numismatics has over 40 years of experience in numismatics. Due to Mr. Pereira’s knowledge of the industry, NGC and PMG have allowed Meso Numismatics to become an authorized dealer of their companies. In addition, under the direction of Mr. Pereira, Meso Numismatics won the coveted 2018 PMG Registry Award for the Best Presented Set, displaying the Company’s nearly flawless collection of Costa Rican Banknotes from 1950 to present. Mr. Pereira continues to be a resource for U.S. collectors who are seeking Latin American inventory.

 

Prior to his career in numismatics, Mr. Pereira owned a technology consulting company, after attending a social media program from MIT. Mr. Pereira was responsible for the infrastructure, the IT, and internet engineering for several of his client companies.

 

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Management also has close relationships with the grading agencies, as a Registered Dealer with PMG and NGC. The Company is able to submit inventory on the behalf of others; and receives discounts as a Registered Dealer.

 

Strategic Partnerships

 

Meso has strategically partnered with Softon Digital (“Softon”) of Costa Rica, in addition to the above relationships with PMG and NGC. Softon assisted in the development and creation of the Meso App and it is expected that Softon will continue to help the Company evolve the technological portion of the business, with their team of programmers and engineers.

 

Competition

 

In the coins and other collectibles business, we will compete with a number of comparably sized and smaller firms, as well as a number of larger firms throughout the United States. Our primary competitors are American Numismatic Rarities, a comparably-sized coin auctioneer. Many of our competitors have the ability to attract customers as a result of their reputation and the quality collectibles they obtain through their industry connections. Additionally, other reputable companies that sell rare coins and other collectibles may decide to enter our markets to compete with us. These companies have greater name recognition and have greater financial and marketing resources than we do. If these auction companies are successful in entering the specialized market for premium collectibles in which we participate or if dealers and sellers participate less in our auctions, we may attract fewer buyers and our revenue could decrease.

 

Employees

 

As of December 12, 2018, the Company had 2 full-time employees and 2 part-time employees. None of our employees are subject to a collective bargaining agreement, and we believe that our relationship with our employees is good.

 

Reports to Security Holders.

 

The Company will file reports with the SEC. The Company will be a reporting company and will comply with the requirements of the Exchange Act.

 

The public may read and copy any materials the Company files with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

 

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Item 1A. Risk Factors.

 

You should carefully consider the risks described below together with all of the other information included in this registration statement before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment. In addition to other information in this registration statement and in other filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating results and financial condition. If any of the following risks actually occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected. Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.

 

Risks Related to Our Business

 

We have a limited operating history.

 

The Company was incorporated under the laws of the State of Nevada in 2001 and has engaged in limited operations to date. Accordingly, the Company has only a limited operating history with which you can evaluate its business and prospects. An investor in the Company must consider its business and prospects in light of the risks, uncertainties and difficulties frequently encountered by early-stage companies, including limited capital, delays in product development, possible marketing and sales obstacles and delays, inability to gain customer and merchant acceptance or inability to achieve significant distribution of our products and services to customers. The Company cannot be certain that it will successfully address these risks. Its failure to address any of these risks could have a material adverse effect on its business.

 

WE COMPETE WITH A NUMBER OF NUMISMATIC COMPANIES AND FACE INCREASED COMPETITION FROM SUCH COMPANIES.

 

In the coins and other collectibles business, we will compete with a number of comparably sized and smaller firms, as well as a number of larger firms throughout the United States. Our primary competitors are American Numismatic Rarities, a comparably-sized coin auctioneer. Many of our competitors have the ability to attract customers as a result of their reputation and the quality collectibles they obtain through their industry connections. Additionally, other reputable companies that sell rare coins and other collectibles may decide to enter our markets to compete with us. These companies have greater name recognition and have greater financial and marketing resources than we do. If these auction companies are successful in entering the specialized market for premium collectibles in which we participate or if dealers and sellers participate less in our auctions, we may attract fewer buyers and our revenue could decrease.

 

MARKET PRICE FLUCTUATION OF THE COIN MARKET MAY AFFECT INTEREST IN OUR PRODUCTS, SERVICES AND PROFITABILITY

 

The profitability of our operations is directly related to the market price of metals and the numismatic coin market. The market prices of metals and the numismatic coin market fluctuate significantly and are affected by a number of factors beyond our control, including, but not limited to, the rate of inflation, the exchange rate of the dollar to other currencies, interest rates, global economic and political conditions, and the collector’s market. Price fluctuations in the metals and numismatic market from the conception of a potential target to the conclusion of operations can significantly affect profitability. We may begin one or more operations at a time when the price of metals or numismatic coins make operations economically feasible and subsequently incur losses due to market decreases. Adverse fluctuations in the metals or numismatic market may force us to curtail or cease our business operations.

 

CHANGES IN APPLE APP STORE AND GOOGLE PLAY STORE POLICIES COULD RESULT IN OUR MOBILE APPLICATIONS BEING DE-LISTED. IN ADDITION, OUR THIRD PARTY SERVICE PROVIDERS MAY DECLINE TO PROVIDE SERVICES DUE TO THEIR POLICIES, OR CEASE TO PROVIDE SERVICES PREVIOUSLY PROVIDED TO US DUE TO A CHANGE OF POLICY. IN ADDITION TO CHALLENGES WE FACE WITH RESPECT TO COMPLIANCE WITH THE APPLE APP STORE AND GOOGLE PLAY STORE GUIDELINES.

 

The company’s application was developed for the numismatic industry as, what we believe is the world’s first banknote recognition scanner. Any user with a smartphone can simply snap and submit a picture of any banknote and they are quickly greeted with information about the note, such as its reference number, the value of the note, which entity it was issued by, the country of origin, and the exact printing company which printed the note. If this application is removed from the apple app store or the google play store, the company would lose the technology side of the business. The company would still be a numismatic company, but would not have any technology associated with the company.

 

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Failure to attract clients could greatly harm our ability to generate revenue.

 

Our ability to generate revenue is dependent on the continued growth of our sales and technology application. If we are unable to continue to grow our network or bring new clients to our network, our ability to generate revenue would be greatly compromised. There is no guarantee that individuals and businesses will want to join our platform, or that we will be able to generate revenue from the existing clients of the Company.

 

The value of our inventory is subject to volatility in the price of gold and any other precious metal The Company has two types of inventory -- paper money and coin currency. The majority of coins are made of either silver, gold, nickel, platinum, etc. Should the price of these metals decline, we would experience a decline in the value of our inventory.

 

Our operations will be significantly affected by changes in the market price of gold, silver, other precious metals and the valuation of currencies. The prices of these metals and currencies fluctuate widely and are affected by numerous factors, all of which are beyond our control. Some of these factors include the sale or purchase of gold by central banks and financial institutions; interest rates; currency exchange rates; inflation or deflation; fluctuation in the value of the United States dollar and other currencies; speculation; global and regional supply and demand, including investment, industrial and jewelry demand; and the political and economic conditions of major gold or other mineral producing countries throughout the world, such as Russia and South Africa. The price of gold or other minerals have fluctuated widely in recent years, and a decline in the price of gold could cause a significant decrease in the value of our properties, limit our ability to raise money, and render continued exploration and development of our properties impracticable. If that happens, then we could lose our rights to our properties and be compelled to sell some or all of these rights. Additionally, the future development of our properties beyond the exploration stage is heavily dependent upon the level of gold prices remaining sufficiently high to make the development of our properties economically viable. You may lose your investment if the price of gold decreases. The greater the decrease in the price of gold, the more likely it is to have a material adverse impact on our business.

 

WE ARE REQUIRED TO COMPLY WITH A WIDE VARIETY OF LAWS AND REGULATIONS, AND ARE SUBJECT TO REGULATION BY VARIOUS FEDERAL, STATE AND FOREIGN AGENCIES.

 

We are subject to various local, state, federal, foreign and transnational laws and regulations, particularly those relating to the importation and exportation of coins and paper money, tariffs and trade barriers, taxation, exchange controls, current good manufacturing practices, health and safety and our business practices in the U.S. and abroad, such as anti-corruption and anti-competition laws, and, in the future, any changes to such laws and regulations could adversely affect us. Any noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

 

WE ARE SUBJECT TO A VARIETY OF LITIGATION THAT COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

The improper handling of coins and paper money or accidents involving the transportation of such materials could subject us to liability. In addition, our reputation could be adversely affected by negative publicity surrounding such events regardless of whether or not claims against us are successful. Defending against such claims may divert our management’s attention, may be expensive, and may require that we pay damage awards or settlements or become subject to equitable remedies that could adversely affect our financial condition and results of operations. A successful claim brought against us in excess of available insurance or not covered by insurance or indemnification agreements, or any claim that results in significant adverse publicity against us, could have a material adverse effect on our business and our reputation. Furthermore, the outcome of litigation is inherently uncertain.

 

Risks and Uncertainties Associated with Our Expansion Into and Our Operations Outside of the United States May Adversely Affect Our Results of Operations, Cash Flow, Liquidity or Financial Condition

 

These challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations, such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) rapid changes in government policy, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation; and (5) currency exchange rate fluctuations.

 

Fluctuations in Foreign Currency Exchange Rates May Adversely Affect Our Results of Operations, Cash Flow, Liquidity or Financial Condition.

 

As a numismatic company, the value of the inventory is not only tied to the price of a metal, but the actual numismatic piece. Since the company has banknotes and coins from around the world, if the price of a foreign currency declines, the value of the inventory may decline as well. In addition, since the Company is able to procure items at discounted rates from the Meso region, if the exchange rates change, the company may be unable to acquire inventory at such discounted costs .

 

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We may become subject to legal proceedings that could have a material adverse impact on our financial position and results of operations.

 

From time to time and in the ordinary course of our business, we may become involved in various legal proceedings. All such legal proceedings are inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming and disruptive to our operations and distracting to management. If resolved against us, such legal proceedings could result in excessive verdicts, injunctive relief or other equitable relief that may affect how we operate our business. Similarly, if we settle such legal proceedings, it may affect how we operate our business. Future court decisions, alternative dispute resolution awards, business expansion or legislative activity may increase our exposure to litigation and regulatory investigations. In some cases, substantial noneconomic remedies or punitive damages may be sought. Although we maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular verdict, judgment or settlement that may be entered against us, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. If we incur liability that exceeds our insurance coverage or that is not within the scope of the coverage in legal proceedings brought against us, it could have an adverse effect on our business, financial condition and results of operations.

 

Certification, licensing or regulatory requirements;

 

Unexpected changes in regulatory requirements;

 

Changes to or reduced protection of intellectual property rights in some countries.

 

We intend to continue strategic business acquisitions and other combinations, which are subject to inherent risks.

 

In order to expand our solutions, services, and grow our market and client base, we may continue to seek and complete strategic business acquisitions and other combinations that we believe are complementary to our business. Acquisitions have inherent risks which may have a material adverse effect on our business, financial condition, operating results or prospects, including, but not limited to: 1) failure to successfully integrate the business and financial operations, services, intellectual property, solutions or personnel of an acquired business and to maintain uniform standard controls, policies and procedures; 2) diversion of management’s attention from other business concerns; 3) entry into markets in which we have little or no direct prior experience; 4) failure to achieve projected synergies and performance targets; 5) loss of clients or key personnel; 6) incurrence of debt or assumption of known and unknown liabilities; 7) write-off of software development costs, goodwill, client lists and amortization of expenses related to intangible assets; 8) dilutive issuances of equity securities; and, 9) accounting deficiencies that could arise in connection with, or as a result of, the acquisition of an acquired company, including issues related to internal control over financial reporting and the time and cost associated with remedying such deficiencies. If we fail to successfully integrate acquired businesses or fail to implement our business strategies with respect to these acquisitions, we may not be able to achieve projected results or support the amount of consideration paid for such acquired businesses.

 

Volatility and disruption resulting from global economic conditions could negatively affect our business, results of operations and financial condition.

 

Although certain indices and economic data have shown signs of stabilization in the United States and certain global markets, there can be no assurance that these improvements will be broad-based or sustainable, nor is it clear how, if at all, they will affect the markets relevant to us. As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expense at levels higher than historically experienced. Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected. 

 

If we are unable to manage our growth in the new markets in which we offer solutions or services, our business and financial results could suffer.

 

Our future financial results will depend in part on our ability to profitably manage our business in the new markets that we enter. Difficulties in managing future growth in new markets could have a significant negative impact on our business, financial condition and results of operations.

 

8

 

 

We rely heavily on our management, and the loss of their services could adversely affect our business.

 

Our success is highly dependent upon the continued services of our Chief Executive Officer, Melvin Pereira. The loss of Mr. Pereira’s services would have a material adverse effect on the Company and its business operations.

 

WE MAY NOT BE ABLE TO IMPLEMENT OUR GROWTH AND MARKETING STRATEGY SUCCESSFULLY OR ON A TIMELY BASIS OR AT ALL.

 

Our future success depends, in large part, on our ability to implement our growth strategy of expanding distribution and sales of our product portfolio, attracting new consumers and introducing new product lines and product extensions.

 

Our sales and operating results will be adversely affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful. 

  

Risks Related to Our Common Stock

  

If our ability to register our Common Stock is limited, your ability to sell such shares may be subject to substantial restrictions, and you may be required to hold such shares for a period of time prior to sale, in which case you could suffer a substantial loss on such shares.

 

If our ability to register the resale of shares of our Common Stock is limited, you may not be able to sell your Common shares. There will be substantial restrictions on your ability to transfer any shares which are not registered for resale, and you may be required to hold the shares for some period of time.

 

OUR STOCK PRICE MAY BE VOLATILE OR MAY DECLINE REGARDLESS OF OUR OPERATING PERFORMANCE, AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT.

 

The market price of our common stock may fluctuate widely in response to various factors, some of which are beyond our control, including:

 

market conditions or trends in the dietary supplement industry or in the economy as a whole;

 

actions by competitors;

 

actual or anticipated growth rates relative to our competitors;

 

the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

economic, legal and regulatory factors unrelated to our performance;

 

any future guidance we may provide to the public, any changes in such guidance or any difference between our guidance and actual results;

 

changes in financial estimates or recommendations by any securities analysts who follow our common stock;

 

speculation by the press or investment community regarding our business;

 

litigation;

 

changes in key personnel; and

 

future sales of our common stock by our officers, directors and significant shareholders.

 

9

 

 

In addition, the stock markets, including the over-the-counter markets where we are quoted, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These broad market fluctuations may materially affect our stock price, regardless of our operating results. Furthermore, the market for our common stock historically has been limited and we cannot assure you that a larger market will ever be developed or maintained. The price at which investors purchase shares of our common stock may not be indicative of the price that will prevail in the trading market. Market fluctuations and volatility, as well as general economic, market and political conditions, could reduce our market price. As a result, these factors may make it more difficult or impossible for you to sell our common stock for a positive return on your investment. In the past, shareholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

 

FUTURE SALES OF SHARES OF OUR COMMON STOCK, OR THE PERCEPTION IN THE PUBLIC MARKETS THAT THESE SALES MAY OCCUR, MAY DEPRESS OUR STOCK PRICE.

 

The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock. In addition, if our significant shareholders sell a large number of shares, or if we issue a large number of shares, the market price of our stock could decline. Any issuance of additional common stock by us in the future, or warrants or options to purchase our common stock, if exercised, would result in dilution to our existing shareholders. Such issuances could be made at a price that reflects a discount or a premium to the then-current trading price of our common stock. Moreover, the perception in the public market that shareholders might sell shares of our stock or that we could make a significant issuance of additional common stock in the future could depress the market for our shares. These sales, or the perception that these sales might occur, could depress the market price of our common stock or make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

  

We have issued shares of common stock, options and convertible notes which are convertible into shares of our common stock in connection with our private placements and certain employment, director and consultant agreements. In addition, we issued shares of our common stock and convertible notes which are convertible into shares of our common stock, in financing transactions and pursuant to employment agreements that are deemed to be “restricted securities,” as that term is defined in Rule 144 promulgated under the Securities Act. From time to time, certain of our shareholders may be eligible to sell all or some of their restricted shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, subject to certain limitations. The resale pursuant to Rule 144 of shares acquired from us in private transactions could cause our stock price to decline significantly.

 

“PENNY STOCK” RULES MAY MAKE BUYING OR SELLING OUR COMMON STOCK DIFFICULT.

 

If the market price for our common stock is below $5.00 per share, trading in our common stock may be subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules would require that any broker-dealer that would recommend our common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations would require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our common stock.

 

POTENTIAL FUTURE FINANCINGS MAY DILUTE THE HOLDINGS OF OUR CURRENT SHAREHOLDERS.

 

In order to provide capital for the operation of our business, in the future we may enter into financing arrangements. These arrangements may involve the issuance of new shares of common stock, preferred stock that is convertible into common stock, debt securities that are convertible into common stock or warrants for the purchase of common stock. Any of these items could result in a material increase in the number of shares of common stock outstanding, which would in turn result in a dilution of the ownership interests of existing common shareholders. In addition, these new securities could contain provisions, such as priorities on distributions and voting rights, which could affect the value of our existing common stock.

 

10

 

 

WE CURRENTLY DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK. AS A RESULT, YOUR ONLY OPPORTUNITY TO ACHIEVE A RETURN ON YOUR INVESTMENT IS IF THE PRICE OF OUR COMMON STOCK APPRECIATES .

 

We currently do not expect to declare or pay dividends on our common stock. In addition, in the future we may enter into agreements that prohibit or restrict our ability to declare or pay dividends on our common stock. As a result, your only opportunity to achieve a return on your investment will be if the market price of our common stock appreciates and you sell your shares at a profit.

 

YOU MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST DUE TO THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.

 

We are in a capital intensive business and we do not have sufficient funds to finance the growth of or to support our projected capital expenditures. As a result, we will require additional funds from future equity or debt financings, including tax equity financing transactions or sales of preferred shares or convertible debt, to complete the development of new projects and pay the general and administrative costs of our business. We may in the future issue our previously authorized and unissued securities, resulting in the dilution of the ownership interests of holders of our common stock. We are currently authorized to issue 6,500,000,000 shares of common stock. The potential issuance of such additional shares of common stock or preferred stock or convertible debt may create downward pressure on the trading price of our common stock. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in future public offerings or private placements for capital raising purposes or for other business purposes. The future issuance of a substantial number of common shares into the public market, or the perception that such issuance could occur, could adversely affect the prevailing market price of our common shares. A decline in the price of our common shares could make it more difficult to raise funds through future offerings of our common shares or securities convertible into common shares.

 

WE HAVE A SIGNIFICANT NUMBER OF SHARES OF OUR COMMON STOCK ISSUABLE UPON CONVERSION OF CERTAIN OUTSTANDING OPTIONS, WARRANTS AND CONVERTIBLE NOTES, AND THE ISSUANCE OF SUCH SHARES UPON EXERCISE OR CONVERSION WILL HAVE A SIGNIFICANT DILUTIVE IMPACT ON OUR STOCKHOLDERS. SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK FOLLOWING THE EXPIRATION OF LOCK-UPS MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND THE ISSUANCE OF ADDITIONAL SHARES WILL DILUTE ALL OTHER STOCKHOLDERS.

As of December 12, 2018, the Company does not have any options outstanding. As of December 12, 2018, there are 2,000,000 shares of Common Stock issuable upon conversion of our convertible notes.

 

In addition, our articles of incorporation, as amended, permits the issuance of up to 6,500,000,000 million shares of Common Stock. Thus, we have the ability to issue substantial amounts of Common Stock in the future, which would dilute the percentage ownership held by stockholders.

 

FUTURE ISSUANCE OF OUR COMMON STOCK, PREFERRED STOCK, OPTIONS AND WARRANTS COULD DILUTE THE INTERESTS OF EXISTING STOCKHOLDERS.

 

We may issue additional shares of our common stock, preferred stock, options and warrants in the future. The issuance of a substantial amount of common stock, options and warrants could have the effect of substantially diluting the interests of our current stockholders. In addition, the sale of a substantial amount of common stock or preferred stock in the public market, or the exercise of a substantial number of warrants and options either in the initial issuance or in a subsequent resale by the target company in an acquisition which received such common stock as consideration or by investors who acquired such common stock in a private placement could have an adverse effect on the market price of our common stock.

 

11

 

 

OUR EXECUTIVE OFFICERS AND DIRECTORS, INCLUDING OUR EXECUTIVE CHAIRMAN MR. PERRIERA AND HIS AFFILIATES, POSSESS SIGNIFICANT VOTING POWER WITH RESPECT TO OUR COMMON STOCK, WHICH WILL LIMIT YOUR INFLUENCE ON CORPORATE MATTERS.

 

As of December 12, 2018, our directors and executive officers collectively beneficially own approximately 100% of the Preferred AA Shares. As of December 12, 2018, our directors and executive officers collectively beneficially own approximately 6% of the Preferred B shares voting equity of the Company.

 

As a result, our insiders have the ability to significantly influence our management and affairs through the election and removal of our Board and all other matters requiring stockholder approval, including any future merger, consolidation or sale of all or substantially all of our assets. This concentrated voting power could discourage others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise be beneficial to our stockholders. Furthermore, this concentrated control will limit the practical effect of your influence over our business and affairs, through any stockholder vote or otherwise. Any of these effects could depress the price of our common stock.

 

OUR ARTICLES OF INCORPORATION GRANTS OUR BOARD THE POWER TO ISSUE ADDITIONAL SHARES OF COMMON AND PREFERRED SHARES AND TO DESIGNATE OTHER CLASSES OF PREFERRED SHARES, ALL WITHOUT STOCKHOLDER APPROVAL.

 

Our authorized capital consists of 6,500,000,000 shares of common stock and 11,000,000 shares are authorized as preferred stock. Our Board, without any action by our stockholders, may designate and issue shares of preferred stock in such series as it deems appropriate and establish the rights, preferences and privileges of such shares, including dividends, liquidation and voting rights, provided it is consistent with Delaware law.

 

The rights of holders of our preferred stock that may be issued could be superior to the rights of holders of our shares of common stock. The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights appurtenant to shares of our common stock. Furthermore, any issuances of additional stock (common or preferred) will dilute the percentage of ownership interest of then-current holders of our capital stock and may dilute our book value per share.

 

Item 2. Financial Information.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

This registration statement on Form 10 and other reports filed by the Company from time to time with the SEC (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

 

12

 

 

General  

 

The following is a discussion by management of its view of the Company’s business, financial condition, and corporate performance for the past year. The purpose of this information is to give management’s recap of the past year, and to give an understanding of management’s current outlook for the near future. This section is meant to be read in conjunction with the Financial Statements of this Registration Statement.

 

Overview

 

We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements.

 

The Company was originally founded in 1999 as Spectrum Ventures LLC, a private company, registered in Tacoma, WA, for the purpose of developing, marketing and selling voice over IP products and services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals.

 

Meso Numismatics, Inc., has established a growing numismatics operation Meso Numismatics focuses on the Central American Caribbean region with a concentration of products surrounding Mesoamerica (Mexico to Panama).

 

Having locations in Costa Rica and Florida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals from Costa Rica, to be sold in the U.S. and around the world. Likewise, the Company also imports such products back to Costa Rica, to be sold throughout the local markets.

 

The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin from Latin America, or a banknote with an error from the United States. All inventory is carefully screened by management, then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company’s inventory is sent to the Numismatic Guaranty Corporation for authentication and grading. For all banknotes, the Company utilizes the services of Paper Money Guaranty, LLC for authentication and grading, both Florida-based companies. Once graded, the inventory is sent to the Company’s Florida-based location prior to being sent to one of the Company’s many customers around the world.

 

We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on the Google Play Store, as well as the Apple App Store. The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.

 

Meso continues to acquire rare inventory at market rates, from throughout the Meso Region (including Central America and the Caribbean). The inventory is then sent for authentication and grading, followed by said items being sold throughout Meso’s sales outlets. This includes an eBay store with up to, but not limited to, $50,000 in items for sale at any one time. For some of the Company’s rarer inventory, items are sent to major auction houses around the world for sale.

 

13

 

 

Results of Operations

 

Below is a summary of the results of operations for the nine months ended September 30, 2018 and 2017.

 

Results of Operations for the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017

 

Gross profit -

 

Gross profit increased by $12,094 for the nine months ended September 30, 2018, compared to the same period in 2017, due to the acquisition of Meso Numismatics, Inc. not occurring until August 4, 2017.

 

Operating expenses

 

Operating expenses increased by $46,422 for the nine months ended September 30, 2018, compared to the same period in 2017, listed below are the major changes to operating expenses:

 

Professional fees increased by $58,008 for the nine months ended September 30, 2018, compared to the same period in 2017, primarily due to increase in legal cost associated with additional filings during 2018.

 

General and administrative expenses decreased by $13,345 for the nine months ended September 30, 2018, compared to the same period in 2017, primarily due to less outside services and organizational expenses during 2018.

 

Other income (expense)

 

Other income (expense) increased by $285,993 for the nine months ended September 30, 2018, compared to the same period in 2017, primarily as a result of increase in amortization of discount on notes of $166,823 and increase due to derivative valuation on notes of $416,904 offset by decrease of loss on debt settlement of $310,673.

 

Liquidity and Capital Resources

 

Since inception, the Company has financed its operations through private placements and convertible notes. The following is a summary of the cash and cash equivalents as of September 30, 2018 and 2017.

 

    As of September 30,  
    2018     2017     $ Change     % Change  
Cash and cash equivalents   $ 30,311     $ 19,028     $ 11,283       59.30 %

 

The Company expects to continue to invest in its technology and development costs. Management will undertake a three-stage approach to build its application technology, the initial stage will cost approximately $45,000, the second stage will cost approximately $100,000 with the third stage, consisting primarily of marketing, will cost upwards of $500,000. The Company intends to raise the majority of the capital required through private placements.

 

Summary of Cash Flows

 

Below is a summary of the Company’s cash flows for the nine months ended September 30, 2018 and 2017.

 

    For the Nine Months ended
September 30,
 
    2018     2017  
Net cash provided (used) in operating activities   $ (170,771 )   $ 5,162  
Net cash provided (used) by investing activities     (4,000 )     5  
Net cash provided by financing activities     197,332       7,213  
Net increase in cash and cash equivalents   $ 22,561     $ 12,380  

 

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Operating activities

 

Net cash used in operating activities was $170,771 during the nine months ended September 30, 2018 and consisted of a net loss of $732,727, which was offset by a net change in operating assets and liabilities of $55,953 offset by non-cash items of $506,003. Non-cash items for the nine months ended September 30, 2018, consisted of amortization of debt discount of $387,897, shares issued for services of $3 and change in derivative liabilities of $118,103. The significant item in the change in operating assets and liabilities was an increase of $56,532 in accounts payable.

 

Net cash provided in operating activities was $5,162 during the nine months ended September 30, 2017 and consisted of a net loss of $412,405, which was offset by a net change in operating assets and liabilities of $184,606 offset by non-cash items of $232,961. Non-cash items for the nine months ended September 30, 2017, consisted of amortization of debt discount of $221,074, loss on debt settlement of $310,673 and shares issued for services of $15 offset by change in derivative liabilities of $298,801. The significant item in the change in operating assets and liabilities was an increase of $176,234 in accounts payable.

 

Investing activities

 

Net cash used by investing activities was approximately $4,000 for the nine months ended September 30, 2018, as compared to net cash provided by investing activities of $5 during the same period in 2017. In 2018 $4,000 was used to purchase equipment whereas, in 2017, $5 was utilized towards the acquisition of Meso Numismatics.

 

Financing activities

 

Net cash provided by financing activities was approximately $197,332 for the nine months ended September 30, 2018, as compared to net cash provided by investing activities of $7,213 during the same period in 2017. In 2018, $197,332 consisted of proceeds received from the issuance of convertible notes. In 2017, $57,919 consisted of proceeds received from the issuance of convertible notes offset by $50,706 paid by the Company on convertible notes.

 

Going Concern

 

The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

 

The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. 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. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Off-Balance Sheet Arrangements

 

As of September 30, 2018, the Company had no off-balance sheet arrangements.

 

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Results of Operations

 

Below is a summary of the results of operations for the years ended December 31, 2017 and 2016.

 

    For the Year ended December 31,  
    2017     2016     $ Change     % Change  
Revenue   $ 29,241     $ -     $ 29,241       100.00 %
Cost of revenue     4,810       -       4,810       100.00 %
Gross profit     24,431       -       24,431       100.00 %
                                 
Operating expenses                                
Advertising & marketing     2,719       14,864       (12,145 )     -81.71 %
Professional fees     358,696       76,406       282,290       369.46 %
Officer compensation     64,679       -       64,679       100.00 %
Rent     -       12,000       (12,000 )     -100.00 %
Investor relations     7,000       97,450       (90,450 )     -92.82 %
General & administrative     91,979       347,782       (255,803 )     -73.55 %
Total operating expenses     525,073       548,502       (23,429 )     -4.27 %
                                 
Other income (expense)                                
Interest expense     (383,656 )     (3,359,147 )     2,975,491       -88.58 %
Gain (loss) on debt settlement     106,664       (205,048 )     311,712       -152.02 %
Derivative financial instruments     398,401       (89,831 )     488,232       -543.50 %
Other income (expense)     2,226       (3,764 )     5,990       -159.14 %
Net income (loss)   $ (377,007 )   $ (4,206,292 )   $ 3,829,285       -91.04 %

 

Results of Operations for the Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016

 

Gross profit

 

Gross profit increased by $24,431 for the year ended December 31, 2017, compared to the same period in 2016, due to the acquisition of Meso Numismatics, Inc. not occurring until August 4, 2017.

 

Operating expenses

 

Operating expenses decreased by $23,429 for the year ended December 31, 2017, compared to the same period in 2016, listed below are the major changes to operating expenses:

 

Professional fees increased by $282,290 for the year ended December 31, 2017, compared to the same period in 2016, primarily due to an Order of Judgement in the Canouse Lawsuit in the amount of $282,500.

 

Officer compensation increased by $64,679 for the year ended December 31, 2017, compared to the same period in 2016, primarily due to amounts paid to Melvin Pereira, CEO of Pure Hospitality Solutions.

 

Investor relations expenses decreased by $90,450 for the year ended December 31, 2017, compared to the same period in 2016, primarily due to amounts paid to Heritage Corporate Services during 2016 in the amount of $75,000 per their agreement.

 

General and administrative expenses decreased by $255,803 for the year ended December 31, 2017, compared to the same period in 2016, primarily due to expenses relating to the travel system software during 2016 in the amount of $255,000.

 

16

 

 

Other income (expense)

 

Other income (expense) increased by $3,781,425 for the year ended December 31, 2017, compared to the same period in 2016, primarily as a result of debt settlement agreement with Wanda Chan on July 27, 2016 and conversion of convertible notes by Union Capital in 2016, which resulted in an expense of unamortized discount on debt in 2016 along with ceasing interest on $3.3M of debt.

 

Liquidity and Capital Resources

 

Since inception, the Company has financed its operations through private placements and convertible notes. The following is a summary of the cash and cash equivalents as of December 31, 2017 and 2016.

 

    As of December 31,  
    2017     2016     $ Change     % Change  
Cash and cash equivalents   $ 7,750     $ 6,648     $ 1,102       16.58 %

 

The Company expects to continue to invest in its technology and development costs. Management will undertake a three-stage approach, the initial stage will cost approximately $45,000, the second stage will cost approximately $100,000 with the third stage, consisting primarily of marketing, will cost upwards of $500,000. The Company intends to raise the majority of the capital required through private placements.

 

Summary of Cash Flows

 

Below is a summary of the Company’s cash flows for the years ended December 31, 2017 and 2016.

 

    For the Year ended
December 31,
 
    2017     2016  
Net cash used in operating activities   $ (6,116 )   $ (380,925 )
Net cash provided by investing activities     5       -  
Net cash provided by financing activities     7,213       376,715  
Net increase (decrease) in cash and cash equivalents   $ 1,102     $ (4,210 )

 

Operating activities

 

Net cash used in operating activities was $6,116 during the year ended December 31, 2017 and consisted of a net loss of $377,007, which was offset by a net change in operating assets and liabilities of $246,020 offset by non-cash items of $616,911. Non-cash items for the year ended December 31, 2017, consisted of amortization of debt discount of $300,324 and change in derivative liabilities of $398,401 offset by loss of $81,829 on conversion of convertible debt. The significant items in the change in operating assets and liabilities was a decrease of $434,813 in accounts payable and prepaid expenses offset by gain on settlement of vendor payables of $188,493.

 

17

 

 

Net cash used in operating activities was $380,925 during the year ended December 31, 2016 and consisted of a net loss of $4,206,292, which was offset by a net change in operating assets and liabilities of $1,902,291 offset by non-cash items of $5,727,658. Non-cash items for the year ended December 31, 2016, consisted of amortization of debt discount of $335,441, discount on debt of $5,507,833 and change in derivative liabilities of $89,831 offset by loss on debt settlement of $205,447. The significant items in the change in operating assets and liabilities was an increase of $110,700 in accounts payable offset by decrease in notes payable and accrued interest of $2,004,440 resulting primarily from settlement of debt with Wanda Chan.

 

Investing activities

 

Net cash provided by investing activities was approximately $5 for the year ended December 31, 2017, as compared to net cash provided by investing activities of $0 during the same period in 2016. In 2017, $5 was utilized towards the acquisition of Meso Numismatics.

 

Financing activities

 

Net cash provided by financing activities was approximately $7,213 for the year ended December 31, 2017, as compared to net cash provided by investing activities of $376,715 during the same period in 2016. In 2017, $57,919 consisted of proceeds received from the issuance of convertible notes offset by $50,706 paid by the Company on convertible notes. In 2016, $669,999 consisted of proceeds received from the issuance of convertible notes offset by $293,284 paid by the Company on convertible notes.

 

Unrecognized Tax Benefits

 

The Company has not recorded a provision for income taxes in our financial statements as we have been in a loss position since inception and we cannot be more certain than not that we will be able to recognize the income tax benefit from our NOL carry forward within the next three years.

 

Off-balance Sheet Arrangements

 

As of December 31, 2017 and 2016, the Company did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

 

Critical Accounting Policies

 

Our critical accounting policies have not materially changed during the year ended December 31, 2017. Furthermore, the preparation of our financial statements is in conformity with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Our management believes that we consistently apply these judgments and estimates, and the financial statements fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our statements of income and financial position.

 

Derivative Instruments

 

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

 

Stock Based Compensation

 

Stock based compensation costs are measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black - Scholes valuation model.

 

18

 

 

New Accounting Pronouncements

 

In May 2014, ASU 2014-09 was issued related to revenue from contracts with customers. The ASU was further amended in August 2015, March 2016, April 2016, and May 2016 by ASU 2015-14, 2016-08, 2016-10 and 2016-

 

In August 2015, the effective date was deferred to reporting periods, including interim periods, beginning after December 31, 2017, and will be applied retrospectively. Early adoption is not permitted.

 

Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognized revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Effective January 1, 2018, the Company will adopt ASU 2014-09, “Revenue from Contracts with Customers”. The results of operations for the reported periods after January 1, 2018 will be presented under this amended guidance, while prior period amounts are reported in accordance with ASC 605-Revenue Recognition.

 

The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial position, results of operations, or cash flows and believes the new standard will not have a material impact. The Company will adopt the standard using the modified retrospective method of adoption. The Company’s revenue arises from contracts with customers in which the sale of coins is the single performance obligation under the customer contract. Accordingly, revenue will continue to be recognized at a point in time when control of the asset is transferred to the customer, which is generally consistent with the Company’s current accounting policies.

 

ASU 2014-09 provides presentation and disclosure requirements which are more detailed than under current GAAP.

 

In February 2016, FASB issued ASC 842 that requires lessees to recognize lease assets and corresponding lease liabilities on the balance sheet for all leases with terms of more than 12 months. The update, which supersedes existing lease guidance, will continue to classify leases as either finance or operating, with the classification determining the pattern of expense recognition in the income statement.

 

The ASU will be effective for annual and interim periods beginning January 1, 2019, with early adoption permitted, and is applicable on a modified retrospective basis with various optional practical expedients. The Company is assessing the impact of this standard.

 

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2017 through the date these financial statements were issued.

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred, or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.

 

Pursuant to ASC 605: revenues were recognized when the four basic criteria for recognition were met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

 

The Company acquires rare coins from Latin America at reduced costs then sends to Numismatic Guaranty Corporation for authentication and grading. Once graded, the inventory is sent to Meso’s Florida-based location to then be sent around the world to one of the Company’s many customers with sales recorded net of fees.

 

Use of Estimates

 

The preparation of these 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 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.

 

19

 

 

Fair Value of Financial Instruments

 

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

 

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:

 

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

 

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include 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 (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

 

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

 

At September 30, 2018 and December 31, 2017, the carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

 

At September 30, 2018 and December 31, 2017, the Company does not have any assets or liabilities required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

 

Item 3. Properties.

 

We maintain our current principal office at 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. Our telephone number at this office is (800) 889-9509. This is a shared workspace, owned by a shareholder of the Company, of approximately 200 sq. ft. that the Company is not required to pay for.

 

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

 

(a) Security ownership of certain beneficial owners.

 

The following table sets forth, as of December 12, 2018, the number of shares of common stock owned of record and beneficially by our executive officers, directors and persons who hold 5% or more of the outstanding shares of common stock of the Company.

 

The amounts and percentages of our common stock beneficially owned are reported on the basis of SEC rules governing the determination of beneficial ownership of securities. Under the SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Unless otherwise indicated, each of the shareholders named in the table below, or his or her family members, has sole voting and investment power with respect to such shares of our common stock. Except as otherwise indicated, the address of each of the shareholders listed below is: c/o Meso Numismatics, Inc., 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463.

 

20

 

 

Applicable percentage ownership is based on 4,067,660 shares of Common Stock outstanding as of December 12, 2018. In computing the number of shares of Common Stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of Common Stock subject to options held by that person or entity that are currently exercisable or that will become exercisable within 60 days of December 12, 2018. In addition, as of December 12, 2018, 1,000,000 shares of Series AA Preferred Stock and 425,294 shares of Series BB Preferred Stock were outstanding.

 

 

Name and Address of Beneficial Owner   Common Stock Owned Beneficially     Percent of Class     Series AA Preferred Stock Owned Beneficially     Percent of Class     Series BB Preferred Stock Owned Beneficially     Percent of Class    
Named Executive Officers and Directors                                                                                                    
Melvin Pereira President, Chief Executive Officer, and Chairman 2011 NW 79tth Avenue, Suite 380, Doral FL 33122 (1)     1,500       * %     500,000       50.0 %    

25,000

     

5.63

   
S&M Chuah Enterprises Ltd. (Martin Chuah), Director (2)     84       * %     500,000       50.0 %                  
All directors and officers as a group (5 persons)    

1,584

                                           
5% or greater shareholders                                                  
Ajene Watson, LLC (3)     350,022       8.60 %                     62,094       13.98 %  
                                                   
Total    

351,606

     

8.61

     

100,000

      100 %    

87,094

     

19.61

%  

 

* Less than 1%

 

(1) Melvin Pereira

is the Principal of E-Network De Costa Rica SA, the holder of 1,500 shares of common stock and 500,000 shares of Series AA Preferred Stock. Mr. Pereira has investment and voting control over such shares. Melvin Pereira is the Principal of Meso Numismatics Corp., the holder of 25,000 shares of Series BB Preferred Stock. Mr. Pereira has investment and voting control over such shares.

 

(2) Martin Chuah is the Principal of S&M Chuah Enterprises Ltd., the holder of 84 shares of common stock and 500,000 shares of Series AA Preferred Stock. Mr. Chuah has investment and voting control over such shares.

 

(3) Ajene Watson LLC holds 350,002 shares of common stock and Ajene Watson holds 20 shares of common stock. Ms. Ajene Watson has investment and voting control over such shares.

 

Item 5. Directors, Executive Officers.

 

The following table contains information with respect to our directors and executive officers. To the best of our knowledge, none of our directors or executive officers have an arrangement or understanding with any other person pursuant to which he or she was selected as a director or officer. There are no family relationships between any of our directors or executive officers. Directors serve one-year terms. Our executive officers are appointed by and serve at the pleasure of the board of directors.

 

Name   Current Age   Position
Melvin Pereira   53   Chairman of the Board of Directors, President, and Chief Executive Officer (Principal Executive Officer)
Martin Chuah   68   Director

 

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Melvin Pereira, Chairman, President and Chief Executive Officer -

 

Mr. Pereira, age 53, combines over 40 years of experience in the numismatic industry, following a 7-year career as an executive in the travel and hospitality industry. Previously, he had been involved in four companies within the travel and hospitality industry, holding positions including President, CEO, Director and Consultant.  From 2014 through 2018, Mr. Pereira was the Chief Executive Officer for Pure Hospitality Solutions, Inc., a travel and hospitality company. From 2003 to 2014, he was President of Enetwork De Costa Rica, a company involved in computer technology, software development and technology consulting. He has an undergraduate degree from Colegio Seminario, Costa Rica, and a Law Degree from Universidad de Costa Rica. 

 

Martin Chuah, Director

 

Mr. Chuah, age 68, combines over 30 years of experience in Business Management and Accounting, including a 14-year career as the Accountant and Controller for a well-known hotel destination. Previously, he had been involved in three companies, holding positions including Director and Controller. From 2014 through 2018, Mr. Chuah was the Director for Pure Hospitality Solutions, Inc., a travel and hospitality company. From 2004 to 2018, he was the Accountant and Controller for the Holiday Inn Express, Calgary DT., a well-recognized hotel brand. From 1984 to 2018, he was the Director of S & M Chuah Enterprises, Ltd. a Business Management company that focused on Accounting and Investments. He received his Professional Level 3 Degree as a Management Accountant from The Institute of Management Accountant of England.

 

Family Relationships.

 

There are no family relationships between any of our directors or executive officers.

 

Involvement in Certain Legal Proceedings.

 

There have been no events under any bankruptcy act, any criminal proceedings and any judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of the Company during the past five years.

 

The board of directors acts as the Audit Committee and the board of directors has no separate committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. The Company intends to continue to search for a qualified individual for hire.

 

Item 6. Executive Compensation.

 

Summary Compensation Table

 

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended December 31, 2017 and 2016.

 

2017 EXECUTIVE OFFICER COMPENSATION TABLE

 

Name and Principal Position   Year   Salary
($)
    Bonus
($)
    Stock
Awards
($)
    Option
Awards
($)
    Non-Equity
Incentive Plan
Compensation
($)
    Non-Qualified
Deferred
Compensation
Earnings
($)
    All Other
Compensation
($)
    Total
($)
 
                                                     
Melvin Pereira   2017              0                                                                                                                   
Chief Executive Officer (PEO/PFO)   2016     0                                                          

   

(1) Mr. Melvin Pereira has cancelled and forgiven an aggregate of $107,793.82 of accrued salary and severance payments, representing his work with the Company from January 1, 2016 through December 31, 2017.

 

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Outstanding Equity Awards at the End of the Fiscal Year

 

We do not have any equity compensation plans and therefore no equity awards are outstanding as of December 31, 2017. 

 

None of the members of the board of directors of the Company were compensated for services in such capacity.

 

Bonuses and Deferred Compensation

 

We do not have any bonus, deferred compensation or retirement plan. All decisions regarding compensation are determined by our board of directors.

 

Options and Stock Appreciation Rights

 

As of December 12, 2018, no options have been issued.

 

Payment of Post-Termination Compensation

 

We do not have change-in-control agreements with our director or executive officer, and we are not obligated to pay severance or other enhanced benefits to our executive officer upon termination of her employment.

 

Employment Agreements

 

Currently, the Company has no employment agreements but expects to enter into one with Chief Executive Officer in the near future.

 

Board of Directors

 

Our directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. Our officers are elected by and serves at the discretion of the board of directors.

 

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

 

Other than as disclosed below, there have been no transactions involving the Company since the beginning of the last fiscal year, or any currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

 

In connection with the $1,711,000 the Company loaned to various consultants / executives to purchase shares of common stock from Treasury, a relative of the Company’s Treasurer received approximately 40,084,000 shares of common stock (estimated value $615,000 at date of issuance) which has not yet been collected. In lieu of issuing the 40,084,000 shares of common stock, the Company issued 170,000 shares of Series BB Preferred Stock.

 

The Company currently shares its corporate registered offices with Ajene Watson LLC at 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. The lease is for a year to year term.  

 

Item 8. Legal Proceedings.

 

Other than described below, to the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

23

 

 

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”), who’s principal at the time, is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P. initiated a lawsuit against the Company in Fulton County Court, in Georgia for, amongst other things, breach of contract. A default judgment was entered into against the Company for failure to response to these claims. The Company appealed the Courts’ decision and in November 2018, while the Court of Appeals affirmed liability under the judgment, the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions.

 

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

 

Market Information.

 

Our common stock is qualified for quotation on the OTC Markets-OTCPink under the symbol “MSSV” and has been quoted on the OTCPINK since October 16, 2018. Previously, our common stock was quoted on the OTC Markets-OTC Pink Current-OTCPink, under the symbol “PNOW.” The following table sets forth the range of the high and low bid prices per share of our common stock for each quarter as reported in the over-the-counter markets. These quotations represent interdealer prices, without retail markup, markdown or commission, and may not represent actual transactions. There currently is no liquid trading market for our common stock. There can be no assurance that a significant active trading market in our common stock will develop, or if such a market develops, that it will be sustained.

  

    2018  
    High     Low  
First Quarter (through March 31)   $ 0.30     $ 0.10  
Second Quarter (through June 30)     0.30       0.10  
Third Quarter (through September 30)     0.30       0.0075  
Fourth Quarter (through December 12)     0.197       0.025  

 

    2017  
    High     Low  
First Quarter (through March 31)   $ 0.80     $ 0.10  
Second Quarter (through June 30)     0.40       0.20  
Third Quarter (through September 30)     0.40       0.10  
Fourth Quarter (through December 31)     0.10       0.20  

 

    2016  
    High     Low  
First Quarter (through March 31)   $ 0.60     $ 0.20  
Second Quarter (through June 30)     0.90       0.20  
Third Quarter (through September 30)     0.40       0.20  
Fourth Quarter (through December 31)     0.30       0.02  

 

The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer’s securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state. Further, our shares may be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

 

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The SEC generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the SEC; authorized for quotation on The NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the issuer’s net tangible assets; or exempted from the definition by the SEC. Broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000 by an individual, or $300,000 together with his or her spouse), are subject to additional sales practice requirements.

 

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, monthly statements must be sent to clients disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.

 

We have not previously filed a registration statement under the Securities Act. Shares sold pursuant to exemptions from registration are deemed to be “restricted” securities as defined by the Securities Act. As of  3, 2018, out of a total of 6,500,000,000 shares authorized, 49,323 shares are issued as restricted securities and can only be sold or otherwise transferred pursuant to a registration statement under the Securities Act or pursuant to an available exemption from registration. Of such restricted shares, 1584, (0.05%) shares are held by affiliates (directors, officers and 10% holders), with the balance of 47,739 (99.5 %) shares being held by non-affiliates.

 

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned restricted shares of a reporting company for at least six months, including any person who may be deemed to be an “affiliate” of the company (as the term “affiliate” is defined under the Securities Act), is entitled to sell, within any three-month period, an amount of shares that does not exceed the greater of (i) the average weekly trading volume in the company’s common stock, as reported through the automated quotation system of a registered securities association, during the four calendar weeks preceding such sale or (ii) 1% of the shares then outstanding. In order for a stockholder to rely on Rule 144, adequate current public information with respect to the company must be available. A person who is not deemed to be an affiliate of the company and has not been an affiliate for the most recent three months, and who has held restricted shares for at least one year is entitled to sell such shares without regard to the various resale limitations under Rule 144. Under Rule 144, the requirements of paragraphs (c), (e), (f), and (h) of such Rule do not apply to restricted securities sold for the account of a person who is not an affiliate of an issuer at the time of the sale and has not been an affiliate during the preceding three months, provided the securities have been beneficially owned by the seller for a period of at least one year prior to their sale. For purposes of this registration statement, a controlling stockholder is considered to be a person who owns 10% or more of the company’s total outstanding shares, or is otherwise an affiliate of the Company. No individual person owning shares that are considered to be not restricted owns more than 10% of the Company’s total outstanding shares.

 

Disclosed below is the number of shares of the Company’s common stock which we expect to be subject to any outstanding options, restricted stock units, or other warrants, rights, or convertible securities:

 

Holders

 

As of December 12, 2018, we had 142 shareholders of common stock per transfer agent’s shareholder list.

 

Dividends

 

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying any dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the growth of the Registrant’s business.

 

Equity Compensation Plan Information

 

The Company does not currently have an equity compensation plan in place.

 

25

 

 

Item 10. Recent Sales of Unregistered Securities.

 

1. During the first quarter of 2016, the Company entered into a Loan Agreement with Heritage Corporate Services (“HCS”) whereby HCS agreed to lend up to $10,000 during 2016, to assist with operational capital needs. Subsequently, this Loan Agreement was amended during the fourth quarter of 2016 to reflect an increase to the facility of $10,000 to $20,000. The advance does not bear interest and has a one-year maturity date. The advance may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of this promissory note.

 

a. The agreement was entered into pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder;
b. The transaction was unregistered;
c. The transaction was executed via a private agreement and not a public offering;
d. The agreement called for conversion, at the investor’s sole discretion, into common shares at a variable conversion price;
e. As of June 30, 2017, advances under the Loan Agreement was approximately $13,230.7;1
f. The Promissory Note Agreement is not publicly traded;
g. The Promissory Note Agreement and any converted shares issued under this agreement contain the appropriate restrictive legend.

 

2. On January 18th, 2016, Company entered into a $38,000 Promissory Note Agreement with Ajene Watson LLC., for the purpose of funding the Company’s Debt Repurchase Program. The promissory note agreement bears interest at eight (8%) percent and has a one (1) year maturity date. The note may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of this promissory note.

 

a. The agreement was entered into pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder;
b. The transaction was unregistered;
c. The transaction was executed via a private agreement and not a public offering;
d. The Issuer received no additional proceeds;
e. The Promissory Note Agreement is not publicly traded;
f. The Promissory Note Agreement and any converted shares issued under this agreement contain the appropriate restrictive legend.

 

During the fourth quarter of 2017, the Company settled the aggregate unpaid balance by authorizing the issuance of 62,094 Series BB Preferred Shares. The issuance was completed in Q1 2018.

 

3. On January 21st, 2016, as part of a capital commitment of $632,100, the Company entered into a $45,465 Convertible Debenture with Union Capital, LLC, for the purpose of funding the Company’s Debt Repurchase Program and providing other operating capital. The promissory note agreement bears interest at eight (8%) percent, has a one (1) year maturity date. The note may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of this promissory note.

 

a. The agreement was entered into pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder;
b. The transaction was unregistered
c. The transaction was executed via a private agreement and not a public offering;
d. The agreement called for conversion, at the investor’s sole discretion, into common shares at a variable conversion price;
e. The Issuer received no additional proceeds;
f. The Promissory Note Agreement is not publicly traded;
g. The Promissory Note Agreement and any converted shares issued under this agreement contain the appropriate restrictive legend.

 

26

 

 

It should be further noted that on the same date, both the Company and Union Capital, LLC entered into two corresponding notes of an equal amount of $45,465.

 

a. The note issued by the Company is a Convertible Debenture which matures on January 21st, 2017. The note does not require the Company to establish any reserve shares until the note matures.
b. Union Capital, LLC issued the Company a note in lieu of cash, with the implicit requirement for Union Capital, LLC to fund the Company in the expressed amount on January 21st, 2017, provided certain events of cancelation were not triggered. If at any time the cancelation triggers in this note become effective, the Company’s Note automatically becomes canceled and void.

 

4. On February 2nd, 2016, as part of capital commitment of $632,100, the Company entered into a $73,500 Convertible Debenture with Union Capital, LLC, for the purpose of funding the Company’s Debt Repurchase Program. The promissory note agreement bears interest at eight (8%) percent, has a one (1) year maturity date. The note may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of this promissory note.

 

a. The agreement was entered into pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder;
b. The transaction was unregistered;
c. The transaction was executed via a private agreement and not a public offering;
d. The agreement called for conversion, at the investor’s sole discretion, into common shares at a variable conversion price;
e. The Issuer received no additional proceeds;
f. The Promissory Note Agreement is not publicly traded;
g. The Promissory Note Agreement and any converted shares issued under this agreement contain the appropriate restrictive legend.

 

It should be further noted that on the same date, both the Company and Union Capital, LLC entered into two corresponding notes of an equal amount of $73,500.

 

a. The note issued by the Company is a Convertible Debenture which matures on February 2nd, 2017. The note does not require the Company to establish any reserve shares until the note matures.
b. Union Capital, LLC issued the Company a note in lieu of cash, with the implicit requirement for Union Capital, LLC to fund the Company in the expressed amount on February 2nd, 2017, provided certain events of cancelation were not triggered. If at any time the cancelation triggers in this note become effective, the Company’s Note automatically becomes canceled and void.

 

5. On March 21st, 2016, as part of capital commitment of $632,100, the Company entered into a $63,000 Convertible Debenture with Union Capital, LLC, for the purpose of funding the Company’s Debt Repurchase Program. The promissory note agreement bears interest at eight (8%) percent, has a one (1) year maturity date. The note may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of this promissory note.

 

a. The agreement was entered into pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder;
b. The transaction was unregistered;
c. The transaction was executed via a private agreement and not a public offering;
d. The agreement called for conversion, at the investor’s sole discretion, into common shares at a variable conversion price;
e. The Issuer received no additional proceeds;
f. The Promissory Note Agreement is not publicly traded;
g. The Promissory Note Agreement and any converted shares issued under this agreement contain the appropriate restrictive legend.

 

It should be further noted that on the same date, both the Company and Union Capital, LLC entered into two corresponding notes of an equal amount of $63,000.

 

a. The note issued by the Company is a Convertible Debenture which matures on March 21st, 2017. The note does not require the Company to establish any reserve shares until the note matures.
b. Union Capital, LLC issued the Company a note in lieu of cash, with the implicit requirement for Union Capital, LLC to fund the Company in the expressed amount on March 21st, 2017, provided certain events of cancelation were not triggered. If at any time the cancelation triggers in this note become effective, the Company’s Note automatically becomes canceled and void.

 

27

 

 

6. On May 4, 2016, as part of a capital commitment of $632,100, the Company entered into a $134,085 Convertible Debenture with Union Capital, LLC, for the purpose of funding the Company’s Debt Repurchase Program and providing other operating capital. The promissory note agreement bears interest at eight (8%) percent, has a one (1) year maturity date. The note may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of this promissory note.

 

It should be further noted that on the same date, both the Company and Union Capital, LLC entered into two corresponding notes of an equal amount of $134,085.

 

a. The note issued by the Company is a Convertible Debenture which matures on May 4th, 2017. The note does not require the Company to establish any reserve shares until the note matures.
b. Union Capital, LLC issued the Company a note in lieu of cash, with the implicit requirement for Union Capital, LLC to fund the Company in the expressed amount on May 4th, 2017, provided certain events of cancelation were not triggered. If at any time the cancelation triggers in this note become effective, the Company’s Note automatically becomes canceled and void.

 

7. On September 13, 2017, the Company issued 42,862 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

8. On September 26, 2017, the Company issued 17,716 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

9. On October 23, 2017, the company issued 9,744 Preferred BB Shares to qualifying shareholders as part of the Preferred BB Share dividend program. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months has elapsed from the issuance of the preferred stock to the holder. Each share of Series BB Preferred Stock shall represent .035% of the Company’s outstanding shares at any point in time in the future when converted by the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

10. On December 19, 2017, the company issued 12,608 Preferred BB Shares to qualifying shareholders as part of the Preferred BB Share dividend program. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months has elapsed from the issuance of the preferred stock to the holder. Each share of Series BB Preferred Stock shall represent .035% of the Company’s outstanding shares at any point in time in the future when converted by the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

28

 

 

11. On January 22, 2018, the Company issued 3,073 Preferred Series BB shares to qualifying shareholders as part of the Preferred BB Share dividend program. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months has elapsed from the issuance of the preferred stock to the holder. Each share of Series BB Preferred Stock shall represent .035% of the Company’s outstanding shares at any point in time in the future when converted the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

12. During February 2018, the Company issued 132,343 Preferred Series BB shares pertaining to the debt settlement entered into in December 2017.

 

13. On April 27, 2018, the company issued 11,564 Preferred BB Shares to qualifying shareholders as part of the Preferred BB Share dividend program. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months has elapsed from the issuance of the preferred stock to the holder. Each share of Series BB Preferred Stock shall represent .035% of the Company’s outstanding shares at any point in time in the future when converted by the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

14. On June 11, 2018, the company issued 384 Preferred BB Shares to qualifying shareholders as part of the Preferred BB Share dividend program. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months has elapsed from the issuance of the preferred stock to the holder. Each share of Series BB Preferred Stock shall represent .035% of the Company’s outstanding shares at any point in time in the future when converted by the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

15. On October 11, 2018, the company issued 19,209 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.09 per OTC Markets on that date.

 

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

 

The following is a summary of the rights of our Common Stock and preferred stock and certain provisions of our articles of incorporation and bylaws which will be in effect after the completion of this offering. This summary does not purport to be complete and is qualified in its entirety by the provisions of our articles of incorporation, bylaws and the Certificates of Designation (as defined below) of our preferred stock, copies of which are filed as exhibits to the registration statement, and to the applicable provisions of Nevada law.

 

The Company is authorized by its Certificate of Incorporation to issue an aggregate of 6,500,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”), 1,000,000 shares of Series AA Preferred Stock (“Series AA Preferred”), 1,000,000 shares of Series BB Preferred Stock (“Series BB Preferred”), and 9,000,000 shares of blank check preferred. As of December 12, 2018, 4,071,184 shares of Common Stock, 1,000,000 Shares of Series AA Preferred, and 444,135 shares of Series BB Preferred were issued and outstanding.

 

Common Stock

 

Dividend Rights

 

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our Common Stock may, receive dividends out of funds legally available if our Board, in its discretion, determines to issue dividends and then only at the times and in the amounts that our Board may determine. We have not paid any dividends on our Common Stock and do not contemplate doing so in the foreseeable future.

 

29

 

 

Voting Rights

 

In accordance with Nevada Revised Statute (“NRS”) Section 78.350, holders of our Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. We have not provided for cumulative voting for the election of directors in our Articles of Incorporation.

 

No Preemptive or Similar Rights

 

In accordance with NRS Section 78.267, our Common Stock is not entitled to preemptive rights and is not subject to conversion, redemption or sinking fund provisions.

 

Right to Receive Liquidation Distribution

 

In accordance with NRS Sections 78.565 to 78.620, if we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable among the holders of our Common Stock and our participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences on any outstanding shares of preferred stock.

 

Fully Paid and Non-Assessable

 

In accordance with NRS Sections 78.195 and 78.211 and the assessment of our Board, all of the outstanding shares of our Common Stock are, fully paid and non-assessable.

 

Series AA Super Voting Preferred Stock

 

On June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing the issuance of up to eleven million (11,000,000) of preferred stock, par value $0.001 per share.

 

On May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Preferred,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series AA Preferred shall be entitled to ten thousand (10,000) votes for each share of Series AA Preferred held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company.

 

The holders of the Series AA Preferred shall not be entitled to receive dividends paid on the Company’s common stock. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Preferred shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

The shares of the Series AA Preferred will not be convertible into the shares of the Company’s common stock.

 

As of December 12, 2018, the Company had 1,000,000 preferred shares of Series AA Preferred issued and outstanding.

 

Series BB Preferred Stock

 

On March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series BB Preferred,” for which the board of directors established the rights, preferences and limitations thereof.

 

30

 

 

Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred after a minimum of six (6) months has elapsed from the issuance of the preferred stock to the holder. Each share of Series BB Preferred shall represent .035% of the Company’s outstanding shares at any point in time in the future when converted by the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred shall not be adjusted by the Corporation.

 

The holders of the Series BB Preferred shall not be entitled to receive dividends paid on the Company’s common stock.

 

The Series BB Preferred has a liquidation value of $1.00. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series BB Preferred shall be entitled to share equally and ratably in proportion to the preferred stock owned by the holder to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders. The Company may redeem the Series BB Preferred at 120% plus any accrued and unpaid dividends

 

As of December 12, 2018, the Company had 444,135 preferred shares of Series BB Preferred issued and outstanding.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our Common Stock is Transfer Online, Inc. with an address at 512 SE Salmon Street, Portland, OR 97214. Their phone number is (503) 227-2950.

 

Item 12. Indemnification of Directors and Officers.

 

Our directors and officers are indemnified as provided by Nevada corporate law. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, 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 our payment of expenses incurred or paid by our director, officer or controlling person in the 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 our counsel the matter has been settled by controlling precedent, submit to a 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.

 

We have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act 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 is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision. 

 

31

 

 

Item 13. Financial Statements and Supplementary Data.

 

Meso Numismatics, Inc.

 

  Page
   
Financial Information  
   
Balance Sheets as of September 30, 2018 (Unaudited) and December 31, 2017 F-2
   
Consolidated Statements of Operations for the Nine Months Ended September 30, 2018 and 2017 F-3
   
Consolidated Statements of Stockholders’ Deficit for the Nine Months Ended September 30, 2018 and Year Ended December 31, 2017 F-4
   
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 F-5
   
Notes to Consolidated Financial Statements F-6

 

F- 1

 

 

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONSOLIDATED BALANCE SHEETS
 
    (Unaudited)        
   

September 30,

2018

   

December 31,

2017

 
ASSETS            
             
Current assets            
Cash and restricted cash   $ 30,311     $ 7,750  
Prepaid expenses and other current assets     688       109  
Total current assets     30,999       7,859  
Property, plant and equipment, net     4,000       -  
Total assets   $ 34,999     $ 7,859  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
Current liabilities                
Current note payable, net   $ 751,913     $ 378,013  
Accrued interest     422,130       374,121  
Derivative liability     1,737,110       1,449,389  
Accounts payable and accrued liabilities     374,251       367,957  
Total current liabilities     3,285,404       2,569,480  
Total liabilities   $ 3,285,404     $ 2,569,480  
                 
Stockholders’ equity                
Common stock, $0.001 par value per share; 6,500,000,000 and 1,500,000,000 shares authorized; 6,499,700,094 shares issued and 4,067,660 outstanding at September 30, 2018, and 3,743,105 outstanding at December 31, 2017, respectively     4,067       3,743  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series AA; 1,000,000 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively     1,000       1,000  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series BB; 627,343 shares issued and 425,294 shares outstanding at September 30, 2018 and 390,061 outstanding at  December 31, 2017, respectively     425       390  
Additional paid in capital     20,799,597       20,756,011  
Stock payable     -       2  
Accumulated deficit     (24,055,494 )     (23,322,767 )
Total stockholders’ equity     (3,250,405 )     (2,561,621 )
Total liabilities and stockholders’ equity   $ 34,999     $ 7,859  

    

See accompanying notes are an integral part of these consolidated financial statements.

  

F- 2

 

 

PURE HOSPITALITY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
             
    For the Nine Months ended
September 30,
 
    2018     2017  
Revenue   $ 38,299     $ 14,091  
Cost of revenue     16,923       4,809  
Gross profit     21,376       9,282  
                 
Operating expenses                
Advertising & marketing     4,465       830  
Professional fees     91,204       33,196  
Officer compensation     33,594       30,427  
Investor relations     1,958       7,000  
General & administrative     38,428       51,773  
Total operating expenses     169,649       123,226  
                 
Other income (expense)                
Interest expense     (438,134 )     (288,815 )
Loss on debt settlement     -       (310,673 )
Derivative financial instruments     (118,103 )     298,801  
Other income (expense)     (28,217 )     2,226  
Net loss   $ (732,727 )   $ (412,405 )
                 
Net loss per common share, basic and diluted   $ (0.19 )   $ (0.12 )
                 
Weighted average number of common shares outstanding, basic and diluted     3,940,506       3,373,828  

   

See accompanying notes are an integral part of these consolidated financial statements.

 

F- 3

 

 

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Nine Months Ended September 30, 2018 and December 31, 2017
 
    Common Stock     Series AA
Preferred Stock
    Series BB
Preferred Stock
    Additional
Paid In
    Stock     Accumulated        
    Shares     Amount     Shares     Amount     Shares     Amount     Capital     Payable     Deficit     Total  
Balance, December 31, 2016     2,360,730     $ 2,361       1,000,000     $ 1,000       -     $ -     $ 15,415,989     $ 2,018,573     $ (22,945,760 )   $ (5,507,837 )
Conversion of debt     1,382,376       1,382       -       -       -       -       85,319       -       -       86,701  
Loss on conversion of debt     -       -       -       -       -       -       (81,829 )     -       -       (81,829 )
Debt settlement     -       -       -       -       282,131       282       228,678       (109 )     -       228,851  
Gain on debt settlement     -       -       -       -       -       -       2,018,462       (2,018,462 )     -       -  
Preferred issued for acquisition     -       -       -       -       25,000       25       (20 )     -       -       5  
Preferred issued as part of incentive program     -       -       -       -       82,930       83       (68 )     -       -       15  
Derivative adjustment     -       -       -       -       -       -       3,089,480       -       -       3,089,480  
Net loss     -       -       -       -       -       -       -       -       (377,007 )     (377,007 )
Balance, December 31,2017     3,743,106     $ 3,743       1,000,000     $ 1,000       390,061     $ 390     $ 20,756,011     $ 2     $ (23,322,767 )   $ (2,561,621 )
                                                                                 
Conversion of debt     324,554       324       -       -       -       -       15,904       -       -       16,228  
Debt settlement     -       -       -       -       20,212       20       (18 )     (2 )     -       -  
Preferred issued as part of incentive program     -       -       -       -       15,021       15       (12 )     -       -       3  
Derivative adjustment     -       -       -       -       -       -       27,712       -       -       27,711  
Net loss     -       -       -       -       -       -       -       -       (732,727 )     (732,727 )
Balance, September 30, 2018     4,067,660     $ 4,067       1,000,000     $ 1,000       425,294     $ 425     $ 20,799,597     $ -     $ (24,055,494 )   $ (3,250,405 )

          

See accompanying notes are an integral part of these consolidated financial statements.

 

F- 4

 

 

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS
       
   

For the Nine Months Ended

September 30,

 
    2018     2017  
CASH FLOWS FROM OPERATING ACTIVITIES            
Net loss   $ (732,727 )   $ (412,405 )
Non-cash adjustments to reconcile net loss to net cash:                
Amortization of debt discount     387,897       221,074  
Change in derivative liabilities     118,103       (298,801 )
Shares issued for services     3       15  
(Gain) loss on debt settlement     -       310,673  
Changes in operating assets and liabilities:                
Prepaid expenses     (579 )     8,372  
Accounts payable and accrued liabilities     56,532       176,234  
CASH PROVIDED/(USED) FOR OPERATING ACTIVITIES     (170,771 )     5,162  
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Payment for purchase of properties and equipment     (4,000 )     -  
Preferred stock issued for acquisition     -       5  
CASH PROVIDED/(USED) BY INVESTING ACTIVITIES     (4,000 )     5  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Payments on note payable     -       (50,706 )
Proceeds from issuance of debt     197,332       57,919  
CASH PROVIDED BY FINANCING ACTIVITIES     197,332       7,213  
                 
Net increase (decrease) in cash     22,561       12,380  
                 
Cash, beginning of year     7,750       6,648  
                 
Cash, end of year   $ 30,311     $ 19,028  
                 
NON-CASH FINANCING ACTIVITIES:                
Debt settlements with common stock   $ 16,228     $ 86,701  
Settlement of derivative discounts   $ 27,712     $ 189,146  
Discount on debt issued   $ 197,332     $ 57,919  
Stock payable settled with preferred stock   $ 20     $ 2,018,403  

    

See accompanying notes are an integral part of these consolidated financial statements.

 

F- 5

 

 

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

NOTES TO CONSOLDIATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2018

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Nature of Business

 

Pure Hospitality Solutions, Inc. (the “Company”) was originally organized under the laws of Washington State in 1999, as Spectrum Ventures, LLC to develop, market and sell VOIP (Voice Over Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.

 

On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”). The acquisition of Meso is to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean; not limited to tourism. Meso is a small but scalable numismatics operation that the Company can leverage for low cost revenues and product marketing.

 

Meso Numismatics maintains an online store with eBay ( www.mesocoins.com ) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.

 

The acquisition was complete on August 4, 2017 following the Company issued 25,000 shares of Series BB preferred stock to Meso to acquire one-hundred (100%) percent of Meso’s common stock.

 

On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build its numismatic business, Meso Numismatics. The Company did however use its footprint within the Latin American Region to expand Meso Numismatics at a much quicker rate.

 

In September 2018, the Company changed its name to Meso Numismatics, Inc. and was approved by FINRA and on September 26, 2018, the new ticker symbol MSSV became effective on October 16, 2018.

 

On July 2, 2018, the Board of Directors authorized and shareholders approved a 1 for 1,000 reverse stock split of its issued and outstanding shares of common stock held by the holders of record, June 30, 2018. The below transactions have been changed to reflect the 1 for 1,000 reverse stock split.

 

F- 6

 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation and Basis of Presentation

 

The audited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, E-Network de Costa Rica MA SA and Meso Numismatics Corp. All intercompany transactions have been eliminated.

 

Use of Estimates in Financial Statement Presentation

 

The preparation of these 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 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.

 

Reclassifications

 

Certain amounts for the prior year have been revised or reclassified to conform with the current year presentation.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents. At September 30, 2018 and December 31, 2017, all of the Company’s cash was deposited in major banking institutions. There were no cash equivalents as of September 30, 2018 and December 31, 2017.

 

Derivative Instruments

 

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

 

F- 7

 

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred, or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.

 

Pursuant to ASC 605: revenues were recognized when the four basic criteria for recognition were met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

   

The Company acquires rare coins from Latin America at reduced costs then sends to Numismatic Guaranty Corporation for authentication and grading. Once graded, the inventory is sent to Meso’s Florida-based location to then be sent around the world to one of the Company’s many customers with sales recorded net of fees.

 

Income Taxes

 

The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities given the provisions of currently enacted tax laws.

 

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.

 

Net Earnings (Losses) Per Common Share

 

The Company computes earnings (loss) per share by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents may consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company’s stock options (calculated using the treasury stock method). Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations.

 

Fair Value of Financial Instruments

 

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

 

F- 8

 

 

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:

 

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

 

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include 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 (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

 

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

 

At September 30, 2018 and December 31, 2017, the carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

 

At September 30, 2018 and December 31, 2017, the Company does not have any assets or liabilities required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

 

Comprehensive Income

 

The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of September 30, 2018 and 2017 , the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

 

Stock Based Compensation

 

Stock based compensation costs are measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black - Scholes valuation model.

 

F- 9

 

 

New Accounting Pronouncements

 

In May 2014, ASU 2014-09 was issued related to revenue from contracts with customers. The ASU was further amended in August 2015, March 2016, April 2016, and May 2016 by ASU 2015-14, 2016-08, 2016-10 and 2016-

 

In August 2015, the effective date was deferred to reporting periods, including interim periods, beginning after December 31, 2017, and will be applied retrospectively. Early adoption is not permitted.

 

Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognized revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Effective January 1, 2018, the Company will adopt ASU 2014-09, “Revenue from Contracts with Customers”. The results of operations for the reported periods after January 1, 2018 will be presented under this amended guidance, while prior period amounts are reported in accordance with ASC 605-Revenue Recognition.

 

The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial position, results of operations, or cash flows and believes the new standard will not have a material impact.  The Company will adopt the standard using the modified retrospective method of adoption. The Company’s revenue arises from contracts with customers in which the sale of coins is the single performance obligation under the customer contract. Accordingly, revenue will continue to be recognized at a point in time when control of the asset is transferred to the customer, which is generally consistent with the Company’s current accounting policies.

 

ASU 2014-09 provides presentation and disclosure requirements which are more detailed than under current GAAP.

 

In February 2016, FASB issued ASC 842 that requires lessees to recognize lease assets and corresponding lease liabilities on the balance sheet for all leases with terms of more than 12 months. The update, which supersedes existing lease guidance, will continue to classify leases as either finance or operating, with the classification determining the pattern of expense recognition in the income statement.

 

The ASU will be effective for annual and interim periods beginning January 1, 2019, with early adoption permitted, and is applicable on a modified retrospective basis with various optional practical expedients. The Company is assessing the impact of this standard.

 

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2017 through the date these financial statements were issued.

 

F- 10

 

 

Going Concern

 

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $24,055,494 and negative working capital of $3,250,405 as of September 30, 2018 and future losses are anticipated. These factors, among others, generally tend to raise substantial doubt as to its ability to obtain additional long-term debt or equity financing in order to have the necessary resources to further design, develop and launch the website and market the Company’s new service.

 

In order to continue as a going concern, the Company needs to develop a reliable source of revenues, and achieve a profitable level of operations in the future and/or to obtain the necessary financing to meet its obligations arising from normal business operations when they come due.

 

To fund basic operations for the next twelve months, the Company projects a need for $750,000 that will have to be raised through debt or equity.

 

Accordingly, the unaudited financial statements are accounted for as if the Company is a going concern and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or other adjustments that might be necessary should be Company be unable to continue as a going concern.

 

Business Combinations

 

In the third quarter of 2017, the Company issued 25,000 Series BB Preferred Stock to complete the acquisition of Meso Numismatics, which the Company accounted for the acquisition as common control, as the CEO of the Company controls and owns both companies.

 

F- 11

 

 

NOTE 3 – NOTES PAYABLE

 

Convertible Notes Payable

 

During 2003 through 2016, the Company entered into a series of convertible debentures, which bear interest at a rate varying from 0 to 10 percent, due on an annual basis. Any amount of interest which is not paid when due shall bear interest at 0 to 10 percent until paid in full.

 

It should be noted, that throughout 2014 & 2015, these particular convertible notes payable have been partitioned and sold in portions to multiple third parties in a combined amount totaling in excess of $450,000. In the majority of cases, these convertible notes payable, because they were in default, were subject to term adjustments at the note holders’ request. Thus, when the convertible notes payable were purchased, the new debt holders (generally) negotiated new terms with the Company. To this end, the Company would issue new notes, referred to as “replacement notes,” which more often resulted in slightly better terms.

 

These debentures are convertible, at the investors’ sole option, into common shares at the following terms:

 

a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange;
a 50 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP;
either (i) a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange, or (ii) a fixed conversion price of $0.00005 per share during any time whereby the current day market price is at or greater than $0.01;
a 40 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP; or
either (i) a 40 percent discount to the 10 days average daily trading price immediately preceding the conversion date, or (ii) at a fixed conversion price of $0.001 per share during any time whereby the current day market price is at or less than $0.075.

 

During the periods ending September 30, 2018 and December 31, 2017 the Company received $54,782 and $12,274, respectively in advances on existing convertible notes and $142,550 and $45,645, respectively from funding on new convertible notes.

 

From 2016 to present, the Company has entered into Convertible Debentures with Union Capital LLC. The promissory note agreements bears interest at eight (8%) percent, has a one (1) year maturity date. The notes may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of the promissory notes. The notes are convertible, at the investor’s sole discretion, into common shares at variable conversion prices. As of September 30, 2018, Union Capital LLC had advanced a total of $825,347.

 

F- 12

 

 

On June 27, 2016, the Company entered into a debt settlement agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, or $68, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On April 12, 2016, the Company entered into a debt settlement agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

During the periods ending September 30, 2018 and December 31, 2017, the Company paid $0 and $50,706, respectively on the outstanding convertible notes, converted $16,228 and $86,701, respectively into 324,554 and 1,382,376 shares of common stock. During the periods ending September 30, 2018 and December 31, 2017, $188,495 and $228,849, respectively of debt was converted into 20,212 and 282,131 shares of preferred series BB stock of which 232,094 shares resulted from a debt settlement equity swap agreement entered into during 2016 with Wanda Chen and Ajene Watson as discussed above. As of September 30, 2018 and December 31, 2017, the balance of outstanding notes payable was $931,903 and $748,571, respectively.

 

    September 30,     December 31,  
    2018     2017  
Ajene Watson, LLC   $ 3,182     $ 3,182  
Digital Arts Media Network     128,556       128,556  
Union Capital, LLC     800,165       616,833  
Current note payable     931,903       748,571  
Less: Discount     179,990       370,558  
Current note payable, net   $ 751,913     $ 378,013  

  

F- 13

 

 

Derivatives Liabilities

 

The Company determined that the convertible notes outstanding as of September 30, 2018 and December 31, 2017 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.

 

The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model.

 

The balance of the fair value of the derivative liability as of September 30, 2018 and December 31, 2017 is as follows:

 

Balance at December 31, 2016   $ 4,140,468  
Additions     -  
Fair value gain     398,401  
Conversions     (3,089,480 )
Balance at December 31, 2017     1,449,389  
Additions     197,332  
Fair value gain     118,103  
Conversions     (27,714 )
Balance at September 30, 2018   $ 1,737,110  

  

During the periods ending September 30, 2018 and December 31, 2017, the Company incurred losses of $0.00 and $81,829, respectively on the conversion of convertible notes and gains of $0 and $2,018,462 respectively on settlement of debt. In connection with the convertible notes, the Company recorded $50,237 and $83,332, respectively of interest expense and $387,897 and $300,324, respectively of debt discount amortization expense. As of September 30, 2018 and December 31, 2017, the Company had approximately $422,130 and $374,121, respectively of accrued interest.

 

NOTE 4 – STOCKHOLDERS EQUITY

 

Common Shares

 

The Board of Directors was required to increase the number of authorized shares of common stock from (a) 200,000,000 to 500,000,000 during June 2015, (b) 500,000,000 to 1,500,000,000 during July 2015, and (c) 1,500,000,000 to 6,500,000,000 during March 2016, to adhere to the Company’s contractual obligation to maintain the required reserve share amount for debtholders.

 

F- 14

 

 

On July 2, 2018, the Board of Directors authorized and shareholders approved a 1 for 1,000 reverse stock split of its issued and outstanding shares of common stock held by the holders of record, June 30, 2018. The below transactions have been changed to reflect the 1 for 1,000 reverse stock split.

 

2017 Transactions

 

On January 20, 2017, the Company issued 155,000 shares of common stock in conversion of $11,150 convertible notes payable at conversion price of $0.00008.

 

On February 7, 2017, the Company issued 191,391 shares of common stock in conversion of $9,570 convertible notes payable at conversion price of $0.00005.

 

On February 17, 2017, the Company issued 250,000 shares of common stock in conversion of $18,750 convertible notes payable at conversion price of $0.00008.

 

On March 6, 2017, the Company issued 195,618 shares of common stock in conversion of $9,781 convertible notes payable at conversion price of $0.00005.

 

On April 4, 2017, the Company issued 250,366 shares of common stock in conversion of $11,500 convertible notes payable at conversion price of $0.00005.

 

On May 4, 2017, the Company issued 340,000 shares of common stock in conversion of $25,950 convertible notes payable at conversion price of $0.00008.

 

The above debt conversions resulted in a total loss on settlement and conversions of $81,829, included under additional paid in capital.

 

2018 Transactions

 

On February 20, 2018, the Company issued 324,554 shares of common stock in conversion of $16,228 convertible notes payable at conversion price of $0.00005.

 

As of September 30, 2018 and December 31, 2017, the Company has 4,067,660 and 3,743,106 common shares issued and outstanding, respectively.

 

F- 15

 

 

Designation of Series AA Super Voting Preferred Stock

 

On June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing the issuance of up to eleven million (11,000,000) of preferred stock, par value $0.001 per share.

 

On May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to ten thousand (10,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company.

 

The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.

 

During 2014, the Company and S & M Chuah Enterprises Ltd, agreed to an exchange of 900,000,000 common shares previously issued to S & M Chuah Enterprises Ltd, entity controlled by Ken Chua, CEO & board member for 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share. The 900,000,000 common shares were returned to the Company’s transfer agent for cancellation. The shares were valued on the date of the agreement using the par value of $0.001, since the shares were non-convertible, non-tradable super voting only.

 

F- 16

 

 

During 2014, the Company and E-Network de Costa Rica S.A., entity controlled by Melvin Pereira mutually agreed upon amount of 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share, as a compensation for becoming the new CEO of Pure Hospitality Solutions Inc. The shares were valued on the date of the agreement and are non-convertible, non-tradable super voting only.

 

As of September 30, 2018 and December 31, 2017, the Company had 1,000,000 preferred shares of Series AA Preferred Stock issued and outstanding.

 

Designation of Series BB Preferred Stock

 

On March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series BB Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert on a 1 for 1 basis into shares of the Company’s common stock, any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

The holders of the Series BB Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

The Series BB Preferred Stock has a liquidation value of $1.00. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series BB Preferred Stock shall be entitled to share equally and ratably in proportion to the preferred stock owned by the holder to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

2017 Transactions

 

On June 30, 2017, the Company and Meso Numismatics have agreed to a payment in the mutually agreed upon amount of 25,000 shares of Series BB Preferred Stock of the Corporation, par value $0.001 per share, which amounts to 2.5% of the authorized shares of this class of preferred, fully satisfying the Merger Agreement, which was first entered into on November 16, 2016. These shares were issued on August 14, 2017, and were accounted for under common control acquisition accounting. The shares were valued on the date of the agreement using the share price of $0.0002 per OTC markets on that date.

 

F- 17

 

 

On June 27, 2016, the Company entered into a debt settlement agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On September 13, 2017, the Company issued 42,862 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

On September 26, 2017, the Company issued 17,716 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

On October 23, 2017, the company issued 9,744 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

F- 18

 

 

On December 19, 2017, the company issued 12,608 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0001 per OTC Markets on that date.

 

On April 12, 2016, the Company entered into a debt settlement equity swap agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

On December 29, 2017, the Company entered into certain Debt Settlement Agreements with three Note Holders to extinguish $228,849 of debts held by these Note Holders in exchange for 50,037 shares of the Company’s Series BB Convertible Preferred Stock, par value $0.001 per share.

 

On December 29, 2017, the Company entered into certain Debt Settlement Agreements with three vendors to extinguish $188,495 of debts held by these vendors. All parties agreed to a total exchange of 20,212 of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as payment for the settlement. The shares were valued using the stock price on the date of the agreement resulting in $2 recorded in equity as stock payable and $188,493 recorded as a gain on settlement of debt. On February 08, 2018, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, releasing the total stock payable in the amount of $2.

 

During the period ending December 31, 2017, the Company incurred losses of $81,829 from conversion of convertible debt, gains of $2,018,462 from settlement of debt in connection with convertible notes and gains of $188,493 from settlement of debt with vendors.

  

F- 19

 

 

Stock Payable

 

On June 27, 2016, the Company entered into a debt settlement equity swap agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On April 12, 2016, the Company entered into a debt settlement equity swap agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

On December 29, 2017, the Company entered into certain Debt Settlement Agreements with three vendors to extinguish $188,495 of debts held by these vendors. All parties agreed to a total exchange of 20,212 of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as payment for the settlement. The shares were valued using the stock price on the date of the agreement resulting in $2 recorded in equity as stock payable and $188,493 recorded as a gain on settlement of debt. On February 08, 2018, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, releasing the total stock payable in the amount of $2.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

The Company currently shares its corporate registered offices with Ajene Watson LLC at 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. The lease is for a year to year term. During the periods ending September 30, 2018 and December 31, 2017, the Company incurred no rent expenses.

 

F- 20

 

 

On June 30, 2017, the Company and Meso Numismatics have agreed to a payment in the mutually agreed upon amount of 25,000 shares of Series BB Preferred Stock of the Corporation, par value $0.001 per share, which amounts to 2.5% of the authorized shares of this class of preferred, fully satisfying the Merger Agreement, which was first entered into on November 16, 2016. These shares were issued on August 14, 2017, and were accounted for under common control acquisition accounting, since both entities were controlled by Melvin Pereira, CEO of Pure Hospitality Solutions. The shares were valued on the date of the agreement using the share price of $0.0002.

 

On June 27, 2016, the Company entered into a debt settlement equity swap agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On April 12, 2016, the Company entered into a debt settlement equity swap agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

A total gain on related party debt forgiveness was $2,018,462 for the year ended December 31, 2017.

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

None.

 

F- 21

 

 

NOTE 7 – RESTATEMENTS

 

Our financial statements have been restated to recognize a debt settlement equity swap, dated December 29, 2017, with three vendors where mutually agreed upon number of shares were issued on February 8, 2018. See below the effects of the adjustments on the Company’s previously filed financial statements as of December 31, 2017. The amounts below have been further adjusted to reflect the 1 for 1,000 reverse stock split.

 

Consolidated Balance Sheets as of December 31, 2017
 
    (As Filed)     Adjustments     (As Restated)  
Current liabilities                  
Current note payable, net   $ 378,013     $ -     $ 378,013  
Accrued interest     374,121       -       374,121  
Derivative liability     1,449,389       -       1,449,389  
Accounts payable and accrued liabilities     556,452       (188,495 )     367,957  
Total current liabilities     2,757,975       (188,495 )     2,569,480  
Total liabilities   $ 2,757,975     $ (188,495 )   $ 2,569,480  
                         
Stockholders’ equity                        
Common stock, $0.001 par value per share; 6,500,000,000 and 1,500,000,000 shares authorized; 6,499,700,094 shares issued and 3,742,994,858 outstanding for the year ended December 31, 2017     3,743       -       3,743  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series AA; 1,000,000 shares issued and outstanding for the year ended December 31, 2017     1,000       -       1,000  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series BB; 495,000 shares issued and 390,061 shares outstanding for the year ended December 31, 2017     390       -       390  
Additional paid in capital     20,756,011       -       20,756,011  
Stock payable     -       2       2  
Accumulated deficit     (23,511,260 )     188,493       (23,322,767 )
Total stockholders’ equity     (2,750,116 )     188,495       (2,561,621 )
Total liabilities and stockholders’ equity   $ 7,859     $ -     $ 7,859  

 

F- 22

 

 

Consolidated Statements of Operations for the year ended December 31, 2017
 
    (As Filed)     Adjustments     (As Restated)  
Other income (expense)                  
Interest expense   $ (383,656 )     -     $ (383,656 )
Gain (loss) on debt settlement     (81,829 )     188,493       106,664  
Derivative financial instruments     398,401       -       398,401  
Other income (expense)     2,226       -       2,226  
Net income (loss)   $ (565,500 )   $ 188,493     $ (377,007 )

 

NOTE 8 – SUBSEQUENT EVENTS

 

On October 11, 2018, the company issued 19,209 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.09 per OTC Markets on that date.

 

On November 2, 2018, the company issued 2,449 shares of Common Stock in conversion of 258 shares of Series BB Preferred Stock. The shares were valued on the date of conversion, using the share price of $0.09 per OTC Markets on that date.

 

On November 6, 2018, the company issued 1,045 shares of Common Stock in conversion of 110 shares of Series BB Preferred Stock. The shares were valued on the date of conversion, using the share price of $0.04405 per OTC Markets on that date.

 

F- 23

 

 

Pure Hospitality Solutions, Inc.

   

  Page
Financial Information  
   
Report of Independent Registered Public Accounting Firm F-25
   
Balance Sheets as of December 31, 2017 and 2016 F-26
   
Consolidated Statements of Operations for the Years Ended December 31, 2017 and 2016 F-27
   
Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2017 and 2016 F-28
   
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017 and 2016 F-29
   
Notes to Consolidated Financial Statements F-30

  

F- 24

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Shareholders of Pure Hospitality Solutions, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Pure Hospitality Solutions, Inc. (the Company) as of December 31, 2017 and 2016, and the related statements of operations, statements of stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2017 and 2016, and the related notes and schedules (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 December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017 and 2016, in conformity with accounting principles generally accepted in the United States of America.

 

Restatement of the 2017 Financial Statements

 

As discussed in Note 8 to the consolidated financial statements, the accompanying 2018 consolidated financials statements have been restated to correct a misstatement.

 

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 audits 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.

 

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 suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ M&K CPAS, PLLC

 

Houston, TX

 

August 27, 2018 (December 12, 2018 as to the effects of the restatement discussed in Note 8)

 

F- 25

 

    

PURE HOSPITALITY SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
             
    As of December 31,  
    2017     2016  
ASSETS            
             
Current assets            
Cash and restricted cash   $ 7,750     $ 6,648  
Other asset     109       8,552  
Total assets   $ 7,859     $ 15,200  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
Current liabilities                
Current note payable, net   $ 378,013     $ 432,884  
Accrued interest     374,121       292,570  
Derivative liability     1,449,389       4,140,468  
Accounts payable and accrued liabilities     367,957       657,115  
Total current liabilities     2,569,480       5,523,037  
Total liabilities   $ 2,569,480     $ 5,523,037  
                 
Stockholders’ equity                
Common stock, $0.001 par value per share; 6,500,000,000 and 1,500,000,000 shares authorized; 6,499,700,094 shares issued and 3,742,994,858 outstanding for the year ended December 31, 2017, 5,370,619,921 shares issued and 2,360,618,518 outstanding for the year ended December 31, 2016, respectively     3,742,995       2,360,619  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series AA; 1,000,000 shares issued and outstanding for the year ended December 31, 2017 and December 31, 2016, respectively     1,000       1,000  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series BB; 495,000 shares issued and 390,061 shares outstanding for the year ended December 30, 2017     390       -  
Additional paid in capital     17,016,759       13,057,731  
Stock payable     2       2,018,573  
Accumulated deficit     (23,322,767 )     (22,945,760 )
Total stockholders’ equity     (2,561,621 )     (5,507,837 )
Total liabilities and stockholders’ equity   $ 7,859     $ 15,200  

    

See accompanying notes are an integral part of these audited consolidated financial statements.

 

F- 26

 

  

PURE HOSPITALITY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
       
    For the Year ended
December 31,
 
    2017     2016  
Revenue   $ 29,241     $ -  
Cost of revenue     4,810       -  
Gross profit     24,431       -  
                 
Operating expenses                
Advertising & marketing     2,719       14,864  
Professional fees     358,696       76,406  
Officer compensation     64,679       -  
Rent     -       12,000  
Investor relations     7,000       97,450  
General & administrative     91,979       347,782  
Total operating expenses     525,073       548,502  
                 
Other income (expense)                
Interest expense     (383,656 )     (3,359,147 )
Gain (loss) on debt settlement     106,664       (205,048 )
Derivative financial instruments     398,401       (89,831 )
Other income (expense)     2,226       (3,764 )
Net loss   $ (377,007 )   $ (4,206,292 )
                 
Net loss per common share, basic and diluted   $ (0.00 )   $ (0.00 )
                 
Weighted average number of common shares outstanding, basic and diluted     3,466,878,424       1,800,490,634  

    

See accompanying notes are an integral part of these audited consolidated financial statements.

 

F- 27

 

 

PURE HOSPITALITY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Year Ended December 31, 2017 and 2016
 
    Common Stock     Series AA
Preferred Stock
    Series BB
Preferred Stock
    Additional
Paid In
    Stock     Accumulated        
    Shares     Amount     Shares     Amount     Shares     Amount     Capital     Payable     Deficit     Total  
Balance, December 31, 2015     1,426,976,457     $ 1,426,977       1,000,000     $ 1,000       -     $ -     $ 11,377,147     $ -     $ (18,739,468 )   $ (5,934,344 )
Conversion of debt     933,642,061       933,642       -       -       -       -       (893,167 )     -       -       40,475  
Loss on conversion of debt     -       -       -       -       -       -       (205,048 )     -       -       (205,048 )
Debt settlement     -       -       -       -       -       -       -       2,018,573       -       2,018,573  
Gain on debt settlement     -       -       -       -       -       -       1,279,245       -       -       1,279,245  
Derivative adjustment     -       -       -       -       -       -       1,499,554       -       -       1,499,554  
Net loss     -       -       -       -       -       -       -       -       (4,206,292 )     (4,206,292 )
Balance, December 31, 2016     2,360,618,518     $ 2,360,619       1,000,000     $ 1,000       -     $ -     $ 13,057,731     $ 2,018,573     $ (22,945,760 )   $ (5,507,837 )
                                                                                 
Conversion of debt     1,382,376,340       1,382,376       -       -       -       -       (1,295,675 )     -       -       86,701  
Loss on conversion of debt     -       -       -       -       -       -       (81,829 )     -       -       (81,829 )
Debt settlement     -       -       -       -       282,131       282       228,678       (109 )     -       228,851  
Gain on debt settlement     -       -       -       -       -       -       2,018,462       (2,018,462 )     -       -  
Preferred issued for acquisition     -       -       -       -       25,000       25       (20 )     -       -       5  
Preferred issued as part of incentive program     -       -       -       -       82,930       83       (68 )     -       -       15  
Derivative adjustment     -       -       -       -       -       -       3,089,480       -       -       3,089,480  
Net loss     -       -       -       -       -       -       -       -       (377,007 )     (377,007 )
Balance, December 31,2017     3,742,994,858     $ 3,742,995       1,000,000     $ 1,000       390,061     $ 390     $ 17,016,759     $ 2     $ (23,322,767 )   $ (2,561,621 )

          

See accompanying notes are an integral part of these audited consolidated financial statements.

 

F- 28

 

 

PURE HOSPITALITY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
       
    For the Year Ended
December 31,
 
    2017     2016  
CASH FLOWS FROM OPERATING ACTIVITIES            
Net loss   $ (377,007 )   $ (4,206,292 )
Non-cash adjustments to reconcile net loss to net cash:                
Amortization of debt discount     300,324       335,441  
Discount on debt     -       5,507,833  
Change in derivative liabilities     398,401       89,831  
Shares issued for services     15       -  
Gain (loss) on debt settlement     106,664       (205,447 )
Changes in operating assets and liabilities:                
Prepaid expenses     8,443       (8,552 )
Accounts payable and accrued liabilities     (442,956 )     (1,893,739 )
CASH PROVIDED/(USED) FOR OPERATING ACTIVITIES     (6,116 )     (380,925 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Preferred stock issued for acquisition     5       -  
CASH PROVIDEDBY INVESTING ACTIVITIES     5       -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Payments on note payable     (50,706 )     (293,284 )
Proceeds from issuance of debt     57,919       669,999  
CASH PROVIDED BY FINANCING ACTIVITIES     7,213       376,715  
                 
Net increase (decrease) in cash     1,102       (4,210 )
                 
Cash, beginning of year     6,648       10,858  
                 
Cash, end of year   $ 7,750     $ 6,648  
                 
NON-CASH FINANCING ACTIVITIES:                
Debt settlements with common stock   $ 315,550     $ 40,474  
Debt settlements with stock payable   $ 188,497     $ 3,298,218  
Settlement of derivative discounts   $ 3,089,480     $ 1,499,554  

   

See accompanying notes are an integral part of these audited consolidated financial statements.

 

F- 29

 

 

PURE HOSPITALITY SOLUTIONS, INC.

NOTES TO CONSOLDIATED FINANCIAL STATEMENTS December 31, 2017

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Nature of Business

 

Pure Hospitality Solutions, Inc. (the “Company”) was originally organized under the laws of Washington State in 1999, as Spectrum Ventures, LLC to develop, market and sell VOIP (Voice Over Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.

 

On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”). The acquisition of Meso is to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean; not limited to tourism. Meso is a small but scalable numismatics operation that the Company can leverage for low cost revenues and product marketing.

 

Meso Numismatics maintains an online store with eBay ( www.mesocoins.com ) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.

 

The acquisition was complete on August 4, 2017 following the Company issued 25,000 shares of Series BB preferred stock to Meso to acquire one-hundred (100%) percent of Meso’s common stock.

 

On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build its numismatic business, Meso Numismatics. The Company did however use its footprint within the Latin American Region to expand Meso Numismatics at a much quicker rate.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation and Basis of Presentation

 

The audited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, E-Network de Costa Rica MA SA and Meso Numismatics Corp. All intercompany transactions have been eliminated.

 

F- 30

 

 

Use of Estimates in Financial Statement Presentation

 

The preparation of these 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 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.

 

Reclassifications

 

Certain amounts for the prior year have been revised or reclassified to conform with the current year presentation.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents. At December 31, 2017 and 2016, all of the Company’s cash was deposited in major banking institutions. There were no cash equivalents as of December 31, 2017 and 2016.

 

Derivative Instruments

 

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

 

Revenue Recognition

 

Pursuant to ASC 605: revenues were recognized when the four basic criteria for recognition were met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

 

The Company acquires rare coins from Latin America at reduced costs then sends to Numismatic Guaranty Corporation for authentication and grading. Once graded, the inventory is sent to Meso’s Florida-based location to then be sent around the world to one of the Company’s many customers with sales recorded net of fees.

 

F- 31

 

 

Income Taxes

 

The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities given the provisions of currently enacted tax laws.

 

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.

 

Net Earnings (Losses) Per Common Share

 

The Company computes earnings (loss) per share by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents may consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company’s stock options (calculated using the treasury stock method). Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations.

 

Fair Value of Financial Instruments

 

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

 

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:

 

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

 

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include 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 (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

 

F- 32

 

 

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

 

At December 31, 2017 and 2016, the carrying amounts of the Company’s financial instruments, including cash, accounts payable, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

 

At December 31, 2017 and 2016, the Company does not have any assets or liabilities required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

 

Comprehensive Income

 

The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of December 31, 2017 and December 31, 2016, the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

 

Stock Based Compensation

 

Stock based compensation costs are measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black - Scholes valuation model.

 

New Accounting Pronouncements

 

In May 2014, ASU 2014-09 was issued related to revenue from contracts with customers. The ASU was further amended in August 2015, March 2016, April 2016, and May 2016 by ASU 2015-14, 2016-08, 2016-10 and 2016-

 

In August 2015, the effective date was deferred to reporting periods, including interim periods, beginning after December 31, 2017, and will be applied retrospectively. Early adoption is not permitted.

 

F- 33

 

 

Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognized revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Effective January 1, 2018, the Company will adopt ASU 2014-09, “Revenue from Contracts with Customers”. The results of operations for the reported periods after January 1, 2018 will be presented under this amended guidance, while prior period amounts are reported in accordance with ASC 605-Revenue Recognition.

 

The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial position, results of operations, or cash flows and believes the new standard will not have a material impact.  The Company will adopt the standard using the modified retrospective method of adoption. The Company’s revenue arises from contracts with customers in which the sale of coins is the single performance obligation under the customer contract. Accordingly, revenue will continue to be recognized at a point in time when control of the asset is transferred to the customer, which is generally consistent with the Company’s current accounting policies.

 

ASU 2014-09 provides presentation and disclosure requirements which are more detailed than under current GAAP.

 

In February 2016, FASB issued ASC 842 that requires lessees to recognize lease assets and corresponding lease liabilities on the balance sheet for all leases with terms of more than 12 months. The update, which supersedes existing lease guidance, will continue to classify leases as either finance or operating, with the classification determining the pattern of expense recognition in the income statement.

 

The ASU will be effective for annual and interim periods beginning January 1, 2019, with early adoption permitted, and is applicable on a modified retrospective basis with various optional practical expedients. The Company is assessing the impact of this standard.

 

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2017 through the date these financial statements were issued.

 

F- 34

 

 

Going Concern

 

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $23,322,767 and negative working capital of $2,561,621 as of December 31, 2017 and future losses are anticipated. These factors, among others, generally tend to raise substantial doubt as to its ability to obtain additional long-term debt or equity financing in order to have the necessary resources to further design, develop and launch the website and market the Company’s new service.

 

In order to continue as a going concern, the Company needs to develop a reliable source of revenues, and achieve a profitable level of operations in the future and/or to obtain the necessary financing to meet its obligations arising from normal business operations when they come due.

 

To fund basic operations for the next twelve months, the Company projects a need for $750,000 that will have to be raised through debt or equity.

 

Accordingly, the audited financial statements are accounted for as if the Company is a going concern and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or other adjustments that might be necessary should be Company be unable to continue as a going concern.

 

Business Combinations

 

In the third quarter of 2017, the Company issued 25,000 Series BB Preferred Stock to complete the acquisition of Meso Numismatics, which the Company accounted for the acquisition as common control, as the CEO of the Company controls and owns both companies.

 

NOTE 3 – NOTES PAYABLE

 

Convertible Notes Payable

 

During 2003 through 2016, the Company entered into a series of convertible debentures, which bear interest at a rate varying from 0 to 10 percent, due on an annual basis. Any amount of interest which is not paid when due shall bear interest at 0 to 10 percent until paid in full.

 

It should be noted, that throughout 2014 & 2015, these particular convertible notes payable have been partitioned and sold in portions to multiple third parties in a combined amount totaling in excess of $450,000. In the majority of cases, these convertible notes payable, because they were in default, were subject to term adjustments at the note holders’ request. Thus, when the convertible notes payable were purchased, the new debt holders (generally) negotiated new terms with the Company. To this end, the Company would issue new notes, referred to as “replacement notes,” which more often resulted in slightly better terms.

 

F- 35

 

 

These debentures are convertible, at the investors’ sole option, into common shares at the following terms:

 

a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange;
a 50 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP;
either (i) a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange, or (ii) a fixed conversion price of $0.00005 per share during any time whereby the current day market price is at or greater than $0.01;
a 40 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP; or
either (i) a 40 percent discount to the 10 days average daily trading price immediately preceding the conversion date, or (ii) at a fixed conversion price of $0.001 per share during any time whereby the current day market price is at or less than $0.075.

 

During the periods ending December 31, 2017 and 2016 the Company received $12,274 and $41,984, respectively in advances on existing convertible notes and $45,645 and $628,015, respectively from funding on new convertible notes.

 

During 2016, the Company entered into a Convertible Debenture with Union Capital LLC with capital commitment of $632,100. The promissory note agreement bears interest at eight (8%) percent, has a one (1) year maturity date. The note may be repaid in whole or in part any time prior to maturity. There are no common shares issuable upon the execution of the promissory note. The note is convertible, at the investor’s sole discretion, into common shares at variable conversion prices. As of December 31, 2016, Union Capital LLC had advanced a total of $628,015.

 

On June 27, 2016, the Company entered into a debt settlement agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, or $68, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

F- 36

 

 

On April 12, 2016, the Company entered into a debt settlement agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

During the periods ending December 31, 2017 and 2016, the Company paid $50,706 and $294,995, respectively on the outstanding convertible notes, converted $86,701 and $40,474, respectively into 1,382,376,340 and 933,642,061 shares of common stock. During 2017, $228,849 of debt was converted into 282 shares of preferred series BB stock of which 232 shares resulted from a debt settlement equity swap agreement entered into during 2016 with Wanda Chen and Ajene Watson as discussed above. As of December 31, 2017 and 2016, the balance of outstanding notes payable was $748,571 and $1,103,766, respectively.

 

    December 31,     December 31,  
    2017     2016  
Ajene Watson, LLC   $ 3,182     $ 97,464  
Digital Arts Media Network     128,556       128,556  
E-Network De Costa Rica S.A.     -       50,000  
Heritage Corporate Services             141,050  
I-Business Management     -       50,000  
Juan Chang     -       37,799  
Union Capital, LLC     616,833       598,897  
Current note payable     748,571       1,103,766  
Less: Discount     370,558       670,882  
Current note payable, net   $ 378,013     $ 432,884  

  

F- 37

 

 

Derivatives Liabilities

 

The Company determined that the convertible notes outstanding as of December 31, 2017 and 2016 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.

 

The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model with the following assumptions:

  

    December 31,  
    2017     2016  
Common stock issuable     14,646,673,333         14,531,132,785    
Market value of common stock on measurement date   $0.0001         $0.97 - $1.28    
Adjusted exercise price     $0.00005 - $0.00006         $0.00005 - $0.000169    
Risk free interest rate     1.76 %       0.85-1.2 %  
Instrument lives in years     1.00  Year       1.00-2.00  Years  
Expected volatility     503 %       367%-397 %  
Expected dividend yields     None         None    

  

The balance of the fair value of the derivative liability as of December 31, 2017 and 2016 is as follows:

 

Balance at December 31, 2015   $ 42,358  
Additions     5,687,485  
Fair value (loss)     (89,831 )
Conversions     (1,499,544 )
Balance at December 31, 2016     4,140,468  
Fair value gain     398,401  
Conversions     (3,089,480 )
Balance at December 31, 2017   $ 1,449,389  

  

During the periods ending December 31, 2017 and 2016, the Company incurred losses of $81,829 and $205,048, respectively on the conversion of convertible notes and gains of $2,206,955 and $1,279,245 respectively on settlement of debt. In connection with the convertible notes, the Company recorded $83,332 and $300,324, respectively of interest expense and $250,603 and $335,441, respectively of debt discount amortization expense. During 2016, the Company recorded $2,773,103 of debt discount amortization expense resulting from conversion and settlement of debt and related derivatives. As of December 31, 2017 and 2016, the Company had approximately $374,121 and $292,570, respectively of accrued interest.

 

F- 38

 

 

NOTE 4 – STOCKHOLDERS EQUITY

 

Common Shares

 

The Board of Directors was required to increase the number of authorized shares of common stock from (a) 200,000,000 to 500,000,000 during June 2015, (b) 500,000,000 to 1,500,000,000 during July 2015, and (c) 1,500,000,000 to 6,500,000,000 during March 2016, to adhere to the Company’s contractual obligation to maintain the required reserve share amount for debtholders.

 

2016 Transactions

 

On January 8, 2016, the Company issued 63,900,000 shares of common stock in conversion of $3,195 convertible notes payable at conversion price of $0.00005.

 

During 2016, at various times during the year the Company issued a cumulative 790,157,530 shares of common stock in conversion of $30,321 convertible notes payable at conversion price ranging from $0.0000067 to $0.0002.

 

On December 1, 2016, the Company issued 79,584,531 shares of common stock in conversion of $6,958 convertible notes payable at conversion price of $0.0001.

 

The above debt conversions resulted in a total loss on settlement and conversions of $205,048, included under additional paid in capital.

 

2017 Transactions

 

On January 20, 2017, the Company issued 155,000,000 shares of common stock in conversion of $11,150 convertible notes payable at conversion price of $0.00008.

 

On February 7, 2017, the Company issued 191,391,800 shares of common stock in conversion of $9,570 convertible notes payable at conversion price of $0.00005.

 

On February 17, 2017, the Company issued 250,000,000 shares of common stock in conversion of $18,750 convertible notes payable at conversion price of $0.00008.

 

F- 39

 

 

On March 6, 2017, the Company issued 195,618,513 shares of common stock in conversion of $9,781 convertible notes payable at conversion price of $0.00005.

 

On April 4, 2017, the Company issued 250,366,027 shares of common stock in conversion of $11,500 convertible notes payable at conversion price of $0.00005.

 

On May 4, 2017, the Company issued 340,000,000 shares of common stock in conversion of $25,950 convertible notes payable at conversion price of $0.00008.

 

The above debt conversions resulted in a total loss on settlement and conversions of $81,829, included under additional paid in capital.

 

As of December 31, 2017 and 2016, the Company has 3,742,994,858 and 2,360,618,518 common shares issued and outstanding, respectively.

 

Designation of Series AA Super Voting Preferred Stock

 

On June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing the issuance of up to eleven million (11,000,000) of preferred stock, par value $0.001 per share.

 

On May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to ten thousand (10,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company.

 

The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

F- 40

 

 

Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.

 

During 2014, the Company and S & M Chuah Enterprises Ltd, agreed to an exchange of 900,000,000 common shares previously issued to S & M Chuah Enterprises Ltd, entity controlled by Ken Chua, CEO & board member for 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share. The 900,000,000 common shares were returned to the Company’s transfer agent for cancellation. The shares were valued on the date of the agreement using the par value of $0.001, since the shares were non-convertible, non-tradable super voting only.

 

During 2014, the Company and E-Network de Costa Rica S.A., entity controlled by Melvin Pereira mutually agreed upon amount of 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share, as a compensation for becoming the new CEO of Pure Hospitality Solutions Inc. The shares were valued on the date of the agreement and are non-convertible, non-tradable super voting only.

 

As of December 31, 2017 and 2016, the Company had 1,000,000 preferred shares of Series AA Preferred Stock issued and outstanding.

 

Designation of Series BB Preferred Stock

 

On March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series BB Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert on a 1 for 1 basis into shares of the Company’s common stock, any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

The holders of the Series BB Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

F- 41

 

 

The Series BB Preferred Stock has a liquidation value of $1.00. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series BB Preferred Stock shall be entitled to share equally and ratably in proportion to the preferred stock owned by the holder to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

On June 30, 2017, the Company and Meso Numismatics have agreed to a payment in the mutually agreed upon amount of 25,000 shares of Series BB Preferred Stock of the Corporation, par value $0.001 per share, which amounts to 2.5% of the authorized shares of this class of preferred, fully satisfying the Merger Agreement, which was first entered into on November 16, 2016. These shares were issued on August 14, 2017, and were accounted for under common control acquisition accounting. The shares were valued on the date of the agreement using the share price of $0.0002 per OTC markets on that date.

 

On June 27, 2016, the Company entered into a debt settlement agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On September 13, 2017, the Company issued 42,862 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

F- 42

 

 

On September 26, 2017, the Company issued 17,716 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

On October 23, 2017, the company issued 9,744 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0002 per OTC Markets on that date.

 

On December 19, 2017, the company issued 12,608 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation. These shares were valued on the date of the agreement, using the share price of $0.0001 per OTC Markets on that date.

 

On April 12, 2016, the Company entered into a debt settlement equity swap agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

On December 29, 2017, the Company entered into certain Debt Settlement Agreements with three Note Holders to extinguish $228,849 of debts held by these Note Holders in exchange for 50,037 shares of the Company’s Series BB Convertible Preferred Stock, par value $0.001 per share.

 

A total debt settlement loss of $81,829 from conversion of convertible debt was recognized in 2017 as discussed on page 15.

 

F- 43

 

 

Stock Payable

 

On June 27, 2016, the Company entered into a debt settlement equity swap agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On April 12, 2016, the Company entered into a debt settlement equity swap agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

On December 29, 2017, the Company entered into certain Debt Settlement Agreements with three vendors to extinguish $188,495 of payables held by these vendors. All parties agreed to a total exchange of 20,212 of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as payment for the settlement. The shares were valued using the stock price on the date of the agreement resulting in $2 recorded in equity as stock payable and $188,493 recorded as a gain on settlement of debt. On February 08, 2018, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, releasing the total stock payable in the amount of $2.

 

F- 44

 

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

The Company currently shares its corporate registered offices with Ajene Watson LLC at 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. The lease is for a year to year term. During the year ended December 31, 2017 and 2016, the Company incurred $0 and $12,000 rent expenses, respectively.

 

On June 30, 2017, the Company and Meso Numismatics have agreed to a payment in the mutually agreed upon amount of 25,000 shares of Series BB Preferred Stock of the Corporation, par value $0.001 per share, which amounts to 2.5% of the authorized shares of this class of preferred, fully satisfying the Merger Agreement, which was first entered into on November 16, 2016. These shares were issued on August 14, 2017, and were accounted for under common control acquisition accounting, since both entities were controlled by Melvin Pereira, CEO of Pure Hospitality Solutions. The shares were valued on the date of the agreement using the share price of $0.0002.

 

On June 27, 2016, the Company entered into a debt settlement equity swap agreement with former management, Wanda Chan, to settle convertible promissory notes issued between 2003 and 2013 for the total amount of $3,288,218. Both parties agreed to a future exchange of equity as payment for a settlement amount of $2,018,530, which was recorded in equity as stock payable. A gain of $1,269,688 on the debt settlement was recorded to paid in capital due to Wanda being a related party. On the date of settlement, the Company and Wanda Chan agreed to a payment in the mutually agreed upon amount of 170,000 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $2,018,530. On July 20, 2017, the Company issued the mutually agreed upon number of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016. The shares were issued on July 20, 2017, releasing the total stock payable in the amount of $2,018,530. The 170,000 shares were valued on the date of the agreement at $.0004 per OTC Markets on that date, resulting in an additional gain during 2017 of $2,018,462 on the issuance of the shares, which was included under additional paid in capital.

 

On April 12, 2016, the Company entered into a debt settlement equity swap agreement with related party, Ajene Watson LLC, to settle convertible promissory notes issued in 2014 for the principle amount of $9,600. On the date of settlement, the Company and Ajene Watson LLC agreed to a payment in the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, for the total stock payable amount of $43, the total value of the shares on the date of the agreement per OTC markets. This resulted in a gain of $9,557 in 2016, which was recorded under additional paid in capital as Ajene was considered a related party. On December 29, 2017, the Company issued the mutually agreed upon amount of 62,094 shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement that was agreed upon during 2016, releasing the stock payable amount of $43.

 

A total gain on related party debt forgiveness was $2,018,462 and $1,279,245 in the years ended December 31, 2017 and 2016, respectively.

 

F- 45

 

 

On April 30, 2018, Melvin Pereira, CEO of Pure Hospitality Solutions, forgave accrued salary and severance liability of $179,242, representing his work with the Company from 2010 to 2017.

 

NOTE 6 – INCOME TAXES

 

Due to the Company’s net losses, there were no provisions for income taxes for the years ended December 31, 2017 and 2016. The difference between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate of 35% is due to the change in the valuation allowance.

 

Deferred income tax assets as of December 31, 2017 and 2016 were as follows:

 

    December 31,
2017
    December 31,
2016
 
Deferred Tax Assets:            
Net operating losses   $ 635,057     $ 1,544,109  
Less valuation allowance     (635,057 )     (1,544,109 )
Total deferred tax assets   $ -     $ -  

 

The Company has recorded a full allowance against its deferred tax assets as of December 31, 2017 and 2016 because management determined that it is not more-likely-than not that those assets will be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

 

For federal income tax purposes, the Company has a net operating loss carry forward of approximately $1,814,448 million at December 31, 2017, which expires commencing in 2032.

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

None.

 

F- 46

 

 

NOTE 8 – RESTATEMENTS

 

Our financial statements have been restated to recognize a debt settlement equity swap, dated December 29, 2017, with three vendors where mutually agreed upon number of shares were issued on February 8, 2018. See below the effects of the adjustments on the Company’s previously filed financial statements as of December 31, 2017.

 

Consolidated Balance Sheets as of December 31, 2017
 
    (As Filed)     Adjustments     (As Restated)  
Current liabilities                  
Current note payable, net   $ 378,013     $ -     $ 378,013  
Accrued interest     374,121       -       374,121  
Derivative liability     1,449,389       -       1,449,389  
Accounts payable and accrued liabilities     556,452       (188,495 )     367,957  
Total current liabilities     2,757,975       (188,495 )     2,569,480  
Total liabilities   $ 2,757,975     $ (188,495 )   $ 2,569,480  
                         
Stockholders’ equity                        
Common stock, $0.001 par value per share; 6,500,000,000 and 1,500,000,000 shares authorized; 6,499,700,094 shares issued and 3,742,994,858 outstanding for the year ended December 31, 2017     3,742,995       -       3,742,995  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series AA; 1,000,000 shares issued and outstanding for the year ended December 31, 2017     1,000       -       1,000  
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized of which 1,000,000 designated as Series BB; 495,000 shares issued and 390,061 shares outstanding for the year ended December 31, 2017     390       -       390  
Additional paid in capital     17,016,759       -       17,016,759  
Stock payable     -       2       2  
Accumulated deficit     (23,511,260 )     188,493       (23,322,767 )
Total stockholders’ equity     (2,750,116 )     188,495       (2,561,621 )
Total liabilities and stockholders’ equity   $ 7,859     $ -     $ 7,859  

 

F- 47

 

 

Consolidated Statements of Operations for the year ended December 31, 2017
 
    (As Filed)     Adjustments     (As Restated)  
Other income (expense)                  
Interest expense   $ (383,656 )     -     $ (383,656 )
Gain (loss) on debt settlement     (81,829 )     188,493       106,664  
Derivative financial instruments     398,401       -       398,401  
Other income (expense)     2,226       -       2,226  
Net income (loss)   $ (565,500 )   $ 188,493     $ (377,007 )

  

Consolidated Statements of Shareholders’ Deficit for the year ended December 31, 2017
 
    (As Filed)     Adjustments     (As Restated)  
Balance, December 31, 2016   $ (5,507,837 )     -     $ (5,507,837 )
Conversion of debt     86,701       -       86,701  
Loss on conversion of debt     (81,829 )     -       (81,829 )
Debt settlement     228,849       2       228,851  
Preferred issued for acquisition     5       -       5  
Preferred issued as part of incentive     15       -       15  
Derivative adjustment     3,089,480       -       3,089,480  
Net loss     (565,500 )     188,493       (377,007 )
Balance, December 31, 2017   $ (2,750,116 )   $ 188,495     $ (2,561,621 )

 

F- 48

 

 

Consolidated Statements of Cash Flows for the year ended December 31, 2017
 
    (As Filed)     Adjustments     (As Restated)  
Cash Flows from Operating Activities                  
Net loss   $ (565,500 )     188,493     $ (377,007 )
Non-cash adjustments to reconcile net loss to net cash:                        
Amortization of debt discount     300,324       -       300,324  
Change in derivative liabilities     398,401       -       398,401  
Shares issued for services     15       -       15  
Loss on debt settlement     (81,829 )     188,493       106,664  
Changes in operating assets and liabilities:                        
Prepaid expenses     8,443       -       8,443  
Accounts payable and accrued liabilities     (65,970 )     (376,986 )     (442,956 )
Cash Used for Operating Activities   $ (6,116 )   $ -     $ (6,116 )
                         
Non-cash Financing Activities                        
Debt settlement with common stock   $ 315,550     $ (188,491 )   $ 127,059  
Debt settlement with stock payable   $ -     $ 188,497     $ 188,497  

 

NOTE 9 – SUBSEQUENT EVENTS

 

On January 22, 2018, the Company issued 3,073 Preferred Series BB shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

On February 08, 2018, the Company issued 20,212 of shares of BB Preferred Stock of the Corporation, par value $0.001 per share, as part of a debt settlement agreement dated December 29, 2017, with three vendors to extinguish $188,495 of debts held by these vendors, releasing the total stock payable in the amount of $2.

 

On February 20, 2018, the Company issued 324,554,521 shares of common stock in conversion of $16,228 convertible notes payable and accrued interest at conversion price of $0.00005.

 

On April 27, 2018, the company issued 11,564 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

On June 11, 2018, the company issued 384 Preferred BB Shares to qualifying shareholders as part of the Common Stock incentive program that occurred during 2017. Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

F- 49

 

 

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

 

There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.

 

Item 15. Financial Statements and Exhibits.

 

Exhibit

Number

  Description
2.1*   Plan of Merger
3.1*   Articles of Incorporation, as Amended
3.2*   Series AA Certificate of Designation
3.3*   Series BB Certificate of Designation
3.4*   Bylaws
4.1*   Form of Convertible Note
10.1*   Form of Debt Repayment
21.1*   Subsidiaries of the Registrant

  

* Filed herewith

 

32

 

  

SIGNATURES

 

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: December 12, 2018 MESO NUMISMATICS, INC.
     
  By: /s/ Melvin Pereira
    Name: Melvin Pereira
    Title: Chief Executive Officer

 

33

 

Exhibit 2.1

 

AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made as of this 21 st day of November, 2016 (the “ Effective Date ”), by and between PURE HOSPITALITY SOLUTIONS, INC., a Nevada corporation (the “ Nevada Corporation ”), and MESO NUMISMATICS, CORP., a Florida corporation (the “ Florida Corporation ”). Each of the Florida Corporation and Nevada Corporation may be referred to individually as a “ Party ” and collectively as the “ Parties ”.

 

W   I   T   N   E   S   S   E   T   H   :

 

WHEREAS, the Nevada Corporation is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada; and

 

WHEREAS, the Florida Corporation is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida; and

 

WHEREAS, the respective Boards of Directors of the Nevada Corporation and the Florida Corporation have determined that, it is advisable, to the advantage of and in the best interests of the Nevada Corporation and its shareholders and the Florida Corporation and its stockholders that the Florida Corporation merge with and into the Nevada Corporation upon the terms and subject to the conditions herein provided; and

 

WHEREAS, the parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”), and to cause the merger described herein to qualify as a reorganization under the provisions of Section 368 of the Code, and

 

WHEREAS, the respective Boards of Directors of the Nevada Corporation and the stockholders of the Florida Corporation have unanimously adopted and approved this Agreement, and the Board of Directors of the Nevada Corporation has directed that this Agreement be submitted to the shareholders of the Nevada Corporation for their consideration.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and intending to be legally bound, the Nevada Corporation and the Florida Corporation hereby agree as follows:

 

1. Merger . Subject to the approval of the shareholders of the Nevada’s general corporate law as set forth in Chapter 78 of the Nevada Revised Statutes (“ NRS ”), at such time hereafter as the parties hereto shall mutually agree, the Florida Corporation shall be merged with and into the Nevada Corporation as a wholly-owned subsidiary (the “ Merger ), and the Nevada Corporation shall be the parent company of the Florida Corporation (hereinafter sometimes referred to as the “ Surviving Corporation ”). The Merger shall be effective upon the Effective Date. The parties shall use their best efforts to timely effectuate (a) the filing of a Certificate of Merger (the “ Certificate of Merger ”) with the office of the Nevada Secretary of State in accordance with the provisions of the NRS; and (b) the filing of a duly certified Certificate of Ownership and Merger (the “ Certificate of Ownership and Merger ”) with the Secretary of State of the State of Florida in accordance with the applicable provisions of Florida Business Corporation Act (the “ FBCA ”); the date and time of the later of such filings being hereinafter referred to as the “ Effective Time .” Following the due approval of the Merger by the shareholders of the Nevada Corporation, subject to the provisions of this Agreement, the Certificate of Ownership and Merger shall be duly executed by the Florida Corporation and the Nevada Corporation and thereafter delivered to the office of the Secretary of State of the State of Nevada, and the Certificate of Ownership and Merger shall be duly executed by the Florida Corporation and the Nevada Corporation and thereafter delivered to the office of the Secretary of State of Florida.

 

2. Closing Transactions .

 

a. Promptly after the Effective Date, subject to, and consistent with, the provisions of this Agreement, Nevada Corporation shall, through reasonable procedures as Nevada Corporation may adopt, issue One Hundred Million (100,000,000) shares of common stock to the Florida Corporation stockholders in exchange for all of the outstanding shares of Florida Corporation’s common stock; after which exchange, Nevada Corporation shall own one hundred (100%) percent of Florida Corporation’s common stock, and Florida Corporation shall thereby become a wholly-owned subsidiary of Nevada Corporation.

 

Page 1 of 7

 

  

b. Effect of the Acquisition . At the Effective Time, the effect of the acquisition shall be as provided in this Agreement and the applicable provisions of Florida and Nevada Law. At the Effective Time, all the property, rights, privileges, powers and franchises of Florida Corporation shall vest in Nevada Corporation.

 

c. No Further Ownership Rights in Florida Corporation shares . All Florida Corporation shares issued upon the surrender for exchange of shares of Nevada Corporation Common Stock in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such Florida Corporation shares, and there shall be no further registration of transfers on the records of the Nevada Corporation of Florida Corporation shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Section 2.

 

3 Governing Documents .

 

a. The Certificate of Incorporation of the each of the respective corporations shall remain in full force and effect.

 

b. The Bylaws of the Nevada Corporation shall be the Bylaws of the Surviving Corporation.

 

4. Officers and Directors . The directors of the Nevada Corporation immediately prior to the Effective Date shall be the directors of the Surviving Corporation and the officers of the Nevada Corporation immediately prior to the Effective Date shall be the officers of the Surviving Corporation. Such directors and officers will hold office from the Effective Date until their respective successors are duly elected or appointed and qualified in the manner provided in the Certificate of Incorporation and Bylaws of the Surviving Corporation, as the same may be lawfully amended, or as otherwise provided by law .

 

5.  Succession; Name of Surviving Corporation . As of the Effective Date, the separate existence of the Florida Corporation shall continue and the Florida Corporation shall be merged with and into as a wholly-owned subsidiary of the Nevada Corporation. The name of each Party’s corporation shall remain, whereby the Nevada Corporation’s name shall remain “Pure Hospitality Solutions, Inc.” and the Florida Corporation’s name shall remain “Meso Numismatic, Inc.” As of the Effective Date, the Florida Corporation shall continue to possess all of its assets, rights, privileges, franchises, powers and property of the Florida Corporation as constituted immediately prior to the Effective Date, (i) shall be subject to all actions previously taken by the Nevada Corporation’s Board of Directors and shall succeed, without other transfer, to all of the assets, rights, privileges, franchises, powers and property of the Florida Corporation in the manner of and as more fully set forth in applicable provisions of FBCA, and (ii) shall continue to be subject to all of the debts, liabilities and obligations of the Florida Corporation as constituted immediately prior to the Effective Date.

 

6. Further Assistance . From and after the Effective Date, as and when required by the Florida Corporation or by its successor and assigns, there shall be executed and delivered on behalf of the Nevada Corporation such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest, perfect or confirm, of record or otherwise, in the Florida Corporation the title to and possession of all the property, interests, assets, rights, privileges, immunities, power, franchises and authority of the Nevada Corporation, and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Florida Corporation are fully authorized in the name and on behalf of the Nevada Corporation or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

 

Page 2 of 7

 

  

7. Outstanding Stock of the Florida Corporation . At the Effective Date, the 1,000 shares of the Florida Common Stock presently issued and outstanding in the name of the stockholders shall be canceled and retired and resume the status of authorized and unissued shares of Florida Corporation’s Common Stock, and no shares of Florida Corporation’s Common Stock or other securities of Florida Corporation’s Common Stock shall be issued in respect thereof

 

8. Stock Certificates . From and after the Effective Date, all of the outstanding certificates which prior to that time represented shares of capital stock of the Florida Corporation shall be deemed for all purposes to evidence ownership and to represent the shares of capital stock of the Nevada Corporation into which such shares of the Florida Corporation represented by such certificates have been converted as herein provided. The registered owner on the books and records of the Florida Corporation or its transfer agent of any such outstanding stock certificate shall, until such certificate shall have been surrendered for transfer or otherwise accounted for to the Florida Corporation or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of capital stock of the Florida Corporation evidenced by such outstanding certificates as above provided. Each certificate representing capital stock of the Surviving Corporation so issued in the Merger shall bear the same legends, if any, with respect to the restrictions on transferability as the certificates of the Nevada Corporation so converted and given in exchange therefor, unless otherwise determined by the Board of Directors of the Surviving Corporation in compliance with applicable laws, and any additional legends required by applicable Blue Sky laws. If any certificate for shares of the Florida Corporation stock is to be issued in a name other than that in which the certificate surrendered in exchange therefor is registered, it shall be a condition of issuance thereof that the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer, that such transfer otherwise be proper and that the person requesting such transfer pay to the exchange agent any transfer or other taxes payable by reason of the issuance of such new certificate in a name other than that of the registered holder of the certificate surrendered or establish to the satisfaction of the Florida Corporation that such tax has been paid or is not payable.

 

9. Validity of Florida Common Stock . All shares of Florida Corporation’s Common Stock into which Nevada Corporation’s Common Stock is to be converted pursuant to the Merger shall not be subject to any statutory or contractual preemptive rights, shall, when issued, be validly issued, fully paid and non-assessable and shall be issued in full satisfaction of all rights pertaining to such Nevada Corporation’s Common Stock.

 

10. Rights of Former Holders . From and after the Effective Date, no holder of certificates which evidenced Florida Corporation’s Common Stock immediately prior to the Effective Date shall have any rights with respect to the shares formerly evidenced by those certificates, other than the right to receive the shares of Florida Corporation’s Common Stock into which such Nevada Corporation’s Common Stock shall have been converted pursuant to the Merger.

 

11. Abandonment and Termination . At any time before the Effective Date, this Agreement may be terminated and the Merger may be abandoned by the Board of Directors of either the Nevada Corporation or the Florida Corporation or both, notwithstanding approval of this Agreement by the sole stockholder of the Florida Corporation and the stockholders of the Nevada Corporation.

 

12. Third Parties . Except as provided in this Agreement, nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto or their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 

 

Page 3 of 7

 

 

13.  Waiver of Conflicts . The Florida Corporation and the Nevada Corporation (collectively, the “ Consenting Parties ”) acknowledge that at all times relevant hereto and up to the Effective Date, each corporation operated independently of the other. If subsequent to the Closing any dispute were to arise relating in any manner to this Agreement (“ Dispute ”), the Consenting Parties consent to and waive all claims against each of the respective corporation’s shareholders in any and all such Disputes.

 

14. Governing Law; Venue . Agreement, and all rights, duties, and obligations of the Parties under this Agreement, shall be governed by and under the laws of the State of New York, without giving effect to any principles of conflict of laws. The Parties hereby submit to the personal and subject matter jurisdiction and venue of the state or federal courts located in the New York, New York. If either Party commences an action arising out of this Agreement, the prevailing Party shall, in addition to any other damages and costs awarded, be entitled to all reasonable attorneys’ fees and costs incurred in connection with the prosecution or defense of such action.

 

15. WAIVER OF JURY TRIAL . TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BETWEEN THE PARTIES, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL TO ITS SATISFACTION.

 

16. Entire Agreement . This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter. With respect to each Party’s rights and obligations, this Agreement (including all exhibits) supersedes all previous agreements among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, representations or understandings between them, written or oral, concerning such subject matter. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force or effect and no changes in or additions to this Agreement shall be recognized without the specific prior written consent of the Parties.

 

17. Gender: Number; Construction; Headlines . Whenever the context of this Agreement requires, the gender of all words shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the Party causing this Agreement to be drafted. Each Party has read this Agreement in its entirety understands its contents and has had the advice of counsel as to the Agreement’s meaning and intent. The headings contained in this Agreement are for reference purposes only and shall not affect in any matter or way the meaning or interpretation of this Agreement.

 

18. Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

 

19. Amendment or Waiver . The terms of this Agreement may be amended, modified, discharged, waived or terminated only by a written instrument executed by both Parties or, in the case of a waiver, by the Party waiving compliance, unless such waiver is conditional. All amendments shall be in writing and may be executed in multiple counterparts. No delay or omission by either Party to exercise any right or power it has under this Agreement shall impair or be construed as a waiver of such right or power. A waiver by either Party of any breach or covenant of the other Party shall not be construed as a waiver of any succeeding breach or any other covenant of such other Party. All waivers must be in writing and signed by the Party waiving its rights.

  

Page 4 of 7

 

 

20. Assignment . No assignment by either Party of this Agreement or any right, duty, or obligation of either Party contained in this Agreement to any individual, firm, corporation, or other business entity, shall be valid without either Party’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties.

 

21. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one such counterpart. In the event that any signature is delivered by facsimile transmission, by email in “portable document format” (“ .pdf ”), electronic signature or other similar electronic means intended to preserve the original graphic and pictorial appearance of this Agreement, such signature shall have the same effect as physical delivery of the paper document bearing original signature and create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were an original thereof.

 

[Remainder of page intentionally left blank;

Signature page follows]

 

Page 5 of 7

 

 

IN WITNESS WHEREOF , the parties hereto, intending to be legally bound hereby, have caused this Agreement to be executed as of this day and year first above written.

 

  PURE HOSPITALITY SOLUTIONS, INC., a Nevada corporation
     
  By: /s/ Melvin Pereira L.
    Name: Melvin Pereira
    Title: Chief Executive Officer
     
  ATTEST:
     
  By:  
    Name:
    Title:
     
  MESO NUMISMATICS, CORP., a Florida corporation
     
  By: /s/ Melvin Pereira L.
    Name: Melvin Pereira
    Title: President
     
  ATTEST:
     
  By:
    Name:
    Title:
     
   

 

Page 6 of 7

 

 

  Exhibit A

to Merger Agreement

 

PLAN OF MERGER

 

The following corporations are parties to this Plan of Merger: (i) PURE HOSPITALITY SOLUTIONS, INC., a Nevada Corporation (the “Nevada Corporation”) and (ii) MESO NUMISMATICS, CORP., a Florida corporation (the “Florida Corporation”).

 

1. The Florida Corporation shall be merged with and into the Nevada Corporation as a wholly-owned subsidiary (the “Merger”).

 

2. The Nevada Corporation shall own all of the outstanding shares of the Florida Corporation.

 

3. All of the shares of the Florida Corporation outstanding immediately after to the Merger shall thereupon be canceled.

 

4. Upon the Merger, each outstanding share of common stock, $0.001 par value per share, of the Florida Corporation (“Florida Common Stock”) shall be converted into one hundred thousand shares of common stock, $0.001 par value per share, of the Nevada Corporation (“Nevada Common Stock”).

 

5. Each holder of shares of the Florida Corporation may thereupon surrender the share certificate or certificates to the Secretary of the Nevada Corporation and shall be entitled to receive in exchange therefor a certificate or certificates representing the number of shares into which the shares theretofore represented by a certificate or certificates so surrendered shall have been converted.

 

6. The officers and directors of the Nevada Corporation immediately preceding the Merger shall be the officers and directors of the Florida Corporation immediately following the Merger.

 

7. The Certificate of Incorporation of the Florida Corporation as in effect immediately preceding the Merger shall continue in full force and effect as a wholly-owned subsidiary of the Nevada Corporation which shall operate the Florida Corporation as the parent and the surviving corporation.

 

8. The Bylaws of the Nevada Corporation as in effect immediately preceding the Merger shall continue in full force and effect as the Bylaws of the Florida Corporation.

 

9. This Plan of Merger shall be effective as of the date of filing of a Certificate of Ownership with the State of Florida.

 

[Remainder of Page Left Blank Intentionally]

 

Page 7 of 7

 

Exhibit 3.1

 

 

ROSS MILLER    

Secretary of State      
204 North Carson Street, Suite 1      
Carson City, Nevada 89701-4520   Filed in the office of Document Number

(775) 684-5708

Website: www.nvsos.gov

  /s/ Ross Miller 00004403442-21
  Ross Miller Filing Date and Time
Certificate to Accompany   Secretary of State 09/24/2014 11:50 AM
Restated Articles or   State of Nevada Entity Number

Amended and Restated Articles

    C6596-2001
(PURSUANT TO NRS)      

  

USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

 

This Form is to Accompany Restated Articles or Amended and Restated Articles of Incorporation
(Pursuant to NRS 78.403, 82.371, 86.221, 87A, 88.355 or 88A.250)

(This form is also to be used to accompany Restated Articles or Amended and Restated Articles for Limited-Liability
Companies, Certificates of Limited Partnership, Limited-Liability Limited Partnerships and Business Trusts)

 

1.  Name of Nevada entity as last recorded in this office:

 

Oriens Travel & Hotel Management Corp.

 

2. The articles are: (mark only one box)       ☐ Restated          ☒ Amended and Restated

Please entitle your attached articles “Restated” or “Amended and Restated,” accordingly.

 

3. Indicate what changes have been made by checking the appropriate box:*

 

  No amendments; articles are restated only and are signed by an officer of the corporation who has been authorized to execute the certificate by resolution of the board of directors adopted on:
     
  The certificate correctly sets forth the text of the articles or certificate as amended to the date of the certificate.
     
  The entity name has been amended.
     
  The registered agent has been changed. (attach Certificate of Acceptance from new registered agent)
     
  The purpose of the entity has been amended.
     
  The authorized shares have been amended.
     
  The directors, managers or general partners have been amended.
     
  IRS tax language has been added.
     
  Articles have been added.
     
  Articles have been deleted.
     
  Other. The articles or certificate have been amended as follows: (provide article numbers, if available)

   

4. Effective date and time of filing: (optional) Date:   Time:  
  (must not be later than 90 days after the certificate is filed)

  

* This form is to accompany Restated Articles or Amended and Restated Articles which contain newly altered or amended articles. The Restated Articles must contain all of the requirements as set fort in the statutes for amending or altering the articles for certificates.

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

 

This form must be accompanied by appropriate fees.

 

Nevada Secretary of State Restated Articles

   

Revised: 8-31-11

 

 

 

   

 

 

ROSS MILLER      
Secretary of State      
204 North Carson Street, Suite 1      
Carson City, Nevada 89701-4520      

(775) 684-5708

Website: www.nvsos.gov

     
     
         
       

Certificate of Amendment

     
(PURSUANT TO NRS 78.385 AND 78.390)      
       

  

USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

 

Certificate of Amendment to Articles of Incorporation

For Nevada Profit Corporations

(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)

 

1.  Name of corporation:

 

Oriens Travel & Hotel Management Corp.

 

2. The articles have been amended as follows: (provide article numbers, if available)

 

Please see attached

 

*Certificate of Amended and Restated Articles of Incorporation*

 

AND

 

*Amended and Restated Articles of Incorporation*

 

3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is:                 274.50%

 

4. Effective date and time of filing: (optional) Date: 9-25-2014   Time:   12:00 PM
  (must not be later than 90 days after the certificate is filed)

  

5. Signature: (required)

 

X /s/ Melvin Pereira L.  
Signature of Officer  

 

*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof.

 

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

 

This form must be accompanied by appropriate fees.

 

Nevada Secretary of State Amend Profit-After

   

Revised: 11-27-13

 

 

 

  

CERTIFICATE OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ORIENS TRAVEL & HOTEL MANAGEMENT CORP.
A NEVADA CORPORATION

 

THE UNDERSIGNED hereby certifies as follows:

 

1. He is the duly elected and acting Chief Executive Officer of Oriens Travel & Hotel Management Corp., a Nevada Corporation (the “Corporation”);

 

2. On September 10, 2014, the board of directors of the Corporation unanimously adopted a resolution, subject to stockholder approval, to amend and restate the Articles of Incorporation of the Corporation pursuant to Section 78.385 and Section 78.390(1) of the Nevada Revised Statutes (“NRS”);

 

3. On September 10, 2014, upon the recommendation of the board of directors of the Corporation, the proposed amendment to the Articles of Incorporation was submitted to the stockholders of the Corporation. The stockholders of the Corporation’s $0.001 par value voting common stock (“Common Stock”) were entitled to vote on the amendment to the Articles of Incorporation, with such vote requiring the affirmative vote of the majority of the outstanding Common Stock of the Corporation. The holders of a majority of the voting power of the outstanding shares of the Corporation’s Common Stock voted in favor of the amendment to the Articles of Incorporation as follows:

 

4. Article I, NAME, is hereby amended to reflect the present name of the Corporation, Pure Hospitality Solutions, Inc., as such corporate name is on file with the Secretary of State of the State of Nevada.

 

Article IV, CAPITAL STOCK, is amended in its entirety to accurately reflect the number of authorized shares of the common stock of the company that have been previously issued and to accurately reflect the number of authorized shares of preferred stock. Such amended Article IV shall read in its entirety as follows:

 

Section 4.1 Authorized Stock . The total number of shares of all classes and series of stock that the Corporation shall have authority to issue is 211,000,000 shares, consisting of two hundred million (200,000,000) shares of common stock, par value $0.001 per share, and eleven million (11,000,000) shares of special or preferred stock, par value $0.001 per share.

 

1 -

 

 

Section 4.2 Authority of the Board of Directors . The board of directors is authorized to provide for the issuance from time to time of authorized, but unissued shares of stock of the Corporation and to determine the respective classes, series, rights and preferences of such stock. When the consideration for such shares has been fully paid, such shares shall be issued in full compliance with the board authorization as duly authorized, validly issued, fully paid and non-assessable.

 

Section 4.3 Preferred Stock . The board of directors is vested with the authority to provide for the issuance of authorized, but unissued shares of preferred stock of the Corporation in one or more classes or series, and to prescribe the voting powers, limitations, restrictions, distinguishing designations, rights and preferences, including rights and preferences upon dissolution and distribution of assets, of each such class or series, as shall be stated and expressed in the resolution or resolutions of the board of directors of the Corporation, the board of directors being hereby expressly vested with such power and authority to the fullest extent now or hereafter permitted by law.

 

Section 4.4 Preemptive Rights . No holders of shares of any class or series of stock of the Corporation shall be entitled to preemptive rights to subscribe to any unissued stock or any other securities of the Corporation. Notwithstanding the foregoing, the board of directors may, at its discretion, by resolution determine that any unissued shares of preferred stock of the Corporation may be offered for subscription solely to the holders of a particular class or series of the Corporation, or any shareholder who owns a minimum number of the common stock of the Corporation, as determined by the board of directors, in such proportions as the board of directors in its discretion may determine.

 

Article V, DIRECTORS, is hereby amended to reflect the names and addresses of the current board of directors and such section reads in full as follows:

 

The business and affairs of the Corporation shall be managed or under the direction of a board of directors, which initially shall consist of one director. Provided that the Corporation has at least one director, the number of directors may at any time or times be increased or decreased as provided in the by-laws of the Corporation, and without the necessity of amending these Articles of Incorporation. The names and addresses of the members of the board of directors are as follows:

 

  NAME   ADDRESS
  Melvin Pereira, CEO   3960 Howard Hughes Parkway, Suite 500,
      Las Vegas, Nevada, 89169
       
  Martin Chua, Treasurer   3960 Howard Hughes Parkway, Suite 500,
      Las Vegas, Nevada, 89169

 

5. The Corporation’s Articles are hereby amended and restated to read in full as follows:

 

2 -

 

 

AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ORIENS TRAVEL & HOTEL MANAGEMENT CORP.
A NEVADA CORPORATION

 

Pursuant to Nevada Revised Statutes 78.390 and 78.403, the undersigned officer of Oriens Travel & Hotel Management Corp. does hereby certify that:

 

1. He constitutes the duly elected and acting Chief Executive Officer of the corporation, which is duly organized and existing under the laws of the State of Nevada.

 

2. The original Articles of Incorporation were filed with the Secretary of State on March 16, 2001.

 

3. The Articles of Incorporation of the Corporation are hereby amended and restated in their entirety as follows:

 

ARTICLE I
NAME

 

The name of the corporation is Oriens Travel & Hotel Management Corp. (the “Corporation”).

 

ARTICLE II
DURATION

 

The Corporation is to have perpetual existence.

 

ARTICLE III

RESIDENT AGENT AND REGISTERED OFFICE

 

Section 3.1 Resident Agent . The name and address of the Corporation’s resident agent for service of process is: CSC Services of Nevada, Inc., 2515-B Renaissance Dr., Las Vegas, Nevada 89119.

 

3 -

 

 

Section 3.2 Registered Office . The address of the Corporation’s registered office: 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada, 89169.

 

Section 3.2 Other Offices . The Corporation may also maintain offices for the transaction of any business at such other places within or without the State of Nevada as it may from time to time determine. Corporate business of every kind and nature may be conducted, and meetings of the directors and stockholders held outside the State of Nevada with the same effect as if in the State of Nevada.

 

ARTICLE IV

CAPITAL STOCK

 

Section 4.1 Authorized Stock . The total number of shares of all classes and series of stock that the Corporation shall have authority to issue is 211,000,000 shares, consisting of two hundred million (200,000,000) shares of common stock, par value $0.001 per share, and eleven million (11,000,000) shares of special or preferred stock, par value $0.001 per share.

 

Section 4.2 Authority of the Board of Directors . The board of directors is authorized to provide for the issuance from time to time of authorized, but unissued shares of stock of the Corporation and to determine the respective classes, series, rights and preferences of such stock. When the consideration for such shares has been fully paid, such shares shall be issued in full compliance with the board authorization as duly authorized, validly issued, fully paid and non-assessable.

 

Section 4.3 Preferred Stock . The board of directors is vested with the authority to provide for the issuance of authorized, but unissued shares of preferred stock of the Corporation in one or more classes or series, and to prescribe the voting powers, limitations, restrictions, distinguishing designations, rights and preferences, including rights and preferences upon dissolution and distribution of assets, of each such class or series, as shall be stated and expressed in the resolution or resolutions of the board of directors of the Corporation, the board of directors being hereby expressly vested with such power and authority to the fullest extent now or hereafter permitted by law.

 

Section 4.4 Preemptive Rights . No holders of shares of any class or series of stock of the Corporation shall be entitled to preemptive rights to subscribe to any unissued stock or any other securities of the Corporation. Notwithstanding the foregoing, the board of directors may, at its discretion, by resolution determine that any unissued shares of preferred stock of the Corporation may be offered for subscription solely to the holders of a particular class or series of the Corporation, or any shareholder who owns a minimum number of the common stock of the Corporation, as determined by the board of directors, in such proportions as the board of directors in its discretion may determine.

 

4 -

 

 

ARTICLE V

DIRECTORS

 

The business and affairs of the Corporation shall be managed or under the direction of a board of directors, which initially shall consist of one director. Provided that the Corporation has at least one director, the number of directors may at any time or times be increased or decreased as provided in the by-laws of the Corporation, and without the necessity of amending these Articles of Incorporation. The names and addresses of the members of the board of directors are as follows:

 

  NAME   ADDRESS
  Melvin Pereira, CEO   3960 Howard Hughes Parkway, Suite 500,
      Las Vegas, Nevada, 89169
       
  Martin Chua, Treasurer   3960 Howard Hughes Parkway, Suite 500,
      Las Vegas, Nevada, 89169

 

ARTICLE VI
PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the NRS, except banking or insurance.

 

ARTICLE VII

DIRECTORS’ AND OFFICERS’ LIABILITY

 

A director or officer of the Corporation shall not be personally liable to the Corporation or to the stockholders for damages for breach of fiduciary duty as a director or officer, except that this provision does not eliminate the liability of a director or officer for (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or (b) the making of distributions in violation of Section 78.300 of the NRS. If the NRS are subsequently amended to authorize corporate action further limiting the personal liability of directors or officers, then the Corporation is authorized to take such actions as the board of directors may deem necessary or advisable to further limit the personal liability of directors or officers to the fullest extent permitted by the NRS, as so amended. Any repeal or modification of the foregoing by the stockholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of such repeal or modification.

 

5 -

 

 

ARTICLE VIII
INDEMNITY

 

Every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he, or a person of whom he is a legal representative, is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the law of the State of Nevada from time to time against all expenses, liability and loss (including attorneys’ fees, judgments, fines, and amounts paid or to be paid in settlement), reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director of officer to repay the amount if it is ultimately determined by a court of competent jurisdiction the he is not entitled to be indemnified by the Corporation. Such right shall not be exclusive of any other right which such directors. Officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any By-law agreement, vote of stockholder, provision of law or otherwise, as well as their rights under this Article.

 

Without limiting the application of the foregoing, the Board of directors may adopt Bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as director or officer of another corporation, or as a representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person.

 

The indemnification provided under this Article shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such person.

 

6 -

 

 

ARTICLE IX

AMENDMENT OF ARTICLES OF INCORPORATION

 

In the event the board of directors of the Corporation determines that it is in the best interest of the Corporation to amend these Articles of Incorporation, the board of directors shall adopt a resolution setting forth the proposed amendment and declaring its advisability and submit the matter to the stockholders entitled to vote thereon for the consideration thereof in accordance with the provisions of the NRS and these Articles of Incorporation. In the resolution setting forth the proposed amendment, the board of directors may insert a provision allowing the board of directors to later abandon the amendment, without concurrence by the stockholders, after the amendment has received stockholder approval but before the amendment is filed with the Nevada Secretary of State.

 

ARTICLE X
POWERS

 

The Corporation has been formed pursuant to Chapter 78 of the NRS. The powers of the Corporation shall be those powers granted under the NRS, including Sections 78.060 and 78.070 thereof. In addition, the Corporation shall have the following specific powers:

 

(a) to elect or appoint officers and agents of the Corporation and to fix their compensation; (b) to act as an agent for any individual, association, partnership, corporation or other legal entity; (c) to receive, acquire, hold, exercise rights arising out of the ownership or possession of, sell, or otherwise dispose of, shares or other interests in, or obligations of, individuals, associations, partnerships, corporations, governments or other legal entities; (d) to receive, acquire, hold, pledge, transfer, or otherwise dispose of shares of the Corporation in accordance with Chapter 78 of the NRS; and (e) to make gifts or contributions for the public welfare or for charitable, scientific or educational purposes.

 

ARTICLE XI
BY-LAWS

 

In furtherance and not in limitation of the powers conferred upon the board of directors of the Corporation by the NRS, the board of directors shall have the power to alter, amend, change, add to and repeal, from time to time, the by-laws of the Corporation, as in the judgment of the board of directors is necessary or advisable for the management and transaction of the business of the Corporation, provided that, such by-laws are not in conflict with these Articles of Association or the laws of the State of Nevada.

 

7 -

 

 

ARTICLE XII

ACQUISITIONS OF CONTROLLING INTEREST

 

The Corporation elects not to be governed by the provisions of Chapters 78.378 to 78.3793 inclusive of the NRS pertaining to acquisitions of controlling interest.

 

ARTICLE XIII

COMBINATIONS WITH INTERESTED STOCKHOLDERS

 

The Corporation elects not to be governed by the provisions of Chapters 78.411 to 78.444, inclusive, of the NRS pertaining to combinations with interested stockholders.

 

IN WITNESS WHEREOF , the undersigned has executed this Certificate of Amendment and Restatement as of the 11 th day of September 2014.

 

  /s/ Melvin Pereira L.
  Melvin Pereira, Chief Executive Officer

 

8 -

 

   

 

 

BARBARA K. CEGAVSKE    

Secretary of State      
202 North Carson Street      
Carson City, Nevada 89701-4201   Filed in the office of Document Number

(775) 684-5708

Website: www.nvsos.gov

  /s/ Barbara K. Cegavske 20180387307-79
  Barbara K. Cegavske Filing Date and Time
      Secretary of State 08/31/2018 12:45 PM
    State of Nevada Entity Number

Certificate of Amendment

    C6596-2001
(PURSUANT TO NRS 78.385 AND 78.390)      
       

  

USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

 

Certificate of Amendment to Articles of Incorporation

For Nevada Profit Corporations

(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)

 

1.  Name of corporation:

 

Pure Hospitality Solutions, Inc.

 

2. The articles have been amended as follows: (provide article numbers, if available)

 

Article I: The name of the Corporation is Meso Numismatics, Inc.

 

Article IV of the Articles of Incorporation is hereby amended: Upon effectiveness (the “Effective Time”) pursuant to the Nevada Revised Statutes of this Certificate of Amendment to the Articles of Incorporation of the Corporation, each One Thousand (1,000) shares of common stock issued and outstanding immediately prior to the Effective Time shall automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) shares of common stock (the “Reverse Stock Split”). No fractional shares shall be issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares of common stock shall be rounded up to the next whole share of common stock.

 

3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is:              71.09%

 

4. Effective date and time of filing: (optional) Date:   Time:  
  (must not be later than 90 days after the certificate is filed)

  

5. Signature: (required)

 

X /s/ Melvin Pereira L.  
Signature of Officer  

 

*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof.

 

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

 

This form must be accompanied by appropriate fees.

 

Nevada Secretary of State Amend Profit-After

   

Revised: 1-5-15

 

 

 

 

 

 

 

Exhibit 3.2

 

 

ROSS MILLER    

Secretary of State      
202 North Carson Street, Suite 1      
Carson City, Nevada 89701-4520   Filed in the office of Document Number

(775) 684-5708

Website: www.nvsos.gov

  /s/ Ross Miller 20140246168-24
  Ross Miller Filing Date and Time
  Secretary of State 04 /02/2014 8:54 AM
Certificate of Designation   State of Nevada Entity Number

(PURSUANT TO NRS 78.1955)
    C6596-2001
     

 

USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

 

Certificate of Designation For

Nevada Profit Corporations

(Pursuant to NRS 78.1955)

 

1. Name of corporation:

Oriens Travel & Hotel Management Corp.

 

2. By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.

 

1. Creation of 1,000,000 shares of Series AA Super Preferred

2. These Series AA Super Preferred shares shall carry TEN THOUSAND (10,000) share of voting rights for each one (1) share.

 

3. Effective date of filing: (optional)  
 

(must not be later than 90 days after the certificate is filed)

 

4. Signature: (required)

 

X /s/ Ken Chua

 

Signature of Officer

 

Filing Fee: $175.00

 

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

 

This form must be accompanied by appropriate fees.

 

Nevada Secretary of State Stock Designation

   

Revised: 3-6-09

 

 

 

 

CERTIFICATE OF DESIGNATIONS PREFERENCES AND RIGHTS
OF
SERIES AA SUPER VOTING PREFERRED STOCK OF
ORIENS TRAVEL & HOTEL MANAGEMENT CORP.
A NEVADA CORPORATION

 

ORIENS TRAVEL & HOTEL MANAGEMENT CORP., a Nevada corporation (the “Corporation”), by its Board of Directors and pursuant to the NRS 78.1955, does hereby certify:

 

Pursuant to the authority expressly granted and vested in the Board of Directors by the provisions of the Corporation’s Amended and Restated Articles of Incorporation, dated March 21, 2014, adopted following the resolution of the Board of Directors, dated March 21, 2014 (i) authorizing the issuance of up to 11,000,000 shares of preferred stock of the Corporation, par value $0.001 per share, and (ii) providing for the designations, preferences and relative, participating, optional or other rights and the qualifications, limitations or restrictions thereof, of 1,000,000 shares of the preferred stock of the Corporation as follows:

 

RESOLVED: That pursuant to the authority vested in the Board of Directors of the Corporation by the Corporation’s Amended and Restated Articles of Incorporation, dated March 21, 2014 (the “Articles of Incorporation”), a series of super preferred voting stock of the Corporation be, and it hereby is, created out of the 11,000,000 authorized but unissued shares of the preferred stock of the Corporation, such series to be designated Series AA Super Voting Preferred Stock (the “Series AA Super Voting Preferred Stock”), to consist of 1,000,000 shares, par value $0.001 per share, which shall have the following preferences, powers, designations and other special rights;

 

1. Voting. Holders of the Series AA Super Voting Preferred Stock shall have ten thousand (10,000) that number of votes on all matters submitted to the stockholders that each stockholder of the Corporation’s Comnam Stock is entitled to vote at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action and consideration. A holder of the Series AA Super Voting Preferred Stock shall vote together with the holders of Common Stock as a single class.

 

2. Dividends. The holders of Series AA Super Voting Preferred Stock of the Corporation shall not be entitled to receive dividends paid on the Corporation’s Common Stock.

 

- 1 -

 

 

3. No Liquidation Preference. Upon liquidation, dissolution and winding up of the Corporation, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock then outstanding shall not be entitled to receive out of the assets of the Corporation, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the Common Stockholders.

 

4. No Conversion. The shares of Series AA Super Voting Preferred Stock will not be convertible into the shares of the Corporation’s Common Stock.

 

5. Vote to Change the Terms of or Issuance of Series AA Super Voting Preferred Stock. The affirmative vote at a meeting duly called for such purpose, or written consent without a meeting, of the holders of not less than fifty-one (51%) of the then outstanding shares of Series AA Super Voting Preferred Stock shall be required for (i) any change to the Corporation’s Articles of Incorporation that would amend, alter, change or repeal any of the voting powers, preferences, limitations or relative rights of the Series AA Super Voting Preferred Stock, or (ii) any issuance of additional shares of Series AA Super Voting Preferred Stock.

 

6. Record Owner. The Corporation may deem the person in whose name shares of Series AA Super Voting Preferred Stock shall be registered upon the registry books of the Corporation to be, and may treat them as, the absolute owner of the Series AA Super Voting Preferred Stock for all purposes, and the Corporation shall not be affected by any notice to the contrary.

 

IN WITNESS WHEREOF, the undersigned Chief Executive Officer of the Corporation does hereby declare and certify that this is the act and deed of the Corporation and accordingly has signed this Certificate of Designations on April 1, 2014.

 

  /s/ Ken Chua
  Ken Chua, Chief Executive Officer

 

- 2 -

 

Exhibit 3.3

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES BB CONVERTIBLE PREFERRED STOCK
OF
PURE HOSPITALITY SOLUTIONS, INC

 

The undersigned, being the Secretary of PURE HOSPITALITY SOLUTIONS, INC. , a Nevada corporation (the “ Corporation ”), in accordance with the provisions of Section 78.195(5) of the Nevada Revised Statutes (“ NRS ”), DOES HEREBY CERTIFY :

 

Pursuant to the authority expressly conferred upon the Board of Directors by the provisions of the Corporation’s Articles of Incorporation, dated March 16, 2001, as amended (the “ Articles of Incorporation ”), the Board of Directors, on March 28, 2017, in accordance with the provisions of NRS 78.195(5), adopted a resolution establishing a series of 1,000,000 (One Million) shares of preferred stock of the Corporation, par value US$0.001 per share (the “ Preferred Stock ”), to be designated as its Series BB Convertible Preferred Stock:

 

WHEREAS , the Corporation’s Articles of Incorporation authorizes up to 11,000,000 shares of Preferred Stock, US$0.001 par value per share, issuable from time to time in one or more series; and

 

WHEREAS , the Corporation’s Articles of Incorporation authorizes the Board of Directors to provide by resolution for the issuance of shares of preferred stock in one or more series, and to fix for each such series such preferences, rights and power as may be permitted by the Nevada Revised Statutes.

 

NOW THEREFORE, BE IT RESOLVED , that pursuant to the authority vested in the Board of Directors of the Corporation by the Corporation’s Articles of Incorporation, the Board of Directors hereby establishes a series of Series BB Convertible Preferred Stock of the Corporation and hereby states the number of shares, and fixes the powers, designations, preferences and relative, participating, optional and other rights, and the qualifications, limitations and restrictions thereof, of such series of shares as follows:

 

SERIES BB CONVERTIBLE PREFERRED

 

STOCK SECTION 1. Designation; Number of Shares; Rank .

 

(a) There shall be created from the 11,000,000 shares of Preferred Stock authorized to be issued by the Articles of Incorporation, a series of Preferred Stock designated as “Series BB Convertible Preferred Stock” (the “ Convertible Preferred Stock ”), and the authorized number of shares constituting the Convertible Preferred Stock shall be 1,000,000 (One Million) shares. Such number of shares may be increased or decreased by resolution of the Board of Directors adopted and filed pursuant to the provisions of NRS 78.195(5) or any successor provision, and by the filing of a certificate of increase or decrease with the Secretary of State of the State of Nevada; provided that no such decrease shall reduce the number of authorized shares of Convertible Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, warrants, convertible or exchangeable securities or other rights to acquire shares of Convertible Preferred Stock.

 

(b) The Convertible Preferred Stock, with respect to dividend rights and upon liquidation, winding-up or dissolution of the Corporation, ranks (a) senior to all Junior Stock; and (b) on a parity, in all respects, with all the Parity Stock. The Corporation has the right to authorize and/or issue additional shares or classes or series of Junior Securities without the consent of the Holders, but such consent is required for the authorization or issuance of Parity Stock pursuant to Section 9 .

 

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SECTION 2. Definitions . As used in this Certificate of Designation, the following terms have the following meanings:

 

Affiliate ” shall mean any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

 

Alternate Consideration ” shall have the meaning assigned to such term in Section 3(d) .

 

Articles of Incorporation ” shall have the meaning assigned to such term in the second paragraph of the preamble.

 

Beneficial Ownership Limitation ” shall have the meaning set forth in Section 6(a)(vi).

 

Board of Directors ” shall mean the Board of Directors of the Corporation or, with respect to any action to be taken by the Board of Directors, any committee of the Board of Directors duly authorized to take such action.

 

Business Day ” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law or executive order to close.

 

Bylaws ” means the bylaws of the Corporation, as they may be amended from time to time.

 

Certificate of Designation ” means this Certificate of Designation relating to the Convertible Preferred Stock, as it may be amended from time to time.

 

Change of Control ” means any merger, consolidation, sale of stock or other business combination in which the Corporation is not the surviving entity or in which the stockholders of the Corporation prior to the transactions beneficially own less than 51% of the Corporation’s voting power after giving effect to such transaction.

 

Close of Business ” shall mean 5:00 p.m. (New York or Eastern Standard Time).

 

Closing Bid Price ” of the Common Stock on any date shall mean the closing bid price per share on that date as reported on the NASDAQ Capital Market. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Closing Bid Price” will be the last quoted bid price for the Common Stock reported in the over-the-counter market on the relevant date. If the Common Stock is not so quoted, the “Closing Bid Price” will be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

 

Common Stock ” shall mean the common stock, par value $0.001 per share, of the Corporation or any other capital stock of the Corporation into which such Common Stock shall be reclassified or changed.

 

Conversion Agent ” shall have the meaning assigned to such term in Section 16 .

 

Conversion Date ” shall have the meaning assigned to such term in Section 6(a)(ii) .

 

Convertible Preferred Stock ” shall have the meaning assigned to such term in Section 1 .

 

Conversion Rate ” shall mean in respect of each share of Convertible Preferred Stock then converted an amount of Common Stock equal to the product of , (A) the Number of Outstanding Shares of Common Stock (OS) divided by three-tenths (0.3) minus the Number of Outstanding Shares of Common Stock (OS), multiplied by (B) the quotient of (a) the number of Series BB Convertible Preferred shares being converted by the Holder (CS) divided by (b) the number of Series BB Convertible Preferred Stock authorized by the Corporation (AS).

 

Corporation ” shall have the meaning assigned to such term in the first paragraph of the preamble.

 

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Effective Date ” shall mean the date on which a Fundamental Change event is consummated.

 

Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Fundamental Change ” shall mean the occurrence of any of the following:

 

(a) the Corporation consolidates with, merges with or into, another Person, or any Person consolidates with, or merges with or into, the Corporation, other than pursuant to a transaction in which the Persons that “beneficially owned” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, the Corporation’s voting capital stock immediately prior to such transaction beneficially own, directly or indirectly, voting capital stock representing a majority of the total voting power of all outstanding classes of voting capital stock of the continuing or surviving Person in substantially the same proportion among themselves as such ownership immediately prior to such transaction; and

 

(b) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the Corporation’s assets (determined on a consolidated basis) to any Person or group (as such term is used in Section 13(d)(3) of the Exchange Act) other than pursuant to a transaction in which persons that “beneficially owned” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, the Corporation’s voting capital stock immediately prior to such transaction beneficially own, directly or indirectly, voting capital stock representing a majority of the total voting power of such Person or group, and excluding license agreements with respect to any of the Corporation’s products.

 

Fundamental Change Notice ” shall have the meaning assigned to such term in Section 9(a) .

 

Holder ” or “ holder ” shall mean a holder of record of the Convertible Preferred Stock.

 

Issue Date ” shall mean the original date of issuance of the Convertible Preferred Stock to the Holder.

 

Junior Stock ” shall mean all classes of the Common Stock and each other class of capital stock or series of preferred stock of the Corporation established after the Issue Date by the Board of Directors, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Convertible Preferred Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Corporation.

 

Liquidation Event ” shall mean, (i) the liquidation, dissolution or winding-up, whether voluntary or involuntary, of the Corporation, (ii) the purchase or Optional Redemption pursuant to Section 3 by the Corporation of shares of any class of stock or the merger or consolidation of the Corporation with or into any other corporation or corporations, unless (a) the holders of the Convertible Preferred Stock receive securities of the surviving corporation having substantially similar rights as the Convertible Preferred Stock and the stockholders of the Corporation immediately prior to such transaction are holders of at least a majority of the voting securities of the successor corporation immediately thereafter (the “ Permitted Merger ”), unless the holders of the shares of Series BB Preferred Stock elect otherwise or (b) the sale, license or lease of all or substantially all, or any material part of, the Corporation’s assets, unless the holders of Convertible Preferred Stock elect otherwise.

 

Liquidation Value ” shall be equal to $1.00.

 

Market Disruption Event ” shall mean (i) a failure by the primary United States national securities or regional exchange or market on which the Common Stock is listed, admitted for trading or quoted to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Trading Day for the Common Stock for an aggregate one half hour period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.

 

Notice of Conversion ” shall have the meaning assigned to such term in Section 6(a)(i)(A) .

 

NRS ” shall have the meaning assigned to such term in the first paragraph of the preamble.

 

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Open of Business ” shall mean 9:30 a.m. (New York City time).

 

Parity Stock ” shall mean any class of capital stock or series of preferred stock of the Corporation established after the Issue Date by the Board of Directors, the terms of which expressly provide that such class or series will rank on a parity with the Convertible Preferred Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Corporation (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).

 

Paying Agent ” shall have the meaning assigned to such term in Section 16 .

 

Person ” shall mean any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

 

Preferred Stock ” shall have the meaning assigned to such term in the second paragraph of the preamble.

 

Record Date ” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock (or other security) have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of security holders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).

 

Redemption Date ” shall have the meaning assigned to such term in Section 3(a) .

 

Reference Property ” shall have the meaning assigned to such term in Section 8 .

 

Registrar ” shall have the meaning assigned to such term in Section 16 .

 

SEC ” or “ Commission ” shall mean the Securities and Exchange Commission.

 

Securities Act ” shall mean the Securities Act of 1933, as amended.

 

Senior Stock ” shall mean each class of capital stock or series of preferred stock of the Corporation established after the Issue Date by the Board of Directors, the terms of which expressly provide that such class or series will rank senior to the Preferred Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Corporation.

 

Scheduled Trading Day ” shall mean any day that is scheduled to be a Trading Day. If the Common Stock is not so listed for trading or quotation on or by any exchange or quotation system, Scheduled Trading Day means a Business Day.

 

Trading Day ” shall mean a day during which (i) trading in the Common Stock generally occurs on The Nasdaq Capital Market, or if the Common Stock is not listed on the Nasdaq Capital Market, then the principal U.S. national or regional securities exchange on which the Common Stock is listed, admitted for trading or quoted or, if the Common Stock is not so listed, admitted for trading or quoted, any Business Day, and (ii) there is no Market Disruption Event. A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for a regular full Trading Day on the relevant exchange or trading system. For the avoidance of doubt, Trading Day shall not include any Scheduled Trading Day with a scheduled closing time earlier than the then standard closing time for a regular full Trading Day even if such earlier closing time is the scheduled closing time for such day.

 

Transfer Agent ” shall have the meaning assigned to such term in Section 16 .

 

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Voting Stock ” of any Person means capital stock or other equity interests of any class or classes (however designated) having ordinary power for the election of directors or other similar governing body of such Person, other than stock or other equity interests having such power only by reason of the happening of a contingency.

 

SECTION 3 . Optional Redemption .

 

(a) The Convertible Preferred Stock shall be subject to optional redemption by the Corporation in its sole and absolute discretion at any time after the Issue Date to the Holder (the “ Redemption Date ”). Notwithstanding anything to the contrary herein, on the Redemption Date, the Corporation may partially or fully repay to Holders of the Convertible Preferred Stock in respect of each share of Convertible Preferred Stock then outstanding a sum , in cash, equal to Liquidation Value plus the product of (a) the Liquidation Value (LV) times (b) two-tenths (0.2) plus (c) any accrued and unpaid dividends through and including the Redemption Date.

 

Optional Redemption = [LV + (LV*.2)] + accrued and unpaid dividends

 

(b) Effectiveness of Redemption . Upon payment of the full redemption price of a share of Convertible Preferred Stock, on and after the close of business on the Redemption Date, such shares of Convertible Preferred Stock shall cease to be outstanding and all rights with respect to such shares of Convertible Preferred Stock shall cease to accumulate and all rights whatsoever with respect to such shares shall terminate.

 

(c) Status of Redeemed Shares . Shares of Convertible Preferred Stock that are redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but unissued shares of Preferred Stock (provided that any such cancelled shares of Convertible Preferred Stock may be reissued only as shares of a series of Preferred Stock other than Convertible Preferred Stock).

 

(d) Shares Not Redeemed . If any shares of Convertible Preferred Stock are not redeemed by the Corporation pursuant to this Section 3 in connection with a Change in Control, then upon any subsequent conversion of such shares of Convertible Preferred Stock, the Holder shall have the right to receive, for each share of Common Stock that would have been issuable upon such conversion absent such Change In Control, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Change of Control if it had been, immediately prior to such Change of Control, the holder of one share of Common Stock (the “ Alternate Consideration ”). For purposes of any such conversion, the determination of the Conversion Ratio shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Change in Control. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Change in Control, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of its shares of Convertible Preferred Stock following such Change in Control. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Change in Control shall file a new Certificate of Designation with the same terms and conditions and issue to the Holder new preferred stock consistent with the foregoing provisions and evidencing the Holder’s right to convert such preferred stock into Alternate Consideration. The terms of any agreement pursuant to which a Change in Control is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (e) and insuring that this Convertible Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Change in Control. Notwithstanding the foregoing or any other provisions of this Certificate of Designation, in the event that the agreement relating to a Change in Control provides for the conversion or exchange of the Convertible Preferred Stock into equity or debt securities, cash or other consideration and the agreement is approved by the holders of a majority of the then-outstanding shares of Convertible Preferred Stock, then the holders of the Convertible Preferred Stock shall have only the rights set forth in such agreement.

 

SECTION 4 . Dividends . No Holder of Convertible Preferred Stock shall be entitled to dividends.

 

SECTION 5 . Liquidation Preference .

 

(a) In the event of the voluntary or involuntary liquidation, winding-up or dissolution of the Corporation, each holder of Convertible Preferred Stock will be entitled to receive and to be paid out of the assets of the Corporation available for distribution to the stockholders of the Corporation, before any payment or distribution is made to holders of Junior Stock (including the Common Stock), in respect of each share of Convertible Preferred Stock an amount equal to the Liquidation Preference, plus any accumulated and unpaid dividends on such shares to the date fixed for liquidation, winding-up or dissolution.

 

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(b) Neither the sale of all or substantially all the assets or business of the Corporation (other than in connection with the liquidation, winding-up or dissolution of its business) nor the merger or consolidation of the Corporation into or with any other Person shall be deemed to be a liquidation, winding-up or dissolution, voluntary or involuntary, for the purposes of this Section 5 .

 

(c) If, upon the voluntary or involuntary liquidation, winding-up or dissolution of the Corporation, the amounts payable with respect to the Liquidation Preference of the Convertible Preferred Stock and all Parity Stock are not paid in full, the holders of the Convertible Preferred Stock and the Parity Stock will share equally and ratably in proportion to the number of shares of Convertible Preferred Stock held by each such holder on the date of the Liquidation Event or any distribution of assets of the Corporation in proportion to the full Liquidation Preference and accumulated and unpaid dividends to which they are entitled.

 

(d) After the payment to the holders of the shares of Convertible Preferred Stock of full amount of the Liquidation Preference and accumulated and unpaid dividends to which they are entitled, the holders of Convertible Preferred Stock as such shall have no right or claim to any of the remaining assets of the Corporation.

 

(e) Certain Events . For purposes of this Section 5 , a Change of Control shall be treated as a Liquidation Event and shall entitle each Holder to receive, upon the consummation of such Change of Control, and at such Holder’s option, cash in an amount equal to the Liquidation Value of such Holder’s Convertible Preferred Stock.

 

SECTION 6 . Conversion .

 

(a) At the Option of the Holder . Holders of Convertible Preferred Stock may convert any or all of their shares of Convertible Preferred Stock, at the option of the Holder thereof and subject to notice requirements described herein, into fully paid and nonassessable shares of the Common Stock at the Conversion Rate, subject to adjustment herein at any time and from time to time from, provided , however , and only after a minimum of six (6) months has elapsed from the issuance of such Convertible Preferred Stock, subject to the terms and provisions of this Section 6 .

 

(i) Mechanics of Conversion .

 

(A) Holders shall effect conversions by transmitting to the Corporation with a copy of a fully executed and completed form of conversion notice attached hereto as Annex A (a “ Notice of Conversion ”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder transmits such Notice of Conversion to the Corporation. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. Each share of Convertible Preferred Stock shall be convertible into a number of fully paid and nonassessable shares of Common Stock (calculated as to each conversion to the nearest 1/10th of a share) equal to the Conversion Rate in effect at the close of business on the Conversion Date.

 

(B) Holder’s Delivery Requirements . Holder shall surrender to a common carrier for delivery to the Corporation as soon as practicable following such Conversion Date but in no event later than three (3) Business Days after such date the original certificates representing the shares of Convertible Preferred Stock being converted (or an indemnification undertaking with respect to such certificates in the case of their loss, theft or destruction) (the “ Preferred Stock Certificates ”) and the originally executed Conversion Notice.

 

(C) Corporation’s Response . Upon receipt by the Corporation of a copy of a Conversion Notice, the Corporation shall within three (3) Business Days transmit a confirmation of receipt of such Conversion Notice to such Holder. Upon receipt by the Corporation of an originally executed Conversion Notice, the Corporation or its designated Transfer Agent, as applicable, shall, within three (3) Business Days following the date of receipt by the Corporation of the originally executed Conversion Notice (so long as the applicable Preferred Stock Certificates and original Conversion Notice are received by the Corporation on or before the third (3rd) Business Day), issue and deliver to the Depository Trust Company (“ DTC ”) account on the Holder’s behalf via the Deposit Withdrawal Agent Commission System (“ DWAC ”) as specified in the Conversion Notice, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled. Notwithstanding the foregoing to the contrary, the Corporation or the Transfer Agent shall only be required to issue and deliver the shares to the DTC on a Holder’s behalf via DWAC if such conversion is in connection with a sale and all requirements to effect such DWAC have been met, including, but not limited to, such shares being (i) registered for resale pursuant to an effective registration statement and satisfaction of applicable prospectus delivery requirements, if any, or (ii) an acceptable legal opinion that the conversion shares are exempt from registration pursuant to the Act, as amended, or applicable safe harbor. If the Corporation or the Transfer Agent cannot issue the shares to a Holder via DWAC because the aforementioned conditions are not satisfied, the Corporation shall deliver physical certificates to the Holder or its designee. If the number of shares of Convertible Preferred Stock represented by the Preferred Stock Certificate(s) submitted for conversion is greater than the number of shares of Convertible Preferred Stock being converted, then the Corporation shall, as soon as practicable, issue and deliver to the Holder a new Preferred Stock Certificate representing the number of shares of Convertible Preferred Stock not converted.

 

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(D) Record Holder . The Person entitled to receive the shares of Common Stock issuable upon a Conversion of Convertible Preferred Stock shall be treated for all purposes as the record holder of such shares of Common Stock on the Conversion Date.

 

(E) The Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of Common Stock or other securities or property upon conversion, whether optional or mandatory, of the Convertible Preferred Stock in a name other than that of the Holder of the shares of Convertible Preferred Stock being converted, nor shall the Corporation be required to issue or deliver any such shares or other securities or property unless and until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of any such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

 

(ii) The conversion right of a Holder of Convertible Preferred Stock shall be exercised by the Holder by the surrender to the Corporation of the certificates representing the shares to be converted to the Corporation, accompanied by (A) written Notice of Conversion to the Corporation that the Holder elects to convert all or a portion of the shares of Convertible Preferred Stock represented by such certificate and specifying the name or names (with address) in which a certificate or certificates for shares of Common Stock are to be issued and (B) (if so required by the Corporation or the Transfer Agent) by a written instrument or instruments of transfer in form reasonably satisfactory to the Corporation duly executed by the holder or its duly authorized legal representative and transfer tax stamps or funds therefor, if required. The date on which a Holder complies with the procedures in this Section 6(a) is the “ Conversion Date .” If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder.

 

(iii) Upon any such conversion of any share of Convertible Preferred Stock, the Holder thereof shall also be entitled to receive a sum, in cash, equal to all declared and unpaid dividends thereon to the Conversion Date.

 

(iv) The Corporation shall deliver the shares of the Common Stock (in respect of the conversion obligation) and cash (in respect of any fractional shares and unpaid dividends) deliverable upon conversion no later than the seventh Trading Day immediately following the relevant Conversion Date.

 

(v) If fewer than all the shares of Convertible Preferred Stock evidenced by any such surrendered certificate or certificates, if any, are converted, the Corporation shall, as soon as practicable, issue and deliver to the holder of the Convertible Preferred Stock a new certificate evidencing the shares of Convertible Preferred Stock that are not subject to such conversion. On and after the close of business on the Conversion Date, the holder converting such shares shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, such shares of Convertible Preferred Stock shall cease to be outstanding, dividends with respect to such shares of Convertible Preferred Stock shall cease to accumulate and all rights whatsoever with respect to such shares (except the right to receive the Common Stock, any accrued and unpaid dividends to the date of such conversion in cash and any cash in lieu of fractional shares of Common Stock due in connection with such conversion in accordance with Section 10 shall terminate.

 

(b) Reservation of Shares; Compliance with Law; Listing . A number of shares of the authorized but unissued Common Stock sufficient to provide for the conversion of the Convertible Preferred Stock outstanding upon the basis hereinbefore provided shall at all times be reserved by the Corporation, free from preemptive rights, for such conversion, subject to the other provisions of this Section 6 . If the Corporation shall issue any securities or make any change in its capital structure that would change the number of shares of Common Stock into which each share of the Convertible Preferred Stock shall be convertible as herein provided, the Corporation shall at the same time also make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Convertible Preferred Stock on the new basis. The Corporation shall comply with all securities laws regulating the offer and delivery of shares of Common Stock upon conversion of the Convertible Preferred Stock and shall use its best efforts to list such shares of Common stock on each national securities exchange on which the Common Stock is listed.

 

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SECTION 7 . Conversion Rate Adjustments .

 

(a) Except as stated herein, the Corporation will not adjust the Conversion Rate for the issuance of shares of the Common Stock or any securities convertible into or exchangeable for shares of the Common Stock or the right to purchase shares of the Common Stock or such convertible or exchangeable securities.

 

(b) Adjustments to the Conversion Rate will be calculated to the nearest 1/10th of a share. The Corporation will not be required to make an adjustment to the Conversion unless the adjustment would require a change of at least 1% in the Conversion Rate, as applicable. However, the Corporation will carry forward any adjustments that are less than 1% of the Conversion Rate and make such carried-forward adjustments; provided that, all such carried forward adjustments to the Conversion Rate shall be made on the conversion date of any shares of Convertible Preferred Stock or at the time the Corporation notifies holders of shares of Convertible Preferred Stock of a Fundamental Change as set forth in Section 9 .

 

SECTION 8 . Recapitalizations, Reclassifications and Changes of the Common Stock . In the event of any of the following events which does not constitute a Fundamental Change:

 

(a) any consolidation, merger or combination involving the Corporation;

 

(b) any sale, lease or other transfer to another person of all or substantially all of property and assets of the Corporation; or

 

(c) any statutory share exchange;

 

in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities or other property or assets (including cash or any combination thereof), then, at and after the effective date of the transaction, the right to convert each share of Convertible Preferred Stock will be changed into a right to convert each such share of Convertible Preferred Stock into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of the Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive (the “ Reference Property ”) upon such transaction. If the transaction causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the Reference Property into which the shares of Convertible Preferred Stock will be convertible will be deemed to be the weighted average of the types and amounts of consideration received by the holders of the Common Stock that affirmatively make such an election. The Corporation will notify holders of the weighted average as soon as practicable after such determination is made. The Corporation agrees not to become a party to any such transaction unless its terms are consistent with the foregoing. Within five (5) Business Days after the Effective Date of any of the foregoing events, the Corporation shall provide written notice to the each Holder of the Convertible Preferred Stock of the completion of the transaction, the effect of such transaction on such Holder’s Convertible Preferred Stock, and a description of the material terms of any consideration payable or issuable to such Holder in respect of such Holder’s Convertible Preferred Stock, including the designations, rights, privileges and preferences of any securities.

 

SECTION 9 . Special Rights Upon a Fundamental Change .

 

(a) In the event that the Corporation is a party to a transaction or event described in clauses (a) or (b) of the definition of Fundamental Change, the Corporation must give notice of each such Fundamental Change (“ Fundamental Change Notice ”) to all record holders of the Convertible Preferred Stock at least twenty (20) Business Days prior to the anticipated Effective Date of the Fundamental Change.

 

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(b) A Holder shall be entitled to elect an optional conversion of its Convertible Preferred Stock in accordance with Section 6(a) at any time on or before the Effective Date of such Fundamental Change. If a Holder elects not to exercise its conversion rights pursuant to Section 6 and this Section 9 , such Holder’s Convertible Preferred Stock shall remain issued and outstanding and all other rights, privileges and preferences of the Convertible Preferred Stock set forth in this Certificate of Designation shall remain fully vested in each such Holder of Convertible Preferred Stock.

 

(c) The Fundamental Change Notice shall be given by first-class mail to each record Holder of shares of Convertible Preferred Stock, at such Holder’s address as the same appears on the books of the Corporation. Each such notice shall state (i) the anticipated Effective Date; (ii) that if optional conversion is elected by a Holder of Convertible Preferred Stock in connection with the Fundamental Change, all declared and unpaid dividends on the shares of Convertible Preferred Stock shall accrue to the Effective Date of the Fundamental Change.

 

(d) Upon any such conversion of any share of Convertible Preferred Stock in connection with a Fundamental Change, the holder thereof shall also be entitled to receive a sum, in cash, equal to all declared and unpaid dividends thereon to the Effective Date of the Fundamental Change.

 

(e) The Corporation shall deliver the shares of the Common Stock (in respect of the conversion obligation) and cash (in respect of any fractional shares and unpaid dividends) deliverable upon conversion no later than the fourth Trading Day immediately following the Effective Date of the Fundamental Change.

 

(f) On or before the Effective Date of the Fundamental Change, each Holder of shares of Convertible Preferred Stock wishing to exercise its conversion right pursuant to this Section 9 shall surrender the certificate or certificates representing the shares of Convertible Preferred Stock to be converted, in the manner and at the place designated in the Fundamental Change Notice.

 

(g) Within five (5) Business Days after the Effective Date of any Fundamental Transaction, the Corporation shall provide written notice to the each Holder of the Convertible Preferred Stock of the completion of the Fundamental Transaction, the effect of such transaction on such Holder’s Convertible Preferred Stock, and a description of the material terms of any consideration payable or issuable to such Holder in respect of such Holder’s Convertible Preferred Stock, including the designations, rights, privileges and preferences of any securities.

 

SECTION 10 . Fractional Shares . If, upon conversion of the Convertible Preferred Stock, a holder would be entitled to receive a fractional interest in a share of the Common Stock, the Corporation will, upon conversion, pay in lieu of such fractional interest, cash in an amount equal to the product of (a) the Closing Sale Price of a share of Common Stock on the Trading Day immediately preceding the date on which shares of Common Stock are issued upon conversion of a share of Convertible Preferred Stock, and (b) such fraction of a share.

 

SECTION 11 . Convertible Preferred Stock Redeemable or Exchangeable at Option of Corporation; No Sinking Fund . Except as set forth in Section 6 , the Convertible Preferred Stock shall not be redeemable upon the request of Holders thereof or exchangeable for other capital stock or indebtedness of the Corporation or other property upon the request of holders thereof. The Corporation reserves the right to exchange the Holder’s Convertible Preferred Stock for other capital stock or indebtedness of the Corporation or other property if the Corporation deems it to be in the best interests of the Corporation to do so. The shares of Convertible Preferred Stock shall not be subject to the operation of a purchase, retirement or sinking fund.

 

SECTION 12 . Voting Rights . No Holder of Convertible Preferred Stock shall be entitled to vote on any matters unless the Holder redeems the Convertible Preferred Stock for the Corporation’s Common Stock.

 

SECTION 13 . Restrictive Covenant . As long as any shares of Convertible Preferred Stock are outstanding, the Corporation shall not: (a) amend this Certificate of Designation, the Articles of Incorporation or Bylaws, in any such case, in a manner that would alter or change the powers, preferences, privileges or rights of the Convertible Preferred Stock or adversely affect the rights, preferences or privileges of the Convertible Preferred Stock; or (b) permit any of its subsidiaries (whether or not a Subsidiary on the Effective Date) to, directly or indirectly, amend this Certificate of Designation.

 

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SECTION 14 . Status of Convertible Preferred Stock Upon Retirement . Shares of Convertible Preferred Stock that are converted pursuant to Section 6 or Section 9 [or redeemed pursuant to Section 3] shall be retired pursuant to NRS, or any successor provision, and thereupon shall return to the status of authorized and unissued shares of Preferred Stock of the Corporation without designation as to series. Upon the conversion pursuant to Section 6 or Section 9 [or redeemed pursuant to Section 3] of all outstanding shares of Convertible Preferred Stock, all provisions of this Certificate of Designation shall cease to be of further effect. Upon the occurrence of such event, the Board of Directors of the Corporation shall have the power, pursuant to the provisions of NRS 78.195(5), or any successor provision, and without stockholder action, to cause this Certificate of Designation to be eliminated from the Corporation’s Articles of Incorporation.

 

SECTION 15 . Certificates . The Corporation may, in its sole discretion, deem the person in whose name shares of Convertible Preferred Stock shall be registered upon the registry books of the Corporation to be, and may treat him as, the absolute owner of the Convertible Preferred Stock for all purposes, and the Corporation shall not be affected by any notice to the contrary. All such payments and such conversion shall be valid and effective to satisfy and discharge the liabilities arising under this Certificate of Designations to the extent of the sum or sums so paid or the conversion so made.

 

SECTION 16 . Transfer, Payment and Conversion . The Convertible Preferred Stock may be presented to the Corporation at its principal place of business for transfer, payment or conversion. The Corporation also shall maintain or cause to be maintained a register in which, subject to such reasonable regulations as it may prescribe, the Corporation shall provide for the registration of shares of Convertible Preferred Stock and of transfers of shares of Convertible Preferred Stock for the purpose of registering shares of Convertible Preferred Stock and of transfers of shares of Convertible Preferred Stock as herein provided. The initial Registrar for the Convertible Preferred Stock shall be the Corporation.

 

The Corporation may appoint one or more additional transfer agents, paying agents and/or conversion agents in such other locations as it shall determine. The term “Transfer Agent” includes any additional transfer agent, the term “Paying Agent” includes any additional paying agent, and the term “Conversion Agent” includes any additional conversion agent. The Corporation may change any Transfer Agent, Paying Agent or Conversion Agent without prior notice to any holder.

 

SECTION 17 . Certain Other Provisions .

 

(a) Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “ New York Courts ”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

(b) Waiver . Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing.

 

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(c) Severability . If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

(d) Headings . The headings of the various subdivisions hereof are for convenience only, do not constitute a part of this Certificate of Designation and shall not affect the interpretation of and not be deemed to limit or affect any of the provisions hereof.

 

(e) Holders of Convertible Preferred Stock shall not be entitled to preemptive rights to acquire additional capital stock of the Corporation.

 

(f) Whenever the Corporation is required to provide notice to Holders of the Convertible Preferred Stock of an Optional Redemption or Fundamental Change, in addition to any other notice hereunder, the Corporation shall issue a press release containing such information for publication on the Dow Jones News Service or Bloomberg Business News (or if such services are not available, another broadly disseminated news or press release service selected by it).

 

(g) All notice periods referred to herein shall commence on the date of the mailing of the applicable notice. Notice to any holder of the Convertible Preferred Stock shall be given to the registered address set forth in the Corporation’s records for such holder.

 

(h) With respect to any notice to a Holder of shares of Convertible Preferred Stock required to be provided hereunder, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the notice.

 

(i) Any payments required to be made hereunder on any day that is not a Business Day shall be made on the next succeeding Business Day without interest or additional payment for such delay. Unless otherwise stated herein, any actions required to be made hereunder on any day that is not a Business Day shall be taken on the next succeeding Business Day.

 

(j) This Certificate of Designation shall become effective upon the filing thereof with the Secretary of State of the State of Nevada.

 

[ Remainder of Page Intentionally Left Blank; Signature Page Follows ]

 

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BE IT, RESOLVED, FURTHER , that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Nevada law.

 

IN WITNESS WHEREOF , the undersigned Chairman and Chief Executive Officer on behalf of the Corporation does hereby declare and certify that this is the act and deed of the Corporation and accordingly has signed this Certificate of Designations as of March 28, 2017 (the “ Effective Date ”).

 

  PURE HOSPITALITY SOLUTIONS, INC.
     
  By: /s/ Melvin Pereira
    Name: Melvin Pereira
    Title: Chief Executive Officer

 

[SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION]

 

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ANNEX A

 

NOTICE OF CONVERSION

 

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

 

The undersigned hereby elects to convert the number of shares of Series BB Convertible Preferred Stock indicated below into shares of common stock, par value $0.001 per share (the “ Common Stock ”), of PURE HOSPITALITY SOLUTIONS, INC. , a Nevada corporation (the “ Corporation ”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with any purchase or transfer agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

 

Conversion calculations:

 

Date Series BB Convertible Preferred Stock acquired:    

 

Date to Effect Conversion:   

 

Number of shares of Preferred Stock owned prior to Conversion:    

 

Number of shares of Preferred Stock to be Converted:    

 

Number of shares of Common Stock to be Issued:    

 

Applicable Conversion Rate:   

 

Number of shares of Preferred Stock subsequent to Conversion:    

 

Address for Delivery:         
     
     

 

or

 

DWAC Instructions:

Broker no:            
Account no:          

 

  [HOLDER]
     
  By:      
    Name:
    Title:

 

ANNEX A

 

 

 

Exhibit 3.4

 

 

 

 

BYLAWS

 

of

 

ORIENS TRAVEL & HOTEL MANAGEMENT CORP

 

ARTICLE I
Offices

 

1.1 Registered Office and Registered Agent : The registered office of the corporation shall be the same as listed on the articles of incorporation and at such place as may be fixed from time to time by the Board of Directors upon filing of such notices as may be required by law, and the registered agent shall have a business office identical with such registered office.

 

1.2 Other Offices : The Corporation may have other offices within or outside the State of incorporation at such place or places as the Board of Directors may from time to time determine.

 

ARTICLE 2

Shareholder’s Meetings

 

2.1 Meeting Place : All meetings of the shareholders shall be held the registered office of the corporation, or at such place as shall be determined from time to time by the Board of Directors, and the place at which any such meeting shall be held shall be stated in the notice of the meeting.

 

2.2 Annual Meeting Time : The annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting, shall be held each year on December 15, at the hour of 1300, if not a legal holiday, and if a legal holiday, then on the day following, at the same hour, or January 31 of every year if no other meeting time is specifically appointed.

 

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2.3 Annual Meeting - Order of Business : At the annual meeting of shareholders, the order of business shall be as follows:

 

(a) Calling of the meeting to order.
(b) Proof of notice of meeting (or filing of waiver).
(c) Reading of minutes of last annual meeting.
(d) Report of officers.

(e) Reports of committees.
(f) Election of directors.
(g) Miscellaneous business.

 

2.4 Special Meetings : Special meetings of the shareholders for any purpose may be called at any time by the President, Board of Directors, or the holders of not less than one-twenty of all shares entitled to vote at the meeting.

 

2.5 Notice :

 

(a) Notice of the time and place of an annual meeting of shareholders shall be given by delivering personally or by mailing a written or printed notice of the same, at least ten days, and not more than fifty days, prior to the meeting, to each shareholder of record entitled to vote at such meeting.

 

(b) At least ten days and not more than fifty days prior to the meeting, written or printed notice of each special meeting, and the purpose or purposes for which the meeting is called, shall be delivered personally, or mailed to each shareholder of record entitled to vote at such meeting.

 

2.6 Voting Record : At least ten days before each meeting of shareholders, a complete record of the shareholders entitled to vote at such meeting, or any adjournment thereof, shall be made, arranged in alphabetical order, with the address of and number of shares held by each, which record shall be kept on file at the registered office of the corporation for a period of ten days prior to the meeting. The records shall be kept open at the time and place of such meeting for the inspection of any shareholder.

 

2.7 Quorum : Except as otherwise required by law:

 

(a) A quorum at any annual or special meeting of shareholders shall consist of shareholders representing, either in person or by proxy, a majority of the outstanding capital stock of the corporation, entitled to vote at such meeting.

 

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(b) The voters of a majority in interest of those present at any properly called meeting or adjourned meeting of shareholders at which a quorum as in this paragraph defined is present, shall be sufficient to transact business.

 

2.8 Closing of Transfer Books and Fixing Record Date : For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or entitled to receive payment of any dividend, the Board of Directors may provide that the stock transfer books shall be closed for a stated period not to exceed fifty days nor be less than ten days preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a record date for any such determination of shareholders, such date to be not more than fifty days, and, in case of a meeting of shareholders, not less than ten days prior to the (late on which the particular action requiring such determination of shareholders is to be taken.

 

2.9 Proxies : A shareholder may vote either in person or by proxy executed in writing by the shareholder, or his duly authorized attorney-in-fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.

 

2.10 Action by Shareholders Without a Meeting : Any action required or which may be taken at a meeting of shareholders of the corporation, may be taken at a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. Such consent shall have the same force and effect as a unanimous vote of the shareholders.

 

2.11 Waiver of Notice : A waiver of notice required to be given any shareholder, signed by the person or persons entitled to such notice, whether before or after the time stated therein for the meeting, shall be equivalent to the giving of such notice.

 

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ARTICLE 3
Stock

   

3.1 Certificates : Certificates of stock shall be issued in numerical order, and each shareholder shall be entitled to a certificate signed by the President, or a Vice President, and may be sealed with the seal of the corporation or a facsimile thereof The signatures of such officers may be facsimiles if the certificate is manually signed on behalf of the transfer agent, or registered by a registrar, other than the corporation itself or an employee of the corporation. If an officer who has signed or whose facsimile signature has been placed upon such certificate ceases to be an officer before the certificate is used, it may be issued by the corporation with the same effect as if the person were an officer on the date of issue.

 

3.2 Transfer : Transfers of stock shall be made only upon the stock transfer books of the corporation, kept at the registered office of the corporation or at its principal place of business, or at the office of its transfer agent or registrar; and before a new certificate is issued. The old certificate shall be surrendered for cancellation. The Board of Directors may, by resolution, open a share register in any state of the United States, and may employ an agent or agents to keep such register, and to record transfers or shares therein.

 

3.3 Registered Owner : Registered shareholders shall be treated by the corporation as the holders in fact of the stock standing in their respective names and the corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided below or by the laws of the State of incorporation. The Board of Directors may adopt by resolution a procedure whereby a shareholder of the corporation may certify in writing to the corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution shall set forth:

 

(a) The classification of shareholder who may certify;
(b) The purpose or purposes for which the certification may be made;
(c) The form of certification and information to be contained therein;
(d) If the certification is with respect to a record date or closing of the stock transfer books, the date within which the certification must be received by the corporation; and

(e) Such other provisions with respect to the procedure as are deemed necessary or desirable.

 

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Upon receipt by the corporation of a certification complying with the procedure, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the shareholder making the certification.

 

3.4 Mutilated, Lost, or Destroyed Certificates : In case of any mutilation, loss or destruction of any certificate of stock, another may be issued in its place on proof of such mutilation, loss or destruction. The Board of Directors may impose conditions on such issuance and may require the giving of a satisfactory bond or indemnity to the corporation in such sum as they might determine or establish such other procedures as they deem necessary.

 

3.5 Fractional Shares or Scrip : The Corporation may:

 

(a) Issue fractions of a share which shall entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the event of liquidation;
(b) Arrange for the disposition of fractional interests by those entitled thereto;
(c) Pay in cash the fair market value of fractions of a share as of the time when those entitled to receive such shares are determined; or
(d) Issue script in registered or bearer form which shall entitle the holder to receive a certificate for the full share upon surrender of such script aggregating a full share.

 

3.6 Shares of Another Corporation : Shares owned by the corporation in another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Board of Directors may determine or, in the absence of such determination, by the President of the Corporation.

 

ARTICLE 4

Board of Directors

 

4.1 Numbers and Powers : The management of all the affairs, property and interest of the corporation shall be vested in the Board of Directors, consisting of one person who shall be elected for a term of one year, and shall hold office until their successors are elected and qualified. Directors need not be shareholders or residents of the State of incorporation. In addition to the powers and authorities granted by these Bylaws, and the Articles of Incorporation expressly conferred upon it, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders.

 

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4.2 Change of Number : The number of directors may at any time be increased or decreased by amendment of these Bylaws, but no decrease shall have the effect of shortening the term of any incumbent director.

 

4.3 Vacancies : All vacancies in the Board of Directors, whether caused by resignation, death or, otherwise, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill any vacancy shall hold office for the unexpired term of his predecessor and until his successor is elected and qualified. Any directorship to be filled by reason of an increase in the number of directors may be filled by the Board of Directors for a term of office continuing only until the next election of directors by the shareholders.

 

4.4 Removal of Directors : At a meeting of shareholders called expressly for that purpose, the entire Board of Directors, or any member thereof, may be removed by a vote of the holders of a majority of shares then entitled to vote at an election of such shareholders.

 

4.5 Regular Meetings : Regular meetings of the Board of Directors or any committee may be held without notice at the registered office of the corporation or at such place or places, either within or without the State of Washington, as the Board of Directors or such committee, as the case may be, may from time to time designate. The annual meeting of the Board of Directors shall be held without notice immediately after the adjournment of the annual meeting of shareholders.

 

4.6 Special Meetings : Special meetings of the Board of Directors may be held at any place and at any time and may be called by the Chairman of the Board, the President, Vice President, Secretary or Treasurer.

 

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4.7 Notice of Meetings : Unless the Articles of Incorporation provide otherwise, any regular meeting of the Board of Directors may be held without notice of the date, time, place, or purpose of the meeting. Any special meeting of the Board of Directors may preceded by at least two days’ notice of the date, time, and place of the meeting, but not of its purpose, unless the Articles of Incorporation of these Bylaws require otherwise. Notice may be given personally, by facsimile, by mail, or in any other manner allowed by law. Oral notification shall be sufficient only if a written record of such notice is included in the Corporation’s minute book. Notice shall be deemed effective at the earliest of. (a) receipt; (b) delivery to the proper address or telephone number of the directors as shown in the Corporation’s records; or (c) five days after its deposit in the United States mail, as evidenced by the postmark, if correctly addressed and mailed with first-class postage prepaid. Notice of any meeting of the Board of Directors may be waived by any director at any time, by a signed writing, delivered to the Corporation for inclusion in the minutes, either before or after the meeting. Attendance or participation by a director at a meeting unless the director promptly objects to holding the meeting or to the transaction of any business on the grounds that the meeting was not lawfully convened and the director does not thereafter vote for or assent to action taken at the meeting.

 

4.8 Quorum : A majority of the whole Board of Directors shall be necessary at all meetings to constitute a quorum for the transaction of business.

 

4.9 Waiver of Notice : Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened. A waiver of notice signed by the director or directors, whether before or after the time stated for the meeting, shall be equivalent to the giving of notice.

 

4.10 Registering Dissent : A director who is present at a meeting of the Board of Directors at which action on a corporate matter is taken shall be presumed to have assented to such action unless his dissent shall be entered in the minutes of the meeting, or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting, before the adjournment thereof, or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

 

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4.11 Executive and Other Committees : Standing or special committees may be appointed from its own number by the Board of Directors from time to time and the Board of Directors may from time to time invest such committees with such powers as it may see fit, subject to such conditions as may be prescribed by such Board. An Executive Committee may be appointed by resolution passed by a majority of the full Board of Directors. It shall have and exercise all of the authority of the Board of Directors, except in reference to amending the Articles of Incorporation, adopting a plan of merger or consolidation, recommending sale, lease or exchange or other disposition of all or substantially all the property and assets of the corporation otherwise than in the equal and regular course of business, recommending a voluntary dissolution or a revocation thereof, or amending the Bylaws. All committees so appointed shall keep regular minutes of the transactions of their meetings and shall cause them to be recorded in books kept for that purpose in the office of the corporation. The designation of any such committee and the delegation of authority thereto, shall not relieve the Board of Directors, or any member thereof, of any responsibility imposed by law.

 

4.12 Remuneration : No stated salary shall be paid directors, as such, for their service, but by resolution of the Board of Directors. A fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of such Board; provided, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefore. Member of standing or special committees may be allowed like compensation for attending committee meetings.

 

4.13 Loans : No loans shall be made by the corporation to the directors, unless first approved by the holders of two-thirds of the voting shares. No loans shall be made by the corporation secured by its’ own shares.

 

4.14 Action by Directors Without a Meeting : Any action required or which may be taken without a meeting of the directors, or of a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors, or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote.

 

4.15 Action of Directors by Communications Equipment : Any action required or which may be taken at a meeting of directors, or of a committee thereof, may be taken by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time.

 

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ARTICLE 5
Officers

 

5.1 Designations : The officers of the corporation shall be a President, one or more Vice-Presidents (one of more of whom may be Executive Vice-President), a Secretary and a Treasurer, and such Assistant Secretaries and Assistant Treasurers as the Board may designate, who shall be elected for one year by the directors at their first meeting after the annual meeting of shareholders, and who shall hold office until their successors are elected and qualified. Any two or more offices may be held by the same person, except the offices of President and Secretary.

 

5.2 The President : The president shall preside at all meetings of shareholders and directors, shall have general supervision of the affairs of the corporation, and shall perform all other duties as are incident to his office or are properly required of him by the Board of Directors.

 

5.3 Vice President : During absence or disability of the President, the Executive Vice-Presidents in the order designated by the Board of Directors, shall exercise all functions of the President. Each Vice-President shall have such powers and discharge such duties as may be assigned to him from time to time by the Board of Directors.

 

5.4 Secretary and Assistant Secretaries : The Secretary shall issue notices for all meetings, except for notices for special meetings of shareholders and special meetings of the directors which are called by the requisite number of shareholders or directors, shall keep the minutes of all meetings, shall have charge of the seal and the corporate books, shall make such reports and perform other duties as are incident to his office, or are properly required of him by the Board of Directors. The Assistant Secretary, or Assistant Secretaries in the order designated by the Board of Directors, shall perform all of the duties of the Secretary during the absence or disability of the Secretary, and at other times may perform such duties as are directed by the President or the Board of Directors.

 

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5.5 The Treasurer : The Treasurer shall have the custody of all moneys and securities of the corporation and shall keep regular books on account. He shall disburse funds of the corporation in payment of the just demands against the corporation or as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors from time to time as may be required of him, an account of all his transactions as Treasurer and of the financial conditions to his office or that are properly required of him by the Board of Directors. The Assistant Treasurer, or Assistant Treasurers in the order designated by the Board of Directors, shall perform all of the duties of the Treasurer in the absence or disability of the Treasurer, and at other times may perform such other duties as are directed by the President or the Board of Directors.

 

5.6 Delegation : In the case of absence or inability to act of any officer of the corporation and of any person herein authorized to act in his place, the Board of Directors may from time to time delegate the powers or duties of such officer to any other officer or any director or other person whom it may select.

 

5.7 Vacancies : Vacancies in any office arising from any cause may be filled by the Board of Directors at any regular or special meeting of the Board.

 

5.8 Other Officers : Directors may appoint such other officers and agents as they shall deem necessary or expedient with who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

 

5.9 Loans : No loans shall be made by the corporation to any officer, unless first approved by the holders of two-thirds of the voting shares.

 

5.10 Term - Removal : The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer or agent elected or appointed by the Board of Directors may be removed at any time, without cause, by the affirmative vote of a majority of the whole Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

 

5.11 Bonds : The Board of Directors may, by resolution, require any and all of the officers to give bonds to the corporation, with sufficient surety or sureties, conditioned for the faithful performance of the duties of their respective offices, and to comply with such other conditions as may from time to time be required by the Board of Directors.

 

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5.12 Salaries : The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation.

 

ARTICLE 6

Dividends and Finance

 

6.1 Dividends : Dividends may be declared by the Board of Directors and paid by the corporation out of the unreserved and unrestricted earned surplus of the corporation, or out of the unreserved and unrestricted net earnings of the current fiscal year, or in treasury shares of the corporation, subject to the conditions and limitations imposed by the State of incorporation. The stock transfer books may be closed for the payment of dividends during such periods of not exceeding fifty days, as from time to time may be fixed by the Board of Directors. The Board of Directors, however, without closing the books of the corporation, may declare dividends payable only to holders of record at the close of business, on any business day not more than fifty days prior to the date on which the dividend is paid.

 

6.2 Reserves : Before making any distribution of earned surplus, there may be set aside out of the earned surplus of the corporation such sum or sums as the directors from time to time in their absolute discretion deem expedient dividends, or for maintaining any property of the corporation, or for any other purpose, and earned surplus of any year not set apart until otherwise disposed of by the Board of Directors.

 

6.3 Depositories : The moneys of the corporation shall be deposited in the name of the corporation in such bank or trust company or trust companies as the Board of Directors shall designate, and shall be drawn out only by check or other order for payment of money signed by such persons and in such manner as may be determined by resolution of the Board of Directors.

 

ARTICLE 7
Notices

 

Except as may otherwise be required by law, any notice to any shareholder or director may be delivered personally or by mail. If mailed, the notice shall be deemed to have been delivered when deposited in the United States mail, addressed to the addressee at his last known address in the records of the corporation, with postage thereon prepaid.

 

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ARTICLE 8
Seal

 

The corporate seal of the corporation shall be in such form and bear such inscription as may be adopted by resolution of the Board of Directors, or by usage of the officers on behalf of the corporation. The procurement of a corporate seal shall be discretionary only, and is not required.

 

ARTICLE 9

Books and Records

 

The corporation shall keep correct and complete books and record of accounts and shall keep minutes of the proceedings of its shareholders and Board of Directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. Any books, records, and minutes may be in written form or any other form capable of being converted into written form within a reasonable time.

 

ARTICLE 10

Special Corporate Acts

 

10.1 Execution of Written Instruments : Contracts, deeds, documents, and instruments shall be executed by the President alone unless the Board of Directors shall, in a particular situation, designate another procedure for their execution.

 

10.2 Signing of Checks or Notes : Checks, notes, drafts, and demands for money shall be signed by the officer or officers from time to time designated by the Board of Directors.

 

Corporate Bylaws – OriensCorp.com

12

 

 

 

 

 

10.3 Indemnification of Directors and Officers : The corporation shall indemnify any and all directors or officers or former directors or former officers or any person who may have served at its request as a director or officer of the corporation or of any other corporation in which it is a creditor, against expenses actually or necessarily incurred by them in connection with the defense or settlement of any action, suit, or proceeding brought or threatened in which they, or any of them, are or might be made parties, or a party, by reason of being or having been directors or officers or a director or an officer of the corporation, or of such other corporation. This indemnification shall not apply, however, to matter as to which such director or officer or former director or officer or person shall be adjudged in such action, suit, or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of other rights to which those indemnified may be entitled, under any law, bylaw, agreement, vote of shareholders, or otherwise.

 

ARTICLE 11
Amendments

 

11.1 By Shareholders : These Bylaws may be altered, amended or repealed by the affirmative vote of a majority of the voting stock issued and outstanding at any regular or special meeting of the shareholders.

 

11.2 By Directors : The Board of Directors shall have the power to make, alter, amend and repeal the Bylaws of this corporation. However any such alteration, amendment, or repeal of the Bylaws, may be changed or repealed by the holders of a majority of the stock entitled to vote at any shareholders meeting.

 

11.3 Emergency Bylaws : The Board of Directors may adopt emergency Bylaws, Bylaws: subject to repeal or change by action of the shareholders, which shall be operative during any emergency in the conduct of business of the corporation resulting from an attack on the United States or any nuclear or atomic disaster.

 

Adopted by resolution of the Corporation’s Board of Directors or incorporator on This 28 th day of August, 2007.

 

 
President  

  

Corporate Bylaws – OriensCorp.com

13

Exhibit 4.1

 

 

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT)

 

US $73,500.00

 

PURE HOSPITALITY SOLUTIONS, INC.

8% CONVERTIBLE REDEEMABLE NOTE

DUE FEBRUARY 25, 2017

 

FOR VALUE RECEIVED, Pure Hospitality Solutions, Inc. (the “Company”) promises to pay to the order of UNION CAPITAL, LLC and its authorized successors and permitted assigns (“Holder”), the aggregate principal face amount of Seventy Three Thousand Five Hundred dollars (U.S. $73,500.00) on February 25, 2017 (“Maturity Date”) and to pay interest on the principal amount outstanding hereunder at the rate of 8% per annum commencing on February 25, 2016. The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable at 525 Norton Parkway, New Haven, CT 06511, initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

 

This Note is subject to the following additional provisions:

 

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1. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith.

 

2.  The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

3.  This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”) and applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company’s records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted (“Notice of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.

 

4.  (a) The Holder of this Note is entitled, at its option, at any time, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company’s common stock (the “Common Stock”) at a price (“Conversion Price”) for each share of Common Stock equal to 50% of the lowest closing bid price of the Common Stock as reported on the National Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future (“Exchange”), for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Accrued but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share . To the extent the Conversion Price of the Company’s Common Stock closes below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 40% instead of 50% while that “Chill” is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company. Initially, the Conversion Price shall initially have a ceiling of $0.00005 per share until such time as the price of the Company’ Common Stock has a closing bid price in at $0.01 or greater, then, if the closing bid price remains at or exceeds $.01 for a period of 20 successive trading days, the ceiling of $0.00005 share be removed and the new Conversion Price shall equal 50% of the lowest closing bid price of the Common Stock for the thirty (30) prior trading days.

 

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(b)  Interest on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in Common Stock (“Interest Shares”). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

 

(c)  During the first 180 days after the Note has been issued, it may be prepaid at 150% of the face amount plus any accrued interest This Note may not be prepaid after the 180 th day. The redemption must be closed and paid for within 3 business days of the Company sending the redemption demand or the redemption will be invalid and the Company may not redeem this Note.

 

(d)  Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, or (iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale Event”), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.

 

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(e) In case of any Sale Event in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

 

5.   No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.   The Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7. The Company agrees to pay all costs and expenses, including reasonable attorneys’ fees and expenses, which may be incurred by the Holder in collecting any amount due under this Note.

 

8. If one or more of the following described “Events of Default” shall occur:

 

(a)  The Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or

 

(b)  Any of the representations or warranties made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or

 

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(c)  The Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or any other note issued to the Holder; or

 

(d)  The Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or

 

(e)  A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within thirty (30) days after such appointment; or

 

(f)  Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)  One or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

 

(h)  defaulted on or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such default within the appropriate grace period; or

 

(i)  The Company shall have its Common Stock delisted from an exchange (including the OTCQB exchange) or, if the Common Stock trades on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934 act reports with the SEC;

 

(j)  If a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;

 

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(k) The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of a Notice of Conversion; or

 

(l)  The Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.

 

(m)  The Company shall not be “current” in its filings with the Securities and Exchange Commission; or

 

(n)  The Company shall lose the “bid” price for its stock and a market (including the OTCQB marketplace or other exchange)

 

Then, or at any time thereafter, unless cured within 5 days, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder’s sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10 th day. The penalty for a breach of Section 8(n) shall be an increase of the outstanding principal amounts by 20%. In case of a breach of Section 8(i), the outstanding principal due under this Note shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%. Further, if a breach of Section 8(m) occurs or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per share. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%.

 

If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

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Make-Whole for Failure to Deliver Loss. At the Holder’s election, if the Company fails for any reason to deliver to the Holder the conversion shares by the by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs a Failure to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to the Holder in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows:

 

Failure to Deliver Loss = [(High trade price at any time on or after the day of exercise) x (Number of conversion shares)]

 

The Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder’s written notice to the Company.

 

9. In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10. Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.

 

11. The Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information indicating it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144 opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.

 

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12. The Company shall issue irrevocable transfer agent instructions reserving 3,500,000,000 shares of its Common Stock for conversions under this Note and the following notes:___ a $45,465.00 note dated January 21, 2016, a $41,200.00 note dated January 19, 2016, a $20,000 note dated July 1, 2015 and a $31,500 note dated December 9, 2014 (the “Share Reserve”). The reserve shall be replenished as needed to allow for conversions of this Note. The Holder will initially submit a conversion notice/request for a tranche of shares to be issued with an agreed to conversion price equal to $1000 (an “Initial Tranche Request”). The shares that are the subject to the Initial Trance Request may be subsequently reconverted and repriced as follows: (i) the Holder shall immediately reduce the outstanding balance of the Note by $1,000 and simultaneously send to the Company a live” or “repriced” conversion notice for the $1,000 priced using the conversion formula set forth in Section 4(a) of this Note, (ii) As the balance of the shares in the Initial Tranche Request are converted via the delivery of the “live” or “repriced” conversion notice, the balance of the Note shall be reduced using the formula set forth in Section 4(a) of this Note, as if such shares had originally been converted as set forth in Section 4(a). By way of example, if the Tranche Conversion Request was for 1,000,000 shares and the face amount of the Note was $25,000 the Holder would initially reduce $1,000 from the face amount leaving a balance of $24,000 and send the Company a repriced conversion notice deducting that number of shares from the Initial Tranche Request necessary to equal $1,000 using the formula set forth in Section 4(a). Additionally, if, the following day, the Holder sent a “live” or “repriced” conversion notice to the Company for 25,000 shares and, using the formula set forth in Section 4(a) the true conversion price would have been $6,000, then the Holder shall make an additional reduction of $6,000 on the Note and shall indicate both the Note balance and the share reserve balance on the “live” conversion notice. This process shall be repeated until there is no balance remaining outstanding on the Note. Upon full conversion of this Note, the any shares remaining in the Share Reserve shall be cancelled. The Company shall pay all costs associated with issuing and delivering the shares. If such amounts are to be paid by the Holder, it may deduct such amounts from the Conversion Price. Conversion Notices may be sent to the Company or its transfer agent via electric mail. The company should at all times reserve a minimum of three times the amount of shares required if the note would be fully converted. The Holder may reasonably request increases from time to time to reserve such amounts.

 

13. The Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations etc. This notice shall be given to the Holder as soon as possible under law.

 

14. This Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.

  

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.

 

Dated: 02/25/2016  

 

  PURE HOSPITALITY SOLUTIONS, INC.
   
  By:  
  Title: President & CEO

  

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EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder in order to Convert the Note)

 

The undersigned hereby irrevocably elects to convert $__________ of the above Note into ___________ Shares of Common Stock of Pure Hospitality Solutions, Inc. (“Shares”) according to the conditions set forth in such Note, as of the date written below.

 

If Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.

 

Date of Conversion: _________________________________________________________________

Applicable Conversion Price: ____________________________________

Signature:  ________________________________________________________________________

[Print Name of Holder and Title of Signer]

Address: _________________________________________________________________________

     _________________________________________________________________________

 

SSN or EIN:__________________________

Shares are to be registered in the following name:_______________________________________________

 

Name: ___________________________________________________________________________

Address: _________________________________________________________________________

Tel:_________________________________

Fax: ________________________________

SSN or EIN: __________________________

 

Shares are to be sent or delivered to the following account:

 

Account Name:_____________________________________________________________________

Address: _________________________________________________________________________

 

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10  

 

Exhibit 10.1

 

EXECUTED COPY

 

DEBT SETTLEMENT AGREEMENT

 

THIS DEBT SETTLEMENT AGREEMENT (this “ Agreement ”) is entered into and effective as of June 30, 2017 (the “ Effective Date ”) by and between PURE HOSPITALITY SOLUTIONS, INC., a Nevada corporation (the “ Company ”) and Meso Numismatics, Corp., a Florida corporation (hereinafter “ Meso ”). Each of the Company and Meso may be referred to individually as a “ Party ” and collectively as the “ Parties ”.

 

W   I   T   N   E   S   S   E   T   H

 

WHEREAS, on November 16, 2016, the Parties entered into that certain Agreement and Plan of Merger (the “ Merger ”); and

 

WHEREAS, pursuant to the Merger, the Company was required to issue One Hundred Million (100,000,000) shares of common stock (the “ Payment ”) to Meso’s stockholders in exchange for all of the outstanding shares of Meso’s common stock; after which exchange, the Company owned one-hundred (100%) percent of Meso’s common stock, and Meso thereby became a wholly-owned subsidiary of the Company; and

 

WHEREAS , by virtue of the Payment from the Merger, Meso beneficially owns shares of common stock, par value $.001 per share of the Company’s common stock (the “ Common Stock ”); and

 

WHEREAS, the Company and Meso have agreed to a payment in the mutually agreed upon amount of 25,000 shares of Series BB Preferred Stock of the Corporation, par value $0.001 per share, which amounts to 2.5% of the authorized shares of this class of preferred, fully satisfying the Merger Agreement; and,

 

WHEREAS , in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Meso has agreed to enter into this Agreement.

 

NOW, THEREFORE , in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged it is hereby agreed as follows:

 

1. Settlement of the Payment . Upon the terms and conditions set forth in this Agreement, the Company hereby agrees to pay to Meso 25,000 shares of Series BB Preferred Stock of the Corporation, par value $0.001 per share, (the “ Securities ”) in lieu of the original Payment, as full payment under the terms and conditions of the Merger. The Company shall issue the Securities for the sole benefit of Meso and Meso hereby agrees that this is full and final payment under the terms of the Merger.

 

2. Representations and Warranties . Each party hereto hereby represents and warrants to the other party as follows:

 

(a) Authorization . Such party has the full right, power and authority to enter into this Agreement and to perform the terms and provisions hereof. The execution, delivery and performance of this Agreement by such party have been duly authorized by all necessary action on the part of such party, and this Agreement constitutes the valid and binding obligation of such party, enforceable against such party in accordance with its terms.

 

Page 1 of 5

EXECUTED COPY

 

(b) No Conflicts . Neither the execution and delivery of this Agreement nor compliance with the terms and provisions hereof on the part of such party shall breach any statutes or regulations of any governmental authority, domestic or foreign, or shall conflict with or result in a breach of such party’s organizational document(s) (if applicable) or of any of the terms, conditions or provisions of any judgment, order, injunction, decree, agreement or instrument to which such party is a party or by which it or its assets are or may be bound, or constitute a default thereunder or an event which with the giving of notice or passage of time or both would constitute a default thereunder, or require the consent of any person or entity.

 

(c) Consents and Approvals . No consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any person or entity is required on the part of such party in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

3. Representations, Warranties and Covenants of the Meso .

 

The Meso represents, warrants and agrees with, the Company that:

 

(a) This Agreement has been duly executed and delivered by the Meso and constitutes a valid and binding obligation of the Meso enforceable in accordance with its terms;

 

(b) Meso acknowledges its understanding that the issuance of the Securities is intended to be exempt from registration under the Act by virtue of Section 4(1) and/or Section 4(2) of the Securities Act of 1933, as amended (the “ Act ”) and the provisions of Regulation D thereunder;

 

(c) Meso has the financial ability to bear the economic risk of his investment, has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to his investment in the Company.

 

(d) Meso is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Act (17 C.F.R. 230.501(a)) or is not a U.S. Person as defined under Regulation S.

 

(e) Meso has made an independent investigation of the Company’s business, been provided an opportunity to obtain additional information concerning the Company Meso deems necessary to make an investment decision and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.

 

(f) Meso represents, warrants and agrees that Meso will not engage in short sales including, hypothecate, sell or otherwise transfer the Securities unless registered under the Act or in reliance upon an exemption there from, and fully understands and agrees that Meso must bear the economic risk of his purchase for an indefinite period of time because, among other reasons, the Securities or underlying securities have not been registered under the Act or under the securities laws of certain states and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Act. Meso also understands that the Company is under no obligation to register the Securities on its behalf or to assist Meso in complying with any exemption from registration under the Act.

 

Page 2 of 5

EXECUTED COPY

 

(g) The Meso is not subject to or obligated under any provisions of any law, regulation, order, judgment or decree which would be breached or violated by the execution, delivery and performance of this Agreement by the Meso and the consummation of the transactions contemplated hereby.

 

6. Miscellaneous .

 

(a) Notices . All notices or other communications required or permitted by this Agreement or by law to be served on or given to either party to this Agreement by the other party shall be in writing and shall be deemed duly served when personally delivered to the party at an address agreed upon by both parties.

 

(b) Assignment . This Agreement and all the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

(c) Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York, without giving effect to the principles of conflict of laws. All parties to this Agreement shall hereby submit to the personal and subject matter jurisdiction and venue of the state or federal courts located in New York, New York and irrevocably waive any trial by jury. If either party commences an action arising out of this Agreement, the prevailing party shall, in addition to any other damages and costs awarded, be entitled to reasonable legal fees incurred in connection with the prosecution or defense of such action.

 

(d) Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such provision or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

(e) Amendment; Waiver . The Board of Directors may amend the terms of the Agreement if it determines it is in the best interest of the Company and its Mesos. In the event either party wishes to amend this Agreement, the Agreement may only be amended or waived in a writing executed by the both parties.

 

(f) Complete Agreement . This Agreement contains the complete agreement between the parties hereto and supersedes any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

 

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EXECUTED COPY

 

(g) Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

(h) Advice of Counsel . EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

  

[ Remainder of Page Intentionally Left Blank; Signature Page to Follow ]

  

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EXECUTED COPY

 

IN WITNESS WHEREOF , the parties hereby have executed this Debt Settlement Agreement as of the date first written above.

 

  PURE HOSPITALITY SOLUTIONS, INC.
     
  By: /s/ Melvin Pereira L.
    Name: Melvin Pereira
    Title: Chief Executive Officer
     
  MESO NUMISMATICS, CORP.
     
  By: /s/ Melvin Pereira L.
    Name: Melvin Pereira
    Title: Principal

 

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Exhibit 21.1

  

None.