| Issuer CIK | 0001726286 |
| Issuer CCC | XXXXXXXX |
| DOS File Number | |
| Offering File Number | |
| Is this a LIVE or TEST Filing? | ☒ LIVE ☐ TEST |
| Would you like a Return Copy? | ☐ |
| Notify via Filing Website only? | ☐ |
| Since Last Filing? | ☐ |
| Name | |
| Phone | |
| E-Mail Address |
| Exact name of issuer as specified in the issuer's charter | SOCIAL DETENTION INC. |
| Jurisdiction of Incorporation / Organization |
COLORADO
|
| Year of Incorporation | 2015 |
| CIK | 0001726286 |
| Primary Standard Industrial Classification Code | CONSTRUCTION SPECIAL TRADECONTRACTORS |
| I.R.S. Employer Identification Number | 81-4502169 |
| Total number of full-time employees | 1 |
| Total number of part-time employees | 0 |
| Address 1 | 3000 F DANVILLE BLVD SUITE 145 |
| Address 2 | |
| City | ALAMO |
| State/Country |
CALIFORNIA
|
| Mailing Zip/ Postal Code | 94507 |
| Phone | 925-575-4433 |
| Name | Byron Thomas, Esq. |
| Address 1 | |
| Address 2 | |
| City | |
| State/Country | |
| Mailing Zip/ Postal Code | |
| Phone |
| Industry Group (select one) | ☐ Banking ☐ Insurance ☒ Other |
| Cash and Cash Equivalents |
$
49117.00 |
| Investment Securities |
$
0.00 |
| Total Investments |
$
|
| Accounts and Notes Receivable |
$
123620.00 |
| Loans |
$
|
| Property, Plant and Equipment (PP&E): |
$
0.00 |
| Property and Equipment |
$
|
| Total Assets |
$
201037.00 |
| Accounts Payable and Accrued Liabilities |
$
217500.00 |
| Policy Liabilities and Accruals |
$
|
| Deposits |
$
|
| Long Term Debt |
$
74663.00 |
| Total Liabilities |
$
292163.00 |
| Total Stockholders' Equity |
$
-91126.00 |
| Total Liabilities and Equity |
$
201037.00 |
| Total Revenues |
$
226780.00 |
| Total Interest Income |
$
|
| Costs and Expenses Applicable to Revenues |
$
0.00 |
| Total Interest Expenses |
$
|
| Depreciation and Amortization |
$
0.00 |
| Net Income |
$
9280.00 |
| Earnings Per Share - Basic |
$
0.00 |
| Earnings Per Share - Diluted |
$
0.00 |
| Name of Auditor (if any) |
| Name of Class (if any) Common Equity | Common Stock |
| Common Equity Units Outstanding | 183753333 |
| Common Equity CUSIP (if any): | 000000n/a |
| Common Equity Units Name of Trading Center or Quotation Medium (if any) | OTC Bulletin |
| Preferred Equity Name of Class (if any) | Preferred Stock |
| Preferred Equity Units Outstanding | 0 |
| Preferred Equity CUSIP (if any) | 000000n/a |
| Preferred Equity Name of Trading Center or Quotation Medium (if any) | n/a |
| Debt Securities Name of Class (if any) | none |
| Debt Securities Units Outstanding | 0 |
| Debt Securities CUSIP (if any): | 000000n/a |
| Debt Securities Name of Trading Center or Quotation Medium (if any) | n/a |
Check this box to certify that all of the following statements are true for the issuer(s)
☒
Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.
☒
Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.
☐
| Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering | ☒ Tier1 ☐ Tier2 |
| Check the appropriate box to indicate whether the financial statements have been audited | ☒ Unaudited ☐ Audited |
| Types of Securities Offered in this Offering Statement (select all that apply) |
| ☒Equity (common or preferred stock) |
| Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? | ☐ Yes ☒ No |
| Does the issuer intend this offering to last more than one year? | ☐ Yes ☒ No |
| Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? | ☐ Yes ☒ No |
| Will the issuer be conducting a best efforts offering? | ☒ Yes ☐ No |
| Has the issuer used solicitation of interest communications in connection with the proposed offering? | ☐ Yes ☒ No |
| Does the proposed offering involve the resale of securities by affiliates of the issuer? | ☐ Yes ☒ No |
| Number of securities offered | 500000000 |
| Number of securities of that class outstanding | 183753333 |
| Price per security |
$
0.0010 |
| The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer |
$
5000000.00 |
| The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders |
$
0.00 |
| The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement |
$
0.00 |
| The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement |
$
0.00 |
| Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs) |
$
5000000.00 |
| Underwriters - Name of Service Provider | Underwriters - Fees |
$
| |
| Sales Commissions - Name of Service Provider | Sales Commissions - Fee |
$
| |
| Finders' Fees - Name of Service Provider | Finders' Fees - Fees |
$
| |
| Audit - Name of Service Provider | Audit - Fees |
$
| |
| Legal - Name of Service Provider | Byron Thomas | Legal - Fees |
$
1500.00 |
| Promoters - Name of Service Provider | Promoters - Fees |
$
| |
| Blue Sky Compliance - Name of Service Provider | Blue Sky Compliance - Fees |
$
|
| CRD Number of any broker or dealer listed: | |
| Estimated net proceeds to the issuer |
$
4998500.00 |
| Clarification of responses (if necessary) |
| Selected States and Jurisdictions |
ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIFORNIA
COLORADO
CONNECTICUT
DELAWARE
FLORIDA
GEORGIA
HAWAII
IDAHO
ILLINOIS
INDIANA
IOWA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NEBRASKA
NEVADA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH CAROLINA
NORTH DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
RHODE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
WYOMING
DISTRICT OF COLUMBIA
PUERTO RICO
|
| None | ☒ |
| Same as the jurisdictions in which the issuer intends to offer the securities | ☐ |
| Selected States and Jurisdictions |
None ☒
| (e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-A
REGULATION A OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933
Social Detention, Inc.
Corporate:
Social Detention, Inc.
| 3000 F Danville Blvd. Suite 145 |
| Alamo, California 94507 |
| 925-575-4433 |
| www.sodetention.com |
| Best Efforts Offering of 500,000,000 Common Stock Shares |
| Offering Price per Common Stock Share: $0.01 USD |
The proposed sale will begin as soon as practicable after this Offering Circular has qualified by the Securities and Exchange Commission. A maximum of 500,000,000 Common Stock Shares are being offered to the public at $0.001 per Share by the Company. A maximum of $5,000,000 will be received by the Company from the offering.
The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 500,000,000 Common Stock Shares by the Company, (2) One Year from the date that this Offering is Qualified by the United States Securities and Exchange Commission, or (3) a date prior to the one year anniversary of this Offering being Qualified by the United States Securities and Exchange Commission as so determined by the Company’s Management (the “Offering Period”).
The United States Securities and Exchange Commission (the “SEC”) does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.
DATED: July 2, 2020
THE COMPANY IS CURRENTLY TRADING ON THE OTC MARKETS PINK TIER UNDER THE SYMBOL SODE.
ANY INVESTOR WHO PURCHASES SECURITIES IN THIS OFFERING WILL HAVE NO ASSURANCE THAT OTHER PURCHASERS WILL INVEST IN THE OFFERING. ACCORDINGLY, IF THE COMPANY SHOULD FILE FOR BANKRUPTCY PROTECTION, OR A PETITION FOR INSOLVENCY BANKRUPTCY IS FILED BY CREDITORS AGAINST THE COMPANY, INVESTOR FUNDS WILL BECOME PART OF THE BANKRUPTCY ESTATE AND ADMINISTERED ACCORDING TO THE BANKRUPTCY LAWS.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURATE OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION, HOWEVER THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, THE COMPANY ENCOURAGES YOU TO REVIEW RULE 251 (d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, THE COMPANY ENCOURAGES YOU TO REFER TO WWW.INVESTOR.GOV
THE COMPANY IS FOLLOWING THE “OFFERING CIRCULAR” FORMAT OF DISCLOSURE UNDER REGULATION A
| Item # | Description | Page # | ||
| Item 2 | Distribution & Spread | 1 | ||
| Item 3 | Summary Information & Risk Factors | 2 | ||
| Item 4 | Dilution | 8 | ||
| Item 5 | Plan for Distribution | 9 | ||
| Item 6 | Use of Proceeds to the Issuer | 10 | ||
| Item 7 | Description of Business | 11 | ||
| Item 8 | Description of Company Property | 14 | ||
| Item 9 | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 14 | ||
| Item 10 | Directors, Executive Officers, and Significant Employees | 15 | ||
| Item 11 | Executive Compensation | 16 | ||
| Item 12 | Security Ownership of Certain Beneficial Owners and Management | 16 | ||
| Item 13 | Interest of Management and Others in Certain Transactions | 17 | ||
| Item 14 | Securities Being Offered | 17 | ||
| Item 15 | Additional Information Regarding Mandatory Shareholder Arbitration | 37 | ||
| Financial Statements | Financial Statements Section | F-1 |
| i |
|
Number of Securities Offered |
Offering Price |
Selling Commissions |
Proceeds to Company |
|||||||||||||
| Per Security | – | $ | 0.001 | $ | 0.00 | $ | 0.001 | |||||||||
| 500,000,000 | 0.001 | 0.00 | 5,000,000 | |||||||||||||
| Total Maximum | 500,000,000 | $ | 0.001 | $ | 0.00 | $ | 5,000,000 | |||||||||
| Common Shares by Selling Shareholders | – | $ | – | $ | – | $ | – | |||||||||
| 1) | We are offering a maximum of 500,000,000 shares of common stock at the price indicated. |
| 2) | Additional Fees for Legal Review and Opinion(s), Accounting Costs, Underwriting fees, and costs related to the drafting of this Registration Statement and Professional Services Fees should not exceed $5,000 USD. Any costs above $5,000 will be paid by funds raised. |
| 3) | The Shares will be offered on a “best-efforts” basis by the Company’s Officers, Directors and Employees, and may be offered through Broker-Dealers who are registered with the Financial Industry Regulatory Authority (“FINRA”), or through other appropriate and legal independent referral sources. As of the date of this Offering Statement, no selling agreements had been entered into by the Company with any Broker Dealer firms. Selling commissions up to 10% may be paid to Broker Dealers who are members of FINRA and are registered with the SEC with respect to sales of Shares made by them and compensation may be paid to consultants in connection with the Offering of Shares. The Company may also pay incentive compensation to Registered Broker Dealers in the form of Common Stock or Stock Options with the Company which will not exceed 10% of the value of the Shares sold. The Company will indemnify participating Broker-Dealers with respect to disclosures made in the Offering Circular. In the event the company engages the services of a Broker Dealer or Underwriter post-qualification of the Offering, the Company shall file a post-qualification amended registration statement with the United States Securities and Exchange Commission disclosing the terms and conditions of the engagement with the Broker Dealer and/or Underwriter. |
| 4) | The Shares are being Offered pursuant to Regulation A of Section 3(b) of the Securities Act of 1933, as amended, for Tier 1 Offerings. The Shares will only be issued to purchasers who satisfy the requirements set forth in Regulation A. |
THIS OFFERING STATEMENT CONTAINS ALL OF THE REPRESENTATIONS BY THE COMPANY CONCERNING THIS OFFERING, AND NO PERSON SHALL MAKE DIFFERENT OR BROADER STATEMENTS THAN THOSE CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON ANY INFORMATION NOT EXPRESSLY SET FORTH IN THIS OFFERING STATEMENT.
THIS OFFERING STATEMENT CONTAINS ALL OF THE REPRESENTATIONS BY THE COMPANY CONCERNING THIS OFFERING, AND NO PERSON SHALL MAKE DIFFERENT OR BROADER STATEMENTS THAN THOSE CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON ANY INFORMATION NOT EXPRESSLY SET FORTH IN THIS OFFERING STATEMENT.
THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING STATEMENT OR SELLING LITERATURE.
INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
| 1 |
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY THIS OFFERING STATEMENT, NOR HAS ANY PERSON BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS OFFERING STATEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS OFFERING STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR ANY PERSON TO WHO IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS OFFERING STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE AS HAS BEEN NO CHANGE IN THE AFFAIRS OF OUR COMPANY SINCE THE DATE HEREOF.
THIS OFFERING STATEMENT MAY NOT BE REPRODUCED IN WHOLE OR IN PART. THE USE OF THIS OFFERING STATEMENT FOR ANY PURPOSE OTHER THAN AN INVESTMENT IN SECURITIES DESCRIBED HEREIN IS NOT AUTHORIZED AND IS PROHIBITED.
THIS OFFERING IS SUBJECT TO WITHDRAWAL OR CANCELLATION BY THE COMPANY AT ANY TIME AND WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART NOTWITHSTANDING TENDER OF PAYMENT OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE NUMBER OF SECURITIES SUBSCRIBED FOR BY SUCH INVESTOR.
THE OFFERING PRICE OF THE SECURITIES IN WHICH THIS OFFERING CIRCULAR RELATES HAS BEEN DETERMINED BY THE COMPANY AND DOES NOT NECESSARILY BEAR ANY SPECIFIC RELATION TO THE ASSETS, BOOK VALUE OR POTENTIAL EARNINGS OF THE COMPANY OR ANY OTHER RECOGNIZED CRITERIA OF VALUE.
NASAA UNIFORM LEGEND:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY THE FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
ITEM 3. SUMMARY INFORMATION, RISK FACTORS AND DILUTION
Investing in the Company’s Securities is very risky. You should be able to bear a complete loss of your investment. You should carefully consider the following factors, including those listed in this Securities Offering.
Emerging Growth Company Status
The Company is an “emerging growth company” as defined in the Jumpstart our Business Startups Act (“JOBS Act”). For as long as the Company is an emerging growth company, the Company may take advantage of specified exemptions from reporting and other regulatory requirements that are otherwise applicable generally to other public companies. These exemptions include:
| · | An exemption from providing an auditor’s attestation report on management’s assessment of the effectiveness of the Company’s systems of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002; | |
| · | An exemption from compliance with any new requirements adopted by the Public Accounting Oversight Board (“PCAOB”), requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; | |
| · | An exemption from compliance with any other new auditing standards adopted by the PCAOB after April 5th, 2012, unless the United States Securities and Exchange Commission (“SEC”) determines otherwise; and | |
| · | Reduced disclosure of executive compensation. |
| 2 |
In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has chosen to “opt out” of such extended transition period and, as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. The Company’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
The Company will cease to be an “emerging growth company” upon the earliest of (i) when the Company has $1.0 Billion or more in annual revenues, (ii) when the Company has at least $700 Million in market value of the Company’s Common Units held by non-affiliates, (iii) when the Company issues more than $1.0 Billion of non-convertible debt over a three-year period, or (iv) the last day of the fiscal year following the fifth anniversary of the Company’s Initial Public Offering.
Any Failure of One or More of The Subsidiary Companies of SODE Could Result in Loss of Revenues
The Company’s operations are dependent upon its primary subsidiary, Summit Harbor Holdings, Inc to produce revenues through its joint venture and subsidiary companies. All the subsidiaries were acquired in 2019. A loss of revenue in one or more of the subsidiary companies or closing of one or more of the subsidiary companies could cause the Company to report lower revenues, however, due to the diversity of the subsidiary companies, an loss of revenue event should not put the Company in jeopardy of closing.
| · | Loss of revenue in a subsidiary company of SODE could be caused by a number of issues such as; | |
| · | Changing laws and regulations regarding the growing, production and sales of hemp or hemp derivatives | |
| · | Undercapitalization of the subsidiaries | |
| · | Market forces that create extreme changes in pricing, supply or demand | |
| · | Increase in competition in certain markets |
THE MARKETS IN WHICH THE COMPANY OPERATES ARE HIGHLY COMPETITVE AND THE COMPANY MAY BE UNABLE TO COMPETE SUCCESSFULLY AGAINST NEW ENTRANTS AND ESTABLISHED COMPANIES WITH GREATER RESOURCES.
The Company competes in markets that are new, intensely competitive, highly fragmented and rapidly changing. Many of the Company’s current competitors, as well as a number of the Company’s potential competitors, have longer operating histories, greater name recognition and substantially greater financial, technical and marketing resources than the Company does. Some of the Company’s current or potential competitors have the financial resources to withstand substantial price competition. Moreover, many of the Company’s competitors have more extensive customer bases, broader customer relationships and broader industry alliances that they could use to their advantage in competitive situations, including relationships with many of the Company’s potential customers. The Company’s competitors may be able to respond more quickly than the Company can to new or emerging opportunities and changes in customer requirements.
As competition in the hemp and hemp derivative markets continues to intensify, new production methods, farming technology, distribution methods and consumer awareness and acceptance will continue to shape the market. The Company is aware that other companies will in the future focus significant resources on growth, production, distribution and sales of hemp and hemp derivatives, hemp products and services that will compete with the Company’s products and services.
Increased competition could result in:
| · | Price and Revenue Reductions and Lower Profit Margins; | |
| · | Increased Cost of Service from farmers, processors, distribution services, sales and marketing | |
| · | Loss of Customers; and | |
| · | Loss of Market Share |
Any one of these could materially and adversely affect the Company’s business, financial condition and results of operations.
| 3 |
The Company’s Business Will Suffer if the Business is Not Able to Generate Sufficient Revenues Through Its Subsidiaries
The Company has had only limited resources to provide its subsidiaries with the support they need for marketing, sales, asset purchasing, and Backoffice support. Although SODE can help in some regards, until there is sufficient capitalization, the revenue growth of the companies could take longer than expected in order to create a sustainable positive net cashflow event.
The Company’s Business Will Suffer if the Company Does Not Respond to Market Changes and New Demands
The market for industrial hemp products and their derivates to be characterized by rapid cultural change and acceptance in the consumer market for such items. Because this is such a new market, and because the demand is high there have been many entrepreneurs trying to enter the industrial hemp space and at some point the market may become saturated with hemp and hemp derivative products. The Company may be unable to respond quickly or effectively to these developments. If competitors introduce products, services or technologies that are better than that of the Company, or that gain greater market acceptance, or if new industry standards emerge, the Company may not have the resources to make the adjustments quickly enough to respond and it could materially and adversely affect the Company’s business, results of operations and financial condition.
If the Company Fails to Promote and Maintain Its Brand in the Market, the Company’s Business, Operating Results, Financial Condition, and Its Ability to Attract Customers will be Materially Adversely Affected
The Company’s success depends on the Company’s ability to create business through its acquired subsidiaries, such as the Company’s subsidiary RL Consulting. This may require a significant amount of capital to allow the Company to market the Company’s subsidiary companies, and to establish brand recognition and customer loyalty. Many of the Company’s competitors in this market are larger than the Company and have substantially greater financial resources than that of the Company. Additionally, many of the companies offering similar products have already established their brand identity within the marketplace. The Company can offer no assurances that it will be successful in establishing awareness of the Company’s subsidiaries, allowing the Company to compete in this market. The importance of brand recognition will continue to increase because of low barriers of entry to the industries in which the Company’s subsidiaries operates and may result in an increased number of direct competitors. To promote the Company’s subsidiary brands, the Company may be required to continue to increase its financial commitment to creating and maintaining the Company’s subsidiary brand awareness. The Company may not generate a corresponding increase in revenue to justify these costs.
The Company is Reliant on Key Individuals
The Company currently is heavily reliant on the services of Mr. Robert Legg, the Company’s Chief Executive Officer and Chief Accounting Officer. The departure or loss of Mr. Legg may negatively affect the Company’s business, until a suitable replacement can be found in a timely manner. Mr. Legg has been approved for a $250,000 term life insurance policy at a preferred rate which will be purchased upon initial funding with the death benefit being paid to the company.
The Company Could Potentially Face Risks Associated with Borrowing
As of December 30, 2020, the Company has $28,000 in principal outstanding on its’ notes payable, none of which is in default. Although the Company does not intend to incur any additional debt from the investment commitments provided in this offering, should the company obtain secure bank debt in the future, possible risks could arise. If the Company incurs additional indebtedness, a portion of the Company’s cash flow will have to be dedicated to the payment of principal and interest on such new indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair the Company’s operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of shareholders of the Company. A judgment creditor would have the right to foreclose on any of the Company’s assets resulting in a material adverse effect on the Company’s business, operating results or financial condition.
| 4 |
Unanticipated Obstacles to Execution of the Business Plan
The Company’s business plans may change significantly. Many of the Company’s potential business endeavors are capital intensive and may be subject to statutory or regulatory requirements. Management believes that the Company’s chosen activities and strategies are achievable in light of current economic and legal conditions with the skills, background, and knowledge of the Company’s principals and advisors. Management reserves the right to make significant modifications to the Company’s stated strategies depending on future events.
Management Discretion as to Use of Proceeds
The net proceeds from this Offering will be used for the purposes described under “Use of Proceeds.” The Company reserves the right to use the funds obtained from this Offering for other similar purposes not presently contemplated which it deems to be in the best interests of the Company and its Investors in order to address changed circumstances or opportunities. As a result of the foregoing, the success of the Company will be substantially dependent upon the discretion and judgment of Management with respect to application and allocation of the net proceeds of this Offering. Investors for the Shares offered hereby will be entrusting their funds to the Company’s Management, upon whose judgment and discretion the investors must depend.
Control by a Limited Number of Shareholder
As of May 31, 2020 the Company’s Managers owned preferred shares that give them approximately 84% of the Company’s outstanding votes. Upon completion of this Offering, the Company’s Management will own approximately 82% of the Company’s outstanding stock votes of the Company. As a result, even if all of the Shares being offered for sale by this Offering are sold, the Company’s Management will control the election of the directors of the Company and the outcome of any vote on any other matter.
The Company’s Revenues and Operating Results May Fluctuate
The Company’s revenues and operating results may fluctuate from quarter-to-quarter and year-to-year, and are likely to continue to vary due to a number of factors, many of which are not within the Company’s control. Thus, revenues and operating results for any future period are not predictable with any significant degree of certainty. For these reasons, comparing the Company’s operating results on a period-to-period basis may not be meaningful. Investors should not rely on the Company’s past results as an indication of the Company’s future performance. Fluctuations in the Company’s operating results, and financial condition may occur due to a number of factors, including, but not limited to, those listed below and those identified through this “Risk Factors” section:
| · | The extent of turnover of the Company’s customers in any period; | |
| · | Development of new competitive Services by others; | |
| · | The Company’s response to price competition; | |
| · | Delays between the Company’s expenditures to develop and market new Products and Services in new areas and the generation of sales from those new Products and Services; | |
| · | Changes in the amount that the Company spends to promote its Subsidiary Companies and Services; | |
| · | General economic and industry conditions that affect the Company’s potential customers; and | |
| · | Changes in accounting rules and tax laws. |
Due to the foregoing factors, Investors should not rely on quarter-to-quarter or year-to-year comparisons of the Company’s operating results as an indicator of future performance.
Return of Profits
The Company has never declared or paid any cash dividends on its Common Stock. The Company currently intends to retain future earnings, if any, to finance the expansion of the Company’s Operations and Holdings. As a result, the Company does not anticipate paying any cash dividends to its Common Stock Holders for the foreseeable future.
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No Assurances of Protection for Proprietary Rights; Reliance on Trade Secrets
In certain cases, the Company may rely on trade secrets to protect intellectual property, proprietary technology and processes, which the Company has acquired, developed or may develop in the future. There can be no assurances that secrecy obligations will be honored or that others will not independently develop similar or superior products or technology. The protection of intellectual property and/or proprietary technology through claims of trade secret status has been the subject of increasing claims and litigation by various companies both in order to protect proprietary rights as well as for competitive reasons even where proprietary claims are unsubstantiated. The prosecution of proprietary claims or the defense of such claims is costly and uncertain given the uncertainty and rapid development of the principles of law pertaining to this area. The Company, in common with other investment funds, may also be subject to claims by other parties with regard to the use of intellectual property, technology information and data, which may be deemed proprietary to others.
The Company’s Continuing as a Going Concern Depends Upon Financing
If the Company does not raise sufficient working capital and continues to experience pre-operating losses, there will continue to be substantial doubt as to its ability to continue as a going concern. Because the Company has generated no significant revenue, all expenditures during the development stage have been recorded as pre-operating losses.
Certain Factors Related to the Company’s Common Stock
Because the Company’s Common Stock may be considered a “penny stock,” and a shareholder may have difficulty selling shares in the secondary trading market.
The Company’s Common Stock Securities may be subject to certain rules and regulations relating to “penny stock” (generally defined as any equity security that has a price less than $5.00 per share, subject to certain exemptions). Broker-dealers who sell penny stocks are subject to certain “sales practice requirements” for sales in certain nonexempt transactions (i.e., sales to persons other than established customers and institutional “qualified investors”), including requiring delivery of a risk disclosure document relating to the penny stock market and monthly statements disclosing recent price information for the penny stocks held in the account, and certain other restrictions. For as long as the Company’s Common Stock is subject to the rules on penny stocks, the market liquidity for such securities could be significantly limited. This lack of liquidity may also make it more difficult for the Company to raise capital in the future through sales of equity in the public or private markets.
The price of the Company’s Common Stock may be volatile, and a shareholder’s investment in the Company’s Common Stock could suffer a decline in value.
There could be significant volatility in the volume and market price of the Company’s Common Stock, and this volatility may continue in the future. The Company’s Common Stock may in the future be listed on the OTC Markets including OTC Pink Markets, “OTCQB” or “OTCQX”, where there is a great chance for market volatility for securities that trade on these markets as opposed to a national exchange or quotation system. This volatility may be caused by a variety of factors, including the lack of readily available quotations, the absence of consistent administrative supervision of “bid” and “ask” quotations and generally lower trading volume. In addition, factors such as quarterly variations in our operating results, changes in financial estimates by securities analysts or our failure to meet our or their projected financial and operating results, litigation involving us, actions by governmental agencies, national economic and stock market considerations as well as other events and circumstances beyond our control could have a significant impact on the future market price of our Common Stock and the relative volatility of such market price.
Secondary Market
The Company’s common Stock is currently trading on the OTC Markets Pink current tier (OTCPink: SODE), There are no assurances that the Company’s Common Stock will ever be listed on any regulated securities exchange. There can be no assurance that an active trading market for the Company’s Common Stock will develop, or, if developed, that an active trading market will be maintained. If an active market is not developed or sustained, the market price and liquidity of the Company’s Common Stock may be adversely affected.
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The Company’s Securities initially will be listed for trade on the OTC Pink Market under trading symbol SODE
The Company’s common Stock is currently trading on the OTC Markets Pink current tier (OTCPink: SODE). There can be no assurance that an active trading market for the Company’s Common Stock will develop, or, if developed, that an active trading market will be maintained. If an active market is not developed or sustained, the market price and liquidity of the Company’s Common Stock may be adversely affected.
Shares of the Company’s Common Stock is Subject to the Penny Stock Rules
The Company’s common Stock is currently trading on the OTC Markets Pink current tier (OTCPink: SODE), which may well make it difficult for a purchaser of Shares of the Company’s Common Stock to sell all, or a party of the Common Stock Shares when the purchasers wish, or, if the Common Stock Shares can be sold, to get what the purchaser may consider to be an adequate price for the Common Stock Shares. The Shares of the Company’s Common Stock may trade at prices which make them subject to the United States Securities and Exchange Commission’s “Penny Stock Rules”, which may also limit the liquidity of the Common Stock Shares, or adversely affect the price at which the Common Stock Shares can be sold, or both.
The Company Cannot Assure Investors that the Market for the Company’s Common Stock Will Continue at any Trading Volume, or that the Market Price of Shares of the Company’s Common Stock Will Not Decline
The Company cannot predict the prices at which the Company’s Common Stock will trade. The offering price for the Shares being sold in this Offering has been determined by the Company based largely on the Company’s perception of the amount of money in which the Company needs to raise at this time to grow the Company. The Company cannot assure you that the Offering price per Share will bear any relationship on the market price of the Company’s Common Stock may trade.
The Market Price for the Company’s Common Stock May Fluctuate Significantly
The market price and liquidity of the market for the Company’s Shares of Common Stock that will prevail in the market may be higher or lower than the price that Investors of the Company’s Common Stock pay for the Common Stock at the time of purchase, and may be significantly affected by numerous factors, some of which are beyond the control of the Company, and may not be directly related to the Company’s operating performance. These factors include, but are not limited to:
| · | Significant volatility in the market price and trading volume of securities of companies in the Company’s Market Sector, which is not necessarily related to the operating performance of these companies; | |
| · | The mix of products that the Company provides during any period; | |
| · | Delays between the Company’s expenditures to develop and market the Company’s products, and the generation of sales from those marketing efforts; | |
| · | Changes in the amount that the Company spends to expand its products to new areas, or to develop new products; | |
| · | Changes in the Company’s expenditures to promote its services; | |
| · | Announcements of acquisitions by the Company, or one of the Company’s competitors; | |
| · | Changes in regulatory policies or tax guidelines; | |
| · | Changes or perceived changes in earnings, or variations in operating results; | |
| · | Any shortfall in revenue, or net income, or any increase in losses from levels expected by Investors or securities analysts; and | |
| · | General economic trends and other external factors. |
If Equity Research Analysts Do Not Publish Research Reports about the Company, of if the Research Analysts Issue Unfavorable Commentary or Downgrade the Company’s Common Stock Shares, the Price of the Company’s Common Stock Shares Could Decline
The trading market for the Company’s Common Stock Shares may come to rely in part on the research and reports that equity research analysts publish about the Company, and the Company’s business. The Company does not have control over research analysts, and the Company does not have commitments from research analysts to write research reports about the Company. The price of the Company’s Common Stock Shares could decline if one or more equity research analysts downgrades the Company’s Common Stock Shares, issues an unfavorable commentary, or ceases publishing reports about the Company.
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Future Sales of the Company’s Shares Could Reduce the Market Price of the Company’s Common Stock Shares
The price of the Company’s Common Stock could decline if there are substantial sales of the Company’s Common Stock, particularly by the Company’s Directors or its Executive Officer(s), or when there is a large number of Shares of the Company’s Common Stock available for sale. The perception in the public market that the Company’s Stockholders might sell the Company Shares could also depress the market price of the Company’s Shares. If this occurs, or continues to occur, it could impair the Company’s ability to raise additional capital through the sale of securities should the Company desire to do so.
Raising Additional Capital by Issuing Securities May Cause Dilution to the Company’s Shareholders
The Company may need to, or desire to, raise substantial additional capital in the future. The Company’s future capital requirements will depend on many factors, including, among others:
| · | The Company’s degree of success in capturing a larger portion of its internet entertainment business; | |
| · | The costs of establishing or acquiring sales, marketing, and distribution capabilities for the Company’s services; | |
| · | The extent to which the Company acquires or invests in businesses, products, or technologies, and other strategic relationships; and | |
| · | The costs of financing unanticipated working capital requirements and responding to competitive pressures. |
If the Company raises additional funds by issuing equity or convertible debt securities, the Company will reduce the percentage of ownership of the then-existing shareholders, and the holders of those newly-issued equity or convertible debt securities may have rights, preferences, or privileges senior to those possessed by the Company’s then-existing shareholders. Additionally, future sales of a substantial number of shares of the Company’s Common Stock, or other equity-related securities in the public market could depress the market price of the Company’s Common Stock and impair the Company’s ability to raise capital through the sale of additional equity or equity-linked securities. The Company cannot predict the effect that future sales of the Company’s Common Stock, or other equity-related securities would have on the market price of the Company’s Common Stock
Offering Price
The price of the Securities offered has been arbitrarily established by our current Officers and Directors, considering such matters as the state of the Company’s business development and the general condition of the industry in which it operates. The Offering price bears little relationship to the assets, net worth, or any other objective criteria.
Compliance with Securities Laws
The Company’s Securities are being offered for sale in reliance upon certain exemptions from the registration requirements of the Securities Act, and applicable state securities laws. If the sale of Securities were to fail to qualify for these exemptions, purchasers may seek rescission of their purchases of Securities. If a number of purchasers were to obtain rescission, we would face significant financial demands, which could adversely affect the Company as a whole, as well as any non-rescinding purchasers.
An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash from outside investors, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of the new investors stake is diluted because each share of the same type is worth the same amount, and the new investor has paid more for the shares than earlier investors did for theirs.
If you purchase shares in this Offering, your ownership interest in our Common Stock will be diluted immediately, to the extent of the difference between the price to the public charged for each share in this Offering and the net tangible book value per share of our Common Stock after this Offering.
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The following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100%, 50% and 25% of the shares offered for sale in this Offering:
| Percentage of shares offered that are sold | 100% | 50% | 25% | |||||||||
| Price to the public charged for each share in this Offering | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||
| Historical net tangible book value per share as of March 31, 2020 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||
| Decrease in net tangible book value per share attributable to new investors in this Offering (2) | $ | 0.003 | $ | 0.005 | $ | 0.007 | ||||||
| Net tangible book value per share, after this Offering | $ | 0.007 | $ | 0.005 | $ | 0.003 | ||||||
| Dilution per share to new investors | 30% | 50% | 70% |
Future Dilution
The Company, for business purposes, may from time to time issue additional shares, which may result in dilution of existing shareholders. Dilution is a reduction in the percentage of a stock caused by the issuance of new stock. Dilution can also occur when holders of stock options (such as company employees) or holders of other optionable securities exercise their options. When the number of shares outstanding increases, each existing stockholder will own a smaller, or diluted, percentage of the Company, making each share less valuable. Dilution may also reduce the value of existing shares by reducing the stock’s earnings per share. There is no guarantee that dilution of the Common Stock will not occur in the future.
ITEM 5. PLAN OF DISTRIBUTION AND SELLING SHAREHOLDERS
The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 500,000,000 Common Stock Shares by the Company, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Company’s Management (the “Offering Period”).
The Common Stock Shares are being offered by the Company on a “Best Efforts” basis and initially without the benefit of a Placement Agent. The Company can provide no assurance that this Offering will be completely sold out. If less than the maximum proceeds are available, the Company’s business plans and prospects for the current fiscal year could be adversely affected.
Any investor who purchases securities in this Offering will have no assurance that other purchasers will invest in this Offering. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency bankruptcy is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws. The Company has the right to terminate this offering of Securities at any time, regardless of the number of Securities that have sold. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
The Securities to be offered with this proposed offering shall be initially offered by the Company, mainly by Mr. Robert Legg, the Company’s Chief Executive Officer. The Company may engage members of the Financial Regulatory Authority (“FINRA”) and is registered with the SEC to sell the Securities for the Company, though the Company has not yet engaged the services of any FINRA Broker Dealer. The Company will offer the securities to prospective investors on a “best efforts” basis.
The Company anticipates that any FINRA Broker Dealer will receive selling commissions of up to ten percent (10%) of the Offering Proceeds, which it may re-allow and pay to participating FINRA Broker Dealers who sell the Company’s Securities. The Company’s FINRA Broker Dealer Manager, may also sell the Securities as part of a selling group, thereby becoming entitled to retain a greater portion of the selling commissions. Any portion of the selling commissions retained by the FINRA Broker Dealer Manager would be included within the amount of selling commissions payable by the Company and not in addition to.
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In order to subscribe to purchase the Securities, a prospective Investor must complete, sign and deliver the executed Purchaser Questionnaire and Subscription Agreement and Form W-9 to Social Detention, Inc. and either mail or wire funds for its total subscription amount in accordance with the instructions included in the Subscription Package.
The Company reserves the right to reject any Investor’s subscription in whole or in part for any reason. If the Offering terminates or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
In addition to this Offering Statement, subject to limitations imposed by applicable securities laws, we expect to use additional advertising, sales and other promotional materials in connection with this Offering. These materials may include public advertisements and audio-visual materials, in each case only as authorized by the Company. Although these materials will not contain information in conflict with the information provided by this Offering and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to the Securities, these materials will not give a complete understanding of this Offering, the Company or the Securities and are not to be considered part of this Offering Statement. This Offering is made only by means of this Offering Statement and prospective Investors must read and rely on the information provided in this Offering Statement in connection with their decision to invest in the Securities.
ITEM 6. USE OF PROCEEDS TO ISSUER
The Company seeks to raise maximum gross proceeds of $5,000,000 from the sale of Securities in this Offering. The Company intends to apply these proceeds substantially as set forth herein, subject only to reallocation by Company Management in the best interests of the Company.
C. Sale of Company Common Stock Shares
| Category | Maximum Proceeds |
Percentage of
Total Proceeds |
Minimum
Proceeds |
Percentage of
Total Proceeds |
||||||||||||
| Proceeds from Sale of Securities | $ | 4,500,000 | 90.0% | $ | 20,000 | 80.0% | ||||||||||
D. Offering Expenses
| Category |
Maximum
Proceeds |
Percentage of
Total Proceeds |
Minimum
Proceeds |
Percentage of
Minimum Proceeds |
||||||||||||
| Offering Expenses | $ | 500,000 | 10.0% | $ | 5,000 | 20.0% | ||||||||||
Footnotes:
| 1) | We are offering a maximum of 500,000,000 Stock Shares to be sold by the Company at the price indicated |
| 2) | We expect to incur offering and registration expenses. |
| 3) | Additional Fees for Legal Review and Opinion(s), Accounting Costs, Underwriting fees, and costs related to the drafting of this Registration Statement and Professional Services Fees should not exceed $5,000 USD. Any costs above $5,000 will be paid by other funds raised by the Company. |
| 4) | The Securities to be offered with this proposed offering shall be initially offered by the Company, mainly by Mr. Robert Legg, the Company’s Chief Executive Officer. The Shares will be offered on a “best efforts” basis by the Company’s Officers, directors and Employees, and may be offered through Broker Dealers who are registered with the Financial Industry regulatory Authority (“FINRA”), or through other independent referral sources. As of the date of this Offering circular, no selling agreements |
| 5) | The Shares are being Offered pursuant to Regulation A of Section 3(b) of the Securities Act of 1933, as amended, for Tier 1 Offerings. The Shares will only be issued to purchasers who satisfy the requirements set forth in Regulation A. |
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USE OF INVESTMENT FUND: SEE SEPARATE DOCUMENT – USAGE OF FUNDS
The above figures only represent estimates.
The application of the investment proceeds of this Offering, in the event the entire Offering is not sold, will be at the discretion of the Management of the Company.
ITEM 7. DESCRIPTION OF BUSINESS:
Who We Are:
Social Detention Inc., is an operating company in the construction of infrastructure. It is poised to expand operations via the expansion of its bond lines and through the acquisition of its sub-contractors. It intends to raise money to acquire these revenue generating companies in the construction industry markets through our wholly owned subsidiary RL Consulting. Our growth strategy is to capitalize on industry leadership and bidding expertise of the management to entice long time owners to sell out and retire. SODE will also be looking to acquire companies with complimentary markets, such as manufacturing of materials and material handling companies. in order to leverage their existing marketplace and distribution channels to cross market products from its subsidiary companies.
Market Opportunity:
The US infrastructure industry is expected to grow steadily over the forecast period (2019-2022). The total output value of the infrastructure construction market reached US$326.6 billion in 2017 up from US$321.2 billion in 2012 - and will rise to US$396 billion in 2022 (in nominal value terms), corresponding to a 3.9% annual average growth rate.
The electricity and power sector account for the largest share of the project pipeline value at US$422.9 billion; this is followed by rail projects; airport and other infrastructure projects, road projects which make up for US$110.9 billion and water and sewerage projects valued at US$86.8 billion.
The public sector is expected to finance 48.3% of the total value of infrastructure projects in the pipeline, while 31.6% are expected to be financed by the private sector (the majority of which are electricity and power projects). The remaining 20% will be financed by a mix of public and private sources.
Trump Administration in February 2018; released its infrastructure initiative to modernize the country's infrastructure. The initiative, which is estimated to cost US$200 billion, seeks to spur US$1.5 trillion billion in state, local and private infrastructure investments over the next ten years, by giving incentives to project sponsors that can demonstrate innovative approaches to create new revenue sources for projects and improve procurement practices and project implementation. The infrastructure initiative also seeks to support rural communities through rural project grants, and speed up the delivery of large-scale infrastructure projects across the country with increased federal loan support.
Reduced tax rates and deregulation are expected to boost overall investment levels over the coming years, especially in the telecommunications, energy and air transportation sectors. States and local governments are pushing for higher gas tax and user fees in order to increase revenues for public works, while the Trump administration is seeking to harness private capital to take advantage of government spending on infrastructure at the federal, state and local levels.
Current Status of SODE:
Organization and History
Social Detention, Inc. (the "Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015. On May 31, 2015 Chenghui Realty Holding Company, Colorado. merged with Chenghui Realty Holding Company of Colorado, with the Colorado entity being the surviving entity. The surviving entity was then renamed Social Detention, Inc.
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On September 26, 2016, Social Detention, Inc., a Delaware corporation, acquired an ownership interest in Social Detention, Inc., a Colorado Corporation and its assets which in turn had acquired total interest in RL Consulting, a closely held company. Social Detention, Inc., of Colorado was the surviving entity.
The Company is a Colorado corporation organized for the purpose of engaging in any lawful business. The Company’s acquisition of RL Consulting gives it a basis of operations in the security infrastructure and any other related business activities as of the date of these financial statements. The Company currently trades on the Pink Sheet under the symbol “SODE”. The Company's fiscal period end is December 31.
Business Model
RL Consulting ( RLC), will generate revenue through earnings percentages from its subsidiary companies. In turn, SODE will support each one of its subsidiary companies through access to resources and capital that will support their growth.
B. The Offering
The Company is offering a maximum of 500,000,000 Common Stock Shares at a price of $0.001 per Share, with all Shares having a par value of $0.001.
C. Risk Factors
See “RISK FACTORS” section of this Registration for certain factors that could adversely affect an investment in the Securities Offered. Those factors include but are not limited to unanticipated obstacles to execution of the business plan, general economic factors, Management’s inability to foresee market downturns and other unforeseen events.
D. Use of Proceeds
Proceeds from the sale of Securities will be used to invest in the development and growth of the Company’s Subsidiary’s products and services. See “USE OF PROCEEDS” section.
E. Minimum Offering Proceeds - Escrow of Subscription Proceeds
Any investor who purchases securities in this Offering will have no assurance that other purchasers will invest in this Offering. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency bankruptcy is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws. The Company has the right to terminate this offering of Securities at any time, regardless of the number of Securities that have sold. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
F. Common Stock Shares
Upon the sale of the maximum number of Common Stock Shares from this Offering, the number of issued and outstanding Common Stock Shares of the Company’s Common stock will be held as follows:
| ○ | Company Founders & Current Shareholders | 20% | |
| ○ | New Shareholders | 80% |
G. Company Dividend Policy
The Company has never declared or paid any cash dividends on its common stock. The Company currently intends to retain future earnings, if any, to finance the expansion of the Company. As a result, the Company does not anticipate paying any cash dividends in the foreseeable future to Common Stock Holders.
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H. Company Share Purchase Warrants
The Company has no outstanding warrants for the purchase of shares of the Company’s Common Stock.
I. Company Stock Options
The Company has no outstanding stock options.
J. Company Convertible Securities
The Company has the following convertible Preferred Shares issued and outstanding:
Class A Preferred Stock – 1,000,000 shares outstanding
Class B Preferred Stock – 11,000,000 shares outstanding convertible at the rate of 1,000 to 1
The company has also sold various convertible notes, which are convertible in the aggregate to 323,588,681 shares of common stock.
K. Stock Option Plan
The Board has adopted a stock option plan and that is being administered by the Board of Directors. The Board has the authority to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not, without the written consent of the optionee, impair any rights under any option previously granted.
L. Stock Transfer Agent
Pacific Stock Transfer
6725 Via Austi Pkwy, STE 300
Las Vegas, NV 89449-3553
Phone (702) 361-3033
M. Subscription Period
The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 500,000,000 Common Stock Shares, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Company’s Management (the “Offering Period”).
The Common Stock Shares are being offered by the Company on a “Best Efforts” basis without the benefit of a Placement Agent The Company can provide no assurance that this Offering will be completely sold out. If less than the maximum proceeds are available, the Company’s business plans and prospects for the current fiscal year could be adversely affected.
Any investor who purchases securities in this Offering will have no assurance that other purchasers will invest in this Offering. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency bankruptcy is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws. The Company has the right to terminate this offering of Securities at any time, regardless of the number of Securities that have sold. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
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ITEM 8. DESCRIPTION OF PROPERTY.
The Company does not own any real estate. The Company’s address is 121 E. 35th Street, Tulsa, OK 74106. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.
ITEM 9. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Forward-Looking Statements
The following Management’s Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Annual Report. The Management’s Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risks Factors” in our various filings with the Securities and Exchange Commission. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.
Financial Condition and Results of Operations
We have incurred losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities, including in connection with this offering.
Results of Operations
Revenues for the fiscal year ended June 30, 2019 were $47,294. We incurred $374,918 in operating expenses, including $257,071 of general and administrative expenses. These expenses related principally to our engagement of independent contractors to push our business forward and develop sales.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through related party advances in the near term as we prepare for future capital raise through an issuance of securities. We have no guarantees or firm commitments that the related party advances will continue in the near term. Our working capital requirements are expected to increase with the growth of our business.
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Existing working capital, further advances, capital raises and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through related party advances and proceeds from the sale of our common stock.
Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
We believe that the proceeds of this offering, even if we are only able to sell 25% of the shares offered, will provide sufficient funding for our operations for at least the next 12 months.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
(a) Directors and Executive Officers.
A. Directors and Executive Officers. The current officers and directors will serve for one year or until their respective successor(s) are elected and qualified.
| Name | Position | |
| Mr. Robert Legg (Age: 46) | Chief Executive Officer and Chief Accounting Officer |
Robert Legg, CEO SODE, - Mr. Legg is a seasoned turnaround specialist. Mr. Legg’s ability to turnaround a company typically takes anywhere from 6 to 24 months depending on the size of the organization and the complexity of the situations that need to be rectified. Mr. Legg has over 30 years of experience building and leading publicly traded companies. and consulted with many companies to help them increase their values.
For more about Mr. Legg, please visit: https://www.linkedin.com/in/robert-Legg-09b93314/
B. Significant Employees. All Members of Social Detention, Inc. as listed above are each considered “Significant Employees” and are each “Executive Officers” of the Company. The Company would be materially adversely affected if it were to lose the services of any member of Social Detention, Inc. listed above as each he has provided significant leadership and direction to the Company.
C. Family Relationships. None.
D. 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 Registrant during the past five years.
E. Legal proceedings. There are not presently any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
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ITEM 11. EXECUTIVE COMPENSATION.
2019 SUMMARY COMPENSATION TABLE
The table below summarizes the total compensation paid to or earned by each of the named executive officers for the fiscal years ended June 30, 2019 and 2018.
|
(a)
Name and Principal Position (1) |
(b)
Year |
(c)
Salary ($) |
(d)
Stock Awards ($) |
(e)
Option Awards ($) (2) |
(f)
Non-Equity Incentive Plan Compensation ($) (3) |
(g)
All Other Compensation ($) |
(h)
Total ($) |
|||||||||||||||||||||
| Robert Legg | ||||||||||||||||||||||||||||
| Chief Executive Officer | 2019 | $ | 75,000 | $ | – | $ | – | $ | 15,500 | $ | – | $ | 90,500 | |||||||||||||||
| 2018 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||||||||
| (1) | The amount in column (e) reflects the grant date fair value of stock options granted in the associated fiscal year granted pursuant to the Company’s 2020 Stock Incentive Plan, computed in accordance with FASB ASC Topic 718. For further information on these awards, see NOTE 9 — SHARE-BASED COMPENSATION in the unaudited financial statements included in this filing. |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners.
The following table sets forth, as of the date of this Offering Statement, the number of shares of Preferred Stock and Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company. Also included are the shares held by all executive officers and directors as a group.
| Name & Address | Amount Owned Prior to Offering | Amount Owned After Offering | ||
|
Mr. Robert Legg Chief Executive Officer Social Detention, Inc. 3000 W Danville Blvd Alamo, CA 94507 |
Common Stock: 100,000,000 Shares (59.8%) Preferred Stock: 1,000,000 Series A Preferred Share 11,000,000 Series B Preferred Shares |
Common Stock: 100,000,000 Shares (15.8 %) Preferred Stock: 1,000,000 Series A Preferred Share 10,000,000 Series B Preferred Shares |
||
|
Mr. Hui Chen Chief Operating Officer 7122 S. Sheridan Rd. Tulsa, OK 74133
|
Common Stock: 53,138,400 Shares (31%) Preferred Stock: No Shares |
Common Stock: 53,138,400 Shares (8.0%) Preferred Stock: No Shares |
||
|
New Shareholders from this Offering Social Detention, Inc., Inc. |
Common Stock: No Shares Preferred Stock: No Shares |
Common Stock:500,000,000 Shares (76%) Preferred Stock: No Shares |
| 16 |
ITEM 13. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.
Our majority voting shareholder is Mr. Robert Legg the Company’s Chief Executive Officer. Upon the completion of this Offering, Mr. Legg will continue to own the majority of the issued and outstanding voting control of the Company via the Series A Preferred Stock, which grants to Mr. Legg 76% of the voting control of the Company. Consequently, these shareholders control the operations of the Company and will have the ability to control all matters submitted to Stockholders for approval, including:
| · | Election of the board of directors; | |
| · | Removal of any directors; | |
| · | Amendment of the Company’s certificate of incorporation or bylaws and | |
| · | Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination. |
Mr. Legg will thus have complete control over the Company’s management and affairs. Accordingly, this ownership may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Common Stock. This registration statement contains forward-looking statements and information relating to us, our industry and to other businesses.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 11 of Form 1-A, Model B.
ITEM 14. SECURITIES BEING OFFERED.
Common Stock Shares
The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 500,000,000 Common Stock Shares, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Company’s Management (the “Offering Period”).
The Common Stock Shares are being offered by the Company on a “Best Efforts” basis and initially without the benefit of a Placement Agent. The Company can provide no assurance that this Offering will be completely sold out. If less than the maximum proceeds are available, the Company’s business plans and prospects for the current fiscal year could be adversely affected.
Any investor who purchases securities in this Offering will have no assurance that other purchasers will invest in this Offering. Accordingly, if the Company should file for bankruptcy protection or a petition for insolvency bankruptcy is filed by creditors against the Company, Investor funds may become part of the bankruptcy estate and administered according to the bankruptcy laws. The Company has the right to terminate this offering of Securities at any time, regardless of the number of Securities that have sold. If the Offering terminates before the offering minimum is achieved, or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
The Securities to be offered with this proposed offering shall be initially offered by Company, mainly by Mr. Robert Legg, the Company’s Chief Executive Officer. The Company anticipates engaging members of the Financial Regulatory Authority (“FINRA”) to sell the Securities for the Company.
The Company anticipates that any FINRA Broker Dealer Manager will receive selling commissions of five to ten percent of the offering proceeds, which it may re-allow and pay to participating FINRA Broker Dealers who sell the Company’s securities. The Company’s FINRA Broker dealer Manager may also sell the Securities as part of a selling group, thereby becoming entitled to retain a greater portion of the selling commissions. Any portion of the selling commissions retained by the FINRA Broker Dealer Manager would be included within the amount of selling commissions payable by the Company and not in addition to.
| 17 |
The Company anticipates that its FINRA Broker Dealer Manager may enter into an agreement with the Company to purchase “Underwriter Warrants” of up to 10% of the shares sold. Should the Company enter into an Underwriter Warrants Agreement with its FINRA Broker Dealer Manager, a copy of the agreement will be filed with the United States Securities and Exchange Commission as an Exhibit to an amended Registration Statement of which this Offering is part.
The Company anticipates that the Company and any FINRA Broker dealer will each enter into a Broker Dealer Manager Agreement, which will be filed with the United States Securities and Exchange Commission as an Exhibit to an amended Registration Statement of which this Offering is part, for the sale of the Company’s securities. FINRA Broker Dealers desiring to become members of a Selling Group will be required to execute a Participating Broker Dealer Agreement with the Company’s FINRA Broker Dealer, either after or before the date of this Registration Statement.
In order to subscribe to purchase the Securities, a prospective Investor must complete, sign and deliver the executed Purchase Questionnaire and Subscription Agreement and Form W-9 to Social Detention, Inc. and either mail or wire funds for its total subscription amount in accordance with the instructions included in the Subscription Package.
The description of certain matters relating to the securities of the Company is a summary and is qualified in its entirety by the provisions of the Company’s Certificate of Incorporation and By-Laws, copies of which have been filed as exhibits to this Form 1-A.
(a) Description of Company Common Stock.
The Company is authorized by its Amended and Restated Articles of Incorporation to issue an aggregate of 4,200,000,000 shares of Common stock, $0.001 par value per share (the "Common Stock"). As of June 30, 2019 – 3,875,000,000 shares of Common Stock were issued and outstanding.
All outstanding shares of Common Stock are of the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative or preemptive rights except for the voting rights for the election of Directors.
(b) Background Information on the Preferred Stock. To date, the Company has issued 13.5 shares of Preferred stock which is equivalent to 250,000,000 shares of the Company’s common stock. On May 22, 2012, the Company authorized one share of no par Series G Preferred (“G”) that entitles the holder to (i) 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 provisioners of the articles of incorporation if any amendment would alter or change any preference or any relative or any 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 voting power of such class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof, (ii) exercise the holder’s voting power without converting the G into Common Stock and (iii) convert, at the holder’s sole option, a share of G Preferred Stock into Common Stock upon providing the Company with fifteen days written notice with the number of Common shares to be issued being equal to 51% of the then outstanding Common Stock. The share of G is held by the Company’s Chief Executive Officer.
(c) Other Debt Securities. The Company has raised capital by issuing convertible notes payable. As of June 30, 2019, $1,051,650 in convertible notes is outstanding which was convertible into 1,306,845,657 shares of Company Common Stock.
(d) Other Securities to Be Registered. None.
Security Holders
As of March 31, 2020 – 183,753,333 shares of the Company’s Common Stock outstanding, which were held of record by approximately 156 stockholders, not including persons or entities that hold the stock in nominee or “street” name through various brokerage firms.
| 18 |
Indemnification of Directors and Officers:
The Company is incorporated under the laws of Colorado. Colorado General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses including attorneys’ fees, judgments, fines and amounts paid in settlement in connection with various actions, suits or proceedings, whether civil, criminal, administrative or investigative other than an action by or in the right of the corporation, a derivative action, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses including attorneys’ fees incurred in connection with the defense or settlement of such actions and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation’s certificate of incorporation, bylaws, agreement, and a vote of stockholders or disinterested directors or otherwise.
The Company’s Certificate of Incorporation provides that it will indemnify and hold harmless, to the fullest extent permitted by Colorado’s General Corporation Law, as amended from time to time, each person that such section grants us the power to indemnify.
Colorado’s General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
| · | any breach of the director’s duty of loyalty to the corporation or its stockholders; | |
| · | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; | |
| · | payments of unlawful dividends or unlawful stock repurchases or redemptions; or | |
| · | any transaction from which the director derived an improper personal benefit. |
The Company’s Certificate of Incorporation provides that, to the fullest extent permitted by applicable law, none of our directors will be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this provision will be prospective only and will not adversely affect any limitation, right or protection of a director of our company existing at the time of such repeal or modification.
| 19 |
SOCIAL DETENTION UNAUDITED BALANCE SHEET & FINANCIAL STATEMENTS
Issuer’s most recent Consolidated Balance Sheet & Financial Statements
For the period ended March 31, 2020
| F-1 |
Social Detention, Inc.
(Unaudited subject to change)
| March 31, | March 31, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash in bank | $ | 49,117 | $ | 188,000 | ||||
| Accounts receivable | 123,620 | 281,757 | ||||||
| Total Current assets | 172,737 | 469,757 | ||||||
| Other assets | ||||||||
| Long term investment | 28,300 | 28,300 | ||||||
| Total other assets | 28,300 | 28,300 | ||||||
| Total Assets | $ | 201,037 | $ | 498,057 | ||||
| LIABILITIES & STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 217,500 | $ | – | ||||
| Advances payable | – | – | ||||||
| Note payable - related party | 12,000 | 12,000 | ||||||
| Notes payable | 62,663 | 28,300 | ||||||
| Total current liabilities | 292,163 | 40,300 | ||||||
| Stockholders' Deficit | ||||||||
| Preferred stock, 25,000,000 shares authorized with $0.001 par value. No Preferred shares issued or outstanding | 12,000 | 12,000 | ||||||
| Common stock, 200,000,000 shares authorized with $0.001 par value. 167,200,000 issued and outstanding at each period respectively | 183,753 | 183,753 | ||||||
| Additional paid in capital | 25,933 | 220,847 | ||||||
| Consolidation accounting | – | (369,647 | ) | |||||
| Accumulated deficit | (322,092 | ) | 346,287 | |||||
| Net Income | 9,280 | 64,517 | ||||||
| Total Stockholders' Deficit | (91,126 | ) | 457,757 | |||||
| Total Liabilities and Stockholders' Deficit | $ | 201,037 | $ | 498,057 | ||||
The accompanying notes are an integral part of these financial statements.
| F-2 |
Social Detention, Inc.
Consolidated Statements of Operations
(Unaudited subject to change)
| Period Ended | Period Ended | |||||||
| March 31, | March 31, | |||||||
| 2020 | 2019 | |||||||
| REVENUE | ||||||||
| Income | $ | 226,780 | $ | 243,269 | ||||
| Prepaid Expenses | – | – | ||||||
| GROSS PROFIT | 226,780 | 243,269 | ||||||
| Operating Expenses: | ||||||||
| Advertising | 350 | 300 | ||||||
| Automobile | 4,751 | 7,332 | ||||||
| Contracted Services | – | 70,023 | ||||||
| Loan Short Term | 25,863 | – | ||||||
| General and administrative | – | – | ||||||
| Goodwill Impairment | – | – | ||||||
| Insurance Expense | – | 15,579 | ||||||
| Materials | 14,523 | 61,820 | ||||||
| Office Supplies | 3,000 | 500 | ||||||
| Rental Equipment | – | 22,838 | ||||||
| Subcontractors | 167,515 | – | ||||||
| Total Interest Expenses | 1,498 | – | ||||||
| Travel Expenses | – | 360 | ||||||
| Total operating expenses | 217,500 | 178,752 | ||||||
| Income (loss) from operations | 9,280 | $ | 64,517 | |||||
| Other income (expense) | ||||||||
| Interest expense | – | – | ||||||
| Other income (expense) net | – | – | ||||||
| Net income (loss) | $ | 9,280 | $ | 64,517 | ||||
| Net income (loss) per share | ||||||||
| (Basic and fully diluted) | $ | 0.0019 | $ | 0.0004 | ||||
| Weighted average number of common shares outstanding | 183,753,333 | 183,753,333 | ||||||
The accompanying notes are an integral part of these financial statements.
| F-3 |
Social Detention, Inc.
Condensed Consolidated Statement of Changes in Stockholders ' Deficit
(Unaudited subject to change)
| Common Stock | Preferred Stock | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||
| Amount | Amount | Paid in | Consolidation | Equity | Equity | |||||||||||||||||||||||||||
| Shares | ($0.001 Par) | Shares | ($0.001 Par) | Capital | Accounting | (Deficit) | (Deficit) | |||||||||||||||||||||||||
| Balances - Dec 31, 2019 | 183,753,333 | $ | 183,753 | 12,000,000 | $ | 12,000 | $ | 220,847 | $ | (369,647 | ) | $ | 47,555 | $ | 82,508 | |||||||||||||||||
| Changes | – | – | – | – | – | 369,647 | (360,367 | ) | (21,280 | ) | ||||||||||||||||||||||
| Balances - Mar. 31, 2020 | 183,753,333 | $ | 183,753 | 12,000,000 | $ | 12,000 | $ | 220,847 | $ | – | $ | (312,812 | ) | $ | 103,788 | |||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-4 |
Social Detention, Inc.
Consolidated Condensed Statement of Cash Flows
(Unaudited subject to change)
| For Period ended | For Period ended | |||||||
| March 31, | March 31, | |||||||
| 2020 | 2019 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Income ( Loss) | $ | 9,280 | $ | 64,517 | ||||
| Amortization and Impairment | – | – | ||||||
| Depreciation | – | – | ||||||
| Adjustments to Reconcile from Net Loss to Net Cash Used In Operating Activities | 9,280 | 64,517 | ||||||
| Accounts Payable | 217,500 | (323,000 | ) | |||||
| Accounts Receivable | (94,000 | ) | 387,206 | |||||
| Accrued Interest | – | – | ||||||
| Other Accrued Expenses | 34,363 | – | ||||||
| Changes in Operating Assets and Liabilities | 157,863 | 64,206 | ||||||
| Net Cash Used by Operating Activities | 167,143 | 128,723 | ||||||
| Paid in Capital | (194,914 | ) | – | |||||
| Consolidated Accounting | 369,647 | – | ||||||
| Retained Earnings | (369,647 | ) | – | |||||
| Shares Issued for Cash | – | – | ||||||
| Cash Flows from Financing Activities | (194,914 | ) | – | |||||
| Net Increase /( Decrease) in Cash | (27,771 | ) | 128,723 | |||||
| Cash Beginning of Period | 76,888 | 59,277 | ||||||
| Cash, End of Period | $ | 49,117 | $ | 188,000 | ||||
The accompanying notes are an integral part of these condensed financial statements.
| F-5 |
March 31, 2020
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and History
Social Detention, Inc. (the "Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015.
It currently trades on the Pink Sheet under the symbol “SODE”. The Company's fiscal period end is Dec 31st.
The financial statements include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
Management, Operations and Risk
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr. Robert Legg has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue a year today, and to be able to secure over $15M in contracts for each in the coming 12 months.
Authorized Common Stock
As of March 31, 2020, Social Detention had an authorized common stock capital of 200,000,000 shares with a par value of $.001. Authorized preferred stands at 25,000,000 shares with a par value of $.001. These numbers remain unchanged as of the date of this filing and the Company has no current plans for any increase thereof.
Issued and Outstanding Common Stock
As of March 31, 2020, Social Detention had a total of 183,753,333 Common Shares outstanding.
The Company has not entered into any agreement to promote its stock nor has it authorized any third party to conduct any type of promotion on its behalf.
Authorized and Issued and Outstanding Preferred Stock
As of March 31, 2020, Social Detention had authorized 1,000,000 Class A Preferred Shares of which 1,000,000 are outstanding.
As of March 31, 2020, Social Detention had authorized 11,000,000 Class B Preferred Shares of which 10,990,000 are outstanding.
Transfer Agent
During the quarter ended March 31, 2020, the Company’s transfer agent, Pacific Stock Transfer, and the Company have reconciled the transfer agent records with the records of the Company and those of the State of Colorado.
Additional Organizational Items
None
| F-6 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.
Revenue recognition
The Company has realized revenues from operations. The Company recognizes revenues when a contract is awarded and work has been commenced and it is under a bond. there is a contract for services and acceptance has been approved by the customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.
Basic and Diluted Loss per Share
The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
Income Taxes
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.
The Company maintains a valuation allowance with respect to deferred tax asset. Social Detention establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.
Carrying Value, Recoverability and Impairment of Long-Lived Assets
The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long–lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
The company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
| F-7 |
The Company considers the following to be some examples of important indicators that may trigger an impairment review; (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
Fair value of Financial Instruments
The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.
Long Lived Assets
In accordance with ASC 350 the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances both internally and externally that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.
Stock-based Compensation
The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.
| F-8 |
Recent pronouncements
Management has evaluated accounting standards and interpretations issued but not yet effective as of March 31, 2020, and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.
NOTE 3 – STOCKHOLDER’S DEFICIT
The total number of common shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. As at March 31, 2020 there are Twelve million preferred shares had been issued.
As at March 31, 2020 the total number of common shares outstanding was 183,753,400. The Company has an ongoing program of private placements to raise funds to support the operations.
NOTE 4 – GOING CONCERN
The company has been profitable and although these financial statements are not audited it is management’s opinion that an auditor would not express a “going concern” statement. The Company has an accumulated profit of $47,555 and while it is still reliant on raising money for operations by seeking loans and selling its common stock, the operations are profitable.
NOTE 5 – RELATED PARTY NOTE
As at March 31, 2020 the Company owes $12,000 to Robert Legg on a zero interest note
NOTE 6 –CONVERTIBLE NOTES PAYABLE
In the Company’s ongoing efforts to raise money for acquisitions and operations the Company has received $28,300 in cash and has issued Convertible Notes Payable in like amount. In accordance with PCAOB standards these notes are considered to be a derivative instrument and accordingly have had a conversion expense recorded on the books of the Company of $28,300. This expense was determined using the Black-Scholes valuation model.
NOTE 7 - SUBSEQUENT EVENTS
The Company has investigated and determined that there are no substantive events that have occurred since the end of this reporting period and the date of the filing of theses financial statements.
| F-9 |
SOCIAL DETENTION UNAUDITED BALANCE SHEET & FINANCIAL STATEMENTS
Issuer’s most recent Consolidated Balance Sheet & Financial Statements for the
Year ended December 31, 2019
TABLE OF CONTENTS
| F-10 |
Social Detention, Inc.
(Unaudited subject to change)
| December 31, | December 31, | |||||||
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash in bank | $ | 76,888 | $ | 59,277 | ||||
| Accounts receivable | 29,620 | 668,963 | ||||||
| Total Current assets | 106,508 | 728,240 | ||||||
| Other assets | ||||||||
| Long term investment | 28,300 | 28,300 | ||||||
| Total other assets | 28,300 | 28,300 | ||||||
| Total Assets | $ | 134,808 | $ | 756,540 | ||||
| LIABILITIES & STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 40,300 | $ | 323,000 | ||||
| Advances payable | – | – | ||||||
| Note payable - related party | 12,000 | 12,000 | ||||||
| Notes payable | 28,300 | 28,300 | ||||||
| Total current liabilities | 80,600 | 363,300 | ||||||
| Stockholders' Deficit | ||||||||
| Preferred stock, 25,000,000 shares authorized with $0.001 par value. No Preferred shares issued or outstanding | 12,000 | 12,000 | ||||||
| Common stock, 200,000,000 shares authorized with $0.001 par value. 167,200,000 issued and outstanding at each period respectively | 183,753 | 183,753 | ||||||
| Additional paid in capital | 220,847 | 220,847 | ||||||
| Consolidation accounting | (369,647 | ) | (369,647 | ) | ||||
| Accumulated deficit | 47,555 | 346,287 | ||||||
| – | – | |||||||
| Total Stockholders' Deficit | 94,508 | 393,240 | ||||||
| Total Liabilities and Stockholders' Deficit | $ | 134,808 | $ | 756,540 | ||||
The accompanying notes are an integral part of these financial statements.
| F-11 |
Social Detention, Inc.
Consolidated Statements of Operations
(Unaudited subject to change)
| Period Ended | Period Ended | |||||||
| December 31, | December 31, | |||||||
| 2019 | 2018 | |||||||
| REVENUE | ||||||||
| Income | $ | 816,614 | $ | 2,927,880 | ||||
| Prepaid Expenses | – | – | ||||||
| GROSS PROFIT | 816,614 | 2,927,880 | ||||||
| Operating Expenses: | ||||||||
| Advertising | 1,560 | 3,600 | ||||||
| Automobile | 22,861 | 23,400 | ||||||
| Contracted Services | 153,296 | 1,503,062 | ||||||
| Depreciation Expense | – | 5,900 | ||||||
| General and administrative | – | 11,200 | ||||||
| Goodwill Impairment | – | 19,840 | ||||||
| Insurance Expense | 39,499 | 24,300 | ||||||
| Materials | 289,813 | 669,580 | ||||||
| Office Supplies | 4,406 | 57,633 | ||||||
| Rental Equipment | 26,038 | 42,478 | ||||||
| Subcontractors | 330,051 | 180,000 | ||||||
| Total Interest Expenses | – | 15,600 | ||||||
| Travel Expenses | 3,060 | 13,000 | ||||||
| Total operating expenses | 870,583 | 2,569,593 | ||||||
| Income (loss) from operations | (53,969 | ) | 358,287 | |||||
| Other income (expense) | ||||||||
| Interest expense | – | – | ||||||
| Other income (expense) net | – | – | ||||||
| Net income (loss) | $ | (53,969 | ) | $ | 358,287 | |||
| Net income (loss) per share (Basic and fully diluted) | $ | 0.0019 | $ | 0.0019 | ||||
| Weighted average number of common shares outstanding | 183,753,333 | 183,753,333 | ||||||
The accompanying notes are an integral part of these financial statements.
| F-12 |
Social Detention, Inc.
Condensed Consolidated Statement of Changes in Stockholders ' Deficit
(Unaudited subject to change)
| Common Stock | Preferred Stock | Accumulated | Stockholders' | |||||||||||||||||||||||||||||
| Amount | Amount | Paid in | Consolidation | Equity | Equity | |||||||||||||||||||||||||||
| Shares | ($0.001 Par) | Shares | ($0.001 Par) | Capital | Accounting | (Deficit) | (Deficit) | |||||||||||||||||||||||||
| Balances - Dec 31, 2018 | 183,753,333 | $ | 183,753 | 12,000,000 | $ | 12,000 | $ | 220,847 | $ | (369,647 | ) | $ | 346,287 | $ | 393,240 | |||||||||||||||||
| Changes | – | – | – | – | $ | – | $ | – | $ | (298,732 | ) | $ | (298,732 | ) | ||||||||||||||||||
| Balances - Dec. 31, 2019 | 183,753,333 | $ | 183,753 | 12,000,000 | $ | 12,000 | $ | 220,847 | $ | (369,647 | ) | $ | 47,555 | $ | 82,508 | |||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-13 |
Social Detention, Inc.
Consolidated Condensed Statement of Cash Flows
(Unaudited subject to change)
| For Year ended | For Year ended | |||||||
| December 31, | December 31, | |||||||
| 2019 | 2018 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Income ( Loss) | $ | (53,969 | ) | $ | 358,287 | |||
| Amortization and Impairment | – | – | ||||||
| Depreciation | – | – | ||||||
| Adjustments to Reconcile from Net Loss to Net Cash Used In Operating Activities | (53,969 | ) | 358,287 | |||||
| Accounts Payable | (323,000 | ) | 315,125 | |||||
| Accounts Receivable | 639,343 | (559,963 | ) | |||||
| Accrued Interest | – | – | ||||||
| Other Accrued Expenses | – | – | ||||||
| Changes in Operating Assets and Liabilities | 316,343 | (244,838 | ) | |||||
| Net Cash Used by Operating Activities | 262,374 | 113,449 | ||||||
| Paid in Capital | – | 220,847 | ||||||
| Consolidated Accounting | – | (97,125 | ) | |||||
| Retained Earnings | (244,763 | ) | (220,847 | ) | ||||
| Shares Issued for Cash | – | – | ||||||
| Cash Flows from Financing Activities | (244,763 | ) | (97,125 | ) | ||||
| Net Increase /( Decrease) in Cash | 17,611 | 16,324 | ||||||
| Cash Beginning of Period | 59,277 | 42,953 | ||||||
| Cash, End of Period | $ | 76,888 | $ | 59,277 | ||||
The accompanying notes are an integral part of these condensed financial statements.
| F-14 |
December 31, 2019
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and History
Social Detention, Inc. (the "Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015.
It currently trades on the Pink Sheet under the symbol “SODE”. The Company's fiscal period end is December 31st.
The financial statements include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
Management, Operations and Risk
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr. Robert Legg has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue an year today, and to be able to secure over $15M in contracts for each in the coming 12 months.
Authorized Common Stock
As of December 31, 2019, Social Detention had an authorized common stock capital of 200,000,000 shares with a par value of $.001. Authorized preferred stands at 25,000,000 shares with a par value of $.001. These numbers remain unchanged as of the date of this filing and the Company has no current plans for any increase thereof.
Issued and Outstanding Common Stock
As of December 31, 2019, Social Detention had a total of 183,753,333 Common Shares outstanding.
The Company has not entered into any agreement to promote its stock nor has it authorized any third party to conduct any type of promotion on its behalf.
Authorized and Issued and Outstanding Preferred Stock
As of December 31, 2019, Social Detention had authorized 1,000,000 Class A Preferred Shares of which 1,000,000 are outstanding.
As of December 31, 2019, Social Detention had authorized 11,000,000 Class B Preferred Shares of which 11,000,000 are outstanding.
Transfer Agent
During the quarter ended December 31, 2019, the Company’s transfer agent, Pacific Stock Transfer, and the Company have reconciled the transfer agent records with the records of the Company and those of the State of Colorado.
| F-15 |
Additional Organizational Items
None
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.
Revenue recognition
The Company has realized revenues from operations. The Company recognizes revenues when a contract is awarded and work has been commenced and it is under a bond. there is a contract for services and acceptance has been approved by the customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.
Basic and Diluted Loss per Share
The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
Income Taxes
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.
The Company maintains a valuation allowance with respect to deferred tax asset. Social Detention establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.
| F-16 |
Carrying Value, Recoverability and Impairment of Long-Lived Assets
The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long –lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
The company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers the following to be some examples of important indicators that may trigger an impairment review; (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and D7losure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
Fair value of Financial Instruments
The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.
Long Lived Assets
In accordance with ASC 350 the Company regularly reviews the carrying value of intangible and other long lived assets for the existence of facts or circumstances both internally and externally that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long lived asset exceeds its fair value.
| F-17 |
Stock-based Compensation
The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.
Recent pronouncements
Management has evaluated accounting standards and interpretations issued but not yet effective as of December 31, 2019, and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.
NOTE 3 – STOCKHOLDER’S DEFICIT
The total number of common shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. As at December 31, 2019 there are twelve million preferred shares had been issued.
As at December 31, 2019 the total number of common shares outstanding was 183,753,400. The Company has an ongoing program of private placements to raise funds to support the operations.
NOTE 4 – GOING CONCERN
The company has been profitable and although these financial statements are not audited it is management’s opinion that an auditor would not express a “going concern” statement. The Company has an accumulated profit of $47,555 and while it is still reliant on raising money for operations by seeking loans and selling its common stock, the operations are profitable.
NOTE 5 – RELATED PARTY NOTE
As at December 31, 2019 the Company owes $12,000 to Robert Legg on a zero interest note
NOTE 6 –CONVERTIBLE NOTES PAYABLE
In the Company’s ongoing efforts to raise money for acquisitions and operations the Company has received $28,300 in cash and has issued Convertible Notes Payable in like amount. In accordance with PCAOB standards these notes are considered to be a derivative instrument and accordingly have had a conversion expense recorded on the books of the Company of $28,300. This expense was determined using the Black-Scholes valuation model.
NOTE 7 - SUBSEQUENT EVENTS
The Company has investigated and determined that there are no substantive events that have occurred since the end of this reporting period and the date of the filing of theses financial statements.
| F-18 |
PART III
EXHIBIT INDEX
| Incorporated by reference | ||||||
| Exhibit | Exhibit Description | Filed herewith | Period Ending | Exhibit | Filing Date | |
| 2.1 | Articles of Incorporation, as currently in effect | X | ||||
| 2.2 | Bylaws, as currently in effect | X | ||||
| 4.1 | Subscription Agreement | X | ||||
| 6.1 | 2020 Stock Incentive Plan | X | ||||
| 12 | Opinion of Counsel, regarding the legality of the securities being registered | X | ||||
| III-1 |
SIGNATURES
Pursuant to the Requirements of the Securities Act of 1933, the Registrant has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, on July 2, 2020.
| Social Detention, Inc. | ||
| By: | Mr. Robert Legg | |
| /s/ Robert Legg | ||
| Name: | Mr. Robert Legg | |
| Title: | Chief Executive Officer and Director (principal executive officer, principal accounting officer) | |
Exhibit 2.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
SOCIAL DETENTION, INC.
ARTICLE I
The name of the corporation shall be SOCIAL DETENTION, INC.. (the “Corporation”).
ARTICLE II
The period of its duration shall be perpetual.
ARTICLE III
The Corporation is organized of conducting any lawful business for which a corporation may be organized under the law of the State of Colorado.
ARTICLE IV
The aggregate number of shares that the Corporation will have authority to issue is Five Hundred Million (500,000,000) with Twenty Five Million (25,000,000) shares of Preferred Stock, with par value $ 0.0001, and the balance Four Hundred Seventy Five Million (475,000,000) in Common Stock, with a par value of $ 0.0001 per share. Shares of any stock may be issued, without shareholder action, from time to time in one or more series as may from time to time be determined by the board of directors. The board of directors of this Corporation is hereby expressly granted authority, without shareholder action, and within the limits set forth in the Colorado Revised Statues, to:
(i.) Designate in whole or in part, the powers, preferences, limitations, and relative rights, of any class of shares before the issuance of any shares of that class.
(ii.) Create one or more series within a class of shares, fix the number of shares of each such series, and designate, in whole or part, the powers, preferences, limitations, and relative rights of any class of shares before the issuance of any shares of that series.
(iii.) Alter or revoke the powers, preferences limitations, and relative rights granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares.
(iv.) Increase or decrease the number of shares constituting any series, the number of shares of which was originally fixed by the board of directors, either before or after the issuance of shares of the series: provided that, the number may not be decreased below the number of shares of the series then outstanding or increased above the total number of authorized shares of the applicable class of shares available for designation as a part of the series;
(v.) Determine the dividend rate on the shares of any class of shares or series of shares, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, payment of dividends on shares of that class of shares or series of shares;
(vi.) Determine whether that class of shares or series of shares will have voting rights, in addition to the voting rights provided by law, and, if, so, the terms of such voting;
(vii.) Determine whether or not these shares of that class of shares or series of shares will have conversion privileges and, if, so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors determines;
(viii.) Determine whether or not these shares of that class of shares or series of shares will be redeemable and, if, so, the terms and conditions of such redemption, including the date or date upon or after which they were redeemable , and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
| 1 |
(ix.) Determine whether or not these shares of that class of shares or series of shares will have a sinking fund for the redemption or purchase of shares of that class of shares or series of shares and, if, so, the terms and amount of such sinking fund;
(x.) determine the rights of the shares of that class of shares of series of shares in the event of voluntary liquidation, dissolution or dining up of the Corporation and the relative rights of priority, if any , of payment of shares of that class of shares or series of shares; and
(xi.) determine any other relative rights, preference and limitation of that class of shares
or series of shares,
The allocation between the classes, or among the series or each class, or unlimited voting rights and the right to receive the net assets of the Corporation upon dissolution shall be as designated by the Board of directors. All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary of in the corporations bylaws or in any amendment hereto shall be vested in the common stock. accordingly, unless and until otherwise designated by the board of directors of the Corporation and subject to any superior rights as so designated the Common stock shall have unlimited voting rights and be entitled to receive the net assets of the Corporation upon dissolution.
ARTICLE V
Provisions for the regulation of the internal affairs of the Corporation will be contained in its Bylaws as adopted by the Board of Directors. The number of Directors of the Corporation shall be fixed by its Bylaws.
ARTICLE VI
The corporation shall indemnify any person against expenses, including without limitation attorney's fees, judgments, fines and amounts paid in settlement, actual and reasonably incurred by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was serving as the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise in all circumstance in which and to the extent that such indemnification is permitted and provided for the laws of the State of Colorado then in effect.
ARTICLE VII
To the fullest extent permitted by Section 7 of the Colorado Business Corporations Act as the same exists of may hereafter be amended, and officer or director of the Corporation shall not be personally liable to the Corporation of its stockholders for monetary damages.
ARTICLE VIII
The Corporation expressly elects not to be governed by or be subject to the provision of section 7-111-101 through 7- 113-150 of the Colorado Revised Statutes of any similar or succor statutes adopted by any state which may be deemed to apply the corporation from time to time.
| 2 |
SIGNATURE
The undersigned hereby certifies on behalf of Social Detention, Inc., a corporation duly organized and existing under the laws of the State of Colorado, ( the "Corporation") that:
| 1. | The undersigned is the President and Secretary, respectively, of the Corporation. |
| 2. | The foregoing Amended and Restated Articles of Incorporation have been duly approved by a majority vote of the Board of Directors. |
| 3. | The foregoing Amended and Restated Article of Incorporation has been duly approved by the required vote of the shareholders in accordance with Colorado Corporations Code. |
I further declare under penalty of perjury under the laws of the State of Colorado that the matters set forth in this certificate are true and correct to our knowledge.
IN WITNESS WHEREOF, the undersigned officers have signed this Amended and Restated Articles of Incorporation this 4th day of January, 2017
| /s/ Robert Legg | |
| SOCIAL DETENTION, INC. | |
| Name: Robert Legg | |
| Title: President | |
| 3 |
Exhibit 2.2
BYLAWS
OF
SOCIAL DETENTION, INC.
A Colorado Corporation
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL EXECUTIVE OFFICE. The principal office of the Corporation shall be determined by the board of directors of the Corporation.
SECTION 2. OTHER OFFICES. Branch or subordinate offices may be established by the Board of Directors at such other places as may be desirable.
ARTICLE II
SHAREHOLDERS
SECTION 1. PLACE OF MEETING. Meetings of shareholders shall be held either at the principal executive office of the corporation or at any other location within or without the State of Colorado which may be designated by written consent of all persons entitled to vote thereat.
SECTION 2. ANNUAL MEETINGS. The annual meeting of shareholders shall be held on such day and at such time as may be fixed by the Board; provided, however, that should said day fall upon a Saturday, Sunday, or legal holiday observed by the Corporation at its principal executive office, then any such meeting of shareholders shall be held at the same time and place on the next day thereafter ensuing which is a full business day. At such meetings, directors shall be elected by plurality vote and any other proper business may be transacted.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders may be called for any purpose or purposes permitted under Colorado Revised Statutes at any time by the Board, the Chairman of the Board, the President, or by the shareholders entitled to cast not less than twenty-five percent (25%) of the votes at such meeting. Upon request in writing to the Chairman of the Board, the President, any Vice-President or the Secretary, by any person or persons entitled to call a special meeting of shareholders, the Secretary shall cause notice to be given to the shareholders entitled to vote, that a special meeting will be held not less than thirty-five (35) nor more than sixty (60) days after the date of the notice.
SECTION 4. NOTICE OF ANNUAL OR SPECIAL MEETING. Written notice of each annual meeting of shareholders shall be given not less than ten (10) no more than sixty (60) days before the date of the meeting to each shareholder entitled to vote thereat. Such notice shall state the place, date and hour of the meeting and (i) in the case of a special meeting the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders, but, any proper matter may be presented at the meeting for such action. The notice of any meeting at which directors are to be elected shall include the names of the nominees intended, at the time of the notice, to be presented by management for election. Notice of a shareholders meeting shall be given either personally or by email, or by mail or, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or if no such address appears or is given, by publication at least once in a newspaper of general circulation in Larimer County, Colorado. An affidavit of mailing of any notice, executed by the Secretary, shall be prima facie evidence of the giving of the notice.
SECTION 5. QUORUM. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders. If a quorum is present, the affirmative vote of the majority of shareholders represented and voting at the meeting on any matter shall be the act of the shareholders unless specifically required otherwise in the Charter or Articles of Incorporation. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the number of shares required as noted above to constitute a quorum. Notwithstanding the foregoing, (1) the sale, transfer and other disposition of substantially all of the corporation's properties and (2) a merger or consolidation of the corporation shall require the approval by an affirmative vote of not less than two-thirds (2/3) of the corporations issued and outstanding shares.
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SECTION 6. ADJOURNED MELTING AND NOTICE THEREOF. Any shareholders meeting, whether or not a quorum is present, may be adjourned from time to time. In the absence of a quorum (except as provided in Section 5 of this Article), no other business may be transacted at such meeting.
SECTION 7. VOTING. The shareholders entitled to notice of any meeting or to vote at such meeting shall be only persons in whose name shares stand on the stock records of the corporation on the record date determined in accordance with Section 8 of this Article.
SECTION 8. RECORD DATE. The Board may fix in advance, a record date for the determination of the shareholders entitled to notice of a meeting or to vote or entitled to receive payment of any dividend or other distribution, or any allotment àf rights, or to exercise rights in respect to any other lawful action. The record date so fixed shall be not more than sixty (60) nor less than ten (10) days prior to the date of the meeting nor more than sixty (60) days prior to any other action. When a record date is so fixed, only shareholders of record on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise of the rights, as the case may be, notwithstanding any transfer of shares on the books of the corporation after the record date. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the meeting. The Board shall fix a new record date if the meeting is adjourned for more than forty-five (45) days. If no record date is fixed by the Board, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which notice is given. The record date for determining shareholders for any purpose other than as set in this Section 8 or Section 10 of this Article shall be at the close of the day on which the Board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later.
SECTION 9. CONSENT OF ABSENTEES. The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
SECTION 10. ACTION WITHOUT MEETING. Any action which, under any provision of law, may be taken at any annual or special meeting of shareholders, may be taken without a meeting and without prior notice if a consent in writing, setting forth the actions to be taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless a record date for voting purposes is fixed as provided in Section 8 of this Article, the record date for determining shareholders entitled to give consent pursuant to this Section 10, when no prior action by the Board has been taken, shall be the day on which the first written-consent is given.
SECTION 11. PROXIES. Every person entitled to vote shares has the right to do so either in person or by one or more persons authorized by a written proxy executed by such shareholder and filed with the Secretary not less than five (5) days prior to the meeting.
SECTION 12. CONDUCT OF MEETING. The Chief Executive Officer shall preside as Chairman at all meetings of the shareholders, unless another Chairman is selected. The Chairman shall conduct each such meeting in a businesslike and fair manner, but shall not be obligated to follow any technical, formal or parliamentary rules or principles of procedure. The Chairman's ruling on procedural matters shall be conclusive and binding on all shareholders, unless at the time of ruling a request for a vote is made by the shareholders entitled to vote and represented in person or by proxy at the meeting, in which case the decision of a majority of such shares shall be conclusive and binding on ?tl shareholders without limiting the generality of the foregoing, the Chairman SHALL have all the powers usually vested in the chairman of a meeting of shareholders.
ARTICLE III
DIRECTORS
SECTION 1. POWERS. Subject to limitation of the Articles of Incorporation, of these bylaws, and of actions required to be approved by the shareholders, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board. The Board may, as permitted by law, delegate the management of the day-to-day operation of the business of the corporation to a management company or other persons or officers of the corporation provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board. Without prejudice to such general powers, it is hereby expressly declared that the Board shall have the following powers:
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(a) To select and remove all of the officers, agents and employees of the corporation, prescribe the powers and duties for them as may not be inconsistent with law, or with the Articles of Incorporation or by these bylaws, fix their compensation, and require from them, if necessary, security for faithful service.
(b) To conduct, manage, and control the affairs and business of the corporation and to make such rules and regulations therefore not inconsistent with law, with the Articles of Incorporation or these bylaws, as they may deem best. -
(c) To adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock and to alter the form of such seal and such of certificates from time to time in their judgment they deem best.
(d) To authorize the issuance of shares of stock of the corporation from time to time, upon such terms and for such consideration as may be lawful.
(e) To borrow money and incur indebtedness for the purposes of the corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation or other evidence of debt and securities therefor.
SECTION 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of directors shall be five (5) until changed by amendment of the Articles or by a bylaw duly adopted by approval of the outstanding shares amending this Section 2.
SECTION 3. ELECTION AND TERM OF OFFICE, The directors shall be elected at each annual meeting of shareholders but if any such annual meeting is not held or the directors are not elected the shareholders may elect a director or directors at any time to fill any vacancy or vacancies. Any such election by written consent requires the consent of a majority of the outstanding shares entitled to vote. If the Board accepts the resignation of a director tendered to take effect at a future time, the shareholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of the director's term of office.
SECTION 4. PLACE OF MEETING. Any meeting of the Board shall be held at any place within or without the State of Colorado which has been designated from time to time by the Board. In the absence of such designation meetings shall be held at the principal executive office of the corporation.
SECTION 5. REGULAR MEETINGS. Immediately following each annual meeting of shareholders the Board shall hold a regular meeting for the purpose of organization, selection of a Chairman of the Board, election of officers, and the transaction of other business. Call and notice of such regular meeting is hereby dispensed with.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board for any purposes may be called at any time by the Chairman of the Board, the President, or the Secretary or a majority of the directors.
Special meetings of the Board shall be held upon at least four (4) days written notice or forty-eight (48) hours notice given personally or by telephone, telegraph, telex, email or other similar means of communication. Any such notice shall be addressed or delivered to each director at such director's address as it is shown upon the records of the Corporation or as may have been given to the Corporation by the director for the purposes of notice.
SECTION 7. QUORUM. A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number be required by law or by the Articles of Incorporation. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the number of directors required as noted above to constitute a quorum for such meeting.
SECTION 8. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the Board may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another.
SECTION 9. WAIVER OF NOTICE. The transactions of any meeting of the Board, however called and noticed or wherever held, are as valid as though had at a meeting duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made part of the minutes of the meeting.
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SECTION 10. ADJOURNMENT. A majority of the directors present, whether or not a quorum is present, may adjourn any directors meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting being adjourned. If the meeting is adjourned for more than forty-eight (48) hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of adjournment.
SECTION 11. FEES AND COMPENSATION. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board.
SECTION 12. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board shall individually or collectively consent in writing to such action. Such consent or consents shall have the same effect as a unanimous vote of the Board and shall be filed with the minutes of the proceedings of the Board.
SECTION 13. COMMITTEES. The board may appoint one or more committees, each consisting of two or more directors, and delegate to such committees any of the authority of the Board except with respect to:
(a) The approval of any action which requires shareholders approval or approval of the outstanding shares;
(b) The filling of vacancies on the Board or on any committees;
(c) The fixing of compensation of the directors for serving on the Board or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
(e) The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable by a committee of the board;
(f) A distribution to the shareholders of the corporation;
(g) The appointment of other committees of the Board or the members thereof. Any such committee must be appointed by resolution adopted by a majority of the authorized number of directors and may be designated an Executive Committee or by such other name as the Board shall specify. The Board shall have the power to prescribe the manner in which proceedings of any such committee shall be conducted, Unless the Board or such committee shall otherwise provide the regular or special meetings and other actions of any such committee shall be governed by the provisions of this Article applicable to meetings and actions of the Board. Minutes shall be kept of each meeting of each committee.
ARTICLE IV
OFFICERS
SECTION 1 . OFFICERS. The officers of the corporation shall be the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Secretary, Treasurer, Vice President of Events and Marketing. The corporation may also have, at the discretion of the Board, one or more vice-presidents, one or more assistant vice presidents, one or more assistant secretaries, one or more assistant treasurers and such other officers as may be elected or appointed in accordance with the provisions of Section 3 of this Article.
SECTION 2. ELECTION. The officers of the corporation, except such officers as may be elected or appointed in accordance with the provisions of Section 3 or Section 5 of this Article, shall be chosen annually by, and shall serve at the pleasure of, the Board, and shall hold their respective offices until their resignation, removal or other disqualification from service, or until their respective successors shall be elected.
SECTION 3. SUBORDINATE OFFICERS. The Board may elect, and may empower the Chief Executive Officer to appoint, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board, or the Chief Executive Officer may from time to time direct.
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SECTION 4, REMOVAL AND RESIGNATION. Any officer may be removed, either with or without cause, by the Board of Directors at any time, or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board. Any officer may resign at any time by giving written notice to the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein. The acceptance of such resignation shall be necessary to make it effective.
SECTION 5. VACANCIES. A vacancy of any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed by these bylaws for the regular election or appointment to such office.
SECTION 6. CEO, The CEO shall be the chief executive officer and general manager of the corporation. The CEO shall preside at all meetings of the shareholders and, in the absence of the Chairman of the Board at all meetings of "the Board. The CEO has the general powers and duties of management usually vested in the chief executive officer and the general manager of a corporation and such other powers and duties as may be prescribed by the Board.
SECTION 7. PRESIDENT. In the absence or disability of the CEO, the President, shall perform all the duties of the CEO, and when so acting shall have all the powers of, and be subject to all the restrictions upon the CEO. The President shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the CEO or the Board.
SECTION 8. SECRETARY. The Secretary shall keep or cause to be kept, at the principal executive offices and such other place as the Board may order, a book of minutes of all meetings of shareholders, the Board, and its committees, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Board and committee meetings, the number of shares present or represented at shareholders' meetings, and proceedings thereof. The Secretary shall keep, or cause to be kept, a copy of the bylaws of the corporation at the principal executive office of the corporation. The Secretary shall keep, or cause to be kept, at the principal executive office, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board and any committees thereof required by these bylaws or by law to be given, shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board.
SECTION 9. TREASURER. The Treasurer is the chief financial officer CFO of the corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and financial-transactions of the corporation, and shall send or cause to be sent to the shareholders of the corporation such financial statements and reports as are by law or these bylaws required to be sent to them.
The Treasurer shall deposit all monies and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the CEO and directors, whenever they request it, an account of all transactions as Treasurer and of the financial conditions of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board.
SECTION 10. AGENTS. The CEO, President, the Secretary or Treasurer may appoint agents with power and authority, as defined or limited in their appointment, for and on behalf of the corporation to execute and deliver, and affix the seal of the corporation thereto, to bonds, undertakings, recognizance, consents of surety or other written obligations in the nature thereof and any said officers may remove any such agent and revoke the power and authority given to him
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ARTICLE V
OTHER PROVISIONS
SECTION 1 DIVIDENDS. The Board may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and on the terms and conditions provided by law, subject to any contractual restrictions on which the corporation is then subject.
SECTION 2. INSPECTION OF BY-LAWS. The Corporation shall keep in its Principal executive Office the original or a copy of these bylaws as amended to date which shall be open to inspection to shareholders at all reasonable times during office hours. If the Principal Executive Office of the corporation is outside the State of Colorado and the Corporation has no principal business office in such State, it shall upon the written notice of any shareholder furnish to such shareholder a copy of these bylaws as amended to date.
SECTION 3. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The CEO or any other officer or officers authorized by the Board or the CEO are each authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by said officer.
ARTICLE VI
INDEMNIFICATION
SECTION 1. INDEMNIFICATION IN ACTIONS BY THIRD PARTIES. Subject to the limitations of law, if any, the corporation shall have the Power to indemnify any director, officer, employee and agent of the corporation who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of to procure a judgment in its favor) against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, provided that the Board shall find that the director, officer, employee or agent acted in good faith and in a manner which such person reasonably believed in the best interests of the corporation and, in the case of criminal proceedings, had no reasonable cause to believe the conduct was unlawful, The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of rolo contendere shall riot, of itself create a presumption that such person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of the corporation or that such person had reasonable cause to believe such person's conduct was unlawful.
SECTION 2, INDEMNIFICATION IN ACTIONS BY OR ON BEHALF OF THE CORPORATION. Subject to the limitations of law, if any, the Corporation shall have the power to indemnify any director, officer, employee and agent of the corporation who was or is threatened to be made a party to any threatened, pending or completed legal action by or in the right of the Corporation to procure a judgment in its favor, against expenses actually and reasonable incurred by such person in connection with the defense or settlement, if the Board of Directors determine that such person acted in good faith, in a manner such person believed to be in the best interests of the Corporation and with such came, including reasonable inquiry, as an ordinarily, prudent person would use under similar circumstances.
SECTION 3. ADVANCE OF EXPENSES. Expenses incurred in defending any proceeding may be advanced by the Corporation prior to the final disposition of such proceeding upon receipt of an undertaking by or on behalf of the officer, director, employee or agent to repay such amount unless it shall be determined ultimately that the officer or director is entitled to be indemnified as authorized by this Article.
SECTION 4. INSURANCE. The corporation shall have power to purchase and maintain insurance on behalf of any officer, director, employee or agent of the Corporation against any liability asserted against or incurred by the officer, director, employee or agent in such capacity or arising out of such person's status as such whether or not the corporation would have the power to indemnify the officer, or director, employee or agent against such liability under the provisions of this Article.
ARTICLE VII
AMENDMENTS
These bylaws may be altered, amended or repealed either by approval of a majority of the outstanding shares entitled to vote or by the approval of the Board; provided however that after the issuance of shares, a bylaw specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to a flexible Board or vice versa may only be adopted by the approval by an affirmative vote of not less than two-thirds of the corporation's issued and outstanding shares entitled to vote.
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Exhibit 4.1
Social Detention, Inc.
3000 F Danville Blvd, Suite 145
Alamo, California 94507
http://www.sodetention.com
Company Direct: (925) 575-4433
SUBSCRIPTION AGREEMENT
Common Stock Shares 1 to 500,000,000
Subject to the terms and conditions of the shares of Common Stock Shares (the "Shares”) described in the Social Detention, Inc. Offering Circular dated June 20, 2020 (the "Offering"), I hereby subscribe to purchase the number of shares of Common Stock set forth below for a purchase price of $0.01 per share. Enclosed with this subscription agreement is my check (Online “E-Check” or Traditional Papery Check) or money order made payable to "Social Detention, Inc." evidencing $0.01 for each share of Common Stock Subscribed, subject to a minimum of TEN COMMON STOCK SHARES ($0.01).
I understand that my subscription is conditioned upon acceptance by Social Detention, Inc. Company Managers and subject to additional conditions described in the Offering Circular. I further understand that Social Detention, Inc. Company Managers, in their sole discretion, may reject my subscription in whole or in part and may, without notice, allot to me a fewer number of shares of Common Stock that I have subscribed for. In the event the Offering is terminated, all subscription proceeds will be returned with such interest as may have been earned thereon.
I understand that when this subscription agreement is executed and delivered, it is irrevocable and binding to me. I further understand and agree that my right to purchase shares of Common Stock offered by the Company may be assigned or transferred to any third party without the express written consent of the Company.
I further certify, under penalties of perjury, that: (1) the taxpayer identification number shown on the signature page of this Offering Circular is my correct identification number; (2) I am not subject to backup withholding under the Internal Revenue Code because (a) I am exempt from backup withholding; (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and (3) I am a U.S. citizen or other U.S. person (as defined in the instructions to Form W-9).
Subscription Agreement • Regulation A • Social Detention, Inc.
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SUBSCRIPTION AGREEMENT (the “Agreement”) with the undersigned Purchaser for ______________ Common Stock Shares of Social Detention, Inc., with a par value per share of $0.01, at a purchase price of $0.01 (ZERO DOLLARS AND ONE TENTH OF ONE CENT) per share (aggregate purchase price: $____________________).
Made __________________________________, by and between Social Detention, Inc., a Wyoming Corporation (the “Company”), and the Purchaser whose signature appears below on the signature line of this Agreement (the “Purchaser”).
W I T N E S E T H:
WHEREAS, the Company is offering for sale up to FIVE HUNDRED MILLION Common Stock Shares (the “Shares”) (such offering being referred to as the “Offering”).
NOW, THEREFORE, the Company and the Purchaser, in consideration of the mutual covenants contained herein and intending to be legally bound, do hereby agree as follows:
1. Purchase and Sale. Subject to the terms and conditions hereof, the Company shall sell, and the Purchaser shall purchase, the number of Shares indicated above at the price so indicated.
2. Method of Subscription. The Purchaser is requested to complete and execute this agreement online or to print, execute and deliver two copies of this Agreement to the Company, at Social Detention, Inc., 3000 F Danville Blvd, Suite 145, Alamo, CA 94507, along with a check payable to the order of Social Detention, Inc. in the amount of the aggregate purchase price of the Shares subscribed (the “Funds”). The Company reserves the right in its sole discretion, to accept or reject, in whole or in part, any and all subscriptions for Shares.
3. Subscription and Purchase. The Offering will begin on the effective date of the Offering Statement and continue until the Company has sold all of the Shares offered hereby or on such earlier date as the Company may close or terminate the Offering.
Any subscription for Shares received will be accepted or rejected by the Company within 30 days of receipt thereof or the termination date of this Offering, if earlier. If any such subscription is accepted, in whole or part, the Company will promptly deliver or mail to the Purchaser (i) a fully executed counterpart of this Agreement, (ii) a certificate or certificates for the Shares being purchased, registered in the name of the Purchaser, and (iii) if the subscription has been accepted only in part, a refund of the Funds submitted for Shares not purchased. Simultaneously with the delivery or mailing of the foregoing, the Funds deposited in payment for the Shares purchased will be released to the Company. If any such subscription is rejected by the Company, the Company will promptly return, without interest, the Funds submitted with such subscription to the subscriber.
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4. Representations, Warranties and Covenants of the Purchaser. The Purchaser represents, warrants and agrees as follows:
(a) Prior to making the decision to enter into this Agreement and invest in the Shares subscribed, the Purchaser has received the Offering Statement. On the basis of the foregoing, the Purchaser acknowledges that the Purchaser processes sufficient information to understand the merits and risks associated with the investment in the Shares subscribed. The Purchaser acknowledges that the Purchaser has not been given any information or representations concerning the Company or the Offering, other than as set forth in the Offering Statement, and if given or made, such information or representations have not been relied upon by the Purchaser in deciding to invest in the Shares subscribed.
(b) The Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the investment in the Shares subscribed and the Purchaser believes that the Purchaser’s prior investment experience and knowledge of investments in low-priced securities (“penny stocks”) enables the Purchaser to make an informal decision with respect to an investment in the Shares subscribed.
(c) The Shares subscribed are being acquired for the Purchaser’s own account and for the purposes of investment and not with a view to, or for the sale in connection with, the distribution thereof, nor with any present intention of distributing or selling any such Shares.
(d) The Purchaser’s overall commitment to investments is not disproportionate to his/her net worth, and his/her investment in the Shares subscribed will not cause such overall commitment to become excessive.
(e) The Purchaser has adequate means of providing for his/her current needs and personal contingencies, and has no need for current income or liquidity in his/her investment in the Shares subscribed.
(f) With respects to the tax aspects of the investment, the Purchaser will rely upon the advice of the Purchaser’s own tax advisors.
(g) The Purchaser can withstand the loss of the Purchaser’s entire investment without suffering serious financial difficulties.
(h) The Purchaser is aware that this investment involves a high degree of risk and that it is possible that his/her entire investment will be lost.
(i) The Purchaser is a resident of the State set forth below the signature of the Purchaser on the last age of this Agreement.
5. Notices. All notices, request, consents and other communications required or permitted hereunder shall be in writing and shall be delivered, or mailed first class, postage prepaid, registered or certified mail, return receipt requested:
(a) If to any holder of any of the Shares, addressed to such holder at the holder’s last address appearing on the books of the Company, or
(b) If to the Company, addressed to the Social Detention, Inc., 3000 F Danville Blvd, Suite 145, Alamo, CA 94507, or such other address as the Company may specify by written notice to the Purchaser, and such notices or other communications shall for all purposes of this Agreement be treated as being effective on delivery, if delivered personally, or, if sent by mail, on the earlier of actual receipt or the third postal business day after the same has been deposited in a regularly maintained receptacle for the deposit of United States’ mail, addressed and postage prepaid as aforesaid.
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6. Severability. If any provision of this Subscription Agreement is determined to be invalid or unenforceable under any applicable law, then such provision shall be deemed inoperative to the extent that it may conflict with such applicable law and shall be deemed modified to conform with such law. Any provision of this Agreement that may be invalid or unenforceable under any applicable law shall not affect the validity or enforceability of any other provision of this Agreement, and to this extent the provisions of this Agreement shall be severable.
7. Parties in Interest. This Agreement shall be binding upon and inure to the benefits of and be enforceable against the parties hereto and their respective successors or assigns, provided, however, that the Purchaser may not assign this Agreement or any rights or benefits hereunder.
8. Choice of Law. This Agreement is made under the laws of the State of Colorado and for all purposes shall be governed by and construed in accordance with the laws of that State, including, without limitation, the validity of this Agreement, the construction of its terms, and the interpretation of the rights and obligations of the parties hereto.
9. Headings. Sections and paragraph heading used in this Agreement have been inserted for convenience of reference only, do not constitute a part of this Agreement and shall not affect the construction of this Agreement.
10. Execution in Counterparts. This Agreement may be executed an any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.
11. Survival of Representations and Warranties. The representations and warranties of the Purchaser in and with respect to this Agreement shall survive the execution and delivery of this Agreement, any investigation at any time made by or on behalf of any Purchaser, and the sale and purchase of the Shares and payment therefore.
12. Arbitration: Except as expressly provided in this Subscription Agreement, any dispute, claim or controversy between or among any of the Investors or between any Investor or his/her/its Affiliates and the Company arising out of or relating to this Agreement or any subscription by any Investor to purchase Securities, or any termination, alleged breach, enforcement, interpretation or validity of any of those agreements (including the determination of the scope or applicability of this agreement to arbitrate), or otherwise involving the Company, will be submitted to arbitration in the county and state in which the Company maintains its principal office at the time the request for arbitration is made, before a sole arbitrator, in accordance with the laws of the state of Colorado for agreements made in and to be performed in the state of Colorado. Such arbitration will be administered by the Judicial Arbitration and Mediation Services (“JAMS”) and conducted under the provisions of its Comprehensive Arbitration Rules and Procedures. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. Judgment upon any award rendered by the arbitrator shall be final and may be entered in any court having jurisdiction thereof. No party to any such controversy will be entitled to any punitive damages. Notwithstanding the rules of JAMS, no arbitration proceeding will be consolidated with any other arbitration proceeding without all parties’ consent. The arbitrator shall, in the award, allocate all of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party, against the party who did not prevail.
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NOTICE: By executing this Subscription Agreement, Subscriber is agreeing to have all disputes, claims, or controversies arising out of or relating to this Agreement decided by neutral binding arbitration, and Subscriber is giving up any rights he, she or it may possess to have those matters litigated in a court or jury trial. By executing this Subscription Agreement, Subscriber is giving up his, her or its judicial rights to discovery and appeal except to the extent that they are specifically provided for in this Subscription Agreement. If Subscriber refuses to submit to arbitration after agreeing to this provision, Subscriber may be compelled to arbitrate under federal or state law. Subscriber confirms that his, her or its agreement to this arbitration provision is voluntary.
NOTICE: SUBSCRIBERS TO THIS OFFERING UNDERSTAND THAT THEY HAVE NOT WAIVED ANY RIGHT THAT THEY MAY HAVE UNDER ANY APPLICABLE FEDERAL SECURITIES LAWS.
13. THE PARTIES HERBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATON BASED HEREIN, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.
14. In Connection with any litigation, mediation, arbitration, special proceeding or other proceeding arising out of this Agreement, the prevailing party shall be entitled to recover its litigation-related costs and reasonable attorneys’ fees through and including any appeals and post-judgment proceedings.
15. In no event shall any party be liable for any incidental, consequential, punitive or special damages by reason of its breach of this Agreement. The liability, if any, of the Company and its Managers, Directors, Officers, Employees, Agents, Representatives, and Employees to the undersigned under this Agreement for claims, costs, damages, and expenses of any nature for which they are or may be legally liable, whether arising in negligence or other tort, contract, or otherwise, shall not exceed, in the aggregate the undersigned’s investment amount.
12. Additional Information. The Purchaser realizes that the Shares are offered hereby pursuant to exemptions from registration provided by Regulation A and the Securities Act of 1933.
IN WITNESSES WHEREOF, the parties hereto have executed this Subscription Agreement as of the day and year first above written.
| Social Detention, Inc. | |
| By: /s/ Robert Legg | |
| Mr. Robert Legg, Chief Executive Officer |
PURCHASER:
| ______________________________ | |
| Signature of Purchaser | |
| ______________________________ | |
| Name of Purchaser |
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Exhibit 6.1
SOCIAL DETENTION, INC.
2020 STOCK INCENTIVE PLAN
1. GENERAL
(a) Purpose. The primary purposes of the Social Detention, Inc. 2020 Stock Incentive Plan are to attract, retain and motivate employees, directors and consultants, to compensate them for their contributions to the growth and profits of the Company and its Affiliates and to encourage them to own Common Stock.
(b) Types of Awards. The Plan permits the award of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options and (iii) Restricted Stock.
2. DEFINITIONS
Except as otherwise provided in an applicable Award Agreement, the following capitalized terms shall have the meanings indicated below for purposes of the Plan and any Award:
(a) “Affiliate” means a parent or subsidiary of the Company, with “parent” meaning an entity that controls the Company directly or indirectly, through one or more intermediaries, and “subsidiary” meaning an entity that is controlled by the Company directly or indirectly, through one or more intermediaries. Solely with respect to the grant of an Incentive Stock Option, Affiliate means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.
(b) “Award” means any award of an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, or Other Stock-Based Award.
(c) “Award Agreement” means the written or electronic document setting forth the terms and conditions of an Award. The Award Agreement is subject to the terms and conditions of the Plan.
(d) “Board” means the Board of Directors of Evolving Systems, Inc.
(e) “Change of Control” means the occurrence of any of the following events:
(i) a liquidation or dissolution of the Company; or
(ii) the sale of all or substantially all (greater than seventy five percent (75%)) of the fair market value of the assets of the Company; or
(iii) individuals who constitute the majority of the Board as of the date of this Agreement (the “lncumbent Board”) cease for any reason to constitute at least a majority of the Board; provided that any individual who becomes a member of the Board after the date of this Agreement whose election, or nomination for election by holders of the Company’s securities, was approved by the vote of at least a majority of the Individuals then constituting the Incumbent Board will be considered a member of the Incumbent Board.
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(iv) any other change in effective control described in Treas. Reg. Section 1.409A(i)(5)(vi).
(f) “Code” means the Internal Revenue Code of 1986, as amended, and the applicable rulings, regulations and guidance thereunder.
(g) “Committee” means the Compensation Committee of the Board which shall consist of two (2) members of the Board.
(h) “Common Stock” means a share of Social Detention, Inc., common stock, $0.001 par value per share.
(i) “Company” means Social Detention, Inc., a Nevada corporation.
(j) “Consultant” means any person, including an advisor, engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services.
(k) “Continuous Service” means continuous service as an Employee, Director or Consultant to the Company or an Affiliate. Unless otherwise stated in the applicable Award Agreement, a Participant’s change in position or duties with the Company or any Affiliate shall not result in interrupted or terminated service, so long as such Participant continues service as an Employee, Director or Consultant. Whether a termination or interruption in service shall have occurred for purposes of the Plan shall be determined by the Committee (or its designee), which determination shall be final, binding and conclusive.
(l) “Covered Employee” means the chief executive officer and other highest compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code and other employees who may become subject to such reporting.
(m) “Director” means a member of the Board.
(n) “Dividend Equivalents” means any right granted under Section 11 of the Plan.
(o) “Employee” means any person employed by the Company or an Affiliate, determined in accordance with the Company’s standard personnel policies and practices.
(p) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as it may be amended from time to time, or any successor act thereto.
(q) “Fair Market Value” means, as of any date, the value of the Common Stock of the Company determined as follows:
(i) If the Common Stock is listed on any established stock exchange, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in Common Stock) on the determination date, as reported in The Wall Street Journal or such other source as the Board deems reliable. Unless otherwise provided by the Committee, if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the determination date, then the Fair Market Value shall be the closing sales price (or closing bid if no sales were reported) on the last preceding date for which such quotation exists.
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(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee.
(r) “Full-Value Award” means an Award of Restricted Stock.
(s) “Incentive Stock Option” means an Option granted under Section 6 of the Plan that is intended to meet the requirements of Section 422 of the Code, or any successor provision thereto.
(t) “Non-statutory Stock Option” means an Option granted under Section 6 of the Plan that is not intended to be an Incentive Stock Option.
(u) “Option” or “Stock Option” means a right to purchase one or more shares of Common Stock.
(v) “Other Stock-Based Award” means any right granted under Section 10 of the Plan.
(w) “Participant” means an eligible individual who is granted an Award under the Plan.
(x) “Performance Award” means any right granted under Section 9 of the Plan.
(y) “Performance Criteria” means any quantitative or qualitative measures, as determined by the Committee, which may be used to measure the level of performance of the Company, an Affiliate or any individual Participant during a Performance Period, including any Qualifying Performance Criteria.
(z) “Performance Period” means any period as determined by the Committee in its sole discretion.
(aa) “Person” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof.
(bb) “Qualifying Performance Criteria” means one or more of the following performance criteria applied to the individual, the Company as a whole, an Affiliate, a business unit, or any combination thereof, and measured quarterly, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to a previous quarter or year’s results or to a designated comparison group, in each case as specified by the Committee in the Award Agreement: (i) revenue (ii) earnings before interest, taxes, depreciation and amortization (EBITDA), (iii) adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, impairment, stock compensation and gain/loss on foreign exchange transaction), (iv) net earnings, (v) net income, (vi) product-related targets and (vii) cash flow, subject to adjustment by the Committee to remove the effect of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence, related to the disposal of a segment or a business, or related to a change in accounting principle or otherwise.
(cc) “Plan” means this Social Detention, Inc. 2020 Stock Incentive Plan.
(dd) “Restricted Stock” means an Award of shares of Common Stock granted under Section 8 of the Plan.
(ee) “Share Reserve” means as defined in Section 4 of the Plan.
(ff) “Substitute Award” means an Award granted in substitution for, or in assumption of, outstanding awards previously granted by an entity acquired by the Company or an Affiliate or with which the Company or Affiliate combines.
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3. PLAN ADMINISTRATION
(a) Authority of the Committee. Except as otherwise provided herein, the Plan shall be administered by the Committee, which shall have the power to interpret the Plan and to adopt such rules and guidelines for implementing the terms of the Plan as it may deem appropriate. The Committee shall have the ability to modify the Plan provisions, to the extent necessary, or delegate such authority, to accommodate any changes in law and regulations in jurisdictions in which Participants will receive Awards. Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to:
(i) designate Participants;
(ii) determine the type or types of Awards to be granted to each Participant under the Plan;
(iii) determine the number of shares of Common Stock to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards;
(iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, shares of Common Stock, other securities, or other Awards, or canceled, forfeited, or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash, shares of Common Stock, other securities, other Awards, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan;
(viii) establish, amend, suspend, or waive such rules and guidelines;
(ix) appoint such agents as it shall deem appropriate for the proper administration of the Plan;
(x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan; and
(xi) correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
(b) Administrative Actions. Unless otherwise expressly provided in the Plan, subject to the limitations described in subsection (a) above, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any stockholder, and any employee of the Company or of any Affiliate.
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(c) No Liability. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan, any Award or any Award Agreement.
(d) Action by the Committee. Notwithstanding anything to the contrary expressed or implied in this Plan, any and all actions by the Committee required or permitted under this Plan shall require the unanimous approval of all Committee members.
4. SHARES SUBJECT TO THE PLAN
(a) Shares Available. Subject to adjustment as provided in Section 14 of the Plan, the maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards granted under the Plan shall be 1,000,000,000 shares (“Share Reserve”).
Each share of Common Stock issued pursuant to an Award shall reduce the Share Reserve by one (1) share. To the extent that a distribution pursuant to an Award is made in cash, the Share Reserve shall be reduced by the number of shares of Common Stock subject to the redeemed or exercised portion of the Award.
(b) Changes to the Share Reserve. If an Award granted under the Plan shall for any reason (i) expire, be canceled or otherwise terminate, in whole or in part, without having been exercised or redeemed in full, (ii) be reacquired by the Company prior to vesting, or (iii) be repurchased at cost by the Company prior to vesting, the shares of Common Stock not acquired by the Participant under such Award shall revert or be added to the Share Reserve and become available for issuance under the Plan; provided, however, that shares of Common Stock shall not revert or be added to the Share Reserve that had been (A) tendered in payment of an Option, (B) withheld by the Company to satisfy any tax withholding obligation, or (C) purchased by the Company with the proceeds from the exercise of Options, and provided, further, that shares of Common Stock covered by a Stock Appreciation Right, to the extent the right is exercised and settled in shares of Common Stock, and whether or not shares of Common Stock are actually issued to the Participant upon exercise of the Stock Appreciation Right, shall be considered issued or transferred pursuant to the Plan.
(c) Source of Shares. Any shares of Common Stock delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued shares or reacquired shares, bought on the market or otherwise.
(d) Substitute Awards. In the case of Substitute Awards, the shares of Common Stock subject to the Substitute Award shall not reduce the Share Reserve. If a Substitute Award shall for any reason expire, be canceled or otherwise terminate, in whole or in part, be settled in cash or otherwise settled by issuance of fewer shares, the shares of Common Stock not acquired by the Participant shall not be added to the Share Reserve. Further, any shares of Common Stock withheld or delivered to pay tax withholding obligations relating to a Substitute Award shall not reduce the Share Reserve.
5. ELIGIBILITY
Individuals eligible to participate in this Plan include Employees, Directors and Consultants of the Company, or any Affiliate; provided, however, to the extent required under Section 409A of the Code, an Affiliate of the Company shall include only an entity in which the Company possesses at least twenty percent (20%) of the total combined voting power of the entity’s outstanding voting securities or such other threshold ownership percentage permitted under Section 409A of the Code.
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6. STOCK OPTIONS
(a) Grant of Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions, and any other terms and conditions not inconsistent with the provisions of the Plan, as the Committee shall determine. Incentive Stock Options may be granted only to eligible Employees of the Company or of any parent corporation or subsidiary corporation (as permitted by Section 422 of the Code).
(b) Award Agreement. Each Option granted under the Plan shall be evidenced by an Award Agreement. The Award Agreement shall specify whether the Option is intended to be an Incentive Stock Option or a Nonstatutory Stock Option.
(i) Exercise Price. The purchase price per share of Common Stock that may be purchased by an Option shall be determined by the Committee; provided, however, and except with respect to Substitute Awards or as provided in Section 14, that such purchase price shall not be less than the Par Value of a share of Common Stock.
(ii) Term. The term of each Option shall not exceed ten (10) years from the date of grant.
(iii) Vesting; Restrictions on Exercise. The Award Agreement shall set forth any installment or other restrictions on exercise of the Option during the term of the Option. Each Option shall become exercisable and shall vest over such period of time, or upon such events or such Performance Criteria, as determined by the Committee.
(iv) Time and Method of Exercise. The Committee shall establish in the applicable Award Agreement the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms, including, without limitation, cash, shares of Common Stock, or other Awards or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which payment of the exercise price with respect thereto may be made or deemed to have been made.
(v) Termination of Continuous Service. Each Award Agreement shall set forth the extent, if any, to which the Participant shall have the right to exercise the Option following termination of the Participant’s Continuous Service. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Continuous Service. In the absence of specific provisions in an Award Agreement setting forth rights to exercise following termination of a Participant’s Continuous Service, the following shall apply:
(A) Termination of Continuous Service Other than as a Result of Disability or Death. In the event a Participant’s Continuous Service terminates (other than upon the Participant’s death or disability), the Participant may exercise his or her Option (to the extent that the Participant was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (a) the date three (3) months after the termination of the Participant’s Continuous Status as an Employee, Director or Consultant (or such longer or shorter period specified in the Option Agreement), or (b) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Participant is not entitled to exercise his or her entire Option, the shares covered by the un-exercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Participant does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate, and the shares covered by such Option shall not become available for issuance under the Plan.
(B) Disability of a Participant. In the event a Participant’s Continuous Service terminates as a result of the Participant’s disability, the Participant may exercise his or her Option (to the extent that the Participant was entitled to exercise it as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Participant is not entitled to exercise his or her entire Option, the shares covered by the un-exercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall not become available for issuance under the Plan.
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(C) Death of a Participant. In the event of the death of a Participant during, or within a period specified in the Option Agreement after the termination of, the Participant’s Continuous Service, the Option may be exercised (to the extent the Participant was entitled to exercise the Option as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Participant’s death pursuant to subsection 15(b), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of death, the Participant was not entitled to exercise his or her entire Option, the shares covered by the un-exercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall not become available for issuance under the Plan.
(c) Limitations on Incentive Stock Options.
(i) Initial Exercise. The aggregate Fair Market Value of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant in any calendar year, under the Plan or otherwise, shall not exceed $100,000. For this purpose, the Fair Market Value of the shares of Common Stock shall be determined as of the date of grant and each Incentive Stock Option shall be taken into account in the order granted.
(ii) Ten Percent Stockholders. An Incentive Stock Option granted to a Participant who is the holder of record of more than ten percent (10%) of the combined voting power of all classes of stock of the Company shall have an exercise price at least equal to 110% of the Fair Market Value of a share of Common Stock on the date of grant and the term of the Option shall not exceed five (5) years.
(iii) Notification of Disqualifying Disposition. If any Participant shall make any disposition of shares of Common Stock acquired pursuant to the exercise of an Incentive Stock Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), the Participant shall notify the Company of such disposition within ten (10) days thereof.
8. RESTRICTED STOCK
(a) Grant of Restricted Stock. The Committee is hereby authorized to grant Awards of Restricted Stock to Participants.
(b) Award Agreement. Each grant of Restricted Stock shall be evidenced by an Award Agreement.
(i) Restrictions on Transfer. Shares of Restricted Stock shall be subject to such restrictions as the Committee may establish in the applicable Award Agreement (including, without limitation, any limitation on the right to vote a share of Restricted Stock or the right to receive any dividend or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. Unrestricted shares of Common Stock, evidenced in such manner as the Committee shall deem appropriate, shall be delivered to the holder of Restricted Stock promptly after such restrictions have lapsed.
(ii) Share Registration. Any Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.
(iii) Forfeiture. Upon termination of Continuous Service during the restriction period, except as determined otherwise by the Committee, all shares of Restricted Stock and all Restricted Stock Units that are then subject to restrictions shall be forfeited and reacquired by the Company.
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11. DIVIDEND EQUIVALENTS
The Committee is hereby authorized to grant to Participants the right, if so determined by the Committee, to receive, currently, or on a deferred basis, dividends or Dividend Equivalents, with respect to the shares of Common Stock covered by the Award. The Committee may provide that any dividends paid on shares of Common Stock subject to an Award must be reinvested in additional shares of Common Stock, which may or may not be subject to the same vesting conditions and restrictions applicable to the Award. Notwithstanding the award of Dividend Equivalents or dividends, a Participant shall not be entitled to receive a special or extraordinary dividend or distribution unless the Committee shall have expressly authorized such receipt. All distributions, if any, received by a Participant with respect to an Award as a result of any split, Common Stock dividend, combination of shares of Common Stock, or other similar transaction shall be subject to the restrictions applicable to the original Award.
12. TAX WITHHOLDING
The Company or any Affiliate shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan the amount (in cash, shares of Common Stock, other securities, or other Awards) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take such other action as may be necessary in the opinion of the Company or Affiliate to satisfy statutory withholding obligations for the payment of such taxes.
13. CANCELLATION AND RE-GRANT OF OPTIONS
(a) Subject to subsection (b) of this Article 13, the Board shall have the authority to effect, at any time and from time to time (i) the repricing of any outstanding Options under the Plan and/or (ii) with the consent of the affected holders of Options, the cancellation of any outstanding Options and the grant in substitution of new Options under the Plan covering the same or different numbers of shares of Common Stock, but having an exercise price per share not less than 100% of the Fair Market Value, or, in the case of a ten percent (10%) stockholder (as defined in subsection 6(c)), not less than 110% of the Fair Market Value) per share of Common Stock on the new grant date.
(b) Prior to the implementation of any such repricing or cancellation of one or more outstanding Options as described in Section 13(c), the Board shall obtain the approval of the stockholders of the Company to the extent required by the New York Stock Exchange, Nasdaq or other securities exchange listing requirements applicable to the Company, or applicable law.
(c) To the extent required by Section 162(m) of the Code, shares subject to an Option canceled under this Section 13 shall continue to be counted against the maximum award of Options permitted to be granted during any calendar year to an individual Participant pursuant to Section 4(b) of the Plan. The repricing of an Option hereunder resulting in a reduction of the exercise price shall be deemed to be a cancellation of the original Option and the grant of a new Option; in the event of such repricing, both the original and the new Options shall be counted against the maximum awards of Options permitted to be granted during any calendar year to an individual Participant pursuant to Section 4(b) of the Plan. The provisions of this Section 13(c) shall be applicable only to the extent required by Section 162(m) of the Code.
14. ADJUSTMENTS UPON CHANGES IN STOCK
(a) Changes in Capital. If any change is made in the Common Stock subject to the Plan, or subject to any Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the maximum number of shares subject to award to any person during any calendar year, and the outstanding Awards will be appropriately adjusted in the class(es) and number of shares and price per share of stock subject to such outstanding Awards. Such adjustments shall be made by the Committee proportionately, so as to put the Participant in the same economic position both prior to and after the change in capital. The determination of the Committee shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a “transaction not involving the receipt of consideration by the Company.”)
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(b) Change of Control. In the event of a Change of Control, to the extent permitted by applicable law: (i) any surviving corporation (or an Affiliate thereof) shall assume any Awards outstanding under the Plan or shall substitute similar Awards for those outstanding under the Plan and (ii) such Awards shall continue in full force and effect. In the event any surviving corporation (or an Affiliate) refuses to assume or continue such Awards, or to substitute similar Awards for those outstanding under the Plan, then vesting (or release from the repurchase option) shall accelerate such that such Awards are fully vested at such event and shall be exercisable for a period of 15 days after notice from the Company. If not so exercised within the 15 day period, then such Awards shall be terminated.
15. GENERAL PROVISIONS
(a) Forms of Payment for Awards. Subject to the terms of the Plan and any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise, or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, shares of Common Stock, rights in or shares issuable under the Award or other Awards, other securities, or other Awards or any combination thereof, and may be in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with the rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments.
(b) Limits on Transfer of Awards. Except as provided by the Committee, no Award, and no right under any such Award, shall be assignable, alienable, saleable, or transferable by a Participant otherwise than by will or by the laws of descent and distribution; provided, however, that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant with respect to any Award upon the death of a Participant. Each Award, and each right under any Award, shall be exercisable, during the Participant’s lifetime, only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative. No Award, and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.
(c) Conditions and Restrictions Upon Securities Subject to Awards. The Committee may provide that the shares of Common Stock issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the exercise of such Option or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability and forfeiture or repurchase provisions or provisions on payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any shares of Common Stock issued under an Award, including without limitation: (i) restrictions under an insider trading policy or pursuant to applicable law; (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company equity compensation arrangements; (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers; and (iv) provisions requiring shares to be sold on the open market or to the Company in order to satisfy tax withholding or other obligations.
(d) Share Certificates. All shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares of Common Stock or other securities are then listed, and any applicable Federal, state, or local securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Notwithstanding any other provision of this Plan to the contrary, the Company may elect to satisfy any requirement under this Plan for the registration or delivery of stock certificates through the use of book-entry registration.
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(e) Changes in Accounting or Tax Rules. Except as provided otherwise at the time an Award is granted, notwithstanding any other provision of the Plan to the contrary, if, during the term of the Plan, any changes in the financial or tax accounting rules applicable to any Award shall occur which, in the sole judgment of the Committee, may have a material adverse effect on the reported earnings, assets or liabilities of the Company, the Committee shall have the right and power to modify, as necessary, any then outstanding and unexercised Options, Stock Appreciation Rights and other outstanding Awards as to which the applicable services or other restrictions have not been satisfied.
(f) Non-exclusivity of the Plan. The adoption of the Plan shall not be construed as creating any limitations upon the right and authority of the Committee to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Committee in its discretion determines desirable.
(g) Other Award Agreement Provisions. Each Award Agreement may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.
(h) Other Employee Benefits. The amount of any compensation deemed to be received by a Participant as a result of the exercise of an Option or Stock Appreciation Right, the sale of shares received upon such exercise, the vesting of any Restricted Stock, receipt of Performance Shares, distributions with respect to Restricted Stock Units, Performance Awards, or Other Stock-Based Awards shall not constitute “earnings” or “compensation” with respect to which any other employee benefits of such employee are determined, including without limitation, benefits under any pension, profit sharing, 401(k), life insurance or salary continuation plan.
(i) Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.
(j) Governing Law. The validity and construction of this Plan and the Award Agreements shall be construed in accordance with and governed by the laws of the State of Colorado other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan and the Award Agreements to the substantive laws of any other jurisdiction.
(k) Section 409A. Notwithstanding anything in this Plan to the contrary, the Plan and Awards made under the Plan are intended to comply with the requirements imposed by Section 409A of the Code. If any Plan provision or Award under the Plan would result in the imposition of an additional tax under Section 409A of the Code, the Company and the Participant intend that the Plan provision or Award will be reformed to avoid imposition, to the extent possible, of the applicable tax and no action taken to comply with Section 409A of the Code shall be deemed to adversely affect the Participant’s rights to an Award. The Participant further agrees that the Committee, in the exercise of its sole discretion and without the consent of the Participant, may amend or modify an Award in any manner and delay the payment of any amounts payable pursuant to an Award to the minimum extent necessary to meet the requirements of Section 409A of the Code as the Committee deems appropriate or desirable.
(l) Stockholder Rights. No Participant nor any other holder of an Award granted under the Plan shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Award unless and until such person has satisfied all requirements for exercise of the Award or lapse of restrictions pursuant to its terms.
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16. AMENDMENT, MODIFICATION AND TERMINATION
(a) Amendment, Modification, and Termination. Subject to Sections 3, 15(k) and 16(b), and only upon unanimous approval of the entire Board, the Board may at any time terminate, and from time to time may amend or modify the Plan; provided, however, that no amendment or modification may become effective without approval of the stockholders of the Company if stockholder approval is required to enable the Plan to satisfy any applicable statutory or regulatory requirements, or if the Company, on the advice of counsel, determines that stockholder approval is otherwise necessary or desirable.
(b) Awards Previously Granted. Except as otherwise may be required under Section 15(k), notwithstanding Section 16(a), to the contrary, no amendment, modification or termination of the Plan or Award Agreement shall adversely affect in any material way any previously granted Award, without the written consent of the Participant holding such Award.
17. STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN
The Plan shall be effective immediately upon approval by the stockholders. Unless sooner terminated by the Board, this Plan shall terminate automatically on June 30, 2024. After the Plan is terminated, no Awards may be granted. Awards outstanding at the time the Plan is terminated shall remain outstanding in accordance with the terms and conditions of the Plan and the Award Agreement.
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Exhibit 12.1
THE LAW OFFICES OF
BYRON THOMAS
ATTORNEY AND COUNSELOR AT LAW
3275 S JONES BLVD STE 104
LAS VEGAS, NEVADA 89146
(702) 747-3103
July 2, 2020
To: Board of Directors, Social Detention, Inc.
Re: Registration Statement on Form 1-A (the "Registration Statement")
Gentlemen:
You have requested our opinion as counsel for Social Detention, Inc., a Nevada corporation (the “Company”) in connection with the registration under the Securities Act of 1933, as amended, pursuant to Regulation A, and the Rules and Regulations promulgated thereunder, and the public offering by the Company of up to 500,000,000 shares of common stock issuable in connection with the Company’s Offering Statement provided under Regulation A.
In that connection, we have examined the Company’s Offering Statement pursuant to Regulation A, and filed with the Securities and Exchange Commission on or about July 2, 2020 (the “Offering Circular”). We further have examined the Articles of Incorporation, Bylaws, and applicable minutes of the Company as a basis for the opinion hereinafter expressed.
Based on the foregoing, we are of the opinion that the issue and sale of the Company Shares to be sold pursuant to the terms of the Registration Statement as filed with the Securities and Exchange Commission have been duly authorized and, upon the sale thereof in accordance with the terms and conditions of the Registration Statement be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the Offering Statement.
| Sincerely, | |
| /s/ Byron Thomas | |
| Byron Thomas, Esq. |