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Shareholder's Equity
9 Months Ended
Sep. 30, 2017
Equity [Abstract]  
Shareholder's Equity

Preferred Stock

 

On December 19, 2016, the Company filed an amendment to its Certificate of Incorporation to authorize the issuance of 20,000,000 shares of blank-check preferred stock at $.001 par value, of which 3,825,000 shares have been reserved for future issuance. The Board of Directors will be authorized to fix the designations, rights, preferences, powers and limitations of each series of the preferred stock.

 

The Company filed a Certificate of Designations effective on December 30, 2016 which sets aside 5,000,000 shares of Preferred Stock as Series A Preferred Stock. The Series A Preferred Stock holders have no voting rights and have an aggregate liquidation value of approximately $11,430,836 and $11,581,000 as of September 30, 2017 and December 31, 2017. The Series A Preferred Stock also carries a coupon payment obligation of 1.5% per year calculated by taking the 30-day average closing price for an equal number of shares of common stock for the month immediately preceding the coupon payment date, which is made annually. Payout of the coupon may be made out of existing cash or in shares of Series A Preferred stock of the Company. The Series A Preferred Stock have no voting or conversion rights. If purchased, redeemed, or otherwise acquired (other than conversion), the preferred stock may be reissued.

 

Common Stock

 

In November 2016, the majority shareholders approved an amendment to the Company’s Certificate of Incorporation to increase the Company’s authorized shares of common stock from 1,100,000 to 25,000,000, to issue up to 2,000,000 shares of blank check preferred stock and to make effective, a reverse stock split at a range of 1 for 500 through 1 for 3,000 immediately followed by a forward split of the outstanding common stock at an exchange rate of 50 for 1 through 300 for 1 to reduce the number of authorized shares of the Company’s common stock, subject to the Board of Directors’ discretion.

 

In January 2017, the Company completed a reverse split of 1-for 3,000 immediately followed by a forward split of 300 for 1. As a result of the split every ten shares of common stock outstanding were consolidated into one share, reducing the number of common shares outstanding on the effective date from 10,989,608 to 1,098,960. All share and per share information on this Form 10-Q has been retroactively adjusted to reflect the reverse stock split.

 

The Company has authorized and reserved for future issuance 550,000 shares of common stock and 3,825,000 shares of preferred stock with respect to the exchangeable shares issued as a result of the merger.

 

Share Repurchase

 

In August 2017, the Company entered into an agreement to repurchase 157 exchangeable shares of ShipTime Canada common stock. Based on the amalgamation agreement, each exchangeable share exchanges into 334 preferred shares and 48 common shares, totaling 52,438 preferred shares and 7,536 common shares. The shares were repurchased through a note payable of $120,000 CAD ($95,931 USD) (see Note 4). The discount on the repurchase of the preferred stock was $1.12 and is recorded in Company’s accumulated deficit and was added to the net loss available to common stockholders in accordance with ASC 260-10-S99-2. The repurchase of the common shares was recorded at its cost of $1.90.

 

Share-based Incentive Plans

 

During the period ended September 30, 2017, the Company had three stock option plans that include both incentive and non-qualified options to be granted to certain eligible employees, non-employee directors, or consultants of the Company. The Company issued 37,500 stock options to board members during the three months ended September 30, 2017. The options vested immediately and expire if not exercised within ten years, the exercise price is $3.30 per share. As a result of the issuance, the Company recorded a share-based compensation expense of $118,572.