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Subsequent Events
6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

Note 16 - Subsequent Events

 

Management has evaluated events that occurred subsequent to the end of the reporting period shown herein:

 

On July 20, 2020 the Company and Iliad entered into agreement to extend the maturity of the Iliad Note until February 27, 2021 in consideration of an extension fee of $1,000.

 

Subsequent to June 30, 2020, the Company issued 3,834,356 shares of common stock to Iliad for the conversion of $50,000 of convertible notes payable.

 

On or about June 23, 2020 Stanley which held a pledge of 3,333,333 shares of SURG common stock (See Note 8) via Stanley’s Member, acting as an agent for the Company, entered into an agreement with SURG, its transfer agent and an escrow officer for which it was agreed that 3,333,333 SURG shares will be cancelled for consideration of up to $700,000. The amount of $500,000 was paid on June 23, 2020 into a lawyer’s trust account, and 2,380,952 of SURG shares have been sent for cancelation. Surge elected not to acquire the remaining 952,381 for $200,000, and as such the remaining shares should be released to Stanley’s member as free trading. The Company and Stanley’s member mitigate the damages created via legal consultant.

 

On July 28, 2020 Discover Growth Fund, LLC filed in the State of Nevada a motion for attorneys $48,844 and costs $716. The Company filed an answer on August 11, 2020. 

 

On August 12, 2020, the Company and its subsidiary, AltCorp Trading LLC, entered into a new pledge agreement with Stanley, where 5,500,000 SURG shares been pledged to Stanley to secure the debt payable by the Company to Stanley as well as mitigate the damages allegedly created by SURG.

 

The Board of Directors of the Company approved, on April 13, 2020, a reverse stock split of all of the Company’s Common Stock, pursuant to which every 50 shares of Common Stock of the Company shall be reverse split, reconstituted and converted into one (1) share of Common Stock of the Company (the “Reverse Stock Split”). The Company submitted an Issuer Company Related Action Notification regarding the Reverse Stock Split to FINRA on April 14, 2020.  To effectuate the Reverse Stock Split, the Company filed on April 21, 2020 a Certificate of Change Pursuant to Nevada Revised Statutes (“NRS”) Section 78.209 (the “Certificate of Change”) with the Secretary of State of the State of Nevada subject to FINRA approval. Since this reverse stock split has not yet been approved by the State of Nevada, the financial statements have not been retroactively restated to reflect this reverse stock split. On June 8, 2020 FINRA advised the Company that such request is deficient due to the fact that a holder of an outstanding convertible note of the Company had entered into two settlements with the Securities and Exchange Commission that related to securities laws violations but were in no way related to the Company. As a result, FINRA advised that it is necessary for the protection of investors, the public interest, and to maintain fair and orderly markets that documentation related to the Reverse Stock Split not be processed. The Company appealed the decision made by FINRA on June 15, 2020. On August 4, 2020, FINRA notified the Company that its appeal had been denied.

 

On August 4, 2020, the Company entered into a Securities Purchase Agreement with Redstart Holdings Corp., an accredited investor (“Redstart”) pursuant to which the Company issued to Redstart a Convertible Promissory Note (the “Redstart Note”) in the aggregate principal amount of $153,600 for a purchase price of $128,000. The Redstart Note has a maturity date of November 3, 2021 and the Company has agreed to pay interest on the unpaid principal balance of the Redstart Note at the rate of six percent (6%) per annum from the date on which the Redstart Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the Redstart Note, provided it makes a payment including a prepayment to Redstart as set forth in the Redstart Note. The transactions described above closed on August 5, 2020. The outstanding principal amount of the Redstart Note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date.  Following the 180th day, Redstart may convert the Redstart Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20 day look back immediately preceding the date of conversion.  In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note), the Redstart Note shall become immediately due and payable and the Company shall pay to Redstart, in full satisfaction of its obligations hereunder, additional amounts as set forth in the Redstart Note. The issuances of the Redstart Note was made in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(a)(2) of the Act. In no event shall Redstart be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by Redstart and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.