Stockholders' Deficit

9 Months Ended

Sep. 30, 2020

NOTE 12 - STOCKHOLDERS’ DEFICIT

Reverse Stock Split

On October 18, 2019, the Company completed a 100 for 1 reverse common stock split reducing the outstanding common shares to 25,410,391. As a subsequent event, as of May 18, 2021 the authorized was increased to 20,000,000,000 shares of common stock.

Preferred Stock

The Preferred Stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges, and restrictions granted to and imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The Board of Directors may increase or decrease (but not below the number of shares such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

The Series B Redeemable Convertible Preferred Stock is classified as temporary equity as it is mandatorily redeemable by the holder at a future date. The Series D-1 and D-2 Preferred Stock are classified as temporary equity as they are redeemable immediately. The Series D-3 Preferred Stock is also classified as temporary equity due to its put option, which providers the holders the right to put the shares to the Company for cash if they elect not to convert into shares of common stock.

2020 Transactions

On January 16, 2020, an existing Series B stockholder purchased 53,000 Series B Preferred shares for proceeds of $53,000 under the same terms as their prior purchases.

In June, 2020 the holders of 3,600 shares of Series B Preferred Stock converted these shares for 29,353,846 shares of common stock.

During the three and nine months ended September 30, 2020, Oasis Capital converted 3,900 and 23,300 Series D-2 Preferred shares with a value of $7,800 and $38,800 into 78,000,000 and 283,142,105 common shares.

During the remainder of 2020, the Company converted an aggregate of 3,600 shares of Series D-2 Preferred Stock with a fair value of $17,203 into 72,000,000 shares of common stock.

During the third quarter, 2020 the company issued $12,750 Series A shares in restricted shares to employees under the Employee Restricted Stock Plan .

1.	As a subsequent event, in December 2020, the company issued $1,250 Series A shares for cash.

2.	As a subsequent event, in March 2021, the company issued 1,250 Series A shares for cash.

3.	As a subsequent event, in April 2021, the company issued 1,250 Series A shares for cash.

4.	As a subsequent event, in April 2021, the company issued 25,000 Series A shares for cash.

2019 Transactions

During the three months ended March 31, 2019, holders of Series B Preferred Stock converted 40,020 shares and reduced the principal by $20,164 and interest of $2,400 through the issuance of 87,041,209 shares of common stock.

During the three months ended March 31, 2019 Oasis Capital converted 28,500 Series D-1 Preferred shares for 63,000,000 shares of common stock and reduced the principal outstanding balance by $28,500. As such, the Company recorded a change in derivative liability associated the Series D-1 Preferred Shares of $86,428.

On March 14, 2019, the Company executed an agreement with Oasis Capital, whereby the Company agreed to exchange the remaining outstanding of Series D-1 Preferred Shares of 282,750 for 282,750 Series D-2 Preferred Shares. In addition, the Company executed an agreement whereby 62,250 outstanding D-1 shares for 62,250 Series D-2 preferred shares in exchange of $100,000. In addition, the Company agreed to pay 1,425 shares of D-2 shares as a finance charge for this agreement. The excess fair value of the shares exchanged was recorded as additional interest expense.

The Company issued 346,625 Series D-2 shares to Oasis Capital with a value of $692,850. The Series D-2 Preferred Stock is classified temporary equity due to the fact that the shares are redeemable immediately. As such, the Company recorded an associated derivative liability of $177,323.

On February 21, 2019, the Company issued 37,500 Series D-5 and 54,00 Series D-6 shares pursuant to the RWG acquisition.

On March 14, 2019, the Company issued 82,588 shares of Series D-5 Preferred Stock for a 92.5% interest in Rune.

Common Stock

2020 Transactions

During the three months and nine months ended September 30, 2020, LG converted $0 and $27,270 of principal and $0 and $3,690 of interest of its outstanding convertible note into zero and 217,990,427 shares of common stock.

During the three months and nine months ended September 30, 2020, SBI Investments converted $6,218 and $16,992 of principal of the outstanding convertible note into 69,089,148 and 96,521,526 shares of common stock.

During the three months and nine months ended September 30, 2020, Adar Alef converted $0 and $40,559 of principal $0 and $4,659 of interest of the outstanding convertible note into zero and 334,419,870 shares of common stock.

During the three and nine months ended September 30, 2020, Oasis Capital converted 3,900 and 19,400 Series D -2 Preferred shares with a value of $7,800 and $35,200 into 78,000,000 and 283,142,105 shares of common stock.

During the remainder of 2020, LG converted $8,900 of principal and $3,458 of interest of its outstanding convertible note into 202,356,666 shares of common stock.

During the remainder of 2020, SBI Investments did not convert any principal of the outstanding convertible note into shares of common stock.

During the remainder of 2020, Adar Alef did not convert any principal of the outstanding convertible note into shares of common stock.

During the remainder of 2020, the Company converted an aggregate of 3,600 shares of Series D-2 Preferred Stock with a fair value of $10,803 into 72,000,000 shares of common stock.

2019 Transactions

During the three months ended March 31, 2019, the Company converted notes payable including principal and accrued interest of $183,874 into 189,859,704 shares of common stock.

During the three months ended March 31, 2019, the Company converted 40,020 Series D-1 Preferred shares and 28,500 Series D-1 Preferred shares into an aggregate of 150,041,209 shares of common stock.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

12 Retech Corp 10-Q