Note 6- Legal Matters
On July 5, 2016 the Company voluntarily filed Form 15 with the SEC in order to cease reporting obligations under
Rule 12g-4(a)(2) of the Securities Exchange Act of 1934 (the “Form 15 Filing”). Subsequent to the Form 15 Filing,
two (2) debtholders have filed separate legal actions against the Company for the collection of an amount of either cash
or common stock to which they believe they are entitled under the terms and conditions of each’s respective debt
instrument.
On or about July 15, 2016, an investment firm filed a civil complaint against the Company in the United States District
Court for the Eastern District of New York, alleging a breach of a convertible debt instrument in face value of over
$75,000. The Company has contested the allegations and the matter is pending.
On September 23, 2016, an investment firm filed a civil complaint in the United States District Court for the Eastern
District of New York against the Company and its CEO alleging a breach and default of a convertible debt instrument
in face value of over $75,000. In February 2017, the civil complaint was settled by binding arbitration. No issuance to
the investment firm by the Company of capital stock of any class occurred under the settlement.
On January 17, 2017, an investment firm filed a civil complaint against the Company in the Third Judicial District
Court of Salt Lake County, State of Utah, alleging breach of the terms and conditions of a convertible debt instrument.
The Company is contesting the allegations. The complaint is undergoing binding arbitration.
Note 7 – SUBSEQUENT EVENTS
On July 20, 2017, Dror Svorai, President and CEO, resigned as an officer and director of the Company and from each and of its
subsidiaries. Simultaneously, with Mr. Svorai’s resignation, Yaniv Nahon, Vice President & Chief Operating Officer, assumed the
role and responsibilities of President & CEO of the Company and each of its subsidiaries. Simultaneously on July 20, 2017, Dror
Svorai entered into a stock purchase agreement with a privately-held company, SF Holdings, LLC, (the “Purchaser”) for the sale and
transfer of 100% of his Series A Preferred Stockin the Company, which represents voting control of the Company (the “Agreement”).
Under the terms of the Agreement, effective on July 20, 2017, the Purchaser obtained any and all rights to voting 100% of the shares
of Series A Preferred Stockwhich was held by Dror Svorai, transferring control of the Company to the Purchaser. As a result of these
events, Dror Svorai is no longer an officer or director of the Company, nor the controlling shareholder ofthe Company.
Also on July 20, 2017, Jorge Schcolnik, Chief Financial Officer of the Company, was appointed a member of the Board of Directors
of the Company.
AI
