And its of course connected to pocket games, who would want to convert to pocket games? Or whatever its called now What a tangled web..
On May 18, 2016, we executed a securities exchange agreement with LMS Development Holdings, Inc, a Delaware corporation (“LMS Holdings”) and Marlborough Brothers Family Trust, dated as of May 11, 2016, under which we propose to acquire 100% of the common stock of LMS Holdings in exchange a $5,500,000 10% original issue discount convertible note due May 31, 2019.
The note, when issued, is convertible into our common stock at any time prior to the maturity date at a price equal to 55% of the average of the three lowest reported sale prices of our common stock as traded on the OTC Markets or other national securities exchange for the 10 trading days prior to the date a conversion notice is given by the holder. LMS Holdings owns 100% of the capital stock of Scriba Corporation (formerly Asahi Net International, Inc.), a corporation that provides certain educational related software to institutions and businesses, The acquisition of LMS Holdings also contemplates our exchanging a $1.8 million installment note issued by Scriba Corporation to Asahi Net, Inc., a Japanese corporation and the former owner of Scriba Corporation, that requires current monthly payments of approximately $81,000 of principal and accrued interest (the “Prior Note”) for a new $1.8 million convertible installment note of the Corporation and Scriba Corporation that is payable as to interest only for six months and thereafter amortizes in the same monthly installments until April 30, 2018 (the “Restated Note’). The Prior Note is subject to mandatory conversion into common stock of LMS Holdings and the Restated Note, if issued, would be subject to mandatory conversion into common stock of our Corporation upon the occurrence of a registered public offering of common stock of LMS Holdings, or our common stock, respectively. In exchange for the Prior Note, we intend to offer to Asahi Net, Inc., 300,000 shares of our Series D Convertible Preferred Stock that is converts into 10% of our Fully-Diluted Common Stock, and a three year warrant requiring the holder to purchase, for $0.10 per share, an additional 5% of our Fully-Diluted Common Stock, in each case, upon consummation of a public offering. Consummation of the exchange of the Restated Note for the Prior Note is a condition to our consummation of the acquisition of LMS Holdings There can be no assurance that we will reach agreement with Asahi Net, Inc. or consummate the acquisition. In the event that we are unable to acquire LMS Holdings or elect not to proceed with the transaction, we may enter into a management services agreement with Scriba Corporation pursuant to which we will provide management services to Scriba Corporation in exchange for a management fee to be determined. https://www.sec.gov/Archives/edgar/data/1591157/000139160916000509/prer14c_pkgm62916.htm