Cyber Apps World Inc (CYAP)

[exisnet]

I commend Management for sticking up for Shareholders... don't see often...
10Q
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
East Capital Investment Corp.

In July 2021, we initiated legal action against East Capital Investment Corp. for its alleged conversion of a penalty amount into our common stock prior to the expiry of the statutory hold period. We obtained default judgment against East Capital when the defendant failed to respond to our complaint within the time permitted. On October 25, 2021, we provided evidence to Nevada’s Eighth Judicial District Court regarding the damages that we suffered as a result of East Capital Investment Corp.’s unjust enrichment and the decline in its market capitalization that its sale of our stock. As a result, the Court has issued a default judgment order that Cyber Apps be entitled to recover approximately $2.7 million in damages from East Capital Investment Corp.

Black Ice Advisors LLC
In July 2021, we commenced legal action against Black Ice Advisors LLC (“Black Ice”) in Nevada District Court for breach of contract claims relating to a share purchase agreement and corresponding convertible promissory note. Pursuant to the convertible promissory note, on May 3 2021, Black Ice converted $38,330 in debt into 3,833,000 shares of our common stock. On June 3, 2021, Black Ice provided our transfer agent with another notice of conversion whereby it converted another $56,310 into 5,631,000 of our shares, which Black Ice received and then immediately sold into the market. However, at the time of the second conversion, we only owed $22,045 to Black Ice. Accordingly, we allege that Black Ice received and sold 3,426,500 to which it was not entitled.

As a result of Black Ice’s excess conversion, we suffered damages due to the dilution to our share capital and Black Ice realized a monetary benefit from the receipt and sale of the shares to which it was not entitled. We are seeking damages that include the disgorgement of the profits that Black Ice wrongfully received, as well as compensation for the adverse impact on our market price and the loss of business that it suffered as a result of the inability to raise further financing.

EMA Financial, LLC.
In June 2021, we commenced legal action against EMA Financial, LLC’s (“EMA”) in Nevada District Court for breach of contract claims relating to a share purchase agreement and corresponding convertible promissory note. In March 2021, we attempted to prepay EMA’s convertible promissory note for the premium stipulated in the note, but EMA, relying on a most favored nation clause, took the position that the payout amount was significantly higher than the amount that we believed was due. Our legal counsel put EMA on notice that we disputed the prepayment amount due pursuant to the note.

On April 6, 2021, EMA provided us and our transfer agent with a notice of conversion whereby it instructed the transfer agent to convert the entire principal amount of the note, plus interest, for 1,281,682 of our shares. Because the note contains a clause that allows EMA to cancel the conversion if the shares are not issued within one business day of the conversion notice, EMA canceled the conversion on April 8 following the decline in our stock price. The transfer agent advised us that it could not issue the converted shares by the one business day deadline because EMA did not provide it with the necessary documentation to affect the conversion and issue the shares.

EMA provided successive conversion notices to us and our transfer agent, which resulted in EMA being issued 18,369,800 shares in our common stock. Through its sales of this stock, our share price declined from by over 90% from $0.102 on April 6, 2021, to $0.009 on May 23, 2021.

We were ready, willing, and able to prepay EMA’s note for the amount originally stated in the note by the prepayment deadline date and suffered damages due to EMA’s failure to accept that prepayment. Moreover, we allege that EMA acted in bad faith by providing notice of conversion of its note to its transfer agent and then failing to provide the transfer agent with the documentation necessary to affect the conversion so that it could withdraw the conversion if our stock price subsequently fell or proceed with the conversion if the stock value increased or remained stable.

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We are seeking damages of $15,256,438 for its decrease in market capitalization due to the wrongful actions of EMA, as well as punitive and other damages.

EMA successfully brought a motion to transfer the venue of the United States District Court for the Southern District of New York. We are in the process of retaining legal counsel in New York to pursue our legal claims against EMA.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

We have disclosed all unregistered sales of equity securities during the quarter ended January 31, 2022 in current reports on Form 8-K filed with the Securities & Exchange Commission.

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