10K TALK ABOUT ALL THE CLASSES OF PREFERRED TO BE DUMPED...BILLIONS AND BILLIONS.
Here is another your MSP*....TALK ABOUT PREFERRED SHARES and CONVERTIBLE TOXIC DEBT.
Recent Sales of Unregistered Securities.
On August 13, 2012, the Company made a Promissory Note in the principal amount of $260,000 in favor of Richard S. Astrom in exchange for $170,146 of advances that he had made to the Company and 10,000,000 shares of the Company’s Series A Preferred Stock. This note was exchanged pursuant to a Promissory Note Exchange Agreement, dated February 19, 2014, between the Company and Mr. Astrom, for a Convertible Promissory Note in a like principal amount and of even date with the Promissory Note Exchange Agreement. The principal of and interest on this note (the “First Convertible Promissory Note”) was convertible into shares of Common Stock at a conversion price of 41.5% of the Current Market Price, as defined. This note was made and delivered in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 as a transaction not involving a public offering and/or Rule 506 thereunder. The Company issued 480,000,000 shares of Common Stock (or 960 shares after the effect of reverse stock splits) upon conversions of this note between February 14 and April 23, 2014, under the exemption from registration provided by Rule 144.
The First Convertible Promissory Note was exchanged pursuant to a Promissory Note Exchange Agreement, dated May 1, 2014, between the Company and Mr. Astrom (the “Second Convertible Promissory Note Agreement”) for a Convertible Promissory Note of even date therewith in the principal amount of $66,944.04, being the unpaid balance of the First Convertible Promissory Note and the Promissory Note Exchange Agreement. This note was made and delivered in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 as a transaction not involving a public offering and/or Rule 506 thereunder. The principal of and interest on this Convertible Promissory Note (was initially convertible into shares of Common Stock at a conversion price equal to its par value of $0.000001 per share; however, on July 14, 2014, the Second Convertible Promissory Note Agreement was amended to change the conversion price to 2.5% of the Current Market Price, as defined. The Company issued 3,224,300,000 shares of Common Stock (or 3,224,300 shares after the effect of reverse stock splits) upon conversions of this note between November 25, 2014, and August 21, 2015, and 178,031,000 shares of Common Stock between September 18, 2015, and November 11, 2015, under the exemption from registration provided by Rule 144.
On February 24, 2014, the Company borrowed $40,000 under an 8% Convertible Redeemable Note, due February 25, 2015, in the like principal amount, made in favor of LG Capital Funding, LLC (“LG”). This note was made and delivered in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 as a transaction not involving a public offering and/or Rule 506 thereunder. The principal of and interest on this Convertible Promissory Note is convertible into shares of Common Stock at a conversion price equal 58% of the lowest closing bid price of the Common Stock as reported on the National Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future for the 15 prior trading days including the day upon which a notice of conversion is received by the Company. The Company issued 152,622,579 shares of Common Stock (or 305 shares after the effect of reverse stock splits) upon a conversion of this note on September 17, 2014, and 130,913,598 shares of Common Stock between January 15, 2015, and April 20, 2015 (or 130,914 shares after the effect of reverse stock splits), upon conversions of this note under the exemption from registration provided by Rule 144.
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On February 6, 2015, the Company borrowed $42,000 under a Convertible Promissory Note, dated that date made by the Company in favor of LG; no conversions were made under this note. On July 28, 2015, LG assigned this note to Apollo Capital Corp. (“Apollo”), and on that date, the note was exchanged for an Amended and Restated Convertible Promissory Note in the principal amount of $42,000 made by the Company in favor of Apollo, which is convertible into shares of Common Stock at a conversion price of 30% of the average of the lowest Trading Price (as defined) for the Common Stock during the period of 30 Trading Days (a Trading Day being defined as any day on which the Common Stock is quotable for any period on the OTC, or tradable on the principal securities exchange or other securities market on which the Common Stock is then being traded). Each of these notes was made and delivered in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 as a transaction not involving a public offering and/or Rule 506 thereunder. The Company issued 200,000,000 shares of Common Stock (or 200,000 shares after the effect of reverse stock splits) upon a conversion of this note on August 28, 2015, and 1,563,334 shares of Common Stock between October 6, 2015, and October 10, 2015 (or 130,914 reverse after the effect of reverse stock splits), upon conversions of this note under the exemption from registration provided by Rule 144.
On November 19, 2014, the Company issued 800,000,000 shares of Common Stock to Oscar Brito, one of its officers, under the Company’s Restricted Stock Plan, and on September 11, 2015, issued 800,000,000 and 799,200,000 shares of Common Stock respectively to Carlos Daniel Silva, one of its officers, and Mr. Brito. These issuances were made to Accredited Investors, as defined in Regulation D under the Securities Act and were exempt from registration thereunder. For further information respecting these issuances, see “Directors, Executive Officers and Corporate Governance - Executive Compensation – Equity Awards, Grant Based Awards, Stock Options, Pension Benefits and Deferred Compensation.”
On March 10, 2014, May 1, 2015, May 8, 2015, and September 11, 2015, the Company issued a total of 340,000 shares of Common Stock (adjusted for reverse stock splits) under 4 consulting agreements. These shares were issued made and delivered in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 as transactions not involving a public offering and/or Rule 506 thereunder.
ITEM 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide information under this item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The financial data discussed below are derived from the audited consolidated financial statements of the Company as at December 31, 2015, which were prepared and presented in accordance with generally accepted United States accounting principles. These financial data are only a summary and should be read in conjunction with the financial statements and related notes contained elsewhere herein, which more fully present our financial condition and operations as at that date. We do not believe that the results set forth in these consolidated financial statements are necessarily indicative of our future performance. This section and other parts of this report contain forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements.
Overview
We are a development stage company and there is substantial doubt about our ability to continue as a going concern because we will need a substantial amount of additional capital to continue our operations. No assurance can be given that any additional capital can be obtained or, if obtained, will be adequate to meet our needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted or we could be forced to terminate operating. In addition, the following matters may affect our ability to continue as a going concern.
Income (Loss) from Operations
We had an operating loss of $ 505,357 for FY 2015, as compared to an operating loss of $65,648 for FY 2014. The loss was higher for FY 2015, as compared to FY 2014, for the reason that operating expenses were higher for FY 2015, as stated above.
Other Income (Expense)
We recorded interest expense of $12,321,666 in FY 2015, as compared to $369,609 in FY 2014. This expense increased in FY 2015 due to interest incurred on promissory convertible notes and the excess of derivative liability over the face amount of the notes. We also recorded a gain on change in fair value of derivative of $749,974 in FY 2015, which resulted from the valuation of derivatives at December 31, 2015, as compared to a loss on change in fair value of derivative incurred in FY 2014, which resulted from the valuation of derivatives at December 31, 2015, as well as a gain on extinguishment of debt of $1,882,323, which resulted from convertible notes converted during FY 2015, as compared to a loss extinguishment of debt of $124,753, which resulted from convertible notes converted during FY 2014.
Net Loss
Our net loss for FY 2015 was $10,194,726, compared with $3,572,349 for FY 2014.
Net Loss Attributable to Common Stockholders
Net loss applicable to common stockholders for FY 2015, was $10,526,768, compared to $3,572,349 for FY 2014.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2015, we had total current assets $245,903, of which $58,668 was in cash, and at December 31, 2014, we had total current assets of $39,010, none of which was cash. On those dates, we had total stockholder deficits of $7,628,426 and $2,882,392, respectively.
METROSPACES, INC.
Consolidated Balance Sheets
December 31, December 31,
2015 2014
ASSETS
Current Assets
Cash and cash equivalents 58,668 —
Accounts receivable 1,033 —
Inventory 11,223 —
Prepaid and other current assets 174,979 39,010
Total Current Assets 245,903 39,010
Advance payment for real property 369,891 369,991
Investment in non-consolidated subsidiary 159,910 150,000
Property and equipment, net 4,456,832 —
Goodwill — —
TOTAL ASSETS 5,232,536 559,001
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Bank overdraft payable — 166
Accounts payable 71,440 —
Accrued expenses 608,184 68,750
Accrued interest 74,312 52,013
Sales deposit 34,046 34,046
Long term debt related party — 400,000
Notes payable - related parties 16,990 166,590
Current portion of convertible notes payable, net of discount of $77,992 and $12,365 90,032 64,528
Note payable 10,000 10,000
Derivative liability 11,904,682 2,645,300
Total Current Liabilities 12,809,686 3,441,393
Convertible notes payable, net discount of $100,406 and $0 51,276 —
TOTAL LIABILITIES 12,860,962 3,441,393
Stockholders' Deficit
Preferred stock, $0.000001 par value, 8,000,000 shares authorized — —
Series B Preferred Stock, $0.000001 par value, 2,000,000 shares authorized, 1,200,000 shares issued 1 —
Series C Preferred Stock, $0.000001 par value, 100,000 shares authorized, 45,354 shares issued 0 —
Series D Preferred Stock, $0.000001 par value, 400,000 shares authorized, 0 shares issued — —
Common Stock, $0.000001 par value, 10,000,000,000 shares authorized 1,784,461,982 and 846,745 shares issued and outstanding 1,785 847
Additional paid in capital 6,747,974 1,160,693
Accumulated other comprehensive loss (139,528 ) —
Accumulated deficit (14,238,658 ) (4,043,932 )
Total Stockholders' Deficit (7,628,426 ) (2,882,392 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 5,232,536 559,001
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