you mean fake like the fdbl 4 closings with the social media cos hangwith inc where they gave hangwith close to 800k for common stock,preferreds,and the use of all their user database never received anything nor filed charges.maybe fdbl was in on the scam?imo
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
The Company used a portion of the proceeds of each Closing to purchase Series A Convertible Participating Preferred Stock of a private entity named Hang With, Inc. (“Hang With”). Alpha Capital is currently Hang With’s majority shareholder. On October 7, 2016, the Company entered into a Securities Purchase Agreement with Hang With (the “Hang With SPA”) to buy up to 330,397 shares of Hang With’s Series A Convertible Participating Preferred Stock (the “Preferred Stock”) for $750,000. On the Initial Closing Date, the Company paid $225,000 and was to receive 99,118 shares of Preferred Stock. The Company paid Hang With $175,000 on each of the subsequent three Closings. In connection with entering into the Hang With SPA, the Company and Hang With entered into a Software License Agreement (the “License Agreement”) in which Hang With is licensing the intellectual property of the Hang With apps to the Company. As part of the Hang With SPA and as compensation for the Company entering into the License Agreement and the future development agreement, Hang With was to issue 154,185 shares of Preferred Stock on the Initial Closing Date and was to issue 100,000 shares of its common stock to the Company. As of April 13, 2018 none of the shares have been issued.
Prior to the November 2016 Closing, the Company and Alpha Capital agreed that Alpha Capital would fund $295,000 in the November 2016 Closing rather than $375,000. After Alpha Capital made such payment, Coventry Enterprises, LLC (“Coventry) funded $80,000 as part of the November 2016 Closing.
On December 2, 2016, the Company and Alpha Capital entered into an Agreement (the “Agreement”) to amend certain portions of the Alpha SPA such Alpha Capital paid only $295,000 to the Company during each of the December 2016 and January 2017 Closings. On December 2, 2016, Coventry signed a Funding Commitment Letter (the “Letter”) such that Coventry paid, not including fees payable by the Company to Coventry, $80,000 to the Company during each of the December 2016 and January 2017 Closings.
In addition to the License Agreement, the Company and Hang With were to enter into a development agreement for Hang With to help develop the Company’s apps. Although the parties never entered into a development agreement, a development schedule was established to develop what the Company calls its Fan Pass Live application or platform.
The Company attributed much of the value of Hang With to Hang With management’s representation that, in the history of its own apps, it had 8 million users (as publicized by Hang With prior to September 2016) and a range of monthly active users (MAU’s) that were, at a minimum, in the tens of thousands. Hang With believed, prior to the Hang With SPA being signed, that, with the Company’s investment, the monthly active users would be at the higher end of the range within a short period of time. Based on these representations by Hang With’s management, the Company believed that it could specifically market its own apps to the total historical users and the minimum monthly active users of the Hang With user base.
The Company believes that, after the November 2016 Closing, the Hang With app was removed for a period of time from the app stores on which it appeared and that the app was shut down for a period of time. At this point, Hang With effectively had zero monthly active users. In addition, the Company was not able to utilize Hang With’s technology in the Friendable app as was contemplated by the License Agreement due to Hang With’s technology being, in the Company’s view, out of date. The Company was required to purchase additional third party licenses of off-the-shelf technology and SDKs to proceed with its co-development efforts. Thereby developing its own platform for live streaming outside of the originally licensed Hang With technology.
The Company brought these matters to the attention of Hang With’s management in March 2017. Subsequently, Hang With halted the work it had been doing in connection with the Fan Pass app. Further, the Company has relieved and released its Fan Pass Live application developers in conjunction with the Hang With development halt in March 2017.
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