Item 8.01 Other Events.
Smith Corporate Services, Inc., a Utah corporation ("SCS"), is the holder of two
convertible promissory notes, as amended, in the principal amount of $100,000
and $130,100, respectively, of which the Company is the maker (the "Notes"). In
May, 2020, the Company and SCS negotiated amendments to the Notes that would
remove from their terms a provision limiting SCS' beneficial ownership of the
Company's common stock to 4.9% of the total number of outstanding shares of the
Company's common stock following any conversion of the Notes. On May 27, 2020,
the Company executed and delivered to SCS the signed third amendment to the
Notes (the "Third Amended Notes"), which documented these amendments. On
October 22, 2020, SCS delivered to the Company a letter requesting conversion of
all of the outstanding principal and interest on the Notes into a total of
28,000,000 shares of the Company's common stock. The following day, Mr. Smith
verbally agreed with the Company that the conversions would not be effective
until a later date to be agreed by the parties. Mr. Smith unexpectedly died
intestate on October 30, 2020, and his signatures on the Third Amended Notes
were not delivered to the Company until November 16, 2020.
There is no disagreement between the Company and SCS with respect to the
above-referenced matters. However, (i) the delivery of Mr. Smith's signatures on
the Third Amended Notes several days after his death; (ii) Mr. Smith's intestate
status and the need to formally determine the identities of the persons who are
entitled to succeed to Mr. Smith's ownership and management of SCS and its
assets; and (iii) the verbal nature of the agreement that the conversion would
not be effective until a later date, raise questions as to the legal effects of
the actions outlined above. It is apparent that management of the Company and
Mr. Smith's surviving spouse, who will presumptively be the personal
representative of Mr. Smith's probate estate: (i) wish to preserve their
respective rights under the instruments; and (ii) anticipate that the probate
proceedings will resolve any issues regarding their enforceability. The Company
will file a Current Report on Form 8-K disclosing the outcome of this process as
it relates to the above matters.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses