No that would be an inaccurate statement. The last promotional attempt Bill did was to say he worked out with the creditors to hold off on payment. Most likely him not filing he is hoping that the statues of limitations hit before the SEC suspends TPAC trading and deletes the ticker.
There are still millions if not billions of shares tied to debt and some still not converted. I suggest reading the last SEC filing of November 2017. I have listed just the toxic debt, keep in mind this does not include the Preferred Series A and Series B shares issued for loans. It also does not include the $240,666 in warrants issued.
But Im not here to argue with you or anyone else. Im simply pointing out options for Bill and helping shareholders understand what TPAC is facing. I know TPAC probably better than anyone on this board as I have followed it since its inception. Bill and I go way back.
There are still millions if not billions of shares tied to debt and some still not converted. I suggest reading the last SEC filing of November 2017. I have listed just the toxic debt, keep in mind this does not include the Preferred Series A and Series B shares issued for loans. It also does not include the $240,666 in warrants issued.
But Im not here to argue with you or anyone else. Im simply pointing out options for Bill and helping shareholders understand what TPAC is facing. I know TPAC probably better than anyone on this board as I have followed it since its inception. Bill and I go way back.
Quote:NOTE 5 - RELATED PARTY TRANSACTIONS
Due to lack of sufficient funding to maintain the Company’s operations, the Company’s officers and directors loaned money to the Company for short term cash flow needs. As of July 31, 2017 and October 31, 2016, Mr. Peter Liu had payables due to him from Godfrey of $60,000 and $60,000; respectively; The Company had receivables due to (from) HAC amounted to $0 and 1,217 at July 31, 2017 and October 31, 2016, respectively.
During the year ended October 31, 2016, the Company borrowed $179,379 from various shareholders under oral agreements. This amount bears no interest and is due on demand. In addition, a shareholder made repayment of $77,186 on behalf of the Company to pay off the Apollo Note as described in Note 6 below. The amount is recorded under related party payable and the amount bears no interest and is due on demand. In July 2016, $43,000 of the principal amount was converted to 97,217,391 shares of the Company’s common stock. As of July 31, 2017 and October 31, 2016, the outstanding balance was $211,311 and $211,311, respectively.
As of July 31, 2017 and October 31, 2016, the total outstanding amount due to related parties was $271,311 and $272,528, respectively. For the amount outstanding as of July 31, 2017 and October 31, 2016, $211,311 was owed to two shareholders as disclosed in Note 7, commitments and contingencies.
During the nine months ended July 31, 2017, the Company advanced $20,803 to William McKay, the Company’s Chief Executive Officer, as short term loan. This amount bears no interest and is due on demand. As of July 31, 2017, the outstanding amount was $2,735.
During the year ended October 31, 2016, the wife of the Company’s Chief Executive Officer purchased 177 shares of its Series A preferred stock in consideration of $92,500. As of July 31, 2017, all of these shares had been issued.
During the year ended October 31, 2016 and the nine months ended July 31, 2017, the son of the Company’s Chief Executive Officer purchased 788 shares of its Series A preferred stock in consideration of $317,900. As of July 31, 2017, 31 of these shares had not been issued and were recorded as preferred stock to be issued.
In September 2016, the Company issued 10,000 shares of its Series A preferred stock to its Chief Executive Officer as a temporary issuance to obtain voting right to make certain board decision at the best interest of the Company. These shares were returned to the Company in December 2016.
In December 2016, the Company issued 1,300 shares of its Series B preferred stock to its Chief Executive Officer in consideration of services rendered. These shares are not convertible or redeemable and have a stated value of $10 per share.
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In December 2016, the Company issued 200 shares of its Series B preferred stock to a director in consideration of services rendered. These shares are not convertible or redeemable and have a stated value of $10 per share.
In September 2016, the Company entered into a consulting agreement (“Consulting Agreement”) with Woodward Global, Ltd. (“WG”), a Nevada corporation owned by Mr. Angus McKay, son of William R. McKay, the Company’s Chairman and CEO. Pursuant to the Consulting Agreement, the Company will provide consulting services to WG for a period of twelve (12) months for a total consideration of $2,000,000. However, due to the uncertainty on collectability, the Company will only record cash received as other income because providing consulting services is not within the normal course of the Company’s business. For the nine months ended July 31, 2017, the Company collected and recorded $102,700 as other income.
In April 2017, the Company issued 1,000 shares of its Series A Convertible Preferred Stock to Angus McKay, son of William McKay, the CEO of the Company, upon execution of a consulting services agreement. These shares were valued at $600,000 based on closing price of the underlying common stock if converted.
In February 2017, the Company entered into another consulting agreement with Woodward Global, Ltd. (“WG”), a Nevada corporation owned by Mr. Angus McKay, son of William R. McKay, the Company’s Chairman and CEO. Pursuant to the Consulting Agreement, WG will provide consulting services to the Company for a period of twelve (12) months for a total consideration of $70,300. For the nine months ended July 31, 2017, the Company paid $20,300 and recorded as consulting fees.
NOTE 6 – CONVERTIBLE NOTES PAYABLE
As part of the acquisition of HAC, the Company assumed $260,000 of obligations under a convertible note. The convertible note assumed by the Company does not bear interest and became payable on March 12, 2011. The note is convertible into shares of the Company’s common stock at an initial conversion price of $0.25 per share. The conversion price is subject to adjustment for stock splits and combinations; certain dividends and distributions; reclassification, exchange or substitution; reorganization, merger, consolidation or sales of assets. As the convertible note does not bear interest, the Company recorded the present value of the convertible note obligation at $239,667 and accordingly recorded a convertible note payable for $260,000 and a corresponding debt discount of $20,333. Under the effective interest method, the Company accretes the note obligation to the face amount of the convertible note over the remaining term of the note. The discount was fully amortized at March 12, 2011. Debt discount expense totaled $7,452 and $12,880 for the years ended October 31, 2011 and 2010 respectively. The Company performed an evaluation and determined that the anti-dilution clause did not require derivative treatment. On September 16, 2011, the Company entered into an agreement with the note holder to extend the maturity date of the note. Pursuant to the agreement, the entire outstanding amount became fully due and payable on December 31, 2011. In May 2017, the Company, the note holder, and Apollo Capital Corp. (“Apollo”) entered into assignment and replacement agreements. Pursuant to the agreements, the note holder assigned $30,000 of the outstanding balance to Apollo and the Company issued a replacement note to Apollo to amend the terms as follows:
• Maturity date: November 5, 2017
• Interest rate: 8% per annum
• Convertible any time at a price equal to 45% multiplied by the lowest trading price for the common stock during the 30 trading day period ending on the latest complete trading day prior to the conversion date.
The Company analyzed the conversion option of the replacement Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liability on the agreement date due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the replacement note issued. The Company then calculated the fair value of the conversion option and discount on the replacement note. For the nine months ended July 31, 2017, the Company recorded a total of $30,000 as note discount, $76,940 as derivative expense and $106,940 as derivative liabilities for the replacement note. As of July 31, 2017, Apollo had exercised the right to fully convert the replacement note to 623,512,079 shares of the Company’s common stock.
As of July 31, 2017, the outstanding balance of the original note was $230,000. For the nine months ended July 31, 2017 and 2016, the Company recorded imputed interest of $13,125 and $13,650, respectively.
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On February 8, 2016, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC, pursuant to which the Company sold an 8% Convertible Promissory Note with an original principal amount of $40,000 (the “Crown Bridge Note”). The principal amount consists of a consideration of $36,000 plus $4,000 OID. The maturity date shall be 12 months from the issue date. The Crown Bridge Note is convertible anytime into the Company’s common stock at a price equal to 55% multiplied by the lowest trading price on the OTCQB or other applicable principal trading market during the 20 trading days prior to the conversion date. If the trading price for the common stock is equal to or lower than $0.003, then an additional discount of 10% shall be factored into the variable conversion price. However, due to misplacement of the agreement, the Company mistakenly recorded the cash received as other payables on February 8, 2016.
Upon discovery of the mistake in August, 2016, the Company analyzed the conversion option of the Crown Bridge Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liability on the agreement date due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the Crown Bridge Note issued. The Company then calculated the fair value of the conversion option and discount on the Crown Bridge Note. For the year ended October 31, 2016, the Company recorded a total of $123,740 as derivative expense and change in fair value of derivative liabilities and a note discount of $40,000 for the Crown Bridge Note.
In August 2016, the note holder exercised the right to fully convert the principal amount plus accrued interest of $1,650 to 154,260,850 shares of the Company’s common stock.
From December 2016 through January 2017, the Company issued $9,500 in convertible promissory notes. These notes are automatically convertible into Series C Preferred Stock at a price of $500 per share upon the effective date our reincorporation as a Wyoming corporation, which became effective on January 27, 2017. The terms of the Series C Preferred Stock have been approved by our board of directors and the shares of Series C Preferred Stock will be issued upon filing of Articles of Amendment with the Wyoming Secretary of State designating 100,000 shares of our preferred stock as Series C Preferred Stock, which was filed on March 6, 2017. The Series C Preferred Stock will have a stated value of $500 per share. Holders of the Series C Preferred Stock will not have any preferential dividend or liquidation rights or any conversion rights. However, on or after the nine-month anniversary after the issuance date for any share of Series C Preferred (an “Issuance Date”), each holder of Series C Preferred Stock has the option to redeem the Series C Preferred at the Redemption Price which is (i) 125% of the Stated Value for the period beginning on the 6-month anniversary of the Issuance Date and ending 1-day prior to the 12-month anniversary of the Issuance Date; (ii) 150% of the Stated Value for the period beginning on the 12-month anniversary of the Issuance Date and ending 1-day prior to the 18-month anniversary of the Issuance Date and (iii) 200% of the Stated Value for the period beginning on the 18-month anniversary of the Issuance Date and any date thereafter. As of July 31, 2017, the shares of Series C Preferred Stock had been issued and recorded as current liabilities, redeemable preferred stock – Series C.
In March 2017, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC, pursuant to which the Company sold an 8% Convertible Promissory Note with an original principal amount of $45,000 (the “Crown Bridge Note 2”). The principal amount consists of a consideration of $39,000 plus $6,000 OID. The maturity date shall be 12 months from the issue date. The Crown Bridge Note 2 is convertible anytime into the Company’s common stock at a price equal to lesser of $0.00018 or 40% multiplied by the lowest trading price on the OTCQB or other applicable principal trading market during the 20 trading days prior to the conversion date.
The Company analyzed the conversion option of the Crown Bridge Note 2 for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liability on the agreement date due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the Crown Bridge Note 2 issued. The Company then calculated the fair value of the conversion option and discount on the Crown Bridge Note 2. For the nine months ended July 31, 2017, the Company recorded a total of $52,182 as derivative expense and change in fair value of derivative liabilities and a note discount of $45,000 for the Crown Bridge Note 2.
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In March 2017, the Company entered into a Securities Purchase Agreement with Power Up Lending Group, pursuant to which the Company sold an 12% Convertible Promissory Note with an original principal amount of $38,000 (the “Power Up Note”). The maturity date is December 5, 2017 and is convertible beginning on the 180 th day into the Company’s common stock at a price equal to 58% multiplied by the average of the lowest three trading price on the OTCQB or other applicable principal trading market during the 15 trading days prior to the conversion date.
The Company analyzed the conversion option of the Power Up Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liability beginning on the 180 th day due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the Power Up Note issued.
In May 2017, the Company entered into a Securities Purchase Agreement with GS Capital Partners, pursuant to which the Company sold an 8% Convertible Promissory Note with an original principal amount of $42,500 (the “GS Note”). The maturity date shall be 12 months from the issue date. The GS Note is convertible anytime into the Company’s common stock at a price equal to 58% multiplied by the lowest closing bid price on the OTCQB or other applicable principal trading market during the 15 trading days prior to the conversion date.
The Company analyzed the conversion option of the GS Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liability on the agreement date due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the GS Note issued. The Company then calculated the fair value of the conversion option and discount on the GS Note. For the nine months ended July 31, 2017, the Company recorded a total of $22,206 as derivative expense and change in fair value of derivative liabilities and a note discount of $42,500 for the GS Note.
In May 2017, the Company entered into a Securities Purchase Agreement with Apollo Capital Corp, pursuant to which the Company sold an 12% Convertible Promissory Note with an original principal amount of $33,000 (the “Apollo Note”). The principal amount consists of a consideration of $30,000 plus $3,000 OID. The maturity date is November 18, 2017 and is convertible beginning on the 180 th day into the Company’s common stock at a price equal to 40% multiplied by the lowest trading price on the OTCQB or other applicable principal trading market during the 20 trading days prior to the conversion date.
The Company analyzed the conversion option of the Apollo Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liability beginning on the 180 th day due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the Apollo Note issued.
As of July 31, 2017 and October 31, 2016, the outstanding amount of the convertible notes was $100,375 and $0, net of note discount of $58,125 and $0, respectively.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Consulting Agreements
The Company has entered into consulting agreements for services to be provided to the Company in the ordinary course of business. These agreements call for expense reimbursement and various payments upon performance of services.
On February 1, 2016, the Company entered into a consulting service agreement with Mr. Nicholas Nguyen for a period of 24 months. Upon execution of this agreement, the Company shall issue total of 100 shares of its convertible preferred stock as compensation for Mr. Nguyen’s services. All shares were fully vested at grant date and consulting expense of $600,000 was recorded for the year ended October 31, 2016. As of July 31, 2017, the shares had not been issued and the Company recorded accrued expense of $600,000.
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On February 22, 2016, the Company entered into an agreement with Ms. Lixin Chen to perform marketing and operation consulting services for the year ended December 31, 2016. Upon execution of this agreement, the Company shall issue total of 300 shares of its convertible preferred stock as compensation for Ms. Chen’s services. All shares were fully vested at grant date. The Company issued the shares in May and recorded $1,260,000 as consulting fee for the year ended October 31, 2016.
On July 23, 2016, the Company entered into a business consultant agreement with Global Savings Organization pursuant to which GSO agreed to provide business campaign consulting services for the Company’s products for a nine-month period. In consideration of GSO services, the Company agreed to issue GSO 1,000 shares of its series A preferred stock, of which 200 shares were to be issued upon execution of the agreement and 200 shares issued in each of the successive four months. The Company issued all the shares during the quarter ended October 31, 2016 and recorded a consulting fee of $700,000 in the year ended October 31, 2016. Further on November 29, 2016, the Company signed an addendum agreement with GSO to extend the service term for an additional one month from the original agreement date. Upon execution of the addendum agreement, the Company issued 200 shares of its Series A Convertible Preferred Stock to GSO and recorded $120,000 as consulting fee for the nine months ended July 31, 2017.
In September 2016, the Company entered into a consulting agreement (“Consulitng Agreement”) with Woodward Global, Ltd. (“WG”), a Nevada corporation owned by Mr. Angus McKay, son of William R. McKay, our Chairman and CEO. Pursuant to the Consulting Agreement, we will provide consulting services to WG for a period of twelve (12) months for a total consideration of $2,000,000.
In April 2017, the Company issued 1,000 shares of its Series A Convertible Preferred Stock to Mr. Angus McKay, son of William R. McKay, our Chairman and CEO, upon execution of a consulting agreement. Pursuant to the agreement, Angus will provide consulting services with regard to the management of Export-Import affairs for the Company for a minimum period of twelve months.
In February 2017, the Company entered into another consulting agreement with Woodward Global, Ltd. (“WG”), a Nevada corporation owned by Mr. Angus McKay, son of William R. McKay, the Company’s Chairman and CEO. Pursuant to the Consulting Agreement, WG will provide consulting services to the Company for a period of twelve (12) months for a total consideration of $70,300. For the nine months ended July 31, 2017, the Company paid $20,300 and recorded as consulting fees.
On May 1, 2017, the Company entered into an agreement with Ms. Lixin Chen to perform marketing and operation consulting services for the year ended December 31, 2017. Upon execution of this agreement, the Company shall issue total of 250 million shares of its common stock as compensation for Ms. Chen’s services. All shares were fully vested at grant date. As of July 31, 2017, the Company had not issued the shares and recorded $75,000 as consulting fee for the quarter ended July 31, 2017.
On May 1, 2017, the Company entered into an agreement with Mr. Stanley Wu to perform operation consulting services for the year ended December 31, 2017. Upon execution of this agreement, the Company shall issue total of 350 million shares of its common stock as compensation for Mr. Wu’s services. All shares were fully vested at grant date. As of July 31, 2017, the Company had not issued the shares and recorded $105,000 as consulting fee for the quarter ended July 31, 2017.
Company incurred a net loss from operations of $1,536,639 during the nine months ended July 31, 2017, and an accumulated deficit of $26,834,481 at July 31, 2017.
