Asset Acquisition

On June 2, 2015, the Company completed an acquisition of some of the assets and assumed certain liabilities of Viking Telecom Services, LLC (“Viking Telecom”) from Dependable Critical Infrastructure, Inc. (“DCI”), f/k/a DTREDS Consolidated, Inc. To acquire the assets, the Company issued 2,265 shares of common stock, 224 shares of common stock to be issued (valued in the aggregate at $740,000), paid $200,000 cash and forgave $59,204 of a note receivable from DCI. The Company now provides telecom services under a new Viking Telecom brand. Services provided by Viking Telecom include cellular tower mapping and audits, ground audits, civil equipment installation, cellular site decommissioning, 3G/4G installations, project/construction management, battery installation and maintenance, shelter and compound preventative maintenance, site cleanup, and other related services. The Company’s Chief Executive Officer owned approximately 30% of DCI. The Company recorded a loss on the acquisition of $1,044,817 for the year ended March 31, 2016.

Revenues

Subsequent to the asset acquisition described above, the Company recorded sales to DCI of $125,682 for the year ended March 31, 2016. Additionally, the Company recorded sales of $59,404 to another related entity and sales of $1,750 to a limited liability company controlled by our chief executive officer. Total related party revenues for the year ended March 31, 2016 was $186,837.

Notes payable-related party 

As of March 31, 2016 and 2015, the balance of loans due to related parties was $505,000 and $558,500, respectively. 

From May 18, 2010 through June 27, 2013, the Company issued in the aggregate $558,500 of unsecured notes payable to a Nevada corporation, lender and preferred shareholder of the Company (“Global”). The notes bear interest at 10%, compounded annually and $553,000 and $5,500 matured on November 30, 2014, and June 27, 2015, respectively. On February 16, 2015, the Company secured extensions on all of the notes that matured on November 20, 2014 through April 1, 2015, with no change in original terms of the agreement. As of June 15, 2015, the note is now payable on demand as part of the Settlement Agreement and is considered current.

On June 15, 2015, Company entered into a Settlement Agreement and Partial Waiver and Release (the “Settlement Agreement”) with Global. Global owned 2,377,500 shares of the Company’s Series A Convertible Preferred Stock, and is the holder of outstanding promissory notes in the original principal amount of $558,500, with accrued interest thereon due to Global of approximately $267,960 (the “Global Notes”) immediately prior to the Settlement Agreement. Pursuant to the Settlement Agreement, Global agreed to (1) waive interest due of $267,960 under the Global Notes and $158,500 of principal, such that only $400,000 of principal and interest would be considered outstanding as of the settlement agreement date, and (2) immediately return all of the Preferred Stock to the Company for cancellation, in consideration for the Company issuing 856 shares of common stock to Global. Due to the related party nature of this transaction, the $238 balance in Convertible Preferred Stock and the debt forgiveness was recorded as additional paid in capital. Pursuant to the Settlement Agreement, the Global Notes are now payable on demand.

The Company issued multiple unsecured notes payable from June 27, 2015 to March 31, 2016, to the Company’s CEO, for amounts received by the Company, or paid by the CEO, on behalf of the Company, totaling $156,512. The notes carry interest at 10% per annum and are due on demand. The Company recorded related party interest expense of $11,806 for the year ended March 31, 2016. During the year ended March 31, 2016, the Company paid $51,512 of principal and $256 of accrued interest. As of March 31, 2016, the principal balance of the notes was $105,000 and the accrued and unpaid interest was $11,550.