NOTE 16 - STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

The Company’s Board has authorized the issuance of up to 200,000,000 shares of preferred stock, par value of $0.0001 per share. The Board may divide this authorization into one or more series, each with distinct powers, designations, preferences, and rights.

Series A Convertible Preferred Stock

The Company’s Board has authorized the issuance of up to 100,000,000 shares of Series A Convertible Preferred Stock (the “Series A preferred stock”). Shares of our Series A preferred stock are senior in rank to shares of our Series C preferred stock, but junior to shares of our Series B preferred stock. The affirmative vote of the holders of 86% of the issued and outstanding shares of our Series A preferred stock is required for the Board: (i) to declare dividends upon shares of common stock unless, with respect to cash dividends, the shares of our Series A preferred stock are to receive the same dividend as the common shares, on an as converted basis; (ii) to redeem the shares of our Series A preferred stock at a redemption price of $0.001 per share; (iii) to authorize or issue additional or other capital stock that is junior or equal in rank to shares of our Series A preferred stock with respect to the preferences as to distributions and payments upon the liquidation, dissolution, or winding up of the Company; and (iv) to amend, alter, change, or repeal any of the powers, designations, preferences, and rights of our Series A preferred stock. Upon the dissolution, liquidation, or winding up of the Company, whether voluntary or involuntary, the holders of the Series A preferred stock are entitled to receive out of the assets of the Company the sum of $0.001 per share before any payment or distribution shall be made on the shares of common stock, or any other class of capital stock ranking junior to the Series A Preferred Stock. For a period of 10 years from the date of issuance, the holders of the Series A preferred stock may elect to convert each share of the Series A preferred stock into one share of the Company’s common stock. Each share of our Series A preferred stock is entitled to one vote when voting as a class or together with the shares of common stock.

In September 2017, the Company issued 75,000,000 shares of its Series A preferred stock in connection with the acquisition of Four Oceans Holdings, Inc. The Company recognized a deemed dividend of $18,750,000 in connection to the acquisition of Four Oceans.

During the fiscal year ended April 30, 2020 and 2019, stockholders converted an aggregate of 10,400,000 shares and 51,315,790 shares, respectively, of the Company’s Series A preferred stock into an equal number of shares of the Company’s common stock. During the fiscal year ended April 30, 2019, the Company issued 7,500,000 shares of its Series A preferred stock in connection with purchases of equity interest in unconsolidated entities, which were valued at a fair market value of $1,875,000.

Series B Convertible Preferred Stock

The Company’s Board has authorized the issuance of up to 10,000,000 shares of Series B Convertible Preferred Stock (the Series B preferred stock”). Shares of our Series B preferred stock are senior in rank to shares of our Series A and Series C preferred stock. The affirmative vote of the holders of 86% of the issued and outstanding shares of our Series B preferred stock is required for the Board: (i) to declare dividends upon shares of common stock unless, with respect to cash dividends, the shares of our Series B preferred stock are to receive the same dividend as the common shares, on an as converted basis; (ii) to redeem the shares of our Series B preferred stock at a redemption price of $0.001 per share; (iii) to authorize or issue additional or other capital stock that is senior, junior or equal in rank to shares of our Series B preferred stock with respect to the preferences as to distributions and payments upon the liquidation, dissolution, or winding up of the Company; and (iv) to amend, alter, change, or repeal any of the powers, designations, preferences, and rights of the Series B preferred stock. Upon the dissolution, liquidation, or winding up of the Company, whether voluntary or involuntary, the holders of the Series B preferred stock are entitled to receive out of the assets of the Company the sum of $0.001 per share before any payment or distribution shall be made on the shares of common stock, or any other class of capital stock of the Company ranking junior to the Series B preferred stock. For a period of 10 years from the date of issuance, the holders of the Series B preferred stock may elect to convert each share of Series B preferred stock into one share of the Company’s common stock. Each share of our Series B preferred stock is entitled to one vote when voting as a class, and to one thousand votes when voting together with shares of our common stock.

In May 2017, the Company issued 10,000,000 shares of its Series B preferred stock in connection with the acquisition of Total Travel Media, Inc.

Series C Convertible Preferred Stock

The Company’s Board has authorized the issuance of up to 10,000,000 shares of Series C Convertible Preferred Stock (the Series C preferred stock”). Shares of our Series C preferred stock are junior in rank to the Series A and Series B preferred stock. The affirmative vote of the holders of 86% of the issued and outstanding shares of our Series C preferred stock is required for the Board: (i) to declare dividends upon shares of common stock unless, with respect to cash dividends, the shares of our Series C preferred stock are to receive the same dividend as the common shares, on an as converted basis; (ii) to redeem the shares of Series C preferred stock at a redemption price of $0.001 per share; (iii) to authorize or issue additional or other capital stock that is junior or equal in rank to our Series C preferred stock with respect to the preferences as to distributions and payments upon the liquidation, dissolution, or winding up of the Company; and (iv) to amend, alter, change, or repeal any of the powers, designations, preferences, and rights of the Series C preferred stock. Upon the dissolution, liquidation, or winding up of the Company, whether voluntary or involuntary, the holders of the Series C preferred stock are entitled to receive out of the assets of the Company the sum of $0.001 per share before any payment or distribution shall be made on the shares of common stock, or any other class of capital stock of the Company ranking junior to the Series C preferred stock. For a period of 10 years from the date of issuance, the holders of the Series C preferred stock may elect to convert each share of Series C preferred stock into one share of the Company’s common stock. Each share of our Series C preferred stock is entitled to one vote when voting as a class or together with shares of common stock.

During the fiscal year ended April 30, 2020 and 2019, the Company issued 20,000 shares and 170,000 shares, respectively, of its Series C preferred stock in exchange for cash in the amount of $5,000 and $42,500, respectively, in connection with stock subscription agreements in the ordinary course of its business. During the fiscal year ended April 30, 2020 and 2019, holders of 50,000 shares and 600,000 shares, respectively, of the Company’s Series C preferred stock converted their holdings into an equal number of shares of the Company’s common stock.

Common Stock

The Company’s Board has authorized the issuance of up to 500,000,000 shares of common stock (Class A) and up to 10,000,000 shares of common stock (Class B), each with a par value of $0.0001 per share. Holders of our common stock are entitled to dividends, subject to the rights of the holders of other classes of capital stock outstanding having priority rights with respect to dividends. Our classes of common stock have the same rights, except that the holders of our Class B common stock have the right to elect a majority of our Board, while the holders of our Class A common stock together with our Series A preferred stock, Series B preferred stock and Series C preferred stock have the right to elect the rest of the directors. References to our “common stock” throughout this report include our Class A common stock and Class B common stock, unless otherwise indicated or the context otherwise requires.

During the fiscal year ended April 30, 2020 and 2019, the Company issued 30,000 shares and 870,000 shares, respectively, of its Class A common stock for cash in the amount of $7,500 and $217,500, respectively in connection with stock subscription agreements in the ordinary course of its business. In addition, in the fiscal year ended April 30, 2020 and 2019, the Company issued 215,325 shares and 449,851 shares, respectively, in exchange for consulting services with fair market value of $57,000 and $119,000, respectively. In the fiscal year ended April 30, 2018, the Company issued 10,000,000 shares of its Class B common stock in connection with the acquisition of Total Travel Media.

In the fiscal year ended April 30, 2020 and 2019, holders of 10,400,000 shares and 51,315,790 shares, respectively, of the Company’s Series A preferred stock, and holders of 50,000 shares and 600,000 shares, respectively, of the Company’s Series C preferred stock converted their holdings into an equal number of shares of the Company’s common stock.

In the fiscal year ended April 30, 2020 and 2019, holders of the Company’s convertible promissory notes converted $28,000 and $16,000, respectively, in notes principal and/or accrued interest into 2,800,000 shares and 3,200,000 shares, respectively, of the Company’s Class A common stock, pursuant to the terms of the underlying debt instruments.

In the fiscal year ended April 30, 2020 and 2019, the Company issued, in the aggregate, 10,000,000 shares and 21,470,620 shares, respectively, of its Class A common stock to officers and/or directors, at an exercise price of $0.0001 per share, upon the exercise of derivative instruments granted in conjunction with employment agreements disclosed previously. In addition, in the fiscal year ended April 30, 2019, the Company issued 800 shares of its Class A common stock in connection with stock warrants exercised, at an exercise price of $0.25 per share.

In addition, in the fiscal year ended April 30, 2020 and 2019, the Company repurchased in private transactions (and retired) 1,500,000 shares and 30,000,000 shares, respectively, of its Class A common stock.

Stock Options

In March 2018, the Company issued fully vested options to purchase up to 3,000,000 shares of its common stock to its Chief Financial Officer in connection with his employment agreement. The stock options had an exercise price of $0.0001 per share and were exercised in the fiscal year ended April 30, 2019.

Stock Warrants

In March 2018, the Company issued fully-vested warrants to purchase up to 5,000,000 shares of its Series A preferred stock and, in January 2019, fully-vested warrants to purchase up to 13,470,620 shares of the its Series A preferred stock to its President and Chief Executive Officer in connection with his employment agreement, as disclosed previously. All the stock warrants had an exercise price of $0.0001 per share and were exercised in the fiscal year ended April 30, 2019. In addition, the resulting shares of Series A preferred stock were converted into and equal number of the Company’s common stock.

In the fiscal year ended April 30, 2019, the Company sold 870,000 fully vested five-year warrants to purchase an equal number of shares of its common stock in connection with stock subscription agreements. The exercise price for these warrants is equal to 50% of the average closing bid price for the Company’s common stock for the 20-day trading period immediately prior to exercise.

In the fiscal year ended April 30, 2020, the Company issued stock warrants to purchase, in the aggregate, up to 32,000,000 shares of the its common stock, with an aggregate fair value of $6.8 million, to certain directors, employees and a consultant. These stock warrants have an exercise price equal to par ($0.0001 per share). In the fiscal year ended April 30, 2020, the Company issued 10,000,000 shares of its common stock to one director upon the exercise of warrants. In the fiscal year ended April 30, 2019, the Company issued warrants to purchase, in the aggregate, up to 160,000 shares of the its common stock to two consulting firms in exchange for consulting services with an aggregate fair value of $38,980.

In the fiscal year ended April 30, 2020 and 2019, the Company issued fully vested warrants to purchase up to 628,800 shares and 1,582,600 shares, respectively, of its common stock to members of its independent sales force, with a fair value of $95,445 and $267,620, respectively. The warrants are exercisable for a period of two years from the issuance date, subject to certain default provisions, at the exercise price of $0.25 per share. In the fiscal year ended April 30, 2019, the Company issued 800 shares of its common stock to members of its independent sales force in connection with stock warrants exercised.

The following table summarizes the activity relating to the Company’s stock warrants:

The following table summarizes additional information relating to stock warrants outstanding and exercisable:

The tables above do not include stock warrants issued to employees and consultants to purchase up to 11,575,000 shares of the Company’s common stock that have variable exercise prices and vest over time, including stock warrants to purchase up to 1,000,000 shares common stock that are fully vested at April 30, 2020. As of April 30, 2020, the Company has recognized a liability of $661,684 in connection with these stock warrants.