Debt, Commitments and Contingencies
|6 Months Ended|
Jun. 30, 2018
|Commitments and Contingencies Disclosure [Abstract]|
|Debt, Commitments and Contingencies||
NOTE 6 - DEBT, COMMITMENTS AND CONTINGENCIES
Debt consists of the following:
On August 14, 2017, the Company entered into a unit purchase agreement (the “Unit Purchase Agreement”) with certain accredited investors providing for the sale of up to $5,500,000 of 5% secured convertible promissory notes (the “Convertible Notes”), which are convertible into shares of the Corporation’s common stock, and the issuance of warrants to purchase 6,875,000 shares of the Company’s Common Stock (the “Warrants”). The Convertible Notes are convertible into shares of the Company’s Common Stock at the lesser of (i) $0.80 per share or (ii) the closing bid price of the Company’s common stock on the day prior to conversion of the Convertible Note; provided that such conversion price may not be less than $0.40 per share. The Warrants have an exercise price of $1.20 per share. The Convertible Notes mature on May 31, 2018 and bear interest at the rate of 5% per annum. In two closings of the Unit Purchase Agreement, the Company issued all $5,500,000 in Convertible Notes to the investors. The investor has agreed to an extension of the maturity date of the note to December 31, 2019. As of June 30, 2018, the Company had an outstanding obligation pursuant to the Convertible Notes in the amount of $999,106. Accrued interest as of June 30, 2018 was $112,944.
During the six months ended June 30, 2018, the amortization of debt discount was $2.3 million.
Effective June 1, 2018, the Company rented its corporate office at 1180 North Town Center Drive, Suite 100, Las Vegas, Nevada 89144, on a month to month basis. The monthly rent is $1,907. A security deposit of $3,815 has been paid.
On March 30, 2018, the Company became aware that a summons and complaint (collectively, the “Summons and Complaint”) were filed by Jeffrey Feinberg, Jeffrey L. Feinberg Personal Trust, and Jeffrey L. Feinberg Family Trust against the Company and certain of its officers and directors. The Summons and Complaint were filed with the Supreme Court of the State of New York, County of New York on March 27, 2018. The Company intends to vigorously defend itself against these claims. However, there can be no assurance that the outcome of these uncertainties will be favorable to the Company.
On June 15, 2018, defendants filed a motion to dismiss all claims asserted in the complaint in this case. On July 27, 2018, plaintiffs filed a statement of non-opposition to the motion for a protective order. Accordingly, all discovery in the case is effectively stayed pending the resolution of defendants’ motion to dismiss.
The Company recently became aware of a complaint that was filed on June 20, 2018 in the United States District Court for the the Central District of California by a plaintiff named Tony Ramirez, Tony Ramirez v. Marathon Patent Group, Inc., Case no, 18-cv-06309 FMO (PLAx). Mr. Ramirez alleges that he was and is a shareholder of the company, and purports to assert a single claim under Section 14 (a) of the Securities and Exchange Act of 1934 and SEC Rule 14a-9 promulgated thereunder. As of this date, the Company has not yet been served with the complaint in this case.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef