Source: https://icoxinnovations.com/investors/link_files/2019/05-14-2019/Form10-Q(05-14-2019)IcoxInnovations/Form10-Q.html
Timestamp: 2019-05-23 03:15:58
Document Index: 245978005

Matched Legal Cases: ['arty 50', 'arty 374', 'arty 105', 'arty 18', 'arty 30', 'arty 327']

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 22,329,474 common shares issued and outstanding as at May 14, 2019.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AN USE OF PROCEEDS 23
It is the opinion of management that the unaudited condensed interim consolidated financial statements for the quarter ended March 31, 2019 include all adjustments necessary in order to ensure that the unaudited condensed interim consolidated financial statements are not misleading.
Cash and cash equivalents $ 431,289 $ 898,142
Accounts receivable, related party 50,000 20,000
Prepaid expenses 96,381 82,215
Deferred service costs 1,124,926 874,838
Related party loans receivable and related accrued interest 1,299,159 1,280,666
Right-of-use asset 175,911 -
Total Current Assets 3,192,666 3,170,861
Total Assets $ 3,192,703 $ 3,170,898
Accounts payable and accrued expenses $ 270,788 $ 239,026
Accounts payable and accrued expenses, related party 374,921 47,431
Current portion of accrued interest on convertible notes 8,938 -
Lease liability 175,911 -
Total Current Liabilities 1,080,558 286,457
Convertible notes payable 750,325 500,325
Accrued interest on convertible notes 121,114 115,518
Total Liabilities 1,951,997 902,300
Common stock, $0.001 par value, 75,000,000 shares authorized; 22,329,474 and 21,579,474 shares issued and outstanding as at March 31, 2019 and December 31, 2018, respectively 22,329 21,579
Additional paid-in-capital 7,067,749 6,959,881
Accumulated deficit (5,849,372 ) (4,712,862 )
Total Stockholders’ Equity 1,240,706 2,268,598
Total Liabilities and Stockholders’ Equity $ 3,192,703 $ 3,170,898
General and administrative expense 1,000,347 514,117
Consulting fees, related party 105,000 105,000
Service costs 35,122 387,080
Total operating expenses 1,140,469 1,006,197
Net loss from operations (1,140,469 ) (1,006,197 )
Interest income, related party 18,493 198
Note interest expense (14,534 ) (16,519 )
Total other income (expense) 3,959 (16,321 )
Net loss $ (1,136,510 ) $ (1,022,518 )
Loss per common share – Basic and diluted $ (0.05 ) $ (0.09 )
Weighted average number of common shares outstanding, basic and diluted 22,262,807 11,600,000
Net loss for the period $ (1,136,510 ) $ (1,022,518 )
Stock-based compensation 3,523 3,229
Stock-based compensation, related party 30,095 41,289
Non-cash lease expense 45,404 -
Accounts receivable, related party (30,000 ) 500,000
Prepaid expense (14,166 ) (54,166 )
Deferred service costs (250,088 ) (61,207 )
Deferred offering costs - (121,558 )
Accrued interest receivable, related party (18,493 ) 752
Accounts payable and accrued expenses 31,762 232,201
Accounts payable and accrued expenses, related party 327,490 (21,085 )
Accrued interest on loans payable, related party - 723
Accrued interest on notes payable 14,534 15,795
Change in operating lease liability (45,404 ) -
Net cash (used in) operating activities (791,853 ) (486,545 )
Net cash provided by investing activities - 100,000
Proceeds from issuance of loans payable, related party - 200,000
Proceeds from issuance of convertible notes payable 325,000 -
Net cash provided by financing activities 325,000 200,000
Net changes in cash and equivalents (466,853 ) (186,545 )
Cash and equivalents at end of the period $ 431,289 $ 28,448
Stock-based compensation $ 3,523 $ 3,229
Stock-based compensation, related party $ 30,095 $ 41,289
Subscription receipts - escrow $ - 5,468,195
Conversion of convertible debt $ 75,000 $ -
Number of Shares Amount Paid-in Capital Accumulated Deficit Stockholders’
Balance, December 31, 2017 11,600,000 $ 11,600 $ 826,018 $ (693,008 ) $ 144,610
Stock-based compensation - - 3,229 - 3,229
Stock-based compensation, related party - - 41,289 - 41,289
Net loss for the period - - - (1,022,518 ) (1,022,518 )
Balance, March 31, 2018 11,600,000 $ 11,600 $ 870,536 $ (1,715,526 ) $ (833,390 )
Balance, December 31, 2018 21,579,474 $ 21,579 $ 6,959,881 $ (4,712,862 ) $ 2,268,598
Stock-based compensation - - 3,523 - 3,523
Stock-based compensation, related party - - 30,095 - 30,095
Share issuance for conversion of debt 750,000 750 74,250 - 75,000
Net loss for the period - - - (1,136,510 ) (1,136,510 )
Balance, March 31, 2019 22,329,474 $ 22,329 $ 7,067,749 $ (5,849,372 ) $ 1,240,706
As of March 31, 2019 and for the three months ended March 31, 2019 and 2018
These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $5,849,372 as of March 31, 2019 and further losses are anticipated in the pursuit of the Company’s new service business opportunity, raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or the private placement of common stock.
The unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“ GAAP ”) in the United States of America.
The unaudited condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated.
The Company computes earnings (loss) per share in accordance with ASC 105, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net loss available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. At March 31, 2019, common shares from the conversion of debt (11,331,217 shares) (Note 4) and exercise of stock options (1,930,548 shares) (Note 10) have been excluded as their effect is anti-dilutive. At March 31, 2018, common shares from the conversion of debt (11,069,843 shares) and exercise of stock options (766,664 shares) have been excluded as their effect is anti-dilutive.
The Company’s policy is to defer revenue that relate to services that have not yet been performed. Revenue is recognized when the service has been performed.
In February 2016, the FASB issued ASU 2016-02, “Leases” which was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in ASU 2016-02 are effective for our quarter ended March 31, 2019. The amendments in ASU 2016-02 are effective for our quarter ended March 31, 2019.
In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The amendments in ASU 2018-07 are effective for our quarter ended March 31, 2019.
As at March 31, 2019, the Company had outstanding accounts receivable from a related party of $50,000 (December 31, 2018 - $20,000).
As at March 31, 2019, the Company had deferred revenue of $250,000 (December 31, 2018 - $0). The Company did not recognize the revenue in the period as it had yet to provide the agreed upon services to the client.
The Company has convertible notes outstanding as at March 31, 2019 and are as follows:
Note 1 (1) 09-14-2015 09-14-2020 8 % $ 73,825 $ 44,627 $ 118,452
Note 2 (1) 12-30-2016 12-30-2021 8 % 50,000 18,587 68,587
Note 3 (1) 12-30-2016 12-30-2021 8 % 21,500 7,992 29,492
Note 4 (1) 03-02-2017 03-02-2022 8 % 20,000 6,823 26,823
Note 5 (1) 06-08-2017 06-08-2022 8 % 10,000 2,928 12,928
Note 6 (2) 10-30-2017 10-30-2020 10 % 250,000 35,411 285,411
Note 7 (2) 10-30-2017 10-30-2020 10 % - 8,938 8,938
Note 8 (3) 02-13-2019 08-12-2020 15 % 25,000 473 25,473
Note 9 (3) 02-22-2019 08-21-2020 15 % 225,000 3,421 228,421
Note 10 (3) 02-27-2019 08-26-2020 15 % 50,000 657 50,657
Note 11 (3) 03-12-2019 09-11-2020 15 % 25,000 195 25,195
Total $ 750,325 $ 130,052 $ 880,377
(3) The note is held in sBetOne, Inc. (“sBetOne”), a subsidiary of the Company, and may be converted into shares of common stock of sBetOne. In the event that sBetOne issues equity securities in a transaction or series of transactions resulting in aggregate gross proceeds of $2,500,000 including the conversion of the notes and any other indebtedness, then the notes and any accrued but unpaid interest thereon, will automatically convert into the equity securities issued in such financings equal to the lesser of:
Notes 1 through 5 were initially entered into with an interest rate of 18% per annum. On November 5, 2018, amendment agreements were signed amending the interest rate to 8% per annum effective December 1, 2018. The amendments also state that the interest is payable only in cash on a quarterly basis commencing December 1, 2018 on March 31, June 30, September 30, and December 31 of each year until the Maturity Date or earlier on the date that all amounts owing under this Note are prepaid by the Company. The principal, and the interest calculated until November 30, 2018, may still be converted to shares.
On January 8, 2019, the principal of Note 7 was converted into common shares at a conversion price of $0.10 per share for a share issuance of 750,000 shares. As at March 31, 2019, the interest accrued is still payable.
Notes 8 through 11 were issued through sBetOne.
5. NOTES PAYABLE (CONT’D)
Note 1 (1) 09-14-2015 09-14-2020 8 % $ 73,825 $ 43,170 $ 116,995
Note 2 (1) 12-30-2016 12-30-2021 8 % 50,000 17,600 67,600
Note 3 (1) 12-30-2016 12-30-2021 8 % 21,500 7,568 29,068
Note 4 (1) 03-02-2017 03-02-2022 8 % 20,000 6,428 26,428
Note 5 (1) 06-08-2017 06-08-2022 8 % 10,000 2,731 12,731
Note 6 (2) 10-30-2017 10-30-2020 10 % 250,000 29,247 279,247
Note 7 (2) 10-30-2017 10-30-2020 10 % 75,000 8,774 83,774
Based upon the balances as of March 31, 2019, the convertible notes and the related interest will come due in the following years:
2019 $ - $ 8,938 $ 8,938
2020 648,825 84,784 733,609
2021 71,500 26,579 98,079
2022 30,000 9,751 39,751
6. NOTES RECEIVABLE – RELATED PARTY
Also, as a condition for entering into the loan agreement, Ryde entered into the amendment no. 2, dated as of July 9, 2018, to the business service agreement dated December 29, 2017 as amended as of March 15, 2018, with the Company. Pursuant to the amendment no. 2, the Company and Ryde agreed that each party will be responsible for its respective expenses and agreed not to charge any out of pocket expenses to the other party unless expressly approved by the other party in advance in writing. As of March 31, 2019, interest of $10,890 has been accrued and earned (December 31, 2018 - $7,192).
6. NOTES RECEIVABLE – RELATED PARTY (CONT’D)
On July 27, 2018, the Company entered into a loan agreement with Ryde whereby the Company provided to Ryde a loan in the principal amount of $500,000. This loan is unsecured, will mature on the earlier of eight (8) months from the date of issuance or the closing by Ryde of a minimum of $4,250,000 in financings, in the aggregate, whether through the sale of KodakCoins, equity, or otherwise and will bear interest at the rate of 12% interest per annum. However, any amounts not paid when due shall immediately commence accruing interest at the default rate of 18% per annum. As of March 31, 2019, interest of $38,269 has been accrued and earned (December 31, 2018 - $23,474).
As at March 31, 2019, the balances of the outstanding notes receivable are as follows:
Note 1 07-09-2018 03-09-2019 2 % $ 750,000 $ 10,890 $ 760,890
Note 2 (1) 07-27-2018 03-27-2019 12 % 500,000 38,269 538,269
Total $ 1,250,000 $ 49,159 $ 1,299,159
The Company is in discussions with Ryde to amend the agreements as they have already matured.
Note 2 (1) 07-27-2018 03-27-2019 12 % 500,000 23,474 523,474
Starting May 1, 2018, the Company entered into a contract to lease its premises. The contract is effective until February 28, 2020 and is for $16,500 per month. ASU 2016-02 was adopted in the period ended March 31, 2019.
The following are the future minimum lease payments as at March 31, 2019:
2019 $ 148,500
Total $ 181,500
Less interest factor (5,589 )
Total to Lease Liability $ 175,911
The Company’s office premises were provided to it at no cost by one of its directors until April 30, 2018. This director did not take any fees for serving as director during the period ended March 31, 2019.
8. RELATED PARTY TRANSACTIONS (CONT’D)
In October 2017, the Company signed an agreement with a company in which the Company’s Chairman is a director, officer, and 30.5% shareholder, to provide strategic management services. The agreement is for a two-year term that will automatically be renewed unless: (i) mutually agreed to by Business Instincts Group Inc. (“BIG”) and us, or (ii) written notice of non-renewal is provided by the non-renewing party to the other at least 90 days prior to the end of the term. The agreement can be terminated by either party, without cause, at any time upon the provision of 90 days written notice to the other party. This agreement committed the Company to pay $35,000 a month and a signing bonus of $100,000 payable as follows: (i) $50,000 upon closing of up to $750,000 of equity financing and (ii) $50,000 payable on signing of the first client agreement which were paid in 2017 and 2018. On June 26, 2018, the agreement was amended to pay $105,000 a month as of June 1, 2018 and pay a bonus of $280,000. $140,000 of the bonus has been paid with the remaining portion to be paid upon signing of two additional clients. As of March 31, 2019, the Company had trade and other payables owing to this related party of $145,480 (December 31, 2018 - $20,458).
2019 $ 735,000
On December 4, 2018, the Company appointed Swapan Kakumanu as Chief Financial Officer. Previously, on October 9, 2017, the Company had signed an agreement with a company owned by Swapan Kakumanu to complete the accounting functions of the Company. As of March 31, 2019, the Company had trade and other payables owing to this related party of $63,000 (December 31, 2018 - $14,000).
The Company’s common stock is issued at a $0.001 par value. 75,000,000 shares have been authorized. As at March 31, 2019, 22,329,474 shares were issued and outstanding (December 31, 2018 – 21,579,474).
The Company has adopted the 2017 Equity Incentive Plan (“the Plan”) under which non-transferable options to purchase common shares of the Company may be granted to directors, officers, employees, or consultants of the Company. The terms of the Plan provide that the Board of Directors have the right to grant options to acquire common shares of the Company at not less than the closing market price of the shares on the day preceding the grant at terms of up to ten years. No amounts are paid or payable by the recipient on receipt of the options. As of December 31, 2018, the maximum number of options available for grant was 3,900,000 shares. As of March 31, 2019, there are 3,500,000 stock options issued (December 31, 2018 – 3,400,000) and 400,000 stock options unissued (December 31, 2018 – 500,000).
On February 13, 2018, the Company granted a total of 100,000 stock options to a consultant. The stock options are exercisable at the exercise price of $0.60 per share for a period of ten years from the date of grant. The stock options are exercisable as follows:
Risk-free interest rate 2.71 % 2.83%-2.87 %
Expected volatility 172.65 % 187.27%-187.29 %
Options outstanding, December 31, 2018 3,400,000 0.13 0.15 8.6
Granted 100,000 0.25 0.60 9.9
Options outstanding, March 31, 2019 3,500,000 0.17 0.19 8.6
Options exercisable, March 31, 2019 1,930,548 0.15 0.17 8.4
10. STOCK-BASED COMPENSATION (CONT’D)
On May 9, 2019, sBetOne issued an additional $250,000 Convertible Promissory Note (“Note”) related to its private placement offering (“Financing”). The terms of the Note are as follows – 1) 15% simple interest per annum, 2) up to $1.5 million of Financing 3) Closing – in one or more closings 4) Principle and interest payable in 18 months 5) Conversion – If sBetOne issues equity securities in a transaction or series of transactions resulting in aggregate gross proceeds of $2,500,000 including the conversion of the Notes and any other indebtedness (a “Qualified Financing”), then the Notes and any accrued but unpaid interest thereon, will automatically convert into the equity securities issued in such financings, at a conversion price equal to the lesser of (i) 70% of the lowest per share price paid by the purchasers of such equity securities in such financings for the first $600,000 Notes issued and to 75% of the lowest per share price for Notes issued over the first $600,000 up to $1,500,000 and (ii) the price per share equal to the quotient of $27,000,000 divided by the aggregate number of outstanding shares of sBetOne’s common stock immediately prior to the closing of the offering that results in a Qualified Financing, but excluding any outstanding common shares resulting from the prior conversion of any other convertible promissory notes issued prior to the date of this Note.
On May 9, 2019, the Company transferred 2,000,000 founder shares of the common stock it holds in its subsidiary sBetOne to an arm’s length third party.
We had no revenue for the three months ended March 31, 2019 and 2018.
We incurred general and administrative expenses of $1,000,347 and $514,117 for the three months ended March 31, 2019 and 2018, respectively, representing an increase of $486,230 between the two periods. These expenses consisted primarily of consulting fees, pre-licensing fees, professional fees, and other general and administrative costs. The increase in consulting fees between the two periods from $297,188 in 2018 to $419,863 in 2019 was due to the increase in compensation for our president, chief operating officer, and Board of Directors. Pre-licensing fees increased from $0 in 2018 to $250,000 in 2019. Once the definitive licensing agreement is signed with the license holder the Company will be able to adjust this pre-licensing fees from future minimum royalty fees that would be payable to the license holder. Professional fees decreased from $108,198 in 2018 to $68,548 in 2019 due to lower legal services as 2018 saw the Company spending on the evaluation of potential business opportunities and regulatory compliance. The increase in other general and administrative costs increased from $213,282 in 2018 to $366,288 in 2019 due to increased travel costs, advertising and marketing costs, compliance fees, and stock-based compensation. Service costs decreased from $387,080 in 2018 to $35,122 in 2019 as many of the costs for the client being recognized are now being charged to them as per the amended agreement.
Consulting fees of $419,863 in the first quarter of 2019 relate in part to $105,000 paid to Business Instincts Group Inc., $100,000 paid for services related to getting listed on the stock exchange, $67,500 paid to our Board of Directors, $48,000 paid to our president, for management services, $36,000 paid to our chief operating officer, for management services, $24,000 paid for accounting services, $18,000 paid for the management of Cathio, Inc., a subsidiary of the Company, $15,000 paid to our chief financial officer, for management services, $3,521 in stock-based compensation, and other smaller costs.
Service fees of $35,122 in 2019 relate to $21,266 for public relation and marketing services, $7,884 for legal services, and $5,972 for business travel.
Other income includes $18,493 of interest earned on a loan receivable from a related party compared to $198 for the same period last year. Other expenses include interest expense on convertible notes payable of $14,534 for the three months ended March 31, 2019 compared to $16,519 for the same period last year.
We incurred net losses from operations of $1,140,469 and $1,006,197 for the three months ended March 31, 2019 and 2018, respectively, representing an increase of $134,272, primarily attributable to the factors discussed above under the heading “Operating Expenses”.
Current Assets $ 3,192,666 $ 3,170,861
Current Liabilities 1,080,558 286,457
Working Capital $ 2,112,108 $ 2,884,404
Current assets were $3,192,666 as at March 31, 2019 and $3,170,861 as at December 31, 2018. The increase in current assets as at March 31, 2019 was due to an increase in deferred service costs and the right-of-use asset partially offset by the increase in cash spent on operating expenses.
Current liabilities as at March 31, 2019 were attributable to $645,709 in accounts payable and accrued expenses, $8,938 in current portion of accrued interest on convertible notes payable, deferred revenue of $250,000, and $175,911 for the lease liability compared to $286,457 in accounts payable and accrued expenses as at December 31, 2018.
Net cash (used in) operating activities $ (791,853 ) $ (486,545 )
Net changes in cash and cash equivalents $ (466,853 ) $ (186,545 )
Net cash used in operating activities was $791,853 for the three-month period ended March 31, 2019, as compared to $486,545 for the three-month period ended March 31, 2018, an increase of $305,308. The increase in net cash used in operating activities was primarily due an increase in accounts receivable and an increase in deferred service costs partially offset by a decrease in deferred offering costs, an increase in accounts payable and accrued liabilities, and an increase in deferred revenue.
Investing activities provided cash of $0 for the three-month period ended March 31, 2019 as compared to $100,000 for the three-month period ended March 31, 2018. In 2018, the cash received was from the repayment of the loan made to Ryde.
Financing activities provided cash of $325,000 for the three months ended March 31, 2019 and $200,000 for the three months ended March 31, 2018. In 2019, sBetOne issued $325,000 of convertible debentures.
In the three months ended March 31, 2019, sBetOne issued $325,000 of convertible notes. These notes may be converted into shares of common stock of sBetOne. In the event that sBetOne issues equity securities in a transaction or series of transactions resulting in aggregate gross proceeds of $2.5 million including the conversion of the notes and any other indebtedness, then the notes and any accrued but unpaid interest thereon, will automatically convert into the equity securities issued in such financings, at a conversion price equal to 70% of the lowest per share price paid by the purchasers of such equity securities in such financings for the first $600,000 notes issued and to 75% of the lowest per share price for notes issued over the first $600,000.
On May 9, 2019, an additional $250,000 convertible note was issued.
Our estimated general and administrative expenses, operating expenses, and service costs for the next 12 months are $5,066,000 and are based on our current expenditures given the current market conditions.
Our unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established a source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred losses since inception resulting in an accumulated deficit of $5,849,372 as at March 31, 2019 (December 31, 2018: $4,712,862). Our ability to operate as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable.
Our principal executive officer and our principal financial officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2019. Based on this evaluation, they concluded that, as of March 31, 2019, our disclosure controls and procedures were not effective such that the information relating to us that is required to be disclosed in our SEC reports: (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) is accumulated and communicated to our management, including our principal executive and financial officer, to allow timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2019, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
Since the beginning of the fiscal quarter ended March 31, 2019, we have not sold any equity securities that were not registered under the Securities Act of 1933 , as amended, that were not previously reported in a quarterly report on Form 10-Q or a current report on Form 8-K.
On May 9, 2019, sBetOne, a majority-owned subsidiary of our Company, issued a convertible promissory note in the principal amount of $250,000 to a subscriber in exchange for a purchase price of $250,000. This is in addition to $325,000 convertible promissory notes issued to four subscribers during the first quarter of 2019 which brings the total convertible promissory notes issued by sBetOne to date to $575,000. Simple interest accrues on the principal balance of this convertible promissory note at a rate of 15% per annum and all outstanding principal and interest that accrues, if not previously converted, are due and payable 18 months from the date of this convertible promissory note. On May 9, 2019, the Company also transferred 2,000,000 founder shares of the common stock it holds in its subsidiary sBetOne to an arm’s length third party. Currently we own approximately 58.5% of the outstanding shares of common stock of sBetOne.
If sBetOne issues equity securities in a transaction or series of transactions resulting in aggregate gross proceeds of $2,500,000 (a “Qualified Financing”), including the conversion of this convertible promissory note and any other indebtedness, then this convertible promissory note and any accrued but unpaid interest thereon, will automatically convert into the equity securities of sBetOne issued in such financings, at a conversion price per share equal to the lesser of (i) 70% of the lowest per share price paid by the purchasers of such equity securities in such financings for the first $600,000 and 75% of the lowest price per share price paid by purchasers of such equity securities in such financing for over $600,000 up to $1,500,000, or (ii) the price per share equal to the quotient of $27,000,000 divided by the aggregate number of outstanding shares of sBetOne’s common stock as of immediately prior to the closing of the offering that results in a Qualified Financing, but excluding any outstanding common stock resulting from the prior conversion of any other convertible promissory notes issued prior to the date of this convertible promissory note.
I, Swapan Kakumanu, certify that:
1. the quarterly report on Form 10-Q of ICOX Innovations Inc. for the period ended March 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The undersigned, Swapan Kakumanu, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that