Jan 25, 2018 - Panama; NL Omega Services, LLC, a company incorporated under the laws of the ... granted a telecommunicat
METROSPACES, INC.
FORM 8-K (Current report filing)
Filed 01/25/18 for the Period Ending 01/24/18 Address
Telephone CIK Symbol SIC Code Industry Sector Fiscal Year
888 BRICKELL KEY DR. UNIT 1102 MIAMI, FL, 33131 3056000407 0001488501 MSPC 6500 - Real estate Real Estate Development & Operations Financials 12/31
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 24, 2018 (Date of earliest event reported) METROSPACES, INC. (Exact name of registrant as specified in its charter) Delaware 333-186559 90-0817201 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number) 888 Brickell Key Dr., Unit 1102 Miami, FL 33131 (Address of principal executive offices) (Zip Code) (305) 600-0407 (Registrant's telephone number, including area code) Not Applicable (Former Name or Former Address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 2 - Financial Information Item 2.01 Completion of Acquisition or Disposition of Assets. On April 10, 2017, the Registrant and Leandro Jose Iglesias in representation of all of the members of Etelix.Com USA LLC (“Etelix”), and its members, entered into a Transaction Agreement under which the Registrant agreed to acquire 51% of the membership units in Etelix and the members of Etelix agreement agreed to transfer certain property owned by them (the “Additional Assets”) to Etelix for $240,000 in cash to be paid to them by the Registrant and the issuance to them of an unspecified number of shares of Registant’s Series D PIK Convertible Preferred Stock having a value of $1,800,000. The Seller agreed to reinvest in the Registrant 38.89% of the proceeds of the sale of shares of common stock received upon conversion of the preferred stock, up to $700,000. The Seller and certain of its members have the the option to convert any part or all of their remining membership units into stock of the Registrant. The value for the conversion of the stock will be a function of a conversion factor multiplied by Etelix’ EBITDA during the 12 months immediately prior to the date on which the conversion is requested. The conversion factor will be determined by dividing $4,000,000 into Etelix’ accumulated EBITDA for its 2016 fiscal year. On April 25, 2017, the Transaction Agreement was amended to provide that the purchase price would remain $240,000, of which $10,000 was to be payable on the Closing Date by check or wire transfer upon the transfer of 51% of the membership units in Etelix and the Additional Assets to Etelix in accordance with the terms of the Transaction Agreement and $230,000 of which was to be payable 90 days after the Closing Date and 18,000 shares of the Registrant’s Series D PIK Convertible Preferred Stock. The assets transferred under the Transaction Agreement do not include New Life Omega Services, Inc., a company created under the laws of the Republic of Panama; NL Omega Services, LLC, a company incorporated under the laws of the State of Florida; Etelix Net Communications Services, Corp., a company created under the laws of the British Virgin Islands; or any of its local and retail businesses including: Future Voyze LLC; Perfect Voyze LLC; Soluciones Latincom C.A.; Mitelco LLC; Etelix.com Peru; Etelix Group SL; and Etelix.com UK. With respect to Future Voyze LLC and Perfect Voyze LLC, these companies and Etelix have entered into an agreement under which Etelix will receive all assets resulting from the liquidation of Future Voyze LLC and all of those assets are to be transferred from Etelix.com USA LLC to Perfect Voyze LLC once it had been granted a telecommunications license by the Federal Communications Commission. Etelix is a Miami-based, FCC-licensed voice, SMS and data carrier. The company's principal products and services are international voice wholesale operations and distribution, residential and commercial data and voice services and data hosting services. Etelix is planning to develop and construct build-to-suit data hosting centers in secondary markets across the United States. Etelix was founded in 2007. On June 7, 2017, the transaction described in Item 1.01 was closed. Etelix was founded in 2007. Its revenue and net loss for the 12-month period ended December 31, 2017, were approximately $7.8 million and $181,000, respectively; for the like period in 2016, Etelix had revenue and net income of approximately $4.1 million and $56,000, respectively. Attached to this Report as Exhibits 99.1 and 99.2 are Etelix’ audited financial statements for its 9-month period ended September 30, 2017, and for its fiscal year ended December 31, 2016, and pro forma financial information, respectively.
Section 9 – Financial Statements and Exhibits Item 9.01. Financial Statements and Exhibits (a) Financial statements of businesses acquired. Audited financial statements for acquired business. (b) Pro forma financial information. Pro forma financial information. (d) Exhibits The exhibits listed in the following Exhibit Index are filed as part of this Current Report:
EXHIBIT INDEX
Exhibit Description 99.1 Audited Financial Statements of Etelix.Com USA LLC for the 9-month period ended September 30, 2017 and for the fiscal year ended December 31, 2016. 99.2 Pro forma financial information.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. METROSPACES, INC. By: /s/ Oscar Brito Oscar Brito President
Dated: January 25, 2018
Exhibit 99.1
N° MI 8473789 Lárez, Mendez y Asociados Public Accountants J-40016904-6 INDEPENDENT AUDITORS' REPORT To the shareholders of Etelix.com USA LLC We have reviewed the accompanying balance sheet of Etelix.com USA LLC at December 31, 2016, and the income statement, statement of changes in equity and cash flow, statement for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to issue a report on these financial statements based on our review. We conducted our review in accordance with the International Standard on Review Engagements 2400. This Standard requires that we plan and perform the review to Obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial statements do not give a true and fair view (or are not presented fairly, in all material respects) in accordance with International Accounting Standards for Small and Medium-sized Entities. /s/ Mariaexandra Lárez Lic. Mariaexandra Lárez Lárez Mendez y Asoc. Certified Public Accountants CCP. MI 20300 April 27, 2017
ETELIX.COM USA LLC BALANCE SHEETS AS OF DECEMBER 31,2016
ASSETS CURRENT ASSETS Cash and Banks Accounts Receivable Customers Other Receivables Total current assets PROPERTY AND EQUIPMENT - Net TOTAL ASSETS
17,885 2,909,771 750,044 3,677,700 352,332 4,030,032
LIABILITIES AND SHAREHOLDER´S EQUITY LIABILITIES CURRENT LIABILITIES Accounts Payable Receivable Outstanding Invoices Other Accounts Payables Prepaid Telecommunications Other Payables - Temporary TOTAL CURRENT LIABILITIES TOTAL LIABILITIES
SHAREHOLDER´S EQUITY Capital Stock Additional Paid in Capital Retained Earnings Net Income TOTAL SHAREHOLDER´S EQUITY
2,727,348 322,455 200 8,576 84,365 3,142,944 3,142,944 1,000 747,515 82,529 56,044 887,088
TOTAL LIABILITIES AND SHAREHOLDER´S EQUITY
4,030,032
ETELIX.COM USA LLC STATEMENTS OF INCOME AS OF DECEMBER 31,2016
INCOME SALES COST OF SERVICES GROSS PROFIT OPERATING EXPENSES Salaries and wages Depreciation Expense Sales commission Amortizacion expense Bank service Changes Financial Interest expenses Professional fees Regulatory fees Technology Expense Trade insurance Travel expenses Other expenses TOTAL OPERATING EXPENSES OTHER INCOME AND EXPENDES Other income Federal Tax prior year
4,067,807 3,484,471 583,336 134,299 36,123 67,824 26,727 18,517 12,334 46,349 829 156,453 15,314 16,661 13,200 544,630 17,338 4,686
TOTAL OTHER INCOME AND EXPENDES NET INCOME Federal Tax prior year NET INCOME 2016
(12,652 51,358 4,686.00 56,044
)
ETELIX.COM USA LLC STATEMENTS OF CASH FLOW AS OF DECEMBER 31,2016
CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and Amortization Changes in working capital:
Accounts receivable Accounts Receivable Employees
Other accounts receivable Invoices pending issue Prepaid Telecommunications Accounts Receivable Shareholders Intercompany Accounts Receivable Sales Tax Accounts payable to suppliers Receivable Outstanding Invoices Other payables Receivable Outstanding Invoices Prepaid Telecommunications Intercompany payable Accounts payable Shareholder
Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Additional Paid in Capital
Net Fixed Assets Capital Stock Net Effect of Investment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITY:
Income Tax 2015
Net cash used in financing activity
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents - Beginning of period Cash and cash equivalents - end of period
56,045 62,850 ) (1,967,835 0 ) (707,735 0 0 0 0 1,958,257 0 68,667 322,455 8,576 0 200 ) (254,566 197,000 ) (6,113 0 0 190,887 ) (4,686 ) (4,686 ) (12,320 30,204 17,884
ETELIX.COM USA LLC STATEMENTS OF SHAREHOLDERS' EQUITY AS OF DECEMBER 31, 2016 BALANCE - DECEMBER 31, 2015 NET INCOME 2016 BALANCE - DECEMBER 31,2016
COMMON STOCK $ $ $
1,000 0 1,000
$ $ $
ADDITIONAL PAID-IN SHARE 550,515 197,000 747,515
RETAINED EARNINGS $ $ $
82,529 56,044 138,573
TOTAL $ $ $
634,044 253,044 887,088
Etelix.com USA LLC NOTES TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2016 1-. CONSTITUTION AND OPERATIONS: The company was registered on September 30, 2008, at the Florida Department of State in the Division of Corporations. Under the registration number Nº 08000092741. It is a Limited Liability Company. The purpose for which this limited liability company is organized is any and all lawful business. 2-. PRESENTATION OF THE FINANCIAL STATEMENTS: The accompanying financial statements have been prepared in historical values, based on the Original Financial Statements in US dollars. 3-. SUMMARY, MEANING AND POLICY OF THE ACCOUNTS: Cash and Cash Equivalents: Refers to available and demand deposits at banks; That is, any item that allows the entity, at any time, to deposit or withdraw funds.
Accounts Receivable Clients: The company recognizes as accounts receivable all transactions invoices that have actually been individually reviewed and issued within the established periods and crossed with the counterparts of service provision.
Other accounts receivable: The Company recognizes in this item Telecom Prepaid for provisions to be made that will be converted into invoices and Short Term Loan Operations of New Life Omega Service and Caribbean Telecom as an investment in fixed assets to be realized. Tangible and intangible Fixed Assets: These are recorded at cost from the date of purchase. Depreciation and amortization is calculated based on the straight-line method over the estimated useful life of the asset and the use of the asset. Depreciation and amortization expenses for the period are those corresponding to a normal period, based on the value of the asset divided by the estimated useful life.
4 -. PROPERTY AND EQUIPMENT Property and Equipment consisted of the following at December 31, 2016 Description Telecommunication Equipment Telecommunication software Computer equipment Less: Depreciation and amortization Total
$
229.532 405.903 5.728 288.831 352.332
Accounts Payable Suppliers and Invoices to be received : The company recognizes as accounts payable, all transactions invoices that have been individually reviewed and issued within the established periods and crossed with the counterparts of service provision. Accounts Receivable Other: The company recognizes as other accounts receivable a loan granted in the short term to FULL RED SAC PERU. Income from services: The revenues of the company are the product of the sale of minutes for long-distance telecommunications, network utilization and fund administration for ETELIX.Net and Etelix.UK collections and payments. Cost of the Service: The service costs represent the purchase of minutes to the different operators with whom the activity is handled and the exchange of the service rendering is performed. 5-. COMMITMENTS - SHAREHOLDER´S EQUITY The result of the company at the close of 2016 $ 56.044 was 2015 $ 22.987 and 2014 $ 50.153 and 2013 $ 14.074. Social capital consists of $ 1.000 and unrealized capital of $ 747.515, by acquisition of assets. 6-. INCOME TAX: The company from the moment it decides to start operations in 2013, has submitted all the corresponding declarations to the ISR for each period 2013, 2014 and 2015, with legal extensions, as established in the IRS, by the year 2016 already stabilizes With the timely fulfillment of their fiscal commitments.
Exhibit 99.2
Pro Forma Statement of Operations (Unaudited)- MSPC and Etelix 12 Months Ending December 31, 2016 Revenue, net of discounts Cost of revenue Gross profit (loss) Operating Expenses General and administrative expenses Loss on write-down of real property advances Total operating expenses Operating Income (Loss) Other Income (expense) Interest expense Gain (loss) on change in fair value of derivative Gain (loss) on extinguishment of debt Other Income Federal Tax prior year Total other income (expense) Net Income before taxes Income tax benefit Net Income (Loss) Preferred stock dividend Net Profit (Loss) attributable to common stockholder Other comprehensive income (loss) Foreign currency transaction adjustment Comprehensive Income
MSPC
267,044 162,824 104,221 225,953 225,953 (121,732) (326,475) 1,329,880 97,377 1,100,782 979,050 — 979,050 — 979,050 — 979,050
Etelix
4,067,807 3,484,471 583,336 532,296 532,296 51,040 (12,334) 17,338 (4,686) 318 51,358 4,686 56,044 56,044 56,044
Consolidated
4,334,851 3,647,295 687,557 758,249 758,249 (70,692) (338,809) 1,329,880 97,377 1,101,100 1,030,408 4,686 1,035,094 1,035,094 — 1,035,094
Pro Forma Balance Sheet (Unaudited) - MSPC and Etelix 12 Months Ending December 31, 2017 Current Assets Cash and cash equivalents Accounts receivable Inventory Prepaid and other current assets Total Current Assets Advance payment for real property Investment in non-consolidated subsidiary Property and equipment, net Goodwill TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Bank overdraft payable Accounts payable Accrued expenses Accrued interest Sales deposit Long term debt related party Notes payable - related parties Current portion of convertible notes payable, net of discount of $77,992 and Note payable Derivative liability Total Current Liabilities Convertible notes payable, net discount of $100,406 and $0 TOTAL LIABILITIES
$12,365
MSPC 29,023 1,033 11,223 82,897 124,176 369,891 159,910 4,456,832 — 5,110,809 1.00 71,440 389,075 400,787 34,046 1.00 16,990 90,032 10,000 10,574,802 11,587,174 51,276 11,638,450
Etelix 17,885 2,909,771 750,044 3,677,700 352,332 4,030,032 2,727,348 415,596 3,142,944 3,142,944
Consolidated 46,908 2,910,804 11,223 832,941 3,801,876 369,891 159,910 4,809,164 0 9,140,841 2,727,348 1 487,036 389,075 400,787 34,046 1 16,990 0 0 90,032 10,000 10,574,802 14,730,118 51,276 14,781,394
Stockholders' Deficit Preferred stock, $0.000001 par value, 8,000,000 shares authorized Series B Preferred Stock, $0.000001 par value, 2,000,000 shares authorized, 1,200,000 shares issued Series C Preferred Stock, $0.000001 par value, 100,000 shares authorized, 45,354 shares issued Series D Preferred Stock, $0.000001 par value, 400,000 shares authorized, 0 shares issued Common Stock, $0.000001 par value, 10,000,000,000 shares authorized 1,784,461,982 and 846,745 shares issued and outstanding Additional paid in capital Accumulated other comprehensive loss Accumulated earnings (deficit) Total Stockholders' Deficit TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
1.00 1 0 — 1,785 6,747,974 961,254 (14,238,658) (6,527,643) 5,110,809.00
1,000 747,515 56,044 82,529 887,088 4,030,032.00
0 1 0 0 1 0 0 0 0 0 0 1,000 0 0 1,785 7,495,489 1,017,298 (14,156,129) (5,640,555) 9,140,841
Pro Forma Statement of Operations (Unaudited) - MSPC and Etelix 12 Months Ending December 31, 2017 Revenue, net of discounts Cost of revenue Gross profit (loss) Operating Expenses General and administrative expenses Loss on write-down of real property advances Total operating expenses Operating Income (Loss) Other Income (expense) Interest expense Gain (loss) on change in fair value of derivative Gain (loss) on extinguishment of debt Gain (loss) on income tax prior year Total other income (expense) Net Income before taxes Income tax benefit Net Income (Loss) Preferred stock dividend Net Profit (Loss) attributable to common stockholder Other comprehensive income (loss) Foreign currency transaction adjustment Comprehensive Income
MSPC
331,624 202,191 129,433 268,950 268,950 (139,517) (217,650) 26,377 (191,273) (330,790) — (330,790) (330,790) — (330,790)
Etelix
7,802,340 6,990,026 812,314 700,267 700,267 112,047 (281,702) (11,193) (292,895) (180,848) (180,848) — (180,848) — (180,848)
Consolidated
8,133,964 7,192,217 941,747 969,217 969,217 (27,470) (499,352) — 26,377 (484,168) (511,638) (511,638) (511,638) — (511,638)
Pro Forma Balance Sheet (Unaudited) - MSPC and Etelix 9 Months Ending September 30, 2017
ASSETS Current Assets Cash and cash equivalents Accounts receivable Due from related party Customers Marketable securities Inventory Prepaid and other current assets Total Current Assets Advance payment for real property Investment in non-consolidated subsidiary Property and equipment, net Goodwill TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Bank overdraft payable Accounts payable Accrued expenses Accrued interest Deferred revenue and customer deposits Due to related parties Sales deposit Long term debt related party Notes payable Current portion of convertible notes payable, net of discount of $189,377 and $77,992 Convertible notes payable related party, net of discount of $0 and $5,921 Note payable Current portion of acquisition note, net of discount Derivative liability Total Current Liabilities Due to related parties Capital lease obligations Acquisition note, net of discount Convertible notes payable, net discount of $0 and $100,406 TOTAL LIABILITIES
MSPC
13,652 3,341 — — 9,971 179,955 206,919 159,910 4,380,940 4,587,859 — 61,251 626,144 75,869 — — 34,046 — 16,990 155,184 — 10,000 — 9,881,741 10,861,225 10,861,225
Etelix
Consolidated 23,266 36,918 4,226,060 4,229,401 — 987,126 987,126 — 9,971 179,955 5,236,452 5,443,371 159,910 305,631 4,686,571 5,542,083 10,129,942 4,133,186 — — 212,958 274,209 170,905 797,049 75,869 — — 34,046 — 318,794 335,784 155,184 — 10,000 — 9,881,741 4,835,843 15,697,068 4,835,843 15,697,068
Stockholders' Deficit Preferred stock, $0.000001 par value, 8,000,000 shares authorized Series B Preferred Stock, $0.000001 par value, 2,000,000 shares authorized, 1,200,000 shares issued Series C Preferred Stock, $0.000001 par value, 100,000 shares authorized, 100,000 shares issued Series D Preferred Stock, $0.000001 par value Common Stock, $0.000001 par value, Additional paid in capital Stock subscription Accumulated other comprehensive loss Accumulated Retained earnings (deficit) Total Stockholders' Deficit Net Income TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
—
—
1
1
0 2,263 7,035,555 — (205,388) (13,105,798) (6,273,367) (330,790) 4,587,859
747,515 1,000 (42,275) — 5,542,083
0 2,263 7,783,070 1,000 (205,388) (13,148,073) (6,273,367) (330,790) 10,129,942
