| 16. |
ISSUANCE OF CLASS A and B UNITS |
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a. |
Class A Units – during the period ended September 30, 2020, Verb Acquisition issued 100 Class A units to the Company as part of the organization of Verb Acquisition. The Class A Units have the following rights and privileges: |
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1. |
Priority on distributions; |
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2. |
Ability to remove the manager; |
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3. |
Drag-along rights; |
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4. |
Power to dissolve Verb Acquisition provided that a majority of the Class B Units also approve the dissolution; |
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5. |
Ability to appoint a liquidator to wind up the affairs of Verb Acquisition; |
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6. |
Entitled to distributions; |
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7. |
Approve board appointments; and |
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8. |
Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class B Units also approve the amendment. |
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b. |
Class B Units – during the period ended September 30,
2020, Verb Acquisition issued 2,642,159 Class B Units as part of its acquisition of SoloFire (see Note 3). The Class B Units
have the following rights and privileges: |
| |
1. |
Exchangeable for shares of the Company’s Common Stock at a conversion rate of 1 to 1; |
| |
2. |
Power to dissolve Verb Acquisition, provided that a majority of the Class A Units also approve the dissolution; |
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3. |
Entitled to profit distributions; |
| |
4. |
Approve board appointments made by the Class A Units; and |
| |
5. |
Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class A Units also approve the amendment. |
As the Class B Units are exchangeable
for the Company’s Common Stock, for valuation purposes, the Company determined to use the trading price of the Company’s
Common Stock at the date of the acquisition of SoloFire which amounted to $3,065,000.
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