SHAREHOLDERS' DEFICIT

3 Months Ended

Mar. 31, 2021

NOTE 8. SHAREHOLDERS’ DEFICIT

Preferred Stock

We are authorized to issue 4,000,000 shares of preferred stock with a par value of $0.0001.

1,000,000 shares of Series A Preferred Stock were designated and issued effective January 17, 2019.

5,000,000 shares of Series B 10% Cumulative Dividend Convertible Preferred Stock were designated effective December 15, 2020.

No other series of preferred stock had been designated or issued at March 31 2020 or December 31, 2020.

Series A Preferred Stock

Effective January 17, 2019, we issued 1,000,000 shares of Series A Preferred Stock, valued by an independent third-party valuation firm using a market approach at $85,500, to one of our directors and a former officer who was also our principal shareholder, for cash consideration of $10,000 and services rendered of $75,500.

The shares of Series A Preferred Stock carry super majority voting rights such that they can vote the equivalent of 60% of common stock at all times.

As of March 31, 2021 and December 31, 2020, 1,000,000 shares of Series A Preferred Stock were issued and outstanding.

Series B Preferred 10% Cumulative Dividend Convertible Stock

On December 15, 2020, we designated 5,000,000 shares of Preferred Stock as Series B Convertible Preferred Stock, with a par value of $0.0001.

No shares of Series B Convertible Preferred Stock have been issued to date.

Liquidation Rights

The Series B Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined and currently the Series A Preferred Stock, and of an amount equal to $10.00 per share.

Conversion Rights

The conversion price for the Series B Preferred Stock shall be 75% of the ten (10) day average market closing price of common stock, for the previous ten business days, divided into $10.00. ($10.00 / by average market closing price previous ten trading days x 75%) = number of common shares.

At any time on or after eighteen months after issuance (18 months), immediately upon the listing of our Common Stock on an Approved Stock Exchange pursuant to an effective registration statement under the Securities Act of 1933, and a Form 10/12b Registration, as amended all outstanding shares of the Series B Preferred Stock shall automatically be converted into shares of the Common Stock, at the “Preferred Conversion Rate,” which shall be post reverse-split of the Common Stock as may be necessary for any Exchange listing, and (2) such shares of Series B may not be reissued by us. A condition of this conversion is that a Registration Statement for the conversion shares shall be effective.

Dividends

The Series B Preferred Stock shall bear dividends, at ten percent (10%) annually, cumulative, based upon a purchase price of $10.00 per share, computed as (10% x $10.00 = $1.00 per share dividend per annum), payable in cash, on or about December 31 of each year, from the date of issue. Payment in cash shall be made on or before January 31 following, at the discretion of the Board.

We shall pay a Project Participation Dividend to the Series B Preferred Stock record holders (pro rata to the holder’s ownership of the Series B Preferred Stock) in cash computed based upon 3% of the net sales of our real estate projects, computed annually by March 1 of the following year for the previous year, for so long as the Series B Preferred Stock is outstanding. In the event that the Series B Preferred Stock is redeemed or converted during a calendar year, the dividend above shall be pro-rated for the year up to redemption date or conversion date and paid in following year by March 1.

Voting Rights

Each holder of shares of the Series B Preferred Stock shall be entitled to the number of votes equal to the number of shares of the Common Stock into which such shares of the Series B Preferred Stock are then convertible.

We will have the right, at our option, to redeem all or any portion of the shares of Series B Preferred Stock. On the date fixed for redemption we shall make payment of the Optional Redemption Amount as calculated below.

Redemption Period	Redemption Percentage
1. The period beginning on the date of the issuance of shares of Series B Preferred Stock (the “Issuance Date”) and ending on the date which is one (1) year following the Issuance Date.	130%
2. The period beginning on the date which is one (1) year and one day following the Issuance Date and ending on the date which is two (2) years following the Issuance Date.	120%
3. The period beginning on the date which is two (2) years and one day following the Issuance Date and ending on the date which is three (3) years following the Issuance Date.	110%
4. The period beginning on the date that is three (3) years and one day from the Issuance Date and ending ten (10) years following the Issuance Date.	100%

Common Stock

We are authorized to issue 25,000,000 shares of common stock with a par value of $0.0001.

No shares of common stock were issued during the three months ended March 31, 2021 and 2020.

In both our Form 10Q for the three and nine months ended September 30, 2020 filed on November 16, 2020 and our Form 8K filed on December 4, 2020, we disclosed our intention to issue certain shares of common stock to directors, officers and staff. No such shares have been issued at this time and any such issuances are unlikely to be finalized before Q2 2021.

As of March 31, 2021 and December 31, 2020, 21,525,481 shares of common stock were issued and outstanding.

Stock Options

We have an incentive stock option plan, which provides for the granting by the Board of Directors of stock options to directors and officers for the purchase of authorized but unissued common shares. No stock options have been granted under this plan since its inception.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

STRATUS CAPITAL CORP 10-Q