SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth, as of June 12, 2014, the number and percentage of shares of outstanding voting stock of the Company, owned of record and beneficially, by each person known by the Company to own 5% or more of such stock, each director of the Company, and by all executive officers and directors of the Company. Unless otherwise indicated below, the address of each person listed in the table below is c/o 10088-1 Juan Cordero Zona Río, Tijuana, Mexico 22010.

 

		Amount and Nature of Beneficial Ownership
		Common Stock (1)								Series A Voting Preferred Stock (2)								% Total
Name and Address of Beneficial Owner		No. of Shares				% of Class				No. of Shares				% of Class				Voting Power (3)
Directors and Officers
Jorge Olson Director, President and Chief Executive Officer			5,600,000				*				2,500,001				100	%			50.11	%
Eduardo Enciso Director and Secretary		0				0		%			0				0	%		0		%
All officers and directors as a group (two persons)			5,600,000				*				2,500,001				100	%			50.11	%
5% Security Holders
Whalehaven Capital Fund Limited			53,535,555	(4)			5.32	%(4)			0				0	%			2.67	%

 

* Less than 1%.

(1)	Based on 1,006,791,619 shares of Common Stock issued and outstanding as of June 12, 2014.
(2)	Based on 2,500,001 Series A Voting Preferred Stock issued and outstanding as of June 12, 2014. Each share of Series A Voting Preferred Stock shall be entitled to vote on all matters (except election or removal of directors of the Corporation) submitted or required to be submitted to a vote of the stockholders of the Corporation and shall be entitled to four hundred (400) votes of whole shares of Common Stock, at the record date for the determination of stockholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited.
(3)	Percentage Total Voting Power represents total voting power for each beneficial owner with respect to all shares of our Common Stock and Series A Voting Preferred Stock beneficially owner as of June 12, 2014.
(4)	Based on a Schedule 13G filed on May 8, 2014. Michael Finkelstein has the voting and control power over the shares held by Whalehave Capital Fund Limited. Its principal business address is 285 Grand Avenue, Patriot Center, Building 5, 2 nd Floor, Englewood, NJ 07631.

PROPOSAL 1

AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED

SHARES OF COMMON STOCK

 

Purpose and effect of an Increase in our Authorized Number of Shares of common stock

 

The increase in the number of authorized but unissued shares of our common stock will enable us, without further shareholder approval, to issue shares of our common stock from time to time as may be required for proper business purposes, such as fulfilling current obligations, raising additional capital for ongoing operations, business and asset acquisitions (as described in more detail in the following paragraphs), stock splits and dividends, present and future employee benefit programs and other corporate purposes. Having such additional authorized shares of our common stock available for issuance in the future should give us greater flexibility with respect to future actions involving the issuance of stock, including without limitation, acquisitions of other businesses. The Board does not intend to seek shareholder approval prior to any issuance of our common stock unless shareholder approval is required by applicable law or any applicable stock market or exchange requirements.

 

 

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We are currently authorized to issue 1,000,000,000 shares of our common stock, of which we currently have 1,006,791,619 shares of common stock outstanding, of which 6,791,619 shares of common stock were invalidly issued. The Company is contracted to promptly issue and deliver shares of its Common Stock to the holders of a series of convertible notes upon conversion at variable conversion prices set forth in the notes, subject to adjustments thereof. The Company also entered into relevant covenants to reserve a certain number shares of its Common Stock for the conversions under these notes. The proposed increase is a necessary component in giving the Company the ability to perform its obligations under the convertible notes.

 

In addition to having enough shares available to fulfill its current obligations, the Board would like the flexibility to issue shares of Common Stock without additional expense or delay in connection with corporate activities that may be identified in the future. Such future activities may include, but are not limited to; stock dividends or stock splits, equity financings, making acquisitions through use of our stock, and adopting new or modifying current management incentive and employee benefit plans.  

PROPOSAL 2

AMENDMENT TO THE ARTICLES OF INCORPORATION TO EFFECTUATE THE REVERSE SPLIT

 

As a result of the Reverse Split, which is defined by the SEC as a transaction that reduces the number of shares and increases the share price proportionately, each share of Common Stock outstanding at the effective time of the Reverse Split, will become, without any action on the part of the holder thereof, one-five hundredth of a share of Common Stock. The amendment will not affect the par value per share of the Company’s common stock and will remain $0.001. For purposes of this description, the Common Stock, as presently constituted, is referred to as the “Old Common Stock” and the Common Stock resulting from the Reverse Split is referred to as the “New Common Stock.” The bid price of the Company’s Common Stock on June 12, 2014 was $0.0009.

 

The Reverse Split will become effective upon the filing with the Secretary of State of Wyoming of an amendment to the Company’s Articles of Incorporation which states that, upon the filing of the Certificate of Amendment, each share of Old Common Stock then issued and outstanding would automatically become such fraction of a share of New Common Stock as determined by the Board.

 

Purpose and Effects of the Reverse Split

 

The principal effects of the Reverse Split will be as follows:

 

Based upon the 1,006,791,619 shares of Old Common Stock outstanding on the Record Date, the Reverse Split of one-five hundredth would decrease the outstanding shares of Old Common Stock by approximately 99.8% to 2,013,584 shares.

 

The Company will obtain a new CUSIP number for the New Common Stock at the time of the Reverse Split. Following the effectiveness of the Reverse Split, each yet to be determined number of shares of Old Common Stock, without any action on the part of the holder, will represent one share of New Common Stock.

 

Subject to the provisions for elimination of fractional shares, as described below, consummation of the Reverse Split will not result in a change in the relative equity position or voting power of the holders of Old Common Stock.

 

The Amendment to the Company’s Articles of Incorporation will be filed with the Secretary of State of Nevada no later than twenty days after the mailing of this Information Statement. The Reverse Split would become effective as of the date of such filing (the “Effective Date”).

 

The Reverse Split will decrease the number of shares of Old Common Stock outstanding and presumably increase the per share market price for the New Common Stock. Theoretically, the number of shares outstanding should not, by itself, affect the marketability of the stock, the type of investor who acquires it, or the Company’s reputation in the financial community, but in practice this is not necessarily the case, as many investors look upon a stock trading at or under $1.00 per share as unduly speculative in nature and, as a matter of policy, avoid investment in such stocks.

 

Many leading brokerage firms are reluctant to recommend lower-priced securities to their clients and a variety of brokerage house policies and practices currently tend to discourage individual brokers within firms from dealing in lower-priced stocks. Some of those policies and practices pertain to the payment of brokers’ commissions and to time-consuming procedures that make the handling of lower priced stocks unattractive to brokers from an economic standpoint. In addition, the structure of trading commissions also tends to have an adverse impact upon holders of lower priced stocks because the brokerage commission on a sale of a lower priced stock generally represents a higher percentage of the sales price than the commission on a relatively higher priced issue.

 

 

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The Board believes that the Reverse Split is in the best interest of the Company and its Stockholders because it would reduce the number of shares of its Common Stock outstanding to amounts that the Board believes are more reasonable in light of its size and market capitalization. The Company requires additional capital for its operations and does not believe that it will be able to raise the necessary capital unless the price of the Common Stock is higher than the current Common Stock price levels. However, no assurance can be given that the Reverse Split will result in any increase in the Common Stock price or that the Company will be able to complete any financing following the Reverse Split.

 

The result of the Reverse Split will only affect the issued and outstanding shares. It is important we preserve our flexibility to issue additional shares of Common Stock. The Board believes that the additional authorized shares of Common Stock is advisable to provide us with the flexibility to take advantage of opportunities to issue such stock in order to obtain capital, as consideration for possible acquisitions or for other purposes including, without limitation, the issuance of additional shares of Common Stock through stock splits and stock dividends in appropriate circumstances. There are, at present, no plans, understandings, agreements or arrangements concerning the issuance of additional shares of Common Stock.

 

Exchange of Certificate and Elimination of Fractional Share Interests

 

On the Effective Date, shares of Old Common Stock will automatically be combined and changed into one share of New Common Stock. No additional action on the part of the Company or any Stockholder will be required in order to affect the Reverse Split. Stockholders will be requested to exchange their certificates representing shares of Old Common Stock held prior to the Reverse Split for new certificates representing shares of New Common Stock. Stockholders will be furnished the necessary materials and instructions to affect such exchange promptly following the Effective Date. Certificates representing shares of Old Common Stock subsequently presented for transfer will not be transferred on the books and records of the Company but will be returned to the tendering person for exchange. Stockholders should not submit any certificates until requested to do so. In the event any certificate representing shares of Old Common Stock is not presented for exchange upon request by the Company, any dividends that may be declared after the Effective Date of the Reverse Split with respect to the Common Stock represented by such certificate will be withheld by the Company until such certificate has been properly presented for exchange, at which time all such withheld dividends which have not yet been paid to a public official pursuant to relevant abandoned property laws will be paid to the holder thereof or his designee, without interest.

 

No fractional shares of New Common Stock will be issued to any Stockholder. Accordingly, Stockholders of record who would otherwise be entitled to receive fractional shares of New Common Stock, will, upon surrender of their certificates representing shares of Old Common Stock, receive a new certificate representing the New Common Stock rounded up to the nearest whole share.

 

Federal Income Tax Consequences of the Reverse Split

 

The combination of shares of the Old Common Stock into one share of New Common Stock should be a tax-free transaction under the Internal Revenue Code of 1986, as amended, and the holding period and tax basis of the Old Common Stock will be transferred to the New Common Stock received in exchange therefor.

 

This discussion should not be considered as tax or investment advice, and the tax consequences of the Reverse Split may not be the same for all shareholders. Stockholders should consult their own tax advisors to know their individual Federal, state, local and foreign tax consequences.

 

PRINCIPAL EFFECTS OF THE INCREASE IN

AUTHORIZED COMMON STOCK AND REVERSE SPLIT

 

The Share Increase and Reverse Split will become effective on the date that we file the Certificate of Amendment to the Articles of Incorporation of the Company (the “Amendment”) with the Secretary of State of the State of Wyoming. We intend to file the Amendment with the Secretary of State of the State of Nevada promptly after the twentieth (20th) day following the date on which this Information Statement is mailed to the Stockholders.

 

Notwithstanding the foregoing, we must first notify FINRA of the intended Reverse Split by filing the Issuer Company Related Action Notification Form no later than ten (10) days prior to the anticipated record date of such action. Our failure to provide such notice may constitute fraud under Section 10 of the Exchange Act.

 

 

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We currently expect to file the Amendment on or about ____, 2014.

 

The increase in our authorized common stock will allow the Board to issue shares without further action or vote by our shareholders, including for acquisitions of other businesses or assets and capital-raising purposes. The issuance in the future of such additional authorized shares may have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights, of existing holders of our common stock. Such dilution may be substantial, depending upon the amount of shares issued. It may also adversely affect the market price of our common stock.

 

We currently have no shares of our common stock available for issuance. The Amendment will provide us with the ability to issue 9,997,986,416 shares of our common stock.

 

The table below shows the cumulative effect of the Share Increase and Reverse Split on our common stock outstanding at June 12, 2014 (as well as the number of shares of preferred stock that are and will be available for issuance both before and after the Amendment).

 

		Prior to Amendment			After Amendment
Shares of common stock
Authorized			1,000,000,000		10,000,000,000
Issued and Outstanding			1,006,791,619		2,013,584
Available for Issuance			0		9,997,986,416
Shares of Preferred Stock
Authorized			50,000,000		50,000,000
Issued and Outstanding			2,500,001		2,500,001
Available for Issuance			47,499,999		47,499,999

 

Common Stock

 

Each share of our common stock entitles the owner thereof to vote at the rate of one (1) vote for each share held.

 

Series A Voting Preferred Stock

 

Each share of our Series A Voting Preferred Stock entitles the owner thereof to vote at the rate of four hundred (400) votes for each share held.

 

Anti-Takeover Effects

 

Issuance of additional common stock may have the effect of deterring or thwarting persons seeking to take control of us through a tender offer, proxy fight or otherwise or to bring about removal of incumbent management or a corporate transaction such as a merger. The Share Increase and Revere Split would permit us to issue additional shares of common stock that could dilute the ownership of the holders of our common stock by one or more persons seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination between us and another company. When, in the judgment of the Board, this action will be in the best interests of our shareholders and us, such shares could be used to create voting or other impediments or to discourage persons seeking to gain control of us. Such shares also could be privately placed with purchasers favorable to the Board in opposing such action. The existence of the additional authorized shares of our common stock could have the effect of discouraging unsolicited takeover attempts. The issuance of new shares also could be used to entrench current management or deter an attempt to replace the Board by diluting the number or rights of shares held by individuals seeking to control us by obtaining a certain number of seats on the Board. The issuance of shares to certain persons allied with management could have the effect of making it more difficult to remove our current management by diluting the stock ownership or voting rights of those seeking to cause such removal. The Increase is not being undertaken in response to any effort of which the Board is aware to enable anyone to accumulate shares of our common stock or gain control of us or our common stock. The purpose of the Increase is to provide us with additional shares of our common stock to meet current obligations and for acquisitions and other matters and not to provide any anti-takeover defense or mechanism on our behalf.

 

Other than the Share Increase and Reverse Split, the Board does not currently contemplate the adoption of any other amendments to the Articles of Incorporation that could be construed to affect the ability of third parties to take over or change the holders of our voting control. While it is possible that our management could use the additional authorized shares of our common stock or our preferred stock to resist or frustrate a third-party transaction that is favored by a majority of the independent shareholders, we have no intent, plans or proposals to use the unissued authorized shares of our common stock or our preferred stock as an anti-takeover mechanism or to adopt other provisions or enter into other arrangements that may have anti-takeover consequences.

 

 

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While the Share Increase and Reverse Split may have anti-takeover ramifications, the Board believes that the financial flexibility offered by such corporate actions will outweigh the disadvantages. To the extent that these corporate actions may have anti-takeover effects, third parties seeking to acquire us may be encouraged to negotiate directly with the Board, enabling us to consider the proposed transaction in a manner that best serves all of the shareholders' interests.

 

DISSENTER'S RIGHTS OF APPRAISAL

 

Holders of our voting securities do not have dissenter’s rights under the Wyoming Business Corporation Act in connection with Proposal 1 and Proposal 2.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and in accordance with the Securities Exchange Act, we file periodic reports, documents, and other information with the Securities and Exchange Commission relating to our business, financial statements, and other matters. These reports and other information may be inspected and are available for copying at the offices of the Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549. Our SEC filings are also available to the public on the SEC's website at http://www.sec.gov.

 

ADDITIONAL INFORMATION

 

Only one information statement is being delivered to multiple shareholders sharing an address, unless we have received contrary instructions from one or more of the shareholders. We will undertake to deliver promptly upon written or oral request a separate copy of the information statement to a stockholder at a shared address to which a single copy of the information statement was delivered. You may make a written or oral request by sending a written notification to our principal executive offices stating your name, your shared address, and the address to which we should direct the additional copy of the information statement or by calling our principal executive offices at (520) 424-5262. If multiple shareholders sharing an address have received one copy of this information statement and would prefer us to mail each stockholder a separate copy of future mailings, you may send notification to or call our principal executive offices. Additionally, if current shareholders with a shared address received multiple copies of this information statement and would prefer us to mail one copy of future mailings to shareholders at the shared address, notification of that request may also be made by mail or telephone call to our principal executive offices.

 

	By Order of the Board of Directors,
	/s/ Jorge Olson
	Jorge Olson Director, President and Chief Executive Officer

 

June 13, 2014

Tijuana, Mexico

 

 

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ANNEXES TO INFORMATION STATEMENT

 

Exhibit		Description
A		Articles of Amendment

 

 

 

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Exhibit A

 

 

Wyoming Secretary of State State Capitol Building, Room 110 200 West 24 th Street Cheyenne, WY 82002-0020 Ph. 307.777.7311 Fax 307.777.5339 Email: Business@wyo.gov

For Office Use Only

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Profit Corporation

Articles of Amendment

 

1.	Corporation name:
	Premier Brands, Inc.
2.	Article(s)		5	is amended as follows:

 

	The aggregate number of shares of all classes of stock which the corporation shall have authority to issue is 10,050,000,000 shares consisting of and divided into: (i) 10,000,000,000 shares of common stock, $0.001 par value per share; and (ii) 50,000,000 shares of preferred stock, $0.001 par value per share, which may be divided into and issued in series, as hereinafter provided.   U pon effectiveness (the "Effective Time") pursuant to the Wyoming Corporation Law of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, each five hundred (500) shares of Common Stock issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock (the "Reverse Stock Split"). No fractional shares shall be issued in connection with the Reverse Stock Split.
3.	If the amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself which may be made upon facts objectively ascertainable outside the articles of amendment.
4.	The amendment was adopted on.
		(Date – mm/dd/yyyy)
5.	If the amendment was adopted by the incorporators or board of directors without shareholder approval, a statement that the amendment was duly approved by the incorporators or by the board of directors as the case may be and that shareholder approval was not required.

 

OR

 

P-Amendment - Revised 11/2012

 

 

 

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Wyoming Secretary of State State Capitol Building, Room 110 200 West 24 th Street Cheyenne, WY 82002-0020 Ph. 307.777.7311 Fax 307.777.5339 Email: Business@wyo.gov

For Office Use Only

 

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If approval was required by the shareholders, a statement that the amendment was duly approved by the shareholders in the manner required by this act and by the articles of incorporation.

 

The share increase and the reverse stock split is hereby approved by the shareholders of the company.

 

Signature:					Date:
						(mm/dd/yyyy)
Print Name:
Title:
Contact Person:
Daytime Phone Number:			Email:

 

	Checklist
			Filing Fee: $50.00 Make check or money order payable to Wyoming Secretary of State.
			The Articles of Amendment may be executed by the Chairman of the Board, President or another of its officers.
			Please submit one originally signed document and one exact photocopy of the filing.

 

 

P-Amendment - Revised 11/2012

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