UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14C INFORMATION

 

Information Statement Pursuant to Section 14(c)

of the Securities Exchange Act of 1934

 

Check the appropriate box:

 

  [ X ] Preliminary Information Statement
[ __ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-5(d)(2))
  [ __ ] Definitive Information Statement

 

 

GREY CLOAK TECH, INC.

(Name of Registrant as Specified In Its Charter)

 

 

Payment of Filing Fee (Check the appropriate box):

 

  [ X ] No fee required
[ __ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and O-11.

 

  1) Title of each class of securities to which transaction applies:
  2)  Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule O-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
  4)  Proposed maximum aggregate value of transaction:
  5)  Total fee paid:

 

  [ __ ] Fee paid previously with preliminary materials.
[ __ ] Check box if any part of the fee is offset as provided by Exchange Act Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

1)       Amount Previously Paid:

2)       Form, Schedule or Registration Statement No.:

3)       Filing Party:

4)       Date Filed:

 

 

Grey Cloak Tech, Inc.

10300 W. Charleston

Las Vegas, NV 89135

 

[•]

 

NOTICE OF ACTION BY WRITTEN CONSENT

IN LIEU OF MEETING OF STOCKHOLDERS

 

TO OUR STOCKHOLDERS:

 

This Notice and Information Statement is furnished by the Board of Directors of Grey Cloak Tech, Inc., a Nevada corporation (the “ Company ”), to holders of record of the Company’s common stock, $0.001 par value per share, at the close of business on December 22, 2016. The purpose of this Notice and Information Statement is to inform the Company’s stockholders of certain actions taken by the written consent of the holders of a majority of the Company’s voting stock, dated as of December 22, 2016, pursuant to Section 14(c) of the Exchange Act and the regulations promulgated thereunder, including Regulation 14C, Section 78.370 of the Nevada Revised Statutes and the Company’s governing documents. This Information Statement provides notice that the Board of Directors has recommended and approved, and holders of a majority of the voting power of our outstanding stock have approved, the following items:

 

1. An amendment to our Articles of Incorporation to increase the authorized common stock from 75,000,000 shares, par value $0.001, to 500,000,000 shares, par value $0.001;
2. An amendment to our Articles of Incorporation to authorize 75,000,000 shares of preferred stock, par value $0.001;
3. An amendment to our Articles of Incorporation to effect a reverse stock split of our common stock at a ratio up to 1-for-100, the exact ratio and timing of which will be set by our Board of Directors at a future date no later than December 31, 2017.

 

We have taken this action in order to reorganize our capital structure to be more attractive to potential investors. These actions are more fully described in the Information Statement accompanying this Notice.

 

Under the rules of the Securities and Exchange Commission, the above action cannot become effective until at least 20 days after the accompanying Information Statement has been distributed to the stockholders of the Company.

 

This is not a notice of a special meeting of stockholders and no stockholder meeting will be held to consider any matter that will be described herein.

 

By Order of the Board of Directors

 

 

                                         

Fred Covely

Chief Executive Officer

Dated: [•]

 

 

WE ARE NOT ASKING YOU FOR A PROXY

AND YOU ARE REQUESTED NOT TO SEND US A PROXY

 

INFORMATION STATEMENT

 

PURSUANT TO REGULATION 14C OF THE SECURITIES EXCHANGE ACT OF 1934

 

THIS IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN. THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF OUR VOTING STOCK. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT TO THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT.

 

INTRODUCTION

 

This Information Statement is being mailed or otherwise furnished to the holders of common stock, $0.001 par value per share (the “ Common Stock ”) of Grey Cloak Tech, Inc., a Nevada corporation (the “ Company ”) by the Board of Directors to notify them about certain actions that the holders of a majority of the Company’s outstanding voting stock (the “ Majority Stockholders ”) have taken by written consent, in lieu of a special meeting of the stockholders. The action was taken on December 22, 2016.

 

Copies of this Information Statement are first being sent on or before [•] to the holders of record on December 22, 2016 of the outstanding shares of the Company’s Common Stock.

 

General Information

 

The Majority Stockholders have approved the following actions (the “ Actions ”) by written consent dated December 22, 2016, in lieu of a special meeting of the stockholders:

 

1. An amendment to our Articles of Incorporation to increase our authorized Common Stock from 75,000,000 shares, par value $0.001, to 500,000,000 shares, par value $0.001;
2. An amendment to our Articles of Incorporation to authorize 75,000,000 shares of preferred stock, par value $0.001;
3. An amendment to our Articles of Incorporation to effect a reverse stock split of our Common Stock at a ratio up to 1-for-100, the exact ratio and timing of which will be set by our Board of Directors at a future date no later than December 31, 2017.

 

We have asked brokers and other custodians, nominees and fiduciaries to forward this Information Statement to the beneficial owners of the Common Stock held of record by such persons and will reimburse such persons for out-of-pocket expenses incurred in forwarding such material.

 

 

 

Dissenters’ Right of Appraisal

 

In connection with the approval of the Reverse Split, the Company’s stockholders will not have a right to dissent and obtain payment for their shares under the Nevada Revised Statutes (the “ NRS ”), the Company’s Certificate of Incorporation or the Company’s Bylaws.

 

Vote Required

 

The vote which was required to approve the above Action was the affirmative vote of the holders of a majority of the Company’s voting stock. Each holder of Common Stock is entitled to one (1) vote for each share of Common Stock held.

 

We currently have no authorized shares of preferred stock (the “ Preferred Stock ”).

 

The record date for purposes of determining the number of outstanding shares of voting stock of the Company, and for determining stockholders entitled to vote, was the close of business on December 22, 2016 (the “ Record Date ”). As of the Record Date, we had outstanding 17,156,276 shares of Common Stock. Holders of the Common Stock have no preemptive rights. All outstanding shares are fully paid and nonassessable.

 

Transfer Agent

 

The transfer agent for our Common Stock is Quicksilver Stock Transfer, LLC and their address is 1980 Festival Plaza Dr., Suite 530, Las Vegas, NV 89135.

 

Vote Obtained - Section 78.320 Nevada Revised Statutes

 

NRS 78.320 provides that the written consent of the holders of the outstanding shares of voting stock, having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, may be substituted for such a meeting .

 

In order to eliminate the costs and management time involved in soliciting and obtaining proxies to approve the Action and in order to effectuate the Action as early as possible in order to accomplish the purposes of the Company as hereafter described, the Board of Directors of the Company voted to utilize, and did in fact obtain, the written consent of the Majority Stockholders. The Majority Stockholders own in the aggregate approximately 51% of the outstanding voting stock.

 

Pursuant to the NRS and our bylaws, the Company is required to provide prompt notice of the taking of the corporate action without a meeting to the stockholders of record who have not consented in writing to such action. This Information Statement serves as that notice.

 

 

 

ACTION ONE

 

AMENDMENT TO THE COMPANY’S

ARTICLES OF INCORPORATION

TO INCREASE THE AUTHORIZED COMMON STOCK

 

General

 

On December 22, 2016 , the Board of Directors of the Company approved, declared it advisable and in the Company’s best interest and directed that there be submitted to the Majority Stockholders for approval, the prospective amendment to the Third Article of the Company’s Articles of Incorporation , a copy of which is attached hereto as Exhibit A (the “ Amendment ”), to increase the authorized Common Stock from 75,000,000 shares, par value $0.001, to 500,000,000 shares, par value $0.001. On December 22, 2016, the Majority Stockholders approved the Amendment by written consent, in lieu of a special meeting of the stockholders.

 

Reasons for the Increase in Authorized Common Stock

 

Currently, the Company is authorized to issue 75,000,000 shares of Common Stock. Of the 75,000,000 shares of Common Stock authorized, as of the Record Date, there were 17,156,276 shares of Common Stock issued and outstanding.

 

As a general matter, the Board of Directors does not believe the currently available number of unissued shares of Common Stock is an adequate number of shares to assure that there will be sufficient shares available for issuance in connection with possible future acquisitions, equity and equity-based financings, possible future awards under employee benefit plans, stock dividends, stock splits, and other corporate purposes. Therefore, the Board of Directors and Majority Stockholders approved the increase in authorized shares of Common Stock as a means of providing the Company with the flexibility to act with respect to the issuance of Common Stock or securities exercisable for, or convertible into, Common Stock in circumstances which they believe will advance the interests of the Company and its stockholders without the delay of seeking an amendment to the Certificate of Incorporation at that time.

 

The Board of Directors is considering, and will continue to consider, various financing options, including the issuance of Common Stock or securities convertible into Common Stock from time to time to raise additional capital necessary to support future growth of the Company. As a result of the Increase in Authorized Amendment, the Board of Directors will have more flexibility to pursue opportunities to engage in possible future capital market transactions involving Common Stock or securities convertible into Common Stock , including, without limitation, public offerings or private placements of such Common Stock or securities convertible into Common Stock . There are no specific financing transactions under consideration at this time.

 

In addition, the Company’s growth strategy may include the pursuit of selective acquisitions to execute its business plan. The Company could also use the additional Common Stock for potential strategic transactions, including, among other things, acquisitions, spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. There are no specific acquisitions under consideration at this time.

 

 

ACTION TWO

 

AMENDMENT TO THE COMPANY’S

ARTICLES OF INCORPORATION

TO AUTHORIZED PREFERRED STOCK

 

General

 

On December 22, 2016 , the Board of Directors of the Company approved, declared it advisable and in the Company’s best interest and directed that there be submitted to the Majority Stockholders for approval, the Amendment to authorize 75,000,000 shares, par value $0.001. On December 22, 2016, the Majority Stockholders approved the Amendment by written consent, in lieu of a special meeting of the stockholders.

 

Currently, the Company is not authorized to issue shares of preferred stock. Once the Amendment is effective, the Board of Directors without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our Board of Directors will be able to authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our Board of Directors will be able to fix limitations and restrictions, if any, upon the payment of dividends on our common stock to be effective while any shares of preferred stock are outstanding.

 

Reasons for the Preferred Stock

 

As a general matter, the Board of Directors believes it to be in the best interest of the Company to make preferred stock available for issuance in connection with possible future acquisitions, equity and equity-based financings, possible future awards under employee benefit plans, stock dividends, stock splits, and other corporate purposes. Therefore, the Board of Directors and Majority Stockholders approved the authorization of preferred stock as a means of providing the Company with the flexibility to act with respect to offerings of the Company’s securities in circumstances which they believe will advance the interests of the Company and its stockholders without the delay of seeking an amendment to the Certificate of Incorporation at that time.

 

The Board of Directors is considering, and will continue to consider, various financing options, including the issuance of preferred stock from time to time to raise additional capital necessary to support future growth of the Company. As a result of the authorization of preferred stock, the Board of Directors will have more flexibility to pursue opportunities to engage in possible future capital market transactions involving preferred stock , including, without limitation, public offerings or private placements of such preferred stock. There are no specific financing transactions under consideration at this time.

 

In addition, the Company’s growth strategy may include the pursuit of selective acquisitions to execute its business plan. The Company could also use the preferred stock for potential strategic transactions, including, among other things, acquisitions, spin-offs, strategic

 

 

partnerships, joint ventures, restructurings, divestitures, business combinations and investments. There are no specific acquisitions under consideration at this time.

 

ACTION THREE

 

AMENDMENT TO THE COMPANY’S

ARTICLES OF INCORPORATION

TO EFFECT A REVERSE STOCK SPLIT

 

General

 

On December 22, 2016 , our Board of Directors approved, declared it advisable and in the Company’s best interest and directed that there be submitted to the Majority Stockholders for approval, an amendment to the Company’s Articles of Incorporation to effect a reverse split of our Common Stock at a ratio of up to 1-for-100 shares (the “ Reverse Split ”) in substantially the form set forth hereto as Exhibit B (the “ Reverse Split Amendment ”) . On December 22, 2016, the Majority Stockholders approved the Reverse Split and Reverse Split Amendment by written consent, in lieu of a special meeting of the stockholders.

 

The Board has been given the authorization to effect a Reverse Split at a ratio of 1-for-100 shares or a ratio of one for less than 100 shares. The Board may use its discretion to select a ratio that it deems to be in the Company’s best interest, as well as the timing of the effectiveness of the Reverse Split.

 

Reasons for the Reverse Split

 

Our Board of Directors believes that the Reverse Split is in our best interests, principally because it may increase the bid price of our Common Stock and facilitate our ability to attract investment. The current bid price of our Common Stock on the OTCQB was $0.01 on December 22, 2016 . Our Board of Directors believes that conducting the Reverse Split may increase our ability to attract investment, as our Board of Directors also believes that we need to seek additional financing to fund our business plan and that the Reverse Split is a necessary pre-requisite to conducting financings.

 

Our Board of Directors also believes that the current price of our Common Stock impairs an efficient market in our Common Stock. This is due to several factors that impact lower priced stocks, including (1) a reluctance among certain institutions and investors to invest in low priced securities, (2) internal restrictions imposed by many securities firms on the solicitation of orders for low priced stocks by stockbrokers, (3) the ineligibility of our Common Stock for margin loans due to its low share price, (4) a reluctance among analysts to write research reports on low priced stocks due to the preceding factors, and (5) high transaction costs relative to share price due to the prevailing rule that commissions charged on the purchase and sale of stock, as a percentage of share price, are higher on lower priced stocks.

 

There can be no assurance that if we effect the Reverse Split we will successfully complete a financing.

 

Our Board of Directors believes that the Reverse Split will have the effect of increasing the market price per share of our Common Stock and, while the Board of Directors believes that the Reverse Split will not immediately alleviate all the above factors, it does believe that such increase may, over time, alleviate some or all of the factors noted above and lead to a more

 

 

efficient market in our Common Stock. In addition, an increase in the per share price of our Common Stock may also generate greater investor interest in our Common Stock, thereby possibly enhancing the marketability of our Common Stock to the financial community.

 

The immediate effect of the Reverse Split will be to reduce the number of issued and outstanding shares of our Common Stock from 17,156,276 to approximately 171,563 (based on a 1-for-100 ratio). The par value of our Common Stock will remain $0.001 per share and the number of shares of Common Stock authorized to be issued will remain as set forth in the Amendment at 500,000,000 shares. The Reverse Split will not reduce or affect our authorized shares of Preferred Stock.

 

The following table sets forth the effects of the Reverse Split on our outstanding and authorized capital, assuming a ratio of 1-for-100 is chosen by the Board of Directors:

 

    Outstanding Common Stock   Outstanding Preferred Stock   Authorized Common Stock   Authorized Preferred Stock   Authorized Capital Stock   Authorized and Unissued Common Stock
  Current       17,156,276       —         75,000,000       45,000,000       120,000,000       57,843,724  
  After Split (1)       171,563 (2)       —         500,000,000       75,000,000       575,000,000       499,828,437 (2)

 

(1) After Split includes those shares to be authorized by the Amendment.
(2) Approximately.

 

In addition, (i) proportionate adjustments will be made to the per-share exercise price and the number of shares issuable upon the exercise of all outstanding options and warrants entitling the holders to purchase shares of our Common Stock, which will result in approximately the same aggregate price being required to be paid for such options and warrants upon exercise immediately as would have been required immediately preceding the Reverse Split, and (ii) the number of shares that may be issued upon the exercise of conversion rights by holders of securities convertible into our Common Stock will be reduced proportionately based on the Reverse Split ratio selected by the Board of Directors.

 

The Reverse Split will affect all of the holders of our Common Stock uniformly and will not affect any stockholder’s percentage ownership interest or proportionate voting power, except for insignificant changes that will result from the rounding up of fractional shares as discussed below. Our outstanding options and warrants contain provisions that are intended to protect the holders against dilution of the holders’ percentage interest in the Company and that also effect a reduction in the exercise price of the option in the event our shares are issued at less than the option exercise price.

 

The current number of holders of record of our Common Stock is approximately 64. Following the Reverse Split, the number of our stockholders of record will remain approximately 64, as any of our stockholders with less than one share will be rounded up in the exchange to one share.

 

Although the Reverse Split may increase the per share market price of our Common Stock, an increase in price can neither be assured nor calculated with certainty. The per share market price of our Common Stock may not rise in proportion to the reduction in the number of shares outstanding as a result of the Reverse Split and such per share market price may be less

 

 

than the proportionate increase in the number of shares outstanding as a result of the Reverse Split. There can be no assurance that the Reverse Split will lead to a sustained increase in the per share market price of our Common Stock or that the factors discussed above that we believe impair an efficient market in our Common Stock will be alleviated.

 

Stockholders should also be aware that the Reverse Split may result in a decrease in the trading volume of the Common Stock due to the decrease in the number of outstanding shares. The per share market price of our Common Stock may also change as a result of other unrelated factors, including our business activities performance and other factors related to our business as well as general market conditions.

 

No Fractional Shares

 

No fractional shares will be issued. Stockholders who would otherwise be entitled to a fractional share as a result of the Reverse Split will receive one whole share of our Common Stock in lieu of the fractional share. No stockholders will receive cash in lieu of fractional shares.

 

Authorized Shares

 

The Reverse Split would affect all issued and outstanding shares of our Common Stock and outstanding rights to acquire our Common Stock. Upon the effectiveness of the Reverse Split, the number of authorized shares of our Common Stock that are not issued or outstanding would increase due to the reduction in the number of shares of our Common Stock issued and outstanding. As of December 22, 2016, we had 75,000,000 shares of authorized Common Stock and 17,156,276 shares of Common Stock issued and outstanding. Once the Amendment is filed and effective, we will have 500,000,000 authorized shares of Common Stock, 75,000,000 authorized shares of preferred stock. As of December 22, 2016, we had no authorized or outstanding preferred stock. Authorized but unissued shares will be available for issuance, and we may issue such shares in the future. If we issue additional shares, the ownership interest of holders of our Common Stock will be diluted.

 

Procedure for Effecting the Reverse Split

 

We intend to file the Reverse Split Amendment with the Secretary of State of the State of Nevada to amend our existing Certificate of Incorporation. However, the Reverse Split will be deemed effective on the date that is the later of (i) 20 days after the commencement of our mailing or otherwise providing this Information Statement and (ii) receipt of approval of the Reverse Split from FINRA (the “ Effective Date ”). Beginning on the Effective Date, each certificate representing pre-Reverse Split shares will be deemed for all corporate purposes to evidence ownership of post-Reverse Split shares. The Reverse Split Amendment has received the unanimous approval of our Board of Directors and has also been approved by the Majority Stockholders. The text of the Reverse Split Amendment is subject to modification to include such changes as may be required by the office of the Secretary of State of the State of Nevada and as the Board of Directors deems necessary and advisable to effect the Reverse Split.

 

The Reverse Split will take place on the Effective Date without any action on the part of the holders of our Common Stock and without regard to current certificates representing shares of our Common Stock being physically surrendered for certificates representing the number of shares of Common Stock each stockholder is entitled to receive as a result of the Reverse Split. New certificates for shares of our Common Stock will not be issued at this time. Stockholders who hold shares in certificated form should not do anything with their certificates at this time.

 

 

Effect on Registered and Beneficial Stockholders

 

Upon a Reverse Split, we intend to treat stockholders holding our Common Stock in “street name,” through a bank, broker or other nominee, in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers or other nominees will be instructed to effect the Reverse Split for their beneficial holders holding our Common Stock in “street name.” However, these banks, brokers or other nominees may have different procedures than registered stockholders for processing the Reverse Split. If you hold your shares with a bank, broker or other nominee and if you have any questions in this regard, we encourage you to contact your nominee.

 

STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNLESS REQUESTED TO DO SO.

 

Potential Anti-Takeover Effect 

 

The Reverse Split could adversely affect the ability of third parties to takeover or change the control of the Company by, for example, permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our Board of Directors or contemplating a tender offer or other transaction for the combination of the Company with another company. Although the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, the Reverse Split is not in response to any effort of which we are aware to accumulate shares of our Common Stock or obtain control of our company, nor is it part of a plan by management to recommend a series of similar amendments to our Board of Directors and stockholders.

 

No Appraisal Rights 

 

Under Nevada law, stockholders are not entitled to appraisal rights with respect to the Reverse Split, and we will not independently provide stockholders with any such right.

 

Accounting Matters 

 

The Reverse Split will not affect the par value of our Common Stock. As a result, as of the effective time of the Reverse Split, the stated capital attributable to our Common Stock on our balance sheet will be reduced proportionately based on the Reverse Split ratio selected by the Board of Directors, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. The per-share net income or loss and net book value of our Common Stock will be restated because there will be fewer shares of our Common Stock outstanding.

 

Federal Income Tax Consequences of the Reverse Stock Split

 

The following is a summary of certain material United States federal income tax consequences of the Reverse Split, does not purport to be a complete discussion of all of the possible federal income tax consequences of the Reverse Split and is included for general information only. Further, it does not address any state, local or foreign income or other tax consequences. Also, it does not address the tax consequences to holders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers and tax-exempt entities.

 

 

The discussion is based on the provisions of the United States federal income tax law as of the date hereof, which is subject to change retroactively as well as prospectively. This summary also assumes that the pre-Reverse Split shares were, and the post-Reverse Split shares will be, held as a “capital asset,” as defined in the Internal Revenue Code of 1986, as amended (i.e., generally, property held for investment). The tax treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder. Each stockholder is urged to consult with such stockholder's own tax advisor with respect to the tax consequences of the Reverse Split. As used herein, the term United States holder means a stockholder that is, for federal income tax purposes: a citizen or resident of the United States; a corporation or other entity taxed as a corporation created or organized in or under the laws of the United States, any State of the United States or the District of Columbia; an estate the income of which is subject to federal income tax regardless of its source; or a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

 

No gain or loss should be recognized by a stockholder upon such stockholder’s exchange of pre-Reverse Split shares for post-Reverse Split shares pursuant to the Reverse Split. The aggregate tax basis of the post-Reverse Split shares received in the Reverse Split will be the same as the stockholder’s aggregate tax basis in the pre-Reverse Split shares exchanged therefor. The stockholder's holding period for the post-Reverse Split shares will include the period during which the stockholder held the pre-Reverse Split shares surrendered in the Reverse Split.

 

Our view regarding the tax consequences of the Reverse Split is not binding on the Internal Revenue Service or the courts.

 

ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES TO HIM OR HER OF THE REVERSE SPLIT.

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

 

The following table sets forth, as of December 22, 2016, certain information with respect to the Company’s equity securities owned of record or beneficially by (i) each Officer and Director of the Company; (ii) each person who owns beneficially more than 5% of each class of the Company’s outstanding equity securities; and (iii) all Directors and Executive Officers as a group.

 

 

 

Name and Address (2)

 

 

Common Stock Ownership (1)

  Percentage of Common Stock Ownership (1) (3)   Percentage of Total Voting Power (3) (4)
             
5% Stockholders:            
None            
             
Officers and Directors:            
Fred Covely   4,000,000   23.3%   23.3%
William Bossung   3,450,000   20.1%   20.1%
Brian J. Dunn (5)   3,500,000   17.4%   2.9%
             
All Officers and Directors as a Group (3 Persons)   10,950,000   54.3%   46.3%

* Less than one percent.

 
(1) This tabular information is intended to conform to Rule 13d-3 promulgated under the Securities Exchange Act of 1934 relating to the determination of beneficial ownership of securities. Unless otherwise indicated, the tabular information gives effect to the exercise of warrants or options exercisable within 60 days of the date of this table owned in each case by the person or group whose percentage ownership is set forth opposite the respective percentage and is based on the assumption that no other person or group exercise their option.
(2) Unless otherwise indicated, the address of the stockholder is c/o Grey Cloak Tech, Inc., 10300 W. Charleston, Las Vegas, NV 89135.
(3) Based on 17,156,276 shares of Common Stock issued and outstanding as of December 22, 2016. We do not have any shares of preferred stock outstanding.
(4) Does not give effect to the exercise of warrants or options exercisable within 60 days of the date of this table..
(5) Includes warrants to acquire 2,000,000 shares of our common stock at $0.25 per share. Also includes warrants to acquire 1,000,000 shares of our common stock at $0.25 per share held by The Dunn Group, LLC, over which Mr. Dunn has beneficial control.

 

The issuer is not aware of any person who owns of record, or is known to own beneficially, five percent or more of the outstanding securities of any class of the issuer, other than as set forth above.

 

There are no current arrangements which will result in a change in control.

 

 

INTEREST OF CERTAIN PERSONS

 

No director, executive officer, associate of any director or executive officer or any other person has any substantial interest, direct or indirect, by security holdings or otherwise, in the Reverse Split Amendment which is not shared by all other holders of the shares of Common Stock.

 

OTHER MATTERS

 

Expenses

 

We will bear all costs related to this Information Statement. We will reimburse brokerage houses and other custodians, nominees, trustees and fiduciaries representing beneficial owners of shares for their reasonable out-of-pocket expenses for forwarding this Information Statement to such beneficial owners.

 

Householding

 

We will deliver only one copy of this Information Statement to multiple stockholders sharing an address unless we have received contrary instructions from one or more of the stockholders. Furthermore, we undertake to deliver promptly, upon written or oral request, a separate copy of this Information Statement to a stockholder at a shared address to which a single copy of this Information Statement is delivered. A stockholder can notify us that the stockholder wishes to receive a separate copy of this Information Statement by contacting us at: 10300 W. Charleston, Las Vegas, NV 89135, Attention: Investor Relations, or by calling (702) 201-6450. Conversely, if multiple stockholders sharing an address receive multiple Information Statements and wish to receive only one, such stockholders can notify us at the address or phone number set forth above.

 

WHERE YOU CAN FIND MORE INFORMATION

 

Additional information about us is contained in our periodic and current reports filed with the U.S. Securities and Exchange Commission (the “ Commission ”). These reports, their accompanying exhibits and other documents filed with the Commission, may be inspected without charge at the Public Reference Section of the Commission at 100 F Street, NE, Washington, DC 20549. Copies of such material may also be obtained from the Commission at prescribed rates. The Commission also maintains a Web site that contains reports, proxy and information statements and other information regarding public companies that file reports with the Commission. Copies of these reports may be obtained from the Commission’s EDGAR archives at http://www.sec.gov/index.htm.

 

By Order of the Board of Directors

 

 

/s/ Fred Covely

Fred Covely

Chief Executive Officer and Director

 

Las Vegas, NV

 

 

 

Exhibit A

 

Amendment to the Articles of Incorporation

 

 

 

 

ARTICLES OF INCORPORATION

of

GREY CLOAK TECH, INC.

The undersigned hereby certifies:

1. The name of the Corporation is Grey Cloak Tech, Inc.

2. The articles have been amended as follows:

Article 3, Authorized Stock:

The corporation has the authority to issue Five Hundred Million (500,000,000) shares of common stock, par value $0.001 per share, and Seventy Five Million (75,000,000) shares of preferred stock, par value $0.001 per share.

Preferred stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly authorized to provide for the issue of all or any of the shares of the authorized preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the Nevada Revised Statutes. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

3. The votes by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is 8,736,406 (50.9%)

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to the Articles of Incorporation on [•].

 

 
 

Fred Covely

Chief Executive Officer

 

 

Exhibit B

 

Amendment to the Articles of Incorporation

(Reverse Split Amendment)

 

 

 

CERTIFICATE OF AMENDMENT

to

ARTICLES OF INCORPORATION

of

GREY CLOAK TECH, INC.

The undersigned hereby certifies:

1. The name of the Corporation is Grey Cloak Tech, Inc.

2. The articles have been amended as follows:

Article 3, Authorized Stock:

The corporation has the authority to issue Five Hundred Million (500,000,000) shares of common stock, par value $0.001 per share, and Seventy Five Million (75,000,000) shares of preferred stock, par value $0.001 per share.

Effective upon the filing of this Certificate of Amendment, the issued and outstanding shares of Common Stock of the Corporation shall be subject to a 1-for-[•] reverse stock split. As a result of the reverse stock split, every [•] ([•]) shares of Common Stock issued and outstanding before the effectiveness of the split shall be exchanged for one (1) share of Common Stock after the split. Fractional shares will be rounded up to the next whole share.

Preferred stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly authorized to provide for the issue of all or any of the shares of the authorized preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the Nevada Revised Statutes. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

3. The votes by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is 8,736,406 (50.9%)

 

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to the Articles of Incorporation on [•].

 

 
 

Fred Covely

Chief Executive Officer