INFORMATION
STATEMENT
Pursuant
to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C promulgated
thereunder, the notice and this information statement (this “Information Statement”) will be sent or given on or about
February __, 2017, to the stockholders of record, as of February 10, 2017 (the “Record Date”), of LIFELOGGER TECHNOLOGIES
CORP., a Nevada corporation (hereinafter referred to as “we,” “us,” “our,” “LIFELOGGER”
or the “Company”). This Information Statement is being circulated to advise stockholders of an action already approved
and taken without a meeting by written consent of a stockholder who holds a majority of the voting power of our voting stock.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
The
action to be effective at least 20 days after the mailing of this Information Statement is as follows:
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Approve
an amendment to our amended and restated articles of incorporation (the “Restated Articles”), to increase our
authorized capital stock from 125,000,000 to 500,000,000 shares, of which 495,000,000 will be common stock and 5,000,000 will
be preferred stock, of which, 1,000 shares have been previously designated by the Corporation’s Board of Directors as
Series A Preferred Stock (the “Series A Preferred Stock”) (the “Recapitalization”).
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Approve
an amendment to the Restated Articles to effect a reverse stock split of the outstanding shares of our common stock at the
ratio of 1-for-30 (the “Reverse Stock Split”).
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Approve
an amendment to the Restated Articles to include certain rights and limitations on holders of the Common Stock (the “Common
Stockholder Rights”).
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The
Recapitalization, the Reverse Stock Split and the Common Stockholder Rights are hereinafter referred to as the “Amendments.”
On
February 22, 2017, our board of directors unanimously approved the Amendments. Subsequent to our board of directors’ approval
of the Amendments, our Chief Executive Officer, sole director and stockholder holding 51% of our voting power approved the Amendments
(the “Consenting Stockholder”). The Consenting Stockholder and his approximate ownership percentage of our voting
stock as of February 10, 2017, which total in the aggregate 51% of the voting rights under our Restated Articles, were as follows:
Name and Affiliation of Beneficial Holder
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Type of Stock
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Shares Beneficially Held
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No. of Votes
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Percent of Total Votes
(1)
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Steward Garner, CEO, CFO and Sole Director
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Common
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0
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0
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0
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Series A Preferred
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1,000
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71,792,052
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51.0
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%
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Total Shares/Votes
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71,792,052
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51.0
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%
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(1)
See Record Date and Voting Securities below.
Pursuant
to Rule 14c-2 promulgated under the Exchange Act, the Amendments will not be effective until at least 20 calendar days after the
mailing of this Information Statement to our stockholders and approval of the Financial Industry Regulatory Authority (FINRA)
as discussed below. The Amendments will be effective after the expiration of such 20-day period and FINRA approval.
Our
common stock is currently quoted on the OTCQB tier of the OTC Markets, and pursuant to Rule 10b-17 of the Securities Exchange
Act of 1934 the Recapitalization will require FINRA’s approval in order for it to be recognized for trading purposes. Furthermore,
the Recapitalization will result in a change in our CUSIP number. We will provide definitive information on our FINRA approval
and new CUSIP number in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission prior to the effective
date of the Recapitalization.
DISSENTERS’
RIGHTS
There
are no rights of appraisal or similar rights of dissenters with respect to any matter described in this Information Statement.
RECORD
DATE AND VOTING SECURITIES
Only
stockholders of record at the close of business on February 10, 2017, the Record Date, are entitled to notice of the information
disclosed in this Information Statement. As of the Record Date, our authorized securities consist of 120,000,000 shares of common
stock with a par value of $0.001 per share and 5,000,000 shares of preferred stock with a par value of $0.001 per share of which,
1,000 shares have been designated as Series A Preferred. As of the Record Date, there were 68,976,677 shares of common stock issued
and outstanding, held by 7 holders of record of our common stock. Each share of common stock is entitled to one vote per share.
As of the Record Date, there were 1,000 shares of Series A Preferred Stock issued and outstanding. Each share of preferred stock
is entitled to 50,000 votes on all matters submitted to a vote of the Company’s stockholders. In the event that such votes
do not total at least 51% of all votes, then the votes cast by the holders of the Series A Preferred Stock shall be equal to 51%
of all votes cast at any meeting of the Company’s stockholders or any issue put to the stockholders for voting.
EXPENSES
The
costs of preparing, printing and mailing this Information Statement will be borne by the Company.
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE PURPOSE OF INFORMING YOU OF THE MATTER DESCRIBED HEREIN.
STOCKHOLDERS’
RIGHTS
The
elimination of the need for a special meeting of the stockholders to approve the action described in this Information Statement
is authorized by Section 78.320(2) of the Nevada Revised Statutes (“NRS”). NRS 78.320(2) provides that any action
required or permitted to be taken at a meeting of stockholders of a corporation may be taken without a meeting, before or after
the action, if a written consent thereto is signed by the stockholders holding at least a majority of the voting power. In order
to eliminate the costs and management time involved in holding a special meeting and in order to effect the action disclosed herein
as quickly as possible in order to accomplish the purposes of our Company, we chose to obtain the written consent of a majority
of our voting power to approve the action described in this Information Statement.
AMENDMENT
OF OUR ARTICLES TO INCREASE OUR AUTHORIZED CAPITAL STOCK
FROM
125,000,000 TO 500,000,000 SHARES
On
February 22, 2017, our board of directors and a stockholder holding a majority of our voting power approved the Amendments, which
will have the effect of increasing our authorized capital stock from 125,000,000 to 500,000,000 shares, of which 495,000,000 will
be common stock, par value $0.001 per share and intact the previously authorized 5,000,000 shares of preferred stock, $0.001 par
value per share, with such designations, rights and preferences as our board of directors may determine from time to time and
the 1,000 shares of Series A Preferred Stock previously approved by our board of directors.
We
currently have authorized capital stock of 125,000,000 shares, of which 120,000,000 shares are common stock and 5,000,000 are
preferred stock of which 1,000 shares have been designated as Series A Preferred Stock. We have 68,976,677 shares of common stock
and 1,000 shares of Series A Preferred Stock, respectively, issued and outstanding as of the Record Date. Upon effectiveness of
the Amendments, our authorized capital stock will consist of 500,000,000 shares, of which 495,000,000 will be common stock and
5,000,000 will be preferred stock, of which 1,000 shares have been designated as Series A Preferred with 4,999,000 shares with
such designations, rights and preferences as our board of directors may determine from time to time.
Purposes
of the Increase in Authorized Shares
Having
an increased number of authorized but unissued shares of our common stock would allow us to take prompt action with respect to
corporate opportunities that develop, without the delay and expense of convening a special meeting of stockholders for the purpose
of approving an increase in our capitalization. There will be no change in the number of authorized preferred shares as a result
of the increase in authorized shares. The unissued shares of preferred stock would be available for issuance from time to time
as determined by our board of directors for any proper corporate purpose. Such purposes might include, without limitation, issuance
in public or private sales for cash as a means of obtaining additional capital for use in our business and operations, and issuance
as part or all of the consideration required to be paid by us for acquisitions of other businesses or assets. Notwithstanding
the foregoing, we have no obligation to issue such shares and there are no plans, proposals or arrangements currently contemplated
by us that would involve the issuance of the preferred shares to acquire another company or its assets, or for any other corporate
purpose stated. In connection with the anticipated continued growth of our business, our board of directors believes it is in
our best interests to increase the number of authorized shares of common stock and to leave intact the previously authorized undesignated
Preferred Stock and the Series A Preferred Stock. The additional shares of common stock can provide flexibility in structuring
the terms of any future agreements, as well as any future financing and recapitalization efforts.
In
addition, upon completion of the Recapitalization which will result in an increase in shares of common stock from 120,000,000
shares to 495,000,000 shares, an additional 375,000,000 shares of common stock will be available for issuance. The availability
of these shares will enable the holders of the Common Stock Equivalents discussed below to acquire shares of our common stock.
Currently, there are an insufficient number of shares of authorized common stock to satisfy these obligations. Our board of directors
believes it is in the best interests of our company to accomplish this objective.
As
of February 10, 2017, we had outstanding the following common stock equivalents (the “Common Stock Equivalents”):
Description
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No. of Potentially Issuable Common Shares
(1)
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Common Stock Purchase Warrants (Exercise price - $0.2625/share)
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850,000
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Common Stock Purchase Warrants (Exercise price - $0.082/share)
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250,000
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Convertible Debt – Principal Amount $250,000 (Conversion price - $0.20/share
(2)
)
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1,349,888
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Convertible Debt - Principal Amount $ 176,794(Conversion price - $0.20/share
(2)
)
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1,012,521
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Convertible Debt - Principal Amount $ 87,912 (Conversion price - $0.20/share
(2)
)
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499,623
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Convertible Debt - Principal Amount $515,000 (Conversion price - $0.20/share
(2)
)
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2,735,421
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Stock options (exercise price -$0.10/share)
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6,000,000
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Total
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12,697,453
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(1)
The number of shares of our Common Stock potentially issuable upon conversion or exercise of our Common Stock Equivalents. Common
Stock Equivalents with a variable conversion rate is computed using 60% of the market price of our common stock as of February
10, 2017 and includes an aggregate of $78,590 of accrued interest on the Convertible Debt as of February 10, 2017.
(2)
Assuming a conversion price of $0.20 per share which gives effect to the Reverse Stock Split on a pro forma basis and is 30 times
the estimated conversion price as of the Record Date.
Potential
Anti-Takeover Effects of the Increase in Capital Stock
Any
additional issuance of common or preferred stock could, under certain circumstances, have the effect of delaying or preventing
a change in control of our company by increasing the number of outstanding shares entitled to vote and by increasing the number
of votes required to approve a change in control. Shares of common or preferred stock could be issued, or rights to purchase such
shares could be issued, to render more difficult or discourage an attempt to obtain control of our company by means of a tender
offer, proxy contest, merger or otherwise. The ability of our board of directors to issue such additional shares of common stock
and/or to designate one or more series or classes of preferred stock for issuance could discourage an attempt by a party to acquire
control of our company by tender offer or other means. Such issuances could therefore deprive stockholders of benefits that could
result from such an attempt, such as the realization of a premium over the market price that such an attempt could cause. Moreover,
the issuance of such additional shares of common or preferred stock to persons whose interests are aligned with that of our board
of directors could make it more difficult to remove incumbent officers and directors from office, even if such change were to
be favorable to stockholders generally.
Although
the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover
effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the
composition of our board or contemplating a tender offer or other transaction for the combination of our company with another
company), the Recapitalization was not proposed in response to any effort of which we are aware to accumulate shares of common
stock or obtain control of us, nor is it part of a plan by management to recommend a series of similar actions having an anti-takeover
effect to the board and our stockholders.
To
the extent that the increase in the number of authorized shares may have anti-takeover effects, the Recapitalization, when effected,
may encourage persons seeking to acquire us to negotiate directly with our board of directors, enabling our board to consider
a proposed transaction in a manner that best serves our stockholders’ interests.
Our
board believes that it is advisable and in the best interests of our company to have available authorized but undesignated shares
of preferred stock in an amount adequate to provide for our future needs. The designation of one or more classes or series of
preferred stock will be available for issuance from time to time as may be deemed advisable or required for various purposes,
including the issuance of shares in connection with financing or acquisition transactions. We have no present plans or commitments
for the issuance or use of the proposed shares of preferred stock in connection with any financing.
Procedure
for Effecting the Recapitalization
The
Recapitalization will become effective at such time as a certificate of amendment to our Restated Articles is filed with the Secretary
of State of Nevada. Pursuant to Rule 14c-2 promulgated under the Exchange Act, the Amendments will not be effected until at least
20 calendar days after the mailing of this Information Statement to our stockholders. We expect to file a certificate of amendment
to our Restated Articles with the Secretary of State of Nevada effective on or about ________, 2017.
Vote
Required
Pursuant
to NRS 78.385 and 78.390, the approval of the Recapitalization required a majority of our outstanding voting capital stock. As
discussed above, the Consenting Stockholders have consented to the Recapitalization.
AMENDMENT
OF OUR ARTICLES TO EFFECT A REVERSE STOCK SPLIT OF THE OUTSTANDING SHARES OF OUR COMMON STOCK AT THE RATIO OF 1-FOR-30
General
The
Consenting Stockholders have approved a resolution granting the Board the authority to effect the Reverse Stock Split, as described
below. If the Board elects to implement the Reverse Stock Split, it will become effective through an amendment to the Restated
Articles.
The
Reverse Stock Split permits (but does not require) the Board to effect the Reverse Stock Split at a ratio (the “Reverse
Stock Split Ratio”) of 1:30. The Board reserves its right not to effect the Reverse Stock Split if it determines, in its
sole discretion, that the Reverse Stock Split is no longer in the best interests of the Company and its stockholders.
Reasons
for the Reverse Stock Split
The
purpose of the proposed Reverse Stock Split is to decrease the number of outstanding shares of Common Stock in order to increase
the market value of each share of Common Stock. Immediately following the Reverse Stock Split the per-share price of the Common
Stock should generally increase proportionately with the Reverse Stock Split Ratio. For example, immediately following the Reverse
Stock Split, you would expect the price of our shares of Common Stock to quintuple if the Company did a five-to-one consolidation
of our shares of Common Stock. In the longer term, however, depending upon market and industry conditions and the status of our
company, the Reverse Stock Split may have no effect, a positive effect or a negative effect on the value of the consolidated Common
Stock.
We
believe it is necessary to seek to increase the market price of the common shares by means of the Reverse Stock Split for the
following purposes:
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Give
the Board Flexibility in Structuring Investments and Potential Change of Control Transactions
. The Company’s business
is experiencing a lack of revenue, and the Company is in immediate need of additional capital. To address its situation, the
Company is considering various alternative plans. At least one alternative involves diversifying the Company’s business
by acquiring an additional business or lines of business from other companies using its stock as consideration. The acquisition
of any such business may require the issuance of a significant number of shares of capital stock (including a number well
in excess of a majority if the acquired business is more valuable than the business of the Company). In addition, the target
may request a consolidation of the Common Stock to ensure that desired ownership percentages by the other party to the transaction
can be achieved without leaving the capitalization of the Company too large relative to the size of its business. In addition,
in order to obtain financing, the Company may be required to consolidate its Common Stock in order to increase the market
price since many investors will not invest in a stock with a trading price below a certain level.
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Reduced
Risk of the OTCQB Marketplace Delisting and Potential Reduction in Shares Issued Upon
Conversion of Convertible Debts.
By potentially increasing the market price of the
Common Stock, the Reverse Stock Split would reduce the risk that shares of our Common
Stock could be delisted from the OTCQB Marketplace. The continued listing rules of the
OTCQB Marketplace require, among other things, that issuers maintain a minimum closing
bid price of at least $0.01 per share. By potentially increasing the market price of
the Common Stock, the Company will help maintain a minimum closing bid price above $0.01
per share.
In
addition, since the conversion price of the debt underlying our convertible debentures which are included in the Common
Stock Equivalents is based on the market price of our Common Stock, by potentially increasing the market price of the
Common Stock, the Company may potentially be required to issue fewer shares of its Common Stock upon conversion of its
convertible debts.
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Increased
Analyst, Adviser and Broker Interest.
The Reverse Stock Split could increase analyst, broker and investor interest in
our Common Stock as many of their policies can discourage them from following or recommending companies with low stock prices.
Because of the trading volatility often associated with low-priced stocks, many investment banks, investment advisers, brokerages
and investors houses have adopted internal policies and practices that either prohibit or discourage them from following low-priced
stocks or recommending low-priced stocks to their customers. There is no assurance that the Reverse Stock Split would cause
any such increase in financial industry interest.
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Reducing
the number of outstanding shares of our Common Stock through the Reverse Stock Split is intended, absent other factors, to increase
the market price of our Common Stock. However, other factors, such as our financial results, market conditions and the market
perception of our business may adversely affect the market price of our Common Stock. As a result, there can be no assurance that
the Reverse Stock Split, if completed, will result in the intended benefits described above, that the market price of our Common
Stock will increase (proportionately to the reduction in the number of shares of our Common Stock after the Reverse Stock Split
or otherwise) following the Reverse Stock Split or that the market price of our Common Stock will not decrease in the future.
Additionally, we cannot assure you that the market price per share of our Common Stock after a Reverse Stock Split will increase
in proportion to the reduction in the number of shares of our Common Stock outstanding before the Reverse Stock Split. Accordingly,
the total market capitalization of our Common Stock after the Reverse Stock Split could be lower or higher than the total market
capitalization before the Reverse Stock Split.
Effects
of Reverse Stock Split
Of
the 120,000,000 shares of pre-Reverse Stock Split common stock which are presently authorized, 68,976,677 shares are issued and
outstanding as of February 10, 2017. The Reverse Stock Split does not change number of our authorized shares of common stock.
The practical effect of the Reverse Stock Split will be to provide us with 66,677,454 additional authorized but unissued shares
of our post-Reverse Stock Split common stock which, along with our proposed increase in authorized common stock from 120,000,000
to 495,000,000 will increase the total number of authorized but unissued shares of common stock available for future issuance
to 480,003,324 after giving effect to the issuance of approximately 12,697,453 shares of post-Reverse Stock Split common stock
upon conversion or exercise of the Common Stock Equivalents.
The
following table presents information about our issued and outstanding common stock, shares reserved and shares available for future
issuance, on a pre-Reverse Stock Split and post-Reverse Stock Split basis:
Description
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Number of Shares
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Pre-Reverse Split
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Post-Reverse Split
(1)
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Total Authorized Shares of our common stock
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120,000,000
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495,000,000
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Less:
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Issued and Outstanding Shares
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68,976,677
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2,299,223
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Estimated Number of Shares to be Issued upon conversion of the Convertible Debentures (excluding shares issuable as interest thereon, if any)
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51,023,323
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(2)
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12,697,453
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(3)
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Total Issued and Outstanding Shares of our common stock plus Shares Reserved
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120,000,000
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14,996,676
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Unreserved Shares Available for Future Issuance
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-
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480,003,324
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(1)
Amounts estimated, subject to rounding.
(2)
Amount reflects number of the number of shares of our Common Stock potentially issuable upon conversion or exercise of the Common
Stock Equivalents to the extent there are a sufficient number of shares of our Common Stock.
(3)
Assuming a conversion price of $0.20 per share which gives effect to the Reverse Stock Split on a pro forma basis and is 30 times
the estimated conversion price in effect prior to the Reverse Stock Split, the aggregate number of shares issuable upon conversion
or exercise of the Common Stock Equivalents on a pro forma basis is 12,697,453.
If
the Recapitalization is not approved and filed, we will not have a sufficient number of authorized shares of common stock to permit
conversion or exercise of the Common Stock Equivalents and the amounts due under our convertible debentures would become payable
in cash. In view of the approval of the Recapitalization and the Reverse Stock Split by our board of directors, and by the Consenting
Stockholder pursuant to the Written Consent, we believe that we will have sufficient shares to permit conversion or exercise of
the Common Stock Equivalents.
Our
board of directors and management also believe that it is prudent and advisable for us to retain a sufficient number of authorized
shares now to better position ourselves with added flexibility to raise additional capital through a variety of possible financing
transactions and/or consummate mergers, acquisitions, combinations and various other strategic alternatives, and in order to avoid
delays that might otherwise arise if we were required to solicit shareholder approval for additional shares at the time of a proposed
transaction.
Our
authorized but unissued common stock may be issued at the direction of our board of directors at such times, in such amounts and
upon such terms as our board of directors may determine, without further approval of our shareholders unless, in any instance,
such approval is expressly required by law. The increase in the number of authorized common shares may affect the rights of existing
holders of common shares to the extent that future issuances of common shares reduce each existing shareholder’s proportionate
ownership and voting rights in our company. In addition, possible dilution caused by future issuances of common shares could be
accompanied by a decline in the market price of our shares, assuming a market for our common stock continues.
The
additional common stock that will be available for issuance following the Reverse Stock Split and the Recapitalization could have
material anti-takeover consequences, including the ability of our board of directors to issue additional common shares without
additional shareholder approval because unissued common stock could be issued by our board of directors in circumstances that
may have the effect of delaying, deterring or preventing takeover bids. For example, without further shareholder approval, our
board of directors could strategically sell common shares in a private transaction to purchasers who would oppose a takeover.
In addition, because shareholders do not have preemptive rights under our Articles of Incorporation, as amended, the rights of
existing shareholders may (depending on the particular circumstances in which the additional common shares are issued) be diluted
by any such issuance and increase the potential cost to acquire control of our company. In proposing the Reverse Stock Split and
Recapitalization our board of directors was, in part, motivated by our desire to provide sufficient shares to permit conversion
of our convertible debentures as an alternative to repaying it on its maturity date, as well as other business and financial considerations,
and not by the threat of any attempt to accumulate shares or otherwise gain control of our company. However, shareholders should
nevertheless be aware that approval of the Amendments could facilitate our efforts to deter or prevent changes of control in the
future.
Other
than as set forth herein, there are currently no plans, agreements, arrangements, or understanding, for the issuance of additional
shares of common stock other than issuances upon conversions of our convertible debentures. Our board of directors does not intend
to issue any additional common shares except on terms that it deems to be in the best interest of our company and our shareholders.
It is not anticipated that our financial condition, the percentage ownership of management, the number of shareholders, or any
aspect of our business will materially change as a result of the Reverse Stock Split, except as impacted by the conversions of
our convertible debentures.
At
the Effective Time (as defined below), each lot of 30 pre-Reverse Stock Split shares of our common stock (the “Old Shares”),
as determined by the Board, issued and outstanding immediately prior to the Effective Time will, automatically and without any
further action on the part of our stockholders, be combined into and become one post-Reverse Stock Split share of our common stock
(a “New Share”), subject to the treatment for fractional shares described below, and each certificate which, immediately
prior to the Effective Time, represented Old Shares will be deemed, for all corporate purposes, to evidence ownership of New Shares.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
The
Reverse Stock Split will be effected simultaneously for all of our then-existing Old Shares and the exchange ratio will be the
same for all of our shares of outstanding our common stock. The Reverse Stock Split will affect all of our stockholders uniformly
and will not affect any stockholder’s percentage ownership interests in us, subject to the treatment for fractional shares
described below. See “Fractional Shares” below. The New Shares issued pursuant to the Reverse Stock Split will be
fully paid and non-assessable. All New Shares will have the same voting rights and other rights as Old Shares. Pursuant to Article
V of our Amended Articles, stockholders of the Company do not have preemptive rights to acquire additional shares of our common
stock. The following table provides the effects of the Reverse Stock Split based on 120,000,000 shares of our common stock outstanding
as of February 10, 2017.
Reverse Stock Split
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Percentage Reduction in the Outstanding Shares of our common stock
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our common stock Outstanding after the Reverse Stock Split
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our common stock Available for Issuance after the Reverse Stock Split
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1-for-30
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96.7
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%
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2,299,223
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117,700,777
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(1)
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(1)
Amount does not give effect to the potential issuance upon conversion or exercise of our Common Stock Equivalents or the increase
from 120,000,000 to 495,000,000 in authorized shares of common stock. The increase in the common stock available for issuance
after the Reverse Stock Split and the Increase in Authorized our common stock will be 492,700,777 excluding shares potentially
issuable upon conversion or exercise of our Common Stock Equivalents.
A
new CUSIP number will also be assigned to our common stock following the Reverse Stock Split.
Commencing
at the Effective Time, all outstanding options, warrants and other convertible securities entitling holders thereof to purchase
shares of our common stock would entitle such holders to receive, upon exercise of their securities, 1/30
th
of the
number of shares of our common stock which such holders may purchase upon exercise or conversion of their securities. In addition,
commencing at the Effective Time, the exercise or conversion price of all outstanding options, warrants and our other convertible
securities will be increased 30 times, based on the exchange ratio of the Reverse Stock Split.
Par
Value Per Share of our common stock
As
a consequence of the Reverse Stock Split, the par value per share of our common stock will remain at $0.001 per share.
Fractional
Shares
No
scrip or fractional shares will be issued if, as a result of the Reverse Stock Split, a stockholder would otherwise become entitled
to receive a fractional share of our common stock. In lieu of issuing fractional shares, the Company will round up to one whole
share of our common stock in the event a stockholder would be entitled to receive a fractional share of our common stock.
Effect
on Voting Rights of, and Dividends on, our common stock
Proportionate
voting rights and other rights of the holders of our common stock will not be affected by the Reverse Stock Split. The percentage
of outstanding shares owned by each stockholder prior to the Reverse Stock Split will remain the same, except for adjustment as
a consequence of rounding up of any fractional shares created by the Reverse Stock Split. See “Fractional Shares”
above.
We
do not believe that the Reverse Stock Split will have any effect with respect to future distributions, if any, to our stockholders,
other than in respect of the additional shares issued to all of our stockholders in the Reverse Stock Split as a consequence of
rounding up of any fractional shares created by the Reverse Stock Split.
Effect
on Liquidity
The
decrease in the number of shares of our common stock outstanding as a consequence of the Reverse Stock Split may decrease the
liquidity in our common stock if the anticipated beneficial effects do not occur. See “Reasons for the Reverse Stock Split”
above.
Certain
U.S. Federal Income Tax Consequences
The
following summary of certain material federal income tax consequences of the Reverse Stock Split does not purport to be a complete
discussion of all of the possible federal income tax consequences and is included for general information only, is not intended
as tax advice to any person and is not a comprehensive description of the tax consequences that may be relevant to each stockholder’s
own particular circumstances. Further, it does not address any state, local, foreign or other income tax consequences, nor does
it address the tax consequences to stockholders that are subject to special tax rules, such as stockholders who are subject to
the alternative minimum tax, banks, insurance companies, regulated investment companies, personal holding companies, stockholders
who are not “United States persons” as defined in section 7701(a)(30) of the Internal Revenue Code of 1986, as amended
(the “Code”), broker-dealers and tax-exempt entities. This summary is based on the Code, the U.S. Treasury Department
regulations thereunder and proposed regulations, court decisions and current administrative rulings and pronouncements of the
Internal Revenue Service, all of which are subject to change, possibly with retroactive effect. This summary addresses only those
stockholders who hold their Old Shares as “capital assets” as defined in the Code (generally, property held for investment),
and will hold the New Shares as capital assets.
Holders
of our common stock are advised to consult their own tax advisers regarding the federal income tax consequences of the Reverse
Stock Split in light of their personal circumstances and the consequences under state, local and foreign tax laws, and also as
to any estate or gift tax considerations.
We
are structuring the Reverse Stock Split in an effort to obtain the following consequences:
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the
Reverse Stock Split will qualify as a recapitalization under section 368(a)(1)(E) of the Code for U.S. federal income tax
purposes;
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stockholders
should not recognize any gain or loss as a result of the Reverse Stock Split;
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the
aggregate basis of a stockholder’s Old Shares will become the aggregate basis of the New Shares held by such stockholder
immediately after the Reverse Stock Split; and
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the
holding period of the New Shares will include the stockholder’s holding period for the Old Shares.
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The
above discussion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding U.S. federal
tax penalties. It was written solely in connection with the proposed Reverse Stock Split of our common stock.
Regulatory
Effects.
The Common Stock is currently registered under Section 12(g) of the Exchange Act, and the Company is subject to the
periodic reporting and other requirements of the Exchange Act. The proposed Reverse Stock Split would not affect the registration
of the Common Stock under the Exchange Act or the Company’s obligation to publicly file financial and other information
with the Securities and Exchange Commission. If the proposed Reverse Stock Split were implemented, the Common Stock would continue
to trade on the OTCQB Marketplace under the symbol “LOGG,” assuming the Company maintains compliance with its listing
requirements; however, the Company would be required to obtain a new CUSIP number associated with post-Reverse Stock Split shares
of Common Stock.
No
Going Private Transaction.
Notwithstanding the decrease in the number of outstanding shares of Common Stock following the
proposed Reverse Stock Split, the Board does not intend for this transaction to be the first step in a series of plans or proposals
of a “going private transaction” within the meaning of Rule 13e-3 of the Exchange Act.
The
Proposed Reverse Stock Split May Decrease the Liquidity of the Common Stock.
The liquidity of the Common Stock may be harmed
by the proposed Reverse Stock Split given the reduced number of shares of Common Stock that would be outstanding after the Reverse
Stock Split, particularly if the stock price does not increase as a result of the Reverse Stock Split.
Possible
Anti-Takeover Effects of the Actions
As
described in more detail above, the Reverse Stock Split will result in an effective increase in the number of authorized but unissued
shares of our Common Stock. Under certain circumstances this could have an anti-takeover effect, although this is not the intent
of the Board. For example, it may be possible for the Board of Directors to delay or impede a takeover or transfer of control
of the Company by causing such authorized but unissued shares to be issued to holders who might side with the Board in opposing
a takeover bid that the Board determines is not in the best interests of the Company and our stockholders. The effective increase
in the number of authorized but unissued shares of our Common Stock therefore may have the effect of discouraging unsolicited
takeover attempts. By potentially discouraging the initiation of any such unsolicited takeover attempt, the effective increase
in the number of authorized but unissued shares of our Common Stock may limit the opportunity for the Company’s stockholders
to dispose of their shares at a higher price than may be available in a takeover attempt or under a merger proposal. Furthermore,
the effective increase in the number of authorized but unissued shares of our Common Stock may have the effect of permitting the
Company’s current management, including the current Board, to retain its position and place it in a better position to resist
changes that stockholders may desire to make if they are dissatisfied with the conduct of the Company’s business. However,
the Board did not approve the Reverse Stock Split with the intent that the Reverse Stock Split be used as a type of anti-takeover
device.
In
addition to the potential anti-takeover effects of an effective increase in the number of authorized but unissued shares of our
Common Stock, certain provisions of the Restated Articles also could be used by management of the Company to prevent, delay or
defer a transaction that might provide an above-market premium that is favored by a majority of the independent stockholders without
further vote or action by the stockholders.
As
described in more detail above, the Restated Articles provide that the Preferred Stock authorized by the Restated Articles may
be issued from time to time in one or more series and authorizes the Board to fix or alter powers, preferences and rights, and
the qualifications, limitations and restrictions granted to or imposed on each additional series of Preferred Stock, and the number
of shares constituting any such series and the designation thereof, or any of them. The issuance of Preferred Stock with either
specified voting rights or rights providing for the approval of extraordinary corporate action could be used to create voting
impediments or to frustrate persons seeking to effect a merger or to otherwise gain control of the Company by diluting their stock
ownership. In addition, the ability of the Board to distribute shares of any class or series (within limits imposed by applicable
law) as a dividend in respect of issued shares of Preferred Stock also could be used to dilute the stock ownership or voting rights
of a person seeking to obtain control of the Company and effectively delay or prevent a change in control without further action
by the stockholders.
While
the aforementioned provision of the Restated Articles may be deemed to have possible anti-takeover effects, their approval and
adoption was not prompted by any specific takeover threat currently perceived by management, and neither our management nor our
Board views any provision of the Restated Articles as an anti-takeover mechanism. Except for the potential effects of the aforementioned
provision, there are no anti-takeover provision in the Restated Articles, the Bylaws or other governing documents of the Company,
and the Board currently has no plan to adopt any proposal or to enter into any other arrangement that may have material anti-takeover
consequences.
Vote
Required
Pursuant
to NRS 78.207, 78.385 and 78.390, the approval of the Reverse Stock Split required a majority of our outstanding voting capital
stock. As discussed above, the Consenting Stockholders have consented to the Reverse Stock Split.
Our
common stock is currently quoted on the OTCQB Tier of the OTC Markets Group, and the Reverse Stock Split will require approval
by FINRA pursuant to Rule 10b-17 of the Securities Exchange Act of 1934 in order for it to be recognized for trading purposes.
We expect to receive FINRA’s approval prior to the effective date of the Reverse Stock Split.
AMENDMENT
OF OUR ARTICLES TO INCLUDE CERTAIN RIGHTS AND LIMITATIONS ON HOLDERS OF THE COMMON STOCK
Reasons
for amendment to include certain rights and limitation on holder of common stock.
Our
board of directors seeks to clarify certain rights and limitations of holders of our common stock by including the following new
Section 5 to Article IV – Capital Stock:
Section
5. Rights of Holders of Common Stock. The following rights, powers, privileges and restrictions, qualifications, and limitations
apply to the Common Stock.
(a)
General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights,
powers and privileges of the holders of the Preferred Stock.
(b)
Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders
(and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized
shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition
to any vote of the holders of one or more series of Preferred Stock that may be authorized by the Board) the affirmative vote
of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding
shares of capital stock of the Corporation entitled to vote. Further, holders of the Common Stock shall have no right to vote
on the designations, preferences, limitations and relative or other rights of the Preferred Stock or any series thereof (collectively,
the “Preferences”), or on any amendment, alteration or repeal of the Preferences or the Preferred Stock, at any time,
whether before or after the issuance thereof.
Purpose
and Effect of the Proposed Amendment
The
primary purpose of this amendment is to clarify that holders of the Common Stock do not have any rights to vote on the designations,
preferences, limitations and relative or other rights of the Preferred Stock or any series thereof (collectively, the “Preferences”),
or on any amendment, alteration or repeal of the Preferences or the Preferred Stock, at any time, whether before or after the
issuance thereof. While the board of directors believes that the exclusive right to establish the Preferences lies with the board
of directors pursuant to their authority to designate the rights and preferences of the Preferred Stock as provided for in Section
2 of Article IV, the board believes that it ought to clarify this right by including this amendment to the Restated Articles.
Specifically, this proposed amendment is intended to invoke the provisions of NRS 78.390(2) which gives the holders of any class
or series of outstanding shares the right to vote on an amendment that would adversely alter or change any of their preferences
or relative or other rights unless the articles of incorporation specifically deny such right.
Anti-Takeover
Effects of Amendment Adopting Common Stockholder Rights
We
do not believe that the proposed amendment will have any anti-takeover effects. Rather, we believe the proposed amendment will
bring certainty to the rights previously delegated to the board of directors and the rights of holders of our Preferred Stock
and other classes of stock whose rights may be adverse to holders of our Common Stock. Also, we have not proposed the amendment
adopting the Common Stockholder Rights as part of a plan by management to adopt a series of anti-takeover amendments and we do
not presently intend to propose any anti-takeover measures in future proxy solicitations or shareholder consents. Our board believes
that the benefit of clarifying the limitation on rights of holders of our Common Stock outweighs any disadvantages.
Vote
Required
Pursuant
to NRS 78.385 and 78.390, the approval of the Common Stockholder Rights required a majority of our outstanding voting capital
stock. As discussed above, the Consenting Stockholders have consented to the Common Stockholder Rights.
INTEREST
OF CERTAIN PERSONS IN OR OPPOSITION TO MATTER TO BE ACTED UPON
Except
as disclosed elsewhere in this Information Statement, none of the following persons has any substantial interest, direct or indirect,
by security holdings or otherwise in any matter to be acted upon:
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Any
director or officer of our Company,
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Any
proposed nominee for election as a director of our Company, and
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Any
associate or affiliate of any of the foregoing persons.
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The
stockholdings of our directors and officers are listed below in the section entitled “Security Ownership of Certain Beneficial
Owners and Management.” No director has advised us that he intends to oppose the Amendments.