MOBETIZE CORP. INFORMATION STATEMENT

NO VOTE OR OTHER ACTION OF OUR STOCKHOLDERS IS REQUIRED IN CONNECTION

WITH THIS INFORMATION STATEMENT.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US

A PROXY.

INTRODUCTION

This    Information    Statement    is    being    furnished    to    the    stockholders    of    Mobetize    Corp.,    a    Nevada

corporation   (“ Company ,”   “ we ”,   “ us ”   or   “ our ”),   to   advise   them   of   the   corporate   actions   that   have   been

authorized   by the   Board   of   Directors   (“ Board ”)   and   the   written   consent   of the   holders   of more   than   57%

of   the   voting   power   (“ Consenting   Stockholders ”)   of   the   Company’s   outstanding   capital   stock   as   of   the

record   date   April   7,   2017   (“ Record   Date ”).   These   actions   are   being   taken   without   notice,   meetings   or

votes   in   accordance   with   the   Nevada Revised   Statutes (“ NRS ”)   Title   7 Chapter   78   §320,   §350, §370   and

§390 . This Information Statement is being mailed to the stockholders of the Company on April 25, 2017.

On   April   7,   2017   (“ Record   Date ”),   our   Board   approved   and   recommended   stockholder   approval   of   the

following matters:

(i)

consolidation of the Company’s issued and outstanding common shares   (“ Common Stock ”) on a

one for one hundred (1/100) basis (“ Reverse Split ”);

(ii)

amending  the    Company’s    Articles    of    Incorporation  (“ Articles ”)    to    decrease    the    number    of

authorized   shares   of   Common   Stock   from   five   hundred   and   twenty-five   million   (525,000,000)

(iii)

amending the Company’s   Articles   to   decrease the   number   of authorized   shares   of   preferred   stock

(“ Preferred Stock ”) from two hundred and fifty million (250,000,000) shares par value $0.001 to

seventy-five   million   shares   (75,000,000)   par   value   $0.001   (“ Amendments ”)   with   no   change   in

the    number    of    designated    or    outstanding    shares    of    Series    A    Preferred    Stock    (“ Series    A

Preferred ”) or Series B Preferred Stock (“ Series B Preferred ”).

Resolution   (i)   is   referred   to   herein   as   the   “Reverse   Split”   and   resolutions   (ii)   and   (iii)   are   collectively

referred to herein as the “ Amendments ”.

The   Record  Date  for  purposes  of  determining   those  stockholders  entitled  to   vote  and  to  whom  this

Information Statement is to be sent is April 7, 2017.

On the Record Date we had 23,450,233 shares of Common Stock, 4,565,000 shares of Series A Preferred,

and   12,970,648   shares   of   Series   B   Preferred   outstanding.   The   outstanding   Preferred   Stock   is   entitled   to

vote with the outstanding Common Stock as a single class.

On   the   Record   Date,   82,070,881   votes   were   entitled   to   vote   on   the   Reverse   Split   and   the   Amendments,

with each share of Common Stock entitled to one (1) vote, each share of Series A Preferred entitled to ten

(10) votes and each share of Series B Preferred entitled to one (1) vote.

The  Reverse  Split  and  the  Amendments  were  approved  by  the  Consenting  Stockholders  by  written

consent.   The   Consenting   Stockholders   held   a   majority   of   the   outstanding   voting   shares   on   the   Record

Date or approximately 57.41% of the total number of votes entitled to participate in the approval.

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No Vote Required

We   will   not   be   holding   an   extraordinary   meeting   of   stockholders   to     consider   the   Reverse   Split   and

Amendments   as   none   is   required   under   Title   7,   Chapter   78   §320   of   the   NRS   as   the   actions   to   be   taken

have been approved by the those stockholders holding a majority of the outstanding votes. We decided to

seek written consent in order to eliminate the cost and delay involved in holding an extraordinary meeting

of our stockholders.

No Appraisal Rights or Dissenter’s Provisions

The   Company’s   stockholders   have   no   rights   under   the   NRS,   the   Company’s   Articles,   or   its   Bylaws   to

seek appraisal rights or to dissent from the approval of the Reverse Split and the Amendments.

Interests of Certain Parties in or Opposition to the Matters to be Acted Upon

None   of   the   following   persons   has   any   substantial   interest,   direct   or   indirect,   by   security   holdings   or

otherwise in any matter to be acted upon:

1.     any   director   or   officer   of   our   Company   since   March   31,   2016,   being   the   commencement   of   our

last completed fiscal year;

2.     any proposed nominee for election as a director of our Company; and

3.     any associate or affiliate of any of the foregoing persons.

The   shareholdings   of   our   directors   and   officers   are   set   forth   below   in   the   section   entitled   “ Security

Ownership  of  Certain  Beneficial  Owners  and  Management .”  No  director  has  advised  us  that  he

opposes the Reverse Split or the Amendments.

Householding of Stockholder Materials

We   may deliver   only one   copy of   this   Information   Statement   to   multiple   stockholders   sharing   a   common

address.   If   requested   by   phone   or   in   writing,   we   will   promptly   provide   a   separate   copy   to   a   stockholder

sharing an address with another stockholder. Requests by phone should be directed to our Chief Executive

Officer at (778) 588-5563, and requests in writing should be sent to:

Mobetize Corp.

Attention Chief Executive Officer

#205 – 8105 Birch Bay Square Street

Blaine

Washington 98230

Stockholders   sharing   an   address   who   currently   receive   multiple   copies   and   wish   to   receive   only   a   single

copy should contact their broker or send a signed, written request to us at the above address.

Effective Date

Pursuant to Rule 14c-2    of the Exchange   Act, the Reverse   Split and the Amendments    will   not   be effected

until  at  least  twenty  (20)  calendar  days  after  this  Information  Statement  is  sent  to  the  Company’s

stockholders.   We   anticipate   that   the   Reverse   Split   and   Amendments   will   become   effective   on   or   after

May 19,   2017   (“ Effective   Date ”),   upon   notification   to   FINRA   and   the   acceptance   of   requisite   filings   by

the Nevada Secretary of State.

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Delivery of Notice

Title   7,  Chapter  78  §370  of   the   NRS  mandates  that   if   a  written  consent  is   signed  by   less  than   the

unanimous   consent   of   all   stockholders   entitled   to   vote,   we   must   give   deliver   of   the   actions   to   be   taken   to

all   stockholders   who   were   entitled   to   vote   on   the Record   Date   but   who   did   not   consent.   This   Information

Statement is intended to provide you with the required notice.

Outstanding Voting Securities

Our   authorized   capital   stock   consisted   of   525,000,000   shares   of   Common   Stock   par   value   $0.001,   of

which   23,450,233   shares   were   outstanding,   250,000,000   shares   of   Preferred   Stock   of   which   4,565,000

shares    of    Series  A    Preferred    were    outstanding,    and    12,970,648  shares    of    Series    B    Preferred    were

outstanding   on   the   Record   Date.   Outstanding   shares   of   Series   A   Preferred   and   Series   B   Preferred   are

entitled to vote with outstanding shares of Common Stock as a single class. On of the Record Date, a total

of   82,070,881   votes   were   entitled   to   vote   on   the   the   Reverse   Split   and   the   Amendments.   Each   share   of

Common   Stock   is   entitled   to   one   (1)   vote,   each   share   of   Series   A   Preferred   is   entitled   to   ten   (10)   votes

and each share of Series B Preferred is entitled to one (1) vote.

REVERSE SPLIT (Resolution (i))

On April 7, 2017, the Company’s Board and the Consenting Stockholders approved a Reverse Split of the

Company's Common Stock on a one (1) for one hundred (100) basis.

The   Reverse   Split   will   be   effected   in   coordination   with   notice   to   FINRA   and   the   Company’s   transfer

agent   of corporate   action   on   a   certain   date   (“ Effective Date ”).   On the   Effective Date   the holder   for   every

100   shares   of   Common   Stock   will   be   entitled   to   one   share   of   Common   Stock.   The   Reverse   Split   will   not

result   in   a   change   in   the   par   value   of   the   Common   Stock.   Rather   than   cause   the   creation   of   fractional

shares   of   Common   Stock,   if   a   stockholder   would   otherwise   be   entitled   to   receive   a   fractional   share,   such

stockholder   will   be   entitled   to   receive   a   whole   share.   The   Reverse   Split   will   occur   automatically   on   the

Effective   Date   without   any   action   on   the   part   of   stockholders   and   without   regard   to   the   date   certificates

representing shares of Common Stock are physically surrendered for new certificates.

Based   on   the   number   of   shares   of   Common   Stock   issued   and   outstanding,   immediately   following   the

Reverse   Split   the   Company   will   have   approximately   234,502   shares   of   Common   Stock   par   value   $0.001

outstanding   (without   giving   effect   to   rounding   up   for   fractional   shares).   Stockholders   will   hold   the   same

percentage interest in the Common Stock on the Effective Date as they held prior to the Reverse Split, but

their interest   will be represented by one-one hundredth   as many shares. All   outstanding options,   warrants,

notes,   debentures   and   other securities   entitling   their   holders   to   purchase   shares   of   Common   Stock will   be

adjusted as a result of the Reverse Split. The conversion ratio for each instrument will be reduced, and the

exercise   price,   if   applicable,   will   be   increased,   in   accordance   with   the   terms   of   each   instrument   and   the

ratio of the Reverse Split.

The   Board   reserves   the   right,   notwithstanding   the   Consenting   Stockholders   approval   and   without   further

action   by   stockholders,   to   elect   not   to   proceed   with   the   Reverse   Split   if   it   determines   that   the   Reverse

Split is no longer in the best interests of the Company and its stockholders.

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Reasons for the Reverse Split

Condition to Lead Investor Financing

The Company has financed operations to date from proceeds of private placements of Common Stock and

Series B Preferred, exercise of warrants, issuances of convertible debentures, advances from directors and

stockholders  and  revenue.  Our  business  plan  anticipates  increases  in  operating  expenses  and  capital

expenditures   over   the   next   twelve   months   in   relation   to   product   development,   research   and   development

and   marketing.   Despite   these   expectations,   we   had   no   agreements   to   obtain   funds   through   bank   loans,

lines of credit or any other sources. Since we had no financing committed, the prospect of being unable to

secure financing to continue as a viable business was a vital concern to our Board.

On  March  29,  2017,  we  acted  to  preserve  and  grow  our  business  by   entering   into  a  Lead  Investor

Agreement  that  committed  certain  investors  to  subscribe  to  a  private  placement  offering.  For  us  to

incentivize    investment    a    condition    of    the    agreement    was    that    in    the    event    the    offering    was    fully

subscribed that the Company would effect a reverse split of its Common Stock on a 1/100 basis. On April

3,   2017,   the   Company announced   that   the   offering   was   fully subscribed   and   as   a   result   it   was   committed

to effect the Reverse Split.

Increased Share Price

The Reverse Split may set our stock price to a level that we believe would be more consistent with similar

companies   in   our   technology   space.   The   resultant   stock   price   may   also   meet   investing   guidelines   for

certain   institutional   investors   and   investment   funds   that   are   currently   prevented   from   investing   in   our

Common Stock.

We  believe  that  the  current  per  share  price  level  of  our  Common  Stock  has  reduced  the  effective

marketability of   our   stock   because   many leading   brokerage   firms   are   reluctant   to   recommend   low   priced

stock   to   their   clients.   Some   investors   view low   priced   stock   as   unattractive   because   of the   greater   trading

volatility   sometimes   associated   with   these   stocks.   In   addition,   a   variety   of   brokerage   house   policies   and

practices   relating   to   the   payment   of   brokerage   commissions   make   the   handling   of   low   priced   stocks

unattractive to brokers from an economic standpoint.

Our stockholders may also benefit from relatively lower trading costs associated with a higher stock price.

Many   investors  pay   commissions  based  on  the  number  of  shares  traded  when  they   buy  or  sell  our

Common Stock. If our stock price increases, such investors would pay lower commissions to trade a fixed

dollar amount of our stock than they would if our stock price were lower.

For   the   above   reasons,   the   Company   believes   that   the   Reverse   Split   is   in   the   best   interests   of   both   the

Company and its stockholders. The Company expects that after the Reverse Split, the Common Stock will

trade at   a price   significantly higher   than its current market   price.   However, the Company cannot give   any

assurance that it will trade at one hundred times the market price prior to the Reverse Split.

Certain Risks Associated with the Reverse Split

The Reverse Split could result in a significant devaluation of the Company’s market capitalization and the

trading price of its Common Stock

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Although   the   Board   expects   that   the   Reverse   Split   will   result   in   an   increase   in   the   market   price   of   the

Common   Stock,   it   cannot   assure   you   that   the   market   price   will   increase   in   proportion   to   the   reduction   in

the   number   of   shares   outstanding   or   result   in   a   permanent   increase   in   the   market   price.   Accordingly,   the

total   market   capitalization   of   the   Company   after   the   Reverse   Split   may   be   lower   than   the   total   market

capitalization   before   the   Reverse   Split   and,   in   the   future, the   market   price   of   the   Common   Stock may not

exceed or remain higher than the market price prior to the Reverse Split.

The   effect   of   the   Reverse   Split   upon   the   market   price   of   our   Common   Stock   cannot   be   predicted   with   any

certainty, and the history of similar reverse splits for companies in similar circumstances to ours is varied

The  market  price  of  the  Common  Stock  is  dependent  on  many   factors,  including  our  business  and

financial   performance,   general   market   conditions,   prospects   for   future   success   and   other   factors   detailed

from   time   to   time   in   the   reports   we   file   with   the   Securities   &   Exchange   Commission   (“ Commission ”).

Once  the  Reverse  Split  is  implemented,  the  market  price  for  our  Common  Stock  may   decline.  The

percentage   of decline as   an   absolute number   and   as   a percentage   of   our   overall   market   capitalization may

then be greater than would have occurred in the absence of the Reverse Split.

The Reverse Split may result in some stockholders owning “odd lots” that may be more difficult to sell or

require greater transaction costs per share to sell

The   Reverse   Split   may   result   in   some   stockholders   owning   “odd   lots”   of   less   than   100   shares   of   our

Common   Stock   on   a   post-split   basis.   These   odd   lots   may   be   more   difficult   to   sell,   or   require   greater

transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.

The Reverse Split may not generate additional investor interest

While  the  Board  believes  that  a  higher  stock  price  may  generate  investor  interest,  there  can  be  no

assurance   that the Reverse Split   will result in   a per   share   price   gain   that   will   attract institutional   investors

or   investment   funds   or   that   such   stock   price   will   satisfy the   investing   guidelines   of   institutional   investors

or investment funds. As a result, the trading liquidity of our Common Stock may not necessarily improve.

The   reduced   number   of   shares   of   Common   Stock   resulting   from   the   Reverse   Split   could   adversely   affect

the liquidity of our Common Stock

Although the Board believes that the decrease in the number of shares of Common Stock outstanding as a

consequence   of   the   Reverse   Split   and   an   anticipated   increase   in   the   market   price   of   our   Common   Stock

could   encourage   market   interest   and   promote   greater   liquidity,   such   liquidity   could   also   be   adversely

affected by the reduced number of shares outstanding.

Effects of the Reverse Split

Effect on Authorized and Outstanding Shares

We    intend    to    amend    our    Articles    to    authorize    us    to    issue    up    to    two    hundred    and    fifty    million

(250,000,000)   shares   of   Common   Stock   (see   Resolution   (ii)   Amendments).   Upon   effectiveness   of   the

Reverse Split and the Amendments, the number of authorized shares of Common Stock that are not issued

or   outstanding   will   decrease   despite   the   Reverse   Split   since   adoption   of   the   Amendments   will   decrease

the number of authorized and available shares available for issuance.

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Effect on Existing Holders of Common Stock

On   the   Effective   Date,   each   holder   of   Common   Stock   will   own   a   lesser   number   of   shares   of   Common

Stock. The Reverse Split   will affect all   holders of Common Stock uniformly but will   not   affect   holders of

Series   A   Preferred   or   Series   B   Preferred.   The   proportionate   voting   rights   of   Common   Stock   holders   will

immediately decrease while the proportionate voting rights of Preferred Stock holders   will increase. Each

Common Stock holders’ ownership interest in the Company will   decrease on the Effective Date while the

ownership of each Preferred Stock holder will proportionately increase. Future prospective conversions of

Preferred   Stock   into   Common   Stock   will   have   a   dilutive   effect   on   holders   of   Common   Stock   further

decreasing   their   ownership   interests.   The   number   of   stockholders   of   record   will   not   be   affected   by   the

Reverse   Split   as   the   Company will   issue   one   (1)   whole   share   of Common   Stock for   any fractional   shares

that might result coincident with the Reverse Split.

Effect on Outstanding Stock Awards; Stock Plans

The   Reverse   Split   will   affect   outstanding restricted   stock awards,   restricted   stock warrants   and   options   to

purchase   our   Common   Stock.   The   Reverse   Split   will   also   reduce   the   number   of   stock   options   issuable

under   the   2015   Stock   Option   Plan.   The   per   share   exercise   price   of   all   outstanding   option   awards   will   be

increased   proportionately   and   the   number   of   Common   Stock   shares   issuable   upon   the   exercise   of   all

outstanding   option   awards   and   the   vesting   of   unvested   restricted   stock   will   be   decreased   proportionately.

These   adjustments   will   result   in   approximately   the   same   aggregate   exercise   price   being   required   to   be

paid   for   all   outstanding   option   awards   upon   exercise,   although   the   aggregate   number   of   shares   issuable

upon exercise of such option awards will be reduced proportionately.

No Going Private Transaction

Notwithstanding  the  decrease  in  the  number  of  outstanding  shares  of  Common  Stock  following  the

Reverse   Split,  our   Board   does   not   intend   for   this   transaction   to   be   the   first   step   in   a   “going   private

transaction”   within   the   meaning   of   Rule   13e-3   of   the   Exchange   Act.   As   of   April   7,   2017,   we   had   47

Common   Stock   holders   of   record.   Accordingly,   we   expect   to   continue   to   have   over   47   Common   Stock

record holders following the Reverse Split.

Accounting Consequences

The   par   value   per   share   of   our   Common   Stock   will   remain   unchanged   at   $0.001   per   share   after   the

Reverse   Split.  As   a   result,   on   the   Effective   Date,   the   stated   capital   on   the   Company’s   balance   sheet

attributable   to   our   Common   Stock   will   be   decreased   proportionately   from   its   present   amount,   and   the

additional  paid  in  capital  account  will  be  credited  with  the  amount    by  which  the  stated  capital  is

decreased.   Per   share   Common   Stock   net   income   or   loss   and   net   book   value   will   increase   because   there

will be fewer shares of Common Stock outstanding.

Registered Certificated Shares

Registered stockholders   hold their shares of Common Stock in certificate form or book entry form.   If any

of   your   shares   of   Common Stock   are   held   in   certificate form,   you   will   receive   a   letter   of   transmittal   from

the Company’s transfer agent as   soon as   practicable after the Effective   Date. The letter   of transmittal   will

contain   instructions   on   how   to   surrender   your   certificate(s)   to   the   transfer   agent.   Upon   receipt   of   your

properly completed   and   executed   letter   of   transmittal   and   your   stock   certificate(s),   you   will   be   issued   the

appropriate   number   of   shares   either   in   certificate   form   or   electronically   in   book-entry   form   under   the

direct registration system. No new stock certificates will   be issued to a stockholder   until   such stockholder

has surrendered such stockholder’s outstanding certificate(s) to the transfer agent.

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Beginning   on   the   Effective   Date,   each   certificate   representing   shares   of   Common   Stock   will   be   deemed

for all corporate purposes to evidence ownership of post Reverse Split shares of Common Stock.

STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE AND SHOULD

NOT SUBMIT ANY CERTIFICATES WITHOUT THE LETTER OF TRANSMITTAL

Registered Book-Entry Holders

The   Company’s   registered   holders   of   Common   Stock   may   hold   some   or   all   of   their   shares   electronically

in   book-entry   form   under   the   direct   registration   system   for   securities.   These   stockholders   will   not   have

stock   certificates   evidencing   their   ownership   of   our   Common   Stock.   They   will,   however,   be   provided

with   a   statement   reflecting   the   number   of   shares   registered   in   their   accounts.   If   you   hold   shares   in   book-

entry form you do not need to take any action to receive your post Reverse Split shares. If you are entitled

to   post   Reverse   Split   shares   a   transaction   statement   will   automatically   be   sent   to   your   address   of   record

indicating the number of shares you hold.

Non-registered Stockholders

Non-registered stockholders holding Common Stock through a bank, broker or other nominee should note

that   such   banks,   brokers   or   other   nominees   may   have   different   procedures   for   processing   the   Reverse

Split   than   those   that   would   be   put   in   place   by the   Company   for   registered   stockholders.   If   you   hold   your

shares   of   Common   Stock   with   a   bank,   broker   or   other   nominee   and   if   you   have   questions   in   this   regard,

you are encouraged to contact your nominee.

C ertain U.S. Federal Income Tax Consequences

The   information   below   is   only a   summary   of   certain   U.S.   federal   income   tax   consequences   of   a   Reverse

Split   and   does   not   purport   to   be   a   complete   discussion   of   all   possible   tax   consequences.   This   summary

addresses   only those   stockholders   who   hold   their   shares   of   Common   Stock   as   "capital   assets"   as   defined

in   the   Internal   Revenue   Code   of   1986,   as   amended   (" Code ").   This   discussion   does   not   address   all   U.S.

federal    income    tax  considerations    that    may  be    relevant    to    particular    stockholders    in    light    of  their

individual   circumstances   or to   stockholders   that   are   subject   to   special   rules,   such as   financial   institutions,

tax-exempt    organizations,  insurance    companies,    dealers  in  securities,    and  foreign  stockholders.  The

following    summary    is    based    upon    the    provisions    of    the    Code,    applicable    Treasury    Regulations

thereunder,   judicial   decisions   and   current   administrative   rulings,   as   of   the   date   hereof,   all   of   which   are

subject to   change,   possibly on   a   retroactive   basis. Tax consequences   under   state,   local,   foreign,   and   other

laws   are   not   addressed   herein.   Each   stockholder   should   consult   his,   her   or   its   own   tax   advisor   as   to   the

particular   facts   and   circumstances   that   may be   unique   to   such   stockholder   and   also   as   to   any estate,   gift,

state, local or foreign tax considerations arising out of the Reverse Split.

The   tax   treatment   of   a   stockholder   may   vary   depending   upon   the   particular   facts   and   circumstances   of

such   stockholder.   You   should   consult   with   your   own   tax   advisor   with   respect   to   the   tax   consequences   of

the   Reverse   Split.   As   used   herein,   the   term   “ U.S.   Holder ”   means   a   stockholder   that   is,   for   U.S.   federal

income   tax   purposes:   a   citizen   or   resident   of   the   United   States;   a   corporation   or   other   entity   treated   as   a

corporation   for   U.S.   federal   income   tax   purposes   created   or   organized   in   or   under   the   laws   of   the   United

States   or   any   state,   including   the   District   of   Columbia;   an   estate   the   income   of   which   is   subject   to   U.S.

federal income tax regardless of its source; or a trust that (i) is subject to the primary supervision of a U.S.

court   and   the   control   of   one   of   more   U.S.   persons   or   (ii)   has   a   valid   election   in   effect   under   applicable

U.S. Treasury Regulations to be treated as a U.S. person.

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The   following   information   is   based   on   the   Code,   applicable   Treasury   Regulations,   judicial   authority   and

administrative   rulings   and   practice,   all   as   of   the   date   hereof.   The   Company’s   view   regarding   the   tax

consequences of the Reverse Split is not   binding on the Internal Revenue Service or   the courts, and either

could  adopt  a  contrary   position.  In  addition,  future  legislative,  judicial  or  administrative  changes  or

interpretations could adversely affect the accuracy of the statements and conclusions set forth herein. Any

such   changes   or   interpretations   could   be   applied   retroactively   and   could   affect  the   tax   consequences

described   herein.   No   ruling   from   the   Internal   Revenue   Service   or   opinion   of   counsel   has   been   or   will   be

obtained in connection with the Reverse Split.

No   gain or   loss   should   be recognized by a   U.S.   Holder   upon such   holder’s   exchange   of pre-Reverse   Split

shares   of Common   Stock   for   post-Reverse   Split   shares   of Common   Stock.   The   aggregate   tax   basis   of   the

post-Reverse   Split   shares   will   be   the   same   as   the   holder’s   aggregate   tax   basis   in   the   pre-Reverse   Split

shares   exchanged   therefor.   The   holder’s   holding   period   for   the   post-Reverse   Split   shares   will   include   the

period during which the stockholder held the pre-Reverse Split shares surrendered.

PLANS, PROPOSALS OR ARRANGEMENTS TO ISSUE AVAILABLE SHARES OF COMMON

STOCK

The principal reasons for effecting the Reverse Split is to comply with the conditions of the Lead Investor

Agreement  and   to  increase  the  share  price  of  our  Common  Stock  in  order  to  attract  investors.  The

Company has not entered into any agreements whereby it has agreed to issue available shares of Common

Stock.

VOTE REQUIRED

The affirmative vote of the holders of a majority of the votes is required for approval of the Reverse Split.

The Company has obtained this approval through the written consent of stockholders casting a majority of

the votes entitled to participate in the approval. Therefore, an extraordinary meeting of the stockholders to

approve the Reverse Split is unnecessary and will not take place for this purpose.

AMENDMENTS TO ARTICLES OF INCORPORATION (Resolutions (ii) and (iii)

On   April   7,   2017,   the   Company’s   Board   and   the   Consenting   Stockholders   approved   the   filing   of   an

amendment   to   the   Articles   to   decrease   the   number   of   authorized   shares   of   Common   Stock   from   five

hundred  and  twenty  five    million  (525,000,000)  par  value  $0.001  to  two  hundred  and  fifty  million

(250,000,000) par   value   $0.001,   and   to decrease the number   of authorized shares of Preferred Stock from

two  hundred  and  fifty  million  (250,000,000)  shares  par  value  $0.001  to  seventy-five  million  shares

(75,000,000) par value $0.001 with no change in the number of designated or outstanding shares of Series

A Preferred or Series B Preferred. The form of the Amendments is attached hereto as Exhibit A.

The   decrease in the number of the Company’s   authorized shares of Common   Stock and authorized shares

of Preferred Stock will be implemented by amending our Articles without changing either the par value of

each   designated   class   of   securities   or   decreasing   the   number   of   shares   already   designated   as   Series   A

Preferred and Series B Preferred.

The   Amendments   will   cause   the   Company   to   delete   the   third   article   of   its   Articles,   as   amended,   in   its

entirety, providing for a new third article as follows:

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“Article  3:  The  Capital  Stock  shall  consist  of  250,000,000  shares  of  common  stock,

$0.001   par   value,   all   of   which   stock   shall   be   entitled   to   voting   power,   and   75,000,000

shares   of preferred stock, $0.001   par   value.   To the   fullest   extent   permitted by the laws   of

the   state   of   Nevada   (currently   set   forth   in   NRS   78.195   and   78.1955),   as   the   same   now

exists   or   may hereafter   be amended or   supplemented,   the Board of   Directors   may fix   and

determine   the   designations,   rights,   preferences   or   other   variations   of   each   class   or   series

within   each   class   of   preferred   stock   of   the   Corporation.     The   Corporation   may   issue

shares    of    Capital    Stock    for    such    consideration    as    may    be    fixed    by    the    Board    of

Directors.”

The   decrease in the number of authorized shares   of the Company’s Common   Stock and authorized shares

of the   Company’s   Preferred   Stock will   become   effective   upon   the   filing of the amendment   to its Articles,

as amended, with the Nevada Secretary of State.

Reasons for Decreasing the Number of Authorized Shares of Common and Preferred Stock

The    Board    and    the    Consenting    Stockholders    determined    to    decrease    the    number    of    shares    of    our

authorized   Common   Stock   and   Preferred   Stock   in   order   to   reduce   the   number   of   shares   available   for

issuance.   We   believe   that   the   number   of   shares   currently   available   for   issuance   may   have   a   negative

impact   on   our   efforts   to   attract   additional   financing   due   to   the   potentially dilutive   effect   of   having   such   a

large number of shares available for issuance.

For   the   above   reason,   we   believe   that   a   decrease   in   the   number   of   shares   of   our   authorized   Common

Stock and Preferred Stock is in the best interests of both the Company and its stockholders.

Effects of Filing the Amendments

The  filing  of  the  Amendments  with  the  Nevada  Secretary  of  State  will  have  no  effect  on  existing

stockholders of Common Stock, Series A Preferred or Series B Preferred.

PLANS, PROPOSALS OR ARRANGEMENTS TO ISSUE AVAILABLE SHARES OF COMMON

OR PREFERRED STOCK

The   reason for   filing the Amendments   is to reduce the number   of   shares of Common   and   Preferred   Stock

that   are   available   for   issuance.   Nevertheless,   as   of   April   25,   2017,   we   are   committed   to   issue   up   to   an

additional   400,000   shares   of   Series   B   Preferred   in   connection   with   certain   convertible   debt   obligations

that   can   be   converted   to   equity   at   the   election   of   the   holders.     Otherwise,   the   Company   has   no   plans,

commitments   or   arrangements   with   respect   to   issuing   authorized   but   unissued   shares   of   Common   Stock

or   Preferred   Stock   other   than   those   commitments   attached   to   the   exercise   of   outstanding   share   purchase

warrants and stock options.

VOTE REQUIRED

The affirmative vote of the holders of a majority of the votes is required for approval of the Amendments

The Company has obtained this approval through the written consent of stockholders casting a majority of

the votes entitled to participate in the approval. Therefore, an extraordinary meeting of the stockholders to

approve the Amendments is unnecessary and will not take place for this purpose.

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