UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
(RULE
14C-101)
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
Check
the appropriate box:
[X]
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Preliminary
Information Statement
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Definitive
Information Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
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VERUS
INTERNATIONAL, INC.
(Name
of Registrant As Specified In Charter)
Payment
of Filing Fee (Check the appropriate box):
[X]
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No
fee required
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which the transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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[ ]
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Fee
paid previously with preliminary materials
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(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.
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(1)
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Amount
previously paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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VERUS INTERNATIONAL, INC.
9841
Washingtonian Boulevard, #390
Gaithersburg,
MD 20878
INFORMATION
STATEMENT
PURSUANT
TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE NOT REQUESTED TO SEND US A PROXY
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN.
Gaithersburg,
Maryland
*,
2019
This
notice and accompanying Information Statement is furnished to the holders of shares of common stock, par value $0.001 per share
(“Common Stock”), of Verus International, Inc., a Delaware corporation (the “Company”) pursuant to Section
14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C and Schedule 14C thereunder,
in connection with the approval of the actions described below (the “Corporate Actions”) taken by unanimous written
consent of the Board of Directors of the Company and by written consent of the holders of a majority of the voting power of the
issued and outstanding capital stock of the Company:
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1.
Approve an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate
of Incorporation”) to (i) increase the number of authorized shares of Common Stock of the Company to 7,500,000,000 shares
from 1,500,000,000 shares and (ii) decrease the par value of the Common Stock and preferred stock to $0.000001 from $0.001
per share; and
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2.
Grant discretionary authority to the Company’s Board of Directors to amend the Certificate of Incorporation to effect
one or more consolidations of the issued and outstanding shares of Common Stock, pursuant to which the shares of Common Stock
would be combined and reclassified into one share of Common Stock at a ratio within the range from 1-for-2 up to 1-for-400
(the “Reverse Stock Split”), provided that, (X) that the Corporation shall not effect Reverse Stock Splits that,
in the aggregate, exceeds 1-for-400, and (Y) any Reverse Stock Split is completed no later than the first anniversary of the
Record Date (as defined herein).
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The
purpose of this Information Statement is to notify our stockholders that on January 11, 2019, stockholders holding a majority
of the voting power of our issued and outstanding shares of voting stock, executed a written consent approving the Corporate Actions.
In accordance with Rule 14c-2 promulgated under the Exchange Act, the Corporate Actions will become effective no sooner than 20
days after we mail this notice and the accompanying Information Statement to our stockholders.
The
written consent that we received constitutes the only stockholder approval required for the Corporate Actions under Delaware law
and the Company’s Certificate of Incorporation and Amended and Restated Bylaws. As a result, no further action by any other
stockholder is required to approve the Corporate Actions and we have not and will not be soliciting your approval of the Corporate
Actions. Notwithstanding, the holders of our common and preferred stock of record at the close of business on January 11, 2019,
are entitled to notice of the stockholder action by written consent.
This
notice and the accompanying Information Statement are being mailed to our holders of our securities of record as of January 11,
2019, on or about *, 2019.
This notice and the accompanying Information Statement shall constitute notice to you of the action
by written consent in accordance with Rule 14c-2 promulgated under the Exchange Act.
NO
VOTE OR OTHER ACTION OF THE COMPANY’S STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT. WE ARE NOT
ASKING FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A PROXY.
THIS
IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER WHICH WILL
BE DESCRIBED HEREIN.
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By
Order of the Board of Directors,
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/s/
Anshu Bhatnagar
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Anshu
Bhatnagar
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Chairman
of the Board
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VERUS
INTERNATIONAL, INC.
9841
Washingtonian Boulevard, #390
Gaithersburg,
MD 20878
INFORMATION
STATEMENT
GENERAL
INFORMATION
Verus
International, Inc. (the “Company”) is a Delaware corporation with its principal executive offices located at 9841
Washingtonian Boulevard, #390, Gaithersburg, MD 20878. The Company’s telephone number is (301) 329-2700. This Information
Statement is being sent to the Company’s stockholders (the “Stockholders”) by the board of directors (the “Board
of Directors”) to notify them about certain actions that the holders of a majority of the Company’s outstanding voting
capital stock have taken by written consent, in lieu of a special meeting of the Stockholders. The action was taken on January
11, 2019, and will be effective on a date that is at least 20 days after the mailing of this Information Statement.
On
January 11, 2019, the Board of Directors and the Stockholders holding a majority of the Company’s outstanding voting capital
stock approved, by written consent in lieu of a meeting, the below-mentioned actions. Accordingly, neither your vote nor your
consent is required and neither is being solicited in connection with the approval of the actions.
January
11, 2019 is the record date (the “Record Date”) for the determination of Stockholders who are entitled to receive
this Information Statement.
This
Information Statement has been filed with the Securities and Exchange Commission (the “SEC”) and is being furnished
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to the Stockholders
of the Company to notify such Stockholders of the following action to be taken on or about *, 2019 (the “Corporate Actions”):
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1.
Approve an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate
of Incorporation”) to (i) increase the number of authorized shares of Common Stock of the Company to 7,500,000,000
shares from 1,500,000,000 shares and (ii) decrease the par value of the common stock and preferred stock to $0.000001 from
$0.001 per share; and
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2.
Grant discretionary authority to the Company’s Board of Directors to amend the Certificate of Incorporation to effect
one or more consolidations of the issued and outstanding shares of common stock, par value $0.001 per share (the “Common
Stock”) pursuant to which the shares of Common Stock would be combined and reclassified into one share of Common Stock
at a ratio within the range from 1-for-2 up to 1- for-400 (the “Reverse Stock Split”), provided that, (X) that
the Corporation shall not effect Reverse Stock Splits that, in the aggregate, exceeds 1-for-400, and (Y) any Reverse Stock
Split is completed no later than the first anniversary of the Record Date.
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Pursuant
to Rule 14c-2 under the Exchange Act, the proposal will not be adopted until a date at least 20 days after the date on which this
Information Statement has been mailed to the Stockholders. This Information Statement will serve as written notice to Stockholders
pursuant to the Delaware General Corporation Law (“DGCL”).
The
Company has asked brokers and other custodians, nominees and fiduciaries to forward this Information Statement to the beneficial
owners of our securities held of record by such persons and will reimburse such persons for out-of-pocket expenses incurred in
forwarding such material.
ABOUT
THE INFORMATION STATEMENT
WHAT
IS THE PURPOSE OF THE INFORMATION STATEMENT?
This
Information Statement is being furnished to you pursuant to Section 14 of the Exchange Act to notify the Company’s Stockholders
as of the close of business on the Record Date of the Corporate Actions taken by a majority of the Company’s Stockholders.
Stockholders
holding a majority of the Company’s outstanding voting capital stock have voted in favor of the Corporate Actions as outlined
in this Information Statement, which action will be effective on a date that is at least 20 days after the mailing of this Information
Statement.
WHO
IS ENTITLED TO NOTICE?
Each
outstanding share of the Company’s voting securities on the close of business on the Record Date is entitled to notice of
each matter voted on by the Stockholders. Stockholders as of the close of business on the Record Date that held the authority
to cast votes in excess of fifty percent (50%) of the Company’s outstanding voting power have voted in favor of the Corporate
Actions. Under the DGCL, stockholder approval may be taken by obtaining the written consent and approval of more than 50% of the
holders of voting stock in lieu of a meeting of the Stockholders.
WHAT
CONSTITUTES THE VOTING SHARES OF THE COMPANY?
The
voting power entitled to vote on the Corporate Actions consists of the vote of the holders of a majority of the Company’s
outstanding voting securities as of the Record Date. As of the Record Date, the Company’s voting securities consisted of
1,499,000,000 shares of Common Stock, 44,570,101 shares of Series A Convertible Preferred Stock, par value $0.001 per share (the
“Series A Preferred Stock”) and 455,801 shares of Series C Convertible Preferred Stock, par value $0.001 per share
(the “Series C Preferred Stock”). Each share of Series A Preferred Stock is entitled to cast five one hundredths of
one (0.05) vote on matters submitted to the holders of Common Stock and each share of Series C Preferred Stock is entitled to
cast ten thousand (10,000) votes on matters submitted to the holders of Common Stock.
WHAT
CORPORATE MATTERS DID THE STOCKHOLDERS VOTE FOR, AND HOW DID THEY VOTE?
Stockholders
holding a majority of our outstanding voting securities have voted in favor of the following proposals:
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1.
Approve an amendment to the Company’s Certificate of Incorporation to (i) increase the number of authorized shares of
Common Stock of the Company to 7,500,000,000 shares from 1,500,000,000 shares and (ii) decrease the par value of the Common
Stock and preferred stock to $0.000001 from $0.001 per share; and
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2.
Grant discretionary authority to the Company’s Board of Directors to amend the Certificate of Incorporation to effect
one or more consolidations of the issued and outstanding shares of Common Stock, pursuant to which the shares of Common Stock
would be combined and reclassified into one share of Common Stock at a ratio within the range from 1-for-2 up to 1-for-400
(the “Reverse Stock Split”), provided that, (X) that the Corporation shall not effect Reverse Stock Splits that,
in the aggregate, exceeds 1-for-400, and (Y) any Reverse Stock Split is completed no later than the first anniversary of the
Record Date.
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WHAT
VOTE IS REQUIRED TO APPROVE THE CORPORATE ACTIONS?
No
further vote is required for approval of the Corporate Actions.
WHO
IS PAYING THE COST OF THIS INFORMATION STATEMENT?
We
will pay for preparing, printing and mailing of this information statement. Our costs are estimated at approximately $10,000.
OUTSTANDING
VOTING SECURITIES
As
of the Record Date, the Company’s authorized capital consisted of 1,625,000,000 shares of capital stock, 1,500,000,000 of
which are authorized as Common Stock and 125,000,000 are authorized as preferred stock of which (i) 120,000,000 are authorized
as Series A Preferred Stock and (ii) 1,000,000 are authorized as Series C Preferred Stock. As of the Record Date, 1,499,000,000
shares of Common Stock, 44,570,101 shares of Series A Preferred Stock and 455,801 shares of Series C Preferred Stock were issued
and outstanding.
Each
share of outstanding Common Stock is entitled to one vote on matters submitted to the Stockholders. Each share of Series A Preferred
Stock is entitled to cast five one hundredths of one (0.05) vote on matters submitted to the Stockholders. Each share of Series
C Preferred Stock is entitled to cast ten thousand (10,000) votes on matters submitted to the Stockholders.
The
following Stockholders voted in favor of the Corporate Actions:
Series
A Preferred Stock Votes
Name
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Number
of Votes
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Percentage
of
Total Votes (1)
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Anshu
Bhatnagar
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5,000
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0.22
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%
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Monaker
Group, Inc.
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44,470,101
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99.78
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%
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TOTAL
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44,475,101
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100
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%
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(1)
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Percentage
based upon 44,570,101 shares of Series A Preferred Stock issued and outstanding as of the Record Date.
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Series
C Preferred Stock Votes
Name
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Number
of Votes
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Percentage
of
Total Votes (1)
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Anshu
Bhatnagar
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3,958,010,000
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86.84
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%
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TOTAL
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3,958,010,000
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86.84
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%
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(1)
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Percentage
based upon 455,801 shares of Series C Preferred Stock issued and outstanding as of the Record Date.
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Pursuant
to Rule 14c-2 under the Exchange Act, the proposals will not be adopted until a date at least 20 days after the date on which
this Information Statement has been mailed to the Stockholders. The Company anticipates that the actions contemplated herein will
be effected on or about the close of business on *, 2019.
The
Company has asked brokers and other custodians, nominees and fiduciaries to forward this Information Statement to the beneficial
owners of the Company’s securities held of record by such persons and will reimburse such persons for out-of-pocket expenses
incurred in forwarding such material.
This
Information Statement will serve as written notice to Stockholders pursuant to the laws of the State of Delaware.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership of our Common Stock as of the Record Date:
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by
each person who is known by us to beneficially own more than 5% of our Common Stock;
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by
each of our officers and directors; and
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by
all of our officers and directors as a group.
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Unless
otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power
and that person’s address is c/o Verus International, Inc., 9841 Washingtonian Boulevard, #390, Gaithersburg, MD 20878.
NAME
OF OWNER
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NUMBER
OF
SHARES
OWNED
(1)
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PERCENTAGE
OF
COMMON
STOCK
(2)
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PERCENTAGE
OF VOTING SECURITIES
(3)
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Anshu
Bhatnagar
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39,680,100
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(4)
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2.65
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%
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65.32
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%
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Michael
O’ Gorman
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0
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0
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%
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0
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%
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Thomas
Butler Fore
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0
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0
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%
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0
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%
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Officers
and Directors as a Group (3 persons)
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39,680,100
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2.65
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%
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65.32
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%
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*
less than 1%
(1)
Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with
respect to securities. Shares of Common Stock subject to options or warrants currently exercisable or convertible, or exercisable
or convertible within 60 days of the Record Date are deemed outstanding for computing the percentage of the person holding such
option or warrant but are not deemed outstanding for computing the percentage of any other person.
(2)
Percentage based upon 1,499,000,000 shares of Common Stock issued and outstanding as of the Record Date.
(3)
Each share of Common Stock is entitled to cast 1 vote per share on all matters submitted to holders of Common Stock. Each share
of Series A Preferred Stock is entitled to cast 0.05 vote per share on matters submitted to the holders of Common Stock. Each
share of Series C Preferred Stock is entitled to cast 10,000 votes per share on matters submitted to the holders of Common Stock.
(4)
Represents (i) 100,000 shares of Common Stock underlying Series A Preferred Stock and (ii) 39,580,100 shares of Common Stock underlying
Series C Preferred Stock.
PROPOSAL
1:
APPROVAL
OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED SHARES OF COMMON STOCK TO 7,500,000,000
SHARES FROM 1,500,000,000 SHARES
On
January 11, 2019, the Board of Directors and the Stockholders holding a majority of the Company’s outstanding voting capital
stock approved, by written consent in lieu of a meeting, an amendment to the Company’s Certificate of Incorporation to (i)
increase the number of authorized shares of Common Stock of the Company to 7,500,000,000 shares from 1,500,000,000 shares (the
“Increase in Authorized”) and (ii) decrease the par value of the Common Stock and preferred stock to $0.000001 from
$0.001 per share (the “Decrease in Par Value”). The Increase in Authorized and Decrease in Par Value will become effective
upon the filing of an amendment to our Certificate of Incorporation with the Secretary of State of Delaware (the “Amendment”);
provided, however,
that the Corporate Action will become effective no sooner than 20 days after we mail this notice and
the accompanying Information Statement to our Stockholders.
The
form of Amendment to be filed with the Secretary of State of the State of Delaware is set forth as
Appendix A
to
this Information Statement (subject to any changes required by applicable law).
The
terms of the additional shares of Common Stock will be identical to those of the currently outstanding shares of Common Stock.
However, because holders of Common Stock have no preemptive rights to purchase or subscribe for any unissued stock of the Company,
the issuance of additional shares of Common Stock will reduce the current Stockholders’ percentage ownership interest in
the total outstanding shares of Common Stock. This Common Stock increase and the creation of additional shares of authorized Common
Stock will not alter the current number of issued shares. The relative rights and limitations of the shares of Common Stock will
remain unchanged under this Amendment.
Reasons
for the Increase in Authorized
The
Board believes that the availability of additional authorized shares of Common Stock is required for reasons including, but not
limited to, the following:
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in
order to avoid defaulting upon its obligations, the Company must satisfy certain covenants in its debt instruments which,
among other things, require that the Company maintain a certain reserve of authorized, but unissued shares of Common Stock;
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certain
of the Company’s debt instruments and preferred stock are convertible into shares of the Company’s Common Stock.
Therefore, the Company must maintain a sufficient amount of authorized, but unissued shares of Common Stock adequate to issue
shares of Common Stock upon the conversion of its outstanding convertible debt instruments and preferred stock; and
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the
additional authorized shares of Common Stock will provide the Company with additional flexibility to issue Common Stock for
a variety of general corporate purposes as the Board may determine to be desirable including, without limitation, future financings,
investment opportunities, acquisitions, or other distributions and stock splits (including splits effected through the declaration
of stock dividends).
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Reasons
for the Decrease in Par Value
Our
authorized capital currently has a par value of $0.001 per share. In recent years, we have issued convertible notes in order to
fund our operating costs and current business plan. Although these debt financings provided us with necessary working capital,
it obligated us to issue shares of our Common Stock at a discount to the quoted over-the-counter price of our Common Stock. Due
to low quoted price of our Common Stock, at times the conversion price under the convertible notes is less than the current par
value of our Common Stock. Since stock cannot be issued by us at less than par value under Delaware law, our inability to honor
those conversion requests could put us in breach of our obligations under our outstanding convertible notes. As a result, our
Board of Directors and Stockholders owning a majority of our voting capital approved the Decrease in Par Value in order to allow
us to honor the conversion requests by the holders of our convertible notes pursuant to the terms of such notes. We believe the
Decrease in Par Value will provide a sufficient cushion to allow us to honor the conversion terms of our outstanding convertible
notes for the foreseeable future. In addition, we believe that the Decrease in Par Value may also aid in reducing the our Delaware
annual franchise taxes that we pay due to the calculation being partially based in part upon the par value of our authorized capital
stock.
Effects
of the Amendment
Following
the filing of the Amendment with the Delaware Secretary of State, we will have the authority to issue 6,000,000,000 additional
shares of Common Stock. These shares may be issued without stockholder approval at any time, in the sole discretion of our Board
of Directors. The authorized and unissued shares may be issued for cash or for any other purpose that is deemed in the best interests
of the Company. In addition, the Amendment could have a number of effects on the Company’s Stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but unissued shares. The increase could have an anti-takeover
effect, in that additional shares could be issued (within the limits imposed by applicable law) in one or more transactions that
could make a change in control or takeover of the Company more difficult. For example, additional shares could be issued by the
Company so as to dilute the stock ownership or voting rights of persons seeking to obtain control of the Company, even if the
persons seeking to obtain control of the Company offer an above-market premium that is favored by a majority of the independent
Stockholders. Similarly, the issuance of additional shares to certain persons allied with the Company’s management could
have the effect of making it more difficult to remove the Company’s current management by diluting the stock ownership or
voting rights of persons seeking to cause such removal. The Board of Directors is not aware of any attempt, or contemplated attempt,
to acquire control of the Company, and this proposal is not being presented with the intent that it be utilized as a type of anti-takeover
device. The Amendment has been prompted by business and financial considerations. The Amendment will not change the number of
shares of Common Stock issued, nor will it have any immediate dilutive effect or change the rights of current holders of the Company’s
Common Stock.
Following
the filing of the Amendment with the Delaware Secretary of State, our par value will decrease to $0.000001 per share from $0.001
per share. The Decrease in Par Value will have not have any effect on the shares of our Common Stock that are currently authorized
and issued; however, it will allow us to issue shares of our capital stock at lower per share prices then we were able to without
decreasing the par value of our capital stock, meaning we will be allowed to issue more shares of our capital stock.
The
issuance of any additional shares of Common Stock as a result of the Increase in Authorized or Decrease in Par Value may occur
at times or under circumstances as to have a dilutive effect on earnings per share, book value per share or the percentage voting
or ownership interest of the present holders of the Company’s Common Stock.
Procedure
for Implementing the Amendment
The
increase in authorized Common Stock will become effective upon the filing or such later time as specified in the filing of the
Amendment with the Delaware Secretary of State. The form of the Amendment is attached hereto as
Appendix A
. The
exact timing of the filing of the Amendment will be determined by our Board of Directors based on its evaluation as to when such
action will be the most advantageous to the Company and our stockholders.
PROPOSAL
2:
GRANT
OF AUTHORITY FOR A REVERSE SPLIT OF
THE
COMPANY’S COMMON STOCK
On
January 11, 2019, the Board of Directors of the Company adopted resolutions to effect the Reverse Stock Split of our issued and
outstanding Common Stock, as described below. The Stockholders approved the Reverse Stock Split by written consent in lieu of
a meeting on January 11, 2019.
The
form of Certificate of Amendment to be filed with the Delaware Secretary of State is set forth as
Appendix B
to
this Information Statement (subject to any changes required by applicable law and provided that, since Proposal Nos. 1 and 2 will
result in changes to the Certificates of Incorporation, the Company may file one or more amendments with the Delaware Secretary
of State to effect multiple approved proposals).
Approval
of the proposal would permit (but not require) our Board of Directors to effect one or more reverse stock splits of our issued
and outstanding Common Stock by a ratio of not less than one-for-two and not more than one-for-four hundred, with the exact ratio
to be set at a number within this range as determined by our Board of Directors in its sole discretion, provided that the Board
of Directors determines to effect the Reverse Stock Split and such amendment is filed with the appropriate authorities in the
State of Delaware no later than one year after the Record Date. The Company shall not effect Reverse Stock Splits that, in the
aggregate, exceeds one-for-four hundred. We believe that enabling our Board of Directors to set the ratio within the stated range
will provide us with the flexibility to implement the Reverse Stock Split in a manner designed to maximize the anticipated benefits
for our stockholders. In determining a ratio, if any, our Board of Directors may consider, among other things, factors such as:
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the
initial or continuing listing requirements of various stock exchanges;
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the
historical trading price and trading volume of our Common Stock;
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the
number of shares of our Common Stock issued and outstanding;
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the
then-prevailing trading price and trading volume of our Common Stock and the anticipated impact of the Reverse Stock Split
on the trading market for our Common Stock; and
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prevailing
general market and economic conditions.
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Our
Board of Directors reserves the right to elect to abandon the Reverse Stock Split, including any or all proposed reverse stock
split ratios, 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.
Depending
on the ratio for the Reverse Stock Split determined by our Board of Directors, no less than two and no more than four hundred
shares of existing Common Stock, as determined by our Board of Directors, will be combined into one share of Common Stock. The
Company shall not effect Reverse Stock Splits that, in the aggregate, exceed one-for-four hundred. The Company shall pay stockholders
the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined. The amendment
to our Certificate of Incorporation to effect a Reverse Stock Split, if any, will include only the reverse split ratio determined
by our Board of Directors to be in the best interests of our stockholders and all of the other proposed amendments at different
ratios will be abandoned.
Reasons
for the Reverse Stock Split; Potential Consequences of the Reverse Stock Split
The
Company’s primary reasons for approving and recommending the Reverse Stock Split are to make the Common Stock more attractive
to certain institutional investors which would provide for a stronger investor base and decrease our Delaware annual franchise
tax which may be calculated based upon the number of issued shares.
Reducing
the number of issued shares of Common Stock should, absent other factors, may increase the per share market price of the Common
Stock. The Company believes the Reverse Stock Split will make its Common Stock more attractive to a broader range of investors,
as it believes that the current market price of the Common Stock may prevent certain institutional investors, professional investors
and other members of the investing public from purchasing stock. Many brokerage houses and institutional investors have internal
policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers
from recommending low-priced stocks to their customers. Furthermore, some of those policies and practices may function to make
the processing of trades in low-priced stocks economically unattractive to brokers. Moreover, because brokers’ commissions
on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the
current average price per share of common stock can result in individual stockholders paying transaction costs representing a
higher percentage of their total share value than would be the case if the share price were higher. The Company believes that
the Reverse Stock Split will make the Common Stock a more attractive and cost effective investment for many investors, which in
turn would enhance the liquidity of the holders of Common Stock.
Reducing
the number of outstanding shares of our Common Stock through the Reverse Stock Split is intended, absent other factors, to increase
the per share 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 Splits, if completed, will result in the intended benefits described above, that the market price of our
Common Stock will increase following the Reverse Stock Splits 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 the 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 may be lower than the total
market capitalization before the Reverse Stock Split.
In
addition, as a Delaware corporation, we are required to pay an annual Delaware franchise tax which is calculated based upon several
variables, including a company’s number of total outstanding shares as compared to the company’s number of authorized
shares of capital stock. We believe that a decrease in the number of outstanding shares as a result of the Reverse Stock Split
may decrease our annual Delaware franchise tax liability; however, no assurance can be given that the decrease in outstanding
shares will decrease our annual Delaware franchise tax liability.
Procedure
for Implementing the Reverse Stock Split
The
Reverse Stock Split would become effective upon the filing or such later time as specified in the filing (the “Effective
Time”) of a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State. The form
of the Certificate of Amendment to our Certificate of Incorporation is attached hereto as
Appendix B
. The exact
timing of the filing of the Certificate of Amendment that will effect the Reverse Stock Split will be determined by our Board
of Directors based on its evaluation as to when such action will be the most advantageous to the Company and our stockholders.
In addition, our Board of Directors reserves the right, without further action by the stockholders, to elect not to proceed with
the Reverse Stock Split if, at any time prior to filing the Certificate of Amendment to the Company’s Certificate of Incorporation,
our Board of Directors, in its sole discretion, determines that it is no longer in our best interest and the best interests of
our stockholders to proceed with the Reverse Stock Split. If a Certificate of Amendment effecting the Reverse Stock Split has
not been filed with the Delaware Secretary of State within one year from the Record Date, our Board of Directors will abandon
the Reverse Stock Split.
Effect
of the Reverse Stock Split on Holders of Outstanding Common Stock
Depending
on the ratio for the Reverse Stock Split determined by our Board of Directors, a minimum of two and a maximum of four hundred
shares in aggregate of existing Common Stock will be combined into one new share of Common Stock. Based on 1,499,000,000 shares
of Common Stock issued as of the Record Date, immediately following the Reverse Stock Split the Company would have 749,500,000
shares of Common Stock issued if the ratio for the Reverse Stock Split is 1-for-2, 7,495,000 shares of Common Stock issued if
the ratio for the reverse split is 1-for-200, and 3,747,500 shares of Common Stock issued if the ratio for the reverse split is
1-for-50, which is the aggregate ratio allowed under this proposal. Any other ratios selected within such range would result in
a number of shares of Common Stock issued and outstanding following the transaction between 749,500,000 and 3,747,500 shares.
The
actual number of shares issued after giving effect to the Reverse Stock Split, if implemented, will depend on the reverse stock
split ratio and the number of reverse stock splits, if any, that are ultimately determined by our Board of Directors.
The
Reverse Stock Split will affect all holders of our Common Stock uniformly and will not affect any stockholder’s percentage
ownership interest in the Company, except that as described below in “— Fractional Shares,” record holders of
Common Stock otherwise entitled to a fractional share as a result of the Reverse Stock Split will receive the fair value of fractions
of a share as of the time when those entitled to receive such fractions are determined. In addition, the Reverse Stock Split will
not affect any stockholder’s proportionate voting power (subject to the treatment of fractional shares).
The
Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of Common Stock. Odd
lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally
somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.
After
the Effective Time, our Common Stock will have a new Committee on Uniform Securities Identification Procedures (CUSIP) number,
which is a number used to identify our equity securities, and stock certificates with the older CUSIP number will need to be exchanged
for stock certificates with the new CUSIP number by following the procedures described below. After the Reverse Stock Split, we
will continue to be subject to the periodic reporting and other requirements of the Exchange Act. Unless we simultaneously list
our Common Stock on an exchange, bid and ask prices for our Common Stock will continue to be quoted on the OTC Pink under the
symbol “VRUS”. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private
transaction” as described by Rule 13e-3 under the Exchange Act.
After
the effective time of the Reverse Stock Split, the post-split market price of our Common Stock may be less than the pre-split
price multiplied by the Reverse Stock Split ratio. In addition, a reduction in number of shares issued may impair the liquidity
for our Common Stock, which may reduce the value of our Common Stock.
Authorized
Shares of Common Stock
The
Reverse Stock Split will not change the number of authorized shares of the Company’s Common Stock under the Company’s
Certificate of Incorporation; however, a separate proposal approved by the Stockholders approved an amendment to our Certificate
of Incorporation to increase our authorized shares of Common Stock to 7,500,000,000 from 1,500,000,000 shares. (See Proposal No.
1) Because the number of issued and outstanding shares of Common Stock will decrease, the number of shares of Common Stock remaining
available for issuance will increase. Currently, under our Certificate of Incorporation, our authorized capital stock consists
of 1,500,000,000 shares of Common Stock. The Company intends to use its authorized but unissued shares of Common Stock to comply
with conversions pursuant to its outstanding convertible notes and preferred stock. In addition, the Company may use its authorized
but unissued shares of Common Stock for future financings, investment opportunities, acquisitions, or other distributions and
stock splits (including splits effected through the declaration of stock dividends).
By
increasing the number of authorized but unissued shares of Common Stock, the Reverse Stock Split could, under certain circumstances,
have an anti-takeover effect, although this is not the intent of the Board of Directors. 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 additional authorized but
unissued shares to be issued to holders who might side with the Board of Directors in opposing a takeover bid that the Board of
Directors determines is not in the best interests of the Company or its stockholders. The Reverse Stock Split therefore may have
the effect of discouraging unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover
attempts the reverse split may limit the opportunity for the Company’s stockholders to dispose of their shares at the higher
price generally available in takeover attempts or that may be available under a merger proposal. The Reverse Stock Split may have
the effect of permitting the Company’s current management, including the current Board of Directors, to retain its position,
and place it in a better position to resist changes that the Company’s stockholders may wish to make if they are dissatisfied
with the conduct of the Company’s business. However, the Board of Directors is not aware of any attempt to take control
of the Company and the Board of Directors has not approved the Reverse Stock Split with the intent that it be utilized as a type
of anti-takeover device.
Beneficial
Holders of Common Stock (i.e. stockholders who hold in street name)
Upon
the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders through a bank, broker, custodian
or other nominee in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians
or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our Common Stock in
street name. However, these banks, brokers, custodians or other nominees may have different procedures than registered stockholders
for processing the Reverse Stock Split. Stockholders who hold shares of our Common Stock with a bank, broker, custodian or other
nominee and who have any questions in this regard are encouraged to contact their banks, brokers, custodians or other nominees.
Registered
“Book-Entry” Holders of Common Stock (i.e. stockholders that are registered on the transfer agent’s books and
records but do not hold stock certificates)
Certain
of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with the transfer
agent. These stockholders do not have stock certificates evidencing their ownership of the Common Stock. They are, however, provided
with a statement reflecting the number of shares registered in their accounts.
Stockholders
who hold shares electronically in book-entry form with the transfer agent will not need to take action (the exchange will be automatic)
to receive whole shares of post-Reverse Stock Split Common Stock, subject to adjustment for treatment of fractional shares.
Holders
of Certificated Shares of Common Stock
Stockholders
holding shares of our Common Stock in certificated form will be sent a transmittal letter by our transfer agent after the Effective
Time. The letter of transmittal will contain instructions on how a stockholder should surrender his, her or its certificate(s)
representing shares of our Common Stock (the “Old Certificates”) to the transfer agent in exchange for certificates
representing the appropriate number of whole shares of post-Reverse Stock Split Common Stock (the “New Certificates”).
No New Certificates will be issued to a stockholder until such stockholder has surrendered all Old Certificates, together with
a properly completed and executed letter of transmittal, to the transfer agent. No stockholder will be required to pay a transfer
or other fee to exchange his, her or its Old Certificates. Stockholders will then receive a New Certificate(s) representing the
number of whole shares of Common Stock that they are entitled as a result of the Reverse Stock Split, subject to the treatment
of fractional shares described below. Until surrendered, we will deem outstanding Old Certificates held by stockholders to be
cancelled and only to represent the number of whole shares of post-Reverse Stock Split Common Stock to which these stockholders
are entitled, subject to the treatment of fractional shares. Any Old Certificates submitted for exchange, whether because of a
sale, transfer or other disposition of stock, will automatically be exchanged for New Certificates. If an Old Certificate has
a restrictive legend on the back of the Old Certificate(s), the New Certificate will be issued with the same restrictive legends
that are on the back of the Old Certificate(s).
The
Company expects that our transfer agent will act as exchange agent for purposes of implementing the exchange of stock certificates.
No service charges will be payable by holders of shares of Common Stock in connection with the exchange of certificates. All of
such expenses will be borne by the Company.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional
Shares
The
Company does not currently intend to issue fractional shares in connection with the Reverse Stock Split. Therefore, the Company
does not expect to issue certificates representing fractional shares. The Board of Directors will arrange for the disposition
of fractional interests by stockholders entitled thereto by paying, in cash, the fair value of fractions of a share as of the
time when those entitled to receive such fractions are determined.
If
the Board of Directors determines to pay, in cash, the fair value of fractions of a share as of the time when those entitled to
receive such fractions are determined, stockholders who would otherwise hold fractional shares because the number of shares of
Common Stock they hold before the Reverse Stock Split is not evenly divisible by the ratio ultimately selected by the Board of
Directors will be entitled to receive cash (without interest or deduction) in lieu of such fractional shares from either: (i)
the Company, upon receipt by the transfer agent of a properly completed and duly executed transmittal letter and, where shares
are held in certificated form, upon due surrender of any certificate previously representing a fractional share, in an amount
equal to such holder’s fractional share based upon the volume weighted average price of the Common Stock as reported on
The OTC Pink Market, or other principal market of the Common Stock, as applicable, as of the date the Reverse Stock Split is effected;
or (ii) the transfer agent, upon receipt by the transfer agent of a properly completed and duly executed transmittal letter and,
where shares are held in certificated form, the surrender of all old certificate(s), in an amount equal to the proceeds attributable
to the sale of such fractional shares following the aggregation and sale by the transfer agent of all fractional shares otherwise
issuable. If the Board of Directors determines to dispose of fractional interests pursuant to clause (ii) above, the Company expects
that the transfer agent would conduct the sale in an orderly fashion at a reasonable pace and that it may take several days to
sell all of the aggregated fractional shares of Common Stock. In this event, such holders would be entitled to an amount equal
to their pro rata share of the proceeds of such sale. The Company will be responsible for any brokerage fees or commissions related
to the transfer agent’s open market sales of shares that would otherwise be fractional shares.
The
ownership of a fractional share interest following the Reverse Stock Split will not give the holder any voting, dividend or other
rights, except the right to receive the cash payment, as described above.
Stockholders
should be aware that, under the escheat laws of various jurisdictions, sums due for fractional interests that are not timely claimed
after the effective time of the Reverse Stock Split may be required to be paid to the designated agent for each such jurisdiction,
unless correspondence has been received by the Company or the transfer agent concerning ownership of such funds within the time
permitted in such jurisdiction. Thereafter, if applicable, stockholders otherwise entitled to receive such funds, but who do not
receive them due to, for example, their failure to timely comply with the transfer agent’s instructions, will have to seek
to obtain such funds directly from the state to which they were paid.
Effect
of the Reverse Stock Split on Employee Plans, Options, Restricted Stock Awards and Units, Warrants, and Convertible or Exchangeable
Securities
Based
upon the Reverse Stock Split ratio determined by the Board of Directors, proportionate adjustments are generally required to be
made to the per share exercise price and the number of shares issuable upon the exercise or conversion of all outstanding options,
warrants, convertible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of Common
Stock. This would result in approximately the same aggregate price being required to be paid under such options, warrants, convertible
or exchangeable securities upon exercise, and approximately the same value of shares of Common Stock being delivered upon such
exercise, exchange or conversion, immediately following the Reverse Stock Split as was the case immediately preceding the Reverse
Stock Split. The number of shares deliverable upon settlement or vesting of restricted stock awards will be similarly adjusted,
subject to our treatment of fractional shares. The number of shares reserved for issuance pursuant to these securities will be
proportionately based upon the Reverse Stock Split ratio determined by the Board of Directors, subject to our treatment of fractional
shares.
Accounting
Matters
The
proposed amendment to the Company’s Certificate of Incorporation will not affect the par value of our Common Stock per share,
which will remain $0.001 par value per share; however, a separate proposal approved by the Stockholders approved an amendment
to our Certificate of Incorporation to decrease our par value to $0.000001 from $0.001 per share. (See Proposal No. 1) As a result,
as of the Effective Time, the stated capital attributable to Common Stock and the additional paid-in capital account on our balance
sheet, on aggregate, will not change due to the Reverse Stock Split. Reported per share net income or loss will be higher because
there will be fewer shares of Common Stock outstanding.
Certain
Federal Income Tax Consequences of the Reverse Stock Split
The
following summary describes certain material U.S. federal income tax consequences of the Reverse Stock Split to holders of our
Common Stock.
Unless
otherwise specifically indicated herein, this summary addresses the tax consequences only to a beneficial owner of our Common
Stock that is a citizen or individual resident of the United States, a corporation organized in or under the laws of the United
States or any state thereof or the District of Columbia or otherwise subject to U.S. federal income taxation on a net income basis
in respect of our Common Stock (a “U.S. holder”). A trust may also be a U.S. holder if (1) a U.S. court is able to
exercise primary supervision over administration of such trust and one or more U.S. persons have the authority to control all
substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person. An estate whose income
is subject to U.S. federal income taxation regardless of its source may also be a U.S. holder. This summary does not address all
of the tax consequences that may be relevant to any particular investor, including tax considerations that arise from rules of
general application to all taxpayers or to certain classes of taxpayers or that are generally assumed to be known by investors.
This summary also does not address the tax consequences to (i) persons that may be subject to special treatment under U.S. federal
income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment
trusts, tax-exempt organizations, U.S. expatriates, persons subject to the alternative minimum tax, traders in securities that
elect to mark to market and dealers in securities or currencies, (ii) persons that hold our Common Stock as part of a position
in a “straddle” or as part of a “hedging,” “conversion” or other integrated investment transaction
for federal income tax purposes, or (iii) persons that do not hold our Common Stock as “capital assets” (generally,
property held for investment).
If
a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our
Common Stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the
partner and the activities of the partnership. Partnerships that hold our Common Stock, and partners in such partnerships, should
consult their own tax advisors regarding the U.S. federal income tax consequences of the Reverse Stock Split.
This
summary is based on the provisions of the Internal Revenue Code of 1986, as amended, U.S. Treasury regulations, administrative
rulings and judicial authority, all as in effect as of the date of this proxy statement. Subsequent developments in U.S. federal
income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material
effect on the U.S. federal income tax consequences of the Reverse Stock Split.
PLEASE
CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE REVERSE
STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.
U.S.
Holders
The
Reverse Stock Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, a stockholder generally
will not recognize gain or loss on the Reverse Stock Split, except to the extent of cash, if any, received in lieu of a fractional
share interest in the post-Reverse Stock Split shares. The aggregate tax basis of the post-split shares received will be equal
to the aggregate tax basis of the pre-split shares exchanged therefore (excluding any portion of the holder’s basis allocated
to fractional shares), and the holding period of the post-split shares received will include the holding period of the pre-split
shares exchanged. A holder of the pre-split shares who receives cash will generally recognize gain or loss equal to the difference
between the portion of the tax basis of the pre-split shares allocated to the fractional share interest and the cash received.
Such gain or loss will be a capital gain or loss and will be short term if the pre-split shares were held for one year or less
and long term if held more than one year. No gain or loss will be recognized by us as a result of the Reverse Stock Split.
No
Appraisal Rights
Under
Delaware law and our charter documents, holders of our Common Stock will not be entitled to dissenter’s rights or appraisal
rights with respect to the Reverse Stock Split.
ANNUAL
REPORT
Our
Annual Report on Form 10-K for the fiscal year ended October 31, 2017 (the “Annual Report”), as filed with the SEC,
excluding exhibits, is being mailed to Stockholders with this Information Statement. We will furnish any exhibit to our Annual
Report free of charge to any stockholder upon written request to the Company at 9841 Washingtonian Boulevard, #390, Gaithersburg,
MD 20878, Attn: CEO. The Annual Report is incorporated in this Information Statement. You are encouraged to review the Annual
Report together with subsequent information filed by the Company with the SEC and other publicly available information.
COST
OF INFORMATION STATEMENT
The
Company is making the mailing and will bear the costs associated therewith. There will be no solicitations made. The Company will
reimburse banks, brokerage firms, other custodians, nominees and fiduciaries for reasonable expenses incurred in sending the Information
Statement to beneficial owners of the Company’s voting securities.
STOCKHOLDER
PROPOSALS
The
Company’s Board of Directors has not yet determined the date on which the next annual meeting of stockholders will be held.
Any proposal by a stockholder intended to be presented at the Company’s next annual meeting of stockholders must be received
at the Company’s offices a reasonable amount of time prior to the date on which the information or proxy statement for that
meeting is mailed to stockholders in order to be included in the Company’s information or proxy statement relating to that
meeting.
DELIVERY
OF INFORMATION TO A SHARED ADDRESS
If
you and one or more Stockholders share the same address, it is possible that only one Information Statement was delivered to your
address. Any registered stockholder who wishes to receive a separate copy of the Information Statement at the same address now
or in the future may mail a request to receive separate copies to the Company at 9841 Washingtonian Boulevard, #390, Gaithersburg,
MD 20878, Attn: CEO, or call the Company at (301) 329-2700 and we will promptly deliver the Information Statement to you upon
your request. Stockholders who received multiple copies of this Information Statement at a shared address and who wish to receive
a single copy may direct their request to the same address.
FORWARD-LOOKING
STATEMENTS AND INFORMATION
This
Information Statement includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. You can identify our forward-looking statements by the words “expects,” “projects,”
“believes,” “anticipates,” “intends,” “plans,” “predicts,” “estimates”
and similar expressions. The forward-looking statements are based on management’s current expectations, estimates and projections
about us. The Company cautions you that these statements are not guarantees of future performance and involve risks, uncertainties
and assumptions that we cannot predict. In addition, the Company has based many of these forward-looking statements on assumptions
about future events that may prove to be inaccurate. Accordingly, actual outcomes and results may differ materially from what
the Company has expressed or forecast in the forward-looking statements. You should rely only on the information the Company has
provided in this Information Statement. The Company has not authorized any person to provide information other than that provided
herein. The Company has not authorized anyone to provide you with different information. You should not assume that the information
in this Information Statement is accurate as of any date other than the date on the front of the document.
WHERE
YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY
The
Company files annual, quarterly and current reports, proxy statements and other information with the SEC. You can read and copy
any materials that the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You can obtain information about the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains a website that contains information we file electronically with the SEC, which you can access over the
Internet at http://www.sec.gov. Copies of these materials may also be obtained by mail from the Public Reference Section of the
SEC, 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates.
By
Order of the Board of Directors
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|
|
|
/s/
Anshu Bhatnagar
|
|
Anshu
Bhatnagar
|
|
Chief
Executive Officer and Chairman of the Board
|
|
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Gaithersburg,
MD
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*,
2019
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APPENDIX
A
Certificate
of Amendment
of
Amended
and Restated Certificate of Incorporation
of
Verus
International, Inc.
Under
Section 242 of the Delaware General Corporation Law
Verus
International, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”)
hereby certifies as follows:
FIRST:
The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by replacing Article FOURTH in its
entirety with the following:
ARTICLE
IV
“4.01
Authorized Capital Stock.
The total number of shares of stock the Company is authorized to issue shall be seven billion
six hundred twenty five million (7,625,000,000) shares. This stock shall be divided into two classes to be designated as “Common
Stock” and “Preferred Stock”.
4.02
Common Stock
. The total number of authorized shares of Common Stock shall be seven billion five hundred million (7,500,000,000)
shares with par value of $0.000001 per share.
4.03
Preferred Stock
. The total number of authorized shares of Preferred Stock shall be one hundred twenty five million (125,000,000)
shares with par value of $0.000001 per share. The board of directors of the Company is hereby expressly authorized to provide,
out of the unissued shares of Preferred Stock, for one or more series of preferred stock and, with respect to each such series,
to fix the number of shares constituting such series and the designation of such series, the voting powers, if any, of the shares
of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications,
limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional
and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any,
may differ from those of any and all other series at any time outstanding.”
SECOND:
The foregoing amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation law
of the State of Delaware by the vote of a majority of each class of outstanding stock of the Corporation entitled to vote thereon.
IN
WITNESS WHEREOF, I have signed this Certificate this __ day of ________, 20___
APPENDIX B
Certificate
of Amendment
of
Amended
and Restated Certificate of Incorporation
of
Verus
International, Inc.
Under
Section 242 of the Delaware General Corporation Law
Verus
International, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”)
hereby certifies as follows:
FIRST:
The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by adding the following to the end
of Article FOURTH:
ARTICLE
IV
“Effective
as of [ ] a.m., local time on [ ], 20__ (the “Amendment Effective Time”), every ________ ( )
shares of the Company’s Common Stock (the “Old Common Stock”) then issued and outstanding shall, automatically
and without any action on the part of the respective holders thereof, be combined, converted and changed into one (1) share of
Common Stock of the Company (the “Reverse Stock Split”). No fractional shares shall be issued upon the Reverse Stock
Split. If the Reverse Stock Split would result in the issuance of a fraction of a share of Common Stock, the Corporation shall,
in lieu of issuing any such fractional share, pay an amount in cash, without interest, equal to the fair value of such fractional
interest.”
SECOND:
The foregoing amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation law
of the State of Delaware by the vote of a majority of each class of outstanding stock of the Corporation entitled to vote thereon.
IN
WITNESS WHEREOF, I have signed this Certificate this __ day of ________, 20__
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