SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
INFORMATION
STATEMENT
PURSUANT
TO SECTION 14(C)
OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
SCHEDULE
14C
(RULE
14C-101)
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
Check
the appropriate box:
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Preliminary
Information Statement
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☒
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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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THE
OLB GROUP, INC.
(Name
of Registrant As Specified In Its Charter)
Payment
of Filing Fee (Check the Appropriate Box):
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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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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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THE
OLB GROUP, INC.
NOTICE
OF STOCKHOLDER ACTION BY WRITTEN CONSENT
July
9, 2018
Dear
Stockholders:
We
are furnishing the attached Information Statement to the holders of common stock, par value $0.0001 per share (the “Common
Stock”), of The OLB Group, Inc., a Delaware corporation (the “Company,” “we,” “us” or
“our”). The purpose of the Information Statement is to notify stockholders that, in lieu of a special meeting
of the stockholders of the Company, and pursuant to the Delaware General Corporation Law (the “DGCL”), the Board of
Directors of the Company (the “Board”) and Ronny Yakov, the Chairman, Chief Executive Officer, President, Interim
Chief Financial Officer, Secretary and Director of the Company and the holder of approximately 75.5% of our outstanding Common
Stock as of the record date (the “Voting Stockholder), have taken and approved the following actions by written consent
to: (1) approve an amendment to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”),
to effect a reverse stock split of our issued and outstanding Common Stock at a ratio of between one-for-five and one-for-thirty
with such ratio to be determined at the sole discretion of the Board (the “Reverse Split”), and with such Reverse
Split to be effected at such time and date, if at all, as determined by the Board in its sole discretion and (2) approve an amendment
to our Certificate of Incorporation to indemnify the directors, officers, employees or other agents of the Company to the fullest
extent permitted by the DGCL.
This
notice and Information Statement shall constitute notice to you of the Voting Stockholder taking action by written consent under
Section 228 of the DGCL.
The
accompanying Information Statement is being provided to you for your information to comply with the requirements of Regulation
14C of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This Information Statement constitutes notice
to you of the aforementioned corporate actions to be taken without a meeting, by less than unanimous consent of our stockholders,
pursuant to Section 228 of the DGCL.
You are urged to read this Information Statement carefully in its entirety. However, no
action is required on your part in connection with this document
, including with respect to the approval of the Reverse Split.
No meeting of our stockholders will be held or proxies requested because we have received written consent to these matters from
the Voting Stockholder who holds a majority of the aggregate issued and outstanding shares of our voting stock.
Under
Rule 14c-2(b) of the Exchange Act, none of the actions described in the Information Statement may be taken earlier than 20 calendar
days after we have sent or given the Information Statement to our stockholders. We intend to distribute this Notice and Information
Statement to our stockholders on or about July 13, 2018. The record date established for purposes of determining the number of
issued and outstanding shares of voting stock, and thus voting power, was June 21, 2018.
THIS
IS FOR YOUR INFORMATION ONLY. YOU DO NOT NEED TO DO ANYTHING IN RESPONSE TO THIS INFORMATION STATEMENT. THIS IS NOT
A NOTICE OF SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
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Sincerely
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/s/
Ronny Yakov
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Name:
Ronny Yakov
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Title:
Chief Executive Officer
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THE
OLB GROUP, INC.
200
Park Avenue, Suite 1700
New
York, NY 10166
(212)
278-0900
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 The OLB Group, Inc. (the “Company,” “we,”
“us,” or “our”) in connection with the actions to be taken by us as a result of a written consent in lieu
of a special meeting of stockholders pursuant to the Delaware General Corporation Law (the “DGCL”), dated June 21,
2018.
This
Information Statement and Notice of Stockholder Action by Written Consent is being furnished by us to our stockholders of record
as of June 21, 2018 (the “Record Date”), to inform our stockholders that the Board of Directors of the Company (the
“Board”) and Ronny Yakov, the Chairman, Chief Executive Officer, President, Interim Chief Financial Officer, Secretary
and Director of the Company and the holder of approximately 75.5% of our outstanding Common Stock as of the Record Date (the “Voting
Stockholder), have taken and approved the following actions (the “Corporate Actions”) by written consent to: (1) approve
an amendment (the “Split Amendment”) to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”)
to effect a reverse stock split of our issued and outstanding Common Stock at a ratio of between one-for-five and one-for-thirty
with such ratio to be determined at the sole discretion of the Board (the “Reverse Split”) and with such Reverse Split
to be effected at such time and date, if at all, as determined by the Board in its sole discretion and (2) approve an amendment
(the “Indemnification Amendment” and collectively with the Split Amendment, the “Amendments”) to our Certificate
of Incorporation to indemnify the directors, officers, employees or other agents of the Company to the fullest extent permitted
by the DGCL
This
Information Statement is being sent to you to notify you of the Corporate Action being taken by written consent in lieu of a special
meeting of our stockholders. On June 21, 2018, our Board adopted pursuant to a unanimous written consent the Amendments and recommended
in particular that the Reverse Split be consummated based upon the subsequent determination of a specific reverse stock split
ratio at the discretion of the Board.
On
the Record Date, the Voting Stockholder, representing approximately 75.5% of the voting power of our Company as of the Record
Date, adopted and approved the Amendments and the Reverse Split.
The
ability to proceed without a special meeting of the stockholders to approve, adopt and/or ratify the Corporate Actions is authorized
by Section 228 of the DGCL which provides that, unless otherwise provided in our Certificate of Incorporation and Bylaws, action
required or permitted to be taken at a meeting of our stockholders may be taken without a meeting if a written consent that sets
forth the action so taken is signed by stockholders holding at least a majority of the voting power of the Company, except that
if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents
is required. Such consent shall have the same force and effect as a majority vote of the stockholders and may be stated as such
in any document. Our Certificate of Incorporation and Bylaws do not contain any provisions contrary to the provisions of Section
228 of the DGCL. Thus, to eliminate the costs to us and management time involved in holding a special meeting, and in order to
take the Corporate Actions as described in this Information Statement, one of our stockholders representing in excess of 50% of
the voting stock executed and delivered a written consent to us.
We
are distributing this Information Statement to our stockholders in full satisfaction of any notice requirements we may have under
the DGCL and of Regulation 14C of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
This
Information Statement is dated as of and is first being sent or given to our stockholders of record on or about July 13, 2018.
On
the Record Date, there were 162,350,364 shares of our Common Stock issued and outstanding and entitled to notice of and to vote
on all matters presented to stockholders. We do not have any shares of preferred stock issued and outstanding. The required vote
for the adoption of the Amendments and the approval of the Reverse Split was a majority of the issued and outstanding shares of
Common Stock. On the Record Date, the Voting Stockholder, as the holder of record of approximately 75.5% of the outstanding shares
of our voting stock, executed a written consent adopting, approving and ratifying the Corporate Actions. When actions are taken
by written consent of less than all of the stockholders entitled to vote on a matter, Section 228 of the DGCL requires notice
of the action to those stockholders who did not vote. This Information Statement and the accompanying notice constitute notice
to you of action by written consent as required by Section 228 of the DGCL. Because we have obtained sufficient stockholder approval
of the Corporate Actions, no other consents or votes will be solicited in connection with this Information Statement.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Under
federal securities laws, the Corporate Actions may not be completed until 20 calendar days after the date of distribution of this
Information Statement to our stockholders. Therefore, notwithstanding the execution and delivery of the written consent, the Corporate
Actions will not occur until that time has elapsed.
Dissenters’
Rights of Appraisal
Under
the DGCL, Company stockholders are not entitled to appraisal rights with respect to the Corporate Actions.
Security
Ownership of Certain Beneficial Owners and Management
As
of the Record Date, the Company had 162,350,364 shares of Common Stock
issued
and outstanding. Holders of Common Stock are entitled to one vote per share. The following table sets forth the beneficial ownership
of the Common Stock as of the Record Date by each person who served as a director and/or an executive officer of the Company on
that date, the number of shares beneficially owned by all of the Company’s directors and executive officers as a group,
and any persons who beneficially own 5% or greater of the Common Stock as of the Record Date.
Name and address of beneficial owners
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Amount and
nature of
beneficial
ownership of
Common
Stock
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Approximate
percentage of
outstanding
Common Stock
(1)
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Ronny Yakov
(2)
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122,640,879
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75.5
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%
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All directors and executive officers as a group (1 person)
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122,640,879
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75.5
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%
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John Herzog
(3)
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36,547,602
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22.5
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%
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(1)
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Beneficial
ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934, as amended, and is generally determined by voting powers and/or investment powers
with respect to securities. Unless otherwise noted, all of such shares of common stock
listed above are owned of record by each individual named as beneficial owner and such
individual has sole voting and dispositive power with respect to the shares of common
stock owned by each of them. Such person or entity’s percentage of ownership is
determined by assuming that any options or convertible securities held by such person
or entity, which are exercisable within sixty (60) days from the date hereof, have been
exercised or converted as the case may be, but not for the purposes of determining the
number of outstanding shares held by any other named beneficial owner.
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(2)
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The
address of Ronny Yakov is 200 Park Avenue, Suite 1700, New York, NY 10166. Excludes 562,660
shares of common stock owned by Mr. Yakov’s mother, Batya Yakov, any beneficial
ownership of which is disclaimed by Mr. Yakov.
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(3)
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The
address of John Herzog is 824 Harbor Road, Southport, CT 06890.
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DESCRIPTION
OF STOCKHOLDER ACTIONS – REVERSE SPLIT
Introduction
On
June 21, 2018, our Board approved, by unanimous written consent, to adopt the Split Amendment to our Certificate of Incorporation
effecting a Reverse Split of our issued and outstanding Common Stock at a ratio of between one-for-five and one-for-thirty with
such ratio to be determined at the sole discretion of the Board and with such Reverse Split to be effected at such time and date,
if at all, as determined by the Board in its sole discretion. On June 21, 2018, the Voting Stockholder, acting by written consent,
approved the Split Amendment and the Reverse Split.
Effecting
the Reverse Split requires that our Certificate of Incorporation be amended. The text that will be incorporated into our Certificate
of Incorporation upon effecting the Reverse Split is attached as
Annex A
to this Information Statement. The Split
Amendment, which will not be filed until at least twenty days following the date of this Information Statement, will be effective
upon the filing of such Split Amendment to the Certificate of Incorporation in the form attached as
Annex A
with
the Secretary of State of Delaware with such filing to occur, if at all, at the sole discretion of the Board.
There
are two principal reasons for the Reverse Split: (1) the Reverse Split should increase the stock price of our Common Stock, which
is currently trading on the Pink Open Market operated by OTC Markets Group Inc. (the “Pink Sheets”), to a level sufficiently
above the minimum bid price requirement that is required to list on either The Nasdaq Capital Market and the NYSE American LLC
(the Nasdaq Capital Market and the NYSE American LLC collectively referred to as the “Exchanges”) such that the Board,
in its sole discretion, may apply for initial listing on either of the Exchanges and (2) the Reverse Split may make it more feasible
for the Company to raise third party equity funding which we will need for business operations and as is required pursuant to
the terms of that certain $12,500,000 term loan that we received in April 2018.
Based
on discussions with our advisors, we believe the Reverse Split would increase our chances of raising funding by: (i) increasing
the price of our Common Stock to levels that might attract a broader audience of potential investors (as of June 21, 2018, the
closing price of our Common Stock was $0.50) and (ii) lower the number of our outstanding shares of Common Stock, resulting in
a capitalization for our Company that might attract a broader audience of potential investors.
One
principal effect of the Reverse Split would be to decrease the number of outstanding shares of our Common Stock. Except for de
minimus adjustments that may result from the treatment of fractional shares as described below, the Reverse Split will not have
any dilutive effect on our stockholders since each stockholder would hold the same percentage of our Common Stock outstanding
immediately following the Reverse Split as such stockholder held immediately prior to the Reverse Split. The relative voting and
other rights that accompany the shares of Common Stock would not be affected by the Reverse Split.
The
table below sets forth the number of shares of our Common Stock outstanding before and after the Reverse Split based on 162,350,364
shares of Common Stock outstanding as of the Record Date.
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Prior to the
Reverse Split
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Assuming a one-for-
five Reverse Split
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Assuming a one-for-
ten Reverse Split
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Assuming a one-for-
twenty Reverse Split
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Assuming a one-for-
thirty Reverse Split
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Aggregate Number of Shares of Common Stock Outstanding
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162,350,364
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32,470,073
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16,235,036
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8,117,518
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5,411,679
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The
Reverse Split will not have any impact on the number of authorized shares of Common Stock provided for in our Certificate of Incorporation
which shall remain at 200,000,000 shares.
Although
the Reverse Split will not have any dilutive effect on our stockholders, the proportion of shares owned by our stockholders relative
to the number of shares authorized for issuance will decrease because we will not be reducing out authorized shares of Common
Stock. The additional authorized but unissued shares may be used for various purposes, including, without limitation, raising
capital, providing equity incentives to employees, officers or directors, effecting stock dividends, establishing strategic relationships
with other companies and expanding our business through the acquisition of other businesses or products. We do not currently have
any plans, proposals or arrangements to issue any of the potentially newly available authorized shares that result from the Reverse
Split for any purposes. The Reverse Split is not part of a broader plan to take us private.
Reasons
for the Reverse Split
The
Board’s primary objectives in effecting the Reverse Split, if necessary or if the Board otherwise desires, is to enable
the Board to (i) raise the per share trading price of our Common Stock, which is currently trading only on the Pink Sheets, to
allow for a listing of our Common Stock on one of the Exchanges and (ii) enable the Board to facilitate capital raising by the
Company by attracting a broader audience of potential investors.
Our
Board has determined that by increasing the market price per share of our Common Stock, we would meet the stock price element
of the initial listing requirements of each of the Exchanges and our Common Stock could be initially listed on one of the Exchanges.
Our Board concluded that the liquidity and marketability of our Common Stock will be adversely affected if it is not quoted on
a national securities exchange as investors can find it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, our Common Stock. Our Board believes that current and prospective investors may view an investment in our Common
Stock more favorably if our Common Stock is quoted on one of the Exchanges.
Our
Board also believes that the Reverse Split and any resulting increase in the per share price of our Common Stock should enhance
the acceptability and marketability of our Common Stock to the financial community and investing public. Many institutional investors
have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential buyers
of our Common Stock. Additionally, analysts at many brokerage firms are reluctant to recommend lower-priced stocks to their clients
or monitor the activity of lower-priced stocks. Brokerage houses frequently have internal practices and policies that discourage
individual brokers from dealing in lower-priced stocks. Further, because brokers’ commissions on lower-priced stock generally
represent a higher percentage of the stock price than commissions on higher priced stock, investors in lower-priced stocks pay
transaction costs which are a higher percentage of their total share value, which may limit the willingness of individual investors
and institutions to purchase our Common Stock.
While
we believe that we will likely implement the Reverse Split in connection with a contemplated uplisting onto an Exchange and subsequent
financing activities, we cannot assure you that the Board will ultimately determine to effect the Reverse Split or if effected,
at what ratio it will be effected or that the Reverse Split will have any of the desired effects described above. More specifically,
we cannot assure you that after the Reverse Split the market price of our Common Stock will increase proportionately to reflect
the ratio for the Reverse Split, that the market price of our Common Stock will not decrease to its pre-split level, or that our
market capitalization will be equal to the market capitalization before the Reverse Split.
Potential
Disadvantages of the Reverse Split
As
noted above, the principal purpose of the Reverse Split would be to help increase the per share market price of our Common Stock
by up to a factor of thirty. We cannot assure you, however, that the Reverse Split will accomplish this objective for any meaningful
period of time. While we expect that the reduction in the number of outstanding shares of Common Stock will increase the market
price of our Common Stock, we cannot assure you that the Reverse Split will increase the market price of our Common Stock by an
equivalent multiple, or result in any permanent increase in the market price of our Common Stock. The price of our Common Stock
is dependent upon many factors, including our business and financial performance, general market conditions and prospects for
future success. If the per share market price does not increase proportionately as a result of the Reverse Split, then the value
of our Company as measured by our stock capitalization will be reduced, perhaps significantly.
The
number of shares held by each individual stockholder would be reduced if the Reverse Split is implemented. This will increase
the number of stockholders who hold less than a “round lot,” or 100 shares. This has two disadvantages. First, each
of the Exchanges requires that we have a certain number of round lot stockholders to be initially listed (the Nasdaq Marketplace
Rules require that we have 300 round lot stockholders and the NYSE MKT LLC requires that we have 400 round lot stockholders).
Second, the transaction costs to stockholders selling “odd lots” are typically higher on a per share basis. Consequently,
the Reverse Split could increase the transaction costs to existing stockholders in the event they wish to sell all or a portion
of their position.
Although
our Board believes that the decrease in the number of shares of our Common Stock outstanding as a consequence of the Reverse Split
and the anticipated increase in the market price of our Common Stock could encourage interest in our Common Stock and possibly
promote greater liquidity for our stockholders, such liquidity could also be adversely affected by the reduced number of shares
outstanding after the Reverse Split.
Effecting
the Reverse Split
Any
time twenty calendar days following the date of this Information Statement, if our Board concludes that it is in the best interests
of our Company and our stockholders to effect the Reverse Split, the Split Amendment will be filed with the Secretary of State
of Delaware. The actual timing of the filing of the Split Amendment with the Secretary of State of Delaware to effect the Reverse
Split will be determined by our Board. In addition, if for any reason our Board deems it advisable to do so, the Reverse Split
may be abandoned at any time prior to the filing of the Split Amendment, without further action by our stockholders. The Reverse
Split will be effective as of the date of filing with the Secretary of State of Delaware (the “Effective Time”). Upon
the filing of the Split Amendment, without further action on our part or our stockholders, the outstanding shares of Common Stock
held by stockholders of record as of the Effective Time would be converted into a lesser number of shares of Common Stock based
on a Reverse Split ratio as determined by the Board. For example, if you presently hold 1,500 shares of our Common Stock, you
would hold 300 shares of our Common Stock following the Reverse Split if the ratio is one-for-five or you would hold 50 shares
of our Common Stock if the ratio is one-for-thirty.
Effect
on Outstanding Shares, Options and Certain Other Securities
If
the Reverse Split is implemented, the number of shares our Common Stock owned by each stockholder will be reduced in the same
proportion as the reduction in the total number of shares outstanding, such that the percentage of our Common Stock owned by each
stockholder will remain unchanged except for any de minimus change resulting from rounding up to the nearest number of whole shares
so that we are not obligated to issue cash in lieu of any fractional shares that such stockholder would have received as a result
of the Reverse Split. The number of shares of our Common Stock that may be purchased upon exercise of outstanding options or other
securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion prices
for these securities, will also be ratably adjusted in accordance with their terms as of the Effective Time.
Effect
on Registration and Stock Trading
We
are subject to the periodic reporting and other requirements of the Exchange Act. The proposed Reverse Split will not affect the
registration of our Common Stock. If the proposed Reverse Split is implemented and our application for initial listing is otherwise
accepted on either of the Exchanges, we will request that our Common Stock be initially listed under the symbol “OLB,”
however we cannot guarantee that the Exchanges will permit our use of “OLB.” If “OLB” is not available
to us, we will announce our new symbol as soon as practicable.
Fractional
Shares; Exchange of Stock Certificates
Our
Board does not currently intend to issue fractional shares in connection with the Reverse Split. Therefore, we do not expect to
issue certificates representing fractional shares. In lieu of any fractional shares, we will issue to stockholders of record who
would otherwise hold a fractional share because the number of shares of Common Stock they hold before the Reverse Split is not
evenly divisible by the Reverse Split ratio that number of shares of Common Stock as rounded up to the nearest whole share. For
example, if a stockholder holds 150.25 shares of Common Stock following the Reverse Split, that stockholder will receive certificate
representing 151 shares of Common Stock. No stockholders will receive cash in lieu of fractional shares.
As
of the Record Date, we had 352 holders of record of our Common Stock (although we have significantly more beneficial holders).
We do not expect the Reverse Split and the rounding up of fractional shares to whole shares to result in a significant reduction
in the number of record holders. We presently do not intend to seek any change in our status as a reporting company for federal
securities law purposes, either before or after the Reverse Split.
On
or after the Effective Time, we will mail a letter of transmittal to each stockholder. Each stockholder will be able to obtain
a certificate evidencing his, her or its post-Reverse Split shares only by sending the exchange agent (who will be the Company’s
transfer agent) the stockholder’s old stock certificate(s), together with the properly executed and completed letter of
transmittal and such evidence of ownership of the shares as we may require. Stockholders will not receive certificates for post-Reverse
Split shares unless and until their old certificates are surrendered. Stockholders should not forward their certificates to the
exchange agent until they receive the letter of transmittal, and they should only send in their certificates with the letter of
transmittal. The exchange agent will send each stockholder, if elected in the letter of transmittal, a new stock certificate after
receipt of that stockholder’s properly completed letter of transmittal and old stock certificate(s). A stockholder that
surrenders his, her or its old stock certificate(s) but does not elect to receive a new stock certificate in the letter of transmittal
will be deemed to have requested to hold that stockholder’s shares electronically in book-entry form with our transfer agent.
Certain
of our registered holders of Common Stock hold some or all of their shares electronically in book-entry form with our transfer
agent. These stockholders do not have stock certificates evidencing their ownership of our Common Stock. They are, however, provided
with a statement reflecting the number of shares registered in their accounts. If a stockholder holds registered shares in book-entry
form with our transfer agent, the stockholder may return a properly executed and completed letter of transmittal.
Stockholders
who hold shares in street name through a nominee (such as a bank or broker) will be treated in the same manner as stockholders
whose shares are registered in their names, and nominees will be instructed to effect the Reverse Split for their beneficial holders.
However, nominees may have different procedures and stockholders holding shares in street name should contact their nominees.
Stockholders will not have to pay any service charges in connection with the exchange of their certificates.
Authorized
Shares
The
Reverse Split will not have any effect on the authorized number of shares of our Common Stock which is currently 200,000,000 shares.
In accordance with our Certificate of Incorporation and Delaware law, our stockholders do not have any preemptive rights to purchase
or subscribe for any of our unissued or treasury shares.
Anti-Takeover
and Dilutive Effects
As
previously described, although the Reverse Split will not have any dilutive effect on our stockholders, the proportion of shares
owned by our stockholders relative to the number of shares authorized for issuance will decrease because we will not be reducing
out authorized shares of Common Stock. The additional shares of Common Stock that are authorized but unissued provide our Board
with flexibility to effect, among other transactions, public or private refinancings, acquisitions, stock dividends, stock splits
and the granting of equity incentive awards. However, these authorized but unissued shares may also be used by our Board, consistent
with and subject to its fiduciary duties, to deter future attempts to gain control of us or make such actions more expensive and
less desirable. The Reverse Split will give our Board authority to issue additional shares from time to time without delay or
further action by the stockholders except as may be required by applicable law or the rules of the Exchanges. The Reverse Split
is not being recommended in response to any specific effort of which we are aware to obtain control of us, nor does our Board
have any present intent to use the authorized but unissued Common Stock to impede a takeover attempt. There are no plans or proposals
to adopt other provisions or enter into any arrangements that have material anti-takeover effects.
In
addition, the issuance of additional shares of Common Stock for any of the corporate purposes listed above could have a dilutive
effect on earnings per share and the book or market value of our outstanding Common Stock, depending on the circumstances, and
would likely dilute a stockholder’s percentage voting power in us. Holders of our Common Stock are not entitled to preemptive
rights or other protections against dilution. Our Board intends to take these factors into account before authorizing any new
issuance of shares.
Accounting
Consequences
As
of the Effective Time, the stated capital attributable to Common Stock on our balance sheet will be reduced proportionately based
on the Reverse Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will
be credited with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because
there will be fewer shares of our Common Stock outstanding.
Federal
Income Tax Consequences
The
following summary describes certain material U.S. federal income tax consequences of the Reverse Split to holders of our Common
Stock. 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”). This summary does not address all of the tax consequences that may be relevant to any particular stockholder,
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 persons that
may be subject to special treatment under U.S. federal income tax law or persons that do not hold our Common Stock as “capital
assets” (generally, property held for investment). 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
hereof. 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 Split.
Each
stockholder should consult his, her or its own tax advisor regarding the U.S. federal, state, local and foreign income and other
tax consequences of the Reverse Split.
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 Split.
The
Reverse Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss should
be recognized by a U.S. holder upon the Reverse Split. Accordingly, the aggregate tax basis in the Common Stock received pursuant
to the Reverse Split should equal the aggregate tax basis in the Common Stock surrendered and the holding period for the Common
Stock received should include the holding period for the Common Stock surrendered.
DESCRIPTION
OF STOCKHOLDER ACTIONS – INDEMNIFICATION
Introduction
On
June 21, 2018, our Board approved, by unanimous written consent, to adopt the Indemnification Amendment to our Certificate of
Incorporation to more fully indemnify the directors, officers, employees or other agents of the Company to the fullest extent
permitted by the DGCL. On June 21, 2018, the Voting Stockholder, acting by written consent, approved the Indemnification Amendment.
Implementing
the Indemnification Amendment requires that our Certificate of Incorporation be amended. The text that will be incorporated into
our Certificate of Incorporation upon effecting the Indemnification Amendment is attached as
Annex B
to this
Information Statement. The Indemnification Amendment, which will not be filed until at least twenty days following the date of
this Information Statement, will be effective upon the filing of such Indemnification Amendment to the Certificate of Incorporation
in the form attached as
Annex B
with the Secretary of State of Delaware.
Reasons
for the Indemnification Amendment
The
Board and the Voting Stockholder approved the Indemnification Amendment to better protect the rights and interests of the Company’s
directors, officers, employees or other agents (the “Indemnitees”) and to better attract and retain the best available
personnel available to the Company. The Board believes that the provisions included in the Indemnification Amendment are customary
for a Delaware corporation and particularly a Delaware corporation that is seeking a potential listing on an Exchange. The following
is a summary of some of the material changes to our Certificate of Incorporation that are included in the Indemnification Amendment
(please see Annex B attached to this Information Statement for the entire language of the Indemnification Amendment):
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Advancement
of Expenses
. The Company shall advance the payment of expenses (including, without
limitation, attorneys’ fees) incurred against any Indemnitee in defending any civil,
criminal, administrative, or investigative action, suit or proceeding for which such
Indemnitee may be entitled to indemnification in advance of a final disposition of any
matter and such undertaking may be made without reference to the financial ability of
the Indemnitee to remake the payment upon receipt of an undertaking by or on behalf of
such Indemnitee to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified as authorized by the Indemnification Amendment.
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Subsequent
Amendment
. No amendment, termination or repeal of the indemnification provisions
in the Certificate of Incorporation or of the relevant provisions of the DGCL or any
other applicable laws shall affect or diminish in any way the rights of any Indemnitee
to receive indemnification.
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ANNUAL
REPORT ON FORM 10-K AND ADDITIONAL INFORMATION
Information
Available
The
Company is subject to the information and reporting requirements of the Exchange Act and in accordance with the Exchange Act,
the Company files periodic reports, documents and other information with the SEC relating to its business, financial statements
and other matters, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and any reports
prior to or subsequent to that date.
These
reports and other information filed by the Company with the SEC may be inspected and are available for copying at the public reference
facilities maintained at the SEC at 100 F Street NW, Washington, D.C. 20549.
The
Company’s filings with the SEC are also available to the public from the SEC’s website, http://www.sec.gov. The
Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and other reports filed under the Exchange Act,
are also available to any stockholder at no cost upon request to: 200 Park Avenue, Suite 1700, New York, NY 10166.
Stockholder
Communications
Stockholders
wishing to communicate with the Board may direct such communications to the Board c/o the Company, Attn: Ronny Yakov. Mr. Yakov
will present a summary of all stockholder communications to the Board at subsequent Board meetings. The directors will have the
opportunity to review the actual communications at their discretion.
Delivery
Of Documents To Security Holders Sharing An Address
If
hard copies of the materials are requested, we will send only one Information Statement and other corporate mailings to stockholders
who share a single address unless we received contrary instructions from any stockholder at that address. This practice, known
as “householding,” is designed to reduce our printing and postage costs. However, the Company will deliver promptly
upon written or oral request a separate copy of the Information Statement to a stockholder at a shared address to which a single
copy of the Information Statement was delivered. You may make such a written or oral request by (a) sending a written notification
stating (i) your name, (ii) your shared address and (iii) the address to which the Company should direct the additional copy of
the Information Statement, to the Company at 200 Park Avenue, Suite 1700, New York, NY 10166.
If
multiple stockholders sharing an address have received one copy of this Information Statement or any other corporate mailing and
would prefer the Company to mail each stockholder a separate copy of future mailings, you may send notification to or call the
Company’s principal executive offices. Additionally, if current stockholders with a shared address received multiple copies
of this Information Statement or other corporate mailings and would prefer the Company to mail one copy of future mailings to
stockholders at the shared address, notification of such request may also be made by mail or telephone to the Company’s
principal executive offices.
By
Order of the Board of Directors
/s/
Ronny Yakov
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Name:
Ronny Yakov
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Title:
Chairman
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Annex
A
CERTIFICATE
OF AMENDMENT TO THE
CERTIFICATE
OF INCORPORATION
OF
THE OLB GROUP, INC.
The
undersigned, for the purposes of amending the Certificate of Incorporation of The OLB Group, Inc. (the “Corporation”),
a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”),
does hereby certify that:
FIRST
:
The Board of Directors of the Corporation (the “Board”) duly adopted
by written
consent filed with the minutes of the Board
in accordance with Section 141(f) of the DCGL on June 21, 2018, a resolution
proposing and declaring advisable an amendment to the Certificate of Incorporation of said Corporation to consummate a reverse
stock split of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”).
SECOND
:
That upon the effectiveness of this Certificate of Amendment (the “Split Effective Time”) each share of the Common
Stock issued and outstanding immediately prior to the date and time of the filing hereof with the Secretary of State of Delaware
shall be automatically changed and reclassified into a smaller number of shares such that each _____ (__) shares of issued Common
Stock immediately prior to the Split Effective Time is reclassified into one share of Common Stock. Notwithstanding the immediately
preceding sentence, there shall be no fractional shares issued and, in lieu thereof, a holder of Common Stock on the Split Effective
Time who would otherwise be entitled to a fraction of a share as a result of the reclassification, following the Split Effective
Time, shall receive a full share of Common Stock upon the surrender of such stockholders' old stock certificate. No stockholders
will receive cash in lieu of fractional shares.
THIRD:
That in lieu of a meeting and vote of the stockholders of the Corporation (the “
Stockholders
”), the
Stockholders have given written consent to said amendments in accordance with the provisions of Section 228 of the
DGCL, and written notice of the adoption of the amendments has been given as provided in Section 228 of the DGCL to
every stockholder entitled to such notice
.
FOURTH
:
The aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.
FIFTH
:
The aforesaid amendment shall be effective as of 9:00 A.M. Eastern Standard Time on _________, 2018.
IN
WITNESS WHEREOF, the Corporation has caused this Amendment to the Certificate of Incorporation of the Corporation to be duly executed
by the undersigned this ____ day of ___________, 2018.
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THE OLB GROUP, INC.
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By:
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Name:
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Ronny Yakov
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Title:
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Chief Executive Officer
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Annex
B
CERTIFICATE
OF AMENDMENT TO THE
CERTIFICATE
OF INCORPORATION
OF
THE OLB GROUP, INC.
The
undersigned, for the purposes of amending the Certificate of Incorporation of The OLB Group, Inc. (the “Corporation”),
a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”),
does hereby certify that:
FIRST
:
The Board of Directors of the Corporation (the “Board”) duly adopted
by written
consent filed with the minutes of the Board
in accordance with Section 141(f) of the DCGL on June 21, 2018, a resolution
proposing and declaring advisable the following amendment to add a new Article XI of the Certificate of Incorporation of said
Corporation:
“ARTICLE
XI
The
Corporation, to the full extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from
time to time (“DGCL”), shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including, without
limitation, attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall be paid by the
Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified
by the Corporation as authorized hereby. Any repeal or modification of this Article XI by the stockholders of the Corporation
or any repeal or modification of the relevant provisions of the DGCL shall not adversely affect any right or protection of a person
or entity entitled to indemnification hereunder with respect to events occurring prior to the time of such repeal or modification.
For purposes of this Article XI, references to “the Corporation” shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its directors, officers, employees, fiduciaries and agents,
so that any person or entity who is or was a director, officer, employee, fiduciary or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article XI with
respect to the resulting or surviving corporation as he, she or it would have with respect to such constituent corporation if
its separate existence had continued. The rights to indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in this Article XI shall not be exclusive of any other right which any person or
entity may have or hereafter acquire under any statute, provision of this certificate of incorporation, By-law, agreement, vote
of stockholders or disinterested directors or otherwise.”
SECOND
:
That in lieu of a meeting and vote of the stockholders of the Corporation (the “
Stockholders
”),
the Stockholders have given written consent to said amendments in accordance with the provisions of Section 228 of the DGCL,
and written notice of the adoption of the amendments has been given as provided in Section 228 of the DGCL to every stockholder
entitled to such notice
.
THIRD
:
The aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.
FOURTH
:
The aforesaid amendment shall be effective as of 9:00 A.M. Eastern Standard Time on _________, 2018.
IN
WITNESS WHEREOF, the Corporation has caused this Amendment to the Certificate of Incorporation of the Corporation to be duly executed
by the undersigned this ____ day of ___________, 2018.
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THE OLB GROUP, INC.
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By:
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Name:
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Ronny Yakov
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Title:
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Chief Executive Officer
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B-
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