THIS INFORMATION STATEMENT IS BEING PROVIDED TO
YOU BY THE BOARD OF DIRECTORS OF FRIENDABLE INC.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
FRIENDABLE, INC.
NOTICE
OF ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN
that the
following action has been approved pursuant to the written consent
of the holders of a majority of the voting power of the outstanding
common stock of Friendable Inc., a Nevada corporation (the
“
Company
,” “
we
,” “
us
,” or “
our
”) dated April 3, 2019, in lieu of a special
meeting of the stockholders and in accordance with Nevada Revised
Statutes 78.320:
A.
To
effect a reverse split of the Company’s common stock on the
basis of 18,000 (Eighteen Thousand) common shares for 1 (One) new
common share.
B.
To
amend the Company’s Articles of Incorporation, to change the
number of authorized shares of common stock of the Company to
1,000,000,000, $0.0001 par value, following the reverse
split.
Stockholders of record at the close of business on April 30, 2019
(the “
Record Date
”), are entitled to receive a copy of this
information statement.
Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934,
as amended, the actions described herein will not be implemented
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 amendments described will be effected
on or before the close of business on May 27, 2019.
The
Information Statement is also available at www.friendable.com. This
website also includes copies of the Information Statement and the
Annual Report to stockholders for the year ended December 31,
2018. Stockholders may also request a copy of the Information
Statement and the Company’s Annual Report by contacting our
main office at (855) 473-7473.
PLEASE NOTE THAT THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS
AND NO STOCKHOLDERS MEETING WILL BE HELD TO CONSIDER THE MATTERS
DESCRIBED HEREIN.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE NOT REQUESTED TO SEND US A
PROXY.
By
order of the Board of Directors of Friendable, Inc.
|
May 6,
2019
|
By:
|
/s/
Robert
Rositano
|
|
|
|
Robert
Rositano
|
|
|
|
Chief Executive Officer,
Secretary, and Director
|
FRIENDABLE,
INC.
1821 S Bascom Ave., Suite 353
Campbell, California 95008
INFORMATION STATEMENT
This
Information Statement is being mailed on or about May 10, 2019 to
the holders of record at the close of business on April 30, 2019
(the “
Record
Date
”) of shares of the common stock of Friendable,
Inc., a Nevada corporation, in connection with actions taken by the
holders of a majority of our outstanding common stock as
follows:
A.
To
effect a reverse split of the Company’s common stock on the
basis of 18,000 (Eighteen Thousand) common shares for 1 (One) new
common share.
B.
To amend the Company’s Articles of
Incorporation, to change the number of authorized shares of common
stock of the Company to 1,000,000,000, $0.0001 par value, following
the reverse split.
The
action above was approved on April 8, 2019, by three holders of our
convertible preferred stock (on a fully diluted, as converted
basis) and our common stock par value $0.0001 per share,
representing a majority of our issued and outstanding Common Stock,
as of such date, by execution of a written consent in lieu of a
special meeting of stockholders (the “
Majority Stockholder Consent
”),
approving the above matter, which had previously been approved by
the Board of Directors of the Company on April 8, 2019, and
recommended to be presented to the majority stockholders for their
approval.
Under
NRS 78.385 and NRS 78.390, and in accordance with the Bylaws of the
Company, all activities requiring stockholder approval may be taken
by obtaining the written consent and approval of more than 50.1% of
the holders of voting stock in lieu of a meeting of the
stockholders. Because the shareholders are entitled to cast a vote
representing more than 50.1% of the total issued and outstanding
voting capital stock of the Company on the Record Date, no action
by the minority stockholders in connection with the Action is
required.
The
entire cost of furnishing this Information Statement will be borne
by us. We will request brokerage houses, nominees, custodians,
fiduciaries and other like parties to forward this Information
Statement to the beneficial owners of our voting securities held of
record by them and we will reimburse such persons
for out-of-pocket expenses incurred in forwarding such
material.
Dissenters’ Right of Appraisal
No
dissenters’ or appraisal rights under Nevada Law are afforded
to the Company’s stockholders as a result of the approval of
the actions set forth above.
Vote Required
The
number of votes cast in favor of the action described above had to
exceed 50% of the issued and outstanding shares entitled to vote
thereon. As of the date of the Majority Stockholder Consent, the
Company had outstanding 5,553,310,369 shares of common stock. The
majority stockholders voted more than 50.1% of our voting shares
via the Majority Stockholder Consent, to approve the actions
described above.
Compensation for Executive Officers and Directors
Compensation arrangements for our named executive officers and
directors are described below.
Employment Agreement – Robert Rositano
Effective January 19, 2014, the Company, entered into an employment
agreement with Robert Rositano to serve as Chief Executive Officer
and Secretary of Friendable, Inc. for a term of two years with
automatic renewals for similar two-year periods pursuant to the
terms of the agreement. Robert Rositano’s duties
shall include the duties and responsibilities for the
Company’s corporate and administration offices and positions
as set forth by the Company and such other duties and
responsibilities as the board of directors may from time to time
reasonably assign to Robert Rositano. The employment agreement
provides, among other things, that Robert Rositano will be eligible
for participation in any employee benefit plan, retirement plan,
and option plan maintained by Friendable, Inc.; receive a base
salary of $150,000 per year; and receive reimbursement for ordinary
and necessary business expenses incurred by Robert Rositano in
connection with the performance of his duties as Chief Executive
Officer and Secretary. During the year, only a portion of the
salary was paid, and the balance was accrued. Upon a successful
launch of Friendable, Inc.’s products and services and
reaching the first 1,000,000 registered users, Robert Rositano will
receive a bonus of $50,000 and his base salary will be increased to
$200,000 annually. When Friendable, Inc. reaches a cumulative
5,000,000 registered users or more, Robert Rositano will receive a
bonus of $75,000 and his base salary will be increased to $250,000
annually. After the above goals are achieved, his base salary will
begin being increased semi-annually at a minimum rate of 10% or
higher, as determined by the board of directors or a committee
established by the board of directors for compensation purposes. If
Friendable, Inc. is unable to pay executive salary or bonuses, the
amounts owed will be accrued as a convertible note. The note can be
converted into common stock, at Robert Rositano’s sole
discretion. The Company may terminate Robert Rositano’s
employment prior to the end of his employment period by a majority
vote of the board of directors, excluding Robert Rositano’s
vote. If we terminate Robert Rositano’s employment
prior to the end of his employment period without cause, which
shall also include termination in the event of a change in control,
Robert Rositano shall be entitled to his base salary in effect
on the date of his termination for a period of twenty-four (24)
months following the date of such termination, in one lump sum
payment within fourteen (14) days of termination or as otherwise
agreed to in writing. Furthermore, any unvested options granted to
Robert Rositano will immediately vest. If we terminate his
employment with cause, he will be entitled to his base salary and
commission schedule in effect on the date of termination for a
period of twelve (12) months. If Robert Rositano, however,
terminates his employment prior to the end of the employment period
without cause, Robert Rositano shall not be entitled to any
severance and the Company shall have no further liability to Robert
Rositano. He is also permitted to pursue other business
interests not in conflict with the Company, including serving as
officers and directors of other public companies.
On April 3, 2019, the Company entered into a new employment
agreement with Robert Rositano. Pursuant to that agreement, the
Company shall pay Rositano an aggregate annual salary at the rate
of $150,000 (One Hundred Fifty Thousand Dollars) (the "Base
Salary"). Upon a successful launch of the company's Fan Pass mobile
app or website, and reaching its first 50,000 subscribers, Rositano
will receive a bonus of $50,000 and the Base Salary will be
increased to $200,000 annually. In addition, when the Company
reaches a cumulative 100,000 subscribers or more, Rositano will
receive a bonus of $75,000 and the Base Salary shall be increased
to $250,000 annually. After the above goals are achieved, the Base
Salary shall increase annually at a minimum rate of ten percent
(10%) as determined by the Board of Directors or a Committee
established by the Board of Directors for compensation purposes
(the "Compensation Committee"), based on Rositano's performance.
Rositano shall be entitled to participate in the Company's stock
option plan if and when it is put in place. Details will be
determined by the board of directors or compensation committee at
such time.
Employment Agreement – Dean Rositano
Effective January 19, 2014, the Company, entered into an employment
agreement with Dean Rositano to serve as President and Chief
Technology Officer of Friendable, Inc. for a term of two years with
automatic renewals for similar two-year periods pursuant to the
terms of the agreement. Dean Rositano’s duties
shall include the duties and responsibilities for the
Company’s corporate and administration offices and positions
as set forth by the Company and such other duties and
responsibilities as the board of directors may from time to time
reasonably assign to Dean Rositano. The employment agreement
provides, among other things, that Dean Rositano will be eligible
for participation in any employee benefit plan, retirement plan,
and option plan maintained by Friendable, Inc.; receive a base
salary of $150,000 per year; and receive reimbursement for ordinary
and necessary business expenses incurred by Dean Rositano in
connection with the performance of his duties as President and
Chief Technology Officer. During the year, only a portion of the
salary was paid and the balance was accrued. Upon a successful
launch of Friendable, Inc.’s products and services and
reaching the first 1,000,000 registered users, Dean Rositano will
receive a bonus of $50,000 and his base salary will be increased to
$200,000 annually. When Friendable, Inc. reaches a cumulative
5,000,000 registered users or more, Dean Rositano will receive a
bonus of $75,000 and his base salary will be increased to $250,000
annually. After the above goals are achieved, his base salary will
begin being increased semi-annually at a minimum rate of 10% or
higher, as determined by the board of directors or a committee
established by the board of directors for compensation purposes. If
Friendable, Inc. is unable to pay executive salary or bonuses, the
amounts owed will be accrued as a convertible note. The note can be
converted into common stock, at Dean Rositano’s sole
discretion. The Company may terminate Dean Rositano’s
employment prior to the end of his employment period by a majority
vote of the board of directors, excluding Dean Rositano’s
vote. If we terminate Dean Rositano’s employment
prior to the end of his employment period without cause, which
shall also include termination in the event of a change in control,
Dean Rositano shall be entitled to his base salary in
effect on the date of his termination for a period of twenty-four
(24) months following the date of such termination, in one lump sum
payment within fourteen (14) days of termination or as otherwise
agreed to in writing. Furthermore, any unvested options granted to
Dean Rositano will immediately vest. If we terminate his employment
with cause, he will be entitled to his base salary and commission
schedule in effect on the date of termination fora period of twelve
(12) months. If Dean Rositano, however, terminates his employment
prior to the end of the employment period without cause, Dean
Rositano shall not be entitled to any severance and the Company
shall have no further liability to Dean Rositano. He is
also permitted to pursue other business interests not in conflict
with the Company, including serving as officers and directors of
other public companies.
On April 3, 2019, the Company entered into a new employment
agreement with Dean Rositano. Pursuant to that agreement, the
Company shall pay Rositano an aggregate annual salary at the rate
of $150,000 (One Hundred Fifty Thousand Dollars) (the "Base
Salary"). Upon a successful launch of the company's Fan Pass mobile
app or website, and reaching its first 50,000 subscribers, Rositano
will receive a bonus of $50,000 and the Base Salary will be
increased to $200,000 annually. In addition, when the Company
reaches a cumulative 100,000 subscribers or more, Rositano will
receive a bonus of $75,000 and the Base Salary shall be increased
to $250,000 annually. After the above goals are achieved, the Base
Salary shall increase annually at a minimum rate of ten percent
(10%) as determined by the Board of Directors or a Committee
established by the Board of Directors for compensation purposes
(the "Compensation Committee"), based on Rositano's performance.
Rositano shall be entitled to participate in the Company's stock
option plan if and when it is put in place. Details will be
determined by the board of directors or compensation committee at
such time.
Employment Agreement – Frank Garcia
Effective February 3, 2014, iHookup, a wholly-owned subsidiary of
the Company, entered into an employment agreement with Frank Garcia
to serve as Chief Financial Officer of iHookup. Frank
Garcia’s duties shall include the duties and responsibilities
for the Company’s corporate and administration offices and
positions as set forth by the Company and such other duties and
responsibilities as the board of directors may from time to time
reasonably assign to Frank Garcia. Frank Garcia received a base
salary of $80,000 per year, which was automatically adjusted to
$100,000 a year beginning April 1, 2014; and receive reimbursement
for ordinary and necessary business expenses incurred by Frank
Garcia in connection with the performance of his duties as Chief
Financial Officer. During the 2016 fiscal year, this amount was
increased to $110,000. Frank Garcia will be granted 20,000,000
stock options of the Company which shall become effective upon the
effective date of a new Company stock option plan. The employment
agreement provides, among other things, that Frank Garcia will be
eligible for an annual bonus based on his performance and
determined in the sole discretion of the Board of Directors. He is
also eligible to participate in any employee benefit plan,
retirement plan, and option plan maintained by Friendable, Inc.
Frank Garcia’s employment is at will, and either party may
terminate his employment at any time with or without cause;
provided that Frank Garcia gives at least 30 days’ advance
notice. He is also permitted to pursue other business interests not
in conflict with the Company, including serving as officers and
directors of other public companies.
On
April 3, 2019 the Company entered into a new employment agreement
with Frank Garcia. The Company shall pay Garcia an aggregate annual
salary at the rate of $100,000 (One Hundred Thousand Dollar) (the
“Base Salary). Upon a successful launch of the
company’s Fan Pass mobile app or website. and reaching its
first 50,000 subscribers, Executive will receive a bonus of $20,000
and the Base Salary will be increased to $110,000 annually. In
addition. when the Company reaches a cumulative 100,000 subscribers
or more, Garcia will receive a bonus of $25,000 and the Base Salary
shall be increased to $125,000 annually. After the above goals are
achieved, the Base Salary shall increase annually at a minimum rate
of ten percent (10%) as determined by the Board of Directors or a
Committee established by the Board of Directors for compensation
purposes (the “Compensation Committee”) based on
Garcia’s performance.
Garcia
shall be entitled to participate in the Company's stock option plan
if and when it is put in place. Details will be determined by the
board of directors or compensation committee at such
time.
ACTION 1: REVERSE STOCK SPLIT AND AUTHORIZATION OF COMMON
SHARES
Overview
On
March 26, 2019, Friendable, Inc. and Fan Pass Inc, (together, the
“Company”) entered into a Debt Restructuring Agreement
(the “Agreement”) with Robert A. Rositano Jr.
(“Robert Rositano”), Dean Rositano (“Dean
Rositano”), Frank Garcia (“Garcia”), Checkmate
Mobile, Inc. (“Checkmate”), Alpha Capital Anstalt
(“Alpha”), Coventry Enterprises, LLC
(“Coventry”), Palladium Capital Advisors, LLC
(“Palladium”), EMA Financial, LLC (“EMA”),
Michael Finkelstein (“Finkelstein”), and Barbara R.
Mittman (“Mittman”), each being a debt holder of the
Company.
The
debt holders have agreed to convert their debt into certain amounts
of common stock as set forth in the Agreement upon the Company
meeting certain milestones including but not limited to: the
Company effecting a reverse stock split and maintaining a stock
price of $1.00 per share; being current with its periodic report
filings pursuant to the Securities Exchange Act; certain vendors
and Company employees forgiving an aggregate of $1,000,000 in
amounts owed to them; the Company raising not less than $400,000 in
common stock at a post-split price of not less than $.20 per share;
and certain other things as further set forth in the Agreement. The
debt holders will be subject to certain lock up and leak out
provisions as contained in the Agreement. The Company has filed the
agreement as an exhibit to its current report on Form 8-K filed
April 3, 2019.
In
order to comply with the terms of the Agreement, our Board of
Directors has determined that it is advisable and in our and our
stockholders’ best interests that the Board of Directors be
granted the authority to implement a reverse stock split of the
issued and outstanding shares of our Common Stock in a ratio of
18,000 (Eighteen Thousand) for 1 (One). In conjunction with the
reverse split the Company will amend its articles of incorporation
to authorize 1,000,000,000 (One Billion) common
shares.
Accordingly,
the Board of Directors has unanimously approved a resolution
proposing an amendment to our amended and restated certificate of
incorporation to allow for the reverse stock split and recommended
that it be approved by our shareholders. The Shareholders approved
the reverse split amendment by the written consent of a majority of
the shares entitled to vote thereon.
As a
result of the stockholder approval for the Action, 20 days after
the date of mailing of our Definitive Information Statement on
Schedule 14C to our stockholders, the Board of Directors will have
the authority to effect the reverse stock split and amendment to
authorize 1,000,000,000 (One Billion) common shares.
The
text of the form of the proposed amendment to our certificate of
incorporation is attached hereto as Annex A. By approving this
Action, stockholders approved the aforesaid reverse stock split and
authorized the Board of Directors to file the
amendment.
Certain
of our officers and directors have an interest in the reverse stock
split as a result of their ownership of Common Stock, as set forth
in the section entitled “Security Ownership of Certain
Beneficial Owners and Management.”
Principal Effects of the Reverse Stock Split
After
the effective date of the proposed reverse stock split, each common
stockholder will own a reduced number of shares of Common Stock.
Except to the extent that whole shares will be exchanged in lieu of
fractional shares as described below, the proposed reverse stock
split will affect all common stockholders uniformly and will not
affect any stockholder’s percentage ownership interest in us
and proportionate voting rights and other rights and preferences of
the holders of Common Stock will not be affected by the proposed
reverse stock split.
The
following table contains approximate information relating to the
Common Stock under the proposed reverse stock split ratio, without
giving effect to any adjustments for fractional shares of Common
Stock, as of April 2, 2019:
Status
|
|
Number of Shares of Common Stock Authorized
|
|
Number of Shares of Common Stock Issued and
Outstanding
|
|
Number of Shares of Common Stock Authorized
but Unissued
|
Pre-Reverse Stock
Split
|
|
15,000,000,000
|
|
5,553,310,369
|
|
9,446,689,631
|
Post-Reverse Stock
Split 1:18,000
|
|
1,000,000,000
|
|
307,406
|
|
999,692,594
|
On
March 26, 2019, Friendable, Inc. and Fan Pass Inc, (together, the
“Company”) entered into a Debt Restructuring Agreement
(the “Agreement”) with Alpha Capital Anstalt
(“Alpha”), Coventry Enterprises, LLC
(“Coventry”), Palladium Capital Advisors, LLC
(“Palladium”), EMA Financial, LLC (“EMA”),
Michael Finkelstein (“Finkelstein”), and Barbara R.
Mittman (“Mittman”), each being a “Debt
Holder” of the Company.
The
Debt Holders have agreed to convert their debt into certain amounts
of common stock as set forth in the table below upon the Company
meeting certain milestones, including but not limited to: the
Company effecting a reverse stock split and maintaining a stock
price of $1.00 per share; being current with its periodic report
filings pursuant to the Securities Exchange Act; certain vendors
and Company employees forgiving an aggregate of $1,000,000 in
amounts owed to them; the Company raising not less than $400,000 in
common stock at a post-split price of not less than $.20 per share;
and certain other things as further set forth in the Agreement
previously filed by the Company on Form 8-K on April 15, 2019. The
debt holders will be subject to certain lock up and leak out
provisions as contained in the Agreement
Post-Split Debt Conversions
Debt Holder
|
Shares to be Issued
|
Alpha Capital Anstalt
|
3,244,572
|
Coventry Enterprises,
|
1,808,017
|
EMA Financial, LLC
|
250,000
|
Michael Finkelstein
|
200,000
|
Palladium Capital Advisors, LLC
|
200,000
|
Barbara R. Mittman
|
200,000
|
Notwithstanding the foregoing each of the Debt
Holders may elect at each such Debt Holder’s sole discretion
to exercise a conversion at a price reset on either the
120
th
day or 240
th
day following the effective date of
the Reverse Split (each being a “Reset Date”). If a
Debt Holder so elects, they may convert any and/or all debt in part
or in toto held by such Debt Holder, and subject to limitations on
sale as contained in the Agreement, at the lower of (i) 75% of the
closing bid price for the Common Stock on such respective Reset
Date, or (ii) the VWAP for the Company’s Common Stock for the
7 trading days immediately preceding and including such respective
Reset Date.
Effective November
22, 2011 our board of directors adopted and approved our stock
option plan. The purpose of the stock option plan is to enhance the
long-term stockholder value of our company by offering
opportunities to directors, key employees, officers, independent
contractors and consultants of our company to acquire and maintain
stock ownership in our company in order to give these persons the
opportunity to participate in our company’s growth and
success, and to encourage them to remain in the service of our
company. A total of 1,899 shares of our common stock are available
for issuance under the stock option plan. Pursuant to the terms of
the Plan, the Board of Directors or a committee thereof, as
applicable, will adjust the number of shares available for future
grant under the Plan, the number of shares underlying outstanding
awards, the exercise price per share of outstanding stock options
and other terms of outstanding awards issued pursuant to the Plan
to equitably reflect the effects of the reverse stock
split.
In
addition, proportionate adjustments will be made to the per share
exercise price of all outstanding warrants to purchase shares of
our Common Stock.
If the
proposed reverse stock split is implemented, it will increase the
number of our stockholders who own “odd lots” of fewer
than 100 shares of Common Stock. Brokerage commission and other
costs of transactions in odd lots are generally higher than the
costs of transactions of more than 100 shares of Common
Stock.
After
the effective date of the reverse stock split, our Common Stock
would have a new committee on uniform securities identification
procedures (“CUSIP”) number, a number used to identify
our Common Stock.
The
Common Stock is currently registered under Section 12(g) of
the Securities Exchange Act, and we are subject to the periodic
reporting and other requirements of the Securities Exchange Act.
The proposed reverse stock split will not affect the registration
of the Common Stock under the Securities Exchange Act. Our Common
Stock would continue to be reported on OTCQB under the symbol
“FDBL”.
Effective Date
The
proposed reverse stock split would become effective on the date of
filing of a certificate of amendment to our amended and restated
certificate of incorporation with the office of the Secretary of
State of the State of Nevada. On the effective date, shares of
Common Stock issued and outstanding and the shares of Common Stock
held in treasury, in each case, immediately prior thereto will be
combined and converted, automatically and without any action on the
part of the stockholders, into new shares of Common Stock in
accordance with the reverse stock split ratio determined by the
Board of Directors within the limits set forth in this
Action.
Treatment of Fractional Shares
No
fractional shares would be issued if, as a result of the reverse
stock split, a registered stockholder would otherwise become
entitled to a fractional share. Instead, stockholders who otherwise
would be entitled to receive fractional shares because they hold a
number of shares not evenly divisible by the ratio of the reverse
stock split will automatically be entitled to receive an additional
share of Common Stock. In other words, any fractional share will be
rounded up to the nearest whole number.
Record and Beneficial Stockholders
If the
Board of Directors elects to implement the reverse stock split,
stockholders of record holding some or all of their shares of our
Common Stock electronically in book-entry form under the direct
registration system for securities will receive a transaction
statement at their address of record indicating the number of
shares of our Common Stock they hold after the reverse stock
split. Non-registered stockholders holding Common Stock
through a bank, broker or other nominee should note that such
banks, brokers or other nominees may have different procedures for
processing the consolidation than those that would be put in place
by us for registered stockholders. If you hold your shares with
such a bank, broker or other nominee and if you have questions in
this regard, you are encouraged to contact your
nominee.
If the
Board of Directors elects to implement the reverse stock split,
stockholders of record holding some or all of their shares in
certificate form will receive a letter of transmittal, as soon as
practicable after the effective date of the reverse stock split.
Our transfer agent will act as “exchange agent” for the
purpose of implementing the exchange of stock certificates. Holders
of pre-reverse stock split shares will be asked to
surrender to the exchange agent certificates
representing pre-reverse stock split shares in exchange
for post-reverse stock split shares, including whole shares to be
issued in lieu of fractional shares (if any) in accordance with the
procedures to be set forth in the letter of transmittal. Until
surrender, each certificate representing shares before the reverse
stock split would continue to be valid and would represent the
adjusted number of shares based on the exchange ratio of the
reverse stock split rounded up to the nearest whole share. No new
post-reverse stock split share certificates, including those
representing whole shares to be issued in lieu of fractional
shares, will be issued to a stockholder until such stockholder has
surrendered such stockholder’s outstanding certificate(s)
together with the properly completed and executed letter of
transmittal to the exchange agent.
STOCKHOLDERS SHOULD
NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD
NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO
SO.
Accounting Consequences
The par
value per share of Common Stock would remain unchanged at $0.0001
per share after the reverse stock split. As a result, on the
effective date of the reverse stock split, the stated capital on
our balance sheet attributable to the Common Stock will be reduced
proportionally, based on the exchange ratio of the reverse stock
split, from its present amount, and the
additional paid-in capital account shall be credited with
the amount by which the stated capital is reduced. The per share
Common Stock net income or loss and net book value will be
increased because there will be fewer shares of Common Stock
outstanding. The shares of Common Stock held in treasury will also
be reduced proportionately based on the exchange ratio of the
reverse stock split. We will reclassify prior period per share
amounts and the Consolidated Statements of Stockholders’
Equity for the effect of the reverse stock split for any prior
periods in our financial statements and reports such that prior
periods are comparable to current period presentation. We do not
anticipate that any other accounting consequences would arise as a
result of the reverse stock split.
No Appraisal Rights
Our
stockholders are not entitled to dissenters’ or appraisal
rights under the Nevada Revised Statutes with respect to the
proposed amendments to our amended and restated certificate of
incorporation to allow for the reverse stock split and we will not
independently provide the stockholders with any such right if the
reverse stock split is implemented.
Certain Material U.S. Federal Income Tax Consequence of the Reverse
Stock Split
The
following is a summary of certain material United States federal
income tax consequences of the reverse stock split to our
stockholders who are United States holders, as defined below. This
summary is general in nature and does not purport to be a complete
discussion of all of the possible federal income tax consequences
of the reverse stock split and is included for general information
only. Further, it does not address any U.S.
federal non-income, state, local or foreign income or
other tax consequences. Also, it does not address the tax
consequences to stockholders that are subject to special tax rules,
such as banks, insurance companies, regulated investment companies,
personal holding companies, real estate investment trusts, real
estate mortgage investment conduits, foreign entities, nonresident
alien individuals, broker-dealers, stockholders whose functional
currency is not the U.S. dollar, partnerships (or other entities
classified as partnership for U.S. federal income tax purposes, S
corporations or other flow-through entities for U.S. federal income
tax purposes, and tax-exempt entities. Other stockholders
may also be subject to special tax rules, including but not limited
to: stockholders that received Common Stock as compensation for
services or pursuant to the exercise of an employee stock option,
or stockholders who have held, or will hold, stock as part of a
straddle, hedging constructive sale or conversion transaction for
federal income tax purposes. This summary also assumes that you are
a United States holder (defined below) who has held, and will hold,
shares of Common Stock as a “capital asset,” as defined
in the Internal Revenue Code of 1986, as amended (the
“Code”), i.e., generally, property held for investment.
Finally, the following discussion does not address the tax
consequences of transactions occurring prior to or after the
reverse stock split (whether or not such transactions are in
connection with the reverse stock split), including, without
limitation, the exercise of options or rights to purchase Common
Stock in anticipation of the reverse stock split.
The tax
treatment of a stockholder may vary depending upon the particular
facts and circumstances of such stockholder. You should consult
with your own tax advisor with respect to the tax consequences of
the reverse stock split. As used herein, the term United States
holder means a stockholder that is, for federal income tax
purposes: a citizen or resident of the United States; a corporation
or other entity taxed as a corporation created or organized in or
under the laws of the United States or any state, including the
District of Columbia; an estate the income of which is subject to
federal income tax regardless of its source; or a trust that
(i) is subject to the primary supervision of a U.S. court and
of which one or more “U.S. persons” (as defined in the
Code) has the authority to control all substantial decisions, or
(ii) has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a U.S. person.
The
following discussion is based on the Code, applicable Treasury
Regulations promulgated thereunder, judicial authority and
administrative rulings and practice, all as of the date hereof, all
of which are subject to change, potentially with retroactive effect
which could adversely affect the accuracy of the statements and
conclusions set forth herein. No ruling from the Internal Revenue
Service or opinion of counsel has been obtained in connection with
the reverse stock split, and there can be no assurance that the
Internal Revenue Service would not take a position contrary to that
discussed herein, nor that such contrary position would not be
sustained.
Other
than in respect of a fractional share that is rounded up to a full
share, no gain or loss should be recognized by a United States
holder upon such stockholder’s exchange
of pre-reverse stock split shares of Common Stock for
post-reverse stock split shares of Common Stock pursuant to the
reverse stock split. The aggregate tax basis of the post-reverse
stock split shares received in the reverse stock split (including
any whole share received in exchange for a fractional share) will
be the same as the stockholder’s aggregate tax basis in
the pre-reverse stock split shares exchanged therefore.
The United States holder’s holding period for the
post-reverse stock split shares will include the period during
which the stockholder held the pre-reverse stock split
shares surrendered in the reverse stock split. Although the matter
is not clear, it is possible that United States holders whose
fractional shares resulting from the reverse stock split are
rounded up to the nearest whole share will recognize gain, which
may be characterized as either a capital gain or as a dividend, to
the extent of the value of such rounded-up amount (i.e.,
less than one share).
No gain
or loss will be recognized by us as a result of the reverse stock
split.
THE
PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK
SPLIT AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION
OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. YOU SHOULD CONSULT
YOUR OWN TAX ADVISORS AS TO THE PARTICULAR FEDERAL, STATE, LOCAL,
FOREIGN AND OTHER TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN
LIGHT OF YOUR SPECIFIC CIRCUMSTANCES
.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This Information Statement includes forward-looking statements. You
can identify the Company’s 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 forecasted 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.
ADDITIONAL INFORMATION
Reports and other information filed by the Company can be inspected
and copied at the public reference facilities maintained at the
Commission at 100 F Street, N.E., Washington, DC 20549. Copies of
such material can be obtained upon written request addressed to the
Commission, Public Reference Section, 100 F Street, N.E.,
Washington, D.C. 20549, at prescribed rates. The Commission
maintains a web site on the Internet (http://www.sec.gov) that
contains reports, proxy and information statements and other
information regarding issuers that file electronically with the
Commission through the Electronic Data Gathering, Analysis and
Retrieval System.
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By
order of the Board of Directors
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May 6, 2019
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By:
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/s/
Robert
Rositano
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Robert
Rositano
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Chief
Executive Officer, Secretary, and Director
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ANNEX A
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BARBARA
K. CEGAVSKE
Secretary
of State
202
North Carson Street
Carson
City, Nevada 89701-4201 (775) 684-5708
Website:
www.nvsos.gov
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Certificate of Amendment
(PURSUANT TO NRS
78.385 AND 78.390)
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USE BLACK INK
ONLY - DO NOT HIGHLIGHT
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ABOVE SPACE IS
FOR OFFICE USE ONLY
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Certificate of Amendment to Articles of Incorporation For Nevada
Profit Corporations
(Pursuant
to NRS 78.385 and 78.390 - After Issuance of Stock)
2.
The articles have been amended as follows:
(provide article numbers, if available)
the fourth article of the Certificate of
Incorporation of
Corporation
be amended by consolidating the issued shares of
the corporation on the basis that 18,000 (Eighteen Thousand) of
such shares shall become one (1) share; provided that no fractional
shares of the corporation shall be issued in connection with the
consolidation and the number of shares to be received by a
stockholder shall be rounded up to the nearest whole number of
shares in the event that such stockholder would otherwise be
entitled to receive a fractional share upon such consolidation.
Upon such consolidation, the fourth article of the Certificate of
Incorporation of
the Corporation
, shall be amended by replacing Section A of the
Article “Capital Stock” follows:
“CAPITAL STOCK
Section A. The total number of shares of capital stock which the
corporation shall have the authority to issue One Billion Fifty
Million (1,050,000,000) shares, consisting of Fifty Million
(50,000,000) shares of Preferred Stock having a par value of $.0001
per share and One Billion (1,000,000,000) shares of Common Stock
have a par value of $.0001 per share.”
Section 2 of the Article “Capital Stock” shall remain
unchanged.
3.
The vote by which
the stockholders holding shares in the corporation entitling them
to exercise at least a majority of the voting power, or such
greater proportion of the voting power as may be required in the
case of a vote by classes or series, or as may be required by the
provisions of the articles of incorporation* have voted in favor of
the amendment is:51%
4.
Effective date and time of filing:
(optional)
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Date:
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5/13/2019
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Time:
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(must not be
later than 90 days after the certificate is filed
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5.
Signature: (required)
X
Signature
of Officer