UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
INFORMATION
STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Preliminary
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Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)(2)) |
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Definitive
Information Statement |
AMERICAN
NOBLE GAS, INC. |
(Name
of registrant as specified in its charter) |
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AMERICAN
NOBLE GAS, INC.
15612
College Blvd.
Overland Park, KS 66219
NOTICE
TO ALL STOCKHOLDERS OF ACTION BY WRITTEN CONSENT OF MAJORITY
STOCKHOLDERS
Dear
American Noble Gas, Inc. Stockholder:
On
October 22, 2021, the Board of Directors of American Noble Gas,
Inc., a Delaware corporation (the “Company”) approved the
reincorporation of the Company in the State of Nevada, pursuant to
a merger with and into a wholly-owned subsidiary of the Company
(the “Reincorporation Merger”). On October 22, 2021,
stockholders holding a majority of the outstanding shares of the
common stock, par value $0.0001 per share (the “Common
Stock”) of the Company (collectively, the “Majority
Stockholders”) approved the Reincorporation Merger by written
consent in lieu of a special meeting of stockholders, in accordance
with the Delaware General Corporation Law, as amended.
A
copy of the following has been provided as Appendices to this
Information Statement:
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Appendix
A – A copy of the Agreement and Plan of Merger |
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Appendix
B – A copy of the Articles of Incorporation of American Noble
Gas, Inc., a Nevada corporation |
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Appendix
C - A copy of the Certificate of Designation of Series A
Convertible Preferred Stock of American Noble Gas, Inc., a Nevada
corporation |
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Appendix
D – A copy of the Bylaws of American Noble Gas, Inc., a Nevada
corporation |
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Appendix
E – Appraisal Rights Procedures |
The information statement accompanying this notice has been filed
with the U.S. Securities and Exchange Commission and is being
furnished pursuant to Section 14C of the Securities Exchange Act of
1934, as amended, to the holders of the Company’s Common Stock to
notify stockholders of the Reincorporation Merger. Because this
action has been approved by the Majority Stockholders, no proxies
were or are being solicited. The Reincorporation Merger will not be
effected until at least twenty (20) calendar days after the mailing
of the information statement accompanying this notice. The Company
will mail this notice and the information statement on or about
November 12, 2021. The Company anticipates that the Reincorporation
Merger will become effective on or about December 3, 2021, at which
time, a Certificate of Merger will be filed with the Secretary of
State of the State of Delaware and Articles of Merger will be filed
with the Secretary of State of the State of Nevada.
THIS
IS FOR YOUR INFORMATION ONLY. YOU DO NOT NEED TO DO ANYTHING IN
RESPONSE TO THIS NOTICE. THIS IS NOT A NOTICE OF A MEETING OF
STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER
ANY MATTER DESCRIBED HEREIN.
By
order of the Board of Directors |
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/s/
Stanton E. Ross |
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Stanton
E. Ross |
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Chairman |
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Overland
Park, Kansas
November
5, 2021
AMERICAN
NOBLE GAS, INC.
15612
College Blvd.
Lenexa,
KS 66219
INFORMATION
STATEMENT
November
5, 2021
Pursuant to Section 14(c) of the Securities Act of 1934, as amended
(the “Exchange Act”), and Regulation 14C promulgated
thereunder, the notice and this information statement (the
“Information Statement”) will be sent or given on or about
November 12, 2021 to the stockholders of record at the close of
business on November 5, 2021 (the “Record Date”) of American
Noble Gas, Inc., a Delaware corporation (hereinafter referred to as
“we”, “us”, “our”, or the
“Company”).
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY.
The
action to be effective at least 20 days after the mailing of this
information Statement is as follows (the
“Action”):
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Approval
of the reincorporation of the Company in the State of Nevada,
pursuant to a merger with and into a wholly-owned subsidiary of the
Company (the “Reincorporation Merger”). |
On October 22, 2021, our Board of Directors (the “Board”)
unanimously approved the Reincorporation Merger. Subsequent to our
Board’s approval of the Reincorporation Merger, the holders of a
majority of the Company’s voting power (the “Consenting Voting
Stockholders”) approved, by written consent (the “Written
Consent”), the Reincorporation Merger on October 22, 2021. The
Consenting Voting Stockholders and their respective ownership
percentage of the voting stock of the Company, total in the
aggregate of more than 50% of the outstanding voting stock, which
is required under the Delaware General Corporation Law, as amended
(the “DGCL”), and our bylaws (the “Bylaws”). We
expect that the Reincorporation Merger will become effective on or
about December 3, 2021, at which time, a Certificate of Merger will
be filed with the Secretary of State of the State of Delaware and
Articles of Merger will be filed with the Secretary of State of the
State of Nevada (together, the “Merger Certificates”).
RECORD
DATE AND VOTING SECURITIES
Only
stockholders of record at the close of business on the Record Date
are entitled to notice of the information disclosed in this
Information Statement. As of the Record Date, the Company’s
authorized capital stock consists of 500,000,000 shares of capital
stock, par value $0.0001 per share (the “Common Stock”) and
10,000,000 authorized shares of preferred stock, par value $0.0001
per share (the “Preferred Stock”), 22,776 shares of which
have been designated as Series A Convertible Preferred Stock. As of
the Record Date, the Company had 18,793,265 shares of Common Stock
and 22,776 shares of Preferred Stock in the form of the Company’s
Series A Convertible Preferred Stock (the “Series A Preferred
Stock”) issued and outstanding. Holders of our Common Stock and
our Series A Preferred Stock (which shares of Series A Preferred
Stock were entitled to a total of 3,818,880 votes on an
as-converted basis, or 3,818,880 votes) were entitled to vote on
the Reincorporation Merger. Holders of our Common Stock and our
Series A Preferred Stock, on an as-converted basis, are currently,
and will continue to be, entitled to one vote per share.
EXPENSES
The
entire cost of furnishing this Information Statement will be borne
by the Company. The Company will request brokerage houses,
nominees, custodians, fiduciaries and other like parties to forward
this Information Statement to the beneficial owners of its common
stock held of record by them and will reimburse such persons for
their reasonable charges and expenses in connection
therewith.
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’
MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN. THIS
INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE
PURPOSE OF INFORMING YOU OF THE MATTER DESCRIBED
HEREIN.
BOARD
OF DIRECTORS AND STOCKHOLDER APPROVAL
As of
the date of the Written Consent, the Company had a total of (a)
18,793,265 shares of Common Stock issued and outstanding, which for
voting purposes are entitled to one vote per share of Common Stock,
and (b) 22,776 shares of Series A Preferred stock issued and
outstanding, which were convertible into a total of 3,818,880
shares of Common Stock and vote on an as-converted to Common Stock
basis with the shares of Common Stock, which for voting purposes
are entitled to one vote per share of Common Stock, on an as
converted to Common Stock basis. On October 22, 2021, the following
Consenting Voting Stockholders, owning a total of 11,586,939 shares
of our Common Stock and Series A Preferred Stock on an as-converted
basis, delivered the executed Written Consent authorizing the
Reincorporation Merger. The Consenting Voting Stockholders’ names,
affiliation with the Company and holdings are as
follows:
Name |
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Affiliation with the Company |
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Number
of
Voting
Shares
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%
of Total
Voting
Shares
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3i,
LP |
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Stockholder |
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1,128,346 |
(1) |
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4.99 |
% |
Alpha Capital
Anstalt |
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Stockholder |
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1,128,346 |
(2) |
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4.99 |
% |
Core Energy, LLC
and affiliate |
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Stockholder |
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645,000 |
(3) |
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2.85 |
% |
FirstFire Global
Opportunities Fund, LLP |
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Stockholder |
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867,813 |
(4) |
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3.84 |
% |
Thomas J. Heckman
and affiliate |
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Stockholder |
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2,789,934 |
(5) |
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12.33 |
% |
Stanton E.
Ross |
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Chairman, Chief Executive Officer,
President and 5% Stockholder |
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2,027,500 |
(6) |
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8.97 |
% |
Leroy C.
Richie |
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Director |
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500,000 |
(7) |
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2.21 |
% |
Daniel F.
Hutchins |
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Director, Chief Financial Officer,
Treasurer & Secretary |
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500,000 |
(8) |
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2.21 |
% |
John
Loeffelbein and affiliate |
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Chief Operating
Officer and 5% Stockholder |
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2,000,000 |
(9) |
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8.85 |
% |
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Total |
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11,586,939 |
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51.24 |
% |
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(1) |
Consist
of 10,000 shares of Series A Convertible Stock which are
convertible into 1,128,346 shares of Common Stock after application
of the 4.99% beneficial ownership limitation. |
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(2) |
Consist
of 7,777 shares of Series A Convertible Stock which are convertible
into 1,128,346 shares of Common Stock after application of the
4.99% beneficial ownership limitation. |
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(3) |
Consist
of 645,000 shares of Common Stock. |
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(4) |
Consist
of 2,777 shares of Series A Convertible Stock which are convertible
into 867,813 shares of Common Stock. |
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(5) |
Consist
of 2,789,934 shares of Common Stock. |
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(6) |
Consist
of 2,442,746 shares of Common Stock and 1,111 shares of Series A
Convertible Stock which are convertible into 347,188 shares of
Common Stock |
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(7) |
Consist
of 500,000 shares of Common Stock. |
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(8) |
Consist
of 500,000 shares of Common Stock. |
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(9) |
Consist
of 2,000,000 shares of Common Stock. |
Pursuant
to the Company’s existing Bylaws and the DGCL, the holders of the
issued and outstanding shares of our Common Stock and/or Series A
Preferred Stock, on an as-converted to Common Stock basis,
representing a majority of our voting power may approve and
authorize the Reincorporation Merger by written consent as if such
Action were undertaken at a duly called and held meeting of
stockholders. In order to significantly reduce the costs and
management time involved in soliciting and obtaining proxies to
approve the Reincorporation Merger, and in order to effectuate the
Reincorporation Merger as early as possible, the Board elected to
utilize, and did in fact obtain, the Written Consent of the
Consenting Voting Stockholders. The Written Consent satisfies the
stockholder approval requirement for the Reincorporation Merger.
Accordingly, no other approval by the Board or stockholders of the
Company is required in order to effect the Reincorporation
Merger.
Except
as otherwise described in this Information Statement, no director,
executive officer, associate of any director or executive officer,
or any other person has any substantial interest, other than
election of office, direct or indirect, by security holdings or
otherwise, in the Reincorporation Merger, which is not shared by
all other holders of the Company’s capital stock.
EFFECTIVE
TIME OF THE REINCORPORATION MERGER
The
Reincorporation Merger will take effect once the Merger
Certificates are filed with the Secretary of State of the State of
Delaware and the Secretary of State of the State of Nevada. We
intend to make these filings promptly after the 20th day
following the date on which this Information Statement is mailed to
the stockholders.
Prior
to the filing of the Merger Certificates, we must first notify the
Financial Industry Regulatory Authority (“FINRA”) of the
intended Reincorporation Merger by filing an Issuer Company Related
Action Notification Form no later than 10 days prior to the
anticipated effective date of such action. Our failure to provide
such notice could constitute fraud under Section 10 of the Exchange
Act.
We
currently expect to file the Merger Certificates on or about
December 3, 2021.
ADDITIONAL
INFORMATION REGARDING THE REINCORPORATION MERGER
Overview
Our
Board has unanimously approved the reincorporation of the Company
in Nevada pursuant to the terms of the Agreement and Plan of Merger
(the “Merger Agreement”), a form of which is attached as
Appendix A to this Information Statement, entered into by
and between the American Noble Gas, Inc., a Delaware corporation
(“AMGAS-DE”) and American Noble Gas, Inc., a Nevada
corporation and a wholly-owned subsidiary of AMGAS-DE formed solely
for purposes of effecting the Reincorporation Merger
(“AMGAS-NV”). For the reasons discussed below, the Board
approved the Merger Agreement, which was also unanimously approved
by the Consenting Voting Stockholders by the Written Consent.
Approval of the Reincorporation Merger also constituted approval of
the Merger Agreement. For purposes of the discussion below,
the Company, before and after the Reincorporation Merger, is
sometimes referred to as “AMGAS-DE” and “AMGAS-NV,”
respectively.
The
Merger Agreement provides for a tax-free reorganization pursuant to
the provisions of Section 368 of the Internal Revenue Code, as
amended (the “Code”), whereby AMGAS-DE will be merged with
and into AMGAS-NV, the Company’s existence as a Delaware
corporation shall cease, and AMGAS-NV shall continue as the
surviving corporation of the Reincorporation Merger governed by the
laws of the State of Nevada. The Merger Agreement provides that
each share of our Common Stock and/or Series A Preferred Stock
outstanding as of the effective time of the Reincorporation Merger
shall be converted into one share of Common Stock and/or Series A
Preferred Stock of AMGAS-NV with no further action required on the
part of our stockholders. The Board believes that the
Reincorporation Merger will benefit the Company and its
stockholders. Our Board, however, may determine to abandon the
Reincorporation Merger either before or after the distribution of
this Information Statement.
We
believe that the Reincorporation Merger will greatly reduce our
overall tax burden given the franchise taxes imposed on Delaware
corporations. Our reincorporation in Nevada will also give us a
greater measure of flexibility and simplicity in corporate
governance than is available under Delaware law and will increase
the marketability of our securities. Chapter 78 of the Nevada
Revised Statutes, as amended (the “NRS”) is generally
recognized as one of the most comprehensive and progressive state
corporate statutes. By reincorporating the Company in Nevada, the
Company will be better suited to take advantage of business
opportunities as they arise and to provide for our ever-changing
business needs. We believe that the Company’s growth can be
conducted to better advantage if the Company is able to operate
under Nevada law.
Accordingly,
our Board believes that it is in the Company’s and our
stockholder’s best interests that our state of incorporation be
changed from Delaware to Nevada and has received the approval
through Written Consent of the Consenting Voting Stockholders.
Reincorporation in Nevada will not result in any change in our
business, operations, management, assets, liabilities or net worth;
however, reincorporation in Nevada will allow us to take advantage
of certain provisions of the corporate laws of Nevada as described
herein.
Our
corporate affairs currently are governed by Delaware law and the
provisions of the Certificate of Incorporation and the Bylaws of
AMGAS-DE. Copies of the Certificate of Incorporation and Bylaws,
each, as amended, are included as exhibits to our filings with the
U.S. Securities and Exchange Commission (the “SEC”) and are
available for inspection during regular business hours at the
principal executive offices of the Company. If the Reincorporation
Merger is effected, our corporate affairs will be governed by
Nevada law and the provisions of the Articles of Incorporation of
AMGAS-NV (the “Nevada Articles”) and the Bylaws of AMGAS-NV
(the “Nevada Bylaws”). Copies of the Nevada Articles and the
Nevada Bylaws are attached to this Information Statement as
Appendix B and Appendix D, respectively.
Principal
Features of the Reincorporation Merger
The
discussion below is qualified in its entirety by reference to the
Merger Agreement, and by the applicable provisions of Delaware law
and Nevada law.
On
effectiveness of the Reincorporation Merger:
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Each
outstanding share of AMGAS-DE Common Stock will be converted into
one share of AMGAS-NV Common Stock; |
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Each
outstanding share of AMGAS-DE Preferred Stock will be converted
into one share of AMGAS-NV Preferred Stock; |
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Each
outstanding share of AMGAS-DE Common Stock held by an AMGAS-DE
stockholder will be retired and canceled and will cease to
exist; |
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Each
outstanding share of AMGAS-DE Preferred Stock held by an AMGAS-DE
stockholder will be retired and canceled and will cease to
exist; |
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Each
outstanding option to purchase shares of AMGAS-DE Common Stock will
be deemed to be an option to purchase the same number of shares of
AMGAS-NV Common Stock, with no change in the exercise price or
other terms or provisions of the option; and |
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Each
outstanding warrant to purchase shares of AMGAS-DE Common Stock
will be deemed to be a warrant to purchase the same number of
shares of AMGAS-NV Common Stock, with no change in the exercise
price or other terms or provisions of the warrant. |
Following
the Reincorporation Merger, stock certificates previously
representing our capital stock may be delivered in effecting sales
through a broker, or otherwise, of shares of AMGAS-NV capital
stock. It will not be necessary for you to exchange your existing
stock certificates for stock certificates of AMGAS-NV, and if you
do so, it will be at your own cost.
The
Reincorporation Merger will not cause a change in our name, which
will continue to be “American Noble Gas, Inc.” The Reincorporation
Merger also will not affect any change in our business, management
or operations or the location of our principal executive office. On
effectiveness of the Reincorporation Merger, our directors and
officers will become all of the officers and directors of AMGAS-NV,
all of our employee benefit and stock option plans will become
AMGAS-NV plans, and each option or right issued under such plans
will automatically be converted into an option or right to purchase
the same number of shares of AMGAS-NV Common Stock, at the same
price per share, upon the same terms and subject to the same
conditions as before the Reincorporation Merger. stockholders
should note that effecting the Reincorporation Merger will result
in these stock plans continuing as plans of AMGAS-NV. Any
employment contracts and other employee benefit arrangements that
are in existence at the time of the Reincorporation Merger also
will be continued by AMGAS-NV upon the terms and subject to the
conditions currently in effect. We believe that the Reincorporation
Merger will not affect any of our material contracts with any third
parties, except to the extent that the Reincorporation Merger is
deemed to result in an assignment of any material contract
requiring the other party to such material contract to consent to
such assignment, and that our rights and obligations under such
material contractual arrangements will continue as rights and
obligations of AMGAS-NV.
Other
than Board approval, the receipt of the Written Consent of the
Consenting Voting Stockholders, notification to FINRA, the filing
of the Merger Certificates in Nevada and Delaware and this
Information Statement, there are no federal, state or other
regulatory requirements or approvals that must be obtained in order
for us to consummate the Reincorporation Merger.
Securities
Act Consequences
The
shares of AMGAS-NV Common Stock to be issued upon conversion of
shares of AMGAS-DE Common Stock in the Reincorporation Merger are
not being registered under the Securities Act of 1933, as amended
(the “Securities Act”). In this regard, we are relying on
Rule 145(a)(2) under the Securities Act, which provides that a
merger that has “as its sole purpose” a change in the domicile of a
corporation does not involve the sale of securities for purposes of
the Securities Act. After the Reincorporation Merger, AMGAS-NV will
continue to be a publicly-held company, AMGAS-NV Common Stock will
continue to be qualified for quotation on the OTCQB tier operated by the OTC Markets
Group Inc. (“OTCQB”) under the symbol “AMNG”, the
Nasdaq Capital Market, or another national securities exchange, as
applicable, and AMGAS-NV will continue file periodic reports and
other documents with the SEC and provide to its stockholder the
same types of information that AMGAS-DE has previously filed and
provided.
Holders
of shares of AMGAS-DE Common Stock that were freely tradable before
the Reincorporation Merger will continue to have freely tradable
shares of AMGAS-NV Common Stock. Stockholders holding so-called
restricted shares of AMGAS-DE Common Stock will have shares of
AMGAS-NV Common Stock that are subject to the same restrictions on
transfer as those to which their shares of AMGAS-DE Common Stock
were subject, and their stock certificates, if surrendered for
replacement certificates representing shares of AMGAS-NV Common
Stock, will bear the same restrictive legend as appears on their
AMGAS-DE stock certificates. For purposes of computing compliance
with the holding period requirement of Rule 144 under the
Securities Act, stockholders will be deemed to have acquired their
shares of AMGAS-NV Common Stock on the date they acquired their
shares of Common Stock of AMGAS-DE. Holders of shares of AMGAS-DE
Series A Preferred Stock will continue to hold shares of AMGAS-NV
Series A Preferred Stock that are subject to the same rights,
preferences, privileges and restrictions, including voting rights,
dividend rights, conversion rights, redemption privileges and
liquidation preferences as those to which their shares of AMGAS-DE
Series A Preferred Stock were subject.
Material
U.S. Federal Income Tax Consequences
The
following discussion summarizes the material U.S. federal income
tax consequences of the Reincorporation Merger that are applicable
to you as a stockholder. It is based on the Code, applicable
Treasury Regulations, judicial authority, and administrative
rulings and practice, all as of the date of this Information
Statement and all of which are subject to change, including changes
with retroactive effect. The discussion below does not address any
state, local or foreign tax consequences of the Reincorporation
Merger. Your tax treatment may vary depending upon your particular
situation. You also may be subject to special rules not discussed
below if you are a certain kind of stockholder, including, but not
limited to: an insurance company; a tax-exempt organization; a
financial institution or broker-dealer; a person who is neither a
citizen nor resident of the United States or entity that is not
organized under the laws of the United States or political
subdivision thereof; a holder of our shares as part of a hedge,
straddle or conversion transaction; a person that does not hold our
shares as a capital asset at the time of the Reincorporation
Merger; or an entity taxable as a partnership for U.S. federal
income tax purposes. The Company will not request an advance ruling
from the Internal Revenue Service as to the U.S. federal income tax
consequences of the Reincorporation Merger or any related
transaction. The Internal Revenue Service could adopt positions
contrary to those discussed below and such positions could be
sustained. Stockholders are urged to consult with their tax
advisors and financial planners as to the particular tax
consequences of the Reincorporation Merger to them, including the
applicability and effect of any state, local or foreign laws, and
the effect of possible changes in applicable tax laws.
It is
intended that the Reincorporation Merger qualify as a
“reorganization” under Section 368(a) of the Code. As a
“reorganization,” it is expected that the Reincorporation Merger
will have the following U.S. federal income tax
consequences:
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An
AMGAS-DE stockholder will not recognize any gain or loss as a
result of the receipt of AMGAS-NV shares in exchange for such
stockholders AMGAS-DE shares in the Reincorporation
Merger; |
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An
AMGAS-DE stockholder’s aggregate tax basis in the AMGAS-NV shares
received in the Reincorporation Merger will equal such
stockholder’s aggregate tax basis in the AMGAS-DE shares held
immediately before the Reincorporation Merger; and |
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An
AMGAS-DE stockholder’s tax holding period for AMGAS-NV shares
received in the Reincorporation Merger will include the period
during which such stockholder held AMGAS-DE shares. |
Accounting
Treatment
The
Reincorporation Merger is expected to be accounted for as a reverse
acquisition in which AMGAS-DE is the accounting acquirer, and
AMGAS-NV is the legal acquirer. Since the Reincorporation Merger is
expected to be accounted for as a reverse acquisition and not a
business combination, no goodwill is expected to be
recognized.
Material
Terms of the Merger Agreement
The
following is only a summary of the material provisions of the
Merger Agreement between AMGAS-DE and AMGAS-NV and is qualified in
its entirety by reference to the full text of the Merger Agreement
which is attached to this Information Statement as Appendix
A. Please read the Merger Agreement in its entirety.
General
The
Merger Agreement provides that, subject to the Written Consent of
the Consenting Voting Stockholders and adoption of the Merger
Agreement by the stockholders of AMGAS-DE and the authority of the
Board of AMGAS-DE to abandon the Reincorporation Merger:
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AMGAS-DE
will merge with and into AMGAS-NV; and |
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AMGAS-DE
will cease to exist and AMGAS-NV will continue as the surviving
corporation. |
As a
result of, and as of the effective time of, the Reincorporation
Merger, AMGAS-NV will succeed to and assume all rights and
obligations of AMGAS-DE, in accordance with Nevada law.
Effective
Time
The
Merger Agreement provides that, subject to the approval by Written
Consent of the Consenting Voting Stockholders of AMGAS-DE, the
Reincorporation Merger will be consummated by the filing of the
Merger Certificates and any other appropriate documents, in
accordance with the relevant provisions of the Delaware General
Corporation Law and the NRS, each, as amended, with the Secretary
of State of the State of Delaware and the Secretary of State of the
State of Nevada, respectively. We expect to effect the
Reincorporation Merger promptly after the 20th day
following the date on which this Information Statement is mailed to
stockholders, or on or about November 12, 2021.
Merger
Consideration
Upon
consummation of the Reincorporation Merger, each outstanding share
of AMGAS-DE Common Stock will be converted into the right to
receive one share of AMGAS-NV Common Stock. Shares of AMGAS-DE
Common Stock will no longer be outstanding and will automatically
be cancelled and retired and will cease to exist. Each holder of a
certificate representing shares of AMGAS-DE Common Stock
immediately prior to the Reincorporation Merger will cease to have
any rights with respect to such certificate, except the right to
receive shares of AMGAS-NV Common Stock: provided, however, if such
holder elects the applicable appraisal rights, in lieu of the
merger consideration provided for in the Merger Agreement, and the
merger is consummated, such holder, provided that such holder has
complied with the applicable requirements of Section 262 of the
DGCL and does not otherwise withdraw or lose the right to appraisal
under Delaware law, shall have the right to seek appraisal of the
fair value of their shares of AMGAS-DE Common Stock and to receive
payment in cash for the fair value of their shares of AMGAS-DE
Common Stock, exclusive of any element of value arising from the
accomplishment or expectation of the merger, as determined by the
Delaware Court of Chancery.
Upon
consummation of the Reincorporation Merger, each outstanding share
of AMGAS-DE Series A Preferred Stock will be converted into the
right to receive one share of AMGAS-NV Series A Preferred Stock.
Shares of AMGAS-DE Series A Preferred Stock will no longer be
outstanding and will automatically be cancelled and retired and
will cease to exist. Each holder of a certificate representing
shares of AMGAS-DE Series A Preferred Stock immediately prior to
the Reincorporation Merger will cease to have any rights with
respect to such certificate, except the right to receive shares of
AMGAS-NV Series A Preferred Stock; provided, however, if such
holder elects the applicable appraisal rights, in lieu of the
merger consideration provided for in the Merger Agreement, and the
merger is consummated, such holder, provided that such holder has
complied with the applicable requirements of Section 262 of the
DGCL and does not otherwise withdraw or lose the right to appraisal
under Delaware law, shall have the right to seek appraisal of the
fair value of their shares of AMGAS-DE Series A Preferred Stock and
to receive payment in cash for the fair value of their shares of
AMGAS-DE Series A Preferred Stock, exclusive of any element of
value arising from the accomplishment or expectation of the merger,
as determined by the Delaware Court of Chancery.
Treatment
of Stock Options
Under
the terms of the Merger Agreement, upon consummation of the
Reincorporation Merger, each outstanding option to purchase a share
of AMGAS-DE Common Stock will be deemed to constitute an option to
purchase one share of AMGAS-NV Common Stock at an exercise price
per full share equal to the stated exercise price.
Under
the Merger Agreement, AMGAS-NV will assume AMGAS-DE’s stock option
and restricted stock plans (including, but not limited to, the
Company’s 2021 Stock Option and Restricted Stock Plan), which,
following the Reincorporation Merger, will be used by AMGAS-NV to
make awards to directors, officers, and employees of AMGAS-NV and
others as permitted under the terms of AMGAS-DE’s stock option
plans.
Treatment
of Common Stock Purchase Warrants
Under
the terms of the Merger Agreement, upon consummation of the
Reincorporation Merger, each outstanding warrant to purchase a
share of AMGAS-DE Common Stock will be deemed to constitute a
warrant to purchase one share of AMGAS-NV Common Stock at an
exercise price per full share equal to the stated exercise
price.
Directors
and Officers
The
Merger Agreement provides that the Board of AMGAS-NV from and after
the Reincorporation Merger will consist of the members of the Board
of AMGAS-DE immediately prior to the Reincorporation Merger. The
Merger Agreement further provides that the officers of AMGAS-NV
from and after the Reincorporation Merger will be the officers of
AMGAS-DE immediately prior to the Reincorporation
Merger.
Articles
of Incorporation and Bylaws
The
Merger Agreement provides that the Nevada Articles in effect
immediately before the Reincorporation Merger will be the Articles
of Incorporation of the surviving Company, and the Nevada Bylaws of
AMGAS-NV in effect immediately before the Reincorporation Merger
will be the bylaws of the surviving Company, unless later amended
in accordance with Nevada law.
Conditions
to the Merger
The
obligations of AMGAS-DE and AMGAS-NV to consummate the
Reincorporation Merger are subject to the satisfaction or waiver of
the conditions that the Reincorporation Merger shall have been
approved and adopted by the Written Consent of the Consenting
Voting Stockholders of AMGAS-DE.
Other
than Board approval, the receipt of the Written Consent of the
Consenting Voting Stockholders, notification to FINRA, the filing
of the Merger Certificates in Delaware and Nevada and this
Information Statement, there are no federal, state or other
regulatory requirements or approvals that must be obtained in order
for us to consummate the Reincorporation Merger.
Effect
on Stock Certificates
The
Reincorporation Merger will not have any effect on the
transferability of outstanding stock certificates representing our
Common Stock. It will not be necessary for stockholders to exchange
their existing stock certificates for certificates of AMGAS-NV.
Each stock certificate representing issued and outstanding shares
of Common Stock of AMGAS-DE will continue to represent the same
number of shares of Common Stock of AMGAS-NV.
Abandonment
of Reincorporation Merger
Our
Board may, in its sole discretion, determine to abandon the
Reincorporation Merger notwithstanding Written Consent by the
Consenting Voting Stockholders approval of the Reincorporation
Merger and the Merger Agreement.
Comparison
of Rights under the Delaware General Corporation Act and the
Chapter 78 of the Nevada Revised Statutes
The
Company was incorporated under the laws of the State of Delaware.
When the Reincorporation is consummated, we will reincorporate
under the laws of the State of Nevada and our stockholders, whose
rights currently are governed by Delaware law and the AMGAS-DE
Certificate and AMGAS-DE Bylaws created pursuant to Delaware law,
will be governed by Nevada law and the Nevada Articles and the
Nevada Bylaws, which have been created under Nevada law.
The
statutory corporate laws of the State of Nevada, as governed by
Chapters 78 and 92A (concerning Mergers) of the NRS, are similar in
many respects to those of Delaware, as governed by the DGCL.
However, there are certain differences that may affect your rights
as a stockholder, as well as the corporate governance of the
Company. The following are summaries of material differences
between the current rights of stockholders of AMGAS-DE and the
rights of stockholders of AMGAS-NV following the consummation of
the Reincorporation Merger.
The
following discussion is a summary. It does not give you a complete
description of the differences that may affect you. You should also
refer to Chapters 78 (concerning Corporations, generally) and 92A
(concerning Mergers) of the NRS, as well as the forms of Nevada
Articles and Nevada Bylaws, which are attached as Appendices B and
D, respectively, to this Information Statement, and which will come
into effect concurrently with the consummation of the
Reincorporation Merger.
General. Delaware for many years has followed a policy of
encouraging incorporation in that state and, in furtherance of that
policy, has adopted comprehensive, modern and flexible corporate
laws that Delaware periodically updates and revises to meet
changing business needs. Because of Delaware’s prominence as a
state of incorporation for many large corporations, the Delaware
courts have developed considerable expertise in dealing with
corporate issues and a substantial body of case law has developed
construing Delaware law and establishing public policies with
respect to Delaware corporations. Because Nevada case law
concerning the governing and effects of its statutes and
regulations is more limited, the Company and its stockholders may
experience less predictability with respect to legality of
corporate affairs and transactions and stockholders’ rights to
challenge them.
Removal of Directors. Under Delaware law, directors
of a corporation without a classified board may be removed with or
without cause by the holders of a majority of shares then entitled
to vote in an election of directors. Under Nevada law, any one or
all of the directors of a corporation may be removed by the holders
of not less than two-thirds of the voting power of a corporation’s
issued and outstanding stock entitled to vote. Nevada does not
distinguish between removal of directors with or without
cause.
Fiduciary Duty and Business Judgment. Nevada, like most
jurisdictions, requires that directors and officers of Nevada
corporations exercise their powers in good faith and with a view to
the interests of the corporation. As a matter of law, directors and
officers are presumed to act in good faith, on an informed basis,
and with a view to the interests of the corporation in making
business decisions. In performing such duties, directors and
officers may exercise their business judgment through reliance on
information, opinions, reports, financial statements, and other
financial data prepared or presented by corporate directors,
officers, or employees who are reasonably believed to be reliable
and competent. Professional reliance may also be extended to legal
counsel, public accountants, advisers, bankers, or other persons
reasonably believed to be competent, and to the work of a committee
(on which the particular director or officer does not serve) if the
committee was established and empowered by the corporation’s board
of directors, and if the committee’s work was within its designated
authority and was about matters on which the committee was
reasonably believed to merit confidence. However, directors and
officers may not rely on such information, opinions, reports, books
of account, or similar statements if they have knowledge concerning
the matter in question that would make such reliance
unwarranted.
In
Delaware, directors and members of any committee designated by the
board are similarly entitled to rely in good faith upon the records
of the corporation and upon such information, opinions, reports,
and statements presented to the corporation by corporate officers,
employees, committees of the board of directors, or other persons
as to matters the member reasonably believes are within such other
person’s professional or expert competence, provided that such
other person has been selected with reasonable care by or on behalf
of the corporation. Unlike Nevada, Delaware does not extend the
statutory protection for reliance on such persons to corporate
officers.
Flexibility for Decisions, including Takeovers. Nevada
provides directors with more discretion than Delaware in making
corporate decisions, including decisions made in takeover
situations. In Nevada, director and officer actions taken in
response to a change or potential change in control that do not
disenfranchise stockholders are granted the benefits of the
business judgment rule. However, in the case of an action that
impedes the rights of stockholders to vote for or remove directors,
directors will only be given the advantages of the business
judgment rule if the directors have reasonable grounds to believe a
threat to corporate policy and effectiveness exists and the action
taken that impedes the exercise of the stockholders’ rights is
reasonable in relation to such threat. In exercising their powers
in response to a change or potential change of control, directors
and officers of Nevada corporations may consider the effect of the
decision on several corporate constituencies in addition to the
stockholders, including the corporation’s employees, the interests
of the community, and the economy.
Delaware
does not provide a similar list of statutory factors that corporate
directors and officers may consider in making decisions. In fact,
in a number of cases, Delaware law has been interpreted to provide
that fiduciary duties require directors to accept an offer from the
highest bidder regardless of the effect of such sale on the
corporate constituencies other than the stockholders. Thus, the
flexibility granted to directors of Nevada corporations in the
context of a hostile takeover are greater than those granted to
directors of Delaware corporations.
Limitation on Personal Liability of Directors. Under
Nevada law it is not necessary to adopt provisions in the articles
of incorporation limiting personal liability as this limitation is
provided by statute. A Delaware corporation is permitted to adopt
provisions in its certificate of incorporation limiting or
eliminating the liability of a director to a company and its
stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such liability does not arise from certain
proscribed conduct, including breach of the duty of loyalty, acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or liability to the
corporation based on unlawful dividends or distributions or
improper personal benefit.
While
Nevada law has a similar provision permitting the adoption of
provisions in the articles of incorporation limiting personal
liability, the Nevada provision differs in three respects. First,
the Nevada provision applies to both directors and officers.
Second, while the Delaware provision excepts from the limitation on
liability a breach of the duty of loyalty, the Nevada counterpart
has a significantly higher threshold before such exception is
applied, which requires the aforementioned presumption of the
director or officer in question, acting in good faith, on an
informed basis and with a view to the interests of the corporation,
to have been rebutted and that it is proven that such director’s or
officer’s act or failure to act constituted a breach of his or her
fiduciary duties and that such breach involved intentional
misconduct, fraud or a knowing violation of law. Third, Nevada law
with respect to the elimination of liability for directors and
officers expressly applies to liabilities owed to creditors of the
corporation. Thus, the Nevada provision is comparatively more
flexible than its Delaware counterpart with respect to limitation
of personal liability of directors and officers.
Indemnification of Officers and Directors and Advancement of
Expenses. Although Delaware and Nevada law have
substantially similar provisions regarding indemnification by a
corporation of its officers, directors, employees and agents,
Nevada provides broader indemnification in connection with
stockholder derivative lawsuits. Both Delaware and Nevada law
provide for advancement of expenses incurred by an officer or
director in defending a civil or criminal action, suit or
proceeding: expenses incurred by an officer or director in
defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in
advance of the final disposition of the action, suit or proceeding
upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined that he
or she is not entitled to be indemnified by the corporation. Both
Delaware and Nevada corporations have the discretion to decide
whether or not to advance expenses, unless its certificate of
incorporation, or bylaws, with respect to Delaware, or articles of
incorporation, bylaws or an agreement made by the corporation, with
respect to Nevada, provide for mandatory advancement.
Action by Written Consent of Directors. Both
Delaware and Nevada law provide that, unless the articles or
certificate of incorporation or the bylaws provide otherwise, any
action required or permitted to be taken at a meeting of the
directors or a committee thereof may be taken without a meeting if
all members of the board or committee, as the case may be, consent
to the action in writing.
Actions by Written Consent of Stockholders. Delaware
and Nevada law differ in their provisions on actions by written
consent of stockholders. Delaware law provides that, unless the
certificate of incorporation provides otherwise, any action
required or permitted to be taken at a meeting of the stockholders
may be taken without a meeting if the holders of outstanding stock
having at least the minimum number of votes that would be necessary
to authorize or take the action at a meeting of stockholders
consent to the action in writing. Nevada law provides that, unless
the articles of incorporation or the bylaws provide otherwise, any
action required or permitted to be taken at a meeting of the
stockholders may be taken without a meeting if, before or after the
action, a written consent is signed by stockholders holding at
least a majority of the voting power, 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. In
particular, Nevada law also permits a corporation to prohibit
stockholder action by written consent in lieu of a meeting of
stockholders by including such prohibition in its by-laws. The
Nevada Bylaws do not contain such a prohibition.
Dividends. Delaware law is more restrictive than
Nevada law with respect to when dividends may be paid. Under
Delaware law, unless further restricted in the certificate of
incorporation, a corporation may declare and pay dividends out of
surplus, or if no surplus exists out of net profits for the fiscal
year in which the dividend is declared and/or the preceding fiscal
year (provided that the amount of capital of the corporation is not
less than the aggregate amount of the capital represented by the
issued and outstanding stock of all classes having a preference
upon the distribution of assets). In addition, Delaware law
provides that a corporation may redeem or repurchase its shares
only if the capital of the corporation is not impaired and such
redemption or repurchase would not impair the capital of the
corporation, except that a corporation other than a nonstock
corporation may purchase or redeem out of capital any of its own
shares which are entitled upon any distribution of its assets,
whether by dividend or in liquidation, to a preference over another
class or series of its stock, or, if no shares entitled to such a
preference are outstanding, any of its own shares, if such shares
will be retired upon their acquisition and the capital of the
corporation reduced.
Nevada
law provides that no distribution (including dividends on, or
redemption or repurchases of, shares of capital stock) may be made
if, after giving effect to such distribution, the corporation would
not be able to pay its debts as they become due in the usual course
of business, or, except as specifically permitted by the articles
of incorporation, the corporation’s total assets would be less than
the sum of its total liabilities plus the amount that would be
needed at the time of a dissolution to satisfy the preferential
rights of preferred stockholders.
Restrictions on Business Combinations. Both Delaware
and Nevada law contain provisions restricting the ability of a
corporation to engage in business combinations with an interested
stockholder. Under Delaware law, a corporation that is listed on a
national securities exchange or held of record by more than 2,000
stockholders, is not permitted to engage in a business combination
with any interested stockholder for a three-year period following
the time the stockholder became an interested stockholder, unless:
(i) the transaction resulting in a person becoming an interested
stockholder, or the business combination, is approved by the board
of directors of the corporation before the person becomes an
interested stockholder; (ii) the interested stockholder acquires
85% or more of the outstanding voting stock of the corporation in
the same transaction that makes it an interested stockholder
(excluding shares owned by persons who are both officers and
directors of the corporation, and shares held by certain employee
stock ownership plans); or (iii) on or after the date the person
becomes an interested stockholder, the business combination is
approved by the corporation’s board of directors and by the holders
of at least two-thirds of the corporation’s outstanding voting
stock at an annual or special meeting, excluding shares owned by
the interested stockholder. Delaware law defines “interested
stockholder” generally as a person who owns 15% or more of the
outstanding shares of a corporation’s voting stock.
Nevada
law regulates business combinations more stringently. Nevada law
defines an interested stockholder as a beneficial owner (directly
or indirectly) of 10% or more of the voting power of the
outstanding voting shares of the corporation. In addition,
combinations with an interested stockholder remain prohibited for
two years after the person became an interested stockholder unless
(i) the combination or transaction by which the person first became
an interested stockholder is approved by the board of directors
before the person first became an interested stockholder, or (ii)
the combination is approved by a majority of the outstanding voting
power of the corporation not beneficially owned by the interested
stockholder or any affiliate or associate of the interested
stockholder. As in Delaware, a Nevada corporation may opt-out of
the statute with appropriate provisions in its articles of
incorporation. The Nevada Articles do not include a provision by
which AMGAS-NV elects to opt out of these provisions.
Stockholder Vote for Mergers and Other Corporate
Reorganizations. Delaware law requires authorization
by a majority of outstanding shares entitled to vote, as well as
approval by the board of directors, with respect to the terms of a
merger or a sale of substantially all of the assets of the
corporation. Under Nevada law, unless the articles of incorporation
provide otherwise, board approval and authorization of stockholders
by a majority of outstanding shares entitled to vote is required
for a merger or sale of all of the assets of a corporation.
However, it is not entirely clear under Nevada law if stockholder
authorization is required for the sale of less than all of the
assets of a corporation. Although a substantial body of law has
been developed under Delaware law as to what constitutes the “sale
of substantially all of the assets” of a corporation, it is not as
easy to determine at what point a sale of virtually all, but less
than all, of the assets of a corporation would be considered a
“sale of all the corporation’s assets” requiring stockholder
approval under Nevada law, although it is likely that many sales of
less than all of the assets of a corporation requiring stockholder
authorization under Delaware law would not require stockholder
authorization under Nevada law.
Delaware
law does not require a stockholder vote of the surviving
corporation in a merger (unless the corporation provides otherwise
in its certificate of incorporation) if: (a) the plan of merger
does not amend the existing certificate of incorporation; (b) each
share of stock of the surviving corporation outstanding immediately
before the effective date of the merger is an identical outstanding
share after the merger; and (c) either no shares of common stock of
the surviving corporation and no shares, securities or obligations
convertible into such stock are to be issued or delivered under the
plan of merger, or the authorized unissued shares or shares of
common stock of the surviving corporation to be issued or delivered
under the plan of merger plus those initially issuable upon
conversion of any other shares, securities or obligations to be
issued or delivered under such plan do not exceed 20% of the shares
of common stock of such surviving corporation outstanding
immediately prior to the effective date of the merger. Nevada law
does not require a stockholder vote of the surviving corporation in
a merger under substantially similar circumstances.
Dissenters’ Rights. In both Delaware and Nevada, dissenting
stockholders of a corporation engaged in certain major corporate
transactions are entitled to appraisal rights. Appraisal rights
permit a stockholder to receive cash equal to the fair market value
of the stockholder’s shares (as determined by agreement of the
parties or by a court) in lieu of the consideration such
stockholder would otherwise receive in any such
transaction.
Under
Nevada law, a stockholder is entitled to dissent from, and obtain
payment for the fair value of his or her shares in the event of (i)
certain acquisitions of a controlling interest in the corporation,
(ii) consummation of a plan of merger, if approval by the
stockholders is required and the stockholder is entitled to vote on
the merger or if the domestic corporation is a subsidiary and is
merged with its parent, (iii) a plan of exchange in which the
corporation is a party, or (iv) any corporate action taken pursuant
to a vote of the stockholders, if the articles of incorporation,
bylaws or a resolution of the board of directors provides that
voting or nonvoting stockholders are entitled to dissent and obtain
payment for their shares. Holders of securities listed on a
national securities exchange, held by at least 2,000 stockholders
of record, with a market value of at least $20,000,000, exclusive
of the value of such shares held by the corporation’s subsidiaries,
senior executives, directors and beneficial stockholders owning
more than 10 percent of such shares, are not entitled to
dissenters’ rights. This exception is not, however, available if
the articles of incorporation of the corporation issuing the shares
state that it is not available, or if the holders of the class or
series are required under the plan of merger or exchange to accept
for the shares anything except cash, shares of stock as described
in Nev. Rev. Stat. § 92A.390 (3)(b), or a combination thereof.
Nevada law prohibits a dissenting shareholder from voting his
shares or receiving certain dividends or distributions after his
dissent.
Under
Delaware law, appraisal rights are generally available for the
shares of any class or series of stock of a Delaware corporation in
a merger or consolidation, provided that no appraisal rights are
available for the shares of any class or series of stock that, at
the record date for the meeting held to approve such transaction,
were either (1) listed on a national securities exchange or (2)
held of record by more than 2,000 stockholders. Even if the shares
of any class or series of stock meet the requirements of
subsections (1) or (2) above, appraisal rights are available for
such class or series if the holders thereof receive in the merger
or consolidation anything except cash, shares of stock of the
issuing corporation or shares of stock of a corporation that is
either listed on a national securities exchange or whose stock is
held of record by more than 2,000 holders, or a combination
thereof.
Delaware
allows beneficial owners of shares to file a petition for appraisal
without the need to name a nominee as a nominal plaintiff and makes
it easier to withdraw from the appraisal process and accept the
terms offered in the merger or consolidation. No appraisal rights
are available to stockholders of the surviving corporation if the
merger did not require their approval.
Special Meetings of the Stockholders. Delaware law
permits special meetings of stockholders to be called by the board
of directors or by any other person authorized in the certificate
of incorporation or bylaws to call a special stockholder meeting.
Nevada law permits special meetings of stockholders to be called by
the entire board of directors, any two directors, or the president,
unless the articles of incorporation or bylaws provide
otherwise. Under the by-laws of AMGAS-DE, a special meeting
of stockholders may be called by the secretary of AMGAS-DE upon the
written request of stockholders holding of record at least 25% of
the capital stock of AMGAS-DE entitled to vote generally in the
election of directors. The Nevada Bylaws require the calling of a
special meeting of stockholders by the secretary of AMGAS-NV upon
the written request of stockholders representing not less than 25%
of capital stock of AMGAS-NV entitled to vote generally in the
election of directors.
Special Meetings Pursuant to Petition of
Stockholders. Delaware law provides that a director
or a stockholder of a corporation may apply to the Court of
Chancery of the State of Delaware if the corporation fails to hold
an annual meeting for the election of directors or there is no
written consent to elect directors instead of an annual meeting for
a period of 30 days after the date designated for the annual
meeting or, if there is no date designated, within 13 months after
the last annual meeting or the last action by written consent to
elect directors in lieu of an annual meeting. Nevada law is more
restrictive. Under Nevada law, stockholders having not less than
15% of the voting interest may petition to the district court to
order a meeting for the election of directors if a corporation
fails to call a meeting for that purpose within 18 months after the
last meeting at which directors were elected. The reincorporation
may make it more difficult for our stockholders to require that an
annual meeting be held without the consent of the Board.
Adjournment of Stockholder Meetings. Under Delaware
law, if a meeting of stockholders is adjourned for more than 30
days, or if after the adjournment a new record date is fixed for
the adjourned meeting, notice of the adjourned meeting must be
given to each stockholder of record entitled to vote at the
meeting. At the adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting.
Under Nevada law, a corporation is not required to give any notice
of an adjourned meeting or of the business to be transacted at an
adjourned meeting, other than by announcement at the meeting at
which the adjournment is taken, unless the board fixes a new record
date for the adjourned meeting or the meeting date is adjourned to
a date more than 60 days later than the date set for the original
meeting, in which case a new record date must be fixed and notice
given.
Duration of Proxies. Under Delaware law, a proxy
executed by a stockholder will remain valid for a period of three
years, unless the proxy provides for a longer period. Under Nevada
law, a proxy is effective only for a period of six months, unless
otherwise provided in the proxy, which duration may not exceed
seven years. Nevada law also provides for irrevocable proxies,
without limitation on duration, in limited
circumstances.
Increasing or Decreasing Authorized Shares. Nevada
law allows the board of directors of a corporation, unless
restricted by the articles of incorporation, to increase or
decrease the number of authorized shares in a class or series of
the corporation’s shares and correspondingly effect a forward or
reverse split of any class or series of the corporation’s shares
without a vote of the stockholders, so long as the action taken
does not change or alter any right or preference of the stockholder
and does not include any provision or provisions pursuant to which
only money will be paid or script issued to stockholders who hold
10% or more of the outstanding shares of the affected class and
series before the increase or decrease in the number of authorized
shares becomes effective, and who would otherwise be entitled to
receive fractions of shares in exchange for the cancellation of all
of their outstanding shares. Delaware law contains no such similar
provision.
Stockholder Inspection Rights. Under Delaware law, any
stockholder or beneficial owner of shares may, upon written demand
under oath stating the proper purpose thereof, either in person or
by attorney, inspect and make copies and extracts from a
corporation’s stock ledger, list of stockholders and its other
books and records for any proper purpose. Under Nevada law, certain
stockholders have the right to inspect the books of account and
records of a corporation for any proper purpose. The right to
inspect the books of account and all financial records of a
corporation, to make copies of records and to conduct an audit of
such records is granted only to a stockholder who owns at least 15%
of the issued and outstanding shares of a Nevada corporation, or
who has been authorized in writing by the holders of at least 15%
of such shares. A Nevada corporation may require a stockholder to
furnish the corporation with an affidavit that such inspection is
for a proper purpose related to his or her interest as a
stockholder of the corporation.
Significant
Differences between the Charter and Bylaws of American Noble Gas,
Inc. Before and After the Effective Date of the Reincorporation
Merger
The
AMGAS-DE Certificate currently provides that the Company is
authorized to issue 500,000,000 shares of Common Stock. Under the
Nevada Articles filed with the Secretary of State of the State of
Nevada on or about November 11, 2021, we will be authorized to
issue 500,000,000 shares of Common Stock, par value $0.0001 per
share.
The
AMGAS-DE Certificate currently provides that the Company is
authorized to issue 10,000,000 shares of Preferred Stock. Under the
Nevada Articles filed with the Secretary of State of the State of
Nevada on November 11, 2021, we will be authorized to issue
10,000,000 shares of Preferred Stock, par value $0.0001 per
share.
SECURTY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of October 22, 2021, information
regarding beneficial ownership of our capital stock by:
|
● |
each
person, or group of affiliated persons, who is known by us to
beneficially own more than 5% of our equity securities; |
|
|
|
|
● |
each
of our named executive officers; |
|
|
|
|
● |
each
of our directors; and |
|
|
|
|
● |
all
of our executive officers and directors as a group. |
The
percentage ownership information shown in the table below is based
upon 18,793,265 shares of Common Stock and 22,776 shares of Series
A Preferred Stock outstanding as of October 22, 2021 (which shares
of Series A Preferred Stock are entitled to a total of 3,818,880
votes). The percentage ownership information shown in the table
excludes (a) shares of Common Stock issuable upon the exercise of
outstanding warrants to purchase an aggregate of up to 12,480,784
shares of Common Stock, with a weighted average exercise price of
$0.46 per share, (b) shares of Common Stock issuable upon
outstanding stock options exercisable for up to 2,077,000 shares of
Common Stock, with a weighted average exercise price of $5.73 per
share and (c) 65,930 shares of Common Stock issuable upon
conversion of $57,330 principal balance of 3% Convertible
Promissory Notes outstanding.
Beneficial
ownership is determined according to the rules of the SEC and
generally means that a person has beneficial ownership of a
security if they possess sole or shared voting or investment power
of that security, including securities that are convertible into
and exercisable for shares of Common Stock within sixty (60) days
after October 22, 2021. Except as indicated by the footnotes below,
we believe, based on the information furnished to us, that the
persons named in the table below have sole voting and investment
power with respect to all shares of Common Stock and Series A
Preferred Stock shown that they beneficially own, subject to
community property laws where applicable.
For
purposes of computing the percentage of outstanding shares of our
Common Stock held by each person or group of persons named above,
any shares of Common Stock that such person or persons has the
right to acquire within sixty (60) days after October 22, 2021 is
deemed to be outstanding, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other
person. The inclusion herein of any shares of Common Stock listed
as beneficially owned does not constitute an admission of
beneficial ownership.
Except
as otherwise noted below, the address for persons listed in the
table is c/o American Noble Gas, Inc., 15612 College Blvd., Lenexa,
KS 66219.
Shares Beneficially Owned |
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
Series A Preferred |
|
|
Total
Voting |
|
|
|
Common Stock |
|
|
Stock |
|
|
Power |
|
5% or
greater stockholders: |
|
Shares |
|
|
% |
|
|
Shares |
|
|
% |
|
|
(1) |
|
Lawrence D. Smith,
estate |
|
|
4,277,790 |
|
|
|
15.5 |
% |
|
|
- |
|
|
|
- |
% |
|
|
13.6 |
% |
Thomas J. Heckman (2) |
|
|
2,444,746 |
|
|
|
8.8 |
% |
|
|
347,188 |
|
|
|
9.1 |
% |
|
|
8.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors and
executive officers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanton E. Ross (3)
President, Chief Executive Officer and Chairman |
|
|
3,221,007 |
|
|
|
11.7 |
% |
|
|
- |
|
|
|
- |
% |
|
|
10.2 |
% |
Daniel F. Hutchins (4)
Director, Chief Financial Officer, Treasurer and Secretary |
|
|
3,938,548 |
|
|
|
14.3 |
% |
|
|
- |
|
|
|
- |
% |
|
|
12.5 |
% |
John Loeffelbein (5)
Chief Operating Officer |
|
|
2,000,000 |
|
|
|
7.2 |
% |
|
|
- |
|
|
|
- |
% |
|
|
6.4 |
% |
Leroy C. Richie (6)
Director |
|
|
1,287,861 |
|
|
|
4.7 |
% |
|
|
- |
|
|
|
- |
% |
|
|
4.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors and
executive officers as a group (4 persons) (7) |
|
|
10,447,416 |
|
|
|
37.9 |
% |
|
|
- |
|
|
|
- |
% |
|
|
33.2 |
% |
(1)
|
Percentage
of total voting power represents voting power with respect to all
shares of our Common Stock and Series A Preferred Stock, which have
the same voting rights as our shares of Common Stock. Holders of
Common Stock are entitled to one (1) vote per share for each share
of Common Stock held by them and holders of our shares of Series A
Preferred Stock are entitled to one (1) vote for each share of
Common Stock into which the Series A Preferred Stock is
convertible, on an as converted basis. Notwithstanding the
foregoing, the Series A Preferred Stock includes beneficial
ownership limitations so that all holders of our Series A Preferred
Stock are unable to convert their shares of Series A Preferred
Stock to shares of Common Stock so that they would own greater than
4.99% of our issued and outstanding shares of Common Stock, unless
they provide at least 61 days’ prior written notice to increase
such beneficial ownership limitation up to a maximum of 9.99% of
our issued and outstanding shares of Common Stock. These
percentages reflect such beneficial ownership
limitations. |
|
|
(2) |
Such
shares of Common Stock beneficially owned by Mr. Heckman include:
(i) 2,000 shares of Common Stock issuable upon full exercise of
vested options, (ii) 442,746 shares held by Ozark Capital LLC
(“Ozark”), which shares Mr. Heckman is deemed to beneficially own,
and (iii) 1,250,000 restricted shares of Common Stock, which are
subject to forfeiture. Such shares of Common Stock beneficially
owned by Mr. Heckman exclude an aggregate of 603,598 shares of
Common Stock that would be issuable in any combination, but for the
applicable Beneficial Ownership Limitation (i) upon conversion of
1,111 shares of Series A Preferred Stock held by Ozark and (ii)
upon exercise of March Warrants held by Ozark. |
|
|
|
Such
shares of Series A Preferred Stock beneficially owned by Mr.
Heckman include 1,111 shares of Series A Preferred Stock held by
Ozark, which shares Mr. Heckman, who in the managing member of
Ozark, is deemed to beneficially own and are convertible into
347,188 shares of Common Stock. Conversion of such shares of Series
A Preferred Stock beneficially owned by Mr. Heckman are subject to
the applicable beneficial ownership limitation. |
|
|
(3) |
Such
shares of Common Stock beneficially owned by Mr. Ross include: (i)
130,000 shares of Common Stock issuable upon full exercise of
vested options, (ii) up to 1,051,416 shares of Common Stock
issuable upon full exercise of a Creditor Warrant, (iii) 12,091
shares of Common Stock issuable upon full conversion of a Note,
including accruable interest, and (iv) 1,250,000 restricted shares
of Common Stock, which are subject to forfeiture. |
|
|
(4) |
Such
shares of Common Stock beneficially owned by Mr. Hutchins include:
(i) 57,500 shares of Common Stock issuable upon full exercise of
vested options, (ii) up to 3,324,813 shares of Common Stock
issuable upon full exercise of a Creditor Warrant, (iii) 38,235
shares of Common Stock issuable upon full conversion of a Note,
including accruable interest, and (iv) 312,500 restricted shares of
Common Stock, which are subject to forfeiture. |
(5) |
Such
shares of Common Stock beneficially owned by Mr. Loeffelbein
consist of 2,000,000 restricted shares of Common Stock issued to
Mr. Loeffelbein as compensation in October 2019, which are fully
vested. |
|
|
(6) |
Such
shares of Common Stock beneficially owned by Mr. Richie include:
(i) 52,500 shares of Common Stock issuable upon full exercise of
vested options, (ii) 727,000 shares of Common Stock issuable upon
full exercise of a Creditor Warrant, (iii) 8,361 shares of Common
Stock issuable upon full conversion of a Note, including accruable
interest, and (iv) 312,500 restricted shares of Common Stock, which
are subject to forfeiture. |
|
|
(7) |
See
the information included in footnotes 2 through 6
above. |
DISSENTERS’
RIGHT OF APPRAISAL
Pursuant
to Section 262 of the DGCL, if stockholders of record do not wish
to accept the merger consideration provided for in the Merger
Agreement and the Reincorporation Merger is consummated, such
stockholders who comply with the applicable requirements of Section
262 of the DGCL and do not otherwise withdraw or lose the right to
appraisal under Delaware law have the right to seek appraisal of
the fair value of their shares and to receive payment in cash for
the fair value of their shares, exclusive of any element of value
arising from the accomplishment or expectation of the
Reincorporation Merger, as determined by the Delaware Court of
Chancery, if the Reincorporation Merger is completed. The “fair
value” of your shares as determined by the Delaware Court of
Chancery may be more or less than, or the same as, the value of the
merger consideration per share that you are otherwise entitled to
receive under the terms of the Merger Agreement. Stockholders who
wish to preserve any appraisal rights must so advise us by
submitting a demand for appraisal within the period prescribed by
Section 262 of the DGCL, and must otherwise follow the procedures
prescribed by Section 262 of the DGCL. A person having a beneficial
interest in shares of our stock held of record in the name of
another person, such as a broker, bank or other nominee, must act
promptly to cause the record holder to perfect appraisal rights. In
view of the complexity of Section 262 of the DGCL, stockholders who
may wish to pursue appraisal rights should consult their legal and
financial advisors. Failure to comply strictly with all conditions
for asserting rights as a dissenting stockholder, including the
time limits set forth in Section 262 of the DGCL, will result in
loss of such dissenting stockholder’s rights prescribed by Section
262 of the DGCL. If you fail to follow the steps required by
Section 262 of the DGCL for perfecting dissenting stockholder
appraisal rights, then you may lose these rights. In that case, you
will receive the shares of AMGAS-NV Common Stock or AMGAS-NV Series
A Preferred Stock, as applicable, to which you are entitled, in
accordance with the Merger Agreement.
This
section is intended only as a brief summary of the material
provisions of the Delaware statutory procedures that a stockholder
must follow in order to seek and perfect appraisal rights under
Section 262 of the DGCL, the full text of which is attached as
Appendix E to this Information Statement. This summary,
however, is not a complete statement of all applicable requirements
and the law pertaining to appraisal rights under the DGCL. This
summary does not constitute any legal or other advice, nor does it
constitute a recommendation that stockholders exercise their
appraisal rights under Section 262 of the DGCL. Unless otherwise
noted, all references in this summary to “stockholders” or “you”
are to the record holders of shares of Common Stock or Series A
Preferred Stock as of the Record Date. A person having a beneficial
interest in shares of Common Stock or Series A Preferred Stock held
of record in the name of another person must act promptly to cause
the record holder to follow the steps summarized below properly and
in a timely manner to perfect appraisal rights.
Section
262 of the DGCL requires that, because the Merger Agreement is
being adopted by a written consent of stockholders in lieu of a
meeting of stockholders, certain stockholders must be given notice
that appraisal rights are available. A copy of Section 262 of the
DGCL must be included with such notice. The notice must be provided
after the Reincorporation Merger is approved and no later than ten
days after the effective time of the merger. Only those
stockholders who did not submit a written consent adopting the
Merger Agreement and who have otherwise complied with Section 262
of the DGCL are entitled to receive such notice. The notice may be
given by the Company, if sent prior to the effective time of the
Reincorporation Merger, or the surviving corporation in the
Reincorporation Merger, if given after the effective time of the
Reincorporation Merger. If given at or after the effective time of
the Reincorporation Merger, the notice must also specify the
effective time of the Reincorporation Merger; otherwise, a
supplementary notice will provide this information.
A
stockholder wishing to exercise appraisal rights must hold of
record the shares of our Common Stock or Series A Preferred Stock
on the date the written demand for appraisal is made and must
continue to hold of record the shares of our Common Stock or Series
A Preferred Stock through the effective time of the Reincorporation
Merger. Appraisal rights will be lost if your shares of Common
Stock or Series A Preferred Stock are transferred prior to the
effective time of the Reincorporation Merger. If you are not the
stockholder of record, you will need to follow special procedures
as discussed further below.
If
you and/or the record holder of your shares of Common Stock or
Series A Preferred Stock fail to comply with all of the conditions
required by Section 262 of the DGCL to perfect your appraisal
rights, and the Reincorporation Merger is completed, you (assuming
that you hold your shares through the effective time of the
Reincorporation Merger) will be entitled to receive payment for
your shares of Common Stock or Series A Preferred Stock as provided
for in the Merger Agreement, but you will have no appraisal rights
with respect to your shares of Common Stock or Series A Preferred
Stock.
If
you wish to exercise dissenter’s appraisal rights, then you
must:
|
(1) |
not
consent to approve the Merger Agreement; |
|
(2) |
deliver
to the Company, within 20 days after the mailing of this
Information Statement (which constitutes notice to you), a written
demand for appraisal; and |
|
(3) |
continuously
hold of record your shares of our Common Stock or Series A
Preferred Stock from the date of delivering a demand for appraisal
through the effective time of the Merger. |
If
you fail to comply with any of these conditions and the
Reincorporation Merger becomes effective, then you will lose your
dissenting stockholder appraisal rights and you will receive
instead the shares of Common Stock or Series A Preferred Stock you
are entitled to receive in accordance with the Merger Agreement.
All written demands for appraisal under Section 262 of the DGCL
must be sent or delivered to American Noble Gas, Inc., c/o Sullivan
& Worcester LLP, 1633 Broadway, New York, NY 10019, Attention:
David E. Danovitch, Esq.
In
order to satisfy Section 262 of the DGCL, a demand for appraisal in
respect of shares of Common Stock or Series A Preferred Stock must
reasonably inform the Company or the surviving corporation, as
applicable, of the identity of the stockholder of record and their
intent to seek appraisal rights. The demand for appraisal should be
executed by or on behalf of the holder of record of the shares of
Common Stock or Series A Preferred Stock, fully and correctly, as
the stockholder’s name appears on the stock certificate(s), should
specify the stockholder’s name and mailing address and the number
of shares registered in the stockholder’s name, and must state that
the person intends thereby to demand appraisal of the stockholder’s
shares of Common Stock or Series A Preferred Stock in connection
with the Reincorporation Merger. The demand cannot be made by the
beneficial owner of shares of Common Stock or Series A Preferred
Stock if such beneficial owner does not also hold of record the
shares of Common Stock or Series A Preferred Stock. The beneficial
owner of shares of Common Stock or Series A Preferred Stock must,
in such cases, have the holder of record of such shares of Common
Stock or Series A Preferred Stock submit the required demand in
respect of such shares.
If
shares of Common Stock or Series A Preferred Stock are held of
record by a person other than the beneficial owner, including a
fiduciary (such as a trustee, guardian or custodian) or other
nominee, a demand for appraisal must be executed by such record
holder of such shares. If the shares of Common Stock or Series A
Preferred Stock are held of record by more than one person, as in a
joint tenancy or tenancy in common, the demand should be executed
by or for all joint owners of such shares. An authorized agent,
including an authorized agent for two or more joint owners, may
execute the demand for appraisal for a stockholder; however, the
agent must identify the record holder or holders and expressly
disclose the fact that, in executing the demand, they are acting as
agent for the record holder or holders. A record holder, who holds
shares of Common Stock or Series A Preferred Stock as a nominee for
others, may exercise their right of appraisal with respect to the
shares of Common Stock or Series A Preferred Stock held for one or
more beneficial owners, while not exercising this right for other
beneficial owners. In that case, the written demand should state
the number of shares of Common Stock or Series A Preferred Stock as
to which appraisal is sought. Where no number of shares of Common
Stock or Series A Preferred Stock is expressly mentioned, the
demand for appraisal will be presumed to cover all shares of Common
Stock or Series A Preferred Stock held in the name of the record
holder.
At
any time within 60 days after the effective time of the
Reincorporation Merger, any stockholder who has not commenced an
appraisal proceeding or joined a proceeding as a named party may
withdraw the demand for appraisal and accept the merger
consideration for their shares of Common Stock or Series A
Preferred Stock by delivering to the surviving corporation a
written withdrawal of the demand for appraisal. However, any such
attempt to withdraw the demand made more than 60 days after the
effective time of the Reincorporation Merger will require written
approval of the surviving corporation. Unless the demand for
appraisal is properly withdrawn by the stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a
named party within 60 days after the effective time of the
Reincorporation Merger, no appraisal proceeding in the Delaware
Court of Chancery will be dismissed as to any stockholder without
the approval of the Delaware Court of Chancery, and such approval
may be conditioned upon such terms as the court deems just. If the
surviving corporation does not approve a request to withdraw a
demand for appraisal when that approval is required, or if the
Delaware Court of Chancery does not approve the dismissal of an
appraisal proceeding, the stockholder will be entitled to receive
only the appraised value determined in any such appraisal
proceeding, which value could be less than, equal to or more than
the merger consideration for their shares of Common Stock or Series
A Preferred Stock.
Within
120 days after the effective time of the Reincorporation Merger,
but not thereafter, either the surviving corporation or any
stockholder who has complied with the requirements of Section 262
of the DGCL and is entitled to appraisal rights under Section 262
of the DGCL may commence an appraisal proceeding by filing a
petition in the Delaware Court of Chancery demanding a
determination of the fair value of the shares of Common Stock or
Series A Preferred Stock held by all stockholders entitled to
appraisal. Upon the filing of such a petition by a stockholder,
service of a copy of such petition shall be made upon the surviving
corporation. The Company has no present intent to file such a
petition and has no obligation to cause such a petition to be
filed, and stockholders should not assume that the surviving
corporation will file a petition. Accordingly, the failure of a
stockholder to file such a petition within the period specified
could nullify his, her or its previous written demand for
appraisal. In addition, within 120 days after the effective time of
the Reincorporation Merger, any stockholder who has properly filed
a written demand for appraisal, upon written request, will be
entitled to receive from the surviving corporation, a statement
setting forth the aggregate number of shares of Common Stock or
Series A Preferred Stock for which a written consent adopting the
Merger Agreement was not submitted and with respect to which
demands for appraisal have been received, and the aggregate number
of holders of such shares. The statement must be mailed within ten
days after such written request has been received by the surviving
corporation or within ten days after the expiration of the period
for delivery of demands for appraisal, whichever is later. A person
who is the beneficial owner of shares of Common Stock or Series A
Preferred Stock held either in a voting trust or by a nominee on
behalf of such person may, in such person’s own name, file a
petition for appraisal or request from the surviving corporation
such statement.
If a
petition for appraisal is duly filed by a stockholder and a copy of
the petition is served upon the surviving corporation, then the
surviving corporation will be obligated, within 20 days after
receiving service of a copy of the petition, to file with the
Delaware Register in Chancery a duly verified list containing the
names and addresses of all stockholders who have demanded an
appraisal of their shares of Common Stock or Series A Preferred
Stock and with whom agreements as to the value of their shares of
Common Stock or Series A Preferred Stock have not been reached.
After notice to stockholders who have demanded appraisal, if such
notice is ordered by the Delaware Court of Chancery, the Delaware
Court of Chancery is empowered to conduct a hearing upon the
petition and to determine those stockholders who have complied with
Section 262 of the DGCL and who have become entitled to the
appraisal rights provided by Section 262 of the DGCL. The Delaware
Court of Chancery may require stockholders who have demanded
payment for their shares of Common Stock or Series A Preferred
Stock to submit their stock certificates to the Delaware Register
in Chancery for notation of the pendency of the appraisal
proceedings, and if any stockholder fails to comply with that
direction, the Delaware Court of Chancery may dismiss the
proceedings as to that stockholder.
After
determination of the stockholders entitled to appraisal of their
shares of Common Stock or Series A Preferred Stock, the Delaware
Court of Chancery will appraise the shares of Common Stock or
Series A Preferred Stock, determining their fair value as of the
effective time of the Reincorporation Merger after taking into
account all relevant factors exclusive of any element of value
arising from the accomplishment or expectation of the
Reincorporation Merger, together with interest, if any, to be paid
upon the amount determined to be the fair value. When the fair
value has been determined, the Delaware Court of Chancery will
direct the payment of such value upon surrender by those
stockholders of the stock certificates representing their shares of
Common Stock or Series A Preferred Stock. Unless the court in its
discretion determines otherwise for good cause shown, interest from
the effective time of the Reincorporation Merger through the date
of payment of the judgment will be compounded quarterly and will
accrue at 5% over the Federal Reserve discount rate (including any
surcharge) as established from time to time during the period
between the effective time of the Reincorporation Merger and the
date of payment of the judgment.
The
Company makes no representation as to the outcome of the appraisal
of fair value as determined by the court and stockholders should
recognize that such an appraisal could result in a determination of
a value higher or lower than, or the same as, the Reincorporation
Merger consideration. Moreover, the Company does not anticipate
offering more than the Reincorporation Merger consideration to any
stockholder exercising appraisal rights and the Company reserves
the right to assert, in any appraisal proceeding, that, for
purposes of Section 262 of the DGCL, the “fair value” of a share of
Common Stock or Series A Preferred Stock is less than the per share
merger consideration.
In
determining “fair value,” the court is required to take into
account all relevant factors. In Weinberger v. UOP, Inc.,
the Delaware Supreme Court discussed the factors that could be
considered in determining fair value in an appraisal proceeding,
stating that “proof of value by any techniques or methods which are
generally considered acceptable in the financial community and
otherwise admissible in court” should be considered and that “fair
price obviously requires consideration of all relevant factors
involving the value of a company.” The Delaware Supreme Court has
stated that, in making this determination of fair value, the court
must consider market value, asset value, dividends, earnings
prospects, the nature of the enterprise and any other facts that
could be ascertained as of the date of the merger and that throw
any light on future prospects of the merged corporation. Section
262 of the DGCL provides that fair value is to be “exclusive of any
element of value arising from the accomplishment or expectation of
the merger.” In Cede & Co. v. Technicolor, Inc. , the
Delaware Supreme Court stated that such exclusion is a “narrow
exclusion that does not encompass known elements of value,” but
which rather applies only to the speculative elements of value
arising from such accomplishment or expectation. In
Weinberger , the Delaware Supreme Court construed Section
262 of the DGCL to mean that “elements of future value, including
the nature of the enterprise, which are known or susceptible of
proof as of the date of the merger and not the product of
speculation, may be considered.” In addition, Delaware courts have
decided that the statutory appraisal remedy, depending on factual
circumstances, may or may not be a dissenting stockholder’s
exclusive remedy.
Costs
of the appraisal proceeding (which do not include attorneys’ fees
or the fees and expenses of experts) may be determined by the
Delaware Court of Chancery and imposed upon the surviving
corporation and the stockholders participating in the appraisal
proceeding by the Delaware Court of Chancery, as it deems equitable
in the circumstances. Each stockholder seeking appraisal is
responsible for their attorneys’ and expert witness expenses,
although, upon the application of a stockholder, the Delaware Court
of Chancery could order all or a portion of the expenses incurred
by any stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys’ fees and the
fees and expenses of experts used in the appraisal proceeding, to
be charged pro rata against the value of all shares of Common Stock
or Series A Preferred Stock entitled to appraisal. Any stockholder
who has duly demanded appraisal in compliance with Section 262 of
the DGCL will not, after the effective time of the Reincorporation
Merger, be entitled to vote shares of Common Stock or Series A
Preferred Stock subject to that demand for any purpose or to
receive payments of dividends or any other distributions with
respect to those shares of Common Stock or Series A Preferred
Stock, other than with respect to payments as of a record date
prior to the effective time of the Reincorporation Merger. However,
if no petition for appraisal is filed within 120 days after the
effective time of the merger, or if a stockholder otherwise fails
to perfect their appraisal rights, successfully withdraws their
demand for appraisal or loses their right to appraisal, then the
right of that stockholder to appraisal will cease and that
stockholder will only be entitled to receive the merger
consideration for their shares of Common Stock or Series A
Preferred Stock pursuant to the Merger Agreement.
FAILING
TO FOLLOW PROPER STATUTORY PROCEDURES WILL RESULT IN LOSS OF YOUR
APPRAISAL RIGHTS. In view of the complexity of Section 262 of the
DGCL, stockholders who may wish to pursue appraisal rights should
consult their legal and financial advisors.
ADDITIONAL
INFORMATION
The
Company files annual, quarterly and special reports and other
information with the SEC. The Company’s filings are available
through the SEC’s Electronic Data Gathering Analysis and Retrieval
System which is publicly available through the SEC’s website
(www.sec.gov) and the Company’s website
(www.IFNYOILANDGAS.com).
Stockholders
may obtain documents by requesting them in writing or by telephone
913-232-5349 from the Company at the following address: 15612
College Blvd., Lenexa, Kansas 66219. Stockholders may also obtain
documents on the Company’s website
(www.IFNYOILANDGAS.com).
This
information statement is dated November 5, 2021. You should not
assume that the information contained in this information statement
is accurate as of any date other than that date.
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 American Noble Gas, Inc., 15612
College Blvd., Lenexa, KS 66219.
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 mail notification to, or call the Company
at, its 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
office.
This
Information Statement is provided to the stockholders of the
Company only for informational purposes in connection with the
stockholder action by Written Consent described herein, pursuant to
and in accordance with Rule 14c-2 under the Exchange
Act.
By
order of the Board of Directors |
|
|
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/s/
Stanton E. Ross |
|
Stanton
E. Ross |
|
Chairman |
|
Overland
Park, Kansas
November
5, 2021
● |
Appendix
A – Merger Agreement |
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|
● |
Appendix
B – Nevada Articles of Incorporation |
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Appendix
C - Nevada Certificate of Designation of Series A Convertible
Preferred Stock |
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● |
Appendix
D – Nevada Bylaws |
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|
● |
Appendix
E – Appraisal Rights Procedures |
APPENDIX A
AGREEMENT
AND PLAN OF MERGER
OF
AMERICAN
NOBLE GAS, INC., A DELAWARE CORPORATION
WITH
AND INTO
AMERICAN
NOBLE GAS, INC., A NEVADA CORPORATION
THIS
AGREEMENT AND PLAN OF MERGER (the “Agreement”), dated
as of December 3, 2021, by and between American Noble Gas, Inc., a
Delaware corporation (“AMGAS-DE”), and American Noble Gas,
Inc., a Nevada corporation (“AMGAS-NV”), which corporations
are sometimes referred to herein as the “Constituent
Corporations.”
W
I T N E S E T H:
WHEREAS,
AMGAS-DE was organized and existing under the laws of the State of
Delaware, pursuant to an original Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on April
29, 2005, as amended by that certain Corrected Instrument Certificate, along
with a Corrected Certificate of Incorporation filed on September
13, 2006, a Certificate of Amendment of Certificate of
Incorporation filed on November 17, 2015 and a Second Certificate
of Amendment of Certificate of Incorporation filed on October 14,
2021;
WHEREAS,
AMGAS-NV is a wholly-owned subsidiary of AMGAS-DE, having been
incorporated under the laws of the State of Nevada, pursuant to
Articles of Incorporation filed with the Secretary of State of the
State of Nevada on November 11, 2021;
WHEREAS,
the respective Boards of Directors of AMGAS-DE and AMGAS-NV have
approved by written consent this Agreement and the merger of
AMGAS-DE with and into AMGAS-NV, with AMGAS-NV continuing as the
surviving company (the “Merger”);
WHEREAS,
the Delaware General Corporation Law, as amended (the
“DGCL”) and Chapter 78 of the Nevada Revised
Statutes, as amended (the “NRS”) permit the Merger;
and
WHEREAS,
the Merger is intended to qualify as a “reorganization” under, and
within the meaning of, Section 368(a) of the Internal Revenue Code
of 1986, as amended (including the Treasury Regulations in effect
thereunder, the “Code”).
NOW,
THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, and for other valuable consideration,
the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound, AMGAS-DE and AMGAS-NV hereto agree
as follows:
ARTICLE
I
MERGER
1.1
Upon the terms and subject to the conditions of this Agreement, a
Certificate of Merger (the “Certificate of Merger”)
shall be duly prepared and executed by AMGAS-NV in accordance with
the DGCL and filed with the Secretary of State of the State of
Delaware and Articles of Merger (the “Articles of
Merger”) shall be duly prepared and executed by the
Constituent Companies in accordance with the NRS, and shall be
filed with the Secretary of State of the State of Nevada,
(together, the “Merger Certificates”). The Merger
shall become effective upon the later of (a) the filing of the
Merger Certificates with the Secretary of State of the State of
Delaware and the Secretary of State of the State of Nevada (b) the
date the Constituent Companies obtain a market effective date from
the Financial Industry Regulatory Authority and (b) such other date
and time as AMGAS-DE and AMGAS-NV shall agree and specify in the
Merger Certificates (the “Effective
Time”).
1.2
At the Effective Time, as provided herein, AMGAS-DE shall be merged
with and into AMGAS-NV, and the separate existence of AMGAS-DE
shall cease to exist. AMGAS-NV shall continue to exist under the
laws of the State of Nevada as the surviving entity following the
Merger. The consummation of the Merger will have the effects
provided in the DGCL and NRS, including, without limitation, the
assets and liability of AMGAS-DE becoming the property of the
AMGAS-NV following the Merger.
1.3
From time to time, as and when required by AMGAS-NV or by its
successors and assigns, AMGAS-DE shall execute and deliver, or
cause to be executed and delivered, all such deeds and other
instruments and will take or cause to be taken such further or
other action as AMGAS-NV may deem necessary in order to vest in and
confirm to AMGAS-NV title to and possession of all the property,
rights, privileges, immunities, powers, purposes and franchises,
and all and every other interest of AMGAS-DE and otherwise to carry
out the intent and purposes of this Agreement.
ARTICLE
II
ARTICLES
OF INCORPORATION AND BYLAWS OF SURVIVING CORPORATION
2.1
The Articles of Incorporation of AMGAS-NV, as in effect at the
Effective Time, shall be the Articles of Incorporation of AMGAS-NV
(the “AMGAS-NV Charter”) until duly amended in
accordance with the terms thereof and the NRS.
2.2
The Bylaws of the AMGAS-NV, as in effect at the Effective Time,
shall be the Bylaws of AMGAS-NV (the “AMGAS-NV
Bylaws”) until duly amended in accordance with the terms
thereof and the NRS.
ARTICLE
III
OFFICERS
AND DIRECTORS OF SURVIVING CORPORATION
3.1
The officers of AMGAS-DE immediately prior to the Effective Time
shall be the officers of the AMGAS-NV immediately after the
Effective time, each to hold off in accordance with the provisions
of the NRS, the AMGAS-NV Charter and the AMGAS-NV Bylaws until
their respective successors shall have been appointed or
elected.
3.2
The directors of AMGAS-DE immediately prior to the Effective Time
shall be the officers and directors of AMGAS-NV immediately after
the Effective Time, and such persons shall hold the office of
director in accordance with the provisions of the NRS, the AMGAS-NV
Charter and AMGAS-NV Bylaws, as amended, until their respective
successors shall have been appointed or elected.
3.3
If, at the Effective Time, a vacancy shall exist in the Board of
Directors of AMGAS-NV, such vacancy shall be filled in the manner
provided by the AMGAS-NV Bylaws.
ARTICLE
IV
TREATMENT
OF CAPITAL STOCK
4.1
At the Effective Time, each share of Common Stock of AMGAS-DE, par
value $0.0001 per share, issued and outstanding immediately prior
to the Effective Time (the “AMGAS-DE Common Stock”)
shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into one (1) fully-paid and
nonassessable newly issued share of common stock, par value $0.0001
per share, of AMGAS-NV (the “AMGAS-NV Common Stock”),
and (ii) each outstanding share of AMGAS-NV Common Stock held by
AMGAS-DE immediately prior to the Merger shall be retired and
canceled. Certificates representing shares of AMGAS-DE Common Stock
will represent shares of AMGAS-NV Common Stock, and upon surrender
of the same to the transfer agent for AMGAS-DE, who shall continue
to serve as the transfer agent for AMGAS-NV, the holder thereof
shall be entitled to receive, in exchange therefor, a certificate
or certificates representing the equivalent number shares of
AMGAS-NV Common Stock into which the AMGAS-DE Common Stock has been
converted.
4.2
At the Effective Time, each share of Preferred Stock of AMGAS-DE,
par value $0.0001 per share, issued and outstanding immediately
prior to the Effective Time (the “AMGAS-DE Preferred
Stock”) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into one (1)
fully-paid and nonassessable newly-issued share of common stock,
par value $0.0001 per share, of AMGAS-NV (the “AMGAS-NV
Preferred Stock”), and (ii) each outstanding share of
AMGAS-NV Preferred Stock held by AMGAS-DE immediately prior to the
Merger shall be retired and canceled. Certificates representing
shares of AMGAS-DE Preferred Stock will represent shares of
AMGAS-NV Preferred Stock, and upon surrender of the same to the
transfer agent for AMGAS-DE, who shall continue to serve as the
transfer agent for AMGAS-NV, the holder thereof shall be entitled
to receive, in exchange therefor, a certificate or certificates
representing the equivalent number shares of AMGAS-NV Preferred
Stock into which the AMGAS-DE Preferred Stock has been
converted.
4.3
At the Effective Time, each option and right to acquire AMGAS-DE
Common Stock, and each warrant or other right to purchase AMGAS-DE
Common Stock issued and outstanding immediately prior to the
Effective Time (together, the “AMGAS-DE Options, Warrants and
Rights”), shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into
equivalent options, warrants and rights to purchase the number of
shares of AMGAS-NV Common Stock on a one-for-one basis including at
the same exercise, conversion or strike price of such converted
options, warrants and rights.
4.4
At the Effective Time, all rights with respect to the AMGAS-DE
Common Stock, the AMGAS-DE Preferred Stock and the AMGAS-DE
Options, Warrants and Rights shall cease and terminate, and the
AMGAS-DE Common Stock, the AMGAS-DE Preferred Stock and the
AMGAS-DE Options, Warrants and Rights shall no longer be deemed to
be outstanding, whether or not the certificate(s), if any,
representing such stock have been surrendered.
4.5
At the Effective Time, each share of capital stock of AMGAS-NV
issued and outstanding immediately prior to the Effective Time
shall remain issued and outstanding as shares of capital stock of
AMGAS-NV.
ARTICLE
V
DISSENTING
SHARES
5.1
Holders of shares of AMGAS-DE Common Stock and AMGAS-DE Preferred
Stock who have complied with all requirements for perfecting their
rights of appraisal set forth in Section 262 of the DGCL shall be
entitled to their rights under Delaware law with respect to
payments to be made by AMGAS-NV in connection with the
Merger.
ARTICLE
VI
TAX MATTERS
6.1
This Agreement is intended to constitute a plan of reorganization
for purposes of Treasury Regulations Section 1.368-2(g) and
Sections 354, 361, and 368 of the Code, and the Merger is intended
to constitute a reorganization under Section 368(a) of the Code.
Each party hereto shall perform, and shall cause its affiliates to
perform, its United States federal income tax reporting and
conforming state tax reporting in accordance with such treatment
unless otherwise required by a determination as defined in Section
1313(a) of the Code.
ARTICLE
VII
MISCELLANEOUS
7.1
GOVERNING LAW. This Agreement shall be governed by, enforced under
and construed in accordance with the laws of the State of Nevada
without giving effect to any choice or conflict of law provision or
rule thereof, and interpreted consistent with the intent that the
Merger qualify as a “reorganization” under, and within the meaning
of, Section 368(a) of the Code.
7.2
EXPENSES. If the Merger becomes effective, AMGAS-NV shall assume
and pay all expenses in connection therewith not theretofore paid
by the respective parties. If for any reason the Merger shall not
become effective, AMGAS-DE shall pay all expenses incurred in
connection with all the proceedings taken in respect of this Merger
Agreement or relating thereto.
7.3
AMENDMENT AND MODIFICATION. The Boards of Directors of AMGAS-DE and
AMGAS-NV may amend this Agreement at any time prior to the
Effective Time, provided that an amendment made subsequent to the
approval of the Merger by the stockholders of AMGAS-DE may not (i)
change the amount or kind of shares to be received in exchange for
or on conversion of the shares of the AMGAS-DE Common Stock or the
AMGAS-DE Preferred Stock; or (ii) alter or change any of the terms
and conditions of this Agreement or the AMGAS-NV Charter or
AMGAS-NV Bylaws if such change would adversely affect the holders
of the AMGAS-DE Common Stock or AMGAS-DE Preferred
Stock.
7.4
TERMINATION. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before
or after stockholder approval of this Agreement, or the consent of
the Board of Directors of AMGAS-DE and AMGAS-NV.
7.5
AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the
subject matter hereof. An executed copy of this Agreement will be
on file at the principal place of business of AMGAS-NV and, upon
request and without cost, a copy thereof will be furnished to any
stockholder.
7.6
COUNTERPARTS. This Merger Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original
and all of which together shall constitute one and the same
instrument.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above
written.
AMERICAN
NOBLE GAS, INC. |
|
a
Nevada corporation |
|
|
|
|
By: |
/s/
Stanton E. Ross |
|
|
Stanton
E. Ross
Chief
Executive Officer
|
|
AMERICAN
NOBLE GAS, INC. |
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a
Delaware corporation |
|
|
|
|
By: |
/s/
Stanton E. Ross |
|
|
Stanton
E. Ross
Chief
Executive Officer
|
|
APPENDIX B
ARTICLES
OF INCORPORATION
OF
AMERICAN
NOBLE GAS, INC. (a Nevada Corporation)
ARTICLE
1
NAME
The
name of the corporation is American Noble Gas, Inc. (the
“Company”).
ARTICLE
2
REGISTERED AGENT
The
address of the registered office of the Company in the State of
Nevada is c/o Corporation Service Company, 112 North Curry St.,
Carson City, NV 89703. The name of its registered agent at that
address is Corporation Service Company.
ARTICLE
3
PURPOSE
The
purpose of the Company is to engage in any lawful act or activity
for which a Corporation may be organized under the provisions of
Nevada Revised Statutes 78.010 to 78.090 inclusive as
amended.
ARTICLE
4
CAPITAL STOCK
4.1
Common Stock.
(a)
The total number of shares of common stock, par value $0.0001 per
share, that the Company is authorized to issue is
500,000,000.
(b)
Each holder of common stock shall be entitled to one vote for each
share of common stock held on all matters as to which holders of
common stock shall be entitled to vote. Except for and subject to
those preferences, rights, and privileges expressly granted to the
holders of all classes of stock at the time outstanding having
prior rights, and any series of preferred stock which may from time
to time come into existence, and except as may be otherwise
provided by the laws of the State of Nevada, the holders of common
stock shall have exclusively all other rights of stockholders of
the Company, including, but not limited to, (i) the right to
receive dividends when, as and if declared by the Board of
Directors out of assets lawfully available therefor, and (ii) in
the event of any distribution of assets upon the dissolution and
liquidation of the Company, the right to receive ratably and
equally all of the assets of the Company remaining after the
payment to the holders of preferred stock of the specific amounts,
if any, which they are entitled to receive as may be provided
herein or pursuant hereto.
4.2
Preferred Stock.
(a)
The total number of shares of preferred stock, par value $0.0001
per share, that the Company is authorized to issue is
10,000,000.
(b)
The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of
preferred stock in one or more series, with such voting powers,
full or limited, or without voting powers and with such
designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted
by the Board of Directors, subject to the limitations prescribed by
law and in accordance with the provisions hereof, including but not
limited to the following:
(1)
The designation of the series and the number of shares to
constitute the series.
(2)
The dividend rate of the series, the conditions and dates upon
which such dividends shall be payable, the relation which such
dividends shall bear to the dividends payable on any other class or
classes of stock, and whether such dividends shall be cumulative or
noncumulative.
(3)
Whether the shares of the series shall be subject to redemption by
the corporation and, if made subject to such redemption, the times,
prices and other terms and conditions of such
redemption.
(4)
The terms and amount of any sinking fund provided for the purchase
or redemption of the shares of the series.
(5)
Whether or not the shares of the series shall be convertible into
or exchangeable for shares of any other class or classes or of any
other series of any class or classes of stock of the corporation,
and, if provision be made for conversion or exchange, the times,
prices, rates, adjustments and other terms and conditions of such
conversion or exchange.
(6)
The extent, if any, to which the holders of the shares of the
series shall be entitled to vote with respect to the election of
directors or otherwise.
(7)
The restrictions, if any, on the issue or reissue of any additional
preferred stock.
(8)
The rights of the holders of the shares of the series upon the
dissolution, liquidation, or winding up of the
corporation.
ARTICLE
5
DIRECTORS
5.1
Authority, Number and Election of Directors. The business
and affairs of the Company shall be conducted by or under the
direction of the Board of Directors. The number of directors of the
Company shall be fixed from time to time in the manner provided in
the bylaws and may be increased or decreased from time to time in
the manner provided in the bylaws; provided, however, that, except
as otherwise provided in this Article 5, the number of directors
shall not be less than three or more than seven. Election of
directors need not be by written ballot except and to the extent
provided in the bylaws of the Company. In the event that the
holders of any class or series of preferred stock shall be
entitled, by a separate class vote, to elect directors as may be
specified pursuant to Article 4, then the provisions of such class
or series of stock with respect to such rights shall apply. The
number of directors that may be elected by the holders of any such
class or series of preferred stock shall be in addition to the
number fixed pursuant to this Section 5.1.
5.2
Removal of Directors. Subject to any rights of the holders
of any series of preferred stock, any director may be removed from
office at any time, but only by the affirmative vote of the holders
of not less than sixty six and two-thirds percent
(662/3%) of the outstanding shares of the
capital stock of the Company entitled to vote generally in the
election of directors (considered for this purpose as one
class).
5.3
Quorum. A quorum of the Board of Directors for the
transaction of business shall not consist of less than a majority
of the total number of directors, except as otherwise may be
provided in these Articles of Incorporation or in the bylaws with
respect to filling vacancies.
5.4
Newly Created Directorships and Vacancies. Except as
otherwise fixed pursuant to the rights of the holders of any class
or series of preferred stock to elect directors under specified
circumstances, newly created directorships resulting from any
increase in the number of directors and any vacancies on the Board
of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled solely by the affirmative
vote of a majority of the remaining directors then in office, or by
a sole remaining director, even though less than a quorum of the
Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full
term of the new directorship which was created or in which the
vacancy occurred and until such director’s successor shall have
been elected and qualified.
ARTICLE
6
BYLAWS
Except
as otherwise provided in these Articles of Incorporation, in
furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt,
repeal, alter, amend and rescind any or all of the bylaws of the
Company.
ARTICLE
7
STOCKHOLDERS
7.1
Meetings. Meetings of stockholders may be held within or
without the State of Nevada, as determined by the Board of
Directors. Each meeting of stockholders will be held on the date
and at the time arid place determined by the Board of Directors.
Except as otherwise required by law and subject to the rights of
the holders of any class or series of preferred stock, special
meetings of the stockholders may be called only by the chairman of
the board, the chief executive officer, the president or any
officer of the Company upon the written request of a majority of
the Board of Directors, or as provided in the bylaws.
ARTICLE
8
VOTING REQUIREMENT
Notwithstanding
any other provisions of these Articles of Incorporation or of the
bylaws of the Company (and notwithstanding the fact that a lesser
percentage may be otherwise specified by law, these Articles of
Incorporation or the bylaws), the affirmative vote of the holders
of not less than sixty six and two-thirds percent (66 2/3%) of the
outstanding shares of the capital stock of the Company entitled to
vote generally in the election of directors (considered for this
purpose as one class), shall be required to amend or repeal or
adopt any provisions inconsistent with Articles 5, 8, 9 or 10 of
these Articles of Incorporation.
ARTICLE
9
LIABILITY OF OFFICERS AND DIRECTORS
9.1
General. A director of the Company shall not be liable to
the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except to the extent such exemption
from liability or limitation thereof is not permitted under the NRS
as currently in effect or as the same may hereafter be
amended.
9.2
Amendment. No amendment, modification or repeal of this
Article 9 shall adversely affect any right or protection of a
director that exists at the time of such amendment, modification or
repeal.
ARTICLE
10
INDEMNIFICATION
10.1
General. The Company shall indemnify to the fullest extent
permitted by and in the manner permissible under the NRS, as
amended from time to time (but, in the case of any such amendment,
only to the extent that such amendment permits the Company ₹o
provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment), any person made, or
threatened to be made, a party to any threatened, pending or
completed action, suit, or proceeding, whether criminal, civil,
administrative, or investigative, by reason of the fact that such
person (a) is or was a director or officer of the Company or any
predecessor of the Company or (b) is or was a director or officer
of the Company or any predecessor of the Company and served any
other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise as a director, officer, partner,
trustee, employee or agent at the request of the Company or any
predecessor of the Company; provided, however, that except as
provided in Section 10.4, the Company shall indemnify any such
person seeking indemnification in connection with a proceeding (or
part thereof) initiated by such person only if such proceeding (or
part thereof) was authorized by the Board of Directors.
10.2
Advancement of Expenses. The right to indemnification
conferred in this Article 10 shall be a contract right and shall
include the right to be paid by the Company the expenses incurred
in defending any such proceeding in advance of its final
disposition, such advances to be paid by the Company within twenty
days after the receipt by the Company of a statement or statements
from the claimant requesting such advance or advances from time to
time; provided, however, that if the NRS requires, the payment of
such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding,
shall be made only upon delivery to the Company of an undertaking
by or on behalf of such director or officer to repay all amounts so
advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article 10 or
otherwise.
10.3
Procedure for Indemnification. To obtain indemnification
under this Article 10, a claimant shall submit to the Company a
written request, including therein or therewith such documentation
and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the
claimant is entitled to indemnification. Upon written request by a
claimant for indemnification pursuant to the first sentence of this
Section 10.3, a determination, if required by applicable law, with
respect to the claimant’s entitlement thereto shall he made as
follows: (a) if requested by the claimant or if there are no
Disinterested Directors (as hereinafter defined), by Independent
Counsel (as hereinafter defined), or (b) by a majority vote of the
Disinterested Directors, even though less than a quorum, or by a
majority vote of a committee of Disinterested Directors designated
by a majority vote of Disinterested Directors, even though less
than a quorum. If it is so determined that the claimant is entitled
to indemnification, payment to the claimant shall be made within 10
days after such determination.
10.4
Certain Remedies. If a claim under Section 10.1 is not paid
in full by the Company within thirty days after a written claim
pursuant to Section 10.3 has been received by the Company, the
claimant may at any time thereafter bring suit against the Company
to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any, has been
tendered to the Company) that the claimant has not met the standard
of conduct which makes it permissible under the NRS for the Company
to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Company. Neither the failure
of the Company (including its Board of Directors, Independent
Counsel or stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the NRS, nor an actual
determination by the Company (including its Board of Directors,
Independent Counsel or stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met
the applicable standard of conduct.
10.5
Binding Effect. if a determination shall have been made
pursuant to Section 10.3 that the claimant is entitled to
indemnification, the Company shall be bound by such determination
in any judicial proceeding commenced pursuant to Section
10.4,
10.6
Validity of this Article. The Company shall be precluded
from asserting in any judicial proceeding commenced pursuant to
Section 10.4 that the procedures and presumptions of this Article
10 are not valid, binding and enforceable and shall stipulate in
such proceeding that the Company is bound by all the provisions of
this Article 10.
10.7
Nonexclusivity, etc. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance
of its final disposition conferred in this Article 10 shall not be
exclusive of any other right which any person may have or hereafter
acquire under any statute, provision of the Articles of
Incorporation, bylaws, agreement, vote of stockholders or
Disinterested Directors or otherwise. No repeal or modification of
this Article 10 shall in any way diminish or adversely affect the
rights of any present or former director, officer, employee or
agent of the Company or any predecessor thereof hereunder in
respect of any occurrence or matter arising prior to any such
repeal or modification.
10.8
Insurance. The Company may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Company or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability
or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under
the NRS.
10.9
Indemnification of Other Persons. The Company may grant
rights to indemnification, arid rights to be paid by the Company
the expenses incurred in defending any proceeding in advance of its
final disposition, to any present or former employee or agent of
the Company or any predecessor of the Company to the fullest extent
of the provisions of this Article 10 with respect to the
indemnification and advancement of expenses of directors and
officers of the Company.
10.10
Severability. If any provision or provisions of this Article
10 shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of
the remaining provisions of this Article 10 (including, without
limitation, each portion of any paragraph of this Article 10
containing any such provision held to be invalid, illegal or
unenforceable, that is not itself held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby
and (b) to the fullest extent possible, the provisions of this
Article 10 (including, without limitation, each such portion of any
paragraph of this Article 10 containing any such provision held to
be invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
10.11
Certain Definitions. For purposes of this Article
10:
(a)
“Disinterested Director” means a director of the Company who
is not and was not a party to the matter in respect of which
indemnification is sought by the claimant.
(b)
“Independent Counsel” means a law firm, a member of a law
fine, or an independent practitioner that is experienced in matters
of corporation law and shall include any such person who, under the
applicable standards of professional conduct then prevailing, would
not have a conflict of interest in representing either the Company
or the claimant in an action to determine the claimant’s rights
under this Article 10. Independent Counsel shall be selected by the
Board of Directors.
ARTICLE
11
INITIAL DIRECTORS
11.1
Incorporator. The name and mailing address of the
incorporator is Stanton E. Ross, c/o American Noble Gas, Inc..
Immediately upon filing of this certificate, the powers of the
incorporator shall cease.
11.2
Initial Director. The names of the initial directors are
listed below and the mailing address of such directors is: c/o
American Noble Gas, Inc., 15612 College Blvd. Lenexa, KS
66219.
|
● |
Stanton
E. Ross; |
|
● |
Leroy
C. Richie; and |
|
● |
Daniel
F. Hutchins |
IN
WITNESS WHEREOF, I, the undersigned, being the incorporator
hereinbefore named, do hereby further certify that the facts
hereinabove stated are truly set forth and, accordingly, I have
hereunto set my hand this 11th day of November, 2021.
|
/s/
Stanton E. Ross |
|
Stanton
E. Ross, Incorporator |
APPENDIX C
CERTIFICATE
OF DESIGNATION
AMERICAN
NOBLE GAS, INC.
CERTIFICATE
OF DESIGNATION OF PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
A CONVERTIBLE PREFERRED STOCK
Pursuant
to Section 78.195 of the
Nevada
Revised Statutes, as Amended
The
undersigned, Stanton E. Ross does hereby certify that:
1. He
is the Chief Executive Officer of American Noble Gas, Inc., a
Nevada corporation (the “Corporation”).
2.
The Corporation is authorized pursuant to its Articles of
Incorporation, to issue 10,000,000 shares of preferred stock,
$0.0001 par value.
3. To
this end, the following resolutions were duly adopted by the board
of directors of the Corporation (the “Board of Directors”)
on October 22, 2021:
“WHEREAS,
the certificate of incorporation of the Corporation provides for a
class of its authorized stock known as preferred stock, consisting
of 10,000,000 shares, $0.0001 par value per share, issuable from
time to time in one or more series; and
WHEREAS,
the Board of Directors is authorized to fix the dividend rights,
dividend rate, voting rights, conversion rights, rights and terms
of redemption and liquidation preferences of any wholly unissued
series of preferred stock and the number of shares constituting any
series and the designation thereof, of any of them;
NOW,
THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested
in the Board of Directors of the Corporation and the provisions of
the Articles of Incorporation the designation and number of shares
thereof and the voting powers, preferences and other rights of the
shares of such class, and the qualifications, limitation and
restrictions thereof, designated as the Series A Convertible
Preferred Stock, are as follows:
TERMS
OF PREFERRED STOCK
Section
1. Definitions. For the purposes hereof, in addition to
the terms defined in the Purchase Agreement dated March 15, 2021
between the Corporation and the purchasers signatory thereto (the
“Purchase Agreement”) the following terms shall have the
following meanings:
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section
7(d).
“Beneficial
Ownership Limitation” shall have the meaning set forth in
Section 6(e).
“Business
Day” means any day except any Saturday, any Sunday, any day
which is a federal legal holiday in the United States or any day on
which the Federal Reserve Bank of New York is closed.
“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).
“Commission”
means the United States Securities and Exchange
Commission.
“Common
Stock” means the Corporation’s common stock, par value $0.0001
per share, and stock of any other class of securities into which
such securities may hereafter be reclassified or
changed.
“Common
Stock Equivalents” means any securities of the Corporation or
the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that
is at any time convertible into or exercisable or exchangeable for,
or otherwise entitles the holder thereof to receive, Common
Stock.
“Conversion
Amount” means the sum of the Stated Value at issue.
“Conversion
Date” shall have the meaning set forth in Section
6(a).
“Conversion
Price” shall have the meaning set forth in Section
6(c).
“Conversion
Shares” means, collectively, the shares of Common Stock
issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof.
“Equity
Conditions” means, during the period in question, (a) no event
of default shall have occurred, (b) the Corporation has timely
filed (or obtained extensions in respect thereof and filed within
the applicable grace period) all reports required to be filed by
the Corporation after the date hereof pursuant to the Exchange Act
and the Corporation has met the current public information
requirements of Rule 144(c) under the Securities Act as of the end
of the period in question, (c) the average daily dollar volume of
the Common Stock for the previous fifteen (15) trading days must be
greater than $25,000, (d) the Common Stock must be DWAC Eligible
and not subject to a “DTC chill,” (e) on any date that the
Corporation desires to make a payment of dividend in shares of
Common Stock instead of cash, the Common Stock has closed at or
above $0.15 per share on the Trading Market with respect to the
Trading Day immediately prior to any date on which dividend is to
be paid, and (f) the Conversion Shares are deemed “free trading”
shares. For the purposes of this definition, “free trading” shares
shall mean that such shares are eligible for resale pursuant to
Rule 144 (provided the Corporation is compliant with its current
public information requirements) promulgated by the SEC pursuant to
the Securities Act of 1933, as amended, or such shares are the
subject of a then effective registration statement.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exempt
Issuance” means the issuance of (a) shares of Common Stock or
options to employees, officers, directors, advisors or independent
contractors of the Corporation; provided, that such issuance is
approved by a majority of the board of directors of the
Corporation; and provided, further that such issuance shall not
exceed in the aggregate 15% of the outstanding shares of Common
Stock without the prior approval of the Purchaser, (b) shares of
Common Stock, warrants or options to advisors or independent
contractors of the Corporation for compensatory purposes, (c)
securities issued upon the exercise or exchange of or conversion of
any Preferred Stock issued pursuant to the Purchase Agreement, any
shares of Preferred Stock issued pursuant to the Purchase Agreement
and/or other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on
the date hereof; provided, that such securities have not been
amended since the Original Issue Date to increase the number of
such securities or to decrease the exercise price, exchange price
or conversion price of such securities, (d) securities issuable
pursuant to any contractual anti-dilution obligations of the
Corporation in effect as of the Original Issue Date; provided, that
such obligations have not been materially amended since the
Original Issue Date, and (e) securities issued pursuant to
acquisitions or any other strategic transactions approved by a
majority of the disinterested members of the Board of Directors
provided, that any such issuance shall not include a transaction in
which the Corporation is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business
is investing in securities.
“Fundamental
Transaction” shall have the meaning set forth in Section
7(d).
“GAAP”
means United States generally accepted accounting
principles.
“Holder”
shall have the meaning given such term in Section 2.
“Junior
Stock” shall have the meaning set forth in Section
9.
“Liquidation”
shall have the meaning set forth in Section 5.
“New
York Courts” shall have the meaning set forth in Section
8(d).
“Notice
of Conversion” shall have the meaning set forth in Section
6(a).
“Original
Issue Date” means the date of the first issuance of any shares
of the Preferred Stock regardless of the number of transfers of any
particular shares of Preferred Stock and regardless of the number
of certificates which may be issued to evidence such Preferred
Stock.
“Parity
Stock” shall have the meaning set forth in Section
9.
“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Preferred
Stock” shall have the meaning set forth in Section
2.
“Qualified
Offering” means any equity financing transaction consummated
after the Original Issue Date, pursuant to which the Corporation
raises gross proceeds of not less than $5,000,000.
“Required
Holders” shall have the meaning set forth in Section
9.
“Securities
Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
“Senior
Preferred Stock” shall have the meaning set forth in Section
9.
“Share
Delivery Date” shall have the meaning set forth in Section
6(d)(i).
“Stated
Value” shall have the meaning set forth in Section
2.
“Subsidiary”
means any direct or indirect subsidiary of the Corporation as set
and shall, where applicable, also include any direct or indirect
subsidiary of the Corporation formed or acquired after the date
Original Issue Date.
“Successor
Entity” shall have the meaning set forth in Section
7(d).
“Trading
Day” means a day on which the principal Trading Market is open
for business.
“Trading
Market” means any of the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market, or the New
York Stock Exchange OTC Markets or the OTC Bulletin Board (or any
successors to any of the foregoing).
“Transfer
Agent” means Action Stock Transfer, the current transfer agent
of the Corporation, with a mailing address of 2469 E. Fort Union
Blvd, Suite 214, Salt Lake City, UT 84121 and a phone number of
(801) 274-1088, attention: Justeene Blankenship, and any successor
transfer agent of the Corporation.
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
in the “Pink Sheets” published by OTC Markets, Inc. (or a similar
organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of
the Preferred Stock then outstanding and reasonably acceptable to
the Corporation, the fees and expenses of which shall be paid by
the Corporation.
Section
2. Designation, Amount and Par Value. The series of
preferred stock shall be designated as its Series A Convertible
Preferred Stock (the “Preferred Stock”) and the number of
shares so designated shall be 27,778 (which shall not be subject to
increase without the written consent of all of the holders of the
Preferred Stock (each, a “Holder” and collectively, the
“Holders”)). Each share of Preferred Stock shall have a par
value of $0.0001 per share and a stated value equal to $100.00 (the
“Stated Value”).
Section
3. Dividends. Holders shall be entitled to receive, and
the Corporation, at its option, shall pay (i) in cash, or (ii) by
issuing shares of free trading Common Stock to Holders, dividends
on shares of Preferred Stock, based on the Stated Value, at a rate
of ten percent (10%) per annum, commencing on April 1, 2021, pro
rated, and continuing on each July 1st, October
1st, and January 1st thereafter until the
earlier of (i) the date that the Preferred Stock is converted to
Common Stock or (ii) date the Corporation’s obligations hereunder
have been satisfied in full (the “Dividend Termination
Date”). Such dividends shall accrue and be compounded daily on
the basis of a 360-day day year and twelve (12) 30-day months and,
in addition to the previously mentioned payment dates, shall be
paid either promptly upon the occurrence of an event of default,
after conversion of the Preferred Stock or on the Dividend
Termination Date, if the Preferred Stock has not been converted
prior to the Dividend Termination Date. No other dividends shall be
paid on shares of Preferred Stock.
Section
4. Voting Rights. The Preferred Shares will vote with
the shares of Common Stock, on an as-converted to Common Stock
basis, with respect to all matters on which the holders of Common
Stock are entitled to vote, subject to any applicable Beneficial
Ownership Limitations. In addition, as long as any shares of
Preferred Stock are outstanding, the Corporation shall not, without
the affirmative vote of the Holders of a majority of the then
outstanding shares of the Preferred Stock, (a) alter or change
adversely the powers, preferences or rights given to the Preferred
Stock or alter or amend this Certificate of Designation, (b) amend
its Articles of Incorporation or other charter documents in any
manner that adversely affects any rights of the Holders, (c)
increase the number of authorized shares of Preferred Stock, or (d)
enter into any agreement with respect to any of the
foregoing.
Section
5. Liquidation. Upon any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary (a
“Liquidation”), the Holders shall be entitled to receive out
of the assets, whether capital or surplus, of the Corporation the
greater of the following amounts:
(a)
the aggregate Stated Value of the Preferred Shares; or
(b)
the amount the Holder would be entitled to receive if the Preferred
Stock were fully converted (disregarding for such purposes any
conversion limitations hereunder) to Common Stock which amounts
shall be paid pari passu with all holders of Common
Stock.
In
addition, in the case of either (a) or (b) above, the Holders will
be entitled to the payment of all accrued and unpaid dividends on
the Preferred Stock and, in the event any of such dividends are
payable in shares of Common Stock, the cash value of such shares of
Common Stock upon Liquidation. The Corporation shall mail written
notice of any such Liquidation, not less than forty-five (45) days
prior to the payment date stated therein, to each
Holder.
Section
6. Conversion.
a)
Conversions at Option of Holder. Each share of Preferred
Stock shall be convertible, at any time and from time to time on or
after the Original Issue Date, at the option of the Holder thereof,
into that number of shares of Common Stock (subject to the
limitations set forth in Section 6(e)) determined by dividing the
Stated Value of such share of Preferred Stock by the Conversion
Price. Holders shall also be paid any accrued and unpaid cash
dividends and/or issued shares of Common Stock, if dividends are
payable in shares of Common Stock, based on the applicable rate of
conversion, at the same time the Conversion Shares are issued to
the Holders. Holders shall effect conversions by providing the
Corporation with the form of conversion notice attached hereto as
Annex A (a “Notice of Conversion”). Each Notice of
Conversion shall specify the number of shares of Preferred Stock to
be converted, the number of shares of Preferred Stock owned prior
to the conversion at issue, the number of shares of Preferred Stock
owned subsequent to the conversion at issue and the date on which
such conversion is to be effected, which date may not be prior to
the date the applicable Holder delivers by facsimile or email such
Notice of Conversion to the Corporation (such date, the
“Conversion Date”). If no Conversion Date is specified in a
Notice of Conversion, the Conversion Date shall be the date that
such Notice of Conversion to the Corporation is deemed delivered
hereunder. No ink-original Notice of Conversion shall be required,
nor shall any medallion guarantee (or other type of guarantee or
notarization) of any Notice of Conversion form be required. The
calculations and entries set forth in the Notice of Conversion
shall control in the absence of manifest or mathematical error. To
effect conversions of shares of Preferred Stock, a Holder shall not
be required to surrender the certificate(s) representing the shares
of Preferred Stock to the Corporation unless all of the shares of
Preferred Stock represented thereby are so converted, in which case
such Holder shall deliver the certificate representing such shares
of Preferred Stock promptly following the Conversion Date at issue.
Shares of Preferred Stock converted into Common Stock or redeemed
in accordance with the terms hereof shall be canceled and shall not
be reissued. Notwithstanding the foregoing in this Section 6(a), a
holder whose interest in the Preferred Stock is a beneficial
interest in certificate(s) representing the Preferred Stock held in
book-entry form through DTC (or another established clearing
corporation performing similar functions), shall effect conversions
made pursuant to this Section 6(a) by delivering to DTC (or such
other clearing corporation, as applicable) the appropriate
instruction form for conversion, complying with the procedures to
effect conversions that are required by DTC (or such other clearing
corporation, as applicable), subject to a Holder’s right to elect
to receive Preferred Stock in certificated form pursuant to Section
2, in which case this sentence shall not apply.
b)
Mandatory Conversion. Upon the Corporation’s closing of a
Qualified Offering, after the Original Issue Date, all shares of
Preferred Stock will automatically convert into the same securities
issued by the Corporation in the Qualified Offering, upon the same
terms as provided in the Qualified Offering (subject to the
limitations set forth in Section 6(e)) determined by dividing the
Stated Value of such share of Preferred Stock by the price per
share of the Common Stock in the Qualified Offering (or the
effective price on an as converted price to Common Stock if the
securities offered in the Qualified Offering are Common Stock
Equivalents. In addition, Holders shall also be paid any accrued
and unpaid cash dividends and/or issued shares of Common Stock, if
dividends are payable in shares of Common Stock, based on the
applicable rate of conversion, at the same time the Conversion
Shares are issued to the Holders. Holders shall deliver the
certificates representing such shares of Preferred Stock promptly
following the Conversion Date. Shares of Preferred Stock converted
into Common Stock or redeemed in accordance with the terms hereof
shall be canceled and shall not be reissued. Notwithstanding the
foregoing in this Section 6(b), a holder whose interest in the
Preferred Stock is a beneficial interest in certificate(s)
representing the Preferred Stock held in book-entry form through
DTC (or another established clearing corporation performing similar
functions), shall effect conversions made pursuant to this Section
6(b) by delivering to DTC (or such other clearing corporation, as
applicable) the appropriate instruction form for conversion,
complying with the procedures to effect conversions that are
required by DTC (or such other clearing corporation, as
applicable), subject to a Holder’s right to elect to receive
Preferred Stock in certificated form pursuant to Section 2, in
which case this sentence shall not apply.
c)
Conversion Price. The Conversion Price for the Preferred
Stock shall equal $0.321 (the “Conversion
Price”), subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the Original
Issue Date as set forth in Section 7 hereof.
1
The Conversion Price shall be based on 110% times the five Trading
Day VWAP prior to Closing.
d)
Mechanics of Conversion.
i.
Delivery of Conversion Shares Upon Conversion. Not later
than the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period (as defined
below) after each Conversion Date (the “Share Delivery
Date”), the Corporation shall deliver, or cause to be
delivered, to the converting Holder (A) Conversion Shares which
shall be free of restrictive legends and trading restrictions
representing the number of Conversion Shares being acquired upon
the conversion of the Preferred Stock, and (B) a bank check in the
amount of accrued and unpaid cash dividends, if any, or additional
shares of Common Stock if any accrued and unpaid dividends are
payable in shares of Common Stock. On any date of delivery of
Conversion Shares, the Corporation shall use its best efforts to
deliver the Conversion Shares required to be delivered by the
Corporation and any additional shares of Common Stock in payment of
accrued and unpaid dividends, as applicable under this Section 6
electronically through the Depository Trust Company or another
established clearing corporation performing similar functions. As
used herein, “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, on the
Corporation’s primary Trading Market with respect to the Common
Stock as in effect on the date of delivery of the Notice of
Conversion or on the date of a mandatory conversion, as applicable.
Notwithstanding the foregoing, with respect to any Notice(s) of
Conversion delivered by 9:00 a.m. (New York City time) on the
Original Issue Date, the Corporation agrees to deliver the
Conversion Shares subject to such notice(s) by 4:00 p.m. (New York
City time) on the Original Issue Date, and the Original Issue Date
being deemed the “Share Delivery Date” with respect to any such
Notice(s) of Conversion.
ii.
Failure to Deliver Conversion Shares. If, in the case of any
Notice of Conversion, such Conversion Shares are not delivered to
or as directed by the applicable Holder by the Share Delivery Date,
the Holder shall be entitled to elect by written notice to the
Corporation at any time on or before its receipt of such Conversion
Shares, to rescind such Conversion, in which event the Corporation
shall promptly return to the Holder any original Preferred Stock
certificate delivered to the Corporation and the Holder shall
promptly return to the Corporation the Conversion Shares issued to
such Holder pursuant to the rescinded Notice of
Conversion.
iii.
Obligation Absolute; Partial Liquidated Damages. The
Corporation’s obligation to issue and deliver the Conversion Shares
upon conversion of Preferred Stock in accordance with the terms
hereof are absolute and unconditional, irrespective of any action
or inaction by a Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by such Holder or any other Person of any
obligation to the Corporation or any violation or alleged violation
of law by such Holder or any other person, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Corporation to such Holder in connection with the issuance of
such Conversion Shares; provided, however, that such
delivery shall not operate as a waiver by the Corporation of any
such action that the Corporation may have against such Holder. In
the event a Holder shall elect to convert any or all of the Stated
Value of its Preferred Stock, the Corporation may not refuse
conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any
violation of law, agreement or for any other reason, unless an
injunction from a court, on notice to Holder, restraining and/or
enjoining conversion of all or part of the Preferred Stock of such
Holder shall have been sought and obtained, and the Corporation
posts a surety bond for the benefit of such Holder in the amount of
150% of the Stated Value of Preferred Stock which is subject to the
injunction, which bond shall remain in effect until the completion
of arbitration/litigation of the underlying dispute and the
proceeds of which shall be payable to such Holder to the extent it
obtains judgment. In the absence of such injunction, the
Corporation shall issue Conversion Shares and, if applicable, cash,
upon a properly noticed conversion. If the Corporation fails to
deliver to a Holder such Conversion Shares pursuant to Section
6(c)(i) by the Share Delivery Date applicable to such conversion,
the Corporation shall pay to such Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Stated Value of
Preferred Stock being converted, $50 per Trading Day (increasing to
$100 per Trading Day on the third Trading Day and increasing to
$200 per Trading Day on the sixth Trading Day after such damages
begin to accrue) for each Trading Day after the Share Delivery Date
until such Conversion Shares are delivered or Holder rescinds such
conversion. Nothing herein shall limit a Holder’s right to pursue
actual damages for the Corporation’s failure to deliver Conversion
Shares within the period specified herein and such Holder shall
have the right to pursue all remedies available to it hereunder, at
law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief. The exercise of any
such rights shall not prohibit a Holder from seeking to enforce
damages pursuant to any other Section hereof or under applicable
law.
iv.
Compensation for Buy-In on Failure to Timely Deliver Conversion
Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Corporation fails for any reason to
deliver to a Holder the applicable Conversion Shares by the Share
Delivery Date pursuant to Section 6(c)(i), and if after such Share
Delivery Date such Holder is required by its brokerage firm to
purchase (in an open market transaction or otherwise), or the
Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by such Holder of the
Conversion Shares which such Holder was entitled to receive upon
the conversion relating to such Share Delivery Date (a
“Buy-In”), then the Corporation shall (A) pay in cash to
such Holder (in addition to any other remedies available to or
elected by such Holder) the amount, if any, by which (x) such
Holder’s total purchase price (including any brokerage commissions)
for the Common Stock so purchased exceeds (y) the product of (1)
the aggregate number of shares of Common Stock that such Holder was
entitled to receive from the conversion at issue multiplied by (2)
the actual sale price at which the sell order giving rise to such
purchase obligation was executed (including any brokerage
commissions) and (B) at the option of such Holder, either reissue
(if surrendered) the shares of Preferred Stock equal to the number
of shares of Preferred Stock submitted for conversion (in which
case, such conversion shall be deemed rescinded) or deliver to such
Holder the number of shares of Common Stock that would have been
issued if the Corporation had timely complied with its delivery
requirements under Section 6(c)(i). For example, if a Holder
purchases shares of Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted conversion
of shares of Preferred Stock with respect to which the actual sale
price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of
$10,000 under clause (A) of the immediately preceding sentence, the
Corporation shall be required to pay such Holder $1,000. The Holder
shall provide the Corporation written notice indicating the amounts
payable to such Holder in respect of the Buy-In and, upon request
of the Corporation, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Corporation’s failure to timely deliver
Conversion Shares upon conversion of the shares of Preferred Stock
as required pursuant to the terms hereof.
v.
Reservation of Shares Issuable Upon Conversion and Payment of
Dividends in Shares of Common Stock. The Corporation covenants
that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock for the sole purpose
of issuance upon conversion of the Preferred Stock as herein
provided, free from preemptive rights or any other actual
contingent purchase rights of Persons other than the Holder (and
the other holders of the Preferred Stock), not less than such
aggregate number of shares of the Common Stock as shall be issuable
(taking into account the adjustments and restrictions of Section 7)
upon the conversion of the then outstanding shares of Preferred
Stock and the payment of any and all dividends payable to the
Holders in shares of Common Stock. The Corporation covenants that
all shares of Common Stock that shall be so issuable shall, upon
issue, be duly authorized, validly issued, fully paid and
nonassessable.
vi.
Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon the conversion
of the Preferred Stock or the payment of dividends in Common Stock.
As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such conversion or any shares of Common
Stock issuable upon the payment of dividends in shares of Common
Stock, the Corporation shall at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Conversion Price or round up to the
next whole share. Notwithstanding anything to the contrary
contained herein, but consistent with the provisions of this
subsection with respect to fractional Conversion Shares, nothing
shall prevent any Holder from converting fractional shares of
Preferred Stock.
vii.
Transfer Taxes and Expenses. The issuance of Conversion
Shares on conversion of this Preferred Stock and the issuance of
Dividend Shares, shall be made without charge to any Holder for any
documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such Conversion Shares or Dividend
Shares, provided that the Corporation shall not be required to pay
any tax that may be payable in respect of any transfer involved in
the issuance and delivery of any such Conversion Shares or Dividend
Shares upon conversion in a name other than that of the Holders of
such shares of Preferred Stock and the Corporation shall not be
required to issue or deliver such Conversion Shares or Dividend
Shares unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid. The Corporation shall pay
all Transfer Agent fees required for same-day processing of any
Notice of Conversion and all fees to the Depository Trust Company
(or another established clearing corporation performing similar
functions) required for same-day electronic delivery of the
Conversion Shares and/or any Dividend Shares.
e)
Beneficial Ownership Limitation. The Corporation shall not
effect any conversion of the Preferred Stock, and a Holder shall
not have the right to convert any portion of the Preferred Stock,
to the extent that, after giving effect to the conversion set forth
on the applicable Notice of Conversion, such Holder (together with
such Holder’s Affiliates, and any Persons acting as a group
together with such Holder or any of such Holder’s Affiliates (such
Persons, “Attribution Parties”)) would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below).
For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by such Holder and its Affiliates
and Attribution Parties shall include the number of shares of
Common Stock issuable upon conversion of the Preferred Stock with
respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which are issuable
upon (i) conversion of the remaining, unconverted Stated Value of
Preferred Stock beneficially owned by such Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or unconverted portion of any other securities
of the Corporation subject to a limitation on conversion or
exercise analogous to the limitation contained herein (including,
without limitation, the Preferred Stock) beneficially owned by such
Holder or any of its Affiliates or Attribution Parties. Except as
set forth in the preceding sentence, for purposes of this Section
6(e), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. To the extent that the limitation contained
in this Section 6(e) applies, the determination of whether the
Preferred Stock is convertible (in relation to other securities
owned by such Holder together with any Affiliates and Attribution
Parties) and of how many shares of Preferred Stock are convertible
shall be in the sole discretion of such Holder, and the submission
of a Notice of Conversion shall be deemed to be such Holder’s
determination of whether the shares of Preferred Stock may be
converted (in relation to other securities owned by such Holder
together with any Affiliates and Attribution Parties) and how many
shares of the Preferred Stock are convertible, in each case subject
to the Beneficial Ownership Limitation. To ensure compliance with
this restriction, each Holder will be deemed to represent to the
Corporation each time it delivers a Notice of Conversion that such
Notice of Conversion has not violated the restrictions set forth in
this paragraph and the Corporation shall have no obligation to
verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder. For purposes
of this Section 6(e), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as stated in the most recent of
the following: (i) the Corporation’s most recent periodic or annual
report filed with the Commission, as the case may be, (ii) a more
recent public announcement by the Corporation or (iii) a more
recent written notice by the Corporation or the Transfer Agent
setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request (which may be via email) of a
Holder, the Corporation shall within two Trading Days confirm
orally and in writing to such Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Corporation,
including the Preferred Stock, by such Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon conversion of
Preferred Stock held by the applicable Holder. A Holder, upon
notice to the Corporation, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 6(e) applicable to
its Preferred Stock provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon conversion of this
Preferred Stock held by the Holder and the provisions of this
Section 6(e) shall continue to apply. Any such increase in the
Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the
Corporation and shall only apply to such Holder and no other
Holder. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with
the terms of this Section 6(e) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation contained herein or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of Preferred
Stock.
Section
7. Certain Adjustments.
a)
Stock Dividends and Stock Splits. If the Corporation, at any
time while this Preferred Stock is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions payable
in shares of Common Stock on shares of Common Stock or any other
Common Stock Equivalents (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Corporation upon
conversion of, or payment of a dividend on, this Preferred Stock),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of a reverse
stock split) outstanding shares of Common Stock into a smaller
number of shares, or (iv) issues, in the event of a
reclassification of shares of the Common Stock, any shares of
capital stock of the Corporation, then the Conversion Price shall
be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding any treasury shares of
the Corporation) outstanding immediately before such event, and of
which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section 7(a) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments
pursuant to Section 7(a) above, if at any time the Corporation
grants, issues or sells any Common Stock Equivalents or rights to
purchase stock, warrants, securities or other property pro rata to
the record holders of any class of shares of Common Stock (the
“Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of such Holder’s Preferred Stock (without
regard to any limitations on exercise hereof, including without
limitation, the Beneficial Ownership Limitation) immediately before
the date on which a record is taken for the grant, issuance or sale
of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to
participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a
result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the
Holder exceeding the Beneficial Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Preferred
Stock is outstanding, if the Corporation declares or makes any
dividend or other distribution of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this
Preferred Stock, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete
conversion of this Preferred Stock (without regard to any
limitations on conversion hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, to the extent that
the Holder’s right to participate in any such Distribution would
result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).
d)
Lower Priced Transaction. So long as the Preferred Stock
remains outstanding, other than in respect of an Exempt Issuance,
the Corporation shall not enter into any financing transaction
pursuant to which the Corporation sells its Securities at a price
lower than the Conversion Price (subject to adjustment in
accordance with Section 7(a)) without the written consent of the
Holder.
e)
Most Favored Nation Status. If the Corporation or any
Subsidiary thereof, as applicable, at any time while the Preferred
Stock is outstanding, shall sell or grant any option to purchase,
or sell or grant any right to reprice, or otherwise dispose of or
issue (or announce any offer, sale, grant or any option to purchase
or other disposition) any Common Stock or Stock Equivalents, at an
effective price per share less than the Conversion Price then in
effect other than in respect of an Exempt Issuance (such lower
price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”) (it being understood
and agreed that if the holder of the Common Stock or Stock
Equivalents so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which are issued in connection with
such issuance, be entitled to receive Common Stock at an effective
price per share that is less than the Conversion Price, such
issuance shall be deemed to have occurred for less than the
Conversion Price on such date of the Dilutive Issuance at such
effective price), then simultaneously with the consummation of each
Dilutive Issuance the Conversion Price shall be reduced and only
reduced to equal the Base Share Price. Such adjustment shall be
made whenever such Common Stock or Stock Equivalents are issued.
The Company shall notify the Holder, in writing, no later than the
Trading Day following the issuance or deemed issuance of any Common
Stock or Stock Equivalents subject to this Section 7(e), indicating
therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”). For purposes of
clarification, whether or not the Corporation provides a Dilutive
Issuance Notice pursuant to this Section 7(e), upon the occurrence
of any Dilutive Issuance, the Holder is entitled to receive a
number of Conversion Shares based upon the Base Share Price
regardless of whether the Holder accurately refers to the Base
Share Price in the Notice of Conversion. If the Corporation enters
into a Variable Rate Transaction, despite the prohibition thereon
in the Purchase Agreement, the Corporation shall be deemed to have
issued Common Stock or Stock Equivalents at the lowest possible
conversion or exercise price at which such Securities may be
converted or exercised.
f)
Fundamental Transaction. If, at any time while this
Preferred Stock is outstanding, (i) the Corporation, directly or
indirectly, in one or more related transactions effects any merger
or consolidation of the Corporation with or into another Person,
(ii) the Corporation, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the
Corporation or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been
accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Corporation, directly or indirectly, in one or more
related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Corporation, directly or indirectly, in one or more
related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a
“Fundamental Transaction”), then, upon any subsequent
conversion of this Preferred Stock, the Holder shall have the right
to receive, for each Conversion Share that would have been issuable
upon such conversion immediately prior to the occurrence of such
Fundamental Transaction (without regard to any limitation in
Section 6(e) on the conversion of this Preferred Stock), the number
of shares of Common Stock of the successor or acquiring corporation
or of the Corporation, if it is the surviving corporation, and any
additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Preferred
Stock is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 6(e) on
the conversion of this Preferred Stock). For purposes of any such
conversion, the determination of the Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and
the Corporation shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this
Preferred Stock following such Fundamental Transaction. To the
extent necessary to effectuate the foregoing provisions, any
successor to the Corporation or surviving entity in such
Fundamental Transaction shall file a new Certificate of Designation
with the same terms and conditions and issue to the Holders new
preferred stock consistent with the foregoing provisions and
evidencing the Holders’ right to convert such preferred stock into
Alternate Consideration. The Corporation shall cause any successor
entity in a Fundamental Transaction in which the Corporation is not
the survivor (the “Successor Entity”) to assume in writing
all of the obligations of the Corporation under this Certificate of
Designation in accordance with the provisions of this Section 7(f)
pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and
shall, at the option of the holder of this Preferred Stock, deliver
to the Holder in exchange for this Preferred Stock a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Preferred Stock
which is convertible for a corresponding number of shares of
capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable
upon conversion of this Preferred Stock (without regard to any
limitations on the conversion of this Preferred Stock) prior to
such Fundamental Transaction, and with a conversion price which
applies the conversion price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of
Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital
stock and such conversion price being for the purpose of protecting
the economic value of this Preferred Stock immediately prior to the
consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Certificate of Designation referring to the “Corporation”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Corporation and shall assume all of
the obligations of the Corporation under this Certificate of
Designation with the same effect as if such Successor Entity had
been named as the Corporation herein.
g)
Calculations. All calculations under this Section 7 shall be
made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 7, the number of shares
of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock
(excluding any treasury shares of the Corporation) issued and
outstanding.
h)
Notice to the Holders.
i.
Adjustment to Conversion Price. Whenever the Conversion
Price is adjusted pursuant to any provision of this Section 7, the
Corporation shall promptly deliver to each record Holder by
facsimile or email a notice setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the
facts requiring such adjustment.
ii.
Notice to Allow Conversion by Holder. If (A) the Corporation
shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Corporation shall declare a
special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Corporation shall authorize the granting to all
holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any
rights, (D) the approval of any stockholders of the Corporation
shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Corporation
is a party, any sale or transfer of all or substantially all of the
assets of the Corporation, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or
property or (E) the Corporation shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs
of the Corporation, then, in each case, the Corporation shall cause
to be filed at each office or agency maintained for the purpose of
conversion of this Preferred Stock, and shall cause to be delivered
by facsimile or email to each record Holder at its last facsimile
number or email address as it shall appear upon the stock books of
the Corporation, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such
notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information
regarding the Corporation or any of the Subsidiaries, the
Corporation shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder
shall remain entitled to convert the Conversion Amount of this
Preferred Stock (or any part hereof) during the 20-day period
commencing on the date of such notice through the effective date of
the event triggering such notice except as may otherwise be
expressly set forth herein.
Section
8. Redemption.
a)
Redemption by the Corporation. The Preferred Stock is
perpetual and has no maturity date. The Corporation may, at its
option, at any time (the “Redemption Date”) and subject to
providing written notice in accordance with Section 8(c), if all of
the shares of Preferred Stock have not been converted to shares of
Common Stock prior to the Redemption Date, redeem the outstanding
shares of Preferred Stock, in whole or in part, at a cash
redemption price per share of Preferred Stock equal to (a) within
60 days of the Original Issue Date, the sum of (i) 110% of the
Stated Value, which the Corporation elects to redeem pursuant to an
Optional Redemption plus (ii) all accrued but unpaid dividends and
all liquidated damages and other amounts due in respect of the
Preferred Stock; (b) between 61 days and 90 days of the Original
Issue Date, the sum of (i) 115% of the Stated Value, which the
Corporation elects to redeem pursuant to an Optional Redemption;
and plus (ii) all accrued but unpaid dividends, and all liquidated
damages and other amounts then due in respect of the Preferred
Stock; (c) between 91 days and 120 days of the Original Issue Date,
the sum of (i) 120% of the Stated Value, which the Corporation
elects to redeem pursuant to an Optional Redemption; and plus (ii)
all accrued but unpaid dividends, and all liquidated damages and
other amounts then due in respect of the Preferred Stock; (d)
between 121 days and 150 days of the Original Issue Date, the sum
of (i) 125% of the Stated Value, which the Corporation elects to
redeem pursuant to an Optional Redemption; and plus (ii) all
accrued but unpaid dividends, and all liquidated damages and other
amounts then due in respect of the Preferred Stock; (e) between 151
days and 180 days of the Original Issue Date, the sum of (i) 130%
of the Stated Value, which the Corporation elects to redeem
pursuant to an Optional Redemption; and plus (ii) all accrued but
unpaid dividends, and all liquidated damages and other amounts then
due in respect of the Preferred Stock; or (f) if on or after the
181st day after the Original Issue Date the sum of (i) 135% of the
Stated Value, which the Corporation elects to redeem pursuant to an
Optional Redemption plus (ii) all accrued but unpaid dividends and
all liquidated damages and other amounts due in respect of the
Preferred Stock. (the “Redemption Price”). The Redemption
Price for any shares of Preferred Stock shall be payable to the
Holder of such shares of Preferred Stock against surrender of the
certificate(s) evidencing such shares, if any, to the Corporation
or its agent, if the shares of the Preferred are issued in
certificated form. To be free from doubt, only the Corporation may
exercise its redemption right under this paragraph.
b)
No Sinking Fund. The Preferred Stock will not be subject to
any mandatory redemption, sinking fund or other similar provisions.
Holders of the Preferred Stock will have no right to require
redemption of any shares of Preferred Stock.
c)
Notice of Redemption. Notice of every redemption of shares
of Preferred Stock shall be given to the Holders in the manner
provided for notices in Section 10(a) hereafter. Such mailing shall
be at least thirty (30) days and not more than sixty (60) days
before the date fixed for redemption. Any notice sent as provided
in this subsection shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice, but failure
duly to give such notice by mail, or any defect in such notice or
in the mailing thereof, to any Holder of shares of Preferred Stock
designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Preferred
Stock. Notwithstanding the foregoing, if the Preferred Stock are
issued in book-entry form through DTC or any other similar
facility, DTC or such other facility will provide notice of
redemption by any authorized method to Holders of record of the
applicable shares of Preferred Stock not less than thirty (30), nor
more than sixty (60) days prior to the date fixed for redemption of
the shares of Preferred Stock. Each notice of redemption given to a
Holder shall state: (1) the redemption date; (2) the number of
shares of Preferred Stock to be redeemed and, if less than all the
shares held by such Holder are to be redeemed, the number of such
shares of Preferred Stock to be redeemed from such Holder; (3) the
Redemption Price; and (4) the place or places where certificates
for such shares are to be surrendered for payment of the Redemption
Price.
d)
Partial Redemption. In case of any redemption of only part
of the shares of Preferred Stock at the time outstanding, the
shares of Preferred Stock to be redeemed shall be redeemed, by the
Corporation, pro rata from the Holders of record of the shares of
Preferred Stock in proportion to the number of shares of Preferred
Stock held by such Holders. Subject to the provisions hereof, the
Board of Directors shall have full power and authority to prescribe
the terms and conditions on which shares of Preferred Stock shall
be redeemed from time to time. If the Corporation shall have issued
certificates for the Preferred Stock and fewer than all shares
represented by any certificates are redeemed, new certificates
shall be issued representing the unredeemed shares of Preferred
Stock without charge to the Holders thereof.
e)
Effectiveness of Redemption. If notice of redemption has
been duly given, then, notwithstanding that any certificate for any
share so called for redemption has not been surrendered for
cancellation in the case that the shares of Preferred Stock are
issued in certificated form, on and after the redemption date all
shares so called for redemption shall no longer be deemed
outstanding and all rights with respect to such shares shall
forthwith on such redemption date cease and terminate, except only
the right of the Holders thereof to receive the amount payable on
such redemption, without interest.
Section
9. Ranking. Except to the extent that the holders of at
least a majority of the outstanding Preferred Stock (the
“Required Holders”) expressly consent to the creation of
Parity Stock (as defined below) or Senior Preferred Stock (as
defined below), all shares of Common Stock and all shares of
capital stock of the Corporation authorized or designated after the
date of the designation of the Preferred Stock shall be junior in
rank to the Preferred Stock with respect to the preferences as to
dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Corporation (such junior stock is
referred to herein collectively as “Junior Stock”). Without
limiting any other provision of this Certificate of Designation,
without the prior express consent of the Required Holders, voting
separate as a single class, the Corporation shall not hereafter
authorize or issue any additional or other shares of capital stock
that is (i) of senior rank to the Preferred Stock in respect of the
preferences as to dividends, distributions and payments upon the
liquidation, dissolution and winding up of the Corporation
(collectively, the “Senior Preferred Stock”) or (ii) of pari
passu rank to the Preferred Stock in respect of the preferences as
to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Corporation (collectively, the
“Parity Stock”).
Section
10. Miscellaneous.
a)
Notices. Any and all notices or other communications or
deliveries to be provided by the Holders or the Corporation
hereunder including, without limitation, any Notice of Conversion,
shall be in writing and delivered personally, by facsimile, or sent
by a nationally recognized overnight courier service, addressed to
(i) the Corporation at the address set forth above Attention:
Stanton E. Ross, Chief Executive Officer, Rossy1979@AOL.com,
, Inc. or such other email address or address as the Corporation
may specify for such purposes by notice to the Holders delivered in
accordance with this Section 10 or (ii) the applicable Holder at
the most current address for such Holder, in the Corporation’s
records, or such other email address or address as such Holder may
specify for such purposes by notice to the Corporation delivered in
accordance with this Section 10. Any and all notices or other
communications or deliveries to be provided by the Corporation or
the Holders hereunder shall be in writing and delivered personally,
by email, or sent by a nationally recognized overnight courier
service addressed to each record Holder or at the email address or
address of such Holder appearing on the books of the Corporation or
to the Corporation at the address set forth above. Any notice or
other communication or deliveries hereunder shall be deemed given
and effective on the earliest of (i) the time of transmission, if
such notice or communication is delivered via facsimile at the
facsimile number or email at the email address set forth in this
Section 10 prior to 5:30 p.m. (New York City time) on any date,
(ii) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile
number or email at the email address set forth in this Section on a
day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (iii) the second Trading Day
following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given
b)
Absolute Obligation. Except as expressly provided herein, no
provision of this Certificate of Designation shall alter or impair
the obligation of the Corporation, which is absolute and
unconditional, to pay liquidated damages and accrued dividends, as
applicable, on the shares of Preferred Stock at the time, place,
and rate, and in the coin or currency, herein prescribed
c)
Lost or Mutilated Preferred Stock Certificate. If a Holder’s
Preferred Stock certificate shall be mutilated, lost, stolen or
destroyed, the Corporation shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated
certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares of
Preferred Stock so mutilated, lost, stolen or destroyed, but only
upon receipt of evidence of such loss, theft or destruction of such
certificate, and of the ownership hereof reasonably satisfactory to
the Corporation.
d)
Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Certificate of
Designation shall be governed by and construed and enforced in
accordance with the internal laws of the State of Nevada, without
regard to the principles of conflict of laws thereof. All legal
proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by this Certificate of Designation
(whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the
City of New York, Borough of Manhattan (the “New York
Courts”). The Corporation and each Holder hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for
the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such New York Courts, or such New
York Courts are improper or inconvenient venue for such proceeding.
The Corporation and each Holder hereby irrevocably waive personal
service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this
Certificate of Designation and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by
applicable law. The Corporation and each Holder hereto hereby
irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Certificate of Designation or
the transactions contemplated hereby. If any party shall commence
an action or proceeding to enforce any provisions of this
Certificate of Designation, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or
proceeding.
e)
Waiver. Any waiver by the Corporation or a Holder of a
breach of any provision of this Certificate of Designation shall
not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this
Certificate of Designation or a waiver by any other Holders. The
failure of the Corporation or a Holder to insist upon strict
adherence to any term of this Certificate of Designation on one or
more occasions shall not be considered a waiver or deprive that
party (or any other Holder) of the right thereafter to insist upon
strict adherence to that term or any other term of this Certificate
of Designation on any other occasion. Any waiver by the Corporation
or a Holder must be in writing.
f)
Severability. If any provision of this Certificate of
Designation is invalid, illegal or unenforceable, the balance of
this Certificate of Designation shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall
nevertheless remain applicable to all other Persons and
circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law
governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum rate of
interest permitted under applicable law
g)
Next Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business
Day.
h)
Headings. The headings contained herein are for convenience
only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions
hereof.
i)
Status of Converted or Redeemed Preferred Stock. If any
shares of Preferred Stock shall be converted, redeemed or
reacquired by the Corporation, such shares shall resume the status
of authorized but unissued shares of preferred stock and shall no
longer be designated as Series A Convertible Preferred
Stock.
*********************
RESOLVED,
FURTHER, that the Chief Executive Officer of the Corporation be and
he hereby is authorized and directed to prepare and file this
Certificate of Designation of Preferences, Rights and Limitations
in accordance with the foregoing resolution and the provisions of
Nevada law.”
IN
WITNESS WHEREOF, the undersigned have executed this Certificate
this 11th day of November, 2021.
|
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/s/ Stanton E. Ross |
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Name: |
Stanton
E. Ross |
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Title: |
Chief
Executive Officer |
ANNEX
A
NOTICE
OF CONVERSION
(TO
BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF
PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of Series
A Convertible Preferred Stock indicated below into shares of common
stock, par value $0.0001 per share (the “Common Stock”),
American Noble Gas, Inc., a Nevada corporation (the
“Corporation”), according to the conditions hereof, as of
the date written below. If shares of Common Stock are to be issued
in the name of a Person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. No fee
will be charged to the Holders for any conversion, except for any
such transfer taxes.
Conversion
calculations:
Date
to Effect Conversion: |
|
|
|
Number
of shares of Preferred Stock owned prior to Conversion: |
|
|
|
Number
of shares of Preferred Stock to be Converted: |
|
|
|
Stated
Value of shares of Preferred Stock to be Converted: |
|
|
|
Number
of shares of Common Stock to be Issued: |
|
|
|
Applicable
Conversion Price: |
|
|
|
Number
of shares of Preferred Stock subsequent to Conversion: |
|
|
[HOLDER] |
|
|
|
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By: |
|
|
Name: |
|
|
Title: |
|
APPENDIX D
BYLAWS
OF
AMERICAN
NOBLE GAS, INC.
Adopted
November 11, 2021
ARTICLE
1
Offices
The
registered office of American Noble Gas, Inc. (the
“Company”) in the State of Nevada will be as provided for in
the Articles of Incorporation of the Company (the “Articles of
Incorporation”). The Company will have offices at such other
places as the Board of Directors may from time to time
determine.
ARTICLE
2
STOCKHOLDERS
2.1
Annual Meetings. The annual meeting of stockholders for the
election of directors and for the transaction of such other
business as may properly come before the meeting will be held on
the date and at the time fixed, from time to time, by resolution of
the Board of Directors.
2.2
Special Meetings. Except as otherwise required by law,
special meetings of stockholders may be called by those persons
specified in the Articles of Incorporation and shall be called by
the Secretary of the Company upon the written request of
stockholders owning of record 25% or more of the capital stock of
the Company entitled to vote generally in the election of
directors. Any such written request shall set forth the purpose of
the proposed meeting and shall include all relevant information
contemplated by Section 2.5. Business transacted at any special
meeting of stockholders shall be limited to those matters properly
set forth in the written request and as to which all information
required pursuant to Section 2.5 has been timely
provided.
2.3
Notice of Meeting. Written notice stating the place, date
and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, will be given
not less than ten nor more than sixty days before the date of the
meeting, except as otherwise required by law or the Articles of
Incorporation, either personally or by mail, prepaid telegram,
telex, facsimile transmission, cablegram or overnight courier, to
each stockholder of record entitled to vote at such meeting. If
mailed, such notice will be deemed to be given when deposited in
the United States mail, postage prepaid, addressed to the
stockholder at the stockholder’s address as it appears on the stock
records of the Company.
2.4
Waiver. Attendance of a stockholder of the Company, either
in person or by proxy, at any meeting, whether annual or special,
will constitute a waiver of notice of such meeting, except where a
stockholder attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A written
waiver of notice of any such meeting signed by a stockholder or
stockholders entitled to such notice, whether before, at or after
the time for notice or the time of the meeting, will be equivalent
to notice. Neither the business to be transacted at, nor the
purposes of, any meeting need be specified in any written waiver of
notice.
2.5
Notice of Business to be Transacted at Meetings of
Stockholders. No business may be transacted at any meeting of
stockholders, including the nomination or election of persons to
the Board of Directors, other than business that is either (a)
specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors (or any duly
authorized committee thereof) with respect to an annual meeting or
a special meeting called by any of the persons specified in Section
7.1 of the Articles of Incorporation, (b) otherwise properly
brought before the meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the meeting by any stockholder of
the Company (1) who is a stockholder of record on the date of the
giving of the notice provided for in this Section 2.5 and on the
record date for the determination of stockholders entitled to vote
at such meeting and (2) who complies with the notice procedures set
forth in this Section 2.5. In addition to any other applicable
requirements, for business to be properly brought before a meeting
by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the
Company.
(a)
To be timely, a stockholder’s notice to the Secretary must be
delivered to or mailed and received at the principal executive
offices of the Company not less than ninety days nor more than one
hundred twenty days prior to the date of the meeting; provided,
however, that (1) in the event that public disclosure of the date
of the meeting is first made less than one hundred days prior to
the date of the meeting, notice by the stockholder in order to be
timely must be so received not later than the close of business on
the tenth day following the day on which such public disclosure of
the date of the meeting was made and (2) the foregoing
notwithstanding, with respect to a special meeting called at the
written request of stockholders pursuant to Section 2.2, any notice
submitted by a stockholder making the request must be provided
simultaneously with such request.
(b)
To be in proper written form, a stockholder’s notice to the
Secretary regarding any business other than nominations of persons
for election to the Board of Directors must set forth as to each
matter such stockholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and record address of
such stockholder, (iii) the class or series and number of shares of
capital stock of the Company which are owned beneficially or of
record by such stockholder, (iv) a description of all arrangements
or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of
such business by such stockholder and any material interest of such
stockholder in such business and (v) a representation that such
stockholder intends to appear in person or by proxy at the meeting
to bring such business before the meeting.
(c)
To be in proper written form, a stockholder’s notice to the
Secretary regarding nominations of persons for election to the
Board of Directors must set forth (a) as to each proposed nominee,
(i) the name, age, business address and residence address of the
nominee, (ii) the principal occupation or employment of the
nominee, (iii) the class or series and number of shares of capital
stock of the Company which are owned beneficially or of record by
the nominee and (iv) any other information relating to the nominee
that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the rules and regulations promulgated thereunder;
and (b) as to the stockholder giving the notice, (i) the name and
record address of such stockholder, (ii) the class or series and
number of shares of capital stock of the Company which are owned
beneficially or of record by such stockholder, (iii) a description
of all arrangements or understandings between such stockholder and
each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder
intends to appear in person or by proxy at the meeting to nominate
the persons named in its notice and (v) any other information
relating to such stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied
by a written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected.
(d)
No business shall be conducted at any meeting of stockholders, and
no person nominated by a stockholder shall be eligible for election
as a director, unless proper notice was given with respect to the
proposed action in compliance with the procedures set forth in this
Section 2.5. Determinations of the chairman of the meeting as to
whether those procedures were complied with in a particular case
shall be final and binding.
2.6
Quorum. Except as otherwise required by law, the Articles of
Incorporation or these bylaws, the holders of not less than a
majority of the shares entitled to vote at any meeting of the
stockholders, present in person or by proxy, will constitute a
quorum, and the act of the majority of such quorum will be deemed
the act of the stockholders, except with respect to the election of
directors. If a quorum is not present at any meeting, the chairman
of the meeting may adjourn the meeting from time to time, without
notice if the time and place are announced at the meeting, until a
quorum will be present. At such adjourned meeting at which a quorum
is present, any business may be transacted which might have been
transacted at the original meeting. If the adjournment is for more
than thirty days or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting
will be given to each stockholder of record entitled to vote at the
meeting.
2.7
Procedure. The order of business and all other matters of
procedure at every meeting of the stockholders may be determined by
the chairman of the meeting. The chairman of any meeting of the
stockholders shall be the chairman of the Board of Directors or, in
his or her absence, the most senior officer of the Company present
at the meeting.
2.8
Consent of Stockholders in Lieu of Meeting.
(a)
Unless otherwise provided in the Articles of Incorporation, any
action required to be taken at any annual or special meeting of
stockholders of the Company, or any action that may be taken at any
annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice, and without a vote if a
consent in writing, setting forth the action so taken, is (i)
signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote
thereon were present and voted, and (ii) delivered to the Company
in accordance with Chapters 78.320 and 78.325 of the Nevada Revised
Statutes, as amended (the “NRS”).
(b)
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be
effective to take the corporate action referred to therein unless,
within sixty (60) days of the date the earliest dated consent is
delivered to the Company, a written consent or consents signed by a
sufficient number of holders to take action are delivered to the
Company in the manner prescribed in this Section 2.8(b). A
telegram, cablegram, electronic mail or other electronic
transmission consenting to an action to be taken and transmitted by
a stockholder or proxyholder, or by a person or persons authorized
to act for a stockholder or proxyholder, shall be deemed to be
written, signed and dated for purposes of this Section to the
extent permitted by law. Any such consent shall be delivered in
accordance with the NRS.
(c)
Any copy, facsimile or other reliable reproduction of a consent in
writing may be substituted or used in lieu of the original writing
for any and all purposes for which the original writing could be
used, provided that such copy, facsimile or other reproduction
shall be a complete reproduction of the entire original
writing.
(d)
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to
those stockholders who have not consented in writing (including by
electronic mail or other electronic transmission as permitted by
law). If the action which is consented to is such as would have
required the filing of a certificate under any section of the NRS
if such action had been voted on by stockholders at a meeting
thereof, then the certificate filed under such section shall state,
in lieu of any statement required by such section concerning any
vote of stockholders, that written notice and written consent have
been given as provided in Chapters 78.320 and 78.325 of the
NRS.
ARTICLE
3
DIRECTORS
3.1
Number. Subject to the provisions of the Articles of
Incorporation, the number of directors will be fixed from time to
time exclusively by resolutions adopted by the Board of
Directors.
3.2
Regular Meetings. The Board of Directors shall meet
immediately after, and at the same place as, the annual meeting of
the stockholders, provided a quorum is present, and no notice of
such meeting will be necessary in order to legally constitute the
meeting. Regular meetings of the Board of Directors will be held at
such times and places as the Board of Directors may from time to
time determine.
3.3
Special Meetings. Special meetings of the Board of Directors
may be called at any time, at any place and for any purpose by the
chairman of the board, the chief executive officer, or by a
majority of the Board of Directors.
3.4
Notice of Meetings. Notice of regular meetings of the Board
of Directors need not be given. Notice of every special meeting of
the Board of Directors will be given to each director at his usual
place of business or at such other address as will have been
furnished by him for such purpose. Such notice will be properly and
timely given if it is (a) deposited in the United States mail not
later than the third calendar day preceding the date of the meeting
or (b) personally delivered, telegraphed, sent by facsimile
transmission or communicated by telephone at least twenty-four
hours before the time of the meeting. Such notice need not include
a statement of the business to be transacted at, or the purpose of,
any such meeting.
3.5
Waiver. Attendance of a director at a meeting of the Board
of Directors will constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or
convened. A written waiver of notice signed by a director or
directors entitled to such notice, whether before, at, or after the
time for notice or the time of the meeting, will be equivalent to
the giving of such notice.
3.6
Quorum. Except as may be otherwise provided by law, the
Articles of Incorporation or these bylaws, the presence of a
majority of the directors then in office will be necessary and
sufficient to constitute a quorum for the transaction of business
at any meeting of the Board of Directors, and the act of a majority
of the directors present at a meeting at which a quorum is present
will be deemed the act of the Board of Directors. Less than a
quorum may adjourn any meeting of the Board of Directors from time
to time without notice.
3.7
Participation in Meetings by Telephone. Members of the Board
of Directors, or of any committee thereof, may participate in a
meeting of such board or committee by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such
participation will constitute presence in person at such
meeting.
3.8
Action Without a Meeting. Unless otherwise restricted by the
NRS, Articles of Incorporation or these bylaws, any action required
or permitted to be taken at any meeting of the Board of Directors
or any committee thereof may be taken without a meeting if written
consent thereto is signed by all members of the Board of Directors
or of such committee, as the case may be, and such written consent
is filed with the minutes of proceedings of the board or committee.
Any such consent may be in counterparts and will be effective on
the date of the last signature thereon unless otherwise provided
therein.
ARTICLE
4
COMMITTEES
4.1
Designation of Committees. The Board of Directors may
establish committees for the performance of delegated or designated
functions to the extent permitted by law, each committee to consist
of one or more directors of the Company. In the absence or
disqualification of a member of a committee, the member or members
present at any meeting and not disqualified from voting, whether or
not such members constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in
the place of such absent or disqualified member.
4.2
Committee Powers and Authority. Except to the extent
otherwise required by law, the Board of Directors may provide, by
resolution or by amendment to these bylaws, that a committee may
exercise all the power and authority of the Board of Directors in
the management of the business and affairs of the
Company.
ARTICLE
5
OFFICERS
5.1
Number. The officers of the Company will be appointed or
elected by the Board of Directors. The officers will be a chief
executive officer, a president, such number, if any, of executive
vice presidents as the Board of Directors may from time to time
determine, such number, if any, of vice presidents as the Board of
Directors may from time to time determine, a secretary, such
number, if any, of assistant secretaries as the Board of Directors
may from time to time determine, and a treasurer. Any person may
hold two or more offices at the same time.
5.2
Additional Officers. The Board of Directors may appoint such
other officers as it may deem appropriate.
5.3
Term of Office; Resignation. All officers, agents and
employees of the Company will hold their respective offices or
positions at the pleasure of the Board of Directors and may be
removed at any time by the Board of Directors with or without
cause. Any officer may resign at any time by giving written notice
of his resignation to the chief executive officer, the president,
or to the secretary, and acceptance of such resignation will not be
necessary to make it effective unless the notice so provides. Any
vacancy occurring in any office will be filled by the Board of
Directors.
5.4
Duties. The officers of the Company will perform the duties
and exercise the powers as may be assigned to them from time to
time by the Board of Directors or the president and chief executive
officer.
ARTICLE
6
CAPITAL
STOCK
6.1
Certificates. The Board of Directors may authorize the
issuance of stock in certificated or uncertificated form. Each
stockholder of the Company, upon written request, will be entitled
to a certificate or certificates signed by or in the name of the
Company by (a) the chief executive officer or the president and (b)
the secretary or an assistant secretary, certifying the number of
shares of stock of the Company owned by such stockholder. Any or
all the signatures on the certificate may be a
facsimile.
6.2
Registered Stockholders. The Company will be entitled to
treat the holder of record of any share or shares of stock of the
Company as the holder in fact thereof and, accordingly, will not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it has actual or other notice thereof, except as provided by
law.
6.3
Cancellation of Certificates. All certificates surrendered
to the Company will be canceled and, except in the case of lost,
stolen or destroyed certificates, no new certificates will be
issued until the former certificate or certificates for the same
number of shares of the same class of stock have been surrendered
and canceled.
6.4
Lost, Stolen, or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued
in place of any certificate or certificates theretofore issued by
the Company alleged to have been lost, stolen, or destroyed upon
the making of an affidavit of that fact in a form acceptable to the
Board of Directors by the person claiming the certificate or
certificates to be lost, stolen or destroyed. In its discretion,
and as a condition precedent to the issuance of any such new
certificate or certificates, the Board of Directors may require
that the owner of such lost, stolen or destroyed certificate or
certificates, or such person’s legal representative, give the
Company and its transfer agent or agents, registrar or registrars a
bond in such form and amount as the Board of Directors may direct
as indemnity against any claim that may be made against the Company
and its transfer agent or agents, registrar or registrars on
account of the alleged loss, theft, or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE
7
FISCAL
YEAR
7.1
Fiscal Year. The fiscal year for the Company will end on the
31st of December of each year.
ARTICLE
8
AMENDMENTS
8.1
Amendments. Subject to the provisions of the Articles of
Incorporation, these bylaws may be altered, amended, or repealed at
any annual meeting of the stockholders or at any special meeting of
the stockholders duly called for that purpose by a majority vote of
the shares represented and entitled to vote at such meeting.
Subject to the laws of the State of Nevada, the Articles of
Incorporation and these bylaws, the Board of Directors may amend
these bylaws or enact such other bylaws as in their judgment may be
advisable for the regulation of the conduct of the affairs of the
Company.
APPENDIX E
Appraisal
Rights
§
262. Appraisal rights [For application of this section, see § 17;
82 Del. Laws, c. 45, § 23; and 82 Del. Laws, c. 256, §
24].
(a)
Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection
(d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of
this section and who has neither voted in favor of the merger or
consolidation nor consented thereto in writing pursuant to § 228 of
this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of the stockholder’s shares of stock
under the circumstances described in subsections (b) and (c) of
this section. As used in this section, the word “stockholder” means
a holder of record of stock in a corporation; the words “stock” and
“share” mean and include what is ordinarily meant by those words;
and the words “depository receipt” mean a receipt or other
instrument issued by a depository representing an interest in 1 or
more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the
depository.
(b)
Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to § 251 (other than a merger
effected pursuant to § 251(g) of this title), § 252, § 254, § 255,
§ 256, § 257, § 258, § 263 or § 264 of this title:
(1)
Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock,
which stock, or depository receipts in respect thereof, at the
record date fixed to determine the stockholders entitled to receive
notice of the meeting of stockholders to act upon the agreement of
merger or consolidation (or, in the case of a merger pursuant to §
251(h), as of immediately prior to the execution of the agreement
of merger), were either: (i) listed on a national securities
exchange or (ii) held of record by more than 2,000 holders; and
further provided that no appraisal rights shall be available for
any shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote of
the stockholders of the surviving corporation as provided in §
251(f) of this title.
(2)
Notwithstanding paragraph (b)(1) of this section, appraisal rights
under this section shall be available for the shares of any class
or series of stock of a constituent corporation if the holders
thereof are required by the terms of an agreement of merger or
consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263
and 264 of this title to accept for such stock anything
except:
a.
Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect
thereof;
b.
Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of
the merger or consolidation will be either listed on a national
securities exchange or held of record by more than 2,000
holders;
c.
Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing paragraphs (b)(2)a. and b. of this
section; or
d.
Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing paragraphs (b)(2)a., b. and c. of this
section.
(3)
In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under § 253 or § 267 of this title is
not owned by the parent immediately prior to the merger, appraisal
rights shall be available for the shares of the subsidiary Delaware
corporation.
(4)
[Repealed.]
(c)
Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the
shares of any class or series of its stock as a result of an
amendment to its certificate of incorporation, any merger or
consolidation in which the corporation is a constituent corporation
or the sale of all or substantially all of the assets of the
corporation. If the certificate of incorporation contains such a
provision, the provisions of this section, including those set
forth in subsections (d),(e), and (g) of this section, shall apply
as nearly as is practicable.
(d)
Appraisal rights shall be perfected as follows:
(1)
If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at
a meeting of stockholders, the corporation, not less than 20 days
prior to the meeting, shall notify each of its stockholders who was
such on the record date for notice of such meeting (or such members
who received notice in accordance with § 255(c) of this title) with
respect to shares for which appraisal rights are available pursuant
to subsection (b) or (c) of this section that appraisal rights are
available for any or all of the shares of the constituent
corporations, and shall include in such notice a copy of this
section and, if 1 of the constituent corporations is a nonstock
corporation, a copy of § 114 of this title. Each stockholder
electing to demand the appraisal of such stockholder’s shares shall
deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of such
stockholder’s shares; provided that a demand may be delivered to
the corporation by electronic transmission if directed to an
information processing system (if any) expressly designated for
that purpose in such notice. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such stockholder’s shares. A proxy or vote against the
merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate
written demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and
has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has
become effective; or
(2)
If the merger or consolidation was approved pursuant to § 228, §
251(h), § 253, or § 267 of this title, then either a constituent
corporation before the effective date of the merger or
consolidation or the surviving or resulting corporation within 10
days thereafter shall notify each of the holders of any class or
series of stock of such constituent corporation who are entitled to
appraisal rights of the approval of the merger or consolidation and
that appraisal rights are available for any or all shares of such
class or series of stock of such constituent corporation, and shall
include in such notice a copy of this section and, if 1 of the
constituent corporations is a nonstock corporation, a copy of § 114
of this title. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also notify
such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of giving such notice or, in the case
of a merger approved pursuant to § 251(h) of this title, within the
later of the consummation of the offer contemplated by § 251(h) of
this title and 20 days after the date of giving such notice, demand
in writing from the surviving or resulting corporation the
appraisal of such holder’s shares; provided that a demand may be
delivered to the corporation by electronic transmission if directed
to an information processing system (if any) expressly designated
for that purpose in such notice. Such demand will be sufficient if
it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder’s shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation,
either (i) each such constituent corporation shall send a second
notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of
such constituent corporation that are entitled to appraisal rights
of the effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second notice
to all such holders on or within 10 days after such effective date;
provided, however, that if such second notice is sent more than 20
days following the sending of the first notice or, in the case of a
merger approved pursuant to § 251(h) of this title, later than the
later of the consummation of the offer contemplated by § 251(h) of
this title and 20 days following the sending of the first notice,
such second notice need only be sent to each stockholder who is
entitled to appraisal rights and who has demanded appraisal of such
holder’s shares in accordance with this subsection. An affidavit of
the secretary or assistant secretary or of the transfer agent of
the corporation that is required to give either notice that such
notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice,
each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the notice is
given, provided, that if the notice is given on or after the
effective date of the merger or consolidation, the record date
shall be such effective date. If no record date is fixed and the
notice is given prior to the effective date, the record date shall
be the close of business on the day next preceding the day on which
the notice is given.
(e)
Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any
stockholder who has complied with subsections (a) and (d) of this
section hereof and who is otherwise entitled to appraisal rights,
may commence an appraisal proceeding by filing a petition in the
Court of Chancery demanding a determination of the value of the
stock of all such stockholders. Notwithstanding the foregoing, at
any time within 60 days after the effective date of the merger or
consolidation, any stockholder who has not commenced an appraisal
proceeding or joined that proceeding as a named party shall have
the right to withdraw such stockholder’s demand for appraisal and
to accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) of this section hereof,
upon request given in writing (or by electronic transmission
directed to an information processing system (if any) expressly
designated for that purpose in the notice of appraisal), shall be
entitled to receive from the corporation surviving the merger or
resulting from the consolidation a statement setting forth the
aggregate number of shares not voted in favor of the merger or
consolidation (or, in the case of a merger approved pursuant to §
251(h) of this title, the aggregate number of shares (other than
any excluded stock (as defined in § 251(h)(6)d. of this title))
that were the subject of, and were not tendered into, and accepted
for purchase or exchange in, the offer referred to in § 251(h)(2)),
and, in either case, with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such statement shall be given to the stockholder within 10
days after such stockholder’s request for such a statement is
received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for
appraisal under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a person who
is the beneficial owner of shares of such stock held either in a
voting trust or by a nominee on behalf of such person may, in such
person’s own name, file a petition or request from the corporation
the statement described in this subsection.
(f)
Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting
corporation, which shall within 20 days after such service file in
the office of the Register in Chancery in which the petition was
filed a duly verified list containing the names and addresses of
all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition
shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The
Register in Chancery, if so ordered by the Court, shall give notice
of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or
more publications at least 1 week before the day of the hearing, in
a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems
advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g)
At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have
become entitled to appraisal rights. The Court may require the
stockholders who have demanded an appraisal for their shares and
who hold stock represented by certificates to submit their
certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any
stockholder fails to comply with such direction, the Court may
dismiss the proceedings as to such stockholder. If immediately
before the merger or consolidation the shares of the class or
series of stock of the constituent corporation as to which
appraisal rights are available were listed on a national securities
exchange, the Court shall dismiss the proceedings as to all holders
of such shares who are otherwise entitled to appraisal rights
unless (1) the total number of shares entitled to appraisal exceeds
1% of the outstanding shares of the class or series eligible for
appraisal, (2) the value of the consideration provided in the
merger or consolidation for such total number of shares exceeds $1
million, or (3) the merger was approved pursuant to § 253 or § 267
of this title.
(h)
After the Court determines the stockholders entitled to an
appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including any
rules specifically governing appraisal proceedings. Through such
proceeding the Court shall determine the fair value of the shares
exclusive of any element of value arising from the accomplishment
or expectation of the merger or consolidation, together with
interest, if any, to be paid upon the amount determined to be the
fair value. In determining such fair value, the Court shall take
into account all relevant factors. Unless the Court in its
discretion determines otherwise for good cause shown, and except as
provided in this subsection, interest from the effective date of
the merger through the date of payment of the judgment shall be
compounded quarterly and shall accrue at 5% over the Federal
Reserve discount rate (including any surcharge) as established from
time to time during the period between the effective date of the
merger and the date of payment of the judgment. At any time before
the entry of judgment in the proceedings, the surviving corporation
may pay to each stockholder entitled to appraisal an amount in
cash, in which case interest shall accrue thereafter as provided
herein only upon the sum of (1) the difference, if any, between the
amount so paid and the fair value of the shares as determined by
the Court, and (2) interest theretofore accrued, unless paid at
that time. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the
appraisal proceeding, the Court may, in its discretion, proceed to
trial upon the appraisal prior to the final determination of the
stockholders entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting corporation
pursuant to subsection (f) of this section and who has submitted
such stockholder’s certificates of stock to the Register in
Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder is
not entitled to appraisal rights under this section.
(i)
The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Payment shall be
so made to each such stockholder, in the case of holders of
uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation
of the certificates representing such stock. The Court’s decree may
be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting corporation be a
corporation of this State or of any state.
(j)
The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the
circumstances. Upon application of a stockholder, the Court may
order all or a portion of the expenses incurred by any stockholder
in connection with the appraisal proceeding, including, without
limitation, reasonable attorney’s fees and the fees and expenses of
experts, to be charged pro rata against the value of all the shares
entitled to an appraisal.
(k)
From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights as provided in
subsection (d) of this section shall be entitled to vote such stock
for any purpose or to receive payment of dividends or other
distributions on the stock (except dividends or other distributions
payable to stockholders of record at a date which is prior to the
effective date of the merger or consolidation); provided, however,
that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written
withdrawal of such stockholder’s demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days
after the effective date of the merger or consolidation as provided
in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to
an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as
to any stockholder without the approval of the Court, and such
approval may be conditioned upon such terms as the Court deems
just; provided, however that this provision shall not affect the
right of any stockholder who has not commenced an appraisal
proceeding or joined that proceeding as a named party to withdraw
such stockholder’s demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days after the
effective date of the merger or consolidation, as set forth in
subsection (e) of this section.
(l)
The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had
they assented to the merger or consolidation shall have the status
of authorized and unissued shares of the surviving or resulting
corporation.
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