THIS
INFORMATION STATEMENT IS BEING PROVIDED TO
YOU
BY THE BOARD OF DIRECTORS OF LIFE CLIPS INC.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED
NOT TO SEND US A PROXY.
LIFE
CLIPS, INC.
NOTICE
OF ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
NOTICE
IS HEREBY GIVEN that the following action has been approved pursuant to the written consent of the holders of a majority of the voting
power of the outstanding common stock of Life Clips Inc., a Wyoming corporation (the “Company ,” “ we
,” “ us ,” or “ our “) dated June 24, 2021, in lieu of a special meeting of the stockholders
and in accordance with Wyoming Business Corporation Act §17-16-704 (d):
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A.
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To
effect a reverse split of the Company’s common stock on the basis of 15 (Fifteen) common
shares for 1 (One) new common share.
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B.
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To
amend the Company’s Articles of Incorporation, to change the number of authorized shares
of common stock of the Company to 5,000,000,000, $0.0010 par value, following the reverse
split.
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Stockholders
of record at the close of business on June 17, 2021 (the “Record Date”), are entitled to receive a copy of this information
statement.
Pursuant
to Rule 14c-2 under the Securities Exchange Act of 1934, as amended, the actions described herein will not be implemented until a date
at least 20 days after the date on which this Information Statement has been mailed to the stockholders. The Company anticipates that
the amendments described will be effected on or before the close of business on July 19, 2021.
The
Information Statement is also available at https://www.sec.gov/edgar/searchedgar/companysearch.html. This website also includes copies
of the Information Statement and the Annual Report to stockholders for the fiscal year ended June 30, 2020. Stockholders may also request
a copy of the Information Statement and the Company’s Annual Report by contacting our main office at (800) 292-8991.
PLEASE
NOTE THAT THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS MEETING WILL BE HELD TO CONSIDER THE MATTERS DESCRIBED
HEREIN.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A PROXY.
By
order of the Board of Directors of Life Clips, Inc.
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July 8, 2021
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By:
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/s/
Robert Grinberg
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Robert
Grinberg
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Director
and Chief Executive Officer
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(Principal
Executive Officer)
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By:
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/s/
Victoria Rudman
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Victoria
Rudman
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Chief
Financial Officer and Director
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(Principal
Financial and
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Principal
Accounting Officer)
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By:
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/s/
William Singer
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William
Singer
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Director
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By:
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/s/
Dr. Charles Adelson
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Dr.
Charles Adelson
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Director
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LIFE
CLIPS INC.
18851
NE 29th Ave., Suite 700-PMB# 348
Aventura, Florida 33180
INFORMATION
STATEMENT
This
Information Statement is being mailed on or about July 19, 2021 to the holders of record at the close of business on June 17, 2021 (the
“Record Date”) of shares of the common stock of Life Clips, Inc., a Wyoming corporation, in connection with actions
taken by the holders of a majority of our outstanding common stock as follows:
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A.
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To
effect a reverse split of the Company’s common stock on the basis of 15 (Fifteen) common
shares for 1 (One) new common share.
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B.
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To
amend the Company’s Articles of Incorporation, to change the number of authorized shares
of common stock of the Company to 1,000,000,000, $0.0010 par value, following the reverse
split.
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The
action above was approved on June 24, 2021, by one holder of our Series A preferred stock representing a majority of our issued and outstanding
Common Stock, as of such date, by execution of a written consent in lieu of a special meeting of stockholders (the “Majority
Stockholder Consent”), approving the above matter, which had previously been approved by the Board of Directors of the Company
on June 3, 2021, and recommended to be presented to the majority stockholders for their approval.
Under
WY Stat § 17-16-1001 and Wyoming Business Corporation Act §17-16-704 (d) and in accordance with the Bylaws of the Company,
all activities requiring stockholder approval may be taken by obtaining the written consent and approval of more than 50.1% of the holders
of voting stock in lieu of a meeting of the stockholders. Because the shareholders are entitled to cast a vote representing more than
50.1% of the total issued and outstanding voting capital stock of the Company on the Record Date, no action by the minority stockholders
in connection with the Action is required.
The
entire cost of furnishing this Information Statement will be borne by us. We will request brokerage houses, nominees, custodians, fiduciaries
and other like parties to forward this Information Statement to the beneficial owners of our voting securities held of record by them
and we will reimburse such persons for out-of-pocket expenses incurred in forwarding such material.
Dissenters’
Right of Appraisal
No
dissenters’ or appraisal rights under Nevada Law are afforded to the Company’s stockholders as a result of the approval of
the actions set forth above.
Vote
Required
The
number of votes cast in favor of the action described above had to exceed 50% of the issued and outstanding shares entitled to vote thereon.
As of the date of the Majority Stockholder Consent, the Company had outstanding 1,259,831,337shares of common stock. The majority stockholders
voted more than 50.1% of our voting shares via the Majority Stockholder Consent, to approve the actions described above.
Compensation
for Executive Officers and Directors
Compensation
arrangements for our named executive officers and directors are described below.
Employment
Agreement – Robert Grinberg
The
Company entered into an employment agreement with Robert Grinberg as of June 23, 2021. The agreement provides for a salary of $250,000
per year and expense reimbursements for rent and an executive assistant. The Agreement also provides for certain equity incentives.
Employment
Agreement- Victoria Rudman
In
connection with her engagement as the Chief Financial Officer of the Company, the Company entered into an Executive Employment Agreement
with Ms. Rudman (the “Agreement”) on June 30, 2017. The Agreement was for a two-year term, which automatically renewed for
successive additional one-year terms unless either Ms. Rudman or the Company notifies the other party that they do not wish the Agreement
to so renew. The Agreement provided that Ms. Rudman will serve as the Company’s Chief Executive Officer and as a member of the
Board.
Pursuant
to the Agreement, the Company was to pay Ms. Rudman a salary of $150,000 annually, payable on a monthly basis. The Company was unable
to pay this Base Salary. Therefore, the Company and the Executive agreed to an initial payment of $8,000 per month towards the Base Salary.
The Base Salary continues to accrue until the Company has raised $100,000 or more for working capital, collectively, since the Effective
Date and, at such time, the accrued Base Salary would be paid in full and regular payments of the Base Salary going forward would commence.
As
of June 30, 2021, the Company and Rudman agreed to settle the accrued amounts for (i) $15,000 in cash and (ii) 33,995,000 shares of the
Company’s common stock on a pre-split basis.
In
addition, the Company granted to Ms. Rudman, effective as of June 30, 2017, a total of 7,500,000 shares of the Company’s unregistered
common stock, par value $0.001 per share (the “Common Stock”). 1,875,000 shares of the Common Stock will vest on December
30, 2017, 1,875,000 shares of the Common Stock will vest on June 30, 2017 and 625,000 shares of the Common Stock will vest each month
thereafter.
Pursuant
to the Agreement, the Company also agreed to grant Ms. Rudman 500,000 shares of Common Stock on each anniversary of June 30, 2017, provided
that the amount of these shares of Common Stock will be based on performance and may be adjusted by the Board. The shares of Common Stock
in these grants will vest 50% on each anniversary of the applicable grant.
Employment
Agreement- William Singer
In
connection with his engagement as the Executive Vice President of Sales and Marketing of the Company, the Company entered into an Executive
Employment Agreement with Mr. Singer (the “Agreement”) on March 1, 2017. The Agreement was for a two-year term, which automatically
renewed for successive additional one-year terms unless either Mr. Singer or the Company notified the other party that they do not wish
the Agreement to so renew. The Agreement provided that Mr. Singer will serve as the Company’s Executive Vice President of Sales
and Marketing and as a member of the Board.
Pursuant
to the Agreement, the Company would pay Mr. Singer a salary of $3,500 per month, which commenced effective as of February 1, 2017, provided
that following the month in which the Company begins generating revenue Mr. Singer’s salary would be increased to $5,000 per month.
Mr. Singer would also receive a commission of 1% of any net sales revenue collected by the Company on the sales of its products, based
on the wholesale price, and contingent on the sale being profitable to the Company, and would be eligible for a bonus as jointly determined
by the Board and Mr. Singer.
In
addition, the Company granted to Mr. Singer, effective as of March 1, 2017, a total of 6,000,000 shares of the Company’s unregistered
common stock, par value $0.001 per share (the “Common Stock”). 1,500,000 shares of the Common Stock will vest on March 1,
2018 and 250,000 shares of the Common Stock will vest each month thereafter.
Pursuant
to the Agreement, the Company also agreed to grant Mr. Singer 500,000 shares of Common Stock on each anniversary of March 1, 2017, provided
that the amount of these shares of Common Stock will be based on performance and may be adjusted by the Board. The shares of Common Stock
in these grants will vest 50% on each anniversary of the applicable grant.
As
of June 30, 2021, the Company and Singer agreed to settle the accrued amounts for 8,050,000 shares of the Company’s common stock
on a pre-split basis.
ACTION
1: REVERSE STOCK SPLIT AND AUTHORIZATION OF COMMON SHARES
Overview
As
of March 31, 2021 and June 30, 2020, $2,428,960 of the Company’s convertible notes were in-default. At March 31, 2021, the Company
has outstanding convertible debt of $2,478,960 which is due within the next 12 months.
The
Company’s convertible promissory notes and detachable warrants gave rise to derivative financial instruments. The notes embodied
certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics.
These terms and features consist of the embedded conversion option. Additionally, the detachable warrants contained terms and features
that gave rise to derivative liability classification. As of March 31, 2021, the Company does not have enough authorized shares to settle
all potential conversion and warrant transactions.
In
order to comply with the terms of the Agreement, our Board of Directors has determined that it is advisable and in our and our stockholders’
best interests that the Board of Directors be granted the authority to implement a reverse stock split of the issued and outstanding
shares of our Common Stock in a ratio of 15 (Fifteen) for 1 (One). In conjunction with the reverse split the Company will amend its articles
of incorporation to authorize 5,000,000,000 (Five Billion) common shares.
Accordingly,
the Board of Directors has unanimously approved a resolution proposing an amendment to our amended and restated certificate of incorporation
to allow for the reverse stock split and recommended that it be approved by our shareholders. The Shareholders approved the reverse split
amendment by the written consent of a majority of the shares entitled to vote thereon.
As
a result of the stockholder approval for the Action, 20 days after the date of mailing of our Definitive Information Statement on Schedule
14C to our stockholders, the Board of Directors will have the authority to effect the reverse stock split and amendment to authorize
5,000,000,000 (Five Billion) common shares.
The
text of the form of the proposed amendment to our certificate of incorporation is attached hereto as Annex A. By approving this Action,
stockholders approved the aforesaid reverse stock split and authorized the Board of Directors to file the amendment.
Certain
of our officers and directors have an interest in the reverse stock split as a result of their ownership of Common Stock, as set forth
in the section entitled “Security Ownership of Certain Beneficial Owners and Management.”
Principal
Effects of the Reverse Stock Split
After
the effective date of the proposed reverse stock split, each common stockholder will own a reduced number of shares of Common Stock.
Except to the extent that whole shares will be exchanged in lieu of fractional shares as described below, the proposed reverse stock
split will affect all common stockholders uniformly and will not affect any stockholder’s percentage ownership interest in us and
proportionate voting rights and other rights and preferences of the holders of Common Stock will not be affected by the proposed reverse
stock split.
The
following table contains approximate information relating to the Common Stock under the proposed reverse stock split ratio, without giving
effect to any adjustments for fractional shares of Common Stock, as of June 30, 2021:
Status
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Number of Shares of Common Stock Authorized
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Number of Shares of Common Stock Issued and Outstanding
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Number of Shares of Common Stock Authorized but Unissued
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Pre-Reverse Stock Split
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5,000,000,000
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1,259,831,337
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3,740,168,663
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Post-Reverse Stock Split 1:15
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5,000,000,000
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83,988,755
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4,916,011,245
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On
April 20, 2017, the Company approved the Life Clips, Inc. 2017 Stock and Incentive Plan (“the Plan”). The Plan provides for
the granting of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock grants and units, performance
units and awards, and cash. The Plan allows for an issuance of a maximum of 20,000,000 shares of common stock, with awards made at the
discretion of the board of directors. No awards have been made to date. The current management does not have any plans to issue stock
options in the future to executive officers and directors.
In
addition, proportionate adjustments will be made to the per share exercise price of all outstanding warrants to purchase shares of our
Common Stock.
If
the proposed reverse stock split is implemented, it will increase the number of our stockholders who own “odd lots” of fewer
than 100 shares of Common Stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs
of transactions of more than 100 shares of Common Stock.
After
the effective date of the reverse stock split, our Common Stock would have a new committee on uniform securities identification procedures
(“CUSIP”) number, a number used to identify our Common Stock.
The
Common Stock is currently registered under Section 12(g) of the Securities Exchange Act, and we are subject to the periodic reporting
and other requirements of the Securities Exchange Act. The proposed reverse stock split will not affect the registration of the Common
Stock under the Securities Exchange Act. Our Common Stock would continue to be reported on OTCQB under the symbol “LCLP”.
Effective
Date
The
proposed reverse stock split would become effective on the date of filing of a certificate of amendment to our amended and restated certificate
of incorporation with the office of the Secretary of State of the State of Wyoming. On the effective date, shares of Common Stock issued
and outstanding and the shares of Common Stock held in treasury, in each case, immediately prior thereto will be combined and converted,
automatically and without any action on the part of the stockholders, into new shares of Common Stock in accordance with the reverse
stock split ratio determined by the Board of Directors within the limits set forth in this Action.
Treatment
of Fractional Shares
No
fractional shares would be issued if, as a result of the reverse stock split, a registered stockholder would otherwise become entitled
to a fractional share. Instead, stockholders who otherwise would be entitled to receive fractional shares because they hold a number
of shares not evenly divisible by the ratio of the reverse stock split will automatically be entitled to receive an additional share
of Common Stock. In other words, any fractional share will be rounded up to the nearest whole number.
Record
and Beneficial Stockholders
If
the Board of Directors elects to implement the reverse stock split, stockholders of record holding some or all of their shares of our
Common Stock electronically in book-entry form under the direct registration system for securities will receive a transaction statement
at their address of record indicating the number of shares of our Common Stock they hold after the reverse stock split. Non-registered
stockholders holding Common Stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may
have different procedures for processing the consolidation than those that would be put in place by us for registered stockholders. If
you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact
your nominee.
If
the Board of Directors elects to implement the reverse stock split, stockholders of record holding some or all of their shares in certificate
form will receive a letter of transmittal, as soon as practicable after the effective date of the reverse stock split. Our transfer agent
will act as “exchange agent” for the purpose of implementing the exchange of stock certificates. Holders of pre-reverse stock
split shares will be asked to surrender to the exchange agent certificates representing pre-reverse stock split shares in exchange for
post-reverse stock split shares, including whole shares to be issued in lieu of fractional shares (if any) in accordance with the procedures
to be set forth in the letter of transmittal. Until surrender, each certificate representing shares before the reverse stock split would
continue to be valid and would represent the adjusted number of shares based on the exchange ratio of the reverse stock split rounded
up to the nearest whole share. No new post-reverse stock split share certificates, including those representing whole shares to be issued
in lieu of fractional shares, will be issued to a stockholder until such stockholder has surrendered such stockholder’s outstanding
certificate(s) together with the properly completed and executed letter of transmittal to the exchange agent.
STOCKHOLDERS
SHOULD NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.
Accounting
Consequences
The
par value per share of Common Stock would remain unchanged at $0.0001 per share after the reverse stock split. As a result, on the effective
date of the reverse stock split, the stated capital on our balance sheet attributable to the Common Stock will be reduced proportionally,
based on the exchange ratio of the reverse stock split, from its present amount, and the additional paid-in capital account shall be
credited with the amount by which the stated capital is reduced. The per share Common Stock net income or loss and net book value will
be increased because there will be fewer shares of Common Stock outstanding. The shares of Common Stock held in treasury will also be
reduced proportionately based on the exchange ratio of the reverse stock split. We will reclassify prior period per share amounts and
the Consolidated Statements of Stockholders’ Equity for the effect of the reverse stock split for any prior periods in our financial
statements and reports such that prior periods are comparable to current period presentation. We do not anticipate that any other accounting
consequences would arise as a result of the reverse stock split.
No
Appraisal Rights
Our
stockholders are not entitled to dissenters’ or appraisal rights under the Wyoming Business Corporation Act with respect to the
proposed amendments to our amended and restated certificate of incorporation to allow for the reverse stock split and we will not independently
provide the stockholders with any such right if the reverse stock split is implemented.
Certain
Material U.S. Federal Income Tax Consequence of the Reverse Stock Split
The
following is a summary of certain material United States federal income tax consequences of the reverse stock split to our stockholders
who are United States holders, as defined below. This summary is general in nature and does not purport to be a complete discussion of
all of the possible federal income tax consequences of the reverse stock split and is included for general information only. Further,
it does not address any U.S. federal non-income, state, local or foreign income or other tax consequences. Also, it does not address
the tax consequences to stockholders that are subject to special tax rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, real estate investment trusts, real estate mortgage investment conduits, foreign entities, nonresident
alien individuals, broker-dealers, stockholders whose functional currency is not the U.S. dollar, partnerships (or other entities classified
as partnership for U.S. federal income tax purposes, S corporations or other flow-through entities for U.S. federal income tax purposes,
and tax-exempt entities. Other stockholders may also be subject to special tax rules, including but not limited to: stockholders that
received Common Stock as compensation for services or pursuant to the exercise of an employee stock option, or stockholders who have
held, or will hold, stock as part of a straddle, hedging constructive sale or conversion transaction for federal income tax purposes.
This summary also assumes that you are a United States holder (defined below) who has held, and will hold, shares of Common Stock as
a “capital asset,” as defined in the Internal Revenue Code of 1986, as amended (the “Code”), i.e., generally,
property held for investment. Finally, the following discussion does not address the tax consequences of transactions occurring prior
to or after the reverse stock split (whether or not such transactions are in connection with the reverse stock split), including, without
limitation, the exercise of options or rights to purchase Common Stock in anticipation of the reverse stock split.
The
tax treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder. You should consult
with your own tax advisor with respect to the tax consequences of the reverse stock split. As used herein, the term United States holder
means a stockholder that is, for federal income tax purposes: a citizen or resident of the United States; a corporation or other entity
taxed as a corporation created or organized in or under the laws of the United States or any state, including the District of Columbia;
an estate the income of which is subject to federal income tax regardless of its source; or a trust that (i) is subject to the primary
supervision of a U.S. court and of which one or more “U.S. persons” (as defined in the Code) has the authority to control
all substantial decisions, or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S.
person.
The
following discussion is based on the Code, applicable Treasury Regulations promulgated thereunder, judicial authority and administrative
rulings and practice, all as of the date hereof, all of which are subject to change, potentially with retroactive effect which could
adversely affect the accuracy of the statements and conclusions set forth herein. No ruling from the Internal Revenue Service or opinion
of counsel has been obtained in connection with the reverse stock split, and there can be no assurance that the Internal Revenue Service
would not take a position contrary to that discussed herein, nor that such contrary position would not be sustained.
Other
than in respect of a fractional share that is rounded up to a full share, no gain or loss should be recognized by a United States holder
upon such stockholder’s exchange of pre-reverse stock split shares of Common Stock for post-reverse stock split shares of Common
Stock pursuant to the reverse stock split. The aggregate tax basis of the post-reverse stock split shares received in the reverse stock
split (including any whole share received in exchange for a fractional share) will be the same as the stockholder’s aggregate tax
basis in the pre-reverse stock split shares exchanged therefore. The United States holder’s holding period for the post-reverse
stock split shares will include the period during which the stockholder held the pre-reverse stock split shares surrendered in the reverse
stock split. Although the matter is not clear, it is possible that United States holders whose fractional shares resulting from the reverse
stock split are rounded up to the nearest whole share will recognize gain, which may be characterized as either a capital gain or as
a dividend, to the extent of the value of such rounded-up amount (i.e., less than one share).
No
gain or loss will be recognized by us as a result of the reverse stock split.
THE
PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. YOU SHOULD CONSULT YOUR OWN
TAX ADVISORS AS TO THE PARTICULAR FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF YOUR
SPECIFIC CIRCUMSTANCES.
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July
8, 2021
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By:
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/s/
Robert Grinberg
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Robert
Grinberg
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Director
and Chief Executive Officer (Principal Executive Officer)
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By:
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/s/
Victoria Rudman
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Victoria
Rudman
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Chief
Financial Officer and Director
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(Principal
Financial and Principal Accounting Officer)
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By:
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/s/
William Singer
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William
Singer
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Director
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By:
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/s/
Dr. Charles Adelson
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Dr.
Charles Adelson
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Director
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ANNEX
A
Amendment to Certificate of Incorporation
Reverse Stock Split and Share Authorization