United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (date of earliest event reported):
November 3, 2020
Puget Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)
| Nevada |
| (State of Incorporation) |
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| 333-179212 |
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01-0959140 |
| Commission File Number |
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(I.R.S. Employer Identification
No.) |
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1200 North Federal Highway, Suite
200-A;
Boca Raton, Florida
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33432 |
| (Address of Principal Executive
Offices) |
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(Zip Code) |
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| 1 561 2108535 |
| (Registrant’s Telephone Number, Including Area
Code) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
| ☐ |
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425). |
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| ☐ |
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12). |
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| ☐ |
Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)). |
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| ☐ |
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c)). |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended
transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act. ☐
Section 1 - Registrant’s
Business and Operations
The
Registrant is continuing to settle its outstanding debt and making
arrangements to audit its financial statements for the past two
years in order in order to prepare and file the reports on forms
10-K and 10-Q due for the fiscal years ended October 31, 2020 and
2019, and has amended, updated and restated its articles of
incorporation and bylaws. It is also arranging to file all
outstanding tax returns for the years ended 2015, 2016, 2017, 2018
and 2019, all as recommended by the Registrant’s affiliate and
strategic consultant, Qest Consulting Group, Inc. (“Qest”), all as
hereinafter more particularly disclosed.
Section 2 - Financial
Information
Item 2.02 Results of Operations and Financial Condition
Reference is made to the disclosure made in the Registrant’s
reports filed on October 16 and 23, 2020.
In
conjunction with the Registrant’s ongoing efforts to eliminate
debt, the debt owed to Adar Bays, LLC as reported in the report of
current event filed with the Commission on October 16, 2020, has
now been discharged. The original debt in the form of a convertible
8% note was incurred on January 30, 2015 in the principal sum of
$75,000. A total, including principal, accrued interest of $32,417,
and costs related to settlement of litigation of $56,000 has been
discharged through conversion over a five year period into
2,307,801,552 shares of the Registrant’s Common Stock in reliance
on Section 3(a)(9) of the Securities Act, and payment of $132.54 in
cash. Payment of this convertible note satisfies the litigation
against the Registrant and its management filed by Adar Bays, LLC
in the United States District Court for the Southern District of
New York (the “Court”) in Case No. 15-cv-08860 entitled Adar
Bays LLC v Puget Technologies Inc. and Hermann Burckhardt.
Confirmation of the foregoing provided by Adar Bays, LLC through a
series of emails and confirmed by the Registrant with a copy of the
check for the final payment is filed as exhibit 99.1.
The
Registrant recently increased its authorized Common Stock from
2,990,000,000 to 4,990,000,000 in order to accommodate future
conversions and other corporate issuances and its management
believes that it now has enough authorized Common Stock at current
market conditions to allow for the conversion of all its current
debt into equity.
Section 3 - Securities
and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the response to this item with respect to
transactions by holders of the Registrant’s convertible notes in
the report of current event filed on October 16, 2020 and by
officers of the Registrant who elected to convert their debt to
equity as disclosed in the report of current event dated October
23, 2020. The same creditors continue to convert their debt into
shares of the Registrant’s Common Stock in reliance on Section
3(a)(9) of the Securities Act and as provided in heretofore
disclosed judgments against the Registrant which qualify under
Section 3(a)(19) of the Securities Act.
Item 3.03 Material Modification to Rights of Security
Holders.
Reference is made to the response to Item 5.03 incorporated herein
by reference.
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 2
of 8 (excluding exhibits)
Section 4 - Matters
Related to Accountants and Financial Statements
Item 4.01 Changes in Registrant’s Certifying Accountant.
(b) Engagement of
Auditor
On
November 3, 2020, the Registrant engaged the firm of BF Borgers CPA
PC of 5400 W Cedar Ave, Lakewood, CO 80226 (“BF Borgers “) to audit
the Registrant’s balance sheet as of October 31, 2020 and October
31, 2019, and the related statements of operations, stockholders’
equity and income, and cash flows for the years then ended as well
as to review the Registrant’s unaudited quarterly financial
information for each of the quarters in the years ending October
31, 2021 and October 31, 2019. During the past two fiscal years, BF
Borgers CPA PC has not been contacted by the Registrant with
reference to any of the matters listed in Item 304(a)(2) of
Regulation S-K. BF Borgers was originally retained by the
Registrant on March 4, 2015 but because of the Registrant’s
financial difficulties at the time, has never before audited the
Registrant’s financial statements. BF Borgers currently performs
10-K audits and 10-Q quarterly reviews in accordance with Public
Company Accounting Oversight Board standards for over 100 publicly
traded companies around the world ranging from start-up and
development stage to successful mid-market companies.
The
engagement letter assumes the existence of an audit committee which
the Registrant does not currently have as it lacks independent
directors. The auditor has, however, indicated to the Registrant
that in the absence of an audit committee, it will deal directly
with the Registrant’s Board of Directors. At such point in the
future as the Registrant’s stockholders elect one or more qualified
independent directors, it is the intention of the current members
of its Board of Directors to form several committees thereof as
permitted by the newly adopted bylaws, an audit committee among
them. Reference is made to Article II Section 6 of the newly
adopted bylaws annexed as exhibit 3(ii) to this current report.
Section 5 - Corporate
Governance and Management
Item 5.03 Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
Amendment and Restatement of Articles of Incorporation
At
the urging of its strategic consultant, Qest, the Registrant
amended and restated its articles of incorporation and filed a
certificate relating thereto with the State of Nevada on November
3, 2020. Qest provided the following justifications for such
action, with which the Registrant’s Board of Directors
concurred:
As
to the articles Qest indicated that its analysis thereof had
disclosed serious clerical errors as a result of which, there were
contradictory capitalization provisions while several articles had
been inadvertently eliminated. Further, it indicated, the
Registrant should more closely align its interests with its
stockholders by eliminating super majority approval requirements
for corporate acquisitions, divestitures and reorganizations,
especially given the need to develop or acquire new lines of
business. Reiterating its advice provided previously in a
memorandum of strategic recommendations that the Registrant not
consider becoming the subject of a reverse acquisition but rather,
become a sort of incubator for innovative new businesses that hoped
to eventually become independent public companies of their own, it
indicated that the Registrant should not limit its purposes to
those included in a list but rather, open itself to any legal
opportunities while at the same time, assuring that it not engage
in activities with special licensing requirements such as
investment companies or investment bankers without very serious
prior consideration and the acquisition of all related licenses and
permits. It noted that because once the corporate cleanup phase was
concluded, the Registrant might become a target for promoters
interested only in short term profits available from the
Registrant’s anticipated status as a fully compliant public company
with a large and loyal stockholder base, it suggested that it would
be prudent to provide an article that empowered the Board of
Directors to undertake defensive strategies and tactics to avoid
“unfriendly takeovers. Finally, it noted that recruitment of
talented professionals to develop the Registrant’s business plans,
as well as to facilitate acquisition of desirable operating
companies, made it important for the Registrant to be permitted not
only to indemnify its officers, directors and authorized agents (as
well as persons performing similar roles for its subsidiaries), but
to permitted it to advance required funds for defense of threatened
or actual litigation resulting from such services. As a concluding
point not involving the proposed amendments to the Articles, Qest
also urged the Registrant to adopt flexible equity compensation
plans for its officers, directors and employees, as well as for
those of its subsidiaries and for third party contractors in order
to align the interests of such persons with those of the Registrant
and its stockholders.
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 3
of 8 (excluding exhibits)
Specifically, the following changes were made:
Old
article 4 listing the purposes for which the Registrant had been
organized had been inadvertently replaced by an improperly numbered
amendment to the Registrant’s capitalization. It had provided a
long specific list of the activities in which the Registrant could
participate, thus limiting its potential activities to those
listed. The article was replaced by a new article numbered III
which reads as follows: “This Corporation is organized for any
legal purpose; provided, however, that it shall not:
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A. |
Engage
in any activities that would subject it to regulation as an
investment company under the Federal Investment Company Act of 1940
(the “Investment Company Act”), as amended, unless it shall have
first qualified and elected to be regulated as a small business
development company pursuant to Sections 55 et. seq., thereof, and
limits its investment company activities to those permitted
thereby; or |
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B. |
Engage
in any activities which would subject the Corporation to regulation
as a broker dealer in securities subject to regulation under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) or
as an investment advisor subject to regulation under the Investment
Advisors Act of 1940, as amended (the “Investment Advisor’s Act”);
or |
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C. |
Engage
in any other activities requiring the Corporation to comply with
governmental registration and supervision, unless it has completed
such registration and conducts itself in full compliance with such
supervisory requirements.” |
Article 5, which described the Registrant’s authorized
capitalization had been frequently amended, the latest such
amendment being on October 22 of this year (accepted for filing by
the State of Nevada on October 27, 2020) and because of the
previously mentioned error in numbering, generated confusion. It
also did not reflect the designation of two classes of preferred
stock. The article was rewritten, numbered IV, and now reflects the
latest changes in authorized capitalization as reported to the
Commission in a current report dated October 23, 2020.
Article 6, which indicated that the Registrant had commenced
business has been eliminated as unnecessary. Article 7, which dealt
with the ability of stockholders to act by written consent has been
renumbered and conformed to actual current Nevada law in a new
Article X which also deals with the ability of the Registrant’s
Board of Directors to take action by written consents in lieu of
meeting.
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 4
of 8 (excluding exhibits)
Article 8, which required supermajority stockholder approval for
business combinations, in essence a right of veto in favor of
minority stockholders, has been eliminated. Article 9, which
required classification of the Board of Directors into three
classes in the event it was comprised of more than two members has
been eliminated as it was mathematically incongruent in the event
there were less than three directors, as has been the case since
2015. A permissive provision to classification has been added to
the bylaws, with discretion left to the Board of Directors as to
its implementation. Article 11 provided a list of actions by the
Board of Directors which required a supermajority vote, incongruous
given that since 2015 it has been comprised of only two members and
further deemed inefficient as the Registrant seeks to move forward
and has thus been eliminated. Article 12, which indicated
considerations the Board of Directors “might” consider in
evaluating a business combination was deemed to have no meaning and
was thus eliminated.
A
new Article VI has been added pertaining to the Board of Directors
which provides as follows: “This Corporation shall have not less
than one Director. The number of Directors may be either increased
or diminished from time to time in the manner provided in the
Bylaws, but shall never be less than one. The Corporation’s Board
of Directors is hereby authorized, without prior stockholder
approval, to amend these Articles of Incorporation, from time to
time, in order to: (a) Effect splits or reverse splits of the
Corporation’s common or preferred stock; (b) Change the name of the
Corporation; (c) Increase the Corporation’s authorized capital; (d)
Decrease the Corporation’s authorized capital; provided that such
decrease may not affect any issued and outstanding shares, and, (e)
Such other matters as may be otherwise permitted under then
applicable laws of the State of Nevada.
Article 13 which required a supermajority vote of the stockholders
to amend designated provisions of the articles of incorporation
unless they were proposed by unanimous vote of the Board of
Directors (old articles 8, 9, 12, or 13) has been eliminated, by
unanimous vote of the Board of Directors and of more than 2/3 of
the votes of the stockholders as unnecessarily giving veto power to
minorities which might impede expeditious action by the Registrant
necessary to develop or acquire new lines of business and increase
costs by requiring unnecessary stockholder meetings.
Article 14 (indemnification) has been replaced by new article VII
which clarifies the procedure for indemnification and permits the
Registrant to advance funds for defense of litigation to “any
person (including his estate) made or threatened to be made a party
to any suit or proceeding, whether civil or criminal, by reason of
the fact that he was a director, officer or authorized agent of the
Corporation or served at its request as a director or officer of
another corporation”. This was deemed prudent to permit the
Registrant to recruit and retain more capable personnel and
advisors.
Articles 15, 16 and 17 were eliminated as unnecessary to restated
articles under Nevada corporate law and dealt with identification
of the Registrant’s incorporator, registered agent and the
Registrant’s address.
The
following new articles were added:
“Article VIII, Limitation on Stockholder Suits” which limits
stockholder derivative suits to the extent permissible under Nevada
law, providing instead an internal procedure for deciding on
litigation recommended by stockholders “to a special committee of
the Board of Directors comprised of members who do not also serve
as officers of the Corporation and are not reasonably involved with
the subject cause of action, or if no such directors are serving,
to legal counsel designated by the Corporation in which neither the
law firm or any of its owners, members, employees or affiliates
holds shares of the Corporation’s securities, holds any office or
position with the Corporation or is related by marriage or through
siblings, parents or children to any officer or director of the
Corporation”. Such provision was deemed important by the
Registrant’s management for both recruitment and retention of
qualified personnel and advisors, as well as in conjunction with
potential future acquisitions.
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 5
of 8 (excluding exhibits)
“Article IX, Affiliated Transactions” which clarifies that the
Registrant will not be restricted from engaging in transactions
with affiliates described in Sections 78.411 et. seq., of Nevada
Revised Statutes, as permitted by the waiver provisions of Section
78.434 thereof.
“Article XI, Take Over Defenses”, which provides the Registrant’s
Board of Directors with the broadest possible authority and
discretion in adopting and maintaining resistance to, and defenses
against, takeover bids that it deems not to be in the best
interests of the Registrant, deemed critical by the Registrant’s
management in its efforts to successfully rehabilitate the
Registrant without intervention by persons interested in using it
as a vehicle for generation of short term profits.
A
copy of the articles of incorporation, as amended and restated is
filed herewith as exhibit 3(i).
Amendment of the Bylaws
At
the urging of its strategic consultant, Qest, the Registrant also
amended its bylaws concurrently with the amendment of its articles
of incorporation effective as of November 3, 2020. Qest provided
the following justifications for such action, with which the
Registrant’s Board of Directors concurred. Qest explained that the
situation with the current bylaws was not as urgent as it was with
the prior articles of incorporation, given that they were not
public records, but stated that bylaws should not be mere
formalisms, but rather manuals of procedure which the Registrant’s
directors and officers should consult and use frequently when
making strategic decisions, as well as when implementing
established policies. Qest reflected that the bylaws should not be
deemed cast in stone, but rather updated and improved consistently,
to reflect evolving best practices and the changing needs of the
Registrant. It then stated that the Registrant’s current bylaws
seemed de minimus, generic, and indeed, with respect to the
Registrant’s voting procedures and capital stock, contradictory,
thus, he recommended that they be completely abandoned and replaced
with the version prepared by Qest that was specifically tailored to
the Registrant, its recently amended articles of incorporation, and
to the strategic recommendations already provided by Qest.
The
original bylaws comprised of six pages were limited to six generic
articles dealing with meetings of stockholders (Article I), stock
(Article II), directors (Article III), officers (Article IV),
indemnification of officers and directors (Article V) and,
amendments (Article VI). They were not necessarily consistent with
comparable provisions in the articles of incorporation and did not
provide the guidance required for the operation of a public
company. Copies of such bylaws were filed with the Commission as an
exhibit to the Registrant’s filing on Form S-1 on January 27, 2012
are hereby incorporated herein. They were replaced by entirely new
bylaws filed as exhibit 3(ii) to this current report. The new
bylaws are comprised of 29 pages and 11 articles with numerous
subsections specifically dealing with the Registrant and its
corporate structure, including supermajority voting procedures and
specifically, with matters pertaining to compliance with federal
and state securities laws, rules and regulations, both those
currently applicable and those that would become applicable should
the Registrant become subject to registration requirements under
Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) as well as with transactions in
securities not registered under Section 5 of the Securities Act of
1933, as amended (the “Securities Act”). Specific additions
include:
Article I dealing with stockholders and comprised of eleven
sections dealing with annual meeting (section 1); special meetings
(section 2); adjournment (section 3); notice of meetings, purpose
of meeting and waiver (section 4); closing of transfer books,
record date, stockholders’ list (section 5); quorum (section 6);
presiding officer and order of business (section 7); voting
(section 8); action without meeting (section 9); proxies (section
10); and, voting of shares by stockholders (section 11).
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 6
of 8 (excluding exhibits)
Article II dealing with directors comprised of ten sections dealing
with exercise of corporate powers (section 1); number, election,
classification and vacancies (section 2); removal of directors
(section 3); director voting and quorum (section 4); director
conflicts of interest (section 5); executive and other committees
(Section 6, of special note the power of the executive committee to
act on behalf of the Board of Directors); place, time, notice and
call of directors’ meetings (section 7); action by directors
without a meeting (section 8); compensation (section 9); and,
resignation (section 10).
Article III dealing with officers comprised of five sections
dealing with election, designation and terms of office (section 1);
removal (section 2); vacancies (section 3); powers and duties
(section 4); and, salaries (section 5). Article IV dealing with
loans to employees and officers and guarantee of obligations of
employees and officers.
Article V dealing with stock certificates, voting trusts and
transfers comprised of five sections dealing with certificates
representing shares (section 1); transfer books (section 2);
transfer of shares (section 3); voting trusts (section 4); and,
lost destroyed and stolen certificates (section 5). Article VI
dealing with books and records. Article VII dealing with dividends.
Article VIII dealing with the corporate seal. Article IX dealing
with amendments to the bylaws, a power primarily vested in the
Board of Directors. Article X dealing with the Registrant’s fiscal
year (set, subject to modification by the Board of Directors, at
October 31).
Article XI deals with medical reimbursement and is comprised of six
sections dealing with the benefits (section 1); a definition of the
term “employees” (section 2); limitations (section 3); submission
of proof (section 4); discontinuation (section 5); and,
determination (section 6). Finally, Article XI, which deals with
equity based compensation and incentive plans and arrangements.
Item 5.07 Submission of Matters to a Vote of Security
Holders.
The
amendment and restatement of the Registrant’s articles of
incorporation was undertaken pursuant to a written consent in lieu
of stockholders meeting as permitted under Nevada Revised Statutes
Sections 78.0704, 78.390 and 78.403 with a quorum present of
8,189,790,344 of the 10,990,000,000 possible votes, with
8,189,790,344 voting in favor and no actual votes against, although
a possible 2,800,209,656 votes might have been cast against such
proposals, had all of the Registrant’s stockholders been present
and voting, thus, all proposals were deemed carried by more than a
2/3 majority. The written consent in lieu of meeting was executed
on October 29, 2020 after its approval by the Board of Directors on
October 28, 2020 and is filed as exhibit 99.2 to this report.
Section 8 - Other
Events
Item 8.01 Other Events.
In
order to avoid the leakage of potentially material information, the
Registrant has elected to disclose the content of a confidential
memorandum dated October 17, 2020 from the Registrant’s strategic
consultant and affiliate, Qest. Such memorandum is filed as exhibit
99.3 to this current report. While management of the Registrant has
taken the initial recommendations seriously and its Board of
Directors finds the intermediate term recommendations interesting,
no assurances can be provided that they will, in fact, be adopted,
or if adopted, successful.
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 7
of 8 (excluding exhibits)
Section 9 - Financial
Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
Exhibits
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
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Puget Technologies,
Inc. |
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By: |
/s/Hermann Burckhardt |
| Date: November 6,
2020 |
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Hermann Burckhardt, President and
Chief Executive Officer |
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By: |
/s/Thomas Jaspers |
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Thomas Jaspers, Treasurer,
Secretary and Chief Financial Officer |
Puget Technologies, Inc., current report on Commission Form 8-K,
Page 8 of 8
(excluding exhibits)
