ITEM 1.
INFORMATION STATEMENT
This Information Statement is furnished
to the stockholders of Zonzia Media, Inc., a Nevada corporation (the “Company”), in connection with our prior receipt
of approval by written consents, in lieu of a special meeting, of the holders of a majority of our outstanding voting power authorizing
the board of directors of the Company, in their discretion, to amend the articles of incorporation of the Company (the "Amendment")
to effect a reverse stock split (the “Reverse Split Proposal”) of the Company's issued and outstanding common stock
(the “Common Stock”) between a range of not less than one-thousand for one (1,000:1) and not more than twenty-five
thousand for one (25,000:1), or if at all.
On July 5, 2016, the Company
obtained the approval of the Reverse Split Proposal by written consent of the stockholders that are the record owners of
684,279,672 shares of common stock, which represents approximately 56% of the voting power as of July 5, 2016. The names of
the shareholders of record who hold a majority of our total issued and outstanding common stock and who signed the written
consent of stockholders are: Myles A. Pressey III, James C. Walter Sr., Stanley L. Teeple, Johnathan F. Adair, New Hope
Partners and Jim Walter Jr. holding of record an aggregate of 684,279,672 shares.
The Reverse Split Proposal cannot, if at
all, be effectuated until twenty (20) days after the mailing of this Information Statement and after the filing of the Amendment
with Secretary of State of the State of Nevada with respect to the reverse stock split. The Amendment will not decrease the authorized
amount of common stock just the number of shares of common stock issued and outstanding.
The date on which this Information
Statement will be sent to stockholders will be on or about August 2, 2016 and is being furnished to all holders of the common
stock of the Company as of July 5, 2016, the record date.
The Board of Directors, and persons owning
a majority of the outstanding voting securities of the Company have unanimously adopted, ratified and approved the proposed action
by the Company's board of directors. No other votes are required or necessary.
The Annual Report on Form 10-K for fiscal
year ended December 31, 2015 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 filed by the Company with
the Securities and Exchange Commission may be viewed on the Securities and Exchange Commission’s web site at
www.sec.gov
in the Edgar Archives. The Company is presently current in the filing of all reports required to be filed by it.
Only one information statement is being
delivered to multiple shareholders sharing an address, unless we have received contrary instructions from one or more of the shareholders.
We will undertake to 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 a written or oral request by
sending a written notification to our principal executive offices stating your name, your shared address, and the address to which
we should direct the additional copy of the information statement or by calling our principal executive offices at (702) 707-3974.
If multiple shareholders sharing an address have received one copy of this information statement and would prefer us to mail each
stockholder a separate copy of future mailings, you may send notification to or call our principal executive offices. Additionally,
if current shareholders with a shared address received multiple copies of this information statement and would prefer us to mail
one copy of future mailings to shareholders at the shared address, notification of that request may also be made by mail or telephone
call to our principal executive offices.
VOTE REQUIRED
Pursuant to the Company's Bylaws and the
Nevada Revised Statutes, a vote by the holders of at least a majority of the Company’s outstanding votes is required to affect
the Reverse Split Proposal. The Company’s certificate of incorporation does not authorize cumulative voting. As of the record
date, the Company had 1,226,031,708 voting shares of common stock issued and outstanding. The consenting stockholders of the shares
of common stock are entitled to 684,279,672 votes, which represents approximately 56% of the voting rights associated with the
Company’s shares of common stock. The consenting stockholders voted in favor of the Reverse Split Proposal described herein
in a unanimous written consent, dated July 5, 2016. Because stockholders holding a majority of the issued and outstanding
shares of common stock are entitled to cast a vote representing 684,279,672 shares of common stock (which shares are equal to approximately
56% of the total issued and outstanding voting capital stock on the record date), no action by the minority stockholders in connection
with the Amendment is required.
PROPOSAL
APPROVAL OF GRANT TO THE BOARD
OF DIRECTORS THE DISCRETIONARY AUTHORITY TO EFFECT A REVERSE STOCK SPLIT TO THE COMPANY'S COMMON STOCK
On July 5, 2016, our Board of Directors and majority shareholders, believing it to be in the best interests of the Company and its shareholders, approved authorizing the board of directors of the Company, in their discretion, to amend the articles of incorporation of the Company (the "Amendment") to effect a reverse stock split (the “Reverse Split Proposal”) of the Company's issued and outstanding common stock (the “Common Stock”) between a range of not less than one-thousand for one (1,000:1) and not more than twenty-five thousand for one (25,000:1), or if at all, at any time prior to March 31, 2017.
The Amendment will not change the number of authorized
shares of Common Stock, Preferred Stock, or the relative voting power of our shareholders. Because the number of authorized shares
will not be reduced, the number of authorized but unissued shares of our Common Stock will materially increase and will be available
for reissuance by the Company. The reverse stock split, if affected, would affect all of our holders of Common Stock uniformly.
Even though a majority of the shareholders approved
the Reverse Split Proposal, we reserve the right not to affect any reverse stock split if the Board does not deem it to be in the
best interests of our shareholders. The Board believes that granting this discretion provides the Board with maximum flexibility
to act in the best interests of our shareholders. Board now has the authority, in its sole discretion, without further action by
the shareholders, to affect a reverse stock split.
The Board's decision as to whether and when to effect
the reverse stock split will be based on a number of factors, including prevailing market conditions, existing and expected trading
prices for our Common Stock, actual or forecasted results of operations, and the likely effect of such results on the market price
of our Common Stock.
Following a reverse stock split, the number of our outstanding
shares of Common Stock will be significantly reduced. A reverse stock split will also affect (i) our outstanding stock options
and shares of Common Stock issued under the Company's 2007 Stock Option Plan (the “Option Plan”), as well as (ii) the
number of shares of Common Stock issuable upon conversion of our outstanding Convertible (“Convertible Notes”) and
(iii) the number of shares issuable upon conversion of our outstanding Warrants. Under these plans, the number of shares of Common
Stock deliverable upon exercise or grant must be appropriately adjusted and appropriate adjustments must be made to the purchase
price per share to reflect the reverse stock split.
The reverse stock split is not being proposed in response
to any effort of which we are aware to accumulate our shares of Common Stock or obtain control of the Company, nor is it a plan
by management to recommend a series of similar actions to our Board or our shareholders.
There are certain risks associated with a reverse stock
split, and we cannot accurately predict or assure the reverse stock split will produce or maintain the desired results (for more
information on the risks see the section below entitled “Certain Risks Associated with a Reverse Stock Split”). However,
our Board believes that the benefits to the Company and our shareholders outweigh the risks and recommends that you vote in favor
of granting the Board the discretionary authority to affect a reverse stock split.
Reasons for the Reverse Stock Split
The primary purpose for effecting the reverse stock
split, should the Board of Directors choose to effect one, would be to increase the per share price of our Common Stock. The Board
of Directors believes that, should the appropriate circumstances arise, affecting the reverse stock split would, among other things,
help us to:
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Meet certain initial listing requirements of the New York Stock Exchange (“NYSE”) and/or NASDAQ;
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Appeal to a broader range of investors to generate greater investor interest in the Company; and
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Improve the perception of our Common Stock as an investment security.
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Meet the
NASDAQ or NYSE Listing Requirements -
Our Common Stock is currently listed on the OTC:QB (“ZONX”). Both the NYSE
and the NASDAQ require a minimum trading price per share in order to list on either exchange. The NYSE and the NASDAQ Rules and
Regulations, require among other things, that in order to list on their exchanges, the average closing price of a company's common
stock must be at least $4.00 per share over a consecutive 30 trading-day period.
Improve
the Perception of Our Common Stock as an Investment Security -
We believe that the overall economic environment in which
we and other entertainment companies are currently operating has been one of the contributing factors in the decline in
the price of our Common Stock. Our Board of Directors unanimously approved the discretionary authority to affect a reverse
stock split as one potential means of increasing the share price of our Common Stock to improve the perception of our Common
Stock as a viable investment security. Lower-priced stocks have a perception in the investment community as being risky
and speculative, which may negatively impact not only the price of our Common Stock, but also our market liquidity. As
an independent entertainment company, we believe that we may be particularly sensitive to this type of negative
public perception and, with the discretion given to the Board by the Reverse Split proposal, our Board would have the ability
to increase our per share price if it determines that it is undermining our current or future prospects.
Appeal to
a Broader Range of Investors to Generate Greater Investor Interest in the Company -
An increase in our stock price may make
our Common Stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their clients,
particularly lower-priced securities of entertainment companies. Many institutional investors have policies prohibiting them from
holding lower-priced stocks in their portfolios, which reduces the number of potential purchasers of our Common Stock. Investment
funds may also be reluctant to invest in lower-priced stocks. Investors may also be dissuaded from purchasing lower-priced stocks
because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts
at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower-priced stocks. Giving the Board
of Directors the ability to affect a reverse stock split, and thereby increase the price of our Common Stock, would give the Board
the ability to address these issues if it is deemed necessary.
Certain Risks Associated with
a Reverse Stock Split
Even if a reverse stock split is
affected, some or all of the expected benefits discussed above may not be realized or maintained. The market price of our Common
Stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares outstanding.
The reverse stock split will reduce
the number of outstanding shares of our Common Stock without reducing the number of shares of available but unissued Common Stock,
which will also have the effect of increasing the number of authorized but unissued shares. The issuance of additional shares of
our Common Stock may have a dilutive effect on the ownership of existing shareholders.
The current economic environment,
in which we operate, the substantial debt we carry and other risks which affect our ability to operate as a going concern, along
with otherwise volatile equity market conditions, could limit our ability to raise new equity capital in the future.
Principal Effects of a Reverse
Stock Split
If the Board of
Directors elects to effect a reverse stock split, our issued and outstanding shares of Common Stock would decrease at a rate
of approximately one share of Common Stock for every 1,000 or 25,000 shares of Common Stock
currently outstanding. The reverse stock split would be affected simultaneously for all of our Common Stock, and the exchange
ratio would be the same for all shares of Common Stock. The reverse stock split would affect all of our shareholders
uniformly and would not affect any shareholder's percentage ownership interests in the Company, except to the extent that it
results in a shareholder receiving an additional share of stock in lieu of fractional shares. The reverse stock split would
not affect the relative voting or other rights that accompany the shares of our Common Stock, except to the extent that it
results in a shareholder receiving an additional share of stock in lieu of fractional shares. Common Stock issued pursuant to
the reverse stock split would remain fully paid and non-assessable. The reverse stock split would not affect our securities
law reporting and disclosure obligations, and we would continue to be subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have no current plans to take the Company
private. Accordingly, a reverse stock split is not related to a strategy to do so.
In addition to the change in the
number of shares of Common Stock outstanding, a reverse stock split would have the following effects:
Increase
the Per Share Price of our Common Stock
- By effectively condensing a number of pre-split shares into one share of Common Stock,
the per share price of a post-split share is generally greater than the per share price of a pre-split share. The amount of the
initial increase in per share price and the duration of such increase, however, are uncertain. If appropriate circumstances exist,
the Board may utilize the reverse stock split as part of its plan to obtain listing on the NYSE or NASDAQ to meet their listing
standards noted above.
Increase
in the Number of Shares of Common Stock Available for Future Issuance
- By reducing the number of shares outstanding without
reducing the number of shares of available but unissued Common Stock, a reverse stock split will increase the number of authorized
but unissued shares. The Board believes the increase is appropriate for use to fund the future operations of the Company. Although
the Company does not have any pending acquisitions for which shares are expected to be used, the Company may also use authorized
shares in connection with the financing of future acquisitions.
The following table contains approximate information
relating to our common stock, based on share information as of July 5, 2016:
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Current
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After Reverse Split if 1,000:1 Ratio is Selected
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After Reverse Split if 25,000:1
Ratio is Selected
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Authorized Common Stock
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2,000,000,000
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2,000,000,000
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2,000,000,000
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Common Stock issued and outstanding
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1,226,031,708
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1,226,032
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49,042
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Common Stock issuable upon exercise of outstanding stock options
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568,162
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569
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23
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Common Stock reserved for issuance for future grants under the 2007 Stock Option Plan
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340,929
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341
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14
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Common Stock available for issuance upon conversion of Convertible Notes
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412,309,203
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412,310
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16,493
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Common Stock issuable under outstanding Warrants
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3,871,591
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3,872
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155
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Common Stock authorized but unissued and unreserved/unallocated
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356,878,407
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1,998,356,876
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1,999,934,273
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Although a reverse stock split would not have any dilutive
effect on our shareholders, a reverse stock split without a reduction in the number of shares authorized for issuance would reduce
the proportion of shares owned by our shareholders relative to the number of shares authorized for issuance, giving our Board an
effective increase in the authorized shares available for issuance, in its discretion. Our Board from time to time may deem it
to be in the best interests of the Company and our shareholders to enter into transactions and other ventures that may include
the issuance of shares of our Common Stock. If our Board authorizes the issuance of additional shares subsequent to the reverse
stock split described above, the dilution to the ownership interest of our existing shareholders may be greater than would occur
had the reverse stock split not been effected. Many stock issuances not involving equity compensation do not require shareholder
approval, and our Board generally seeks approval of our shareholders in connection with a proposed issuance only if required at
that time.
Require
Adjustment to Currently Outstanding Securities Exercisable or Convertible into Shares of our Common Stock
- A reverse stock
split would effect a reduction in the number of shares of Common Stock issuable upon the exercise or conversion of our outstanding
stock options and Convertible Notes in proportion to the reverse stock split ratio. Additionally, the exercise price of outstanding
options and conversion price of our Convertible Notes would increase, likewise in proportion to the reverse stock split ratio.
Require
Adjustments to Number of Shares of Common Stock Available for Future Issuance under our 2007 Stock Option Plan
- In connection
with any reverse split, our Board would also make a corresponding reduction in the number of shares available with respect to options
granted under our 2007 Stock Option Plan so as to avoid the effect of increasing the value of options previously granted.
Require
Adjustments to the Number of Shares Issued and Issuable under our Outstanding Warrants
- A reverse split would effect a reduction
in the number of shares of Common Stock issuable upon the exercise of our outstanding Warrants in proportion to the reverse stock
split ratio. Additionally, the exercise price of our outstanding Warrants would increase, likewise in proportion to the reverse
stock split ratio.
In addition, a reverse stock split
may result in some shareholders owning “odd lots” of less than 100 shares of Common Stock, which may be more difficult
to sell and may cause those holders to incur greater brokerage commissions and other costs upon sale.
Authorized Shares of Common
Stock
The Reverse Split Proposal will
not change the number of authorized shares of Common Stock but will increase the number of authorized shares available for future
issuance for corporate needs such as equity financing, retirement of outstanding indebtedness, stock splits and stock dividends,
employee benefit plans, or other corporate purposes as may be deemed by the Board to be in the best interests of the Company and
its shareholders. The Board believes the increase in available shares for future issuance is appropriate to fund the future operations
of the Company and to address the upcoming maturity of some of the Company’s outstanding convertible notes. It will also
provide the Company with greater flexibility to respond quickly to advantageous business opportunities. However, we may from time
to time explore opportunities to make acquisitions through the use of stock. As a result, the Company's current number of authorized
shares of Common Stock may enable the Company to better meet its future business needs.
We believe that the current amount
of authorized Common Stock will make a sufficient number of shares available, should the Company decide to use its shares for one
or more of such previously mentioned purposes or otherwise. The current capital will provide the Board with the ability to issue
additional shares of stock without further vote of the shareholders of the Company, except as provided under Nevada corporate law
or under the rules of any national securities exchange on which shares of stock of the Company are then listed.
Procedure for Effecting Reverse
Stock Split and Exchange of Stock Certificates
If the Reverse Split Proposal is
approved by our shareholders, our Board, in its sole discretion, will determine whether such an action is in the best interests
of the Company and our shareholders, taking into consideration the factors discussed above. If our Board believes that a reverse
stock split is in our best interests and the best interest of our shareholders, our Board will then implement the reverse stock
split.
We would then file a certificate
of amendment to our Articles of Incorporation with the Secretary of the State of Nevada at such time as our Board of Directors
had determined as the appropriate effective time for the reverse stock split to affect the reverse split. The certificate of amendment
would add a new provision providing that holders of our Common Stock immediately prior to the filing of the amendment will receive
one share of Common Stock for each number of shares selected by the Board. A copy of the proposed amendment is attached to this
proxy statement as
Appendix A
and is considered a part of this proxy statement. Upon the filing of the certificate of amendment,
and without any further action on the part of the Company or our shareholders, the issued shares of Common Stock held by shareholders
of record as of the effective date of the reverse stock split would be converted into a lesser number of shares of Common Stock
calculated in accordance with the reverse stock split ratio of not less than one thousand for one (1,000:1) or not more than twenty-five
thousand (25,000:1), as selected by our Board and set forth in the certificate of amendment.
For example, if
a shareholder presently holds 50,000 shares of our Common Stock, he or she would hold 50 shares of Common Stock following a
1-for-1,000 reverse stock split, or 2 shares of Common Stock following a 1-for-25,000 reverse stock split, in each case with
an additional share of stock in lieu of fractional shares as described below under “-Fractional Shares.”
Beginning on the effective date of the split, each certificate representing pre-split shares would be deemed for all
corporate purposes to evidence ownership of post-split shares.
As soon as practicable after the
effective date of the reverse stock split, shareholders would be notified that the reverse stock split had been effected.
Effect on Beneficial Holders
(i.e., Shareholders Who Hold in “Street Name”)
Upon the reverse stock split, we
intend to treat Common Stock held by shareholders in “street name,” through a bank, broker or other nominee, in the
same manner as shareholders whose shares are registered in their own names. Banks, brokers or other nominees will be instructed
to affect the reverse stock split for their customers holding Common Stock in “street name.” However, these banks,
brokers or other nominees may have different procedures than registered shareholders for processing the reverse stock split. If
you hold shares of Common Stock with a bank, broker or other nominee and have any questions in this regard, you are encouraged
to contact your bank, broker or other nominee.
Effect on Registered “Book-Entry”
Holders (i.e., Shareholders that are Registered on the Transfer Agent's Books and Records but do not Hold Certificates)
Some of our registered holders of Common Stock may hold
some or all of their shares electronically in book-entry form with our transfer agent, Continental Stock Transfer and Trust. These
shareholders do not have stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement
reflecting the number of shares registered in their accounts. If a shareholder holds registered shares in book-entry form with
our transfer agent, no action needs to be taken to receive post-reverse stock split shares or fractional shares, if applicable.
If a shareholder is entitled to post-reverse stock split shares, a transaction statement will automatically be sent to the shareholder's
address of record indicating the number of shares of Common Stock held following the reverse stock split.
Effect on Certificated Shares
Upon the reverse stock split our
transfer agent will act as our exchange agent and assist holders of Common Stock in implementing the exchange of their certificates.
Commencing on the effective date
of a reverse stock split, shareholders holding shares in certificated form will be sent a transmittal letter by our transfer agent.
The letter of transmittal will contain instructions on how a shareholder should surrender his or her certificates representing
Common Stock (“Old Certificates”) to the transfer agent in exchange for certificates representing the appropriate number
of whole post-reverse stock split Common Stock, as applicable (“New Certificates”). No New Certificates will be issued
to a shareholder until that shareholder has surrendered all Old Certificates, together with a properly completed and executed letter
of transmittal, to the transfer agent. No shareholder will be required to pay a transfer or other fee to exchange Old Certificates.
The letter of transmittal will contain instructions on how you may obtain New Certificates if your Old Certificates have been lost.
If you have lost your certificates, you will have to pay any surety premium and the service fee required by our transfer agent.
Until surrendered, we will deem
outstanding Old Certificates held by shareholders to be canceled and only to represent the number of whole shares to which these
shareholders are entitled.
Any Old Certificates submitted
for exchange, whether because of a sale, transfer or other disposition of shares, will automatically be exchanged for New Certificates.
Shareholders should not destroy
any stock certificates and should not submit any certificates until requested to do so by the transfer agent. Shortly after the
reverse stock split the transfer agent will provide registered shareholders with instructions and a letter of transmittal for converting
Old Certificates into New Certificates. Shareholders are encouraged to promptly surrender Old Certificates to the transfer agent
(acting as exchange agent in connection with the reverse stock split) in order to avoid having shares become subject to escheat
laws.
Fractional Shares
No fractional shares will be issued
in connection with the reverse stock split. Shareholders of record who otherwise would be entitled to receive fractional shares
will be entitled to an additional share of stock in lieu of the fractional share.
No Appraisal Rights
Our shareholders are not entitled
to appraisal rights with respect to a reverse stock split, and we will not independently provide shareholders with any such right.
Interests of Directors and Executive
Officers
Our directors and executive officers
have no substantial interests, directly or indirectly, in the matters set forth in this Reverse Split Proposal except to the extent
of their ownership of shares of our Common Stock.
Reservation of Right to Abandon Reverse
Stock Split
We reserve the right to abandon
a reverse stock split without further action by our shareholders at any time before the effectiveness of the filing with the Secretary
of the State of Nevada of the certificate of amendment to our Articles of Incorporation, even though the authority to affect a
reverse stock split has been approved by our shareholders. The approval by a majority of our shareholders has expressly authorized
the Board to delay, not to proceed with, and abandon, a reverse stock split if it should so decide, in its sole discretion, that
such action is in the best interests of the shareholders.
FORWARD-LOOKING STATEMENTS
This information statement may contain
certain “forward-looking” statements (as that term is defined in the Private Securities Litigation Reform Act of 1995
or by the U.S. Securities and Exchange Commission in its rules, regulations and releases) representing our expectations or beliefs
regarding our company. These forward-looking statements include, but are not limited to, statements concerning our operations,
economic performance, financial condition, and prospects and opportunities. For this purpose, any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing,
words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,”
“could,” “estimate,” “might,” or “continue” or the negative or other variations
thereof or comparable terminology are intended to identify forward-looking statements. These statements, by their nature, involve
substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending
on a variety of important factors, including factors discussed in this and other of our filings with the U.S. Securities and Exchange
Commission.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information and reporting
requirements of the Securities Exchange Act of 1934, as amended, and in accordance with the Securities Exchange Act, we file periodic
reports, documents, and other information with the Securities and Exchange Commission relating to our business, financial statements,
and other matters. These reports and other information may be inspected and are available for copying at the offices of the Securities
and Exchange Commission, 100 F Street, N.E., Washington, DC 20549. Our SEC filings are also available to the public on the SEC’s
website at
http://www.sec.gov
.