Item 8.01 Other Information
On January 24, 2013 the Company’s Majority Board of Directors and Shareholders effectively being the beneficial owners of approximately 54.29% of the issued and outstanding voting shares of the Company’s $0.001 par value common and preferred voting stock (the “Common and Preferred Stock”) have voted affirmatively for a reverse stock split. The Company has received their executed Written Consents, effective on January 24, 2013 to effect a One (1) for Four Thousand (4,000) reverse stock split (1:4000), whereby, as of a date to be not less than ten (10) days following the Company’s submission to FINRA of which its submission to FINRA is expected to be no later than
January 31, 2013, for every four thousand shares of Common Stock then owned, each stockholder shall receive one share of Common Stock.
Background
The Company currently has 20,000,000,000 shares of Common Stock, and 60,002,500 shares of Preferred Stock authorized. Approximately 19,042,939,184 shares of Common Stock are issued and outstanding, along with 2,000,000,000 shares of Common Stock additionally subscribed for issuance, 1,087,142 shares of Series C Voting Only Preferred Stock are issued and outstanding, and 2,484 shares of its Series D Preferred Stock are issued and outstanding as of , respectively. The Board of Directors believes that the price of the Common Stock is too low to attract investors to buy the stock. In order to proportionally raise the per share price of the Common Stock by reducing the number of shares of the Common
Stock outstanding, the Board of Directors believes that it is in the best interests of the Company’s stockholders to implement a reverse stock split. In addition, the Board of Directors believes that the share price of the Common Stock is a factor in whether the Common Stock meets investing guidelines for certain institutional investors and investment funds. Finally, the Board of Directors believes that the Company’s stockholders will benefit from relatively lower trading costs for a higher priced stock. The combination of lower transaction costs and increased interest from institutional investors and investment funds may ultimately improve the trading liquidity of the Common Stock. The Board of Directors is not implementing the reverse stock split in anticipation of any future transaction or series of transactions, including any “going private”
transaction.
NO DISSENTERS’ RIGHTS
Pursuant to the Nevada Revised Statues, NRS 92A.300 to 92A.500 inclusive, none of the corporate actions described in this Current Report will afford to stockholders the opportunity to dissent from the actions described herein and to receive an agreed or judicially appraised value for their shares.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY STOCKHOLDER APPROVAL HAS BEEN PREVIOUSLY OBTAINED FROM THE
MAJORITY SHAREHOLDERS
Effect on Registered Certificated Shares
Stockholders whose shares are held in certificate form will receive a transmittal letter from our transfer agent, Computershare, as soon as practicable after the effective date of the reverse stock split. The letter of transmittal will contain instructions on how to surrender certificate(s) representing pre-reverse stock split shares to the transfer agent. No new shares will be issued until outstanding certificate(s) are surrendered, together with a properly completed and executed letter of transmittal, to the transfer agent. Stockholders should not submit any certificate(s) until requested to do so.
Effect on Fractional Stockholders
Stockholders will not receive fractional post-reverse stock split shares in connection with the reverse stock split and we will not be paying any cash to stockholders for any fractional shares from the reverse split. Instead, any resulting fractional shares shall be rounded up to the nearest whole number.
