INFORMATION STATEMENT
To the Holders of Common Stock of Medical
Alarm Concepts Holdings, Inc.:
This Information Statement has been filed
with the Securities and Exchange Commission
(the “SEC”) and is being furnished, pursuant
to Section 14C of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), to the holders (the
“
Stockholders
”) of common stock, par value $0.001 per share (the “
Common Stock
”), of Medical
Alarm Concepts Holdings, Inc., a Nevada corporation(the “
Company
,” “
we
,” “
our
,” or “
us
”), to notify such Stockholders that on April 16, 2013
the Company has received
written consents from the holders of 51.118% of our issued and outstanding Common Stock and 51.118% of the voting power of Common
Stock (our “Majority Stockholders”) approving the Authorized Share Increase (as defined and described below) as permitted
by Nevada law and the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”).
In connection with the determination of
our Board of Directors (the “Board”) that it is in the best interest of the Company and our Stockholders to undertake
the following corporate action,
our Majority Stockholders authorized the following:
|
·
|
The
amendment of the Certificate of Incorporation to
increase the authorized
number of shares of Common Stock from 800,000,000 (Eight Hundred Million) shares of Common Stock to 1,400,000,000 (One Billion
Four Hundred Million) shares
of Common Stock (the “
Authorized Share Increase
”).
|
On March 27, 2013, the Board approved the
Authorized Share Increase, and recommended the Authorized Share Increase for approval to the Stockholders. Nevada law provides
that the written consent of the holders of outstanding shares of voting capital stock having not less than the minimum number of
votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were
present and voted can approve an action in lieu of conducting a special stockholders' meeting convened for the specific purpose
of such action. Nevada law, however, requires that in the event an action is approved by written consent, the corporation must
provide prompt notice of the taking of any corporate action without a meeting to the stockholders of record who have not consented
in writing to such action and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting
if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the
action were delivered to the corporation.
At the time
that the Board approved the Authorized Share Increase it set April 3, 2013 as the Record Date for determining the Stockholders
entitled to vote on the Authorized Share Increase. As of April 3, 2013, there were issued and outstanding (i)
800,000,000
shares of our Common Stock, (ii) zero shares of our Series A Preferred Stock, and (iii) zero shares
of our Series B Preferred Stock.
Under the Certificate of Incorporation each share of Common Stock is entitled to one vote
per share.
Based on the foregoing, the total aggregate amount of votes entitled to vote regarding the
approval of the Authorized Share Increase is 800,000,000. Pursuant to Nevada law, at least a majority of the voting equity of the
Company, or at least 400,000,001 votes, are required to approve the Authorized Share Increase by written consent.
As described
above, on April 16, 2013 the Majority Stockholders, which hold in the aggregate 408,944,070 (as of the Record Date), or approximately
51.118% of the voting equity of the Company, have voted in favor of the Authorized Share Increase thereby satisfying the requirement
under Nevada law that at least a majority of the voting equity vote in favor of a corporate action by written consent. Accordingly,
your consent is not required and is not being solicited in connection with the approval of the Authorized Share Increase. This
Information Statement, which is being mailed on or about May 17, 2013 to the Stockholders of the Company as of the Record Date,
is the notice of the taking of a corporate action without a meeting of the stockholders that is referred to above as required under
Nevada law. In accordance with the requirements of the Securities Exchange Act of 1934, as amended, and Nevada law, t
he
Authorized Share Increase will not become effective until at least 20 calendar days following the date of mailing of this Information
Statement to our Stockholders.
It is expected that we will file the amendment
to the Certification of Incorporation that will make the Authorized Share Increase effective (the “Amendment”) on or
about June 6, 2013. However,
the Board reserves the right to elect not to proceed with the Authorized
Share Increase, at any time prior to filing the Amendment, if the Board, in its sole and absolute discretion, determines that it
is no longer in the Company’s best interests and the best interests of the Stockholders to consummate the Authorized Share
Increase.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND A PROXY.
This Information Statement is being provided
to you pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as amended. It contains a description of the Authorized
Share Increase, as well as summary information regarding the transactions covered by the Information Statement. We encourage you
to read the Information Statement thoroughly. You may also obtain information about us from publicly available documents filed
with the Securities and Exchange Commission. We may provide only one copy of the Information Statement to Shareholders who share
an address, unless we have received instructions otherwise. If you share an address, your household has received only one copy
of this Information Statement and if you wish to receive another copy, please contact our corporate secretary at the address or
telephone number above. If you have received multiple copies and only wish to receive one copy of our SEC materials, you also may
contact us at the address and telephone number above.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION
This Information Statement may contain
“forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements”
for purposes of these provisions, including any projections of earnings, revenues or other financial items, any statement of the
plans and objectives of management for future operations, and any statement of assumptions underlying any of the foregoing. These
statements may contain words such as “expects,” “anticipates,” “plans,” “believes,”
“projects,” and words of similar meaning. These statements relate to our future business and financial performance.
Actual outcomes may differ materially from these statements. The risks listed in this Information Statement as well as any cautionary
language in this Information Statement, provide examples of risks, uncertainties and events that may cause our actual results
to differ materially from any expectations we describe in our forward looking statements. There may be other risks that we have
not described that may adversely affect our business and financial condition. We disclaim any obligation to update or revise any
of the forward-looking statements contained in this Information Statement. We caution you not to rely upon any forward-looking
statement as representing our views as of any date after the date of this Information Statement. You should carefully review the
information and risk factors set forth in other reports and documents that we file from time to time with the SEC.
CORPORATE UPDATE
Over the past few quarters there has been
a substantial positive turn around in our business operations. As a result, we are expecting 2013 and 2014 to be strong growth
years for Medical Alarm Concepts Holdings, Inc.
Based on only the contracts the Company
has currently signed, revenues exclusively from monthly monitoring contracts exceed our monthly operating expenses, putting the
Company into a positive monthly operating cash flow position; a position, which grows in strength virtually every day. In addition
to monthly monitoring contracts, the Company expects strong sales of MediPendant products into its distribution network, which
will add both additional revenues and gross margins to the income statement. We expect this positive monthly operating cash flow
position to continue for the foreseeable future due to the high quality and expected longevity of our customer contracts.
The Company’s relationship with its
major retail distribution partner remains strong with sales and shipments occurring on a consistent basis. Early in the March quarter,
the Company successfully completed a retail promotion with this large discount warehouse chain partner. An additional program began
late in the March quarter and ran through April 21, 2013. The MediPendant has now received 21 product reviews on the retailer's
website, 17 of which are "5 out of 5 Star" ratings. The average rating is "4.5 Stars" out of 5 Stars.
Medical Alarm Concepts recently announced
the signing of a major diversified national healthcare insurer that will offer the Company's MediPendant product and monthly monitoring
services to subscribers of selected healthcare programs. Additionally, the product will be included in the insurance carrier's
dual demonstration program (Medicaid and Medicare) related contracts on which it may bid. Management is currently in process of
hiring additional staff to meet the expected demand from this major customer.
The Company is experiencing acceleration
in its international business having recently announced two European distribution partnerships. The Company also recently announced
it has signed a marketing and operations agreement with JTT-EMS LTD of Shijiazhuang, China to bring the MediPendant personal medical
alarm to the People's Republic of China.
The Company
recently received an investment led by strategic partner, JTT-EMS LTD of Shijiazhuang, China. Under the terms of the investment,
JTT-EMS LTD purchased Common Stock in a private placement transaction and has indicated to the Company that it plans to hold these
shares as a long-term investment. The financing, including additional investments by current shareholders, will total up
to approximately $330,000. There are no warrants or options associated with this investment.
As more fully noted below
,
funds received will primarily be used to rebuild inventory levels to meet the growing demand and to pay professional fees associated
with returning the Company to fully reporting status.
Management has been very successful in
negotiating with debt holders for the cancellation of very significant portions of our debt and all of our outstanding preferred
stock. Since the beginning of last year, approximately $93,775 of convertible debt has been cancelled. Earlier this month, the
holder of our short-term credit line cancelled $236,397 of the outstanding balance. Additionally, since the beginning of last year,
approximately 161,000,000 million toxic and highly dilutive warrants were also cancelled as was the remaining $75,000 portion of
the outstanding Series B Convertible Preferred Stock. No shares, warrants or options were granted in exchange for these cancellations.
There is currently no outstanding Series A or Series B Convertible Preferred Stock and there are no outstanding options to purchase
common or preferred stock.
The debt cancellations will likely result
in one or more large non-recurring gains during the June 2013 quarter and/or previous accounting periods. The warrant cancellations
are expected to generate substantial additional one-time, non-cash flow related gains for the Company as derivative liability charges
currently carried on the balance sheet are reversed.
Although
the Company is expecting to announce additional major debt cancellations over the coming weeks upon closing of additional negotiations
with debt holders
, the Company is unable at this time to determine the aggregate number of shares that are issuable upon
conversion of its outstanding debt. The Management of the Company is currently negotiating with debt holders to cancel large portions
of the Company’s outstanding debt and will disclose the aggregate number of shares that are issuable upon conversion of its
outstanding debt to stockholders by filing a Form 8-K with the SEC upon completion of these negotiations.
Because our trade payables have been paid
down very substantially over the past few quarters, we are expecting our balance sheet to be very strong, nearly long-term debt
free and with very manageable trade payable levels.
We believe our upcoming balance sheet,
which will be free of nearly all long-term debt and free of warrants, options and outstanding preferred stock will more accurately
reflect the true value of our growing company.
Effective April 8, 2013, the Company engaged
Paritz& Company, P.A. as its new independent registered public accounting firm. Paritz& Company has begun the process of
auditing our financial performance. The Company has also recently hired new corporate counsel and new accounting professionals
to assist management in completing its Form 10-Q and Form 10-K filings with the Securities and Exchange Commission in order to
return the Company to fully reporting status.
The Company expects calendar year 2013
to be one of continued growth in both monthly recurring revenues and distribution sales, which will allow the Company to realize
sustainable positive operating cash flow. We believe the growth rate and the positive operating cash flow we are currently realizing
is sustainable into 2014 and beyond.
The Company is currently experiencing accelerated
growth as a result of extensive promotional activities with its main retail partner, Costco Warehouse Stores, and as a result of
the Company’s expanded Internet marketing activities. An increase in the number of authorized shares is necessary to acquire
inventories to meet the growing level of demand for the Company's flagship medical alarm product called the MediPendant, and to
ensure adequate working capital during the Company’s growth in order to pay its employees, monthly monitoring fees, and advertising.
Without an increase in the authorized shares of the Company’s common stock, the Company's current revenue growth trajectory
will be at risk as it would not be able to afford adequate working capital and acquire enough inventories to fulfill the growing
level of demand for MediPendant. For example, the Company recently placed an order
for an additional
2,200 units of MediPendants from the factory in order to partially meet the continued growing demand, and the Company expects additional
orders will need to be placed in the very near future as demand continues to accelerate.
Without an increase in the authorized
shares, the Company will likely not be able to maintain and/or grow its current level of positive operational cash flow. The Company
is now operating on a positive operating cash flow basis due to the strong growth it has realized in sales of its unique medical
alarm products. Furthermore, the Company plans to emerge as a profitable, growing company over the next few months if the Amendment
becomes effective and the number of authorized shares of Common Stock has been increased as provided for in the Authorized Share
Increase.
Additionally, without an increase in the
authorized shares, the Company will not likely be able to continue its efforts to become current in its Securities Exchange Act
reporting. The Company intends to use part of the proceeds from the private placement to pay for related and continued fees and
costs of retaining legal, accounting and auditing services to assist the Company to prepare and file all delinquent reports including
three Form 10-Qs and one Form 10-K with the for each year delinquent, in order to become current in its Securities Exchange Act
reporting. By way of example, the Company’s new independent registered public accounting firm, Paritz & Company, P.A.
is currently working on the audit of the Company.
As also mentioned above, the Company has recently
hired new corporate counsel and new accounting professionals to assist the management of the Company in completing its Form 10-Q
and Form 10-K filings with the Securities and Exchange Commission in order to return the Company to fully reporting status.
As
a result of this progress, the Company intends to have all of its delinquent quarterly and annual reports filed with the Securities
and Exchange Commission by July 31, 2013.
INCREASE IN THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
The purpose
of the Authorized Share Increase is to increase the number of authorized shares of our Common Stock
from 800,000,000 (Eight
Hundred Million) shares of to 1,400,000,000 (One Billion Four Hundred Million) shares
.
As discussed above, on March 6, 2013, the
Company announced it received an investment led by strategic partner, JTT-EMS LTD of ShiJiaZhuang, China. Under the terms
of the investment, JTT-EMS LTD purchased in a private placement transaction Common Stock and has indicated to the Company that
it plans to hold these shares as a long-term investment. The investment by JTT-EMS LTD was accompanied by additional investments
by current stockholders bringing the total investment to approximately $330,000. There are no warrants, options, or any other enhancements
attached to these investments. Because the Company does not have a sufficient number of shares authorized to cover the issuance
of Common Stock in the private placement transaction until the Amendment is effective, zero shares of Common Stock have been issued;
however, once the Amendment is effective and the number of authorized shares of Common Stock has been increased as provided for
in the Authorized Share Increase, the aggregate number of shares issued in the private placement, including shares issued to JTT-EMS
LTD and associated companies will be approximately
433,941,000
shares of the Company’s
Common Stock and as a result of such issuance, the corresponding stockholders will own approximately 31% of the outstanding shares
of the Company’s Common Stock.
The per share price of the referenced investments was $0.00058
per share and that the initial closing date of the private placement was March 31, 2013; however, since the shares of Common Stock
issuable in the transaction will not be authorized until the Authorized Share Increase is effective and because
the Company
does not have a sufficient number of shares authorized to cover the issuance of common stock in the private placement as of the
initial closing date, the closing date of the private placement has been extended to July 15, 2013.
In order to satisfy its obligations with
respect to the issuance of shares of Common Stock to the investors, meet regulatory requirements, meet requirements for debt conversions,
maintain current revenue growth trajectories, acquire inventory to meet growing demand, and to ensure adequate working capital,
the Company requires an increase in the number of authorized shares of Common Stock. The additional shares of Common Stock to be
authorized after effecting the Amendment would have rights identical to the currently outstanding shares of Common Stock, except
for effects incidental to increasing the number of outstanding shares, such as the dilution of current Stockholders’ ownership
and voting interests.
The Authorized Share Increase will also
give the Company additional shares to provide flexibility for the future to meet business needs as they arise, to take advantage
of favorable opportunities and to respond to a changing corporate environment. For example, the Company may require additional
funding for its operations and therefore may need the increased number of authorized shares to raise additional equity capital.
Further, the additional authorized shares may be used in the future for any other proper corporate purpose approved by the Board,
including corporate mergers or acquisitions, shares reserved under stock option plans, stock dividends or splits, debt conversions,
or other corporate purposes.
Assurances cannot be provided that any such transactions will be consummated
on favorable terms or at all, that they will enhance Stockholder value or that they will not adversely affect the Company’s
business or the trading price of the Common Stock.
Potential Dilutive Effect
The issuance of a substantial number of
additional shares of Common Stock from the newly authorized shares provided for in the Authorized Share Increase may result in
dilution of your ownership interest in the Company. Stockholders of the Company do not have preemptive rights with respect to our
Common stock. Thus, existing Stockholders would not have any preferential rights to purchase any shares.
Any such issuance of the additional shares
of Common Stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common
Stock, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control
of the Company. Any additional Common Stock, when issued, would have the same rights and preferences as the shares of Common Stock
presently outstanding.
Potential Anti-Takeover Effect
The increase in the authorized number of
shares of Common Stock and any subsequent issuance of such shares could have the effect of delaying or preventing a change in control
of the Company without further action by the Stockholders. Shares of authorized and unissued Common Stock could (within the limits
imposed by applicable law) be issued in one or more transactions which would make a change in control of the Company more difficult,
and therefore less likely. The Board is not aware of any attempt to take control of the Company and has not presented this proposal
with the intention that the increase in the number of authorized shares of Common Stock be used as a type of anti-takeover device.
The Authorized Share Increase is not part
of any plan to adopt a series of amendments having an anti-takeover effect, and the Company’s management presently does not
intend to propose anti-takeover measures in future proxy solicitations. Subject to the limitations of Nevada law, it could be possible
to use the additional shares of Common Stock that would become available for issuance once the Amendment is filed to oppose a hostile
takeover attempt or delay or prevent changes of control of the Company or changes in or removal of our management, including transactions
that are favored by a majority of the independent Stockholders or in which the Stockholders might otherwise receive a premium for
their shares over then-current market prices or benefit in some other manner. For example, the Board could, without further Stockholder
approval, strategically sell shares of our Common Stock in a private transaction to purchasers who would oppose a takeover or favor
our current board of directors. The Authorized Share Increase was not being proposed in response to any effort, nor are we aware
of any effort, to accumulate shares of our Common Stock or obtain control of the Company.
Effective Date
The Shareholder Actions will not become
effective until at least 20 calendar days following the date of mailing of this Information Statement to our Shareholders. This
Information Statement is first being mailed on or about May 17, 2013 to holders of record of Common Stock as of the close of business
on April 3, 2013.
The Authorized Share Increase will become effective on the date that we file the Amendment
with the Secretary of State of the State of Nevada. We intend to file the Amendment with the Secretary of State of the State of
Nevada promptly after the twentieth (20
th
) day following the date on which this Information Statement is mailed to the
Stockholders.
No Dissenters’ Rights
Stockholders of the Company do not have
dissenters’ rights or the right to seek the appraisal of their shares under Nevada law as a result of the Authorized Share
Increase.
Government Approvals
Except for compliance with the applicable
regulations of the Securities and Exchange Commission (“SEC”) in connection with this Information Statement and of
the Nevada Revised Statutes in connection with the Authorized Share Increase, we are not required to comply with any federal or
state regulatory requirements, and no federal or state regulatory approvals are required in connection with the Authorized Share
Increase.
Approval of the Board of Directors and
Shareholders
The Board, after careful consideration,
has approved the Authorized Share Increase and has recommended that the Stockholders vote for its adoption. Effective
April
16, 2013
, the Majority Stockholders holding 51.118% of the outstanding Common Stock executed a written consent in lieu
of a Shareholders meeting approving the Authorized Share Increase.
Interests of Certain Persons in Matter
to be Acted Upon
Except in their capacity as Stockholders
(which interest does not differ from that of the other common shareholders), none of our officers, directors, or any of their respective
affiliates has any interest in the Authorized Share Increase.