1. REVERSE SPLIT
General
On September 4, 2014, the Company’s Board of Directors and shareholders holding the majority of issued and outstanding Common Stock approved a One (1) for One Thousand Five Hundred (1500) reverse stock-split of its $0.00001 par value Common Stock. The par value of Common Stock will not change.
As of the Record Date the Company had approximately 198,508,123 Common Stock shares, 1,000 Series A Preferred Stock shares and 544,440 Series B Preferred Stock shares that are issued and outstanding.
Reasons for the Reverse Stock Split
The reverse split will decrease the number of shares of Common Stock issued and outstanding and increase the per share market price for the Common Stock. The effect of the reverse stock split upon the market price for its Common Stock cannot be predicted. There can be no assurance that the market price per share of the Company’s Common Stock after the reverse stock split will rise in proportion to the reduction in the number of shares of its Common Stock outstanding resulting from the reverse stock split. The market price of the Company’s Common Stock may also be based on its performance and other factors, some of which may be unrelated to the number of shares outstanding.
Material Effects of the Reverse Stock Split
The principal effects of the reverse split will be as follows:
· Based upon 198,508,123 shares of Common Stock outstanding on the Record Date, the reverse split would decrease the outstanding shares of Common Stock to approximately 132,339 shares of Common Stock issued and outstanding. The reverse stock split will affect all of the Company’s stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company, except to the extent that the reverse stock split results in fractional share ownership (which shall be rounded up to the nearest whole share). Further, any outstanding options, warrants and rights to purchase Common Stock as of the Effective Date that are subject to adjustment will be decreased accordingly.
