ADOPTION OF AMENDED AND RESTATED ARTICLES OF INCORPORATION OF THE COMPANY
Our Board has adopted the Amended and Restated Articles of Incorporation in the form attached hereto as Annex A.
The following discussion is a summary of the key changes effected by the Amended and Restated Articles of Incorporation, but this summary is qualified in its entirety by reference to the full text of the Amended and Restated Articles of Incorporation, a copy of which is included as Annex A.
Our articles of incorporation (the “Articles of Incorporation”) currently authorize us to issue a maximum of 500,000,000 shares of Common Stock, par value $0.001 per share.
The adopted Amended and Restated Articles of Incorporation, in the form attached hereto as Annex A, (i) increases the number of authorized common stock from 500,000,000 shares to 800,000,000 shares; and (ii) changes the Company’s name to Unique Logistics International, Inc.
Increase in Authorized Common Stock
Our Articles of Incorporation currently authorize us to issue a maximum of 500,000,000 shares of Common Stock, par value $0.001 per share.
The Majority Stockholder, on November 20, 2020, authorized the adoption of the Amended and Restated Articles of Incorporation to increase the number of shares of common stock the Company is authorized to issue from 500,000,000 to 800,000,000.
The Majority Stockholder also believes that it is advisable and in the best interests of the Company and its stockholders to effect the increase in authorized shares of common stock in order to provide additional shares that could be issued for raising of additional equity capital or other financing activities, stock dividends or the exercise of stock options and warrants and to provide additional shares that could be issued in an acquisition or other form of business combination and to better position the Company for future trading should a transaction be entered into and completed. The future issuance of additional shares of Common Stock on other than a pro rata basis to existing stockholders will dilute the ownership of the current stockholders, as well as their proportionate voting rights.
The terms of the additional shares of common stock will be identical to those of the currently outstanding shares of common stock. However, because holders of common stock have no preemptive rights to purchase or subscribe for any unissued stock of the Company, the issuance of additional shares of common stock will reduce the current Stockholders’ percentage ownership interest in the total outstanding shares of common stock. This common stock increase and the creation of additional shares of authorized common stock will not alter the current number of issued shares. The relative rights and limitations of the shares of common stock will remain unchanged under the proposed Second Amended and Restated Articles of Incorporation.
Effects of Amendment.
The following table summarizes the principal effects of the Increase in the Authorized Shares:
Pre-Increase
Post-Increase
Common Shares
Issued and Outstanding
357,829,365
357,829,365
Authorized
500,000,000
800,000,000
Potential Anti-takeover effects of the Increase in Authorized Shares of Common Stock.
The implementation of the increase in authorized shares of Common Stock will have the effect of increasing the proportion of unissued authorized shares to issued shares. Under certain circumstances this may have an anti-takeover effect. These authorized but unissued shares could be used by the Company to oppose a hostile takeover attempt or to delay or prevent a change of control or changes in or removal of the Board, including a transaction that may be favored by a majority of our stockholders or in which our stockholders might receive a premium for their shares over then-current market prices or benefit in some other manner. For example, without further stockholder approval, the Board could issue and sell shares, thereby diluting the stock ownership of a person seeking to effect a change in the composition of our Board or to propose or complete a tender offer or business combination involving us and potentially strategically placing shares with purchasers who would oppose such a change in the Board or such a transaction.
Although an increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have a potential anti-takeover effect, the amendments to our Articles of Incorporation is not in response to any effort of which we are aware to accumulate the shares of our Common Stock or obtain control of the Company. There are no plans or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover consequences.
The increase in authorized common stock will not change the number of shares of common stock outstanding, nor will it have any immediate dilutive effect or change the rights of current holders of the Company’s common stock. However, the issuance of additional shares of common stock authorized by the increase in authorized common stock may occur at times or under circumstances as to have a dilutive effect on earnings per share, book value per share or the percentage voting or ownership interest of the present holders of the Company’s common stock.
The Board does not intend to use the consolidation as a part of or a first step in a “going private” transaction pursuant to Rule 13e-3under the Securities Exchange Act of 1934, as amended.
