Life Clips Inc (fka LCLP)

[pennytips]

ACTION 1: REVERSE STOCK SPLIT AND AUTHORIZATION OF COMMON SHARES



Overview



As of March 31, 2021 and June 30, 2020, $2,428,960 of the Company’s convertible notes were in-default. At March 31, 2021, the Company has outstanding convertible debt of $2,478,960 which is due within the next 12 months.



The Company’s convertible promissory notes and detachable warrants gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option. Additionally, the detachable warrants contained terms and features that gave rise to derivative liability classification. As of March 31, 2021, the Company does not have enough authorized shares to settle all potential conversion and warrant transactions.



In order to comply with the terms of the Agreement, our Board of Directors has determined that it is advisable and in our and our stockholders’ best interests that the Board of Directors be granted the authority to implement a reverse stock split of the issued and outstanding shares of our Common Stock in a ratio of 15 (Fifteen) for 1 (One). In conjunction with the reverse split the Company will amend its articles of incorporation to authorize 5,000,000,000 (Five Billion) common shares.



Accordingly, the Board of Directors has unanimously approved a resolution proposing an amendment to our amended and restated certificate of incorporation to allow for the reverse stock split and recommended that it be approved by our shareholders. The Shareholders approved the reverse split amendment by the written consent of a majority of the shares entitled to vote thereon.



As a result of the stockholder approval for the Action, 20 days after the date of mailing of our Definitive Information Statement on Schedule 14C to our stockholders, the Board of Directors will have the authority to effect the reverse stock split and amendment to authorize 5,000,000,000 (Five Billion) common shares.



The text of the form of the proposed amendment to our certificate of incorporation is attached hereto as Annex A. By approving this Action, stockholders approved the aforesaid reverse stock split and authorized the Board of Directors to file the amendment.



Certain of our officers and directors have an interest in the reverse stock split as a result of their ownership of Common Stock, as set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management.”

https://www.sec.gov/Archives/edgar/data/1604930/000149315221016502/formpre14c.htm