“Giving effect to the Authorized Shares Amendment, Phoenix Rising will still have 7,803,622,701 shares of common stock, all of which will be unreserved, but authorized for issuance. Any additional issuance of common stock could, under certain circumstances, have the effect of delaying or preventing a change in control of Phoenix Rising by increasing the number of outstanding shares entitled to vote and by increasing the number of votes required to approve a change in control of Phoenix Rising. Shares of common stock could be issued, or rights to purchase such shares could be issued, to render more difficult or discourage an attempt to obtain control of Phoenix Rising by means of a tender offer, proxy contest, merger or otherwise. The ability of the Board of the Directors to issue such additional shares of common stock could discourage an attempt by a party to acquire control of Phoenix Rising by tender offer or other means. Such issuances could therefore deprive stockholders of benefits that could result from such an attempt, such as the realization of a premium over the market price that such an attempt could cause. Moreover, the issuance of such additional shares of common stock to certain persons’ interests aligned with that of the Board of Directors could make it more difficult to remove incumbent managers and directors from office even if such change were to be favorable to stockholders generally.
While the increase in the number of shares of common stock authorized may have anti-takeover ramifications, the Board of Directors believes that the financial flexibility offered by the amendment outweighs any disadvantages. To the extent that the increase in the number of shares of common stock authorized may have anti-takeover effects, the amendment may encourage persons seeking to acquire Phoenix Rising to negotiate directly with the Board of Directors, enabling the Board of Directors to consider a proposed transaction in a manner that best serves the stockholders’ interests.
The Board of Directors believes that it is advisable and in the best interests of Phoenix Rising to have available additional authorized but unissued shares of common stock in an amount adequate to provide for Phoenix Rising’s future needs. The unissued shares of common stock will be available for issuance from time to time as may be deemed advisable or required for various purposes, including the issuance of shares in connection with financing or acquisition transactions. Phoenix Rising has no present plans or commitments for the issuance or use of the proposed additional shares of common stock in connection with any financing.
The Authorized Shares Amendment is not intended to have any anti-takeover effect and is not part of any series of anti-takeover measures contained in any debt instruments or the Articles of Incorporation or the Bylaws of Phoenix Rising in effect on the date of this Information Statement. However, Phoenix Rising stockholders should note that the availability of additional authorized and unissued shares of common stock could make any attempt to gain control of Phoenix Rising or the Board of Directors more difficult or time consuming and that the availability of additional authorized and unissued shares might make it more difficult to remove management. Phoenix Rising is not aware of any proposed attempt to take over Phoenix Rising or of any attempt to acquire a large block of Phoenix Rising’s stock. Phoenix “
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