for various corporate purposes, including but not limited to, financings, potential
strategic transactions, including mergers, acquisitions, strategic partnerships, joint ventures, divestitures, and business combinations, stock splits, stock dividends, grants under employee stock incentive plans, as well as other general
corporate transactions.
Possible Effects of the Amendment and Additional
Anti-takeover Consideration
The additional shares of common stock that would become available
for issuance if the proposal is adopted could also be used by
the Company to oppose a hostile takeover attempt or to delay or prevent changes in control or management of
the Company. For example, without further shareholder approval, the Board of
Directors could strategically sell shares of common stock in a private transaction to purchasers who would oppose a takeover or favor the current Board of Directors. Although this proposal to increase the authorized common stock has been prompted
by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board of Directors currently aware of any such attempt directed at
the Company), shareholders should be aware that approval of the proposal
could facilitate future efforts by
the Company to deter or prevent changes in control of
the Company, including transactions in which the shareholders might otherwise receive a premium for their shares over then current market prices.
Effect of the Amendment
If
the Company’s shareholders approve the proposed amendment, the
Board will have authority to file with the Department of State of the State of Florida an amendment to the Articles to authorize an additional 62,500,000 shares of capital stock, all of which shall be designated as common stock ($.001 par value).
Upon approval and following such filing with the Secretary of State of the State of Florida, the Articles of Amendment will become effective on the date they are filed.
The first paragraph of Article 3 of the Articles currently provides
as follows:
“Article 3. Capital Stock. The total number of shares of stock which the Corporation
shall have authority to issue is not more than 192,500,000 shares of capital stock, of which 187,500,000 shares shall be designated “Common Stock,” at $.001 par value per share, and 5,000,000 shares shall be designated as “Preferred Stock,” at
$.001 par value per share.”
Our Board of Directors has approved the following amendment to
Article 3, subject to approval of such amendment by the holders of our common stock in accordance with the required vote as set forth above. If this Proposal 4 is approved, we will subsequently file Articles of Amendment to the Articles providing
that the first paragraph of Article 3, set forth above, will be deleted in its entirety and replaced by the following:
“Article 3. Capital Stock. The total number of shares of stock which the Corporation
shall have authority to issue is not more than 255,000,000 shares of capital stock, of which 250,000,000 shares shall be designated “Common Stock,” at $.001 par value per share, and 5,000,000 shares shall be designated as “Preferred Stock,” at
$.001 par value per share.”
Vote Required
This proposal requires the affirmative vote of a majority of shares
entitled to vote on the matter (i.e., shares outstanding). The failure to vote as well as abstentions and broker non-votes will be counted as votes “AGAINST” this proposal.
Neither Florida law, nor the Articles, nor
the Company’s amended and
restated
bylaws provide for appraisal or other similar rights for dissenting shareholders in connection with this proposal. Accordingly,
the Company’s shareholders will have no right to dissent and obtain payment for their shares.