o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
This Information Statement is being furnished on or about November *, 2014 by the Board of Directors (the “Board”) of Fragmented Industry Exchange, Inc., a Delaware corporation (the “Corporation”), to the holders of record of the Corporation’s issued and outstanding common stock, par value $0.0001 per share (“Common Stock”), as of the close of business on October 30, 2014 (the “Record Date”), pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Corporation had no other voting capital stock outstanding on the Record Date.
The purpose of this Information Statement is to inform holders of Common Stock that pursuant to Delaware General Corporate Law, holders of a majority of our outstanding voting stock have approved the following (“Corporate Actions”):
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Amend our Articles of Incorporation to change the name of the Corporation from Fragmented Industry Exchange, Inc. to HotApp International, Inc.,
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Amend our Articles of Incorporation to increase our authorized shares of common stock, $0.0001 par value, from 75,000,000 to 500,000,000, and
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Amend our By-laws to increase the number of members of our Board of Directors from a maximum of three members to a maximum of eight members.
The Corporate Actions will become effective on or about November *, 2014 or as soon thereafter as practical, a date that is at least 20 days from the mailing of this Information Statement to our stockholders. This Information Statement is first being mailed to stockholders on or about November *, 2014.
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER THESE MATTERS.
This Information Statement is being furnished by Fragmented Industry Exchange, Inc., a Delaware corporation (the “Company,”“we,”“our,” “us” or words of similar import), to our stockholders, as of the close of business on the record date, October 30, 2014 (”Record Date”), regarding the following corporate actions (“Corporate Actions”):
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Amend our Articles of Incorporation Change the name of the Corporation from Fragmented Industry Exchange, Inc. to HotApp International, Inc.,
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Amend our By-laws to increase the number of members of our Board of Directors from a maximum of three members to a maximum of eight member, and
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Amend our Articles of Incorporation to increase our authorized shares of common stock, $0.0001 par value, from 75,000,000 to 500,000,000.
The Corporate Actions were adopted at a meeting of our Board of Directors October 23, 2014, and the Board of Directors recommended that the Corporate Actions be presented to our shareholders for approval.
Pursuant to Delaware General Corporate Law (“DGCL”), on the Record Date, four of our shareholders owning 4,506,000 shares of our common stock, or collectively 90% of our outstanding voting securities (“Majority Shareholders”) on the Record Date executed written consents approving the Corporate Actions. The elimination of the need for a special meeting of stockholders to approve the Amendment is made possible by Section 228 of the DGCL which provides that the written consent of the holders of outstanding shares entitled to vote at a meeting of stockholders, having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, may be substituted for such a special meeting. Pursuant to Section 242 of the DGCL, a majority of the outstanding shares of voting capital stock
entitled to vote thereon is required in order to amend the Company's Certificate of Incorporation. In addition, our By-Laws provide that the vote of a majority of shareholders is required to amend the By-Laws.
In order to eliminate the costs and management time involved in holding a special meeting and in order to effect the Charter Amendment as early as possible in order to accomplish the purposes of the Company as hereafter described, the Board of Directors of the Company voted to utilize the written consent of the holders of a majority in interest of the Voting Capital Stock of the Company. The Board of Directors recommended approval of the Corporate Actions to the Majority Shareholders.
Holders of the Corporation’s Common Stock do not have appraisal or dissenter’s rights under DGCL in connection with the matters approved by stockholders in this Information Statement. No other votes were required or necessary to adopt the Corporate Actions and none is being solicited hereunder (See the captions “Vote Required for Approval” and “Voting Securities” herein).
Pursuant to Section 228 of the DGCL, no advance notice is required to be provided to the other shareholders, who have not consented in writing to such action, of the taking of the corporate action without a meeting of stockholders. However, the Corporate Actions will become effective on or about November *, 2014 or as soon thereafter as practical, a date that is at least 20 days from the mailing of this Information Statement to our stockholders.
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The Board has fixed the close of business on the Record Date for the determination of stockholders who are entitled to receive this Information Statement.
We will bear the entire cost of furnishing this Information Statement to any stockholder who requests a hard copy rather than Internet availability. We will request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of our Common Stock held of record by them.
PLEASE NOTE THAT THIS IS NOT A REQUEST FOR YOUR VOTE OR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE PROPOSALS APPROVED BY WRITTEN CONSENT OF A MAJORITY OF THE STOCKHOLDERS.
This Information Statement is first being sent to shareholders on or about November *, 2014.
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BACKGROUND OF THE ACTIONS TO BE TAKEN
On October 15, 2014, the Company entered into a Sale & Purchase Agreement with Singapore eDevelopment Limited, a Singapore company, pursuant to which the Company acquired all of the issued and outstanding capital stock of Hotapps International Pte. Ltd., a Singapore company (“Subsidiary”) in exchange for the issuance of 1,000,000 shares of common stock and 13,800,000 shares of newly created class of preferred stock. The preferred stock has no voting rights.
The Board of Directors and the Majority Shareholders have determined that, although we intend to continue with the original business of the Company, due to the acquisition of the Subsidiary, it would be in the best interests of the company to change our corporate name from Fragmented Industry Exchange, Inc. to HotApp International, Inc.
The Board of Directors and the Majority Shareholders have approved the amendment to the Company’s By-Laws to increase the number of directors from a maximum of three to a maximum of eight.
“Section 1. The business and affairs of this corporation shall be managed by the Board of Directors. The Board of Directors may consist of 1 to 3 members, unless and until this number is changed by amendment to this article. Each director shall be elected for a term of one year, and until his successor shall qualify or until his earlier resignation or removal.”
The amendment of the By-Laws will redact in its entirety the above text and be replaced by the following text:
“Section 1. The business and affairs of this corporation shall be managed by the Board of Directors. The Board of Directors may consist of 1 to 8 members, unless and until this number is changed by amendment to this article. Each director shall be elected for a term of one year, and until his successor shall qualify or until his earlier resignation or removal.”
The current Board of Directors believe that additional directors to the Board of Directors will assist in governing the affairs of the Company and to generally maintain the number of directors on the Board at between one and eight. Accordingly, the Board and the majority shareholders have approved an amendment to the By-Laws that will increase the number of directors to not less than one and not more than eight, with the exact number to determined from time to time by the Board. The vacancies that will occur due to the creation of the additional Board seats may be filled by the current director, and the newly appointed directors will serve until the next annual meeting of stockholders and until their successors are elected and qualified.
The Board of Directors and Majority Stockholders of the Company have approved an increase in the number of the Company’s authorized shares of common stock from 75,000,000 shares to 500,000,000 by means of an amendment to the Company’s Articles of Incorporation.
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The terms of the additional shares of common stock will be identical to those of the currently outstanding shares of Common Stock. However, because the holders of common stock do not have preemptive rights to purchase or subscribe for any new issuances of common stock, the authorization and subsequent issuance of additional shares of common stock will reduce the current stockholders’ percentage ownership interest in the total outstanding shares of common stock. This amendment and the creation of additional shares of authorized common stock will not alter current stockholders’ relative rights and limitations.
The increase in the authorized common stock will become effective upon the filing of the Articles of Amendment with the Secretary of State of the State of Delaware, which is expected to occur as soon as is reasonably practicable on or after the twentieth (20th) day following the mailing of this Information Statement to the Company's non-voting stockholders.
The Company’s Board of Directors believes that the proposed amendment to the Company’s share capital will allow the Company to issue shares from time to time as may be required for proper business purposes, such as raising additional capital for ongoing operations, establishing strategic relationships with corporate partners, acquiring or investing in complementary businesses or products, and providing equity incentives to employees.
In general, the issuance of any new shares of common stock will cause immediate dilution to the Company’s existing stockholders, may affect the amount of any dividends paid to such stockholders and may reduce the share of the proceeds of the Company that they would receive upon liquidation of the Company. Another effect of increasing the Company’s authorized common stock may be to enable the Board of Directors to render it more difficult to, or discourage an attempt to, obtain control of the Company
by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of present management. The Board of Directors would, unless prohibited by applicable law, have additional shares of common stock available to effect transactions (such as private placements) in which the number of the Company's outstanding shares would be increased and would thereby dilute the interest of any party attempting to gain control of the Company, even if such party is offering a significant premium over the current market price of the common stock. Such an issuance of shares of common stock would increase the number of outstanding shares, thereby possibly diluting the interest of a party attempting to obtain control of the
Company. The Board of Directors is not aware of any attempt, or contemplated attempt, to acquire control of the Company, and this resolution was not presented with the intent that the increase in the Company's authorized common stock be utilized as an anti-takeover measure.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the outstanding shares of the common stock is required for the approval of the Corporate Actions. On the Record Date, the Corporate Actions was approved by the holders of approximately 90% of the outstanding shares of our voting stock.
VOTING SECURITIES
The voting securities of the Company as of the Record Date consist of its Common Stock, of which 5,132,000 were issued and outstanding. All outstanding Common Stock are entitled to one vote on each matter submitted for voting by the shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of Record Date, there were a total of 5,132,000 shares of Common Stock outstanding. the following table describes the beneficial ownership of our voting securities by: (i) each of our officers and directors; (ii) all of our officers and directors as a group; and (iii) each shareholder known to us to own beneficially more than 5% of our common stock. Unless otherwise stated, the address of each individual is our address, 80 Mountain Laurel Road, Fairfield, CT06824. All ownership is direct, unless otherwise stated.
(1). “Beneficial ownership" means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days. Unless otherwise indicated, the beneficial owner has sole voting and investment power.
(2). William Schloth, husband of our sole officer and director, is the sole shareholder of the entity.
(3). Chan Heng Fai, our director, is the Chief Executive Officer of the entity.
(4). Represents shares held by her spouse individually and her minor son.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THIS INFORMATION STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY.
No Dissenters’ Right of Appraisal
Neither DGCL law nor our Articles of Incorporation provides our shareholders with dissenters’ rights in connection with the amendment to our Articles. This means that no shareholder is entitled to receive any cash or other payment as a result of, or in connection with the amendment to our Articles of Incorporation, even if a shareholder has not been given an opportunity to vote.
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FORWARD-LOOKING STATEMENTS AND INFORMATION
This Information Statement includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. You can identify our forward-looking statements by the words "expects,""projects,""believes,""anticipates,""intends,""plans,""predicts,""estimates" and similar expressions.
The forward-looking statements are based on management’s current expectations, estimates and projections about us. The Company cautions you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, the Company has based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, actual outcomes and results may differ materially from what the Company has expressed or forecast in the forward-looking statements.
You should rely only on the information the Company has provided in this Information Statement. The Company has not authorized any person to provide information other than that provided herein. The Company has not authorized anyone to provide you with different information. You should not assume that the information in this Information Statement is accurate as of any date other than the date on the front of the document.
ADDITIONAL INFORMATION
The Company will provide upon request and without charge to each shareholder receiving this Information Statement a copy of the Company's annual report on Form 10-K/A for the fiscal year ended December 31, 2013, including the financial statements and financial statement schedule information included therein, as filed with the SEC. Reports and other information filed by us can be inspected and copied at the public reference facilities maintained at the SEC at 100 F Street, N.E., Washington, DC 20549. Copies of such material can be obtained upon written request addressed to the Commission, Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. The SEC maintains a web
site on the Internet (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC through the Electronic Data Gathering, Analysis and Retrieval System.
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Dates Referenced Herein and Documents Incorporated by Reference
