STYLE="font: 10pt Times New Roman, Times, Serif">
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
| |
☐ | Preliminary Information Statement |
☐ | Confidential, For Use of the Commission Only (as Permitted by Rule 14c-5(d)(2) |
☒ | Definitive Information Statement |
UNIQUE
LOGISTICS INTERNATIONAL, INC.
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): | |
☒ | No fee required |
☐ | Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
☐ | Fee paid previously with preliminary materials: |
☐ | 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. |
(1) | Amount previously paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
UNIQUE
LOGISTICS INTERNATIONAL, INC.
154-09
146th Ave
Jamaica,
NY 11434
(678)
365-6004
November 29, 2021
To
the Holders of Common Stock of Unique Logistics International, Inc.:
This
Information Statement is first being mailed on or about November 29, 2021 to the holders of record of the outstanding common stock,
$0.001 par value per share (the “
Common Stock
”) of Unique Logistics International, Inc., a Nevada corporation (the
“
Company
”), as of the close of business on November 17, 2021 (the “
Record Date
”), to inform the
stockholders of actions already approved by written consent of the majority stockholders holding approximately 58.71% of the voting power
of the Company’s Common Stock. Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as amended (the “
Exchange
Act
”), the proposals will not be effective until at least 20 calendar days after the mailing of this Information Statement
to our stockholders, warrant holders and convertible note holders. Therefore, this Information Statement is being sent to you for informational
purposes only.
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
The
actions to be effective at least 20 days after the mailing of this Information Statement are:
● | A reverse stock split of the Company’s issued and outstanding shares of Common Stock (the “ Reverse Stock Split ”) with a ratio within the range of 1-for-300 to 1-for-400 (the “ Reverse Stock Split Ratio ”). | |
● | A decrease in the number of authorized shares of Common Stock from 800,000,000 shares to 250,000,000shares (the “ Decrease in Authorized Shares ”) |
● | The filing of an amendment to our Articles of Incorporation, as amended, to effect the Reverse Stock Split and the Decrease in Authorized Shares . A copy of the amendment is attached as Appendix A to this Information Statement. | |
● | Amendment to the Unique 2020 Equity and Incentive Plan (the “ 2020 Plan ”) to set the number of shares of the Company’s Common Stock available for issuance under the 2020 Plan to 1,500,000 shares effective upon the Reverse Stock Split (the “ 2020 Plan Amendment ”). A copy of the 2020 Plan Amendment is attached as Appendix B to this Information Statement. |
The
enclosed information statement contains information pertaining to the matters acted upon.
Pursuant
to rules adopted by the Securities and Exchange Commission, you may access a copy of the information statement at https://unique-logistics.com.
This
is not a notice of a meeting of stockholders and no stockholders’ meeting will be held to consider the matters described herein.
This Information Statement is being furnished to you solely for the purpose of informing stockholders of the matters described herein
pursuant to Section 14(c) of the Exchange Act and the regulations promulgated thereunder, including Regulation 14C.
ACCORDINGLY,
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY. NO PROXY CARD HAS BEEN ENCLOSED WITH THIS INFORMATION.
This
Information Statement will serve as written notice to stockholders of the Company pursuant to the Nevada Revised Statutes.
By Order of the Board of Directors. | ||
November 29, 2021 | /s/ Sunandan Ray | |
|
THIS
INFORMATION STATEMENT IS BEING PROVIDED TO
YOU
BY THE BOARD OF DIRECTORS OF UNIQUE LOGISTICS INTERNATIONAL, INC.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED
NOT TO SEND US A PROXY
UNIQUE
LOGISTICS INTERNATIONAL, INC.
154-09
146th Ave.
Jamaica,
NY 11434
(678)
365-6004
INFORMATION
STATEMENT
(Definitive)
November
29, 2021
NOTICE
OF STOCKHOLDER ACTION BY WRITTEN CONSENT
GENERAL
INFORMATION
This
Information Statement has been filed with the Securities and Exchange Commission (the “
SEC
”) and is being sent, pursuant
to Section 14C of the Exchange Act, to the holders of record as of November 17, 2021 (the “
Record Date
”) of Common
Stock, par value $0.001 per share (the “
Common Stock
”), of Unique Logistics International, Inc., a Nevada corporation
(the “
Company
,” “
we
,” “
our
” or “
us
”), to notify the Common
Stock holders of the following:
On
November 16, 2021, the Company received a written consent in lieu of a meeting by the holders of approximately 58.71% of the voting power
the Common Stock (the “
Majority Stockholders
”) authorizing the following actions:
● | A reverse stock split of the Company’s issued and outstanding shares of Common Stock (the “ Reverse Stock Split ”) with a ratio within the range of 1-for-300 to 1-for-400 (the “ Reverse Stock Split Ratio ”); | |
● | A decrease in the number of authorized shares of Common Stock from 800,000,000 shares to 250,000,000 shares (the “ Decrease in Authorized Shares ”) | |
● | The filing of an amendment to our Articles of Incorporation, as amended (the “Amendment”), to effect the Reverse Stock Split and the Decrease in Authorized Shares. A copy of the amendment is attached as Appendix A to this Information Statement; and | |
● | Amendment to the Unique 2020 Equity and Incentive Plan (the “2020 Plan”) to set the number of shares of the Company’s Common Stock available for issuance under the 2020 Plan to 1,500,000 shares effective upon the Reverse Stock Split (the “2020 Plan Amendment”). A copy of the 2020 Plan Amendment is attached as Appendix B to this Information Statement. |
On
November 16, 2021, the Board approved, and recommended for approval to the Majority Stockholders, the Reverse Stock Split, the Decrease
in Authorized Shares and the 2020 Plan Amendment.
On
November 16, 2021, the Majority Stockholders approved the Reverse Stock Split, the Decrease in Authorized Shares and the 2020 Plan Amendment
by written consent in lieu of a meeting in accordance with the Nevada Revised Statutes (“
NRS
”). Accordingly, your
consent is not required and is not being solicited.
We
will commence mailing the notice to the holders of Common Stock on or about November 29, 2021.
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 CERTAIN
ACTIONS TAKEN BY THE MAJORITY STOCKHOLDERS.
The
entire cost of furnishing this Information Statement will be borne by the Company. We will request brokerage houses, nominees, custodians,
fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the Common Stock held of record
by them.
The
following table sets forth the name of the Majority Stockholders, the number of shares of Common Stock held by the Majority Stockholders,
the total number of votes that the Majority Stockholders voted in favor of the Reverse Stock Split and the 2020 Plan Amendment and the
percentage of the issued and outstanding voting equity of the Company that voted in favor thereof.
Name of Majority Stockholders | Number of Shares of Common Stock held | Number of Votes held by Majority Stockholders | Number of Votes that Voted in favor of the Action | Percentage of the Voting Equity that Voted in favor of the Action | ||||||||||||
Sunandan Ray | 322,086,324 | 322,086,324 | 322,086,324 | 49.11 | % | |||||||||||
3a Capital Establishment | 63,000,000 | 63,000,000 | 63,000,000 | 9.60 | % | |||||||||||
Total | 385,086,324 | 385,086,324 | 385,086,324 | 58.71 | % | |||||||||||
ACTIONS
TO BE TAKEN
This
Information Statement contains a brief summary of the material aspects of the actions approved by the Board and the Majority Stockholders.
The
Reverse Stock Split and the Decrease in Authorized Shares will become effective on the date that we file an amendment (the “
Amendment
”)
to the Company’s Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada. Such filing can occur
no earlier than twenty (20) calendar days after the mailing of this Information statement. The 2020 Plan Amendment will be effective
upon the effectiveness of the Reverse Stock Split and the Decrease in Authorized Shares.
Notwithstanding
the foregoing, we must first notify the Financial Industry Regulatory Authority (“
FINRA
”) of the intended Reverse
Stock Split by filing an Issuer Company Related Action Notification Form no later than ten (10) days prior to the anticipated record
date of such action.
REVERSE
STOCK SPLIT
General
Our
Board and Majority Stockholders have approved the Reverse Stock Split in order to provide for meeting minimum Nasdaq requirements for
listing (such as a minimum stock price of $4.00, and the Board and our Majority Stockholders have determined that it is in the best interests
of our stockholders in general to provide our Board with the flexibility to effect the Reverse Split in a ratio within the range of 1-for-300
to 1-for-400 (the “
Reverse Stock Split Ratio
”).
The
Reverse Stock Split, as approved by our stockholders, will become effective upon the filing of the Amendment with the Secretary of State
of the State of Nevada, or at the later time set forth in the Amendment, subject to the approval of FINRA. The filing may occur any time
after 20 days from the date of completion of mailing of this Information Statement to our stockholders of record as of November 17, 2021.
The exact timing of the Amendment will be determined by our Board based on its evaluation as to if and when such action will be the most
advantageous to the Company and our stockholders. In addition, our Board reserves the right, notwithstanding stockholder approval and
without further action by the stockholders, to abandon the Amendment and the Reverse Stock Split if, at any time prior to the effectiveness
of the filing of the Amendment with the Secretary of State of the State of Nevada, our Board, in its sole discretion, determines that
it is no longer in our best interest and the best interests of our stockholders to proceed.
We
do not have any current plans, arrangements or understandings relating to the issuance of any additional shares of authorized Common
Stock that will become available following the Reverse Stock Split other than (i) approximately 75,000- 150,000 options to employees
(ii) upon exercise of our currently outstanding options and warrants, (iii) upon conversion of our currently outstanding convertible
debt and (iv) a contemplated primary offering of our equity securities in connection with the potential up-listing of the Common Stock
to the Nasdaq Stock Market (the “Nasdaq”).
The
proposed form of amendment to our Articles of Incorporation, as amended, to effect the Reverse Stock Split is attached as Appendix A
to this Information Statement. Any amendment to our Articles of Incorporation, as amended, to effect the Reverse Stock Split will include
the Reverse Stock Split Ratio fixed by our Board, within the range approved by our stockholders.
Reasons
for Proposed Amendment
The
Board believes that listing our Common Stock on Nasdaq will increase the liquidity of our Common Stock by providing us with a market
for the Common Stock that is more accessible than if our Common Stock were to continue to trade on the OTC maintained by the OTC Markets
Group, Inc. Such alternative markets are generally considered to be less efficient than, and not as broad as, the Nasdaq. Among other
factors, trading on the Nasdaq may increase liquidity and potentially minimize the spread between the “bid” and “asked”
prices quoted by market makers. Further, such a listing may enhance our access to capital, increase our flexibility in responding to
anticipated capital requirements and facilitate the use of our Common Stock in any strategic or financing transactions that we may undertake.
We believe that prospective investors will view an investment in the Company more favorably if our shares qualify for listing on the
Nasdaq as compared with the OTC markets. The Board has also determined that the consummation of the Reverse Stock Split may be necessary
to achieve compliance with the listing requirements of Nasdaq.
The
Board also believes that the current low per share market price of our Common Stock has a negative effect on the marketability of our
existing shares. The Board believes there are several reasons for this effect. First, certain institutional investors have internal policies
preventing the purchase of low-priced stocks. Second, a variety of policies and practices of broker-dealers discourage individual brokers
within those firms from dealing in low-priced stocks. Third, because the brokers’ commissions on low-priced stocks generally represent
a higher percentage of the stock price than commissions on higher priced stocks, the current share price of our Common Stock can result
in individual stockholders paying transaction costs (commissions, markups or markdowns) that are a higher percentage of their total share
value than would be the case if the share price of the Common Stock were substantially higher. This factor is also believed to limit
the willingness of some institutions to purchase the Common Stock. The Board anticipates that a Reverse Stock Split will result in a
higher bid price for our Common Stock, which may help to alleviate some of these problems.
We
expect that a Reverse Stock Split of our Common Stock will increase the market price of the Common Stock so that we are able to obtain
compliance with the initial listing minimum bid price listing standard of Nasdaq. However, the effect of a Reverse Stock Split on the
market price of the Common Stock cannot be predicted with any certainty, and the history of similar stock split combinations for companies
in like circumstances is varied. It is possible that the per share price of the Common Stock after the Reverse Stock Split will not rise
in proportion to the reduction in the number of shares of the Common Stock outstanding resulting from the Reverse Stock Split, effectively
reducing our market capitalization, and there can be no assurance that the market price per post-reverse split share will either exceed
or remain in excess of the prescribed initial listing minimum bid price for a sustained period of time. The market price of our Common
Stock may vary based on other factors that are unrelated to the number of shares outstanding, including our future performance.
If
the Reverse Stock Split successfully increases the per share price of our Common Stock, as to which no assurance can be given, the Board
believes this increase will aid us in obtaining listing on Nasdaq and may facilitate future financings and enhance our ability to attract,
retain, and motivate employees and other service providers.
PLEASE
NOTE THAT UNLESS SPECIFICALLY INDICATED TO THE CONTRARY, THE DATA CONTAINED IN THIS INFORMATION STATEMENT, INCLUDING BUT NOT LIMITED
TO SHARE NUMBERS, CONVERSION PRICES AND EXERCISE PRICES OF OPTIONS AND WARRANTS, DOES NOT REFLECT THE IMPACT OF THE REVERSE STOCK SPLIT
THAT MAY BE EFFECTUATED.
Implementation
and Effects of the Reverse Stock Split
If
the Board elects to implement the Reverse Stock Split, which the Board may choose not to do at its discretion, the Reverse Stock Split
would have the following effects:
● | the number of shares of the Common Stock owned by each Stockholder will automatically be reduced proportionately based on the reverse stock split ratio determined by the Board; | |
● | the number of shares of the Common Stock issued and outstanding will be reduced proportionately; | |
● | proportionate adjustments will be made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding options and warrants entitling the holders thereof to purchase shares of the Common Stock, which will result in approximately the same aggregate price being required to be paid for such options or warrants upon exercise of such options or warrants immediately preceding the reverse stock split; and | |
● | a proportionate adjustment will be made to the per share conversion price under the terms of the Company’s outstanding convertible promissory notes. |
The
table set forth below illustrates the Company’s capitalization subsequent to the Reverse Stock Split in varying ratios with the
ratio of 1-for-400 being the maximum ratio which may be effectuated by the Board. This model is based on the total number of shares issued
and outstanding as of the Record Date and gives effect to the Reverse Stock Split and the Decrease in Authorized Shares, as well as shares
of Common Stock issued and outstanding and issuable upon the conversion/exercise of promissory notes, options and warrants.
Reverse Stock Split Ratio | Shares of Common Stock issued and outstanding following the Reverse Stock Split | Shares of Common Stock issued and outstanding and issuable upon the conversion/exercise of promissory notes, options and warrants following the Reverse Stock Split | Shares of Common Stock available for future issuance following the Reverse Stock Split (1) | |||||||||
1:300 | 2,185,937 | 33,959,984 | 216,040,016 | |||||||||
1:350 | 1,873,660 | 29,108,558 | 220,891,442 | |||||||||
1:400 | 1,639,453 | 25,469,988 | 224,530,012 | |||||||||
(1) | Assumes the Decrease in Authorized Shares is approved and based on 250,000,000 shares of authorized Common Stock. |
The
Board may decide not to proceed with the Reverse Stock Split for various reasons including general stock market/business conditions.
The
Reverse Stock Split will not affect the rights of Stockholders or any Stockholder’s proportionate equity interest in the Company,
subject to the treatment of fractional shares. At this time the Company has no plans to issue such additional shares of its capital stock,
other than (i) as required for existing and additional financings, and (ii) as compensation and incentives to employees and directors
under the Company’s existing stock incentive plans and other arrangements that may be undertaken.
The
future issuance of such authorized shares may have the effect of diluting the Company’s earnings per share and book value per share,
as well as the stock ownership and voting rights of the current Stockholders. The effective increase in the number of authorized but
unissued shares of the Common Stock may be construed as having an anti-takeover effect by permitting the issuance of shares to purchasers
who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain provisions of the Company’s Articles of
Incorporation or Bylaws.
Fractional
Shares
No
scrip or fractional share certificates will be issued in connection with the Reverse Stock Split. In lieu of issuing fractional shares,
stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares not evenly divisible by
the ratio of the Reverse Stock Split will automatically be entitled to receive an additional fraction of a share of Common Stock to round
up to the next whole share.
Risks
Associated with the Reverse Stock Split
There
are risks associated with the Reverse Stock Split, including that the Reverse Stock Split may not result in a sustained increase in the
per share price of our Common Stock. There is no assurance that:
● | the market price per share of the Common Stock after the Reverse Stock Split will rise in proportion to the reduction in the number of shares of the Common Stock outstanding before the Reverse Stock Split; | |
● | the Reverse Stock Split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks; or | |
● | the Reverse Stock Split will result in a per share price that will increase our ability to attract and retain employees and other service providers. |
Stockholders
should note that the effect of the Reverse Stock Split, if any, upon the market price for the Common Stock cannot be accurately predicted.
In particular, we cannot assure you that prices for shares of the Common Stock after the Reverse Stock Split will be two (2) to four
(4) times, as applicable, the prices for shares of the Common Stock immediately prior to the Reverse Stock Split. Furthermore, even if
the market price of the Common Stock does rise following the Reverse Stock Split, we cannot assure you that the market price of the Common
Stock immediately after the proposed Reverse Stock Split will be maintained for any period of time. Even if an increased per-share price
can be maintained, the Reverse Stock Split may not achieve the desired results that have been outlined above. Moreover, because some
investors may view the Reverse Stock Split negatively, we cannot assure you that the Reverse Stock Split will not adversely impact the
market price of the Common Stock.
The
market price of the Common Stock will also be based on our performance and other factors, some of which are unrelated to the Reverse
Stock Split or the number of shares outstanding. If the Reverse Stock Split is effected and the market price of the Common Stock declines,
the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur
in the absence of a Reverse Stock Split. The total market capitalization of the Common Stock after implementation of the Reverse Stock
Split when and if implemented may also be lower than the total market capitalization before the Reverse Stock Split. Furthermore, the
liquidity of the Common Stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse
Stock Split.
While
we anticipate that the Reverse Stock Split will be sufficient to obtain our listing on Nasdaq, it is possible that, even if the
Reverse Stock Split results in a bid price for the Common Stock that exceeds the required price per share another reverse split may be
necessary in the future and we may not be able to continue to satisfy the other criteria for continued listing of the Common Stock on
Nasdaq.
Authorized
Shares
As
of the Record Date, there were 800,000,000 shares of authorized Common Stock and 5,000,000 shares of authorized preferred stock. As of
the Record Date, there were 655,781,078 shares of voting securities issued and outstanding.
As
a result of the Reverse Stock Split, the number of shares remaining available for future issuance under the Company’s authorized
pool of Common Stock would increase. As a result of the Decrease in Authorized we will have 250,000,000 shares of Common Stock authorized.
In addition, the Company will continue to have 5,000,000 authorized but unissued shares of preferred stock.
These
authorized but unissued shares would be available for issuance from time to time for corporate purposes such as raising additional capital,
acquisitions of businesses or assets and sales of stock or securities convertible into Common Stock. The Company believes that the availability
of the authorized but unissued shares will provide it with the flexibility to meet business needs as they arise, to take advantage of
favorable opportunities and to respond to a changing corporate environment. If the Company issues additional shares, the ownership interests
of holders of the Common Stock may be diluted. Also, if the Company issues shares of its preferred stock, the issued shares may have
rights, preferences and privileges senior to those of the Common Stock.
No
Dissenters’ Rights
Under
the NRS, the Stockholders are not entitled to dissenters’ rights with respect to the Reverse Stock Split, and the Company will
not independently provide Stockholders with any such right.
Anti-Takeover
Effects of the Reverse Stock Split
A
possible effect of the Reverse Stock Split may be to discourage a merger, tender offer or proxy contest, or the assumption of control
by a holder of a large block of the Company’s voting securities and the removal of incumbent management. The Board could use the
additional shares of Common Stock available for issuance to resist or frustrate a third-party take-over effort favored by a majority
of the independent stockholders that would provide an above market premium by issuing additional shares of our Common Stock.
The
Reverse Stock Split is not the result of the Board’s knowledge of an effort to accumulate any of the Company’s securities
or to obtain control of the Company by means of a merger, tender offer, solicitation or otherwise. Nor is the Reverse Stock Split a plan
by the Board to adopt a series of amendments to the Articles of Incorporation or our Bylaws to institute an anti-takeover provision.
We do not have any plans or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover
consequences.
Although
the Reverse Stock Split is not being undertaken by the Board to institute an anti-takeover provision, in the future the Board could,
subject to its fiduciary duties and applicable law, use the unissued shares of Common Stock to frustrate persons seeking to take over
or otherwise gain control of the Company by, for example, privately placing shares with purchasers who might side with the Board in opposing
a hostile takeover bid. Shares of Common Stock could also be issued to a holder that would thereafter have sufficient voting power to
assure that any proposal to amend or repeal the Company’s Bylaws or certain provisions of the Articles of Incorporation would not
receive the requisite vote. Such uses of the Common Stock could render more difficult, or discourage, an attempt to acquire control of
the Company, if such transactions were opposed by the Board. However, it is also possible that an indirect result of the anti-takeover
effect of the Reverse Stock Split could be that our stockholders will be denied the opportunity to obtain any advantages of a hostile
takeover, including, but not limited to, receiving a premium to the then current market price of the Common Stock, if the same was so
offered by a party attempting a hostile takeover of the Company.
Determination
of Ratio
The
ratio of the Reverse Stock Split, if implemented, will be a ratio within the range of 1-for-300 to 1-for-400 (the “
Reverse Stock
Split Ratio
”).
Our
Board would carry out a Reverse Stock Split only upon its determination that a Reverse Stock Split would be in the best interests of
our stockholders at that time. In determining the ratio, the Board considered, among other things:
● | the historical and projected performance of our Common Stock; |
● | the potential devaluation of the Company’s market capitalization as a result of the Reverse Stock Split; |
● | prevailing market conditions; |
● | general economic and other related conditions prevailing in our industry and in the marketplace; |
● | the projected impact of the selected Reverse Stock Split Ratio on trading liquidity in our Common Stock and our ability to list our Common Stock on Nasdaq; |
● | our capitalization (including the number of shares of our Common Stock issued and outstanding); and |
● | the prevailing trading price for our Common Stock and the volume level thereof. |
Beneficial
Holders of Common Stock
Upon
the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders through a bank, broker or other nominee
in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers or other nominees will be instructed
to effect the Reverse Stock Split for their beneficial holders holding our Common Stock in “street name.” However, these
banks, brokers or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split. Stockholders
who hold shares of our Common Stock with a bank, broker or other nominee and who have any questions in this regard are encouraged to
contact their banks, brokers or other nominees.
Registered
“Book-Entry” Holders of Common Stock
Certain
of the registered holders of our Common Stock may hold some or all of their shares electronically in book-entry form with our transfer
agent. These stockholders do not have stock certificates evidencing their ownership of our Common Stock. They are, however, provided
with statements reflecting the number of shares registered in their accounts. Stockholders who hold shares electronically in book-entry
form with our transfer agent will not need to take action to receive evidence of their shares of Common Stock subsequent to the Reverse
Stock Split.
Holders
of Certificated Shares of Common Stock
Stockholders
holding shares of our Common Stock in certificated form will be sent a transmittal letter by our transfer agent after the effective time
of the Reverse Stock Split. The letter of transmittal will contain instructions on how a stockholder should surrender his, her or its
certificate(s) representing shares of our Common Stock (the “
Old Certificates
”) to our transfer agent in exchange
for certificates representing the appropriate number of shares of post-Reverse Stock Split Common Stock (the “
New Certificates
”).
No New Certificates will be issued to a stockholder until such stockholder has surrendered all Old Certificates, together with a properly
completed and executed letter of transmittal, to our transfer agent. Stockholders will then receive a New Certificate(s) representing
the number of shares of our Common Stock to which they are entitled as a result of the Reverse Stock Split. Any Old Certificates submitted
for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for New Certificates.
If an Old Certificate has a restrictive legend on its reverse side, the New Certificate will be issued with the same restrictive legend
on its reverse side.
Regardless
of how stockholders hold our Common Stock (i.e., in book-entry or certificated form), stockholders will not have to pay any service charges
to us or our transfer agent in connection with the reverse stock split.
Accounting
Matters
The
proposed amendment to our Articles of Incorporation, as amended, will not affect the par value of our Common Stock. As a result, at the
effective time of the Reverse Stock Split, the stated capital on our balance sheet attributable to our Common Stock will be reduced in
the same proportion as the Reverse Stock Split Ratio, and the additional paid-in capital account will be credited with the amount by
which the stated capital is reduced. The per share net income or loss and net book value of our Common Stock will be reclassified for
prior periods to conform to the post-Reverse Stock Split presentation.
Federal
Income Tax Consequences of the Reverse Stock Split
The
following is a summary of certain material United States federal income tax consequences of the Reverse Stock Split. It does not purport
to be a complete discussion of all of the possible United States federal income tax consequences of the Reverse Stock Split and is included
for general information only. Further, it does not address any state, local or foreign income or other tax consequences. This discussion
does not address the tax consequences to holders that are subject to special tax rules, such as banks, insurance companies, regulated
investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers and tax-exempt entities.
The discussion is based on the provisions of the United States federal income tax law as of the date hereof, which is subject to change
retroactively as well as prospectively. This summary also assumes that the shares of Common Stock held by our Stockholders before the
Reverse Stock Split were, and the shares of Common Stock held after the Reverse Stock Split will be, held as “capital assets,”
as defined in the Internal Revenue Code of 1986, as amended (i.e., generally, property held for investment). The tax treatment of a Stockholder
may vary depending upon the particular facts and circumstances of such Stockholder. Each stockholder is urged to consult with such Stockholder’s
own tax advisor with respect to the tax consequences of the Reverse Stock Split.
No
gain or loss will be recognized by a Stockholder upon such Stockholder’s exchange of shares held before the Reverse Stock Split
for shares after the Reverse Stock Split. The aggregate tax basis of the shares of the Common Stock received in the Reverse Stock Split
(including any fraction of a share deemed to have been received) will be the same as the Stockholder’s aggregate tax basis in the
shares of our Common Stock exchanged therefor. The Stockholder’s holding period for the shares of our Common Stock after the Reverse
Stock Split will include the period during which the Stockholder held the shares of our Common Stock surrendered in the Reverse Stock
Split.
This
summary of certain material United States federal income tax consequence of the Reverse Stock Split is not binding on the Internal Revenue
Service, the Company or the courts. Accordingly, each Stockholder should consult with his or her own tax advisor with respect to all
of the potential tax consequences to him or her of the Reverse Stock Split.
Tax
Consequences of the Reverse Stock Split Generally
A
reverse split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a U.S. Holder generally
should not recognize gain or loss upon the reverse split, except with respect to cash received in lieu of a fractional share of our Common
Stock. A U.S. Holder’s aggregate tax basis in the shares of our Common Stock received pursuant to the reverse split
should equal the aggregate tax basis of the shares of our Common Stock surrendered (excluding any portion of such basis that is
allocated to any fractional share of our Common Stock), and such U.S. Holder’s holding period in the shares of our Common
Stock received should include the holding period in the shares of our Common Stock surrendered. Treasury Regulations provide
detailed rules for allocating the tax basis and holding period of the shares of our Common Stock surrendered to the shares of
our Common Stock received pursuant to the reverse split. Holders of shares of our Common Stock acquired on different dates
and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
Information
Reporting and Backup Withholding.
A U.S. Holder (other than corporations and certain other exempt recipients) may be subject to information
reporting and backup withholding when such holder receives cash in lieu of a fractional share of our Common Stock pursuant to
the reverse split. A U.S. Holder will be subject to backup withholding if such holder is not otherwise exempt and such holder does not
provide its taxpayer identification number in the manner required or otherwise fails to comply with applicable backup withholding tax
rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed
as a credit against the U.S. Holder’s federal income tax liability, if any, provided the required information is timely furnished
to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and
the procedures for obtaining such an exemption.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
DECREASE
IN AUTHORIZED SHARES
The
Company’s Amended and Restated Articles of Incorporation authorizes the issuance of 800,000,000 shares of Common Stock, par value
of $0.001 per share, and 5,000,000 shares of preferred stock, par value of $0.001 per share. On November 16, 2021, the Board and the
Majority Stockholders approved a decrease in the authorized shares of common stock from 800,000,000 shares to 250,000,000 shares.
The
Board plans to file the Decrease in Authorized Shares with the Secretary of State of Nevada. The Decrease in Authorized Shares will become
effective on the date of filing. There is no change with respect to the number of authorized preferred shares.
Purposes
of the Decrease in Authorized Shares
The
principal purpose of the Decrease in Authorized Shares is to more closely align our capital structure. With the Reverse Stock Split at
a range of 1-for-300 to 1-for-400 shares, the Reverse Stock Split will create a sharp reduction in the number of outstanding
shares of Common Stock and would, with no further action by us, result in a significant disparity in the ratio of our outstanding to
authorized shares of Common Stock. By implementing the Decrease in Authorized Shares simultaneously with the Reverse Stock Split, we
will still have a sufficient number of authorized shares of both common stock and preferred stock that will afford us maximum flexibility
to issue shares of either class in the future while allowing us to have a proportionate capital structure.
Further,
each year, we are required to make franchise tax payments to the State of Nevada in an amount determined, in part, by the total number
of shares of stock we are authorized to issue. Therefore, the amount of this tax will be decreased if we reduce the number of authorized
shares of our Common Stock (unless before and after such reduction, we are subject to the maximum tax amount).
Effect
of the Decrease in Authorized Shares
Once
we file the amendment for the decrease in authorized shares of Common Stock, it will have the immediate effect of reducing the total
amount of authorized Common Stock. Unlike the Reverse Stock Split, it will have no impact on the number of shares you own.
No
Dissenters’ Rights
Under
the Nevada Revised Statutes, the Company’s Stockholders are not entitled to dissenters’ rights with respect to the decrease
in authorized shares, and the Company will not independently provide Stockholders with any such right.
AMENDMENT
TO THE UNIQUE 2020 EQUITY AND INCENTIVE PLAN
Our
Board and Majority Stockholders have approved the 2020 Plan Amendment Plan to set the number of shares of the Company’s Common
Stock available for issuance under the 2020 Plan to 1,500,000 shares effective upon the Reverse Stock Split.
The
2020 Plan is our only ongoing plan providing stock-based awards to employees and non-employee directors. In addition to stock-based compensation,
the Plan also authorizes the issuance of awards payable in cash. Our ability to provide long-term incentives in the form of equity compensation
aligns management’s interests with the interests of our stockholders and fosters an ownership mentality that drives optimal decision-making
for the long-term health and profitability of our Company. Equally important, equity compensation is critical to our continuing ability
to attract, retain and motivate qualified corporate executives and retain management. Our ability to grant equity compensation has been
important to our past success, and we expect it to be crucial to achieving our long-term growth.
Currently,
the 2020 Plan provides for the issuance of up to 40,000,000 shares of Common Stock through the grant of non-qualified options (the “Non-qualified
Options”), incentive options (the “Incentive Options” and together with the Non-qualified Options, the “Options”)
and restricted stock (the “Restricted Stock”) to directors, officers, consultants, attorneys, advisors and employees.
There
are currently no options outstanding under the 2020 Plan.
As
a result of the planned Reverse Stock Split, the number of shares of Common Stock approved for issuance pursuant to the 2020 Plan shall
decrease to 114,285. The Board believes that such number of shares available for issuance pursuant to the 2020 Plan is not sufficient
in view of our compensation structure and strategy. The Board believes that setting the number of shares available for issuance under
the 2020 Plan at 1,500,000 shares, effective upon the Reverse Stock Split, is consistent with the Company’s compensation philosophy
(and with responsible compensation policies generally) and will preserve the Company’s ability to attract and retain capable officers,
employees, directors and consultants.
Summary
of 2020 Plan, as Proposed to be Amended
The
following is a summary of the material terms and conditions of the 2020 Plan, as proposed to be amended, and is qualified in its entirety
by the provisions contained in the 2020 Plan, as amended (the “Amended 2020 Plan”), a copy of which is attached to this Proxy
Statement as Appendix B:
Plan
Highlights
The
essential features of our 2020 Plan are outlined below. The following description is not complete and is qualified by reference to the
full text of our 2020 Plan, which is appended to this Information Statement as Appendix B.
Options
are subject to the following conditions:
(i) | The Committee (as defined below) determines the exercise price of Incentive Options at the time the Incentive Options are granted. The assigned exercise price must be no less than 100% of the Fair Market Value (as defined in the 2020 Plan) of the Common Stock on the Grant Day (as defined in the 2020 Plan). In the event that the recipient is a Ten Percent Owner (as defined in the 2020 Plan), the exercise price must be no less than 110% of the Fair Market Value of the Company on the Grant Day. | |
(ii) | The exercise price of each Non-qualified Option will be at least 100% of the Fair Market Value of such share of the Common Stock on the date the Non-qualified Option is granted. | |
(iii) | The Committee fixes the term of Options, provided that Options may not be exercisable more than ten years from the date the Option is granted, and provided further that Incentive Options granted to a Ten Percent Owner may not be exercisable more than five years from the date the Incentive Option is granted. | |
(iv) | Stock Options shall become exercisable and/or vested at such time or times, whether or not in installments, as shall be determined by the Committee at or after the Grant Date. The Award Agreement may permit a grantee to exercise all or a portion of a Stock Option immediately at grant; provided that the Shares issued upon such exercise shall be subject to restrictions and a vesting schedule identical to the vesting schedule of the related Stock Option, such Shares shall be deemed to be Restricted Stock for purposes of the Plan, and the optionee may be required to enter into an additional or new Award Agreement as a condition to exercise of such Stock Option. An optionee shall have the rights of a stockholder only as to Shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options. An optionee shall not be deemed to have acquired any Shares unless and until a Stock Option shall have been exercised pursuant to the terms of the Award Agreement and this Plan and the optionee’s name has been entered on the books of the Company as a stockholder. | |
(v) | Options are not transferable except to a recipient’s family members or partnerships in which such family members are the only partners and Options are exercisable only by the Options’ recipient, except upon the recipient’s death. | |
(vi) | Incentive Options may not be issued in an amount or manner where the amount of Incentive Options exercisable in one year entitles the holder to Common Stock of the Company with an aggregate Fair Market value of greater than $100,000. |
Awards
of Restricted Stock are subject to the following conditions
:
(i) | The Committee grants Restricted Stock Options and determines the restrictions on each Restricted Stock Award (as defined in the 2020 Plan). Upon the grant of a Restricted Stock Award and the payment of any applicable purchase price, grantee is considered the record owner of the Restricted Stock and entitled to vote the Restricted Stock if such Restricted Stock is entitled to voting rights. | |
(ii) | Restricted Stock may not be delivered to the grantee until the Restricted Stock has vested. | |
(iii) | Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as provided in the 2020 Plan or in the Award Agreement (as defined in the 2020 Plan). |
Upon
a Termination Event (as defined in the 2020 Plan), the Company or its assigns shall have the right and option to repurchase from a Holder
of Shares (as defined in the 2020 Plan) received pursuant to a Restricted Stock Award any Shares that are still subject to a risk of
forfeiture as of the Termination Event (as defined in the 2020 Plan).
Purpose
The
objective of the 2020 Plan is to encourage and enable the officers, employees, directors, consultants and other key persons of the Company
and its subsidiaries, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business,
to acquire a proprietary interest in the Company.
Grants
The
2020 Plan permits the granting of incentive stock options, nonqualified stock options, stock awards, restricted stock units, stock appreciation
rights (“SARs”) and other equity-based awards (collectively, “grants”). Although all employees and all of the
employees of our subsidiaries are eligible to receive grants under our 2020 Plan, the grant to any particular employee is subject to
the discretion of the Compensation Committee of the Board, comprised of not less than two directors (such
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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