INFORMATION STATEMENT REGARDING ACTION TO BE TAKEN BY WRITTEN
CONSENT OF A MAJORITY OF SHAREHOLDERS IN LIEU OF A SPECIAL
MEETING
PURSUANT TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT OF
1934
PLEASE NOTE THAT THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS
AND NO STOCKHOLDERS MEETING WILL BE HELD TO CONSIDER THE MATTERS
DESCRIBED HEREIN. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
GENERAL INFORMATION
This
Information Statement is being mailed on or about November 9, 2020,
to the holders of record (the “Stockholders”) at the
close of business on October 28, 2020 (the “Record
Date”) of shares of , $0.0001 par value per share (the
“Common Stock”), and shares of Series AA Convertible
Stock, $0.001 par value per share (the “Preferred
Stock”), of Visium Technologies, Inc., a Florida corporation
(the “Company,” “we,” “us” or
“our”), in connection with the approval and adoption of
the Certificate of Amendment to our Articles of Incorporation to
allow for the Reverse Stock Split and Reduction in Authorized Stock
by the written consent of the Majority Stockholders (as defined
below).
Action by Written Consent
On
August 24, 2020, the Board and the
holders of a majority of the voting power of the Company of the
issued and outstanding capital stock of the Company
consented in writing to:
File a
Certificate of Amendment to amend our Amended and Restated Articles
of Incorporation to (1) effect a reverse stock split of our Common
Stock and Series A and B Preferred Stock by a ratio of
sixty-for-one (60:1), and to authorize our board of directors to
implement the aforementioned reverse stock split by filing an
amendment to our Amended and Restated Articles of Incorporation
(the “Reverse Stock Split”) and (2) reduce our
authorized number of Common Stock from 10,000,000,000 to
2,000,000,000 Common Stock (the “Reduction in Authorized
Stock” and together with the Reverse Stock Split, the
“Corporate Actions”).
Required Vote
On or
about August 24, 2020, the Board approved a resolution to
effectuate the Reverse Stock Split and Reduction in Authorized
Stock. On August 24, 2020, the following holders of shares of the
Common Stock and shares of the Series AA Preferred Stock,
representing 62.62% of the total outstanding voting power of the
Company (the “Majority Stockholders”), executed the
written consent of the Majority Stockholders approving the
Corporate Actions:
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Series
AA Preferred Stock Ownership
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NAME
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(1)
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Mark
Lucky
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306,812,564
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15.89%
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1
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100%
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58.79
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%
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Tom
Grbelja
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103,666,667
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5.37%
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2.63
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%
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Emmanuel
Esaka
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44,500,000
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2.31%
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1.13
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%
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Paul
Favata
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25,333,333
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1.31%
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0.64
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%
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Total
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480,312,564
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24.88%
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1
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100%
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63.20
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%
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(1)
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Percent of Voting Control is based upon the number of outstanding
shares of our common stock and our Series AA Preferred Stock as of
August 24, 2020. On that date, we had 1,930,250,521 outstanding
shares of common stock with one vote per share, and 1 share of
Series AA Preferred Stock outstanding with voting rights equal to
51% of the outstanding common shares.
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We
expect that the Corporate Actions will be effective on or about
November 30, 2020 (the “Effective Date”), which date
shall be no sooner than 20 days after we mail this Information
Statement and the accompanying notice to our stockholders. Our
Board retains the authority to abandon the Corporate Actions for
any reason at any time prior to the Effective Date. Because the
Corporate Actions have already been approved by holders of a
majority of the voting power of the Company, you are not required
to take any action. This Information Statement provides to you
notice that the Corporate Actions have been approved. You will
receive no further notice of the approval nor of the effective date
of the Corporate Actions other than pursuant to reports which the
Company will be required to file with the SEC in the
future.
CORPORATE ACTIONS TO BE TAKEN
With
respect to the Corporate Action described in this Information
Statement, the Board reserves the right, notwithstanding that the
Majority Stockholders have approved the Corporate Action, to elect
not to proceed with the Corporate Action if the Board, in its sole
discretion, determines that it is no longer in the Company’s
best interests and the best interests of the stockholders of the
Company to consummate the Corporate Action.
ACTION ONE: APPROVAL OF THE CERTIFICATE OF AMENDMENT TO THE
COMPANY’S ARTICLES OF
INCORPORATION TO EFFECTUATE A REVERSE STOCK SPLIT AND REDUCTION OF
AUTHORIZED SHARES OF COMMON STOCK
General
Under
the Reverse Stock Split, each sixty (60) shares of our outstanding
Common Stock will be automatically converted into one (1) share of
Common Stock. The effective date of the Reverse Stock Split will be
on or after November 30, 2020 (the “Effective Date”).
In addition, the Board and Majority Shareholders approved a
resolution to effectuate a reduction in authorized Shares of Common
Stock from ten billion (10,000,000,000) shares of Common Stock down
to 2 billion (2,000,000,000) shares of Common Stock, $0.0001 par
value.
PLEASE
NOTE THAT THE REVERSE STOCK SPLIT WILL NOT CHANGE YOUR
PROPORTIONATE EQUITY INTERESTS IN THE COMPANY, EXCEPT AS MAY RESULT
FROM THE ISSUANCE OF SHARES PURSUANT TO THE FRACTIONAL
SHARES.
Purpose and Material Effects of Reverse Stock Split and Reduction
in Authorized Stock
Reducing
the number of outstanding shares of our Common Stock through the
Reverse Stock Split is intended, absent other factors, to increase
the per share market price of our Common Stock and make our Common
Stock more attractive to a broader range of investors.
Additionally, we believe that the Reverse Stock Split improve the
visibility of our earnings trends and lower investor trading costs.
Many brokerage houses and institutional investors have internal
policies and practices that either prohibit them from investing in
low-priced stocks or tend to discourage individual brokers from
recommending low-priced stocks to their customers. In addition,
some of those policies and practices may function to make the
processing of trades in low-priced stocks economically less
attractive to brokers. Moreover, because brokers’ commissions
on low-priced stocks generally represent a higher percentage of the
stock price than commissions on higher-priced stocks, the current
average price per share of Common Stock can result in individual
stockholders paying transaction costs representing a higher
percentage of their total share value than would be the case if the
share price were substantially higher.
We
believe that the Reverse Stock Split will potentially make our
Common Stock a more attractive and cost-effective investment for
many investors. However, other factors, such as our financial
results, market conditions and the market perception of our
business may adversely affect the market price of our Common Stock.
As a result, we cannot assure you that the Reverse Stock Split, if
completed, will result in the intended benefits described above.
Additionally, we cannot assure you that the market price per share
of our Common Stock after the Reverse Stock Split will increase in
direct proportion to the reduction in the number of shares of our
Common Stock outstanding before the Reverse Stock Split.
Accordingly, the total market capitalization of our Common Stock
after the Reverse Stock Split may be lower than the total market
capitalization before the Reverse Stock Split.
The
principal effect of the Reverse Stock Split will be that the number
of shares of Common Stock issued and outstanding will be reduced
from 2,453,799,890 shares of Common Stock as of October 28, 2020 to
approximately 48,69,757 shares of Common Stock(depending on the
number of fractional shares that are issued). The Reverse Stock
Split will only affect the shares of Common Stock outstanding and
the Series A and B Preferred Shares are subject to this Reverse
Stock Split. The Reverse Stock Split will not affect any
convertible securities currently outstanding, other than some
convertible promissory notes with fixed convertible prices issued
by the Company, as such securities for the most part, convert based
on a percentage calculation related to stock price alone. The
Reverse Stock Split will not affect the par value of our Common
Stock. As a result, on the effective date of the Reverse Stock
Split, the stated capital on our balance sheet attributable to our
Common Stock will be reduced to less than the present amount, and
the additional paid-in capital account shall 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
increased because there will be fewer shares of our Common Stock
outstanding.
The
Reverse Stock Split will not change the proportionate equity
interests of our stockholders, nor will the respective voting
rights and other rights of stockholders be altered. The Common
Stock issued pursuant to the Reverse Stock Split will remain fully
paid and non-assessable. The Reverse Stock Split is not intended
as, and will not have the effect of, a “going private
transaction” covered by Rule 13e-3 under the Securities
Exchange Act of 1934. We will continue to be subject to the
periodic reporting requirements of the Securities Exchange Act of
1934.
The
following table sets forth the effects of the Reverse Split and
Reduction of Authorized Shares on our outstanding and authorized
capital:
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Current
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2,453,799,890
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13,759
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10,000,000,000
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100,000,000
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10,100,000,000
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7,546,200,110
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Following
Reverse Stock Split and Reduction of Authorized Shares
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48,679,757
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551
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2,000,000,000
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100,000,000
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2,100,000,000
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1,951,320,243
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The
Board intends to affect the Reverse Stock Split only if it believes
that the implementation of the Reverse Stock Split is in the best
interests of the Company and its stockholders. The Board may
exercise its discretion not to implement the Reverse Stock
Split.
The
Board believes that the large number of its outstanding shares of
Common Stock have contributed to the Company’s ongoing
difficulty in attracting new investors, especially during a time
when the security software market is active with regard to
authentication and malware. Accordingly, the Board and Majority
Stockholders have agreed to decrease the number of the
Company’s authorized Common Stock by 80% from ten billion
(10,000,000,000) Common Stock to two billion (2,000,000,000) Common
Stock.
We
have no present understandings or agreements that will involve the
issuance of capital stock. However, we are engaged in negotiations
with respect to transactions, including financings and
acquisitions, which could involve the issuance of capital stock. As
of the date herein, there are no definitive agreements, letters of
intent of memorandums of understanding with respect to any
transactions, financings or acquisitions.
Fractional Shares
The
Reverse Stock Split will affect all of our stockholders uniformly
and will not affect any stockholder's percentage ownership
interests in the Company or proportionate voting power, except to
the extent that the Reverse Stock Split results in any of our
stockholders owning a fractional share. All stockholders holding a
fractional share shall be issued an additional share.
Certain
Risks Associated with the Reverse Stock Split
Stockholders should
recognize that they will own a fewer number of shares than they
presently own (a number equal to the number of shares owned
immediately prior to the filing of the Certificate of Amendment
divided by 60). While we expect that the Reverse Stock Split will
result in an increase in the potential market price of our Common
Stock, there can be no assurance that the Reverse Stock Split will
increase the potential market price of our Common Stock by a
multiple equal to the exchange number or result in the permanent
increase in any potential market price (which is dependent upon
many factors, including our performance and prospects). Also,
should the market price of our Common Stock decline, the percentage
decline as an absolute number and as a percentage of our overall
market capitalization may be greater than would pertain in the
absence of a reverse split. Furthermore, the possibility exists
that potential liquidity in the market price of our Common Stock
could be adversely affected by the reduced number of shares that
would be outstanding after the reverse split. In addition, the
reverse split will increase the number of stockholders of the
Company who own odd lots (less than 100 shares). Stockholders who
hold odd lots typically will experience an increase in the cost of
selling their shares, as well as possible greater difficulty in
effecting such sales. Consequently, there can be no assurance that
the Reverse Split will achieve the desired results that have been
outlined above.
In
evaluating whether to approve the Reverse Stock Split, the Board
took into consideration other negative factors associated with
Reverse Stock Splits. These factors include: the negative
perception of reverse stock splits that investors, analysts and
other stock market participants may hold; the fact that the stock
prices of some companies that have effected reverse stock splits
have subsequently declined, sometimes significantly, following
their reverse stock splits; the possible adverse effect on
liquidity that a reduced number of outstanding shares could cause;
and the costs associated with implementing a reverse stock
split.
Procedure for Effecting Reverse Stock Split
The
Company’s transfer agent, Madison Stock Transfer, Inc., will
act as exchange agent for purposes of implementing the exchange of
stock certificates. There will be no mandatory exchange of
certificates; rather certificates will be exchanged in the ordinary
course of business. No new certificates will be issued to a
stockholder until that stockholder has surrendered the
stockholder's outstanding certificate(s) together with the properly
completed and executed letter of transmittal.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY
CERTIFICATES UNLESS REQUESTED TO DO SO.
Upon
the Effective Date, the Company will notify FINRA and request an
ex-dividend date. The Reverse Stock Split will take place on the
ex-dividend date without any action on the part of the holders of
the Common Stock. The Certificate of Amendment will become
effective upon the acceptance for record of the Certificate of
Amendment with the Secretary of State of the State of Florida,
which will occur no earlier than 20 calendar days after this
Information Statement is first mailed to our Stockholders who did
not execute the written consent of the Majority
Stockholders.
Federal Income Tax Consequences of the Reverse Stock
Split
The
following discussion is a summary of certain federal income tax
consequences of the Reverse Stock Split to the holders of Common
Stock. This discussion is based on the Internal Revenue Code of
1986, as amended, regulations, rulings and decisions in effect on
the date hereof, all of which are subject to change (possibly with
retroactive effect) and to differing interpretations. This
discussion is for general information purposes only and the tax
treatment of a stockholder may vary depending upon the particular
facts and circumstances of such stockholder. In addition, this
discussion does not address all aspects of federal income taxation
that may be relevant to holders in light of their particular
circumstances or to holders who may be subject to special tax
treatment, including without limitation, holders of warrants,
holders who are dealers in securities, foreign persons, insurance
companies, tax-exempt organizations, banks, financial institutions,
broker-dealers, holders who hold Common Stock as part of a hedge,
straddle, conversion or other risk reduction transaction, or who
acquired the Common Stock pursuant to the exercise of compensatory
stock options or otherwise as compensation. The following
discussion also does not address the tax consequences of the
Reverse Stock Split under foreign, state or local tax laws.
Accordingly, each stockholder should consult his or her tax adviser
to determine the particular tax consequences to him or her of a
reverse split, including the application and effect of federal,
state, local and/or foreign income tax and other laws.
Generally,
a reverse split will not result in the recognition of gain or loss
for federal income tax purposes. The adjusted basis of the new
shares of Common Stock will be the same as the adjusted basis of
the Common Stock exchanged for such new shares. The holding period
of the post-Reverse Stock Split shares of the Common Stock
resulting from implementation of the Reverse Stock Split will
include the stockholder’s respective holding periods for the
pre-Reverse Stock Split shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table, together with the accompanying footnotes, sets
forth information regarding the beneficial ownership of the Common
Stock of the Company as of October 28, 2020, for (i) each person
known by the Company to own beneficially more than 5% of the
Company’s Common Stock, (ii) each of the Company’s
Executive Officers, (iii) each of the Company’s Directors and
(iv) all Directors and Executive Officers as a group. Applicable
percentage ownership in the following table is based on
2,453,799,890 shares of Common Stock outstanding as of October 28,
2020.
Beneficial
ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and
investment power with respect to the securities. Subject to
applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them. In addition,
shares of Common Stock issuable upon exercise of options, warrants
and other convertible securities beneficially owned that are
exercisable within sixty days of October 26, 2020, are deemed
outstanding for the purpose of computing the percentage ownership
of the person holding those securities, and the group as a whole,
but are not deemed outstanding for computing the percentage
ownership of any other person.
Amount and Nature of Beneficial Ownership
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Series AA Preferred Stock Ownership
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NAME
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(1)
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Mark
Lucky
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306,812,564
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12.50%
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1
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100%
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57.13%
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Tom
Grbelja
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103,666,667
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4.22%
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2.07%
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Emmanuel
Esaka
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44,500,001
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1.81%
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0.89%
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Paul
Favata
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25,333,334
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1.03%
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0.51%
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Officers
and directors as a group
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480,312,566
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19.57%
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1
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100%
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60.60%
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Total
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480,312,566
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19.57%
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1
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100%
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63.32%
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(1)
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Percent of Voting Control is based upon the number of issued and
outstanding shares of our common stock and our Series AA Preferred
Stock as of October 28, 2020. On that date, we had 2,453,733,223
outstanding shares of common stock with one vote per share, and 1
share of Series AA Preferred Stock outstanding with voting rights
equal to 51% of the outstanding common shares.
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INTERESTS OF CERTAIN PERSONS ON MATTERS TO BE ACTED
UPON
None
of the persons who have served as our officers or directors since
the beginning of our last fiscal year, or any associates of such
persons, have any substantial interest, direct or indirect, in the
Reverse Stock Split, other than the interests held by such persons
through their respective beneficial ownership of the shares of our
capital stock set forth above in the section entitled
“Security Ownership of Certain Beneficial Owners and
Management.”
NO APPRAISAL RIGHTS
Under
Florida corporate law, stockholders have no appraisal or
dissenters’ rights in connection with the Corporate
Actions.
STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS
The
SEC has adopted rules that permit companies and brokers, banks and
other nominees to satisfy the delivery requirements for proxy
statements and annual reports, with respect to two or more
stockholders sharing the same address and who do not participate in
electronic delivery of proxy materials, by delivering a single copy
of such documents addressed to those stockholders. This process,
which is commonly referred to as “householding,”
potentially means extra convenience for stockholders and cost
savings for companies.
Brokers,
banks and other nominees may be “householding” Company
proxy materials. This means that only one copy of proxy materials
may have been sent to multiple stockholders in a household. If, at
any time, you no longer wish to participate in householding and
would prefer to receive a separate proxy statement and annual
report from the other stockholder(s) sharing your address, please:
(i) notify your broker, bank or other nominee, (ii) direct your
written request to Chief Executive Officer, 4094 Majestic Lane,
Suite 360 c fFairfax, VA 22033. The Company will undertake to
deliver promptly, upon any such oral or written request, a separate
copy of the proxy materials to a stockholder at a shared address to
which a single copy of these documents was delivered. Stockholders
who currently receive multiple copies of proxy materials at their
address and would like to request householding of their
communications should notify their broker, bank or other nominee,
or contact our Chief Executive Officer at the above address or
phone number.
ADDITIONAL INFORMATION
This
Information Statement should be read in conjunction with certain
reports that we previously filed with the SEC, including
our:
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Annual
Report on Form 10-K for the period ended June 30, 2020, filed with
the SEC on October 9, 2020
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Quarterly
Reports on Form10-Q for the periods ending September 30, 2019,
December 31, 2019 and March 31, 2020 filed with the SEC on November
14, 2019, February 12, 2020, and June 29, 2020,
respectively.
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The
reports we file with the SEC and the accompanying exhibits may be
inspected without charge at the Public Reference Section of the
Commission at 100 F Street, N.E., Washington, DC 20549. Copies of
such materials may also be obtained from the SEC at prescribed
rates. The SEC also maintains a Web site that contains reports,
proxy and information statements and other information regarding
public companies that file reports with the SEC. Copies of the
Reports may be obtained from the SEC’s EDGAR archives at
http://www.sec.gov. We will also mail copies of our prior reports
to any stockholder upon written request.
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By
Order of the Board of Directors
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November
9, 2020
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/s/ Mark Lucky
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Mark
Lucky, Chairman, and Director
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Fairfax,
VA
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