Information Statement Pursuant
to Section 14(c) of the Securities Exchange Act of 1934
NOTICE IS HEREBY GIVEN that the holder of the majority of the voting
power of the shareholders of Bespoke Extracts, Inc., a Nevada corporation (the “Company” “we”, “us,”
or “our”), has approved the following action without a meeting of stockholders in accordance with in accordance with Section
78.315 of the Nevada Revised Statutes:
The approval of an amendment
to our articles of incorporation to effect a 45-to-1 reverse split of our common stock. The action will become effective on the 20th day
after this Information Statement is mailed to our stockholders.
The enclosed Information Statement
contains information pertaining to the matters acted upon.
INFORMATION STATEMENT
Action by Written Consent of Stockholders
GENERAL INFORMATION
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement
is being furnished in connection with the action by written consent of stockholders taken without a meeting of a proposal to approve the
actions described in this Information Statement. We are mailing this Information Statement to our stockholders on or about December 19,
2022.
What action was taken by written consent?
We obtained stockholder consent
for the approval of an amendment to our articles of incorporation, to effect a 45-to-1 reverse split of our common stock.
How many shares of common stock and Series
C Preferred Stock were outstanding on December 2, 2022?
On December 2, 2022, the date
we received the consent of the holder a majority of the voting power of our shareholders, there were 450,071,119 shares of common stock
and 1 share of Series C Preferred Stock outstanding. The Series C Preferred Stock provides the holder with 51% of the total voting power
of our stockholders.
What vote was obtained to approve the amendment
to the articles of incorporation described in this Information Statement?
We obtained the approval of
Infinity Management, LLC (“Infinity”), which is the holder of our 1 outstanding share of Series C Preferred Stock. The managing
member of Infinity is Michael Feinsod, who is our chief executive officer.
Who is paying the cost of this Information
Statement?
We will pay for preparing,
printing and mailing this Information Statement. Our costs are estimated at approximately $10,000.
AMENDMENT TO THE ARTICLES OF INCORPORATION
TO EFFECT 45-TO-1 REVERSE STOCK SPLIT
Our board of directors and
the holder of a majority of the voting power of our shareholders have approved an amendment to our articles of incorporation to effect
a 45-to-1 reverse stock split. The reverse split will become effective upon the filing of the amendment to the articles of incorporation
with the Secretary of State of the State of Nevada. We will file the amendment to our articles of incorporation to effect the reverse
stock split approximately (but not less than) 20 days after this Information Statement is mailed to stockholders.
The amendment to the articles
of incorporation of incorporation will effect a 45-to-1 reverse split in our common stock. As a result of the reverse split, each 45 shares
of common stock (the “Old Shares”) will become and be converted into one share of common stock (the “New Shares”),
with stockholders who would receive a fractional share to receive such additional fractional share as will result in the holder having
a whole number of shares.
As a result of the reverse
split, the number of shares of common stock issued and outstanding will decrease from 450,071,119 to approximately 10,001,580. Since additional
fractional shares may be issued in order to round up fractional shares, we do not know the exact number of New Shares that will be outstanding
after the reverse split.
Reasons for the Reverse Stock Split
The Company’s common
stock is quoted on the OTCQB under the symbol “BSPK”. The shares of common stock of the Company have traded at low prices
for some time. The reverse stock split is intended to increase the per share stock price. We believe that if we are successful in maintaining
a higher stock price, the stock will generate greater interest among professional investors and institutions. If we are successful in
generating interest among such entities, we anticipate that our common stock would have greater liquidity and a stronger investor base.
In evaluating the reverse
stock split, the Company's Board of Directors also took into consideration negative factors associated with reverse stock splits. These
factors include the negative perception of reverse stock spits held by many investors, analysts and other stock market participants, as
well as the fact that the stock price of some companies that have effected reverse stock splits has subsequently declined back to pre-reverse
stock split levels. The Board, however, determined that these negative factors were outweighed by the potential benefits.
Potential Effects of the Reverse Stock Split
The immediate effect of a
reverse stock split will be to reduce the number of shares of common stock outstanding, and to increase the trading price of the common
stock. However, the effect of any reverse stock split upon the market price of the common stock cannot be predicted, and the history of
reverse stock splits for companies in similar circumstances is varied. We cannot assure you that the trading price of the common stock
after the reverse stock split will rise in exact proportion to the reduction in the number of shares of the common stock outstanding as
a result of the reverse stock split. Also, as stated above, the Company cannot assure you that a reverse stock split will lead to a sustained
increase in the trading price of the common stock. The trading price of the common stock may change due to a variety of other factors,
including the Company’s operating results, other factors related to the Company’s business, and general market conditions.
Effect on Ownership by Individual Shareholders
The New Shares issued pursuant
to the reverse stock split will be fully paid and non-assessable. All New Shares will have the same voting rights and other rights as
the Old Shares. Our stockholders do not have preemptive rights to acquire additional shares of common stock. The reverse stock split will
not alter any shareholder’s percentage interest in our equity, except to the extent that the reverse stock split results in any
of our stockholders owning a fractional share, which will be rounded up to the next whole number of shares.
Effect on Options, Warrants and other Securities
All outstanding options, warrants,
and other securities entitling their holders to purchase shares of common stock will be adjusted as a result of the reverse stock split,
as required by the terms of these securities. In particular, the conversion ratio for each instrument will be reduced, and the exercise
price, if applicable, will be increased, in accordance with the terms of each instrument and based on the of 1 for 45 ratio.
Other Effects on Outstanding Shares
As stated above, the rights
of the outstanding shares of common stock will remain the same after the reverse stock split.
The reverse stock split may
result in some shareholders owning "odd-lots" of less than 100 shares of common stock. Brokerage commissions and other costs
of transactions in odd-lots are generally higher than the costs of transactions in "round-lots" of even multiples of 100 shares.
The Company’s common
stock is currently registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
As a result, the Company is subject to the periodic reporting and other requirements of the Exchange Act. The reverse stock split will
not affect the registration of the Company’s common stock under the Exchange Act.
Authorized Shares of Common Stock
The reverse stock split will
not change the number of authorized shares of the Company’s common stock under the Company’s articles of incorporation. Because
the number of issued and outstanding shares of common stock will decrease, the number of shares of common stock remaining available for
issuance will increase. Under our articles of incorporation, our authorized capital stock consists of 3,000,000,000 shares of common stock,
$0.001 par value per share, and 50,000,000 shares of preferred stock, par value $0.001 per share, of which 1 share has been designated
Series C Preferred Stock. The Company does not currently have any plans, proposal or arrangement to issue any of its authorized but unissued
shares of common stock. However, it is possible that some of these additional shares could be used in the future for various purposes
without further stockholder approval, except as such approval may be required in particular cases by our charter documents, applicable
law or the rules of any stock exchange or other system on which our securities may then be listed. These purposes may include: raising
capital, providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies, and
expanding the company’s business or product lines through the acquisition of other businesses or products.
By increasing the number of
authorized but unissued shares of common stock, the reverse split could, under certain circumstances, have an anti-takeover effect, although
this is not the intent of the Board of Directors. For example, it may be possible for the Board of Directors to delay or impede a takeover
or transfer of control of the Company by causing such additional authorized but unissued shares to be issued to holders who might side
with the Board of Directors in opposing a takeover bid that the Board of Directors determines is not in the best interests of the Company
or its stockholders. The reverse split therefore may have the effect of discouraging unsolicited takeover attempts. By potentially discouraging
initiation of any such unsolicited takeover attempts the reverse split may limit the opportunity for the Company’s stockholders
to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. The
reverse split may have the effect of permitting the Company’s current management, including the current Board of Directors, to retain
its position, and place it in a better position to resist changes that stockholders may wish to make if they are dissatisfied with the
conduct of the Company’s business. However, the Board of Directors is not aware of any attempt to take control of the
Company and the Board of Directors has not approved the reverse split with the intent that it be utilized as a type of anti-takeover device.
The Company’s articles of incorporation and by-laws do not have any anti-takeover provisions.
Fractional Shares
The Company will not issue
fractional shares in connection with the reverse stock split. Instead, any fractional share resulting from the reverse stock split will
be rounded up to the nearest whole share.
Accounting Consequences
The par value of the common
stock will remain unchanged at $0.001 per share after the reverse stock split. Also, the capital account of the Company will remain unchanged,
and the Company does not anticipate that any other accounting consequences will arise as a result of the reverse stock split.
Federal Income Tax Consequences
We believe that the United
States federal income tax consequences of the reverse stock split to holders of common stock will be as follows:
(i) Except as explained in
(v) below with respect to fractional shares, no income gain or loss will be recognized by a shareholder on the surrender of the current
shares or receipt of the certificate representing new post-split shares.
(ii) Except as explained in
(v) below with respect to fractional shares, the tax basis of the New Shares will equal the tax basis of the Old Shares exchanged therefore.
(iii) Except as explained
in (v) below, the holding period of the New Shares will include the holding period of the Old Shares if such Old Shares were held as capital
assets.
(iv) The conversion of the
Old Shares into the New Shares will produce no taxable income or gain or loss to us.
(v) The federal income tax
treatment of the receipt of the additional fractional interest by a shareholder is not clear and may result in tax liability not material
in amount in view of the low value of such fractional interest.
Our opinion is not binding
upon the Internal Revenue Service or the courts, and there can be no assurance that the Internal Revenue Service or the courts will accept
the positions expressed above.
THE ABOVE IS A BRIEF SUMMARY
OF THE EFFECT OF FEDERAL INCOME TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE REVERSE STOCK SPLIT, AND DOES NOT CONSTITUTE
A TAX OPINION. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH
SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN
COUNTRY IN WHICH THE STOCKHOLDER MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES.
THE COMPANY ADVISES EACH PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT AND
FOR REFERENCE TO APPLICABLE PROVISIONS OF THE CODE.
Procedure for Effecting the Reverse Stock Split
and Exchange of Stock Certificates
The reverse stock split will
be implemented by filing an amendment to the Company's articles of incorporation with the Secretary of State of the State of Nevada. We
will obtain a new CUSIP number for the new common stock effective at the time of the reverse split.
As of the effective date of
the reverse stock split, each certificate representing shares of common stock before the reverse stock split will be deemed, for all corporate
purposes, to evidence ownership of the reduced number of shares of common stock resulting from the reverse stock split. All options, warrants,
and other securities will also be automatically adjusted on the effective date.
The Company anticipates that
its transfer agent will act as the exchange agent for purposes of implementing the exchange of stock certificates. As soon as practicable
after the effective date, shareholders will be notified of the effectiveness of the reverse split. Shareholders of record will receive
a letter of transmittal requesting them to surrender their stock certificates for stock certificates reflecting the adjusted number of
shares as a result of the reverse stock split. Persons who hold their shares in brokerage accounts or "street name" will not
be required to take any further actions to effect the exchange of their certificates. Instead, the holder of the certificate will be contacted.
No new certificates will be
issued to a shareholder until the shareholder has surrendered the shareholder's outstanding certificate(s) together with the properly
completed and executed letter of transmittal to the exchange agent. Until surrender, each certificate representing shares before the reverse
stock split will continue to be valid and will represent the adjusted number of shares based on the exchange ratio of the reverse stock
split, rounded up to the nearest whole share. Shareholders should not destroy any stock certificate and should not submit any certificates
until they receive a letter of transmittal.