Proxy Statement - Other Information (preliminary) (pre 14c)

Date : 12/06/2018 @ 7:12PM
Source : Edgar (US Regulatory)
Stock : Cannapharmarx Inc. (PN) (CPMD)
Quote : 1.71  -0.05 (-2.84%) @ 6:00PM
Cannapharmarx Inc. share price Chart

Proxy Statement - Other Information (preliminary) (pre 14c)

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

 

Check the appropriate box:

 

[X] Preliminary Information Statement
   
[_] Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2))
   
[_] Definitive Information Statement

 

CANNAPHARMARX, INC.
(Name of Registrant As Specified In Charter)

 

Payment of Filing Fee (Check the appropriate box):

 

[X] 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:

 

 

 

 

     

 

 

Cannapharmarx, Inc.

 

NOTICE OF ACTION BY WRITTEN CONSENT

 

 

 

TO THE STOCKHOLDERS OF CANNAPHARMARX, INC.:

 

NOTICE IS HEREBY GIVEN that on December 5, 2018, Cannapharmarx, Inc., a Delaware corporation (the “Company,” “we,” “us,” or “our”), obtained written consent from stockholders holding a majority of the outstanding shares of voting securities of the Company entitled to vote on the following action:

 

To amend our Certificate of Incorporation to increase or authorized capital stock from 100,000,000 shares of Common Stock, par value $.0001 per share , to 300,000,000 shares of Common Stock having a par value of $.0001 per share.

 

The details of the foregoing action and other important information are set forth in the accompanying Information Statement. The board of directors of the Company (“Board of Directors”) has unanimously approved the above amendment to our Certificate of Incorporation (the “Amendment”).

 

Under Section 228 of the Delaware General Corporation Act (“DGCA”), unless otherwise provided in the Certificate of Incorporation, action by stockholders may be taken without a meeting, without prior notice, by written consent of the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize the action at a meeting at which all shares entitled to vote thereon were present and voted. There is no limitation in our Certificate of Incorporation that limits this right. On that basis, the stockholders holding a majority of the outstanding shares of capital stock entitled to vote approved the foregoing actions. No other vote or stockholder action is required. Under Delaware law, no dissenters’ or appraisal rights are afforded to our stockholders as a result of the prior stockholder approval of the actions described above which are described in detail in the accompanying Information Statement.

 

Please read this Information Statement carefully and in its entirety. Although you will not have an opportunity to vote on the approval of amendment to the Certificate of Incorporation to increase the authorized capital stock of the Company, this Information Statement contains important information about these actions.

 

We Are Not Asking You For A Proxy

And You Are Requested Not To Send Us A Proxy.

 

This information statement is being mailed on or about _____________, 201__ to all stockholders of record as of December 5, 2018.

 

  By Order of the Board of Directors
   
  James Samuelson, Chief Executive Officer

 

 

 

 

  2  

 

 

CANNAPHARMARX, INC.

2 Park Plaza

Suite 1200-B

Irvine, CA 92614

949-652-6838

 

INFORMATION STATEMENT

 

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 furnished to our stockholders in connection with the actions taken by our Board of Directors and the written consent of the holders of a majority of our outstanding voting securities with respect to the actions described below. On December 5, 2018, pursuant to Section 141(f) of the Delaware General Corporation Act, our Board of Directors unanimously approved these actions, subject to stockholder approval. In accordance with Section 228(a) of the DGCA, on or about December 5, 2018, we received written consents in lieu of a meeting from three stockholders beneficially holding an aggregate of 76,166,000 of our voting shares (“Majority Stockholders”), representing approximately 81.9% of the total shares eligible to vote as of December 5, 2018 (the “Record Date”), to approve an amendment to our Certificate of Incorporation, as amended, substantially in the form attached as Exhibit "A" to this Information Statement (the " Amendment "). The purpose of the Amendment is to increase our authorized capital stock from 100,000,000 shares of Common Stock having a par value of $0.0001 per share, to 300,000,000 shares of Common Stock. We also have 10,000,000 shares of Preferred Stock authorized, that will remain unchanged. This Information Statement is being sent to our stockholders to comply with the requirements of Section 14(c) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and shall constitute notice to our stockholders of action taken by written stockholder consent.

 

We have elected not to call a special meeting of our shareholders in order to eliminate the costs of and time involved in holding a special meeting. Our management has concluded that it is in the best interests of our Company to address this matter in the manner stated herein.

 

Shareholders of record at the close of business on December 5, 2018 (the " Record Date ") are entitled to receive this Information Statement. As the Amendment has been duly approved by shareholders holding a majority of our voting capital stock, approval or consent of the remaining shareholders is not required and is not being solicited hereby or by any other means.

 

The Amendment will become effective when filed with the Secretary of State of the State of Delaware. We anticipate that the filing of the Amendment will occur after dissemination of this Information Statement to our shareholders, which is expected to occur on or about January __, 2019.

 

We Are Not Asking You For A Proxy And You

Are Requested Not To Send Us A Proxy

 

The date of this Information Statement is January __, 2019

 

 

 

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Amendment to Certificate of Incorporation

 

On December 5, 2018, our Board of Directors, by written unanimous consent, authorized and recommended that our shareholders approve the Amendment. Also on December 5, 2018, shareholders representing a majority of our voting capital stock outstanding consented in writing to the Amendment. The purpose of the Amendment is to increase the number of authorized Common Shares from 100,000,000 shares, to 300,000,000 shares, par value $0.0001 per share. We are not amending the number of authorized Preferred Shares.

 

The Amendment will become effective upon filing of Certificate of Amendment to the Certificate of Incorporation (the “ Certificate of Amendment ”), attached hereto as Exhibit “A,” with the Secretary of State of the State of Delaware, but our Board of Directors reserves the right to not make such filing if it deems it appropriate not to do so.

 

Purpose and Effect of the Increase in Authorized Capitalization

( the “ Increase in Authorized Capitalization”)

 

As of the date of this Information Statement we have 1,814,259 shares of our authorized Common Stock available for issuance, not including up to 1.1 million shares that may be issued if the shareholders of a company we recently acquired elect to take their consideration in stock rather than cash. The Board of Directors does not believe this is an adequate number of shares to assure that there will be sufficient shares available for issuance in connection with possible future financings, possible future acquisition transactions, possible future awards under employee benefit plans, stock dividends, stock splits and other corporate purposes. Therefore, the Board of Directors approved the Increase in Authorized Capitalization as a means of providing it with the flexibility to act with respect to the issuance of Common Stock or securities exercisable for, or convertible into, Common Stock in circumstances which it believes will advance the interests of the Company and its stockholders without the delay of seeking an amendment to the Certificate of Incorporation at that time.

 

The Increase in Authorized Capitalization will not have any immediate effect on the rights of existing stockholders. However, under the laws of the State of Delaware, authorized, unissued and unreserved shares may be issued for such consideration (not less than par value) and for such purposes as the Board of Directors may determine without further action by the stockholders. The issuance of such additional shares may under certain circumstances result in the dilution of the equity or earnings per share of the existing stockholders.

 

While there are no assurances, our Board of Directors expects to undertake additional acquisitions in the near future, as well as corresponding private equity offering of our securities in the near future for the primary purpose of providing capital to allow the Company for such acquisitions and for working capital for the businesses to be acquired. The Board of Directors has no other current plans to authorize the issuance of additional shares of Common Stock or Preferred Stock or securities exercisable for, or convertible into, Common Stock or Preferred Stock. The approval of the Increase in Authorized Capitalization will give the Board of Directors more flexibility to pursue opportunities to engage in possible future acquisitions and financing transactions involving Common Stock or securities convertible into Common Stock. However, at this time there are no definitive agreements in place relating to any such transactions and no determination as to the type or amount of securities that might be offered has been made, should possible future transactions be pursued.

 

Certain Effects of the Increase in Authorized Capitalization

 

The Increase in Authorized Capitalization was not approved as a means of preventing or dissuading a change in control or a takeover of the Company. However, use of these shares for such a purpose is possible. For example, shares of authorized but unissued Common Stock or authorized but unissued Preferred Stock could be issued in an effort to dilute the stock ownership and voting power of persons seeking to obtain control of the Company or could be issued to purchasers who would support the Board of Directors in opposing a takeover proposal. In addition, the Increase in Authorized Capitalization may have the effect of discouraging a challenge for control or make it less likely that such a challenge, if attempted, would be successful. The Board of Directors and executive officers of the Company have no knowledge of any current effort to obtain control of the Company or to accumulate large amounts of capital stock of the Company.

 

 

 

  4  

 

 

The holders of Common Stock are not entitled to preemptive rights with respect to the issuance of additional shares of Common Stock or securities convertible into or exercisable for Common Stock. Accordingly, the issuance of additional shares of Common Stock or such other securities might dilute the ownership and voting rights of stockholders. The Increase in Authorized Capitalization does not change the terms of the Common Stock or Preferred Stock as set forth in the Company’s Certificate of Incorporation, as amended. The additional shares of Common Stock authorized by the Increase in Authorized Capitalization Stock will have the same voting rights, the same rights to dividends and distributions, and will be identical in all other respects to the shares of Common Stock now authorized.

 

For this reason our Board of Directors has chosen to adopt and recommend the Increase in Authorized Capitalization.

 

Manner of Effecting the Amendments

 

The Amendment will be effected by the filing of Certificate of Amendment to our Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware. The Amendment will become effective on the date of filing of the Certificate of Amendment unless we specify otherwise (the " Effective Date ").

 

Shareholders ARE NOT REQUIRED to return their certificates to have them re-issued by the Transfer Agent. All certificates heretofore issued will continue to represent fully paid and non-assessable shares of the Common Stock and/or Preferred Stock of the Company. The Amendment will not change any of the terms of our Common Stock or Preferred Stock and holders thereof will have the same voting rights and rights to dividends and distributions and each shareholder's percentage ownership of Company will not be altered.

 

A copy of the Certificate of Amendment to our Certificate of Incorporation is attached to this Information Statement as Exhibit “A.”

 

Appraisal Rights and Vote Required

 

No Rights of Appraisal

 

Under the laws of the State of Delaware, shareholders are not entitled to appraisal rights with respect to approval of the Amendment and we will not independently provide shareholders with any such right.

 

Vote Required

 

The Amendment requires the approval of the holders of a majority of the shares entitled to vote at a shareholder meeting on the Record Date of December 5, 2018. Holders of our Common Stock are entitled to one vote per share and holders of our Series “A” Convertible Preferred Stock are entitled to 1,250 votes per share on all matters submitted to a vote. There were 17,960,741 shares of our Common Stock and 60,000 shares of Series “A” Convertible Preferred Stock issued and outstanding as of the Record Date. Each share of Series “A” Convertible Preferred Stock is convertible into 1,250 shares of Common Stock. On December 5, 2018, shareholders representing 75,166,000 shares (81.9%) entitled to vote at a meeting, which is a majority of the shares outstanding, consented in writing to the Amendment.

 

Security Ownership Of Certain

Beneficial Owners And Management

 

The following table sets forth certain information regarding ownership of our Company's Common Stock as of December 5, 2018, the Record Date by (i) each person known to the Company to own beneficially more than 5% of our Common Stock, (ii) each director, (iii) each executive officer, and (iv) all directors and executive officers as a group. Share ownership is deemed to include all shares that may be acquired through the exercise or conversion of any other security immediately or within the next sixty days. Such shares that may be so acquired are also deemed outstanding for purposes of calculating the percentage of ownership for that individual or any group of which that individual is a member. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

 

 

 

  5  

 

 

Title of Class   Name of Beneficial Owner   Amount and Nature Of Beneficial Ownership     Percent Of Class  
Common and Series A Preferred  

Gary Herick (1)

2 Park Plaza

Suite 1200B

Irvine, CA 92614

    26,166,000       28.1%  
Series A Preferred  

James Samuelson (1)

2 Park Plaza

Suite 1200B

Irvine, CA 92614

    25,000,000       26.9%  
Series A Preferred  

Matt Nicosia (1)

2 Park Plaza

Suite 1200B

Irvine, CA 92614

    25,000,000       26.9%  
Common and Series A Preferred   All Officers and Directors as a Group (3 person)     76,166,000       81.9%  

 

_______________________

  (1) Officer and/or Director of our Company.
  (2) Includes 20,000 shares of Series A Convertible Preferred Share will entitle the holder thereof to 1,250 votes on all matters submitted to a vote of the shareholders.
  (3) Includes 826,000 shares of our Common Stock owned by companies owned and controlled by Mr. Herick, as well as family members. Mr. Herick disclaims ownership of 300,000 of these shares.

 

Other Matters

 

No matters other than those discussed in this Information Statement are contained in the written consent signed by the holders of a majority of the voting power of the Company.

 

Interests Of Certain Persons In Or Opposition To Matters Acted Upon

 

No officer or director of the Company has any substantial interest in the matters acted upon, other than his or her role as an officer or director of the Company. No director of the Company opposed the action taken by the Company set forth in this Information Statement.

 

Proposal By Security Holders

 

No security holder has requested the Company to include any proposal in this Information Statement.

 

Additional Information

 

The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and in accordance therewith files reports, proxy statements and other information including annual and quarterly reports on Form 10-K and Form 10-Q (the “1934 Act filings”) with the Securities and Exchange Commission (the “ Commission ”). Reports and other information filed by the Company can be inspected and copied at the public reference facilities maintained at the Commission at 100 F Street NW, Washington, D.C. 20549. Copies of such material can be obtained upon written request addressed to the Commission, Public Reference Section, 100 F Street NW, Washington D.C. 20549, at prescribed rates. The Commission maintains a website on the Internet (http://www.sec.gov) that contains the 1934 Act Filings of issuers that file electronically with the Commission through the Electronic Data Gathering, Analysis and Retrieval System (“ EDGAR ”).

 

 

 

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Expense of Information Statement

 

The expenses of mailing this Information Statement will be borne by the Company, including expenses in connection with the preparation and mailing of this Information Statement and all documents that now accompany or may hereafter supplement it. It is contemplated that brokerage houses, custodians, nominees and fiduciaries will be requested to forward the Information Statement to the beneficial owners of our Common Stock held of record by such persons and that our Company will reimburse them for their reasonable expenses incurred in connection therewith.

 

Delivery of Documents to Security Holders Sharing an Address

 

Only one Information Statement is being delivered to multiple security holders sharing an address unless the Company has received contrary instructions from one or more of the security holders. The Company shall deliver promptly upon written or oral request a separate copy of the Information Statement to a security holder at a shared address to which a single copy of the documents was delivered. A security holder can notify the Company that the security holder wishes to receive a separate copy of the Information Statement by sending a written request to the Company at the address below or by calling the Company at the number below and requesting a copy of the Information Statement. A security holder may utilize the same address and telephone number to request either separate copies or a single copy for a single address for all future information statements and annual reports.

 

Company Contact Information

 

All inquiries regarding our Company should be addressed to our Company’s principal executive office:

 

Cannapharmarx, Inc.

2 Park Plaza

Suite 1200B

Irvine, CA 92614

 

 

 

 

 

BY ORDER OF THE BOARD OF DIRECTORS

 

_______________________________________

James Samuelson, Chief Executive Officer

 

 

 

  7  

 

EXHIBIT “A’

 

CANNPHARMARX, INC.

 

AMENDMENT TO CERTIFICATE OF INCORPORATION

 

ARTICLE IV OF THE CANNAPHARMARX, INC. CERTIFICATE OF INCORPORATION IS HEREBY AMENDED TO READ AS FOLLOWS:

 

CAPITAL STOCK

 

A.       The amount of the total authorized capital stock of the corporation shall be three hundred ten million (310,000,000) shares consisting of Three Hundred Million (300,000,000) shares of Common Stock, $0.0001 par value per share, and Ten Million (10,000,000) shares of Preferred Stock, par value $0.0001 per share, the designations, preferences, limitations and relative rights of the shares of each such class are as follows:

 

1. Common Shares.

 

(a) The rights of holders of the Common Shares to receive dividends or share in the distribution of assets in the event of liquidation, dissolution or winding up of the affairs of the Corporation shall be subject to the preferences, limitations and relative rights of the Preferred Shares fixed in the resolution or resolutions which may be adopted from time to time by the Board of Directors of the corporation providing for the issuance of one or more series of the Preferred Shares.

 

(b) The holders of the Common Shares shall have unlimited voting rights and shall constitute the sole voting group of the corporation, except to the extent any additional voting groups or groups may hereafter be established in accordance with the Colorado Business Corporation Act, and shall be entitled to one vote for each share of Common Shares held by them of record at the time for determining the holders thereof entitled to vote.

 

The balance of the Certificate of Incorporation shall remain as previously stated.

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