The holders of a majority of
our issued and outstanding Voting Stock consented to the Corporate Actions on
June 25, 2018
.
The Corporate Actions were approved by Stockholders that owned 105,611,489 shares of our Common Stock and from stockholders that
owned 5,930,200 shares of our Series B Preferred that have the equivalent cumulative voting rights of 6,035,811,489 which represents
approximately 58.3% of our voting rights.
No action is required by you. The accompanying
Information Statement is furnished to inform our Stockholders of the actions described above before it takes effect in accordance
with Rule 14c-2 promulgated under the Exchange Act. This Information Statement is being first mailed to you on or about
June
29
, 2018
.
You are urged to read the Information Statement carefully in its
entirety. However, no action is required on your part in connection with the Information Statement or the actions taken by the
holders of Voting Stockholders, including with respect to the approval of the amendments to the Articles of Incorporation.
PLEASE NOTE THAT THE COMPANY’S
CONTROLLING STOCKHOLDERS HAVE VOTED TO APPROVE THE CORPORATE ACTION. THE NUMBER OF VOTES HELD BY THE STOCKHOLDERS EXECUTING THE
WRITTEN CONSENT IS SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT FOR THESE MATTERS UNDER APPLICABLE LAW AND THE COMPANY’S
CHARTER, SO NO ADDITIONAL VOTES WILL CONSEQUENTLY BE NEEDED TO APPROVE THESE ACTIONS.
Information
Statement Costs
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 voting stock
held of record by them and will reimburse such persons for their reasonable charges and expenses in connection therewith.
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN.
PLEASE
NOTE THAT THE COMPANY’S CONTROLLING STOCKHOLDERS HAVE VOTED TO APPROVE THE CORPORATE ACTION. THE NUMBER OF VOTES HELD BY
THE STOCKHOLDERS EXECUTING THE CONSENT IS SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT FOR SUCH MATTERS UNDER APPLICABLE
LAW AND THE COMPANY’S CHARTER, SO NO ADDITIONAL VOTES WILL BE NEEDED TO APPROVE THIS ACTION.
FORWARD-LOOKING
STATEMENTS
Certain
statements included in this Information Statement regarding the Company are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the “
Securities Act
”), and Section 21E of the Exchange Act.
This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations,
are generally identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend” or “project” or the
negative of these words or other variations on these words or comparable terminology. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various factors. In light of these risks and uncertainties,
there can be no assurance that the forward-looking statements contained in this Information Statement will in fact occur. We are
not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether
as a result of new information, future events or otherwise.
VOTE
REQUIRED TO APPROVE THE PROPOSAL
As
of the Record Date, there were 357,591,331 shares of Common Stock issued and outstanding and 10,000,000 shares of Series B Preferred
with each share of Series B Preferred having the equivalent voting rights of 1,000 shares of Common Stock. The affirmative vote
of a majority of the shares of Common Stock and Preferred Stock entitled to vote is required for approval of the Corporate Actions.
CONSENTING
STOCKHOLDERS
On
June 25, 2018
, stockholders
holding 58.3% o
f
the voting power of the outstanding capital stock consented in writing to the approval of the Corporate Actions.
Under
Section 14(c) of the Exchange Act, the Corporate Actions may not be completed until 20 calendar days after the date of distribution
of this Information Statement to our stockholders.
CORPORATE
ACTION 1: APPROVAL OF ELECTION OF DIRECTORS
There
are currently four (4) members of the Company’s Board of Directors that have been elected to serve as directors for the ensuing
year or until their successors have been elected and qualified. The Board has nominated Arik Maimon, Michael De Prado, Adiv Baruch,
Natali Dadon and Orlando Taddeo (the “
Nominees
”) as Directors on June 25, 2018, and the Consenting Stockholders
have, on June 25, 2018, elected each of the Nominees.
Nominees
for Election as Directors
Certain
information relating to each director nominee is set forth below:
Name
|
|
Age
|
|
Position
|
Arik Maimon
|
|
42
|
|
Chief Executive
Officer and Director
|
|
|
|
|
|
Michael De
Prado
|
|
47
|
|
President,
Interim Chief Financial Officer and Director
|
|
|
|
|
|
Adiv
Baruch
|
|
55
|
|
Director
|
|
|
|
|
|
Natali
Dadon
|
|
30
|
|
Director
|
|
|
|
|
|
Orlando
Taddeo
|
|
44
|
|
Director
Nominee
|
Directors,
Executive Officers, Promoters and Control Persons
Arik
Maimon
is a founder of the Company and has served as its CEO and Director since its inception. In addition to co-founding
the Company and its Next CALA and NxtGn subsidiaries, Mr. Maimon founded the Company’s subsidiaries Next Mobile, and M&M.
Prior to founding the Company and its subsidiaries, Mr. Maimon founded and ran successful telecommunications companies operating
primarily in the United States and Mexico. In 1998, Mr. Maimon founded and ran a privately-held wholesaler of long distance telecommunications
services which, later, under Mr. Maimon’s management, grew from a start up to a profitable enterprise with more than $100
million in annual revenues. Mr. Maimon serves on the Company’s board of directors due to the perspective and experience
he brings as our co-founder, Chairman, CEO, and as our largest stockholder.
Michael
A. De Prado
is a founder of the Company and has served as its President and Director since its inception. In addition
to co-founding the Company, Mr. De Prado co-founded the Company’s Next CALA subsidiary. Prior to founding the Company and
Next CALA, Mr. De Prado spent 20 years in executive positions at various levels of responsibility in the banking, technology,
and telecommunications industries. Mr. De Prado was Area Vice President of Sales - Southeast US Service Providers at Lucent Technologies
Bell Labs. As President of Sales at telecommunications company Radiant/Ntera, Mr. De Prado grew Radiant/Ntera’s sales to
more than $200 million in annual revenues. At theglobe.com, Mr. De Prado served as President, reporting directly to Michael S.
Egan. Mr. De Prado serves on the Company’s board of directors due to the perspective and experience he brings as our co-founder,
President, Interim CFO and COO.
Adiv
Baruch
has been a director of the Company since May 2016. Mr. Baruch serves as Chairman of Jerusalem Technology Investments
Ltd. (“JTI”), which is engaged in the business of identifying, investing in, and mentoring emerging software and medical
devices technology companies. JTI is a publicly-traded company whose shares are listed on the Tel-Aviv Stock Exchange. He also
currently serves as Chairman of Maayan Ventures, a platform for investments in innovative technology companies, as President of
Nyotron, a global cyber technology company, and as Chairman of Covertix, whose patented technology delivers real-time, non-invasive
control, protection, and tracking of confidential files. Mr. Baruch has served as a director of the Bank of Jerusalem, and he
served as CEO of BOS Better Online Solutions, which, under this leadership, grew into a highly-successful company traded on the
NASDAQ market (“NASDAQ”) under the symbol BOSC. Throughout his career, he has championed development and support of
new talent in the high tech and entrepreneurial arenas. Mr. Baruch is the Chairman of Ness College, which is a leader in educating
Israeli technology professionals and entrepreneurs.
Natali
Dadon
has served as a Director of the Company since its inception. Prior to joining the Company’s board of
directors in a non-executive capacity, Ms. Dadon served for five years as the Vice President for Sales of a privately-held wholesale
long distance telecommunications services provider with more than $100 million in annual revenues. Ms. Dadon serves on the Company’s
board of directors due to the perspective and experience she brings as a seasoned telecommunications executive and one of the
first investors in Next CALA.
Orlando
Taddeo
is a nominee to serve as a Director of the Company. Mr. Taddeo founded and ran a telecommunication’s company
Limecom Inc. in 2006: The Company in 2017 was successfully sold to NGH. In addition to founding Limecom, Mr. Taddeo founded the
Irish Holding Company “Heritage Ventures Ltd” based in Ireland. He also serves as Director of Heritage and ran successful
all the companies being part of the Holding’s portfolio of various sectors. Among those companies is Medii8 who is an innovative
technology platform (PaaS). Throughout his career in the telecommunications industry has earned him the experience that will be
beneficial to him to be a contributing member of the Board of Director of the Company once elected or appointed.
Family
Relationships
Natali
Dadon and Arik Maimon are siblings.
Indemnification
of Directors and Officers
Our
Articles of Incorporation and Bylaws both provide for the indemnification of our officers and directors to the fullest extent
permitted by Florida law and the BCA.
Limitation
of Liability of Directors
Pursuant
to the BCA, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation
of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives
an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified
and does not affect any Director’s liability under federal or applicable state securities laws. We have agreed to indemnify
our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he
acted in good faith and in a manner he believed to be in our best interests.
Election
of Directors and Officers
Directors
are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified.
Officers are appointed to serve until the meeting of the Board of Directors following the next annual meeting of stockholders
and until their successors have been elected and qualified.
Involvement
in Certain Legal Proceedings
No
Executive Officer or Director of the Company has been the subject of any Order, Judgment, or Decree of any Court of competent
jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him/her
from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director
or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing
any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
No
Executive Officer or Director of the Company has been convicted in any criminal proceeding (excluding traffic violations) or is
the subject of a criminal proceeding which is currently pending.
No
Executive Officer or Director of the Company is the subject of any pending legal proceedings.
Audit
Committee and Financial Expert
We
do not have an Audit Committee. Our directors perform some of the same functions of an Audit Committee, such as: recommending
a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditor’s
independence, the financial statements and their audit report; and reviewing management’s administration of the system of
internal accounting controls. The Company does not currently have a written audit committee charter or similar document.
We
do not have a financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further,
because of our start-up operations, we believe the services of a financial expert are not warranted.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers and
directors, and persons who beneficially own more than ten percent of an issuer’s common stock, which has been registered
under Section 12 of the Exchange Act, to file initial reports of ownership and reports of changes in ownership with the SEC. Based
upon a review of the copies of such forms furnished to us and written representations from our executive officers and Directors,
we believe that as of the date of this filing they were all current in their filings.
Corporate
Governance
Nominating
Committee
We
do not have a Nominating Committee or Nominating Committee Charter. Our Board of Directors performs some of the functions associated
with a Nominating Committee. We have elected not to have a Nominating Committee in that we are an initial-stages operating company
with limited operations and resources.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND
RELATED STOCKHOLDER MATTERS
The
following table sets forth, as of December 31, 2017, certain information with respect to the beneficial ownership of shares of
our common stock by: (i) each person known to us to be the beneficial owner of more than five percent (5%) of our outstanding
shares of common stock, (ii) each director or nominee for director of our Company, (iii) each of the executives, and (iv) our
directors and executive officers as a group. Unless otherwise indicated, the address of each shareholder is c/o our company at
our principal office address:
Beneficial
Owner
|
|
Address
|
|
Percent
of
Class (**)
|
|
|
Number
of
Shares
Beneficially
Owned (*)
|
|
|
|
|
|
|
|
|
|
|
Arik
Maimon
|
|
19
W. Flagler St, Suite 507
|
|
|
18.9
|
%
|
|
|
64,589,888
|
|
CEO
|
|
Miami, FL
33130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael De
Prado
|
|
19 W. Flagler
St, Suite 507
|
|
|
4.7
|
%
|
|
|
15,934,211
|
***
|
President
and CFO
|
|
Miami, FL
33130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adiv Baruch
|
|
19 W. Flagler
St, Suite 507
|
|
|
1.0
|
%
|
|
|
3,333,334
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natali Dadon
|
|
4019 194
th
Trail
|
|
|
0.06
|
%
|
|
|
2,064,781
|
|
Director
|
|
Golden Beach,
FL 33160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orlando Taddeo
|
|
19 W. Flagler
St, Suite 507
|
|
|
11.1
|
%
|
|
|
38,000,000
|
|
President
of Limecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harrison
Vargas
|
|
10007 Vestal
Place
|
|
|
9.1
|
%
|
|
|
31,293,253
|
|
|
|
Coral Springs,
Florida 33071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Directors
and Officers as a Group (4 persons)
|
|
|
|
|
36.2
|
%
|
|
|
123,922,214
|
|
(*) Beneficial
ownership is determined in accordance with the rules of the SEC which generally attribute Beneficial ownership of securities to
persons who possess sole or shared voting power and/or investment power with respect to those securities. Unless otherwise indicated,
voting and investment power are exercised solely by the person named above or shared with members of such person’s household.
This includes any shares such person has the right to acquire within 60 days.
(**) Percent
of class is calculated on the basis of the number of shares outstanding on December 31, 2017 of 342,118,912.
(***) Excludes
8,9000,000 common shares owing for the settlement of a related party payable yet to be issued. When issued, these shares will
represent an additional 2.4% ownership.
Changes
in Control
There
are no arrangements, known to the Company, including any pledge by any person of securities of the Company, the operation of which
may at a subsequent date result in a change in control of the Company.
Director
Independence
We
currently do not have any independent directors, as the term “independent” is defined in Section 803A of the NYSE
Amex LLC Company Guide. Since the OTC Markets does not have rules regarding director independence, the Board makes its determination
as to director independence based on the definition of “independence” as defined under the rules of the New York Stock
Exchange (“NYSE”) and American Stock Exchange (“Amex”).
CORPORATE
ACTION 2: INDEPENDENT ACCOUNTANTS
On
February 23, 2018, the Company appointed Marcum LLP (“Marcum”) as its new independent registered public accounting
firm to audit the Company’s consolidated financial statements as of and for the year ended December 31, 2017, and such appointment
was approved by the Board. Based on the Board’s review and discussions it was determined that the decision to retain Marcum
will suit the Company’s needs for an independent registered public accounting firm. Marcum was appointed for year end 2018.
The
Consenting Stockholders have, on June 25, 2018, ratified the appointment of Marcum LLP as the company’s auditors for the
year ending in December 31, 2018.
On
December 21, 2017, the Company voted unanimously to dismiss Assurance Dimensions (“AD”) as the Company’s independent
registered public accounting firm. The decision to dismiss AD was in no way due to a lack of confidence or quality of work by
AD. The Board was satisfied with the work done by AD and had no issues with their work product.
The
audit reports of AD on the consolidated financial statements of the Company for each of the two most recent fiscal years ended
December 31, 2017 and December 31, 2016 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles.
During
the Company’s most recent fiscal year ended December 31, 2017 and during the subsequent interim period from January 1, 2018
through February 23, 2018 (i) there were no disagreements with AD on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedures that, if not resolved to AD’s satisfaction, would have caused AD to
make reference to the subject matter of the disagreement in connection with its reports and (ii) there were no “reportable
events” as defined in Item 304(a)(1)(v) of Regulation S-K.
During
the Company’s fiscal years ended December 31, 2017 and 2016, and the subsequent interim period through February 23 2018,
neither the Company nor anyone on its behalf has consulted with Marcum regarding (i) the application of accounting principles
to a specific transaction, either completed or proposed or (ii) the type of audit opinion that might be rendered on the Company’s
financial statements and, neither a written report nor oral advice was provided to the Company that Marcum concluded was an important
factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issues, or (iii) any
matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions),
or (iv) any “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).
CORPORATE
ACTION 3: APPROVAL OF THE AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO EFFECT A REVERSE SPLIT OF COMMON STOCK
Reasons
to Effect a Reverse Split
Potential
for listing on NASDAQ
Our
Board and the Shareholders have approved an amendment to our Articles of Incorporation to effect a reverse stock split of the
Company’s Common Stock at a ratio of not less than one-for-one hundred (1:100) and not more than one-for-three hundred (1:300)
to be determined by the Board in its discretion, without any further action by stockholders, or to not proceed with a reverse
stock split if it determines that a reverse stock split is no longer in the best interest of the Company and its stockholders.
The new language in the Articles of Incorporation relative to any split is set forth in Annex A to this Information Statement.
The Board and the Shareholders believe that a reverse split may be desirable because it could assist the Company in meeting the
requirements for initial listing on NASDAQ by helping to raise the bid or closing price for our Common Stock. Currently, our Common
Stock is quoted on the OTCQB, which is not a national securities exchange. One of the key requirements for initial listing on
NASDAQ is that our Common Stock must have met certain minimum bid or closing prices, generally ranging between $2 per share and
$4 per share, depending on whether other optional listing requirements are met. Our Common Stock currently does not meet these
minimum bid or closing price requirements.
If
our Common Stock is listed on NASDAQ, the liquidity of our Common Stock and coverage of our company by security analysts and media
could be increased, which could result in higher prices for our Common Stock than might otherwise prevail, lowered spreads between
the bid and asked prices for our Common Stock and lowered transaction costs inherent in trading such shares. Additionally, certain
investors will only purchase securities that are listed on a national securities exchange, and such listing could thus increase
our ability to raise funds through the issuance of our Common Stock or other securities convertible into our Common Stock. Moreover,
listing our shares on a national securities exchange is a requirement for using Form S-3, a short form registration statement,
for registering the issuance of our shares or the resale of existing shares and increase our ability to do so.
In
addition, because our Common Stock is traded on the OTCQB and has a trading price below $5.00 per share, trading in our Common
Stock is currently subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure
by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any equity security that
is traded other than on a national securities exchange and has a market bid price of less than $5.00 per share, subject to certain
exceptions). The additional burdens imposed upon broker-dealers by such requirements can discourage broker-dealers from making
a market, seeking or generating interest in our Common Stock and otherwise effecting transactions in our Common Stock, which can
limit the market liquidity of our Common Stock and the ability of investors to trade our Common Stock. The burdens could be removed
if our Common Stock was traded on a national securities exchange and has a market bid price of more than $5.00 per share.
The
primary purpose of a reverse split would be to increase the market bid and closing price of our Common Stock. We believe that
a reverse split could initially help increase the market bid price of our Common Stock to at least the amount required for initial
listing by NASDAQ. However, the effect of a reverse split on the market bid price of our Common Stock cannot be predicted with
any certainty, and the history of similar reverse splits for companies in similar circumstances is varied. There can be no assurance
that:
|
●
|
the
bid or closing price of our Common Stock would rise in proportion to the reduction in
the number of shares of our Common Stock outstanding following the reverse split;
|
|
●
|
even
if the reverse split succeeds in initially raising the bid or closing price of our Common
Stock, it would be successful in maintaining the market bid price of our Common Stock
above the levels needed for successfully applying for listing on NASDAQ for any extended
period of time;
|
|
●
|
even
if the Company satisfied NASDAQ’s initial minimal bid or closing price standard,
the Company would be able to initially meet or continue to meet NASDAQ’s other
quantitative continued listing criteria; or
|
|
●
|
our
Common Stock would not be delisted by NASDAQ for other reasons.
|
Additionally,
even though the reverse split, by itself, would not impact the Company’s assets or prospects, the reverse split could be
followed by a decrease in the aggregate market value of our Common Stock. The market bid price of our Common Stock may be based
also on other factors that may be unrelated to the number of shares outstanding, including our future performance.
Potential
Increased Investor Interest
The
Board also believes that a higher share price for our Common Stock may help generate investor interest in the Company. The current
low price of our Common Stock may mean that it does not appeal to brokerage firms that are reluctant to recommend lower priced
securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions,
as a percentage of the total transaction, tend to be higher for such stocks. Furthermore, various regulations and policies restrict
the ability of stockholders to borrow against or “margin” low-priced stock and declines in the stock price below certain
levels may trigger unexpected margin calls. Moreover, the analysts at many brokerage firms do not monitor the trading activity
or otherwise provide coverage of lower priced stocks. Finally, we believe that most investment funds are reluctant to invest in
lower priced stocks. It should be noted that the liquidity of our Common Stock may be adversely affected by the reverse split,
since fewer shares will be outstanding after the reverse split. However, the Board is hopeful that the anticipated higher market
bid price will reduce, to some extent, the negative effects on the liquidity and marketability of the Common Stock inherent in
some of the policies and practices of institutional investors and brokerage houses described above.
Potential
Effects of Proposed Reverse Split
General
When
the Company files the Company’s articles of amendment (“Articles of Amendment”) to its Articles of Incorporation
effecting the reverse split on the Effective Date, each holder of our Common Stock will own a reduced number of shares of our
Common Stock. However, a reverse split will affect all holders of our Common Stock uniformly and will not affect any stockholder’s
percentage ownership interests in the Company or proportionate voting power. In lieu of issuing fractional shares, each holder
of our Common Stock who would otherwise have been entitled to a fraction of a share upon surrender of such holder’s certificates
will be entitled to receive one full share in lieu of the fraction of a share.
Effect
on Authorized and Outstanding Shares
Following
the decrease in the number of Issued & Outstanding Shares as discussed below, the Company will be authorized to issue a maximum
of 360,000,000 shares of Common Stock. As of June 29, 2018, there were 357,591,331 shares of Common Stock issued and outstanding.
Although the number of authorized shares of Common Stock will not change as a result of the reverse split, the number of shares
of our Common Stock outstanding will be reduced to the number of Common Stock listed on the chart below depending on the size
of the reverse split.
Reverse Split
|
|
1:100
|
|
|
1:150
|
|
|
1:200
|
|
|
1:250
|
|
|
1:250
|
|
|
1:300
|
|
Common Stock outstanding post reverse split
|
|
|
3,576,286
|
|
|
|
2,384,375
|
|
|
|
1,788,452
|
|
|
|
1,430,886
|
|
|
|
1,430,886
|
|
|
|
1,192,519
|
|
The
reverse stock split of the Common Stock will have no effect on the number of Series B Preferred outstanding.
The
Articles of Amendment will not change the terms of our Common Stock. The post-split shares of Common Stock will have the same
voting rights and rights to dividends and distribution and will be identical in all other respects to the Common Stock now outstanding.
Each stockholder’s percentage ownership of Common Stock will not be altered. The Common Stock will remain fully paid and
non-assessable. The reverse split is not intended as a “going private transaction” covered by Rule 13e-3 under the
Securities and Exchange Act of 1934, as amended. We plan to continue to comply with the periodic reporting requirements of the
Exchange Act.
Following
the Effective Date, it is not anticipated that the Company’s financial condition, the percentage ownership of management
or any aspect of the Company’s business would materially change as a result of a reverse split.
Effect
on Number of Shareholders of Record
The
reverse split will not change the number of shareholders of record.
Potential
Odd Lots
A
reverse split could result in some stockholders holding less than 100 shares of Common Stock and as a consequence may incur greater
costs associated with selling such shares. Brokerage commissions and other costs of transactions in odd lots may be higher, particularly
on a per-share basis than the cost of transactions in even multiples of 100 shares.
Accounting
Matters
A
reverse split would not affect the par value of our Common Stock. As a result, on the Effective Date, the stated capital on our
balance sheet attributable to the Common Stock will be reduced in proportion to the fraction by which the number of shares of
Common Stock are reduced, 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 retroactively increased for each period
because there will be fewer shares of our Common Stock outstanding.
Potential
Anti-Takeover Effect
While
the Board believes it advisable to authorize an approve the reverse stock split for the reasons set forth above, the Board is
aware that the increase in the number of unissued shares of Common Stock that may be issued after the reverse split may have a
potential anti-takeover effect. Our ability to issue additional shares could be used to thwart persons, or otherwise dilute the
stock ownership of stockholders seeking to control the Company. A reverse stock split is not being recommended by the Board as
part of an anti-takeover strategy.
Options
and Warrants
On
the Effective Date of any split, all outstanding options and warrants will be adjusted to reflect the reverse split. The number
of shares of Common Stock that the holders of outstanding options and warrants may purchase upon exercise of their options and
warrants may decrease, and the exercise prices of such options and warrants will increase, in proportion to the fraction by which
the number of shares of Common Stock underlying such options and warrants are reduced as a result of the reverse split, resulting
in the same aggregate price being required to be paid as would have been paid immediately preceding the reverse split.
Increase
of Shares of Common Stock Available for Future Issuance
Because
our authorized Common Stock will not be reduced the overall effect will be an increase in our authorized but not outstanding or
reserved shares of Common Stock. These shares may be issued by our Board in its discretion. Any future issuances will have the
effect of diluting the percentage of stock ownership and voting rights of the present holders of Common Stock.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE
.
Beginning
on the Effective Date, each certificate representing pre-reverse split shares will be deemed for all corporate purposes to evidence
ownership of post-reverse split shares. Shares held by a stockholder will automatically reflect the new quantity of shares based
on the ratio of the reverse split.
On
or after the Effective Time, we will mail a letter of transmittal to each stockholder. Each stockholder will be able to obtain
a certificate evidencing his, her or its post-reverse split shares only by sending the exchange agent (who will be the Company’s
transfer agent) the stockholder’s old stock certificate(s), together with the properly executed and completed letter of
transmittal and such evidence of ownership of the shares as we may require. Stockholders will not receive certificates for post-reverse
split shares unless and until their old certificates are surrendered. Stockholders should not forward their certificates to the
exchange agent until they receive the letter of transmittal, and they should only send in their certificates with the letter of
transmittal. The exchange agent will send each stockholder, if elected in the letter of transmittal, a new stock certificate after
receipt of that stockholder’s properly completed letter of transmittal and old stock certificate(s). A stockholder that
surrenders his, her or its old stock certificate(s) but does not elect to receive a new stock certificate in the letter of transmittal
will be deemed to have requested to hold that stockholder’s shares electronically in book-entry form with our transfer agent.
Certain
of our registered holders of 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 a statement reflecting the number of shares registered in their accounts. If a stockholder holds registered shares in book-entry
form with our transfer agent, the stockholder may return a properly executed and completed letter of transmittal.
Stockholders
who hold shares in street name through a nominee (such as a bank or broker) will be treated in the same manner as stockholders
whose shares are registered in their names, and nominees will be instructed to effect the reverse split for their beneficial holders.
However, nominees may have different procedures and stockholders holding shares in street name should contact their nominees.
Stockholders
will not have to pay any service charges in connection with the exchange of their certificates.
Fractional
Shares
We
will not issue fractional certificates for post-reverse split shares in connection with the reverse split. In lieu of issuing
fractional shares, each holder of Common Stock who would otherwise have been entitled to a fraction of a share will be entitled
to receive one full share for the fraction of a share to which he is entitled.
Federal
Income Tax Consequences of the Reverse Split
The
following discussion is a summary of certain federal income tax consequences of the reverse 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 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 split shares of the Common Stock resulting from implementation of the reverse split will include the
stockholder’s respective holding periods for the pre-reverse split shares. Each stockholder should consult his, her or its
own tax advisor regarding the U.S. federal, state, local and foreign income and other tax consequences of the Reverse Split.
Effectiveness
of Articles of Amendment
The
Articles of Amendment effecting a reverse split will be in substantially the form attached to this Information Statement as Annex
A and will become effective upon the acceptance for record of the Articles of Amendment with the Secretary of State of Florida
which will occur no earlier than 20 days after this Information Statement has first been sent to the Company’s stockholders.
No
Dissenter’s Rights
Under
BCA 607.1302, our dissenting stockholders are not entitled to appraisal rights with respect to the approval of the Corporate Actions,
and we will not independently provide our stockholders with any such right.
Interest
of Certain Persons In or Opposition to Matters to be Acted Upon
We
are not aware of any substantial interest, direct or indirect, by our executive officers or directors that is in favor of or in
opposition to any of the Corporate Actions.
CORPORATE
ACTION 4: APPROVAL OF THE AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO AUTHORIZE BLANK CHECK PREFERRED STOCK
Authorization
of Blank Check Preferred Stock
The
Board has, on June 25, 2018, and the Consenting Stockholders have, on June 25, 2018, approved an amendment to the Articles of
Incorporation authorizing fifty million (50,000,000) Blank Check Preferred Stock. Upon filing the Articles of Amendment with the
Florida Secretary of State the Company will authorize the issuance of up to an additional 50,000,000 shares of preferred stock,
$0.001 par value (“
Preferred Stock
”). At the time of incorporation, the Company was authorized to issue 60,000,000
shares of preferred stock with a par value of $0.001 of which 50,000,000 was designated as Series A Preferred and 10,000,000 as
Series B Preferred.
The
50,000,000 shares of Series A Preferred were issued to shareholders and were converted into Common Stock prior to the merger of
the Company effected January 1, 2016. The Company has 10,000,000 shares of Preferred Stock designated as Series B Preferred. The
Series B Preferred is not convertible into Common Stock at any time and is not entitled to dividends of any kind or liquidation,
dissolution rights of any kind. The holders of Series B Preferred are entitled to 1,000 votes for each share of Series B Stock
that is held when voting together with holders of the Common Stock.
In
May 12, 2016, the Company designated a Class D Redeemable Preferred Stock and considered issuing such securities as a dividend
to the holders of the Common Stock. No such dividend took place and the Class D Redeemable Preferred Stock were cancelled.
As
of June 25, 2018, 357,591,331 shares of Common Stock are issued and outstanding. The Board will be authorized to fix the designations,
rights, preferences, powers and limitations of the Preferred Stock.
The
term “blank check” preferred stock refers to stock which gives the board of directors of a corporation the flexibility
to create one or more series of preferred stock, from time to time, and to determine the relative rights, preferences, powers
and limitations of each series, including, without limitation: (i) the number of shares in each series, (ii) whether a series
will bear dividends and whether dividends will be cumulative, (iii) the dividend rate and the dates of dividend payments, (iv)
liquidation preferences and prices, (v) terms of redemption, including timing, rates and prices, (vi) conversion rights, (vii)
any sinking fund requirements, (viii) any restrictions on the issuance of additional shares of any class or series, (ix) any voting
rights and (x) any other relative, participating, optional or other special rights, preferences, powers, qualifications, limitations
or restrictions.
Effect
of Amendment on Current Shareholders
The
shares of Preferred Stock authorized pursuant to the Articles of Amendment could be issued, at the discretion of the Board, for
any proper corporate purpose, without further action by the shareholders other than as may be required by applicable law. Existing
shareholders do not have preemptive rights with respect to future issuance of Preferred Stock by the Company and their interest
in the Company could be diluted by such issuance with respect to any of the following: earnings per share, voting, liquidation
rights and book and market value. Such dilution may be substantial, depending upon the number of shares issued. The newly authorized
shares of Preferred Stock could also have voting rights superior to our other outstanding securities, and in such event would
have a dilutive effect on the voting power of our existing stockholders.
The
Board will have the power to issue the shares of Preferred Stock in one or more classes or series with such preferences and voting
rights as the Board may fix in the resolution providing for the issuance of such shares. The issuance of shares of Preferred Stock
could affect the relative rights of the Company’s shares of Common Stock and Series B Preferred. Depending upon the exact terms,
limitations and relative rights and preferences, if any of the shares of Preferred Stock as determined by the Board at the time
of issuance, the holders of shares of Preferred Stock may be entitled to a higher dividend rate than that paid on the Common Stock
and/or Series B Preferred, a prior claim on funds available for the payment of dividends, a fixed preferential payment in the
event of liquidation and dissolution of the Company, redemption rights, rights to convert their shares of Preferred Stock into
shares of Common Stock, and voting rights which would tend to dilute the voting control of the Company by the holders of shares
of Common Stock . Depending on the particular terms of any series of the Preferred Stock, holders thereof may have significant
voting rights and the right to representation on the Board. In addition, the approval of the holders of shares of Preferred Stock,
voting as a class or as a series, may be required for the taking of certain corporate actions, such as mergers.
Purpose
of Authorization of Blank Check Preferred Stock
The
Board believes that the authorization of shares of Preferred Stock is desirable because it will provide the Company with increased
flexibility of action to meet future working capital and capital expenditure requirements through equity financings without the
delay and expense ordinarily attendant on obtaining further shareholder approvals. The Board believes that the authorization of
blank check preferred stock will improve the Company’s ability to attract needed investment capital, as various series of the
Preferred Stock may be customized to meet the needs of any particular transaction or market conditions.
Possible
Anti-Takeover Effects of Authorization of Blank Check Preferred Stock
The
issuance of shares of Preferred Stock may have the effect of discouraging or thwarting persons seeking to take control of the
Company through a tender offer, proxy fight or otherwise or seeking to bring about removal of incumbent management or a corporate
transaction such as a merger. For example, the issuance of shares of Preferred Stock in a public or private sale, merger or in
a similar transaction may, depending on the terms of the series of Preferred Stock dilute the interest of a party seeking to take
over the Company. Further, the authorized Preferred Stock could be used by the Board for adoption of a shareholder rights plan
or “poison pill.”
The
amendment to our Articles of Incorporation was not proposed in response to, or for the purpose of deterring, any effort to obtain
control of the Company or as an anti-takeover measure. It should be noted that any action taken by the Company to discourage an
attempt to acquire control of the Company might result in shareholders not being able to participate in any possible premiums
which might be obtained in the absence of anti-takeover provisions. Any transaction which may be so discouraged or avoided could
be a transaction that the Company’s shareholders might consider to be in their best interests. However, the Board has a fiduciary
duty to act in the best interests of the Company’s shareholders at all times.
We
have (i) no present plans or commitments for the issuance or use of the Preferred Stock in connection with any financing, and
(ii) no present plans, proposals or arrangements, written or otherwise, at this time to issue any of the Preferred Stock in connection
with a merger, share exchange or acquisition, except that we reserve the right to issue Preferred Stock with such designations
and preferences as the Board determines.
Effectiveness
of Amendment
The
Articles of Amendment authorizing the Preferred Stock in substantially the form attached to this Information Statement as Annex
A and will become effective upon the acceptance for record of the Articles of Amendment with the Secretary of State of Florida
which will occur no earlier than 20 calendar days after the initial mailing of this Information Statement.
No
Dissenter’s Rights
Under
BCA 607.1302, our dissenting stockholders are not entitled to appraisal rights with respect to the approval of the Corporate Actions,
and we will not independently provide our stockholders with any such right.
Interest
of Certain Persons In or Opposition to Matters to be Acted Upon
We
are not aware of any substantial interest, direct or indirect, by our executive officers or directors that is in favor of or in
opposition to any of the Corporate Actions.
CORPORATE
ACTION 5: APPROVAL OF THE AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO CHANGE THE COMPANY NAME
The
Board of the Company, on June 25, 2018, approved an amendment to the Articles of Incorporation changing the name of the Company
to “Cuentas Inc.”
The
Consenting Stockholders representing a majority of the Company’s outstanding voting stock have, on June 25, 2018, given
their written consent to amend the Articles of Incorporation of the Company to change the name of the Company to “Cuentas
Inc.”
It
is the belief of the Consenting Stockholders that the name “Next Group Holdings” does not truly reflect the business
and the business plan of the Company and as such it is believed that increased goodwill can be established through a change in
the Company name to “Cuentas Inc.” A copy of the form of Articles of Amendment is attached hereto as
Annex A
.
DESCRIPTION
OF VOTING RIGHTS SECURITIES
Authorized
and Outstanding Capital Stock
We
have authorized 360,000,000 shares of common stock, par value $0.001, 357,591,331 of which are currently issued and outstanding.
We currently have 0 shares of “blank check” preferred stock. We had designated 50,000,000 shares of Series A Preferred
which were converted, issued or cancelled upon the merger in January 2016 with 0 shares outstanding or currently available for
conversion or issuance and we have designated 10,000,000 shares of Series B Preferred with 10,000,000 shares issued and outstanding.
Common
Stock
The
holders of our common stock are entitled to one vote per share. In addition, the holders of our common stock will be entitled
to receive ratably dividends, if any, declared by our board of directors out of legally available funds; however, the current
policy of our board of directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up,
the holders of our common stock will be entitled to share ratably in all assets that are legally available for distribution. The
holders of our common stock will have no preemptive, subscription, redemption or conversion rights. The rights, preferences and
privileges of holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any
series of preferred stock.
Series
A Preferred Stock
There
are 0 designated Series A preferred stock shares available and 0 Series A preferred stock shares issued and outstanding.
Series
B Preferred
There
are 10,000,000 shares of Series B Preferred outstanding. The Series B Preferred is not convertible into Common Stock at any time
and is not entitled to dividends of any kind or liquidation, dissolution rights of any kind. The holders of Series B Preferred
are entitled to 1,000 votes for each share of Series B Preferred that is held when voting together with holders of the Common
Stock.
Blank
Check Preferred Stock
Upon
filing of the Articles of Amendment there will be 50,000,000 shares of newly created Blank Check Preferred Shares available. They
may in future be designated to confer voting rights and conversion rights.
Transfer
Agent
Our
transfer agent is:
Olde
Monmouth Stock Transfer Co., Inc.
200
Memorial Parkway, Atlantic Highlands, NJ 07716
Their
telephone number is (732) 872-2727
Proposals
by Security Holders
No
Stockholder has requested that we include any additional proposals in this Information Statement.
REASONS
WE USED STOCKHOLDER CONSENT AS OPPOSED TO
SOLICITATION
OF STOCKHOLDER APPROVAL VIA PROXY STATEMENT
AND
SPECIAL MEETING
The
Corporate Actions require stockholder approval. Stockholder approval could have been obtained by us in one of two ways: (i) by
the dissemination of a proxy statement and subsequent majority vote in favor of the actions at a stockholders meeting called for
such purpose, or (ii) by a written consent of the holders of a majority of our voting securities. However, the latter method,
while it represents the requisite stockholder approval, is not deemed effective until twenty (20) days after this Information
Statement has been sent to all of our stockholders giving them notice of and informing them of the actions approved by such consent.
Given
that we have already secured the affirmative consent of the holders of a majority of our voting securities to the Corporate Action,
we determined that it would be a more efficient use of limited corporate resources to forego the dissemination of a proxy statement
and subsequent majority vote in favor of the actions at a stockholders meeting called for such purposes, and rather proceed through
the written consent of the holders of a majority of our voting securities. Spending the additional company time, money and other
resources required by the proxy and meeting approach would have been potentially wasteful and, consequently, detrimental to completing
the Corporate Actions in a manner that is timely and efficient for us and our stockholders.
DELIVERY
OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
Only
one copy of this Information Statement is being delivered to multiple stockholders sharing an address, unless the Company has
received contrary instructions from one or more of the stockholders. The Company will deliver promptly, upon written or oral request,
a separate copy of this Information Statement to a stockholder at a shared address to which a single copy of this document was
delivered. A stockholder may mail a written request to Next Group Holdings, Inc. Attention: Secretary, 19 West Flagler Street,
Suite 507, Miami Florida 33130 request:
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a
separate copy of this Information Statement;
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a separate
copy of Information Statements in the future; or
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delivery
of a single copy of Information Statements, if such stockholder is receiving multiple copies of those documents.
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WHERE
YOU CAN OBTAIN ADDITIONAL INFORMATION
We
file annual, quarterly, current and other reports and other information with the SEC. Certain of our SEC filings are available
over the Internet at the SEC’s web site at
www.sec.gov
. You may also read and copy
any document we file with the SEC at its public reference room by writing to the Public Reference Room of the SEC at 100 F Street,
N.E., Room 1580, Washington, D.C. 20549. Callers in the United States can also call 1-800-SEC-0330 for further information on
the operations of the public reference facilities.
Dated:
June 25, 2018
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By
Order of the Board of Directors of
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NEXT
GROUP HOLDINGS INC.
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By:
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/s/
Arik Maimon
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Arik
Maimon,
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Chief
Executive Officer
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Annex
1
Amendment
to Article I: Name.
The name of the corporation formed hereby is Cuentas, Inc. (the “
Corporation
”).
Amendment
to Article IV: Shares
. The total number of shares of all classes of capital stock, each with a par value of $0.001 per
share, which the Corporation is authorized to issue is shares, consisting of (i) 360,000,000 shares of common stock (the
“
Common Stock
”), and (ii) 60,000,000 shares of preferred stock consisting of 10,000,000 shares of Series B
Common Stock (
“
Series B Preferred Stock
”
), and 50,000,000 shares of preferred stock, par value $0.001
per share (the “
Blank Check Preferred Stock
”). The Board of Directors of the Corporation (the “
Board
”)
is hereby expressly authorized without the additional vote of stockholders to provide out of the unissued shares of the Preferred
Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each
such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special
and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated
in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate
of filed pursuant to the
Florida Business Corporation Act
, and the Board is hereby
expressly vested without the additional vote of stockholders and with the authority to the full extent provided by law, now or
hereafter, to adopt any such resolution or resolutions.
Annex-1