INFORMATION
STATEMENT
OF
SPECTRASCIENCE,
INC.
11568-11
Sorrento Valley Road
San
Diego, CA 92121
Dated January 23, 2017
THIS
INFORMATION STATEMENT IS BEING PROVIDED
TO
YOU BY THE BOARD OF DIRECTORS OF
SPECTRASCIENCE,
INC.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT
HAVE ALREADY BEEN APPROVED BY OUR STOCKHOLDERS. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT NECESSARY.
This
Information Statement is being furnished to the stockholders of record of SpectraScience, Inc., a Minnesota corporation (the “Company”),
in connection with the authorization of the corporate action described below by the Company’s Board of Directors on January
10, 2017, and the approval of such corporate action by the written consent, taken as of January 10, 2017, of those stockholders
of record of the Company entitled to vote the majority of the aggregate shares of the Company’s common stock, par value
$0.01 per share (the “Common Stock”) totaling 876,171,222 voting shares, and the holders of Series AA Super Voting
Stock outstanding on such date totaling 3,000,000,000 voting shares. Stockholders holding in the aggregate 3,000,000,000 shares
of Common Stock and Series AA Super Voting Stock (77% of the voting stock outstanding as of January 10, 2017) (the “Consenting
Stockholders”) approved the corporate action described below. Accordingly, this Information Statement is furnished solely
for the purpose of informing the stockholders of record of the Company, in the manner required under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), of this corporate action before it takes effect.
The
Board and Consenting Shareholders have approved an Amendment to the Company’s Amended and Restated Articles of Incorporation,
a copy of which is attached hereto as Appendix A (the “Amendment”) to increase the number of authorized shares of
Capital Stock of the Company to 2,000,000,000 as more fully described below.
The
reasons for, and general effect of, the Amendment is described below in “Approval of the Amendment.”
This
Information Statement is first furnished to the stockholders of record of the Company as of the record date of January 10, 2017
on or about January 23, 2017, and the Amendment shall not become effective until at least 20 days thereafter.
APPROVAL
OF THE AMENDMENT
AMENDMENT
OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK FROM 1,250,000,000
TO 2,000,000,000, CONSISTING OF AN INCREASE IN AUTHORIZED SHARES OF COMMON STOCK FROM 1,246,000,000 TO 1,996,000,000
On
January 10, 2017, the Board of Directors voted to submit to the Company’s shareholders a proposal to amend the Company’s
Amended and Restated Articles of Incorporation to increase the number of authorized shares of capital stock from 1,250,000,000
to 2,000,000,000, consisting of an increase in authorized shares of common stock from 1,246,000,000 to 1,996,000,000.
The
text of the amendment to the Amended and Restated Articles of Incorporation increasing the number of authorized shares of capital
stock from 1,250,000,000 to 2,000,000,000, consisting of an increase in authorized shares of common stock from 1,246,000,000 to
1,996,000,000 is attached to this information statement as Appendix A.
The
Amended and Restated Articles of Incorporation previously authorized the Company to issue an aggregate of 1,250,000,000 shares
of capital stock, consisting of 1,246,000,000 shares of common stock, $.01 par value per share (the “Common Stock”);
2,585,000 shares of Series B Preferred Stock, $.01 par value per share (the “Series B Preferred Stock”; 500,000 shares
of Series C Preferred Stock, $.01 par value per share (the “Series C Preferred Stock”); 3,000 shares of Series AA
Super Voting Stock, $.001 par value per share (the Series AA Super Voting Stock”); and 912,000 undesignated shares of capital
stock, undesignated par value per share (the “Undesignated Stock”). The undesignated Stock may be issued in one or
more series as determined from time to time by the Board of Directors.
As
of December 31, 2016, 876,171,222 shares of common stock were issued and outstanding, 3,085,000 shares of preferred stock were
issued and outstanding, 3,000 shares of Super Voting Stock were issued and outstanding (each share eligible to vote the equivalent
of 1,000,000 shares of common stock), and 912,000 undesignated shares were authorized but not issued and outstanding. In addition,
approximately 132,278,221 shares of common stock have been reserved for issuance pursuant to common stock purchase warrants, 354,646,841
shares of common stock have been reserved for issuance upon the conversion of Convertible Debentures and 34,168,800 shares of
common stock reserved under equity incentive arrangements. As a result, the Company had a deficit of approximately 151,265,084
shares of common stock that are not issued and outstanding but are committed for issuance. The Board desired to increase the number
of authorized shares of capital stock to ensure it has the necessary capital stock to pursue equity financing that will enable
the Company to continue operations, and provide the flexibility to promptly take advantage of any strategic opportunities, raise
additional working capital, grant equity awards to officers, employees, directors, and consultants as may be desirable in the
future, and evidence the Company’s commitment to growth. Because of the need for additional growth capital, without the
authorization of additional authorized shares of common stock, it would have been unlikely that the Company would have been able
to continue to implement its commercialization plan, conduct near-term operations, or continue as a going concern.
The
common stock authorized will have rights identical to our previous common stock. Our shareholders have no preemptive rights with
respect to the common stock. The additional authorized shares will be available for issuance from time to time at the discretion
of the Board without further action by the shareholders, except where shareholder approval is required by law, by regulatory authorities
or to obtain favorable tax treatment for certain employee benefit plans. Thus, additional shares of common stock might be issued
at times and under circumstances that will have a dilutive effect on earnings per share and on the equity ownership of the present
holders of our common stock.
An
increase in the number of authorized shares of common stock could, under certain circumstances, be construed as having an anti-takeover
effect (for example, by diluting the stock ownership of a person seeking to affect a change in the composition of the Board of
Directors or contemplating a tender offer or other transaction for the combination of the company with another company). We are
not proposing the increase in authorized shares in response to, and we have no knowledge of, any effort to accumulate our stock
or to obtain control of the Company by means of a merger, tender offer or solicitation in opposition to management. In addition,
we do not have any present plan or intention to issue any existing or additional authorized shares of our common stock as part
of a merger transaction or acquisition.
DISSENTERS
RIGHTS OF APPRAISAL
There
are no dissenter’s rights of appraisal applicable to this action to adopt the Amendment.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANGAGEMENT
The
following table shows as of December 31, 2016, the stock ownership of (i) all persons known by us to be beneficial owners of more
than five percent of our outstanding shares of Common Stock, (ii) each director and each nominee for election as a director, (iii)
the Named Executive Officers, and (iv) all current directors and executive officers as a group.
Beneficial
ownership of the Common Stock is determined in accordance with the rules of the SEC and includes any shares of Common Stock over
which a person exercises shared or sole voting or investment powers, or of which a person has a right to acquire ownership at
any time within 60 days of December 31, 2016. Except as otherwise indicated, and subject to applicable community property laws,
the persons named in this table have sole voting and investment power with respect to all shares of Common Stock held by them.
Applicable percentage ownership in the following table is based on 876,171,222 shares of Common Stock outstanding as of December
31, 2016, plus for each individual, any securities that individual has the right to acquire within 60 days of December 31, 2016.
Unless
otherwise indicated below, the address of each principal shareholder is c/o SpectraScience, Inc., 11568-11 Sorrento Valley Road,
San Diego, California 92121.
|
|
|
Title of Class
|
|
Shares Beneficially
|
|
|
Percentage of Outstanding Stock
|
|
|
Percentage of Aggregate
Voting Power
of Common
|
|
|
Name of Beneficial Owner
|
|
of Stock
|
|
Owned (1)
|
|
|
of Respective Class
|
|
|
and Series AA
|
|
|
Sheldon L. Miller (2)(10)
|
|
Common
|
|
|
4,795,998
|
|
|
|
*
|
|
|
|
*
|
|
|
Michael P. Oliver (3)(11)(10)
|
|
Common
|
|
|
9,894,821
|
|
|
|
1.1
|
%
|
|
|
*
|
|
|
Stanley Pappelbaum M.D. (4)(10) (12)
|
|
Common
|
|
|
1,001,511,693
|
|
|
|
*
|
|
|
|
|
|
|
|
|
Series AA Super Voting
|
|
|
1,000
|
|
|
|
33.3
|
%
|
|
|
25.7
|
%
|
|
Mark McWilliams (5)(10) (12)
|
|
Common
|
|
|
1,002,036,913
|
|
|
|
*
|
|
|
|
|
|
|
|
|
Series AA Super Voting
|
|
|
1,000
|
|
|
|
33.3
|
%
|
|
|
25.7
|
%
|
|
F. Duwaine Townsen (6)(10)
|
|
Common
|
|
|
1,065,484
|
|
|
|
*
|
|
|
|
*
|
|
|
Lowell W. Giffhorn (7) (11)
|
|
Common
|
|
|
1,500,000
|
|
|
|
*
|
|
|
|
*
|
|
|
Rand Mulford (8) (12)
|
|
Common
|
|
|
1,000,400,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
Series AA Super Voting
|
|
|
1,000
|
|
|
|
33.3
|
%
|
|
|
25.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All officers and directors as a group (9) (7 persons)
|
|
Common
|
|
|
3,021,201,909
|
|
|
|
2.4
|
%
|
|
|
77.6
|
%
|
|
|
|
Series AA Super Voting
|
|
|
3,000
|
|
|
|
100
|
%
|
|
|
|
|
|
|
(1)
|
Beneficial
ownership is determined in accordance with Rule 13d-3(a) of the Securities Exchange Act of 1934 and generally includes
voting or investment power with respect to securities. Except as indicated by footnotes and subject to community property
laws, where applicable, the person named above has sole voting and investment power with respect to all shares of the
Common Stock shown as beneficially owned by him or her.
|
|
|
|
|
|
|
(2)
|
Includes
1,061,693 shares which may be acquired upon exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016.
|
|
|
(3)
|
Includes
9,845,821 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016.
|
|
|
|
|
|
|
(4)
|
Includes
1,461,693 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016.
|
|
|
|
|
|
|
(5)
|
Includes
534,284 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016. Also includes warrants to purchase 162,697 shares of Common Stock.
|
|
|
|
|
|
|
(6)
|
Includes
1,065,484 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016.
|
|
|
|
|
|
|
(7)
|
Includes
1,500,000 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016.
|
|
|
|
|
|
|
(
8)
|
Includes
200,000 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016.
|
|
|
|
|
|
|
(9)
|
Includes
15,668,975 shares which may be acquired upon the exercise of options which are currently exercisable or which become exercisable
within 60 days of December 31, 2016. Also includes warrants to purchase 162,697shares of Common Stock.
|
|
|
|
|
|
|
(10)
|
Director
|
|
|
|
|
|
|
(
11)
|
Executive
Officer
|
|
|
|
|
|
|
(12)
|
Included
in Messrs. Pappelbaum, McWilliams and Mulford’s beneficial ownership are 1,000 shares each of Series AA Super Voting
Stock enabling each to vote the equivalent of up to 1,000,000,000 shares of Common Stock.
|
Appendix
A
AMENDMENT
TO
AMENDED
AND RESTATED ARTICLES OF INCORPORATION OF
SPECTRASCIENCE,
INC.
SpectraScience,
Inc., a corporation organized and existing under the laws of the State of Minnesota (the “Company”), hereby certifies
as follows:
The
members of the Board of Directors have adopted a resolution amending Section 2.01 of the Amended and Restated Articles of
Incorporation of the Company, and the Shareholders of the Company have voted to approve such amendment, such that Section
2.01 of the Amended and Restated Articles of Incorporation now reads in its entirety as follows:
“2.01)
Numbers and Classes of Shares. This Corporation shall have the authority to issue an aggregate of 2,000,000,000 shares of capital
stock, consisting of 1,996,000,000 shares of common stock, $.01 par value per share (the “Common Stock”); 2,585,000
shares of Series B Preferred Stock, $.01 par value per share (the “Series B Preferred Stock”; 500,000 shares of Series
C Preferred Stock, $.01 par value per share (the “Series C Preferred Stock”); 3,000 shares of Series AA Super Voting
Stock, $.001 par value per share (the Series AA Super Voting Stock”); and 912,000 undesignated shares of capital stock,
undesignated par value per share (the “Undesignated Stock”). The undesignated Stock may be issued in one or more series
as determined from time to time by the Board of Directors. Any series authorized for issuance by the Board of Directors may be
senior to the Common Stock with respect to any distribution (as such term is defined in Section 302A.011, Subd. 10, Minnesota
Statutes) if so designated by the Board of Directors upon issuance of the shares of that series. The Board of Directors is hereby
granted the express authority to fix by resolution any other designations, powers, preferences, rights (including voting rights),
qualifications, limitations or restrictions with respect to any particular series created from the Undesignated Stock prior to
issuance thereof.”
This
amendment has been approved pursuant to Minnesota Statutes, Chapter 302A. I certify that I am authorized to execute this amendment
and I further certify that I understand that by signing this amendment, I am subject to the penalties of perjury as set forth
in Section 609.48 as if I had signed this amendment under oath.
Dated:
January 10, 2017
|
|
SPECTRASCIENCE,
INC.
|
|
|
|
|
|
/s/
Lowell W. Giffhorn
|
|
|
Lowell
W. Giffhorn, Secretary and Chief Financial Officer
|