THIS IS
NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO
STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN. THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE
BEEN APPROVED BY HOLDERS OF A MAJORITY OF OUR VOTING STOCK. WE ARE
NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT TO THE
ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT.
INTRODUCTION
This
Information Statement is being mailed or otherwise furnished to the
holders of common stock, $0.00001 par value per share (the
“Common Stock”) of Premier Biomedical, Inc., a Nevada
corporation (the “Company”) by the Board of Directors to notify
them about certain actions that the holders of a majority of the
Company’s outstanding voting stock (the “Majority
Stockholders”) have taken by written consent, in lieu of a
special meeting of the stockholders. The action was taken on
November 1, 2019.
Copies
of this Information Statement are first being sent on or before
November 27, 2019 to the holders of record on November 7, 2019 of
the outstanding shares of the Company’s Common
Stock.
General Information
Stockholders of the
Company owning a majority of the Company’s outstanding voting
stock have approved the following actions (the
“Actions”) by written consent dated November 1, 2019,
in lieu of a special meeting of the stockholders:
1.
An amendment to our
Articles of Incorporation to increase the authorized common stock
from 1 billion shares to 2 billion shares.
2.
An amendment to our
Articles of Incorporation to effect a reverse stock split of our
common stock at a ratio of 1-for-600, to be effectuated at any time
in 2020 as determined by our Board of Directors in their sole
discretion.
3.
An amendment to our
Articles of Incorporation to change our name to “Technology
Health, Inc.,” to be effectuated at any time in 2020 as
determined by our Board of Directors in their sole
discretion.
The
Company has asked brokers and other custodians, nominees and
fiduciaries to forward this Information Statement to the beneficial
owners of the Common Stock held of record by such persons and will
reimburse such persons for out-of-pocket expenses incurred in
forwarding such material.
Dissenters’ Right of Appraisal
No
dissenters’ or appraisal rights under the Nevada Revised
Statutes (“NRS”)
are afforded to the Company’s stockholders as a result of the
approval of the Action.
Vote Required
The
vote which was required to approve the above Action was the
affirmative vote of the holders of a majority of the
Company’s voting stock. Each holder of Common Stock is
entitled to one (1) vote for each share of Common Stock
held.
The
Company has 10,000,000 authorized shares of Preferred Stock,
2,000,000 of which have been designated as Series A Convertible
Preferred Stock (the “Preferred Stock”), all 2,000,000
of which are issued and outstanding as of the date hereof. Each
share of Preferred Stock is convertible, at the option of the
holder thereof, at any time after the issuance of such share into
one (1) fully paid and non-assessable share of Common Stock. Each
outstanding share of Preferred Stock is entitled to one hundred
(100) votes per share on all matters to which the shareholders of
the Company are entitled or required to vote.
The
record date for purposes of determining the number of outstanding
shares of voting stock of the Company, and for determining
stockholders entitled to vote, was the close of business on
November 7, 2019 (the “Record Date”). As of the Record
Date, the Company had outstanding 63,723,186 shares of Common Stock
and 2,000,000 shares of Preferred Stock, resulting in total votes
by all voting securities of 263,723,186. Holders of the Common
Stock and Preferred Stock have no preemptive rights. All
outstanding shares are fully paid and nonassessable.
Transfer Agent
The
transfer agent for our Common Stock is Issuer Director Corporation,
1981 Murray Holladay Road, Suite 100, Salt Lake City, Utah
84117.
Vote Obtained - Section 78.320 Nevada Revised Statutes
NRS 78.320 provides that the written consent of
the holders of the outstanding shares of voting stock, having not
less than the minimum number of votes which would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, may be substituted
for such a meeting.
In
order to eliminate the costs and management time involved in
soliciting and obtaining proxies to approve the Action and in order
to effectuate the Action as early as possible in order to
accomplish the purposes of the Company as hereafter described, the
Board of Directors of the Company voted to utilize, and did in fact
obtain, the written consent of the holders of a majority of the
voting power of the Company. The consenting shareholders own in the
aggregate approximately 76% of the outstanding voting
stock.
Pursuant
to NRS 78.370, the Company is required to provide prompt notice of
the taking of the corporate action without a meeting to the
stockholders of record who have not consented in writing to such
action. This Information Statement is intended to provide such
notice.
ACTION ONE
AMENDMENT TO THE COMPANY’S
ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK
General
On November 1, 2019, the Board of Directors of the
Company approved, declared it advisable and in the Company’s
best interest and directed that there be submitted to the
Shareholders for approval, the prospective amendment to the Eighth
Article of the Company’s Articles of Incorporation to
increase the authorized Common Stock from 1,000,000,000 shares, par
value $0.00001, to 2,000,000,000 shares, par value $0.00001
(the “Increase in Authorized Amendment”), a copy
of which is attached hereto as Exhibit A. On November 1, 2019,
the Majority Stockholders approved the Increase in Authorized
Amendment by written consent in lieu of a special meeting of the
stockholders.
Reasons for the Increase in Authorized Amendment
Currently, the
Company is authorized to issue 1,000,000,000 shares of Common
Stock. Of the 1,000,000,000 shares of Common Stock authorized, as
of the Record Date, there were 63,723,186 shares of Common Stock issued and outstanding, and
over 936 million shares
of Common Stock reserved for
issuance upon the exercise of outstanding convertible debt,
warrants, and options. Consequently, in the event of the conversion
of one or more convertible notes, or the exercise of warrants or
options, the Company would not have sufficient authorized but
unissued shares of Common Stock to honor the
conversions.
As a
general matter, the Board of Directors does not believe the
currently available number of unissued shares of Common Stock is an adequate number of
shares to assure that there will be sufficient shares available for
issuance in connection with possible future acquisitions, equity
and equity-based financings, 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 shares of Common
Stock as a means of providing the Company 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 they believe 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
Board of Directors is considering, and will continue to consider,
various financing options, including the issuance of Common Stock or securities convertible into
Common Stock from time to time
to raise additional capital necessary to support future growth of
the Company. As a result of the Increase in Authorized Amendment,
the Board of Directors will have more flexibility to pursue
opportunities to engage in possible future capital market
transactions involving Common
Stock or securities convertible into Common Stock, including, without
limitation, public offerings or private placements of such
Common Stock or securities
convertible into Common
Stock.
In
addition, the Company’s growth strategy may include the
pursuit of selective acquisitions to execute its business plan. The
Company could also use the additional Common Stock for potential strategic
transactions, including, among other things, acquisitions,
spin-offs, strategic partnerships, joint ventures, restructurings,
divestitures, business combinations and investments. There are no
specific acquisitions under consideration at this
time.
ACTION TWO
AMENDMENT TO THE COMPANY’S
ARTICLES OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT
General
On November 1, 2019, the Board of Directors of the
Company approved, declared it advisable and in the Company’s
best interest and directed that there be submitted to the
Shareholders for approval, the prospective amendment to the Eighth
Article of the Company’s Articles of Incorporation, a
copy of which is attached hereto as Exhibit A (the “Reverse Split
Amendment”), to effect a
reverse split of the Company’s outstanding Common Stock at a
ratio of 1 share for every 600 shares. The Reverse Split Amendment
will be effectuated at a date in 2020 chosen by the Board of
Directors in their sole discretion. On November 1, 2019, the
Majority Stockholders approved the Reverse Split Amendment by
written consent in lieu of a special meeting of the
stockholders.
Reasons for the Reverse Split
We do
not have enough authorized common stock to reserve the full amount
required by various outstanding convertible notes, nor may we issue
additional shares of common stock in other financings until we have
reserved the number of shares the various notes require. Therefore,
our Board of Directors believes that the Reverse Split is in our
best interest because it will increase the number of authorized but
unissued shares, allowing us to reserve the number of shares
required by the various notes and making it possible to seek out
additional financing when needed.
Facilitating the necessary reserves is not the
only reason for the reverse split, however. In addition, our Board
of Directors believes that the Reverse Split is in our best
interest because it may increase the bid price of our Common
Stock and facilitate our ability to attract investment. Our
common stock is currently quoted on the OTCQB tier of the
marketplace maintained by OTC Markets Group, Inc. under the symbol
“BIEI.” Our stock traded there since 2012. The OTCQB requires that companies maintain a stock
price of at least $0.01 to remain eligible for quotation on the
OTCQB, and our common stock currently trades at approximately
$0.0015 per share. Because we are currently under this threshold,
we have received a warning letter from OTC Markets that we are no
longer eligible for quotation on the OTCQB and will be dropped to a
lower trading tier on or about January 19, 2020. The Reverse Split
will help us to maintain a bid price above $0.01 per share so we
can again become eligible for quotation on the
OTCQB.
Our
Board of Directors believes that conducting the Reverse Split may
increase our ability to attract investment, as our Board of
Directors also believes that we need to seek additional financing
to fund our business plan and that the Reverse Split is a necessary
pre-requisite to conducting financings. Currently, we have issued
and outstanding convertible notes that require reserves of
authorized shares for conversion of the notes. We have reserved the
remainder of our authorized, unissued common stock for conversion
of these notes. Without the reverse split, we will not be able to
raise money through the issuance of equity or convertible debt
securities.
Our
Board of Directors also believes that the current price of our
Common Stock impairs an efficient market in our Common Stock.
This is due to several factors that impact lower priced stocks,
including (1) a reluctance among certain institutions and investors
to invest in low priced securities, (2) internal restrictions
imposed by many securities firms on the solicitation of orders for
low priced stocks by stockbrokers, (3) the ineligibility of our
Common Stock for margin loans due to its low share price, (4) a
reluctance among analysts to write research reports on low priced
stocks due to the preceding factors, and (5) high transaction costs
relative to share price due to the prevailing rule that commissions
charged on the purchase and sale of stock, as a percentage of share
price, are higher on lower priced stocks.
There
can be no assurance that if we effect the Reverse Split we will
successfully complete a financing.
Effect on Common Stock
Our
Board of Directors believes that the Reverse Split will have the
effect of increasing the market price per share of our Common Stock
and, while the Board of Directors believes that the Reverse Split
will not immediately alleviate all the above factors, it does
believe that such increase may, over time, alleviate some or all of
the factors noted above and lead to a more efficient market in our
Common Stock. In addition, an increase in the per share price of
our Common Stock may also generate greater investor interest in our
Common Stock, thereby possibly enhancing the marketability of our
Common Stock to the financial community.
The immediate effect of the Reverse Split will be
to reduce the number of issued and outstanding shares of our Common
Stock from 63,723,186 to
approximately 106,206 (based
on a 1-for-600 ratio). The par value of our Common Stock will
remain $0.00001 per share and the number of shares of Common Stock
authorized to be issued will remain the same (at either
1,000,000,000 shares or 2,000,000 shares, depending on the outcome
of Proposal One, above). The Reverse Split will not reduce or
affect our authorized or outstanding shares of Preferred
Stock.
The
following table sets forth the effects of the Reverse Split on our
outstanding and authorized capital at a ratio of
1-for-600:
|
|
|
Outstanding
Preferred Stock
|
|
Authorized
Preferred Stock
|
|
Authorized and
Unissued Common Stock
|
|
Current
|
63,723,186
|
2,000,000
|
2,000,000,000
|
10,000,000
|
2,010,000,000
|
936,276,814
|
|
After Split
|
106,206(1)
|
2,000,000
|
2,000,000,000
|
10,000,000
|
2,010,000,000
|
1,999,893,794(1)
|
In
addition, (i) proportionate adjustments will be made to the
per-share exercise price and the number of shares issuable upon the
exercise of all outstanding options and warrants entitling the
holders to purchase shares of our Common Stock, which will result
in approximately the same aggregate price being required to be paid
for such options and warrants upon exercise immediately as would
have been required immediately preceding the Reverse Split, and
(ii) the number of shares that may be issued upon the exercise of
conversion rights by holders of securities convertible into our
Common Stock will be reduced proportionately based on the Reverse
Split ratio.
The
Reverse Split will affect all of the holders of our Common Stock
uniformly and will not affect any Common Stockholder’s
percentage ownership interest or proportionate voting power, except
for insignificant changes that will result from the rounding up of
fractional shares as discussed below. Our outstanding options,
warrants and convertible notes contain provisions that are intended
to protect the holders against dilution of the holders’
percentage interest in the Company and that also effect a reduction
in the exercise price of the option in the event our shares are
issued at less than the option exercise price.
The
current number of holders of record of our Common Stock is
approximately 107, not including shares held in in brokerage
accounts (“street name”) which is unknown. Following
the Reverse Split, the number of our shareholders of record will
remain the same, as any of our shareholders with less than one
share will be rounded up in the exchange to one share.
Although the
Reverse Split may increase the per share market price of our Common
Stock, an increase in price can neither be assured nor calculated
with certainty. The per share market price of our Common Stock may
not rise in proportion to the reduction in the number of shares
outstanding as a result of the Reverse Split and such per share
market price may be less than the proportionate increase in the
number of shares outstanding as a result of the Reverse Split.
There can be no assurance that the Reverse Split will lead to a
sustained increase in the per share market price of our Common
Stock or that the factors discussed above that we believe impair an
efficient market in our Common Stock will be
alleviated.
Shareholders should
also be aware that the Reverse Split may result in a decrease in
the trading volume of the Common Stock due to the decrease in the
number of outstanding shares. The per share market price of our
Common Stock may also change as a result of other unrelated
factors, including the performance of our business, general market
conditions and other factors related to our business.
Effect on Preferred Stock and Change in Control
The
conversion ratio of our Preferred Stock will be reduced
proportionately based on the Reverse Split ratio of 1-to-600. This
means that after the Reverse Split, each share of Preferred Stock
will be convertible into 0.00000667 of one share. As a result, the
holders of the 2,000,000 shares of outstanding Preferred Stock will
be able to convert their shares of Preferred Stock into an
aggregate of 14 shares of Common Stock.
The
voting rights of our Preferred Stock will not be affected. On any
matters presented to the holders of Common Stock for a vote, the
Preferred Stockholders will continue to have one hundred (100)
votes for each share of Preferred Stock. Following the Reverse
Split, the two holders of the 2,000,000 outstanding shares of
Preferred Stock will have 200,000,000 votes on any matter that
comes before the stockholders; the holders of Common Stock will
have approximately 63,723,186 votes in the aggregate. Therefore,
the Preferred Stockholders will have approximately 76% of the votes
and control over the Company. Currently there are only two
Preferred Stockholders who are officers and directors of the
Company, see Security Ownership of
Certain Beneficial Owners on page 10 below.
No Fractional Shares
No
fractional shares will be issued. Shareholders who would otherwise
be entitled to a fractional share as a result of the Reverse Split
will receive one whole share of our Common Stock in lieu of the
fractional share. No shareholders will receive cash in lieu of
fractional shares.
Authorized Shares
The
Reverse Split would affect all issued and outstanding shares of our
Common Stock and outstanding rights to acquire our Common
Stock. Upon the effectiveness of the Reverse Split, the number of
authorized shares of our Common Stock that are not issued or
outstanding would increase due to the reduction in the number of
shares of our Common Stock issued and outstanding. As of the Record
Date, we had 1,000,000,000 shares of authorized Common Stock and
63,723,186 shares of
Common Stock issued and outstanding. As of the Record Date, we had
2,000,000 shares of Series A Convertible Preferred Stock authorized
and outstanding. Authorized but unissued shares will be available
for issuance, and we may issue such shares in the future. If we
issue additional shares, the ownership interest of holders of our
Common Stock will be diluted.
Except
as described above with respect to the Notes, we currently have no
plans or agreements to issue shares of our common
stock.
Procedure for Effecting the Reverse Split
We
intend to file the Reverse Split Amendment with the Secretary of
State of the State of Nevada on a date to be selected by our Board
of Directors in the year 2020 (the “Effective Date”). However, the
Effective Date will not be set for a date before (i) 20 days after
the commencement of our mailing or otherwise providing this
Information Statement and (ii) receipt of approval of the Reverse
Split from FINRA.
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. The Reverse Split Amendment
has received the unanimous approval of our Board of Directors. The
text of the Reverse Split Amendment is subject to modification to
include such changes as may be required by the office of the
Secretary of State of the State of Nevada and as the Board of
Directors deems necessary and advisable to effect the Reverse
Split.
The
Reverse Split will take place on the Effective Date without any
action on the part of the holders of our Common Stock and
without regard to current certificates representing shares of our
Common Stock being physically surrendered for certificates
representing the number of shares of Common Stock each stockholder
is entitled to receive as a result of the Reverse Split. New
certificates for shares of our Common Stock will not be issued at
this time. Shareholders who hold shares in certificated form should
not do anything with their certificates at this time.
Effect on Registered and Beneficial Shareholders
Upon a
Reverse Split, we intend to treat shareholders holding our Common
Stock in “street name,” through a bank, broker or other
nominee, in the same manner as registered shareholders whose shares
are registered in their names. Banks, brokers or other nominees
will be instructed to effect the Reverse Split for their beneficial
holders holding our Common Stock in “street name.”
However, these banks, brokers or other nominees may have different
procedures than registered shareholders for processing the Reverse
Split. If you hold your shares with a bank, broker or other nominee
and if you have any questions in this regard, we encourage you to
contact your nominee.
SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD
NOT SUBMIT ANY CERTIFICATE(S) UNLESS REQUESTED TO DO
SO.
Potential Anti-Takeover Effect
The
Reverse Split could adversely affect the ability of third parties
to takeover or change the control of the Company by, for example,
permitting issuances that would dilute the stock ownership of a
person seeking to effect a change in the composition of our Board
of Directors or contemplating a tender offer or other transaction
for the combination of the Company with another company. Although
the increased proportion of unissued authorized shares to issued
shares could, under certain circumstances, have an anti-takeover
effect, the Reverse Split is not in response to any effort of which
we are aware to accumulate shares of our Common Stock or obtain
control of our company, nor is it part of a plan by management to
recommend a series of similar amendments to our Board of Directors
and shareholders.
No Appraisal Rights
Under
Nevada law, shareholders are not entitled to appraisal rights with
respect to the Reverse Split, and we will not independently
provide shareholders with any such right.
Accounting Matters
The
Reverse Split will not affect the par value of our Common Stock. As
a result, as of the effective time of the Reverse Split, the
stated capital attributable to our Common Stock on our balance
sheet will be reduced proportionately based on the Reverse Split
ratio, and the additional paid-in capital account will 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 restated because there will be fewer shares of our Common
Stock outstanding.
Federal Income Tax Consequences of the Reverse Stock
Split
The
following is a summary of certain material United States federal
income tax consequences of the Reverse Split, does not purport
to be a complete discussion of all of the possible federal income
tax consequences of the Reverse Split and is included for general
information only. Further, it does not address any state, local or
foreign income or other tax consequences. Also, it does not address
the tax consequences to holders that are subject to special tax
rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities,
nonresident alien individuals, broker-dealers and tax-exempt
entities. The discussion is based on the provisions of the United
States federal income tax law as of the date hereof, which is
subject to change retroactively as well as prospectively. This
summary also assumes that the pre-Reverse Split shares were, and
the post-Reverse Split shares will be, held as a “capital
asset,” as defined in the Internal Revenue Code of 1986, as
amended (i.e., generally, property held for investment). The tax
treatment of a stockholder may vary depending upon the particular
facts and circumstances of such stockholder. Each stockholder is
urged to consult with such stockholder's own tax advisor with
respect to the tax consequences of the Reverse Split. As used
herein, the term United States holder means a stockholder that is,
for federal income tax purposes: a citizen or resident of the
United States; a corporation or other entity taxed as a corporation
created or organized in or under the laws of the United States, any
State of the United States or the District of Columbia; an estate
the income of which is subject to federal income tax regardless of
its source; or a trust if a U.S. court is able to exercise primary
supervision over the administration of the trust and one or more
U.S. persons have the authority to control all substantial
decisions of the trust.
No gain
or loss should be recognized by a stockholder upon such
stockholder’s exchange of pre-Reverse Split shares for
post-Reverse Split shares pursuant to the Reverse Split. The
aggregate tax basis of the post-Reverse Split shares received in
the Reverse Split will be the same as the stockholder’s
aggregate tax basis in the pre-Reverse Split shares exchanged
therefor. The stockholder's holding period for the post-Reverse
Split shares will include the period during which the stockholder
held the pre-Reverse Split shares surrendered in the Reverse
Split.
Our
view regarding the tax consequences of the Reverse Split is not
binding on the Internal Revenue Service or the
courts.
ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT WITH HIS OR HER OWN
TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES
TO HIM OR HER OF THE REVERSE SPLIT.
ACTION THREE
AMENDMENT TO THE COMPANY’S
ARTICLES OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
General
On November 1, 2019, the Board of Directors of the
Company approved, declared it advisable and in the Company’s
best interest and directed that there be submitted to the
shareholders of the Company’s voting stock for approval, the
prospective amendment to Article One of the Company’s
Articles of Incorporation to change the name of the Company
to “Technology Health, Inc.,” to be effectuated at any
time in 2020 as determined by our Board of Directors in their sole
discretion (the “Name Change Amendment”). On November
1, 2019, the Majority Stockholders approved the Name Change
Amendment by written consent in lieu of a special meeting of the
stockholders.
Reasons for the Name Amendment
As a
general matter, the Board of Directors does not believe the current
name properly reflects the business operations of the Company.
Therefore, the Board of Directors approved the name change as a
means to better position the Company in its current business
operations. By changing the name of the Company to Technology
Health, Inc., the Company will be in a better position to achieve
the desired success in the pain management industry.
As a
result of the name change, our stock trading symbol will also
change. The new symbol will be assigned by FINRA.