INFORMATION STATEMENT
OCTOBER 15, 2018
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY. THE ACTIONS, DEFINED BELOW, HAVE ALREADY BEEN APPROVED BY WRITTEN CONSENT OF HOLDERS
OF A MAJORITY OF THE OUTSTANDING COMMON STOCK OF THE COMPANY. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT NECESSARY.
General
This Information Statement
is first being furnished on or about October 15, 2018 to stockholders of record as of the close of business on September 7, 2018
(the “Record Date”) of the Common Stock, par value $0.001 per share (the “Common Stock”), of ProBility
Media Corporation in connection with the following (collectively, the “Actions”):
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1.
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Amendment of the Certificate of Incorporation increasing the number of authorized shares of Common Stock from 500,000,000 shares to 5,000,000,000 shares; and
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2.
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Grant of discretionary authority to the Board of Directors of Probility Media to implement a reverse stock split of the outstanding shares of Common Stock on the basis of one post-reverse split share for up to every 100 pre-reverse split shares (for example, if you own 100 shares now, you will own 1 share after the reverse stock split) to occur as soon as practicable, with the exact time of the reverse stock split and the exchange ratio of the reverse split to be determined by the Board of Directors. A proposed 1-for-100 reverse stock split of the outstanding shares of Common Stock would reduce the outstanding shares of Common Stock from 77,931,415 shares to approximately 779,314 shares;
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The Board of Directors
has approved, and stockholders of ProBility Media (the “Consenting Stockholders”) representing 42,073,061 shares out
of 77,931,415 shares of Common Stock outstanding as of September 7, 2018, have consented in writing to the Actions. The Consenting
Stockholders included our executive officers and directors holding 33,471,031 shares, as well as several employees and consultants
who work for us and other individuals who formerly owned companies recently acquired by us, each of whom work in our offices. No
solicitations were made by us in connection with obtaining the stockholder votes. Such approval and consent constitute the approval
and consent of a majority of the total number of shares of outstanding Common Stock and are sufficient under the Nevada Revised
Statutes and ProBility Media’s By-Laws to approve the Actions. Accordingly, the Actions will not be submitted to the other
stockholders of ProBility Media for a vote and this Information Statement is being furnished to stockholders to provide them with
certain information concerning the Actions in accordance with the requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and the regulations promulgated thereunder, including Regulation 14C.
This Information Statement
contains forward-looking statements which involve risks and uncertainties. ProBility Media’s actual results may differ significantly
from the results discussed in the forward-looking statements.
ProBility Media will
pay all costs associated with the distribution of the Information Statement, including the costs of printing and mailing. ProBility
Media will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending this Information Statement to the beneficial owners of the Common Stock.
FOR ADDITIONAL
INFORMATION ABOUT PROBILITY MEDIA, REFERENCE IS MADE TO PROBILITY MEDIA’S ANNUAL REPORT ON FORM 10
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K.
The principal executive
offices of ProBility Media are located at 1517 San Jacinto Street, Houston, Texas 77002, and its telephone number is (713) 856-7722.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors
has unanimously adopted and the Consenting Stockholders have approved an amendment to the Certificate of Incorporation of ProBility
Media (the “Authorized Shares Amendment”) to increase the authorized shares of Common Stock from 500,000,000 shares
to 5,000,000,000 shares. The text of the Authorized Shares Amendment is attached as
Appendix A
and is incorporated herein
by reference.
As of September 7,
2018, there were 77,931,415 shares of Common Stock outstanding. Additionally, there were 33,000 shares reserved for issuance pursuant
to the exercise of outstanding stock options, 11,354,583 shares reserved for issuance pursuant to the exercise of outstanding warrants,
286,381,740 shares reserved for issuance pursuant to the conversion of outstanding November 2017, January 2018 and Bridge convertible
notes, and 124,299,262 shares issuable upon the conversion of ProBility Media’s convertible notes. Other than stated above,
ProBility Media has not entered into any agreements or understandings for the issuance of additional shares of Common Stock.
The Board of Directors
has deemed it advisable and in the best interests of ProBility Media to amend Section I of the Articles of Incorporation to increase
the authorized number of shares of Common Stock to 5,000,000,000 shares. The purpose of such increase is to place ProBility Media
in a position where it will continue to have a sufficient number of shares of authorized and unissued Common Stock which can be
issued for or in connection with such corporate purposes as may from time to time be considered advisable by the Board of Directors.
Having such shares available for issuance in the future will give ProBility Media greater flexibility and will allow such shares
to be issued as determined by the Board of Directors of ProBility Media without the expense and delay of a special stockholders’
meeting to approve such additional authorized capital stock. Such corporate purposes could include, without limitation: (a) issuances
in connection with any desirable acquisitions which may be presented to ProBility Media, (b) payments of stock dividends, (c) issuances
of Common Stock upon the exercise of stock options granted under the ProBility Media 2017 Incentive Compensation Plan or in connection
with other employee benefit plans, (d) issuances of Common Stock upon the exercise of warrants or the conversion of other securities
convertible into Common Stock which may be outstanding from time to time, and (e) issuances in connection with an offering to raise
capital for ProBility Media.
The authorized shares
of Common Stock and preferred stock in excess of those presently issued will be available for issuance at such times and for such
purposes as the Board of Directors may deem advisable without further action by the stockholders, except as may be required by
the Articles of Incorporation and applicable laws and regulations. Any future issuances of shares will be subject to the rights
of holders of shares of any then outstanding preferred stock. No shares of preferred stock are currently outstanding.
The Authorized Shares
Amendment may have the result of making it more difficult for any person or group of persons, other than the current principal
stockholders and management, to acquire control of ProBility Media by expanding the ability of ProBility Media to issue shares
and thereby dilute the voting power of any person or group that might accumulate shares in order to attempt to effect a change
in control. Although the Authorized Shares Amendment might have this effect, the Authorized Shares Amendment has been proposed
by the Board of Directors for the reasons set forth above and not for anti-takeover reasons. ProBility Media is not aware of any
present effort to accumulate shares of Common Stock or to attempt to change control of ProBility Media. ProBility Media has no
present plans to issue additional shares of Common Stock to any of the current principal stockholders, executive officers, directors
or any other person or entity, except under the ProBility Media 2017 Incentive Compensation Plan or pursuant to the conversion
or exercise of outstanding stock options, warrants and convertible securities or contracts.
The Authorized Shares
Amendment will become effective upon the filing of a certificate of amendment relating thereto with the Secretary of State of the
State of Nevada, which will occur on or about October 8, 2018. Under federal securities law, ProBility Media cannot file the certificate
of amendment until at least 20 days after the mailing of this Information Statement.
GRANT OF DISCRETIONARY AUTHORITY TO THE
BOARD TO IMPLEMENT A
ONE FOR UP TO 100 REVERSE STOCK SPLIT
The Board of Directors
and the holders of a majority of the outstanding shares of Common Stock have approved a grant of discretionary authority to the
Board of Directors of the Company to implement a reverse stock split for the purpose of increasing the per share price of the Common
Stock. The reverse split exchange ratio that the Board of Directors and majority stockholders approved is up to 100 pre-reverse
split shares (“Old Shares”) for each one post-reverse split share (“New Shares”), with the reverse stock
split to occur as soon as practicable, the exact time of the reverse stock split and the exchange ratio of the reverse split to
be determined by the directors of the Company in their discretion.
The Board of Directors
believes that the approval of a range for the exchange ratio of the reverse stock split (as contrasted with approval of a specified
exchange ratio of the reverse split) provides the Board of Directors of the Company with maximum flexibility to achieve the purposes
of a reverse stock split and, therefore, is in the best interests of the stockholders. The actual ratio for implementation of the
reverse split would be determined by the directors based upon their evaluation as to what exchange ratio of Old Shares to New Shares
would be most advantageous to the Company and the stockholders.
The Board of Directors
also believes that approval of a reverse split process that is achieved “as soon as practicable” (as contrasted with
approval of a specified time of the reverse split) provides the Board of Directors of the Company with maximum flexibility to achieve
the purposes of a reverse stock split and, therefore, is in the best interests of the stockholders.
The Company believes
that a reverse stock split will increase the share price of its Common Stock, which may thereafter generate greater interest in
the Common Stock among potential investors and ultimately enhance prospective brokerage recommendations and analyst coverage.
In connection with
the Company’s reverse stock split and the corporate name change, and to make an OTC Voluntary Symbol Request Change, the
Company will submit to FINRA a completed Issuer Company-Related Action Notification Form no later than 10 calendar days prior to
the earlier of the record date for the stock split or the effective date of the corporate name change.
The New Shares issued
pursuant to the reverse stock split will be fully paid and non-assessable. All New Shares will have the same par value, voting
rights and other rights as Old Shares. Stockholders of the Company do not have preemptive rights to acquire additional shares of
Common Stock.
Stockholders should
note that if the Company elects to implement a reverse stock split, there is no assurance that prices for shares of the Common
Stock after the reverse split will be up to 100 times greater than the price for shares of Common Stock immediately before the
reverse stock split, depending on the exchange ratio of the reverse split. Additionally, the Company cannot assure you that it
will be successful in generating greater interest among professional investors and institutions or enhancing prospective analyst
coverage and brokerage recommendations.
Effect of the Reverse Stock Split
ProBility Media is
a public company. The reverse stock split would not affect the registration of the Common Stock under the Exchange Act, nor will
it change the Company’s periodic reporting and other obligations under that act.
The reverse stock split
will not alter any stockholder’s percentage interest in the Company’s outstanding shares, except to the extent that
the reverse stock split results in any of the Company’s stockholders owning a fractional share. No fractional shares shall
be issued. Any stockholder who beneficially owns a fractional share of the Company’s common stock after the reverse stock
split, will receive an additional share of Common Stock in lieu of such fractional share. The principal effects of the reverse
stock split will be that the number of shares of Common Stock issued and outstanding will be reduced from approximately 77,931,415
shares to 779,314 shares (assuming the reverse stock split is implemented at a 1-for-100 exchange ratio).
The voting and other
rights of holders of Common Stock would not be affected by the reverse split (other than as described above). For example, a holder
of 1% of the voting power of the outstanding shares of Common Stock immediately before the effective time of the reverse stock
split would continue to hold 1% of the voting power of the outstanding shares of Common Stock after the reverse split. The number
of stockholders of record would also not be affected by the reverse stock split.
Stockholders should
recognize that if a reverse stock split is effected, they will own a fewer number of shares than they presently own (a number equal
to the number of shares owned immediately before the effective time divided by the 1-for-100 exchange ratio, or such lesser exchange
ratio as may be determined by the Company’s directors, subject to adjustment for fractional shares, as described above).
The determination of
the exchange ratio of the reverse stock split will have also have an effect on the number of authorized but unissued shares of
Common Stock remaining. Based on the 5,000,000,000 shares of Common Stock that will be authorized under the Company’s Articles
of Incorporation, if the Company elects to implement a 1-for-100 reverse stock split, the reverse split, when implemented, would
have the effect of leaving approximately 4,999,220,686 authorized but unissued shares of Common Stock. By comparison, if the Company
elects to implement a 1-for-10 reverse stock split, the reverse split, when implemented, would have the effect of leaving approximately
4,992,206,858 authorized but unissued shares of Common Stock.
The issuance in the
future of such additional authorized shares may have the effect of diluting the earnings per share and book value per share, as
well as the stock ownership and voting rights, of the currently outstanding shares of Common Stock.
The large number of
authorized but unissued shares of Common Stock may be construed as having an anti-takeover effect by permitting the issuance of
shares to purchasers who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain provisions of the
Company’s Articles of Incorporation or By-laws. Such a use of these additional authorized shares could render more
difficult, or discourage, an attempt to acquire control of the Company through a transaction opposed by the Company’s Board
of Directors. At this time, the Board does not have any agreements or commitments to issue new shares of Common Stock resulting
from the large number of authorized but unissued shares because of the reverse stock split.
The Company currently
has no intention of going private, and this proposed reverse stock split is not intended to be a first step in a going private
transaction and will not have the effect of a going private transaction covered by Rule 13e-3 under the Exchange Act.
Commencing with the
effective date of the reverse stock split, all outstanding stock options, warrants and other convertible securities entitling holders
thereof to purchase shares of the Company’s Common Stock will entitle such holders to receive, upon exercise of their securities,
a fraction (depending on the actual exchange ratio of the reverse stock split) of the number of shares of the Company’s Common
Stock which such holders may purchase upon exercise or conversion of their securities. In addition, commencing on the effective
date of the reverse stock split, the exercise or conversion price of all outstanding options, warrants and other convertible securities
of the Company will be increased depending on the actual exchange ratio of the reverse stock split.
The Company expects
to effectuate the proposed 1-for-10 reverse stock split of the issued and outstanding shares of Common Stock prior to December
31, 2019.
Risks Associated with the Reverse Stock Split
This Information Statement
includes forward-looking statements including statements regarding the timing of the proposed reverse stock split and the potential
benefits of a reverse split, including, but not limited to, increasing the per share price of the Common Stock. The words
“believe,” “expect,” “will, “may” and similar phrases are intended to identify such forward-looking
statements. Such statements reflect the Company’s current views and assumptions, and are subject to various risks and uncertainties
that could cause actual results to differ materially from expectations. Some of the important risk factors affecting the
Company’s business, that could cause its actual results, performance or financial condition to differ seriously from expectations,
include uncertainties relating to overall economic conditions, the ability of the Company to effect an acquisition or other business
combination and other factors. For a discussion of these and other risk factors, see the Company’s annual report on
Form 10-K for the year ended October 31, 2017, filed April 16, 2018, and other filings made by the Company with the U.S. Securities
and Exchange Commission.
If implemented, the
reverse stock split will result in some stockholders owning “odd-lots” of less than 100 shares of Common Stock on a
post-split basis. Odd lots may be more difficult to sell, or require greater transaction costs per share to sell than shares in
“even lots” of even multiples of 100 shares.
Federal Income Tax Consequences
The Company believes
that the federal income tax consequences of the reverse stock split to holders of Common Stock will be as follows:
(i)
Except as explained in (v) below, no income gain or loss will be recognized by a stockholder on the surrender of the Old Shares
or receipt of the certificate representing post-split New Shares.
(ii)
Except as explained in (v) below, the tax basis of the New Shares will equal the tax basis of the Old Shares exchanged therefor.
(iii)
Except as explained in (v) below, the holding period of the New Shares will include the holding period of the Old Shares if such
Old Shares were held as capital assets.
(iv)
The conversion of the Old Shares into the New Shares will produce no taxable income or gain or loss to the Company.
(v)
The federal income tax treatment of the receipt of the one additional share in lieu of any fractional interests by a stockholder
is not clear and may result in tax liability not material in amount in view of the low value of such fractional interest.
The Company’s
opinion is not binding upon the Internal Revenue Service or the courts, and the Company cannot assure you that the Internal Revenue
Service or the courts will accept the positions expressed above.
The state and local
tax consequences of the reverse stock split may vary significantly as to each stockholder, depending upon the state in which he,
she or it resides. Stockholders are urged to consult their own tax advisors with respect to the federal, state and local tax consequences
of the reverse stock split.
SHAREHOLDERS SHOULD NOT DESTROY ANY
STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Currently our common
stock is quoted on the OTCQB marketplace under the symbol “PBYA.” In connection with a reverse split, our common stock
will change its current CUSIP number. This new CUSIP number will appear on any new certificates representing post-split shares
of our common stock.