UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 20, 2016
MOBETIZE CORP.
(Exact name of registrant as specified in its charter)
Nevada
333-181747
99-0373704
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
8105 Birch Bay Square Street, Suite 205 Blaine, Washington 98230
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (778) 588-5563
n/a
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
□
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
□
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
□
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
□
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
1
ITEM 3.02
UNREGISTERED SALES OF EQUITY SECURITIES.
_____________________________________________________________________________________
On June 2, 2016, Mobetize Corp., (the “Company”), and Alligato, Inc. (“Alligato”) entered into a Share
Exchange Agreement pursuant to which Alligato is to exchange four million eighty one thousand four
hundred and eighty one (4,081,481) shares of the Company’s Common Stock for four million eighty one
thousand four hundred and eighty one (4,081,481) shares of the Company’s Series B Preferred Stock (the
“Series B Preferred Stock”) in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended
(the “Securities Act”), the (i) Company is the same issuer of the Common Stock and the Series B
Preferred Stock, (ii) no additional consideration was given to Alligato for the exchange, (iii) Alligato is an
existing security holder of the Company and (iv) the Company will not pay any commission or
remuneration for the exchange.
Ajay Hans, our Chief Executive Officer and a member of the Company’s Board of Directors (the
“Board”) is the principal owner and control person of Alligato. Mr. Hans recused himself from the Board
decision to approve the Share Exchange Agreement with Alligato.
On June 2, 2016, the Company and Don Duberstein, a member of the Board (“Duberstein”), entered into
a Share Exchange Agreement pursuant to which Duberstein is to exchange one million thirty nine
thousand one hundred and sixty seven (1,039,167) shares of the Company’s Common Stock for one
million thirty nine thousand one hundred and sixty seven (1,039,167) shares of the Company’s Series B
Preferred Stock in accordance with Section 3(a)(9) of the Securities Act, the (i) Company is the same
issuer of the Common Stock and the Series B Preferred Stock, (ii) no additional consideration was given
to Duberstein for the exchange, (iii) Duberstein is an existing security holder of the Company and (iv) the
Company will not pay any commission or remuneration for the exchange.
Mr. Duberstein recused himself from the Board decision to approve the Share Exchange Agreement with
him.
On June 2, 2016, the Company” and Malek Ladki, a member of the Board (“Ladki”) entered into a Share
Exchange Agreement pursuant to which Ladki is to exchange three hundred thousand (300,000) shares
of the Company’s Common Stock for three hundred thousand (300,000) shares of the Company’s
Series B Preferred Stock in accordance with Section 3(a)(9) of the Securities Act of 1933, the (i)
Company is the same issuer of the Common Stock and the Series B Preferred Stock, (ii) no additional
consideration was given to Ladki for the exchange, (iii) Ladki is an existing security holder of the
Company and (iv) the Company will not pay any commission or remuneration for the exchange.
Mr. Ladki recused himself from the Board decision to approve the Share Exchange Agreement with him.
As a result of the respective agreements with Alligato, Duberstein and Ladki, the number of outstanding
shares of the Company's Common Stock will decrease from 28,750,881 to 23,330,233 and the total
number of shares of the Company's Series B Preferred Stock will increase to 5,420,648.
_______________________________________________________________________________
ITEM 5.03
AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS;
CHANGE IN FISCAL YEAR
______________________________________________________________________________
Amendment to Certificate of Designation - On May 20, 2016, the Company filed a Certificate of
Amendment to its Articles of Incorporation (the “Series A Amendment”) with the Nevada Secretary of
State to amend its Designation of Series A Preferred Stock dated February 25, 2016 (the “Series A
Preferred Designation”), in its entirety, to amend the provision related to conversion adjustments. The
Series A Amendment was approved by the Board on May 11, 2016.
The Series A Preferred Designation provided that in the event the Company adjusted the number of
outstanding shares of Common Stock, whether by subdivision or combination, the number of shares of
Common Stock into which the Series A Preferred Stock could be converted would change in proportion
to any subdivision or combination of the Common Stock. The Series A Amendment does not permit any
adjustment in the number of shares of Common Stock into which the Series A Preferred Stock can be
converted.
Certificate of Designation - On May 23, 2016, the Company filed a Certificate of Designation for Series
B Preferred Stock (the “Series B Preferred Designation”) with the Nevada Secretary of State. The Series
B Designation was approved by the Board on May 11, 2016.
The Series B Preferred Designation designated twenty five million (25,000,000) shares of the authorized
preferred share capital as Series B Preferred Stock and provides certain preferences to holders of Series B
Preferred Stock over those rights held by holders of the Company’s Common Stock certain of which
rights are summarized as follows:
Conversion Rights – Shares of Series B Preferred Stock can be converted into shares of Common Stock
on a one for one (1:1) basis, which conversion is not subject to adjustment, on or after the second (2 nd )
anniversary of the designation of the Series B Preferred Stock or on an earlier date if converted in
connection with a reorganization, reclassification, consolidation, merger or sale.
Voting Rights – Shares of Series B Preferred Stock entitle the holder thereof to one (1) vote for each share
of Series B Preferred Stock, voting together with the Common Stock as a single class, with respect to any
and all matters presented to the shareholders of the Company for their action or consideration (whether at
a meeting of stockholders of the Company, by written action of stockholders in lieu of a meeting or
otherwise).
Rank – Shares of Series B Preferred Stock rank pari pasu with the Common Stock in respect to dividend
rights upon voluntary or involuntary liquidation, dissolution or winding up of the Company.
Protection Provisions – The Series B Certificate of Designation may not be altered in any way except
with the consent of those holders of a majority of the outstanding shares of Series B Preferred Stock; the
Company may not redeem for value existing shares of Common Stock if such redemption does not
include outstanding shares of Series B Preferred Stock; Series B Preferred Stock could only be issued
pursuant to a share exchange.
Amendment to Certificate of Designation - On May 31, 2016, the Company filed a Certificate of
Amendment to its Articles of Incorporation (the “Series B Amendment”) with the Nevada Secretary of
State to amend its Designation of Series B Preferred Stock dated May 23, 2016, in its entirety, to amend
the protection provision related to the limitations placed on the issuance of Series B Preferred Stock. The
Series B Amendment was approved by the Board on May 27, 2016.
The Series B Preferred Designation provided that Series B Preferred Stock could only be issued pursuant
to a share exchange agreement. The Series B Amendment deleted this limitation on the issuance of Series
B Preferred Stock from the Series B Preferred Designation.
The foregoing descriptions of the Series A Amendment to Certificate of Designation, the Series B
Preferred Designation, Amendment and the preferences associated with the Series B Designation are
qualified in their entirety by reference to the full text of each document, and should be read in conjunction
with the Amendment and the Series B Designation, copies of the respective documents are filed with this
Current Report on Form 8-K as Exhibit 3.1.1, 3.1.2 and 3.1.3.
______________________________________________________________________________
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS
_____________________________________________________________________________________
(d)
Exhibits
The exhibits required to be attached by Item 601 of Regulation S-K are filed herewith.
Exhibit No.
Page No.
Description
Attached
Certificate of Amendment Series A Preferred Designation
Attached
Series B Preferred Designation
Attached
Certificate of Amendment Series B Preferred Designation
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
Mobetize Corp.
Date
By:
/s/ Ajay Hans
June 2, 2016
Name: Ajay Hans
Title: Chief Executive Officer
EXHIBIT 3.1.1
CERTIFICATE OF AMENDMENT
OF
PREFERRED STOCK
OF
MOBETIZE CORP.
Series A Preferred Stock
Pursuant to
Sections 78.385and78.390 of Nevada Revised Statutes
The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board
of Directors (the “ Board of Directors” ) of Mobetize Corp., a Nevada corporation (the “ Corporation” ), at a
meeting duly convened and held, at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority conferred on the Board of Directors by the Corporation’s
Articles of Incorporation, the designation of the Corporation’s Series A Preferred Stock effective February
25, 2016, is hereby amended and replaced in its entirety; and the Chairman and Chief Executive Officer of
the Corporation be, and he hereby is, authorized and directed to execute and file with the Secretary of State
of the State of Nevada a Certificate of Amendment of the Corporation fixing the designations, powers,
preferences and rights of the shares of Series A Preferred Stock, and the qualifications, limitations or
restrictions thereof (in addition to the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, set forth in the Articles of Incorporation which may be applicable to the
Corporation’s Series A Preferred Stock, as follows:
1. Number of Shares; Designation . A total of 10,000,000 shares of preferred stock, par value $0.001 per
share, of the Corporation are hereby designated as Series A Preferred Stock (the “ Series” ). Shares of the
Series (the “ Preferred Stock ”) will be issued pursuant to the terms of a Share Exchange Agreement, dated
as of February 4, 2016, by and among the Corporation and Ajay Hans (the “ Share Exchange Agreement” ),
a copy of which will be provided to any stockholder of the Corporation upon request therefor. Capitalized
terms used herein and not otherwise defined have the respective meanings set forth in the Share Exchange
Agreement.
2. Rank . The Series shall, with respect to dividend rights upon voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation rank:
(i)
Pari pasu with the Common Stock, par value $0.001 per share, of the Corporation (the
“ Common Stock ”), and any additional series of preferred stock which may in the future be
issued by the Corporation and are designated in an amendment to the Articles of
Incorporation or a certificate of designation establishing such additional preferred stock.
(ii)
Junior to any additional series of preferred stock which may in the future be issued by the
Corporation and are designated in the amendment to the Articles of Incorporation or a
certificate of designation establishing such additional preferred stock as ranking senior to
the Preferred Stock.
3. Dividends. Dividends may be declared and paid on the Preferred Stock from funds legally available
therefor as and when determined by the Board of Directors. The Series shall, with respect to the payment
of dividends, rank pari passu with the Common Stock.
4. Conversion .
(a) Right to Convert . The Holder of Preferred Stock (the “ Holder”) s hall have the right to convert, on the
second (2 nd ) annual anniversary date of the designation of the Series and from time to time thereafter, all or
any part of the Preferred Stock held by such Holder into such number of fully paid and non-assessable
shares of Common Stock (the “ Conversion Shares” ) as is determined in accordance with the terms hereof
(a “ Conversion” ). Notwithstanding the initial time restriction on conversion contained in this paragraph,
Holder shall have the right to convert on any date prior to the second (2 nd ) annual anniversary of the
designation of the Series in connection with a transaction of the type described in paragraph 4(e)(ii) below.
(b) Conversion Notice . In order to convert Preferred Stock, the Holder shall send to the Corporation by
facsimile transmission, at any time prior to 3:00 p.m., central time, on the Business Day (as used herein,
the term “ Business Day ” shall mean any day except a Saturday, Sunday or day on which there is a Federal
holiday (the “ Conversion Date” ), a notice of conversion in substantially the form attached as Annex I h ereto
(a “ Conversion Notice” ), stating the number of Preferred Stock to be converted, and a calculation of the
number of shares of Common Stock issuable upon such Conversion in accordance with the formula set
forth in paragraph 4(c) below setting forth the basis for each component thereof, including the details
relating to any adjustments made to the Conversion Price. The Holder shall promptly thereafter send the
Conversion Notice and the certificate or certificates being converted to the Corporation. The Corporation
shall issue a new certificate for Preferred Stock to the Holder in the event that less than all of the Preferred
Stock represented by a certificate are converted; provided, however, that the failure of the Corporation to
deliver such new certificate shall not affect the right of the Holder to submit a further Conversion Notice
with respect to such Preferred Stock and, in any such case, the Holder shall be deemed to have submitted
the original of such new certificate at the time that it submits such further Conversion Notice. Except as
otherwise provided herein, upon delivery of a Conversion Notice by the Holder in accordance with the
terms hereof, the Holder shall, as of the applicable Conversion Date, be deemed for all purposes to be the
record owner of the Common Stock to which such Conversion Notice relates.
(c) Number of Conversion Shares . The number of Conversion Shares to be delivered by the Corporation to
a Holder for each share of Preferred Stock pursuant to a Conversion shall be one (1) share of Common
Stock for each one (1) share of Preferred Stock delivered to the Corporation (the “ Conversion Rate” ).
If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise)
the authorized Common Stock into a greater number of shares, the Conversion Rate in effect immediately
prior to such subdivision will not be subject to adjustment. If the Corporation at any time combines (by
combination, reverse stock split or otherwise) the authorized Common Stock into a smaller number of
shares, the Conversion Rate in effect immediately prior to such combination will not be subject to
adjustment.
(d) Delivery of Conversion Shares . The Corporation shall, no later than the close of business on the third
(3 rd ) Business Day following the later of the date on which the Corporation receives a Conversion Notice
from the Holder pursuant to paragraph 4(b), above, and the date on which the Corporation receives the
related Preferred Stock certificate (such third Business Day, the “ Delivery Date” ), issue and deliver or cause
to be delivered to such Holder the number of Conversion Shares determined pursuant to paragraph 4(c)
above; provided.
(e) Adjustments . The Conversion Rate shall be subject to adjustment from time to time as follows:
(i)
Reorganization, Reclassification, Consolidation, Merger or Sale. Prior to any
re capitalization, reorganization, reclassification, consolidation, merger, or other similar
transaction pursuant to which the holders of the Common Stock are entitled to receive
stock, securities or assets with respect to or in exchange for the Common Stock, the
Corporation will make appropriate provision, in form and substance satisfactory to the
Holder of the Preferred Stock, to ensure that the Holder will thereafter have the right to
acquire and receive in lieu of or in addition to, as the case may be, the shares of Common
Stock immediately theretofore acquirable and receivable upon conversion of the Preferred
Stock, had such recapitalization, reorganization, reclassification, consolidation, merger, or
other similar transaction not taken place. In any such case, the Corporation will make
appropriate provision, in form and substance satisfactory to the Holder of a the Preferred
Stock to ensure that the provisions of this paragraph and paragraph 4(e)(iii) below will
thereafter be applicable to the Preferred Stock. The Corporation will not effect any
consolidation or merger, unless prior to the consummation thereof, the successor entity
resulting from such consolidation or merger, assumes, by written instrument, in form and
substance satisfactory to the Holder of the Preferred Stock, the obligation to deliver to the
Holder of the Preferred Stock such shares of stock, securities or assets as, in accordance
with the foregoing provisions, that the Holder may be entitled to acquire.
(ii)
Purchase Rights . If at any time the Corporation grants, issues or sells any options,
convertible securities or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of the Common Stock (the 'Purchase Rights" ), then the Holder of
the Preferred Stock will be entitled to acquire, upon the terms applicable to such purchase
rights, the aggregate purchase rights which Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of
Holder's shares of the Preferred Stock immediately before the date on which a record is
taken for the grant, issuance or sale of such purchase rights, or, if no such record is taken,
the date as of which the record holders of the Common Stock are to be determined for the
grant, issue or sale of such purchase rights.
(iii)
Status of Shares . All shares of Preferred Stock that are at any time converted pursuant to
this paragraph 4, and all shares of Preferred Stock that are otherwise reacquired by the
Corporation and subsequently canceled by the Board of Directors, shall be retired and shall
not be subject to reissuance.
5. Voting Rights . Each share of the Series shall entitle the Holder thereof to ten (10) votes for each
Conversion Share into which such share of the Series is then convertible (the “ Super Voting Rights” ), which
on the initial date of issuance of the Preferred Stock shall equal, when combined with the shares of Common
Stock held by the Holder on the initial date of issuance of the Preferred Stock, in the aggregate not less than
66 2/3 % of the total votes of all outstanding shares of capital stock of the Corporation, and shall otherwise
have voting rights and powers equal to the voting rights and powers of the Common Stock (except as
otherwise expressly provided herein or as required by law), voting together with the Common Stock as a
single class and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of
the Corporation.
6. Restrictions and Limitations
So long as any shares of Preferred Stock remain outstanding, the Corporation shall not, without the vote or
written consent by the Holder of the outstanding Preferred Stock, voting as a single class:
(i)
Redeem, purchase or otherwise acquire for value (or pay into or set aside for a sinking or
other analogous fund for such purpose) any share or shares of its capital stock, except for
a transaction in which all outstanding shares of Preferred Stock are concurrently redeemed,
purchased or otherwise acquired, provided however, that this restriction shall not apply to
the repurchase of shares of Common Stock from employees, officers, directors, consultants
or other persons performing services for the Corporation or any subsidiary pursuant to
agreements pursuant to which the Corporation has the option to repurchase such shares
upon the occurrence of certain events, such as the termination of employment.
(ii)
alter, modify or amend (whether by merger or otherwise) the terms of the Series in any
way;
(iii)
issue (whether by merger or otherwise) any new series or class of capital stock ranking
pari passu with or having a preference over the Series as to the Super Voting Rights;
(iv)
increase (whether by merger or otherwise) the authorized number of shares of the Series;
(v)
re-issue (whether by merger or otherwise) any shares of Preferred Stock which have been
converted or redeemed in accordance with the terms hereof;
(vi)
issue (whether by merger or otherwise) any shares of the Series except pursuant to the
terms of the Share Exchange Agreement;
(vii)
enter into any definitive agreement or commitment with respect to any of the foregoing; or
(viii) cause or permit any subsidiary to engage in or enter into any definitive agreement or
commitment with respect to any of the foregoing.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be duly executed
on its behalf by its undersigned Chairman of the Board of Directors as of May 12, 2016.
By:
/s/ Malek Ladki
Name: Malek Ladki
Title: Chairman of the Board of Directors
ANNEX I
CONVERSION NOTICE
The undersigned hereby elects to convert shares of Series A Preferred Stock (the “ Preferred Stock ”),
represented by stock certificate No(s). ________ , into shares of common stock (“ Common Stock ”) of
Mobetize (the “ Corporation ”) according to the terms and conditions of the Amended Certificate of
Designation dated effective May 20, 2016, relating to the Preferred Stock (the “ Amended Certificate of
Designation ”), as of the date written below.
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the
Certificate of Designation.
Conversion Date: ____________________________
Number of Shares of Preferred Stock to be Converted:
Number of Shares of Common Stock to be Issued:
Name of Holder: Ajay Hans
Address: ___________________________________
__________________________________________
__________________________________________
Signature:______________________
Holder Requests Delivery to be made: (check one)
o By Delivery of Physical Certificates to the Above Address
Through Depository Trust Corporation: __ (Account No: ________________)
5
EXHIBIT 3.1.2
CERTIFICATE OF DESIGNATION
OF
PREFERRED STOCK
OF
MOBETIZE CORP.
Designated
Series B Preferred Stock
Pursuant to
Sections 78.1955 of Nevada Revised Statutes
The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board
of Directors (the “ Board of Directors” ) of Mobetize Corp., a Nevada corporation (the “ Corporation” ), at a
meeting duly convened and held, at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority conferred on the Board of Directors by the Corporation’s
Articles of Incorporation, the issuance of a series of preferred stock, par value $0.001 per share, of the
Corporation which shall consist of 25,000,000 shares of preferred stock be, and the same hereby is,
authorized; and the Chairman and Chief Executive Officer of the Corporation be, and they hereby are,
authorized and directed to execute and file with the Secretary of State of the State of Nevada a Certificate
of Designation of Series B Preferred Stock of the Corporation fixing the designations, powers, preferences
and rights of the shares of such series, and the qualifications, limitations or restrictions thereof in addition
to the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof,
set forth in the Articles of Incorporation which may be applicable to the Corporation’s preferred stock, as
follows:
1. Number of Shares; Designation . A total of 25,000,000 shares of preferred stock, par value $0.001 per
share, of the Corporation are hereby designated as Series B Preferred Stock (the “ Series B Preferred Stock” ).
2. Rank . The Series B Preferred Stock shall, with respect to voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation rank:
(i)
Pari passu with the Common Stock, par value $0.001 per share, of the Corporation (the
“ Common Stock ”), the Series A Preferred Stock, and any additional series of preferred
stock which may in the future be issued by the Corporation and are designated in an
amendment to the Articles of Incorporation or a certificate of designation establishing such
additional preferred stock.
(ii)
Junior to any additional series of preferred stock which may in the future be issued by the
Corporation and are designated in the amendment to the Articles of Incorporation or a
certificate of designation establishing such additional preferred stock as ranking senior to
the Preferred Stock.
3. Dividends. Dividends may be declared and paid on the Series B Preferred Stock from funds legally
available therefor as and when determined by the Board of Directors. The Series B Preferred Stock shall,
with respect to the payment of dividends, rank pari passu with the Common Stock and the Series A Preferred
Stock.
If the Corporation declares or pays a dividend or distribution on the Common Stock or the Series A
Preferred Stock, whether such dividend or distribution is payable in cash, securities or other property, the
Corporation shall simultaneously declare and pay a dividend on the Series B Preferred Stock on a pari
passu basis with the Common Stock determined on an as-converted basis assuming all outstanding shares
of Series B Preferred Stock had been converted as of immediately prior to the record date of the applicable
dividend (or if no record date is fixed, the date as of which the record holders of Common Stock entitled to
such dividends are to be determined).
4. Conversion .
(a) Right to Convert . The Holder of Series B Preferred Stock (the “ Holder”) s hall have the right to convert,
on the second (2 nd ) annual anniversary date of the designation of the Series B Preferred Stock and from
time to time thereafter, all or any part of the Series B Preferred Stock held by such Holder into such number
of fully paid and non-assessable shares of Common Stock (the “ Conversion Shares” ) as is determined in
accordance with the terms hereof (a “ Conversion” ); provided, however, in connection with any conversion
hereunder, each Holder of Series B Preferred Stock may not convert any part of the Series B Preferred
Stock if such conversion would cause such Holder or any of its assignees to beneficially own more than
4.99% of the Common Stock of the Corporation. Notwithstanding the initial time restriction on conversion
contained in this paragraph, Holder shall have the right to convert on any date prior to the second (2 nd )
annual anniversary of the designation of the Series B Preferred Stock in connection with a transaction of
the type described in paragraph 4(e)(i) below.
(b) Conversion Notice . In order to convert Series B Preferred Stock, the Holder shall send to the Corporation
by facsimile transmission, at any time prior to 3:00 p.m., Pacific Time, on the Business Day (as used herein,
the term “ Business Day ” shall mean any day except a Saturday, Sunday or day on which there is a Federal
holiday (the “ Conversion Date” ), a notice of conversion in substantially the form attached as Annex I h ereto
(a “ Conversion Notice” ), stating the number of Series B Preferred Stock to be converted, and a calculation
of the number of shares of Common Stock issuable upon such Conversion in accordance with the formula
set forth in paragraph 4(c) below setting forth the basis for each component thereof. The Holder shall
promptly thereafter send the Conversion Notice and the certificate or certificates being converted to the
Corporation. The Corporation shall issue a new certificate for Series B Preferred Stock to the Holder in the
event that less than all of the Series B Preferred Stock represented by a certificate are converted; provided,
however, that the failure of the Corporation to deliver such new certificate shall not affect the right of the
Holder to submit a further Conversion Notice with respect to such Series B Preferred Stock and, in any
such case, the Holder shall be deemed to have submitted the original of such new certificate at the time that
it submits such further Conversion Notice. Except as otherwise provided herein, upon delivery of a
Conversion Notice by the Holder in accordance with the terms hereof, the Holder shall, as of the applicable
Conversion Date, be deemed for all purposes to be the record owner of the Common Stock to which such
Conversion Notice relates.
(c) Number of Conversion Shares . The number of Conversion Shares to be delivered by the Corporation to
a Holder for each share of Series B Preferred Stock delivered pursuant to a Conversion shall be one (1)
share of Common Stock for each one (1) share of Series B Preferred Stock (the “ Conversion Rate” ).
If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise)
the authorized Common Stock into a greater number of shares, the Conversion Rate in effect immediately
prior to such subdivision will not be subject to adjustment. If the Corporation at any time combines (by
combination, reverse stock split or otherwise) the authorized Common Stock into a smaller number of
shares, the Conversion Rate in effect immediately prior to such combination will not be subject to
adjustment.
(d) Delivery of Conversion Shares . The Corporation shall, no later than the close of business on the third
(3 rd ) Business Day following the later of the date on which the Corporation receives a Conversion Notice
from the Holder pursuant to paragraph 4(b), above, and the date on which the Corporation receives the
related Series B Preferred Stock certificate (such third Business Day, the “ Delivery Date” ), issue and deliver
or cause to be delivered to such Holder the number of Conversion Shares determined pursuant to paragraph
4(c) above; provided.
(e) Additional Considerations . The Conversion shall be subject to change from time to time as follows:
(i)
Reorganization, Reclassification, Consolidation, Merger or Sale. Prior to any
recapitalization, reorganization, reclassification, consolidation, merger, or other similar
transaction pursuant to which the holders of the Common Stock are entitled to receive
stock, securities or assets with respect to or in exchange for the Common Stock, the
Corporation will make appropriate provision, in form and substance satisfactory to the
Holder of the Series B Preferred Stock, to ensure that the Holder will thereafter have the
right to acquire and receive in lieu of or in addition to, as the case may be, the shares of
Common Stock immediately theretofore acquirable and receivable upon conversion of the
Series B Preferred Stock, had such recapitalization, reorganization, reclassification,
consolidation, merger, or other similar transaction not taken place. In any such case, the
Corporation will make appropriate provision, in form and substance satisfactory to the
Holder of a the Series B Preferred Stock to ensure that the provisions of this paragraph and
paragraph 4(e)(ii) below will thereafter be applicable to the Series B Preferred Stock. The
Corporation will not effect any consolidation or merger, unless prior to the consummation
thereof, the successor entity resulting from such consolidation or merger, assumes, by
written instrument, in form and substance satisfactory to the Holder of the Series B
Preferred Stock, the obligation to deliver to the Holder of the Series B Preferred Stock such
shares of stock, securities or assets as, in accordance with the foregoing provisions, that
the Holder may be entitled to acquire.
(ii)
Purchase Rights . If at any time the Corporation grants, issues or sells any options,
convertible securities or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of the Common Stock (the 'Purchase Rights" ), then the Holder of
the Series B Preferred Stock will be entitled to acquire, upon the terms applicable to such
purchase rights, the aggregate purchase rights which Holder could have acquired if the
Holder had held the number of shares of Common Stock acquirable upon complete
conversion of Holder's shares of the Series B Preferred Stock immediately before the date
on which a record is taken for the grant, issuance or sale of such purchase rights, or, if no
such record is taken, the date as of which the record holders of the Common Stock are to
be determined for the grant, issue or sale of such purchase rights.
(iii)
Status of Shares . All shares of Series B Preferred Stock that are at any time converted
pursuant to this paragraph 4, and all shares of Series B Preferred Stock that are otherwise
reacquired by the Corporation and subsequently canceled by the Board of Directors, shall
be retired and shall not be subject to reissuance.
5. Voting Rights . Each share of the Series B Preferred Stock shall entitle the Holder thereof to one (1) vote
for each Conversion Share into which such share of the Series B Preferred Stock is then convertible and
shall otherwise have voting rights and powers equal to the voting rights and powers of the Common Stock
(except as otherwise expressly provided herein or as required by law), voting together with the Common
Stock as a single class and shall be entitled to notice of any stockholders’ meeting in accordance with the
Bylaws of the Corporation.
To the extent that under the Nevada Revised Statutes, the vote of the Holders of the Series B Preferred
Stock, voting separately as a class or series, as applicable, is required to authorize a given action of the
Corporation, the affirmative vote or consent of the Holders of at least a majority of the shares of the Series
B Preferred Stock represented at a duly held meeting at which a quorum is present or by written consent of
a majority of the shares of Series B Preferred Stock (except as otherwise may be required under the Nevada
Revised Statutes) shall constitute the approval of such action by the class.
6. Restrictions and Limitations
So long as any shares of Series B Preferred Stock remain outstanding, the Corporation shall not, without
the vote or written consent by the Holders of the outstanding Series B Preferred Stock, voting as a single
class:
(i)
Redeem, purchase or otherwise acquire for value (or pay into or set aside for a sinking or
other analogous fund for such purpose) any share or shares of its capital stock, except for
a transaction in which all outstanding shares of Series B Preferred Stock are concurrently
redeemed, purchased or otherwise acquired, provided however, that this restriction shall
not apply to the repurchase of shares of Common Stock from employees, officers, directors,
consultants or other persons performing services for the Corporation or any subsidiary
pursuant to agreements pursuant to which the Corporation has the option to repurchase
such shares upon the occurrence of certain events, such as the termination of employment.
(ii)
alter, modify or amend (whether by merger or otherwise) the terms of the Series B Preferred
Stock in any way;
(iii)
increase (whether by merger or otherwise) the authorized number of shares of the Series B
Preferred Stock;
(iv)
re-issue (whether by merger or otherwise) any shares of Series B Preferred Stock which
have been converted or redeemed in accordance with the terms hereof;
(v)
issue (whether by merger or otherwise) any shares of the Series B Preferred Stock except
pursuant to the terms of a Share Exchange Agreement;
(vi)
enter into any definitive agreement or commitment with respect to any of the foregoing; or
(vii)
cause or permit any subsidiary to engage in or enter into any definitive agreement or
commitment with respect to any of the foregoing.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be duly executed
on its behalf by its undersigned Chairman of the Board of Directors as of May 12, 2016.
By:
/s/ Malek Ladki
Name: Malek Ladki
Title: Chairman of the Board of Directors
ANNEX I
CONVERSION NOTICE
The undersigned hereby elects to convert shares of Series B Preferred Stock (the “ Preferred Stock ”),
represented by stock certificate No(s). ________ , into shares of common stock (“ Common Stock ”) of
Mobetize (the “ Corporation ”) according to the terms and conditions of the Certificate of Designation dated
effective May 23, 2016, relating to the Preferred Stock (the “ Certificate of Designation ”), as of the date
written below.
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the
Certificate of Designation.
Conversion Date: ____________________________
Number of Shares of Preferred Stock to be Converted:
Number of Shares of Common Stock to be Issued:
Name of Holder: ____________________________
Address: ___________________________________
__________________________________________
__________________________________________
Signature:______________________
Holder Requests Delivery to be made: (check one)
o By Delivery of Physical Certificates to the Above Address
Through Depository Trust Corporation: __ (Account No: ________________)
Exhibit 3.1.3
CERTIFICATE OF AMENDMENT
OF
PREFERRED STOCK
OF
MOBETIZE CORP.
Series B Preferred Stock
Pursuant to
Sections 78.385and78.390 of Nevada Revised Statutes
The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board
of Directors (the “ Board of Directors” ) of Mobetize Corp., a Nevada corporation (the “ Corporation” ), at a
meeting duly convened and held, at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority conferred on the Board of Directors by the Corporation’s
Articles of Incorporation, the designation of the Corporation’s Series B Preferred Stock effective May 20,
2016, is hereby amended and replaced in its entirety; and the Chairman and Chief Executive Officer of the
Corporation be, and he hereby is, authorized and directed to execute and file with the Secretary of State of
the State of Nevada a Certificate of Amendment of the Corporation fixing the designations, powers,
preferences and rights of the shares of Series B Preferred Stock, and the qualifications, limitations or
restrictions thereof (in addition to the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, set forth in the Articles of Incorporation which may be applicable to the
Corporation’s Series B Preferred Stock, as follows:
1. Number of Shares; Designation . A total of 25,000,000 shares of preferred stock, par value $0.001 per
share, of the Corporation are hereby designated as Series B Preferred Stock (the “ Series B Preferred Stock” ).
2. Rank . The Series B Preferred Stock shall, with respect to voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation rank:
(i)
Pari passu with the Common Stock, par value $0.001 per share, of the Corporation (the “ Common
Stock ”), the Series A Preferred Stock, and any additional series of preferred stock which may in the future
be issued by the Corporation and are designated in an amendment to the Articles of Incorporation or a
certificate of designation establishing such additional preferred stock.
(ii)
Junior to any additional series of preferred stock which may in the future be issued by the
Corporation and are designated in the amendment to the Articles of Incorporation or a certificate of
designation establishing such additional preferred stock as ranking senior to the Preferred Stock.
3. Dividends . Dividends may be declared and paid on the Series B Preferred Stock from funds legally
available therefor as and when determined by the Board of Directors. The Series B Preferred Stock shall,
with respect to the payment of dividends, rank pari passu with the Common Stock and the Series A
Preferred Stock.
If the Corporation declares or pays a dividend or distribution on the Common Stock or the Series A
Preferred Stock, whether such dividend or distribution is payable in cash, securities or other property, the
1
Exhibit 3.1.3
Corporation shall simultaneously declare and pay a dividend on the Series B Preferred Stock on a pari
passu basis with the Common Stock determined on an as-converted basis assuming all outstanding shares
of Series B Preferred Stock had been converted as of immediately prior to the record date of the applicable
dividend (or if no record date is fixed, the date as of which the record holders of Common Stock entitled to
such dividends are to be determined).
4. Conversion .
(a) Right to Convert . The Holder of Series B Preferred Stock (the “ Holder” ) shall have the right to convert,
on the second (2nd) annual anniversary date of the designation of the Series B Preferred Stock and from
time to time thereafter, all or any part of the Series B Preferred Stock held by such Holder into such number
of fully paid and non-assessable shares of Common Stock (the “ Conversion Shares” ) as is determined in
accordance with the terms hereof (a “ Conversion” ); provided, however, in connection with any conversion
hereunder, each Holder of Series B Preferred Stock may not convert any part of the Series B Preferred
Stock if such conversion would cause such Holder or any of its assignees to beneficially own more than
4.99% of the Common Stock of the Corporation. Notwithstanding the initial time restriction on conversion
contained in this paragraph, Holder shall have the right to convert on any date prior to the second (2nd)
annual anniversary of the designation of the Series B Preferred Stock in connection with a transaction of
the type described in paragraph 4(e)(i) below.
(b) Conversion Notice . In order to convert Series B Preferred Stock, the Holder shall send to the Corporation
by facsimile transmission, at any time prior to 3:00 p.m., Pacific Time, on the Business Day (as used herein,
the term “ Business Day ” shall mean any day except a Saturday, Sunday or day on which there is a Federal
holiday (the “ Conversion Date” ), a notice of conversion in substantially the form attached as Annex I h ereto
(a “ Conversion Notice” ), stating the number of Series B Preferred Stock to be converted, and a calculation
of the number of shares of Common Stock issuable upon such Conversion in accordance with the formula
set forth in paragraph 4(c) below setting forth the basis for each component thereof. The Holder shall
promptly thereafter send the Conversion Notice and the certificate or certificates being converted to the
Corporation. The Corporation shall issue a new certificate for Series B Preferred Stock to the Holder in the
event that less than all of the Series B Preferred Stock represented by a certificate are converted; provided,
however, that the failure of the Corporation to deliver such new certificate shall not affect the right of the
Holder to submit a further Conversion Notice with respect to such Series B Preferred Stock and, in any
such case, the Holder shall be deemed to have submitted the original of such new certificate at the time that
it submits such further Conversion Notice. Except as otherwise provided herein, upon delivery of a
Conversion Notice by the Holder in accordance with the terms hereof, the Holder shall, as of the applicable
Conversion Date, be deemed for all purposes to be the record owner of the Common Stock to which such
Conversion Notice relates.
(c) Number of Conversion Shares . The number of Conversion Shares to be delivered by the Corporation to
a Holder for each share of Series B Preferred Stock delivered pursuant to a Conversion shall be one (1)
share of Common Stock for each one (1) share of Series B Preferred Stock (the “ Conversion Rate” ).
If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise)
the authorized Common Stock into a greater number of shares, the Conversion Rate in effect immediately
prior to such subdivision will not be subject to adjustment. If the Corporation at any time combines (by
combination, reverse stock split or otherwise) the authorized Common Stock into a smaller number of
shares, the Conversion Rate in effect immediately prior to such combination will not be subject to
adjustment.
(d) Delivery of Conversion Shares . The Corporation shall, no later than the close of business on the third
(3rd ) Business Day following the later of the date on which the Corporation receives a Conversion Notice
2
Exhibit 3.1.3
from the Holder pursuant to paragraph 4(b), above, and the date on which the Corporation receives the
related Series B Preferred Stock certificate (such third Business Day, the “ Delivery Date” ), issue and deliver
or cause to be delivered to such Holder the number of Conversion Shares determined pursuant to paragraph
4(c) above; provided.
(e) Additional Considerations . The Conversion shall be subject to change from time to time as follows:
(i)
Reorganization, Reclassification, Consolidation, Merger or Sale . Prior to any recapitalization,
reorganization, reclassification, consolidation, merger, or other similar transaction pursuant to which the
holders of the Common Stock are entitled to receive stock, securities or assets with respect to or in exchange
for the Common Stock, the Corporation will make appropriate provision, in form and substance satisfactory
to the Holder of the Series B Preferred Stock, to ensure that the Holder will thereafter have the right to
acquire and receive in lieu of or in addition to, as the case may be, the shares of Common Stock immediately
theretofore acquirable and receivable upon conversion of the Series B Preferred Stock, had such
recapitalization, reorganization, reclassification, consolidation, merger, or other similar transaction not
taken place. In any such case, the Corporation will make appropriate provision, in form and substance
satisfactory to the Holder of a the Series B Preferred Stock to ensure that the provisions of this paragraph
and paragraph 4(e)(ii) below will thereafter be applicable to the Series B Preferred Stock. The Corporation
will not effect any consolidation or merger, unless prior to the consummation thereof, the successor entity
resulting from such consolidation or merger, assumes, by written instrument, in form and substance
satisfactory to the Holder of the Series B Preferred Stock, the obligation to deliver to the Holder of the
Series B Preferred Stock such shares of stock, securities or assets as, in accordance with the foregoing
provisions, that the Holder may be entitled to acquire.
(ii)
Purchase Rights . If at any time the Corporation grants, issues or sells any options, convertible
securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of
the Common Stock (the “ Purchase Rights" ), then the Holder of the Series B Preferred Stock will be entitled
to acquire, upon the terms applicable to such purchase rights, the aggregate purchase rights which Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete conversion of Holder's shares of the Series B Preferred Stock immediately before the date on
which a record is taken for the grant, issuance or sale of such purchase rights, or, if no such record is taken,
the date as of which the record holders of the Common Stock are to be determined for the grant, issue or
sale of such purchase rights.
(iii)
Status of Shares . All shares of Series B Preferred Stock that are at any time converted pursuant to
this paragraph 4, and all shares of Series B Preferred Stock that are otherwise reacquired by the Corporation
and subsequently canceled by the Board of Directors, shall be retired and shall not be subject to reissuance.
5. Voting Rights. Each share of the Series B Preferred Stock shall entitle the Holder thereof to one (1) vote
for each Conversion Share into which such share of the Series B Preferred Stock is then convertible and
shall otherwise have voting rights and powers equal to the voting rights and powers of the Common Stock
(except as otherwise expressly provided herein or as required by law), voting together with the Common
Stock as a single class and shall be entitled to notice of any stockholders’ meeting in accordance with the
Bylaws of the Corporation.
To the extent that under the Nevada Revised Statutes, the vote of the Holders of the Series B Preferred
Stock, voting separately as a class or series, as applicable, is required to authorize a given action of the
Corporation, the affirmative vote or consent of the Holders of at least a majority of the shares of the Series
B Preferred Stock represented at a duly held meeting at which a quorum is present or by written consent of
3
Exhibit 3.1.3
a majority of the shares of Series B Preferred Stock (except as otherwise may be required under the Nevada
Revised Statutes) shall constitute the approval of such action by the class.
6. Restrictions and Limitations .
So long as any shares of Series B Preferred Stock remain outstanding, the Corporation shall not, without
the vote or written consent by the Holders of the outstanding Series B Preferred Stock, voting as a single
class:
(i)
Redeem, purchase or otherwise acquire for value (or pay into or set aside for a sinking or other
analogous fund for such purpose) any share or shares of its capital stock, except for a transaction
in which all outstanding shares of Series B Preferred Stock are concurrently redeemed, purchased
or otherwise acquired, provided however, that this restriction shall not apply to the repurchase of
shares of Common Stock from employees, officers, directors, consultants or other persons
performing services for the Corporation or any subsidiary pursuant to agreements pursuant to which
the Corporation has the option to repurchase such shares upon the occurrence of certain events,
such as the termination of employment.
(ii)
alter, modify or amend (whether by merger or otherwise) the terms of the Series B Preferred Stock
in any way;
(iii)
increase (whether by merger or otherwise) the authorized number of shares of the Series B Preferred
Stock;
(iv)
re-issue (whether by merger or otherwise) any shares of Series B Preferred Stock which have been
converted or redeemed in accordance with the terms hereof;
(v)
enter into any definitive agreement or commitment with respect to any of the foregoing; or
(vi)
cause or permit any subsidiary to engage in or enter into any definitive agreement or commitment
with respect to any of the foregoing.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be duly executed
on its behalf by its undersigned Chairman of the Board of Directors as of May 27, 2016.
By:
/s/ Malek Ladki
Name: Malek Ladki
Title: Chairman of the Board of Directors
4
Exhibit 3.1.3
ANNEX I
CONVERSION NOTICE
The undersigned hereby elects to convert shares of Series B Preferred Stock (the “ Preferred Stock ”),
represented by stock certificate No(s). ________ , into shares of common stock (“ Common Stock ”) of
Mobetize (the “ Corporation ”) according to the terms and conditions of the Amended Certificate of
Designation dated effective May 31, 2016, relating to the Preferred Stock (the “ Amended Certificate of
Designation ”), as of the date written below.
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the
Certificate of Designation.
Conversion Date: ____________________________
Number of Shares of Preferred Stock to be Converted:
Number of Shares of Common Stock to be Issued:
Name of Holder:
Address: ___________________________________
__________________________________________
__________________________________________
Signature:______________________
Holder Requests Delivery to be made: (check one)
o By Delivery of Physical Certificates to the Above Address
Through Depository Trust Corporation: __ (Account No: ________________)
5