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): December 19, 2016
(Exact Name of Registrant as Specified in Charter)
Delaware
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0-28720
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73-1479833
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(State or Other Jurisdiction
of
Incorporation
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(Commission
File
Number)
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(IRS Employer
Identification
No.)
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200 Friberg Parkway Suite 4004
Westborough,
Massachusetts
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01581
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area
code:
(617) 861-6050
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 (
see
General Instruction A.2.
below):
☐ 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))
Item 2.01
Completion of Acquisition or Disposition of Assets.
In
September 2016, the Company announced that it entered into an
Amalgamation Agreement (the “Amalgamation Agreement”)
with emergeIT Inc., an Ontario corporation, which does business as
“ShipTime” (“emergeIT” or
“ShipTime”) to acquire emergeIT and two new PAID
subsidiaries. emergeIT is a leading cloud based shipping platform
bringing individuals small and medium sized businesses together
with many of the world’s leading carriers to save time and
money. A copy of the Amalgamation Agreement is set forth as
Exhibit 10.1
. The
Closing for the Amalgamation Agreement occurred on December 19,
2016, and the amalgamation will be effective on December 30,
2016.
Description of emergeIT
emergeIT’s
platform provides its members with the ability to quote, process,
track and dispatch shipments while getting preferred rates on
packages and skidded (LTL) freight shipments throughout North
America and around the world. In addition to these features,
ShipTime also provides what it refers to as “Heroic
Multilingual Customer Support.” In this capacity, ShipTime
acts as an advocate on behalf of its clients in resolving matters
concerning orders and shipping. With an increasing focus and
service offering for e-commerce merchants; which includes online
shopping carts, inventory management, payment services, client
prospecting and retention software, emergeIT can help merchants
worldwide grow and scale their businesses. emergeIT generates
monthly recurring revenue through transactions and “software
as a service” (SAAS) offerings. It currently serves in excess
of 30,000 members in North America. The company has plans to expand
its services into Europe and then worldwide.
Transaction Structure; Consideration to emergeIT
Shareholders
Pursuant to the
Amalgamation Agreement the Company formed a new subsidiary under
Canadian law (“Callco”). The new subsidiary formed its
own Canadian subsidiary (“Exchangeco”), and Callco is
the sole shareholder of Exchangeco. Both Callco and Exchangeco are
incorporated in Ontario under the province’s
Business Corporations Act
. Effective
December 30, 2016 (the “Effective Date”), Exchangeco
will merge (amalgamate) with emergeIT so that as of the effective
date, the Company will own, indirectly through Callco, all of the
issued and outstanding shares of common stock of emergeIT. At that
time, the amalgamated entity will be renamed “ShipTime Canada
Inc.” and will be the operating company with respect to the
emergeIT assets.
emergeIT is
privately held by 13 holders. The emergeIT holders own “Class
A” and “Class B” common shares, which will
convert into “exchangeable shares” of ShipTime Canada
Inc. in the merger. Exchangeable shares are rights to the
Company’s common stock and preferred stock. These rights can
be exercised by the conversion of the exchangeable shares into
shares of common and preferred stock of the Company, in accordance
with an Exchange and Call Rights Agreement, described
below.
emergeIT Class A
common shares and Class B common shares will be converted into
exchangeable shares with rights to receive 447 shares of the
Company’s common stock and 3,109, provided that upon the
reverse/forward split described below, the right shall be to
receive 45 shares of the Company’s common stock and 311
shares of the Company’s Preferred Stock. As of the effective
date, outstanding emergeIT options and warrants will be replaced by
exchangeable shares in the same manner as emergeIT’s Class A
and Class B common shares.
As of
the Effective Date, the former holders of emergeIT will hold rights
to approximately 79.5% of all the issued and outstanding shares of
capital stock of the Company, and the current stockholders of the
Company will own approximately 20.5% of all the issued and
outstanding shares of capital stock of the Company.
Pursuant to the
Amalgamation Agreement, the Company filed a Certificate of
Designations effective on December 30, 2016 which sets aside
5,000,000 shares of Preferred Stock as Series A Preferred Stock.
The Series A Preferred Stock holders have no voting rights and have
an aggregate liquidation value of approximately $11,581,000. The
Preferred Stock also carries a coupon payment obligation of 1.5%
per year calculated by taking the 30-day average closing price for
an equal number of shares of common stock for the month immediately
preceding the coupon payment date, which is made annually. Payout
of the coupon may be made out of existing cash or in shares of
Series A Preferred stock of the Company. The Series A Preferred
Stock have no voting or
conversion rights.
If purchased, redeemed, or otherwise acquired (other than
conversion), the preferred stock may be reissued
The
Amalgamation Agreement includes representations and warranties and
other covenants by both the Company and emergeIT. In the event that
either party is in breach, the non-breaching party may have an
indemnification claim. The Company will hold back up to 2,680,000
shares of its preferred stock to satisfy any claims of the other
party, provided that upon the reverse/forward split described
below, the right shall be to receive 268,000 shares of Series A
Preferred Shares or common stock of PAID, Inc. If after the
Effective Date the shares are issued to the emergeIT shareholders,
the current Company stockholders percentage ownership would be
diluted. Generally claims for indemnification must be made within
12 months after the amalgamation or merger.
Exchange and Call Rights Agreement
Pursuant to the
Amalgamation Agreement, as of the Effective Date, the existing
holders of emergeIT will exchange their shares in emergeIT into
“exchangeable shares” of the amalgamated company,
ShipTime Inc. The holders of ShipTime Inc. will have those rights
described in its organizational documents. ShipTime Inc.’s
authorized capital will be composed of preferred shares, and common
shares. The preferred shares are exchangeable into a right to
receive approximately 447 shares of the Company’s preferred
stock and 3,109 shares of the Company’s common stock,
provided that upon the reverse/forward split described below, the
right shall be to receive 45 shares of the Company’s common
stock and 311 shares of the Company’s Preferred Stock. Any
and all outstanding common shares will be owned by Callco, the
Company’s direct subsidiary. As a result, Callco will have
the only voting shares of ShipTime Canada Inc.
As of
the Effective Date, holders of ShipTime Inc. shares have the same
dividend and distribution rights as holders of Company shares, and
if Company shares are subdivided or in the event of a Company stock
dividend, the exchangeable shares will be equally subdivided, as
exchangeable shares are intended to be economically the same as
shares of common or preferred stock of the Company. As of the
Effective Date, the Company has a “liquidation call
right” in the event of proposed liquidation, dissolution or
winding up of ShipTime Canada Inc. Absent prior events, the Company
will redeem the exchangeable shares on the fifth anniversary
whereby the Company will redeem the exchangeable shares for shares
of the Company’s preferred stock and common stock. By
agreement, exchangeable shares also may be purchased by ShipTime
Canada Inc. for cancellation. The Company also has a right to call
the shares in the event of a change in the applicable
laws.
The
holders of exchangeable shares have an “automatic exchange
right” in the event any bankruptcy or insolvency or in
general, related proceedings, of ShipTime Canada Inc. or the
Company. The exchangeable shares would at such time be converted
automatically into that number of shares of common stock and
preferred stock of the Company at the agreed upon conversion ratio.
Moreover, Callco will have an overriding call right to purchase
some or all of the exchangeable shares. This mechanism will be
triggered with the automatic exchange right and is necessary to
comply with Canadian tax laws. The exercise of this call right does
not alter the outcome of the exchangeable share
transaction.
A copy
of the form of Exchange and Call Rights Agreement is set forth as
Exhibit 10.2
. A
form of description of the rights of ShipTime Canada Inc.
shareholders is set for as
Exhibit 10.3
.
Support Agreement
Pursuant to the
Amalgamation Agreement, the Company entered into a Support
Agreement with the combined entity as of the Effective Date. The
Support Agreement generally provides that the Company will treat
holders of Exchangeable Shares substantially similar, or
economically equivalent, to holders of Company stock.
As
such, under the Support Agreement, the Company cannot declare or
pay any dividend or other distribution on Company stock unless
ShipTime Canada Inc. simultaneously declares or pays the dividend
or distribution on the Exchangeable Shares and has sufficient money
or other assets to meet these requirements. In turn, the ShipTime
Canada Inc. would effect a corresponding dividend or distribution
of its securities related to the Exchangeable Shares. The Company
also undertakes to advise ShipTime Canada Inc. of the declaration
of dividend or distribution, among other similar events, and to
cooperate with it to effect the dividend or distribution as of the
same record and effective date.
The
Company is also required in this case to segregate funds to pay for
the dividend, and to reserve sufficient number of shares to permit
the exchange of the Exchangeable Shares into the required number of
Company shares of common stock and preferred stock.
The
Support Agreement is also binding on any successor to the Company
and with respect to any successor transaction. A copy of the form
of Support Agreement is set forth as
Exhibit 10.4
.
Employment Agreement; Officer
At the
Closing, effective as of the Effective Date, Mr. Allan Pratt
entered into an employment agreement (the “Employment
Agreement”) with the Company to serve as the Company’s
President and CEO. The Employment Agreement will be for an initial
term through February 2020, with a base salary of US$185,000 and
eligibility for a bonus as the Board of Directors determines.
Bonuses may be in the form of cash, equity awards or both. Mr.
Pratt will be eligible for employee and fringe benefits consistent
with other employees, and equity awards adopted by the Company for
its employees generally. Mr. Pratt will also have an automobile
allowance of US$600 per month and mileage reimbursement for
business travel at IRS rates.
Mr.
Pratt may terminate the Employment Agreement at any time with 30
days’ notice. The Company may terminate Mr. Pratt for
“cause”, which shall include willful, intentional or
tortious conduct detrimental to the Company’s operations. The
Company may terminate Mr. Pratt without cause upon giving 30
days’ notice, subject to a severance payment. Mr. Pratt also
may terminate his employment for “good reason”, which
means a material diminution in his authority, duties or
responsibilities, a change in geographic location from where Mr.
Pratt provides services, or any action or inaction by the Company
that constitutes a breach of the employment agreement. If Mr. Pratt
is terminated without cause or by Mr. Pratt for “good
reason,” during the initial term, Mr. Pratt shall receive a
severance payment which is three times his overall compensation of
salary plus bonus, which amount decreases after two years to three
times his base salary. Mr. Pratt would be subject to a two year
non-compete with respect to on-line package shipping services to
small businesses and retail customers in the territory of the
United States and Canada.
A copy
of the form of Employment Agreement is set forth as
Exhibit 10.5
.
In
addition, W. Austin Lewis, IV is will continue to serve in his
capacity as Treasurer and CFO, as well as Director, but as of the
Effective Date has stepped down as President and CEO. The
Company’s board anticipates that Mr. Lewis will also enter
into an employment agreement.
Board of Directors of Combined Company
As of
the Effective Date, the Board of Directors will be increased from
three to five, and three new individuals have been appointed by the
Company’s current Board of Directors, including Allan Pratt,
who will serve as the Chairman of the Board. The other two new
Board members are David Ogden and Laurie Bradley. A summary of
biographical information for each of the new Directors is contained
in Item 5.02 below. W. Austin Lewis, IV remains on the Board as
well as Andrew Pilaro. Mr. Terry Fokas resigned as Director
effective as of the Effective Date.
Net Operating Losses
The
Company anticipates that it will be able to preserve its net
operating losses carry forwards for federal income tax purposes
after effectiveness of the amalgamation of its new subsidiary with
emergeIT.
Interest
of Certain Persons
Other
than as described below, no director, executive officer, associate
of any director or executive officer, or any other person has any
substantial interest, direct or indirect, by security holdings or
otherwise, in any of the proposals that is not shared by all other
stockholders.
W.
Austin Lewis, IV, as President of the Company, is the owner and
President of Lewis Asset Management. Lewis Asset
Management, Inc. invested approximately $845,000 in the form of
convertible notes and similar instruments, which amount can be
converted into 14% of the issued and outstanding shares of
emergeIT. In additional, if Lewis Asset Management has
warrants to receive an additional 6.25% of shares upon an
investment of an additional $400,000.
Upon
consummation of the amalgamation under the Amalgamation Agreement,
Lewis Asset Management will own approximately 1,725 exchangeable
shares, which will be exchangeable into approximately 771,216
shares of Company common stock and 5,363,457 shares of Company
Series A Preferred Stock, and warrants for approximately 770
exchangeable shares which, if exercised, would be convertible into
approximately 344,253 shares of Company common stock and 2,394,123
shares of Series A Preferred Stock, provided that after the
reverse/forward split described below, the total shares that Lewis
Asset Management will receive are 34,425 shares of common stock of
the Company and 239,412 of Preferred Stock of the
Company.
Exhibits
The
foregoing description of the Amalgamation Agreement and related
agreement does not purport to be complete and is qualified in its
entirety by reference to the actual agreements and documents
attached as Exhibits.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
The
description set forth in Item 1.01 is incorporated by reference
herein.
Item 3.02
Unregistered Sale of Equity Securities
(a)
Pursuant to the Amalgamation Agreement, effective December 30,
2016, the Company’s subsidiary will issue exchangeable shares
to 13 holders, almost all of which reside in Canada. The
exchangeable shares represent a right to receive 45 shares of the
Company’s common stock (after adjusting for the
reverse/forward split described below) and 311 shares of Preferred
Stock (after adjusting for the reverse /forward split described
below) in the aggregate, such that the former holders of emergeIT
will hold rights to approximately 79.5% of all the issued and
outstanding shares of capital stock of the Company, and the current
stockholders of the Company will own approximately 20.5% of all the
issued and outstanding shares of capital stock of the Company. Once
converted the stock has restrictions on transfer. An additional
300,000 (after adjusting for the reverse/forward split described
below) shares of preferred stock are reserved for indemnification
purposes only. Based on the small number of shareholders and the
restricted nature of the securities received, the Company has
relied on the exemption from registration under Section 4(a)(2) of
the Securities Act with respect to the issuance of the
stock.
Item 3.03
Material Modification to Rights of Security Holders
The
description set forth in Item 1.01 is incorporated by reference
herein.
Pursuant to the
Amalgamation Agreement, the Company filed a Certificate of
Designations effective on December 30, 2016 which sets aside
5,000,000 shares of Preferred Stock as Series A Preferred Stock.
The Series A Preferred Stock holders have no voting rights and have
an aggregate liquidation value of approximately $11,581,000. The
Preferred Stock also carries a coupon payment obligation of 1.5%
per year calculated by taking the 30-day average closing price for
an equal number of shares of common stock for the month immediately
preceding the coupon payment date, which is made annually. Payout
of the coupon may be made out of existing cash or in shares of
Series A Preferred stock of the Company. The Series A Preferred
Stock have no voting or conversion rights. If purchased, redeemed,
or otherwise acquired (other than conversion), the preferred stock
may be reissued.
Item 5.01
Changes in Control of Registrant
The
description set forth in Item 1.01 is incorporated by reference
herein.
Item 5.02
Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of
Certain Officers
(a)
On December 19, 2016, and effective as of December 30, 2016, Mr.
Terry Fokas has resigned as a director. There were no disagreements
between the Company and Mr. Fokas with regards to the
Company’s operations, policies or practices. Mr. Fokas does
not sit on any committee of the Board. Mr. Fokas resigned to allow
room for three new directors to be appointed pursuant to the
Amalgamation Agreement. Mr. Fokas did not provide any written
correspondence concerning the circumstances surrounding his
resignation. Mr. Fokas has been provided a copy of this disclosure
and has been given the opportunity to furnish a letter whether he
agrees with the statements made by the Company herein.
(b)
As of December 30, 2016, W. Austin Lewis resigned as the
Company’s President and CEO to allow emergeIT’s
President, Allan Pratt, to become President and CEO of the Company.
Mr. Lewis will continue to serve as the Company’s CFO and
Treasurer and remain on the Board of Directors.
(c),
(d), (e)
As
of December 30, 2016, Mr. Allan Pratt is named CEO and President
and Director of the Company. Mr. Pratt, 59, formed emergeIT in 2008
and is its co-founder, CEO and President. emergeIT, also known as
ShipTime, is a world leader in web delivered solutions in the
transportation industry representing major channel partners such as
Costco with over 30,000 members and growing. In 1985, Pratt began
the creation of an operational and sales network in the US to
provide a next day service to Canada from 50 US cities into a
Canadian regional carrier’s primary footprint. The business
continued to grow and evolve until the acquisition by FedEx in
1988. As a Global Sales Manager at FedEx and Vice President of
Canada’s largest freight forwarder and LTL provider, Mr.
Pratt developed teams of vertical market specialists providing
cycle time reduction and information technology solutions. In the
automotive and telecommunications industry, Mr. Pratt was
instrumental in developing and implementing new supply chain models
which led to an overall decrease in North American distribution
centers, improved order fulfillment, cycle times and overall cost
reductions, while increasing customer satisfaction levels. Mr.
Pratt has been selected for his strong management and leadership
skills.
As
of December 30, 2016, the following two individual are named as
directors of the Company:
Mr. David Ogden, 53, is President of Soho
Management Consulting since November 2013. He was also Senior Vice
President of International Operations of
Delhivery.com
from October 2015 to October 2016. Further, he was
Senior Vice President for Operations & Logistics to Global
Access from March 2015 to August 2015, and owners of Soho Print, a
digital print and promotions firm, from 2003 through 2013. Mr.
Ogden also held positions with Helios-SinoGulf Property
Development, Egypt Express, and FedEx Logistics. Mr. Ogden has been
selected as Director for his expertise in shipping and delivery in
commerce.
Ms.
Laurie Bradley, 62, is the current President of ASG Renaissance
since 2006, and is responsible for corporate strategy and business
development. Her position includes the design and delivery of human
capital solutions and the development of partnerships and teaming
relationships. Ms. Bradley leads the cross functional sales teams
representing the human capital, advisory services and marketing the
divisions of ASG. In 2009, Ms. Bradley launched Blue Force Services
a wholly owned subsidiary of ASG. Blue Force delivers defense and
security services, training programs, technical documentation
services and program management to both commercial and defense
clients. In 2007, Ms. Bradley created a network of minority owned,
women owned and veteran owned businesses branding this association
as the Mosaic Advantage. Ms. Bradley was selected as director for
her leadership skills in corporate strategy and business
development.
Committee
appointments have not yet been made, and the three new directors
are not yet members of any committee at this time. The new
directors shall serve for one, two or three years, and then be
placed into three year staggered terms, or until they resign,
retire or each successor is duly elected. There are no arrangements
or understandings between any of the new directors and any other
person pursuant to which such director was selected as director.
None of the three new directors is related to any other director or
executive officer of the Company. None of the new directors has not
been involved in any transaction during the past two years in which
the Company was a participant and the amount involved exceeds
$120,000 and in which such director had or would have a direct or
indirect material interest, except that Mr. Pratt was a shareholder
of emergeIT and received exchangeable shares that may be converted
into 938,872 shares of common stock equal to approximately 5.69% of
the issued and outstanding shares of the company on a fully diluted
basis.
Other
than the employment agreement with respect to Mr. Pratt described
herein, none of the new directors is a party to or a participant in
any material plan, contract or arrangement (whether or not written)
that is entered into or any material amendment in connection with a
triggering event or entitled to any grant or award under any such
plan, contract or arrangement in connection with any such
triggering event.
At the
Closing, effective as of the Effective Date, Mr. Pratt entered into
an employment agreement (the “Employment Agreement”)
with the Company to serve as the Company’s President and CEO.
The Employment Agreement will be for an initial term through
February 2020, with a base salary of US$185,000 and eligibility for
a bonus as the Board of Directors determines. Bonuses may be in the
form of cash, equity awards or both. Mr. Pratt will be eligible for
employee and fringe benefits consistent with other employees, and
equity awards adopted by the Company for its employees generally.
Mr. Pratt will also have an automobile allowance of US$600 per
month and mileage reimbursement for business travel at IRS
rates.
Mr.
Pratt may terminate the employment agreement at any time with 30
days’ notice. The Company may terminate Mr. Pratt for
“cause”, which shall include willful, intentional or
tortious conduct detrimental to the Company’s operations. The
Company may terminate Mr. Pratt without cause upon giving 30
days’ notice, subject to a severance payment. Mr. Pratt also
may terminate his employment for “good reason”, which
means a material diminution in his authority, duties or
responsibilities, a change in geographic location from where Mr.
Pratt provides services, or any action or inaction by the Company
that constitutes a breach of the employment agreement. If Mr. Pratt
is terminated without cause or by Mr. Pratt for “good
reason,” during the initial term, Mr. Pratt shall receive a
severance payment which is three times his overall compensation of
salary plus bonus, which amount decreases after two years to three
times his base salary. Mr. Pratt would be subject to a two year
non-compete with respect to on-line package shipping services to
small businesses and retail customers in the territory of the
United States and Canada.
A copy
of the form of Employment Agreement is set forth as
Exhibit 10.5
.
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The
Company amended its Certificate of Incorporation to do the
following:
(a)
to
affect a 1:3000 reverse stock split, whereby every 3000 shares of
Common Stock of the Company shall be converted automatically into 1
share effective December 30, 2016, at 12:01 a.m. (“Reverse
Stock Split”);
(b)
to
affect a 300:1 forward split, whereby every 1 share shall be
converted automatically into 300 shares effective December 30,
2016, at 12:02 a.m. (“Forward
Split”);
(c)
to authorize the Chairman of the Board
with respect to any matter coming before the board of directors
where there is an even number of members on the board of directors
and a vote has been taken that results in a deadlock because the
vote is tied, the matter shall be reintroduced for a vote by the
board of directors and the Chairman of the board of directors shall
cast the deciding vote, effective at December 30, 2016, at 12:03
a.m.
(d)
to
increase authorized shares, after giving effect to the Reverse
Stock Split and the Reverse Forward Split to 45,000,000, of which
25,000,000 shares are common stock and 20,000,000 shares are set
aside as preferred stock effective at December 30, 2016, at 12:04
a.m.
(e)
a
certificate of designations to provide for the rights of 5,000,000
shares of preferred stock. The Certificate of Designations,
effective on December 30, 2016, sets aside 5,000,000 shares of
Preferred Stock as Series A Preferred Stock. The Series A Preferred
Stock holders have no voting rights and have an aggregate
liquidation value of approximately $11,581,000. The Series A
Preferred Stock also carries a coupon payment obligation of 1.5%
per year calculated by taking the 30-day average closing price for
an equal number of shares of common stock for the month immediately
preceding the coupon payment date, which is made annually. Payout
of the coupon may be made out of existing cash or in shares of
Series A Preferred stock of the Company. The Series A Preferred
Stock have no voting or conversion rights. If purchased, redeemed,
or otherwise acquired (other than conversion), the preferred stock
may be reissued. The Certificate is effective at December 30, 2016,
at 12:05 a.m.
A copy of the Amendments for each of (a), (b),
(c), (d) and (e) is attached as
Exhibit 3.1
to this Form 8-K.
As of December 30, 2016, the Bylaws of the Company
will be amended to provide for a classified or staggered board of
directors, where each board member is elected into one of three
classes. Initially, five directors will serve between one to three
year terms. The directors placed in a Class I position will
serve for approximately one year. The directors placed in a
Class II position will serve for approximately two years. The
directors placed in a Class III position will serve approximately
three years. After this transitional arrangement, the
Directors will serve for three year terms, with one class being
elected each year. A copy of the amendment to the bylaws is
attached as
Exhibit
3.2
.
Item 5.07
Submission of Matters to a Vote of Security Holders
(a) The
following matters were approved effective December 19, 2016
pursuant to a consent solicitation without a meeting:
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1.
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To
effect a reverse split of the Company’s outstanding common
stock, at an exchange ratio ranging between 1-for-500 and
1-for-3000, with the exact exchange ratio to be determined by the
Board in its sole discretion, immediately followed by a forward
split of the Company’s outstanding common stock, at an
exchange ratio ranging between 50-for-1 and 300-for-1,
respectively, with the exact exchange ratio to be determined by the
Board in its sole discretion, by filing amendments to the
Company’s Certificate of Incorporation;
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2.
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An
amendment to the Company’s Certificate of Incorporation to
change the name of the Company from PAID, Inc. to ShipTime
Inc.;
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3.
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An
amendment to the Company’s Certificate of Incorporation to
permit the Chairman of the Board of Directors to have a deciding
vote in the event of a tie vote of the Board of
Directors;
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4.
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An
amendment to the Company’s Bylaws to provide for a classified
Board of Directors;
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5.
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An
amendment to the Company’s Certificate of Incorporation to
increase the Company’s authorized shares of common stock from
11,000,000 (pre-reverse/forward split) to 25,000,000
(post-reverse/forward split); and
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6.
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To
approve an amendment to the Company’s Certificate of
Incorporation to authorize the issuance of up to 20,000,000 shares
of blank check preferred stock.
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The
following table sets forth the number of votes cast for and
against, and the number of abstentions and non- votes, with respect
to each proposal.
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Number of Votes
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For
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Against
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Abstain
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Non-Votes
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To
consider and vote on a proposal giving the Board the authority to
effect a reverse split of the Company’s outstanding common
stock, at an exchange ratio ranging between 1-for-500 and
1-for-3000, with the exact exchange ratio to be determined by the
Board in its sole discretion, immediately followed by a forward
split of the Company’s outstanding common stock, at an
exchange ratio ranging between 50-for-1 and 300-for-1,
respectively, with the exact exchange ratio to be determined by the
Board in its sole discretion, by filing amendments to the
Company’s Certificate of Incorporation
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6,108,402
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4,881,206
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To
approve an amendment to the Company’s Certificate of
Incorporation to change the name of the Company from PAID, Inc. to
ShipTime Inc.
|
|
6,108,402
|
|
|
|
|
|
4,881,206
|
|
|
|
|
|
|
|
|
|
To
approve an amendment to the Company’s Certificate of
Incorporation to permit the Chairman of the Board of Directors to
have a deciding vote in the event of a tie vote of the Board of
Directors
|
|
6,108,402
|
|
|
|
|
|
4,881,206
|
|
|
|
|
|
|
|
|
|
To
approve an amendment to the Company’s Bylaws to provide for a
classified Board of Directors
|
|
6,108,402
|
|
|
|
|
|
4,881,206
|
|
|
|
|
|
|
|
|
|
To
approve an amendment to the Company’s Certificate of
Incorporation to increase the Company’s authorized shares of
common stock from 11,000,000 (pre-reverse/forward split) to
25,000,000 (post-reverse/forward split)
|
|
6,108,402
|
|
|
|
|
|
4,881,206
|
|
|
|
|
|
|
|
|
|
To
approve an amendment to the Company’s Certificate of
Incorporation to authorize the issuance of up to 20,000,000 shares
of blank check preferred stock
|
|
6,108,402
|
|
|
|
|
|
4,881,206
|
The Company determined to defer the possible name change from PAID,
Inc. to Shiptime Inc. until a possible later date.
Item
9.01
Financial Statements and Exhibits.
Financial
statements require by this item shall be filed by amendment no
later than 71 calendar days after the date that the initial report
on Form 8-K must be filed.
Exhibit
Number
|
|
Description
|
3.1
|
|
Certificates of
Amendment of Certificate of Incorporation of the Company effective
December 30, 2016
|
3.2
|
|
Amendment No. 1 to
Bylaws effective December 30, 2016
|
10.1
|
|
Amalgamation
Agreement dated September 1, 2016 by and among PAID, Inc.,
emergeIT, Inc., 2534845 Ontario Inc. and 2534841 Ontario
Inc.*
|
10.2
|
|
Exchange and Call
Rights Agreement*
|
10.3
|
|
Description of
Rights of ShipTime Canada Inc. stockholders*
|
10.4
|
|
Support
Agreement*
|
10.5
|
|
Employment
Agreement for Allan Pratt*
|
* Filed
previously on Current Report on Form 8-K dated September 1,
2016
SIGNATURE
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.
|
PAID, INC.
|
|
|
|
|
|
Date: December 23,
2016
|
By:
|
/s/
W. Austin Lewis, IV
|
|
|
W. Austin Lewis, IV, President and CFO
|
EXHIBIT INDEX
Exhibit
Number
|
|
Description
|
3.1
|
|
Certificates of
Amendment of Certificate of Incorporation of the Company effective
December 30, 2016
|
3.2
|
|
Amendment No. 1 to
Bylaws effective December 30, 2016
|
10.1
|
|
Amalgamation
Agreement dated September 1, 2016 by and among PAID, Inc.,
emergeIT, Inc., 2534845 Ontario Inc. and 2534841 Ontario
Inc.*
|
10.2
|
|
Exchange and Call
Rights Agreement*
|
10.3
|
|
Description of
Rights of ShipTime Canada Inc. stockholders*
|
10.4
|
|
Support
Agreement*
|
10.5
|
|
Employment
Agreement for Allan Pratt*
|
Exhibit
3.1
CERTIFICATE
OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAID,
INC.
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
FIRST: That
the Board of Directors of said corporation, by unanimous written
consent of its members pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware, filed with the minutes of
the Board of Directors, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of
Incorporation of said corporation.
RESOLVED, that the
Certificate of Incorporation of PAID, Inc. be amended by changing
the FOURTH Article thereof so that, as amended said Article shall
add the following two paragraphs:
Effective at 12:01
a.m. (Eastern Time) on the effective date of the certificate of
amendment adding this paragraph to Article FOURTH of the
Certificate of Incorporation (the “Reverse Split Effective
Time”), each share of the Common Stock, par value $0.001 per
share, of the corporation outstanding at the Reverse Split
Effective Time shall, without any action on the part of the holder
thereof, automatically be reclassified and changed into three
thousand (1/3000) of a share of Common Stock, par value $0.001 per
share, of the corporation;
provided, however
, that (i) if the
foregoing reverse stock split (the “Reverse Split”)
would result in the record account of any holder of Common Stock
having a number of shares of Common Stock that is, in the
aggregate, less than one (1) share (“Fractional
Shares”), such Fractional Shares shall, without any action on
the part of the holder thereof, automatically be canceled in the
Reverse Split; (ii) in the Reverse Split, all of the Fractional
Shares shall automatically be converted into the right to receive
the Trading Value thereof upon surrender by the holder thereof of
the certificate or certificates representing such Fractional
Shares; and (iii) the number of authorized shares of Common Stock
after giving effect to the Reverse Stock Split shall remain
unchanged so as to give effect to the Forward Split set forth in
the next paragraph of this Article FOURTH. For purposes
hereof, the term “Trading Value” of any Fractional
Shares shall mean the product of: (A) the average daily
closing price per share of the common stock on the OTCQB (or other
applicable marketplace of the OTC Markets Group) for the five
trading days immediately before and including the effective date of
the Reverse/Forward Split,
multiplied by
(B) the number of shares
of Common Stock that were converted into such Fractional Shares as
a result of the Reverse Split. From and after the
Reverse Split Effective Time, each holder of Fractional Shares
shall have no further interest as a stockholder in the corporation
in respect of such Fractional Shares.
SECOND: That
in lieu of a meeting and vote of stockholders, the stockholders
holding a majority of the outstanding shares of stock entitled to
vote on the amendment have given written consent to said amendment
in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware and written notice of the
adoption of the amendment has been given as provided in Section 228
of the General Corporation Law of the State of Delaware to every
stockholder entitled to such notice.
THIRD: That
the aforesaid amendment was duly adopted in accordance with the
applicable provisions of section 242 and Section 228 of the General
Corporation Law of the State of Delaware.
FOURTH: That
this Certificate of Amendment to the Certificate of Incorporation
shall be effective on December 30, 2016 at 12:01 a.m.
IN
WITNESS WHEREOF, said PAID, Inc. has caused this Certificate to be
executed, acknowledged and filed by its President this
20
th
day
of December, 2016.
|
PAID,
INC.
By:
/s/ W. Austin Lewis,
IV
|
|
W.
Austin Lewis, IV
|
CERTIFICATE
OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAID,
INC.
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
FIRST: That
the Board of Directors of said corporation, by unanimous written
consent of its members pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware, filed with the minutes of
the Board of Directors, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of
Incorporation of said corporation.
RESOLVED, that the
Certificate of Incorporation of PAID, Inc. be amended by changing
the FOURTH Article thereof so that, as amended said Article shall
add the following two paragraphs:
Effective at 12:02
a.m. (Eastern Time) on the effective date of the certificate of
amendment adding this paragraph to Article FOURTH of the
Certificate of Incorporation (the “Forward Split Effective
Time”): (i) each whole share of the Common Stock,
par value $0.001 per share, of the corporation outstanding at the
Forward Split Effective Time (after giving effect to the Reverse
Split at the Reverse Split Effective Time) shall, without any
action on the part of the holder thereof, automatically be
reclassified and changed into three hundred (300) shares of Common
Stock, par value $0.001 per share, of the corporation (the
“Forward Split”); and (ii) fractions of a share
outstanding at the Forward Split Effective Time (after giving
effect to the Reverse Split at the Reverse Split Effective Time)
shall be proportionately reclassified and changed.
SECOND: That
in lieu of a meeting and vote of stockholders, the stockholders
holding a majority of the outstanding shares of stock entitled to
vote on the amendment have given written consent to said amendment
in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware and written notice of the
adoption of the amendment has been given as provided in Section 228
of the General Corporation Law of the State of Delaware to every
stockholder entitled to such notice.
THIRD: That
the aforesaid amendment was duly adopted in accordance with the
applicable provisions of section 242 and Section 228 of the General
Corporation Law of the State of Delaware.
FOURTH: That
this Certificate of Amendment to the Certificate of Incorporation
shall be effective on December 30, 2016 at 12:02 a.m.
IN
WITNESS WHEREOF, said PAID, Inc. has caused this Certificate to be
executed, acknowledged and filed by its President this
20
th
day
of December, 2016.
|
PAID,
INC.
|
|
By:
/s/ W. Austin Lewis,
IV
|
|
W.
Austin Lewis, IV
|
CERTIFICATE
OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAID,
INC.
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
FIRST: That
the Board of Directors of said corporation, by unanimous written
consent of its members pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware, filed with the minutes of
the Board of Directors, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of
Incorporation of said corporation.
RESOLVED, that the
Certificate of Incorporation of PAID, Inc. be amended by changing
the SIXTH Article thereof so that, as amended, the following
sentence shall be added to the end of said Article:
With
respect to any matter coming before the board of directors where
there is an even number of members on the board of directors and a
vote has been taken that results in a deadlock because the vote is
tied, the matter shall be reintroduced for a vote by the board of
directors and the Chairman of the board of directors shall cast the
deciding vote.
SECOND: That
in lieu of a meeting and vote of stockholders, the stockholders
holding a majority of the outstanding shares of stock entitled to
vote on the amendment have given written consent to said amendment
in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware and written notice of the
adoption of the amendment has been given as provided in Section 228
of the General Corporation Law of the State of Delaware to every
stockholder entitled to such notice.
THIRD: That
the aforesaid amendment was duly adopted in accordance with the
applicable provisions of section 242 and Section 228 of the General
Corporation Law of the State of Delaware.
FOURTH: That
this Certificate of Amendment to the Certificate of Incorporation
shall be effective on December 30, 2016 at 12:03 a.m.
IN
WITNESS WHEREOF, said PAID, Inc. has caused this Certificate to be
executed, acknowledged and filed by its President this
20
th
day
of December, 2016.
|
PAID,
INC.
|
|
By:
/s/ W. Austin Lewis,
IV
|
|
W.
Austin Lewis, IV
|
CERTIFICA
TE
OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAID,
INC.
PAID,
Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES
HEREBY CERTIFY:
FIRST: That
the Board of Directors of said corporation, by unanimous written
consent of its members pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware, filed with the minutes of
the Board of Directors, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of
Incorporation of said corporation.
RESOLVED, that the
Certificate of Incorporation of PAID, Inc. be amended by changing
the FOURTH Article thereof so that, as amended said Article shall
be and read in its entirety as follows:
“FOURTH: The
amount of total authorized capital stock of the corporation shall
consist of 45,000,000 shares, consisting of (i) 25,000,000 shares
of Common Stock, $.001 par value per share (“Common
Stock”), and (ii) 20,000,000 shares of Preferred Stock, $.001
par value per share (“Preferred Stock”).
The
following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or
restrictions thereof in respect of each class of capital stock of
the Corporation.
(a)
COMMON STOCK.
(i)
General
. The voting,
dividend and liquidation rights of the holders of the Common Stock
are subject to and qualified by the rights of the holders of the
Preferred Stock of any series as may be designated by the Board of
Directors upon any issuance of the Preferred Stock of any
series.
(ii)
Voting
. The holders
of the Common Stock shall have voting rights at all meetings of
stockholders, each such holder being entitled to one vote for each
share thereof held by such holder; provided, however, that, except
as otherwise required by law, holders of Common Stock shall not be
entitled to vote on any amendment to this Certificate of
Incorporation (which, as used herein, shall mean the Certificate of
Incorporation of the Corporation, as amended from time to time,
including the terms of any certificate of designations of any
series of Preferred Stock) that relates solely to the terms of one
or more outstanding series of Preferred Stock if the holders of
such affected series are entitled, either separately or together as
a class with the holders of one or more other such series, to vote
thereon pursuant to this Certificate of
Incorporation. There shall be no cumulative
voting.
The
number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote, irrespective of
the provisions of Section 242(b)(2) of the General Corporation Law
of Delaware.
(iii)
Dividends
. Dividends
may be declared and paid on the Common Stock from funds lawfully
available therefor as and when determined by the Board of Directors
and subject to any preferential dividend or other rights of any
then outstanding Preferred Stock.
(iv)
Liquidation
. Upon
the dissolution or liquidation of the Corporation, whether
voluntary or involuntary, holders of Common Stock will be entitled
to receive all assets of the Corporation available for distribution
to its stockholders, subject to any preferential or other rights of
any then outstanding Preferred Stock.
(b)
PREFERRED STOCK.
Preferred Stock may
be issued from time to time in one or more series, each of such
series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series
adopted by the Board of Directors of the Corporation as hereinafter
provided. Any shares of Preferred Stock which may be
redeemed, purchased or acquired by the Corporation may be reissued
except as otherwise provided by law.
Authority is hereby
expressly granted to the Board of Directors from time to time to
issue the Preferred Stock in one or more series, and in connection
with the creation of any such series, by resolution or resolutions
providing for the issuance of the shares thereof, to determine and
fix the number of shares of such series and such voting powers,
full or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special
rights, and qualifications, limitations or restrictions thereof,
including without limitation thereof, dividend rights, conversion
rights, redemption privileges and liquidation preferences, as shall
be stated and expressed in such resolutions, all to the full extent
now or hereafter permitted by the General Corporation Law of
Delaware. Without limiting the generality of the
foregoing, the resolutions providing for issuance of any series of
Preferred Stock may provide that such series shall be superior or
rank equally or be junior to the Preferred Stock of any other
series to the extent permitted by law.
The
number of authorized shares of Preferred Stock may be increased or
decreased (but not below the number of shares then outstanding) by
the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote, irrespective of the provisions of
Section 242(b)(2) of the General Corporation Law of
Delaware.”
SECOND: That
in lieu of a meeting and vote of stockholders, the stockholders
holding a majority of the outstanding shares of stock entitled to
vote on the amendment have given written consent to said amendment
in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware and written notice of the
adoption of the amendment has been given as provided in Section 228
of the General Corporation Law of the State of Delaware to every
stockholder entitled to such notice.
THIRD: That
the aforesaid amendment was duly adopted in accordance with the
applicable provisions of section 242 and Section 228 of the General
Corporation Law of the State of Delaware.
FOURTH: That
this Certificate of Amendment to the Certificate of Incorporation
shall be effective on December 30, 2016 at 12:04 a.m.
IN
WITNESS WHEREOF, said PAID, Inc. has caused this Certificate to be
executed, acknowledged and filed by its President this
20
th
day
of December, 2016.
|
PAID,
INC.
By:
/s/ W. Austin Lewis,
IV
|
|
W.
Austin Lewis, IV
President
|
CERTIFICATE
OF DESIGNATIONS OF PREFERRED STOCK
OF
PAID,
INC.
Pursuant to Section
151 of the General Corporation Law of the State of Delaware, the
undersigned corporation submits the following statement for the
purpose of establishing and designating a series of shares and
fixing and determining the relative rights and preferences
thereof:
1. The
name of the Corporation is PAID, Inc., a Delaware corporation (the
“Corporation”).
2. The
Corporation’s Board of Directors (the “Board of
Directors”) duly adopted the following resolution at a
meeting of the Board of Directors held on December 19,
2016:
WHEREAS, the
Corporation’s directors have reviewed and approved the
Certificate of Designations (“Certificate of
Designations”), attached hereto and incorporated herein by
reference, delineating the number of shares, the voting powers,
designations, preferences and relative, participating, optional,
redemption, conversion, exchange, dividend or other special rights
and qualifications, limitations or restrictions of a series of
Preferred Stock to be issued by the Corporation and designated
Series A Preferred Stock, $.001 par value per share; now,
therefore, be it
RESOLVED, that the
President or any Vice President of the Corporation, individually or
collectively, be, and such officers hereby are, authorized and
directed to execute, acknowledge, attest, record and file with the
Secretary of State of the State of Delaware the Certificate of
Designation in accordance with the Delaware General Corporation Law
and to take all other actions that such officers deem necessary to
effectuate this Certificate of Designations.
A.
SERIES A PREFERRED STOCK
5,000,000 shares of
the authorized Preferred Stock of the corporation have been
designated “Series A Preferred Stock”, each with the
following rights, preferences, powers, privileges and restrictions,
qualifications and limitations.
Section
1.
Coupon
Payment
.
(a)
Rate
. Holders of
the shares of Series A Preferred Stock shall be entitled to receive
a cumulative 1.5% per annum coupon payment on the value of $0.45
per share of Series A Preferred Stock. In lieu of cash,
in the Board of Director’s discretion, payment shall be in
equal value in additional shares of Series A Preferred Stock based
on the same fair market value of one share of common stock of the
corporation as of the prior 30-day closing average for the month
immediately preceding the Coupon Payment Date as set forth on an
listed exchange, or if not so listed, on any applicable exchange
selected in the discretion of the Board of Directors.
(b)
Payout
.
Payments shall accrue annually as of January 1 of each
year (the “Coupon Payment Date”) and shall remain
unpaid unless and until the Board of Directors determines in its
sole discretion to make such payment. Rights to unpaid
Coupon payments shall be held by the holder of the Series A
Preferred Stock. The period from and including the
initial issue date of the Series A Preferred Stock, or the
immediately preceding Coupon Payment Date, as the case may be, to
but excluding the next Coupon Payment Date is a “Coupon
Period.” Coupons accrue in each Coupon Period from
the first day of such Coupon Period, whether or not Coupons are
paid with respect to any prior Coupon Period. Coupons
payable on the shares of Series A Preferred Stock for any Coupon
Period will be calculated on the basis of a 360-day year consisting
of twelve 30-day months, and Coupons payable on the shares of
Series A Preferred Stock for any subsequent Coupon Period will be
computed on the basis of a 360-day year and the number of days
actually elapse.
(c)
No Interest;
Notice
. No interest will be payable in respect of any Coupon
payment on shares of Series A Preferred Stock that may be in
arrears. If the Board of Directors of the corporation determines
not to pay any Coupon or a full Coupon on a Coupon Payment Date,
the corporation will provide, or cause to be provided, written
notice to the holders of the shares of Series A Preferred Stock
prior to such date.
Section
2.
Liquidation,
Dissolution, or Winding-Up
.
(a)
Distributions to Holders
of Preferred Stock
. In the event of any
liquidation, dissolution, or winding-up of the corporation, whether
voluntary or involuntary (a “
Liquidation
”), the
holders of outstanding shares of Series A Preferred Stock will be
entitled to be paid out of the assets of the corporation available
for distribution to shareholders, before any payment is made to or
set aside for the holders of shares of any other class or series of
capital stock, as follows: in respect of each share of Series A
Preferred Stock held by such holder, an amount per share equal to
the sum of (A) $3.30 (such amount to be subject to proportionate
adjustment in the event of any stock dividend, stock split,
combination of shares, reorganization, recapitalization,
reclassification or other similar event affecting the Series A
Preferred Stock
plus
(B) an amount equal to the
aggregate of all Coupon accrued but unpaid in respect of such share
of Series A Preferred Stock.
After
payment in accordance with the foregoing has been made in full to
the holders of Series A Preferred Stock, or funds necessary for
such payment have been set aside by the corporation in trust for
the exclusive benefit of such holders so as to be available for
such payment, any assets remaining available for distribution will
be distributed ratably among the holders of shares of Series A
Preferred Stock and Common Stock, respectively, with each holder of
one or more shares of Series A Preferred Stock being entitled to
receive in respect thereof the same kinds and amounts of such
assets as such holder would be entitled to receive if such holder
held the number of shares of Common Stock on a one-for-one
basis.
(b)
Deemed
Liquidations
. A consolidation or merger of the
corporation with or into any other person(s) or entity(-ies) (other
than a wholly owned subsidiary of the corporation) or a sale
(whether in a single transaction or a series of related
transactions) of all or substantially all of the assets of the
corporation or all or substantially all of the intellectual
property rights of the corporation, or other similar transaction,
will be regarded as a liquidation, dissolution, or winding-up of
the affairs of the corporation within the meaning of this Section
2.
(c)
Non-Cash
Distributions
. In the event of a liquidation,
dissolution, or winding-up of the corporation resulting in the
availability of assets other than cash for distribution to the
holders of shares of Series A Preferred Stock, the holders of
Series A Preferred Stock will be entitled to a distribution of cash
and/or other assets equal in value to the liquidation preference
and other distribution rights stated in Section 2(a). In
the event that such distribution to the holders of shares of Series
A Preferred Stock will include any assets other than cash, the
Board of Directors will first determine in good faith and with due
care the value of such assets for such purpose, and will notify all
holders of shares of Series A Preferred Stock of such
determination. The value of such assets for purposes of
the distribution under this Section 2(c) will be the value as so
determined by the Board of Directors.
Section
3.
Voting
Rights
. Except as otherwise expressly provided
herein or as required by applicable law, the holders of each share
of Series A Preferred Stock will not be entitled to vote on any
matters submitted to a vote or consent of
stockholders.
Section
4.
Conversion
. Shares
of Series A Preferred Stock will not be convertible into shares of
Common Stock and/or other securities, properties, or
rights.
Section
5.
Reissuance of Shares of
Preferred Stock
. Shares of Series A Preferred
Stock acquired by the corporation by reason of redemption, purchase
or otherwise acquired (other than conversion), at the discretion of
the Board of Directors, may be reissued by the Board of Directors
at any time or from time to time.
Section
6.
Notices of Capital
Reorganization, etc
. In the event there is to
occur any capital reorganization of the corporation, any
reclassification or recapitalization of the capital stock of the
corporation, any merger or consolidation of the corporation, or any
transfer of all or substantially all of the assets of the
corporation to any other company, or any other entity or person, or
any voluntary or involuntary dissolution, liquidation, or
winding-up of the corporation, the corporation will deliver to each
holder of Series A Preferred Stock, in accordance with Section
8(a), prior to the proposed effective date of the transaction
specified therein, a notice specifying (a) the date on which any
such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation, or winding-up is expected to
become effective, and (b) the time, if any, that is to be fixed, as
to when the holders of record of Common Stock (or other securities)
will be entitled to exchange their shares of Common Stock (or other
securities) for cash, securities, and/or other property deliverable
upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation, or
winding-up.
Section
7.
Other
Rights
. Shares of Series A Preferred Stock will
have only those rights set forth herein or as required by the
Delaware General corporation Law.
Section
8.
Miscellaneous
.
(a)
Notices
. All
notices, requests, payments, instructions or other documents to be
given hereunder will be in writing and will be delivered by hand,
by telecopier, by electronic delivery (including e-mail), by
facsimile, by express overnight courier service or mailed by first
class mail, postage prepaid. Notices provided in
accordance with this Section 8(a) will be deemed delivered upon
personal delivery, receipt by telecopy, email or overnight mail, or
48 hours after deposit in the mail in accordance with the
above.
(b)
Transfer
Agents
.
The
corporation may appoint, and from time to time discharge and
change, a transfer agent for Series A Preferred
Stock. Upon any such appointment or discharge of a
transfer agent, the corporation will send written notice thereof to
each holder of record of Series A Preferred Stock.
Section
9.
Effective Time.
This Certificate of Designation shall be effective at 12:05 a.m. on
December 30, 2016.
3. The
undersigned further certifies that the authorized number of shares
of Preferred Stock is 20,000,000 and that the authorized number of
shares of the Series A Preferred Stock, none of which has been
issued, is 5,000,000.
4. The
resolution set forth above has been duly adopted by all necessary
action on the part of the Corporation.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be signed by the undersigned officer of the
Corporation as of December 20, 2016.
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PAID,
INC.
By:
/s/ W. Austin Lewis,
IV
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W.
Austin Lewis, IV, President
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