Item 5.03. Amendments to
Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Conversion of Series A Stock and Withdrawal of Designation for
Series A Stock
On October 13, 2020, Eagle Lake Laboratories,
Inc. (“Eagle
Lake”), the owner of 100% of the issued and outstanding
shares of Series A Preferred Stock (“Series A
Stock”) of
Sollensys Corp. (the
“Company”) converted its 19,000,000 shares of Series A
Stock into shares of the Company’s common stock, par value
$0.001 per share (“Common Stock”), resulting
in the issuance to Eagle Lake of 11,400,000,000 shares of Common
Stock and resulting in Eagle Lake now holding approximately 95.8%
of the Company’s issued and outstanding Common
Stock.
On October 14, 2020, following the conversion of the Series A Stock
by Eagle Lake, as there were no additional shares of Series A Stock
outstanding, the Company filed a Certificate of Withdrawal with the
Secretary of State of the State of Nevada to withdraw the
designation of the Series A Stock. The 25,000,000 shares of
preferred stock that had been designated as the Series A Stock are
now returned to authorized but undesignated shares of preferred
stock of the Company. The withdrawal of the Series A Stock
designation did not require the approval of the shareholders of the
Company.
The foregoing description of the Certificate of Withdrawal is
qualified in its entirety by reference to the complete terms and
conditions of the Certificate of Withdrawal, a copy of which is
attached to this Current Report on Form 8-K as Exhibit 3.1 and is
incorporated by reference into this Item 5.03.
New Reverse Split and Reduction of Authorized Shares
On October 14, 2020, the Company filed with the Secretary of State
of Nevada a Certificate of Amendment to its Articles of
Incorporation (the “Amendment”) to effect a 1-for-120
reverse stock split (the “New Reverse Split”) of the
Company’s issued and outstanding common stock, par value
$0.001 per share (“Common Stock”). Pursuant to the
Amendment, effective as of October 30, 2020, every one hundred and
twenty (120) shares of the issued and outstanding Common Stock will
be converted into one share of Common Stock, without any change in
the par value per share. No fractional shares of Common Stock will
be issued in connection with the New Reverse Split. If, as a result
of the New Reverse Split, a shareholder would otherwise hold a
fractional share, the shareholder will receive, in lieu of the
issuance of such fractional share, one whole share of Common
Stock.
In connection with the New Reverse Split, the Amendment also
reduces the number of authorized shares of Common Stock from
12,000,000,000 shares to 300,000,000 shares following the New
Reverse Split, with no change in the par value thereof (the
“Reduction in Authorized Shares” and, together with the
New Reverse Split, the “Corporate
Actions”).
The Corporate Actions will not be effective until the Financial
Industry Regulatory Authority (“FINRA”) completes its
review and approval of the New Reverse Split. The Reduction is
Authorized Shares is not required to be approved by FINRA, but will
not be completed if the New Reverse Split is not approved by
FINRA.
Globex Transfer, LLC, the Company’s transfer agent, is acting
as the exchange agent for the New Reverse Split and will provide
instructions to shareholders of record regarding the process for
exchanging shares.
Assuming that the New Reverse Split is approved and becomes
effective, Eagle Lake, the Company’s majority shareholder,
shall continue to hold 95.8% of the issued and outstanding shares
of Common Stock, which is the same percentage as Eagle Lake would
have held had the prior Reverse Split, as described in the
Company’s Form 8-Ks as filed on August 12, 2020 and October
13, 2020, been completed and Eagle Lake had converted its Series A
Preferred Stock to Common Stock after that time.
The foregoing description of the Amendment is qualified in its
entirety by reference to the complete terms and conditions of the
Amendment, a copy of which is attached to this Current Report on
Form 8-K as Exhibit 3.2 and is incorporated by reference into this
Item 5.03.