DEF 14C: IIOT-OXYS Boosts Authorized Shares to 10 Billion

IIOT-OXYS, Inc. stockholders approved an amendment to increase authorized common stock from 3 billion to 10 billion shares to support financing and operational flexibility.

Summary

• Stockholders approved an amendment to the Articles of Incorporation to increase authorized common stock from 3,000,000,000 to 10,000,000,000 shares.
• The approval was obtained by written consent from holders representing approximately 95.19% of the voting power.
• The increase is necessary to comply with existing financing agreements, maintain share reserves for conversions of outstanding debt and warrants, and provide flexibility for future financings.
• As of July 30, 2025, 566,315,293 shares of Common Stock were issued and outstanding.
• The company estimates needing to reserve approximately 6,266,739,793 shares of Common Stock for various conversions and incentive plans, including 3,125,000,000 for Series B Preferred Stock and 850,000,000 for convertible consulting fees.
• The amendment will become effective on or about the 20th day after the definitive information statement is mailed to stockholders.

Sentiment

Score: 5

Explanation: The filing describes a necessary corporate action to accommodate existing and future financing needs. While it provides flexibility, the significant potential for dilution from the increased authorized shares and various convertible instruments introduces a neutral to slightly negative sentiment for existing common shareholders, balanced by the necessity for corporate operations and growth.

Positives

• The increase in authorized shares provides greater flexibility in the capital structure for future financing needs.
• It allows the company to comply with existing financing agreements that require maintaining a reserve of shares for conversions of outstanding debt and exercise of warrants.
• Additional shares can be used for equity incentives to employees, officers, or directors, fostering alignment and motivation.
• The increased share pool facilitates strategic relationships, business expansion, and acquisitions.

Negatives

• The future issuance of additional common stock, particularly through conversions of preferred stock and outstanding debt, would have the effect of diluting existing stockholders.
• The Board's ability to issue additional preferred stock without shareholder approval could adversely affect the rights of common stock holders, including voting rights, dividend distributions, and liquidation preferences.
• The amendment could be used to deter or prevent hostile takeover attempts or changes in control, potentially denying stockholders a premium for their shares.

Risks

• Future issuance of additional common stock will dilute the ownership and voting power of existing stockholders.
• The Board's authority to issue preferred stock with varying rights could negatively impact common stockholders by creating senior classes of stock regarding dividends, liquidation, or voting.
• The amendment could be used as an anti-takeover measure, potentially entrenching current management and preventing transactions that might be beneficial to shareholders.
• The number of shares issuable under certain convertible instruments (Series B, C, D Preferred Stock, and some convertible debt) is variable and dependent on the trading price of common stock, leading to uncertainty regarding future dilution.
• Failure to timely deliver required shares upon conversion or breach of material covenants for Series B and Series D Preferred Stock can result in significant financial penalties, including liquidated damages and forced redemption at a premium.

Future Outlook

The company anticipates using the additional authorized shares for various purposes without further stockholder approval, including raising capital, providing equity incentives, establishing strategic relationships, and expanding business through acquisitions. The Board currently has no specific plans to issue the additional shares beyond those disclosed for existing agreements.

Management Comments

• The Board of Directors believes that the increase in authorized Common Stock will allow us to comply with existing financing agreements and will also provide us greater flexibility with respect to the Company's capital structure for purposes of obtaining additional financing.
• At present, the Board of Directors has no specific plans to issue the additional shares of Common Stock authorized by the Amendment (except as disclosed above).

Industry Context

NA

Corporate Governance

Related Party Transactions

• August 2019 Convertible Note was entered into with a related-party investor.
• Convertible consulting agreements exist with two executive officers (Clifford Emmons and Karen McNemar) allowing conversion of accrued fees into common stock.
• Sergey Gogin (holder of 2018 Note) and Vidhyadhar Mitta (holder of a note and Series A Preferred Stock) are significant beneficial owners.
• GHS Investments, LLC holds Series B and Series D Convertible Preferred Stock and the July 2020 Convertible Note.
• Cambridge MedSpace LLC holds Series C Convertible Preferred Stock.

Stakeholder Impact

• **Shareholders (Common Stock):** Face significant potential dilution from the future issuance of additional common stock for conversions, warrants, and future financings. Their voting power and economic interest could be reduced. The amendment could also be used to deter hostile takeovers, potentially limiting opportunities for a premium sale.
• **Preferred Stockholders:** Their conversion rights are secured by the increased authorized shares, ensuring the company can meet its obligations to them. Series B, C, and D Preferred Stockholders also have specific protective covenants and dividend rights.
• **Employees/Management:** Benefit from the availability of shares for stock incentive plans, which can be used for compensation and retention.
• **Creditors (Convertible Debt Holders):** The increased authorized shares ensure the company can fulfill its conversion obligations, reducing default risk related to share availability.

Next Steps

• The amendment to the Articles of Incorporation will become effective on or about the 20th day after the definitive information statement is mailed to stockholders of record.
• The company will file the amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada approximately (but not less than) 20 days after the definitive information statement is mailed to stockholders.

Key Dates

Recommendation

The filing details a necessary corporate action to increase authorized shares, primarily to meet existing and future financing obligations and provide operational flexibility. While this is a standard procedure for growth-oriented companies, the substantial potential for dilution from the issuance of up to 10 billion shares, coupled with the complex structure of various convertible instruments and preferred stock, creates significant uncertainty for common shareholders. The anti-takeover implications also warrant caution. Given the proactive nature of the filing to enable future activities rather than report immediate results, a 'hold' recommendation is appropriate, advising investors to monitor the actual issuance of shares and the company's strategic use of this increased authorization.

Keywords

Authorized Shares, Common Stock, Preferred Stock, Dilution, Capital Structure, SEC Filing, Corporate Governance, Convertible Debt, Stock Incentive Plans, Anti-Takeover, IIOT-OXYS