DEF 14C: IIOT-OXYS Seeks to Boost Authorized Common Stock to 3 Billion Shares

IIOT-OXYS, Inc. is increasing its authorized shares of common stock from 1 billion to 3 billion to accommodate existing financing agreements and future capital needs.

Summary

• IIOT-OXYS, Inc. has announced an amendment to its Articles of Incorporation to increase the authorized shares of common stock from 1,000,000,000 to 3,000,000,000.
• This decision was approved by the Board of Directors and holders of a majority of the voting power of the stockholders.
• As of April 16, 2024, the company had 555,015,293 shares of Common Stock issued and outstanding.
• The increase in authorized shares is intended to comply with existing financing agreements, including stock incentive plans, convertible notes, and preferred stock conversions.
• The company estimates it will need to reserve approximately 614,004,385 shares for consulting fee conversions and 762,806,801 shares for Series B Convertible Preferred designation.
• The amendment will become effective approximately 20 days after the definitive information statement is mailed to stockholders.
• The company is not soliciting proxies in connection with this action.

Sentiment

Score: 6

Explanation: The document is neutral in tone, outlining a corporate action to increase authorized shares. While it provides flexibility for future financing, it also carries the risk of dilution for existing shareholders.

Positives

• The increase in authorized shares provides the company with greater flexibility in its capital structure.
• It allows the company to comply with existing financing agreements.
• It enables the company to pursue future financing opportunities.
• The company can use the additional shares for equity incentives, strategic relationships, and acquisitions.

Negatives

• The future issuance of additional shares of Common Stock would have the effect of diluting existing stockholders.
• The increase in authorized shares could be used to oppose a hostile takeover attempt or delay changes in control.

Risks

• The number of shares of Common Stock issuable under convertible debt and preferred stock arrangements is variable and dependent on the trading price of the Common Stock.
• The company's ability to obtain additional financing depends on having sufficient authorized and unissued shares reserved for issuance.
• The Nevada anti-takeover laws could discourage companies or persons interested in acquiring a significant interest in or control of the company.

Future Outlook

The company anticipates using some of the additional authorized shares for various purposes without further stockholder approval, including raising capital, providing equity incentives, establishing strategic relationships, and expanding its business.

Management Comments

• The Board of Directors believes that the increase in our 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.

Industry Context

Many micro-cap companies increase their authorized share count to provide flexibility for future financing and potential acquisitions, which is a common practice in the industry.

Comparison to Industry Standards

• Increasing authorized shares is a common practice among small-cap and micro-cap companies to facilitate future financing activities.
• Comparable companies in similar stages of development often maintain a significant reserve of authorized but unissued shares to attract investors and accommodate potential acquisitions.
• The specific ratio of authorized to outstanding shares varies depending on the company's growth strategy and financing needs, but a ratio of 5:1 or higher is not uncommon in high-growth sectors.

Related Party Transactions

• On August 2, 2019, we entered into a Securities Purchase Agreement with a related-party investor for the purchase of a 12% Secured Convertible Note in the principal amount of up to $125,000.

Stakeholder Impact

• Existing stockholders may experience dilution upon the issuance of additional shares.
• The increased authorized shares provide the company with greater financial flexibility, potentially benefiting all stakeholders in the long term.

Next Steps

• The company will file the amendment to its Articles of Incorporation with the Secretary of State of Nevada approximately 20 days after mailing the information statement to stockholders.
• The company will continue to monitor its capital structure and financing needs.

Key Dates

Keywords

authorized shares, common stock, IIOT-OXYS, financing, convertible notes, warrants, dilution, capital structure, preferred stock