THIS IS NOT A NOTICE OF A SPECIAL MEETING OF
STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN. THE ACTIONS DESCRIBED IN THIS INFORMATION
STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF OUR VOTING CAPITAL STOCK. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS OR APPRAISAL RIGHTS WITH RESPECT TO THE ACTIONS DESCRIBED IN THIS INFORMATION
STATEMENT.
This information statement is being furnished
in connection with the action by written consent of stockholders holding a majority of our voting capital stock taken without a meeting
of certain actions described in this information statement. We are mailing this information statement to our stockholders of record as
of January 20, 2022 (the “Record Date”).
What is the Purpose of this Information Statement?
This Information Statement is being furnished
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to notify the Company’s
stockholders as of the Record Date of certain corporate actions to be taken pursuant to the consents or authorizations of stockholders
representing a majority of the voting rights of the Company’s outstanding capital stock.
What actions were taken by written consent?
Effective as of January 20, 2022, we obtained
consent from holders of a majority of the voting capital stock of the Company approving the authorization of the Company’s board
of directors (the “Board”), in its sole and absolute discretion, and without further action of the stockholders, to file an
amendment to the Company’s certificate of incorporation (the “Certificate of Incorporation”), to effect a reverse stock
split of the Company’s issued and outstanding common stock, par value $0.001 per share (“Common Stock”), at a ratio
of one for 50,000 (the “Reverse Stock Split”), with the Reverse Stock Split to be effected at such time and date, if at all,
as determined by the Board in its sole discretion.
How many shares of voting capital stock were
outstanding on the date of the consent?
On the date of the written consent, which is the
Record Date and the date we received a copy of the consent of the holders of a majority of the voting power of capital stock, there were
issued and outstanding 166,130,069 shares of Common Stock. Each share of the Common Stock entitles the holder to one vote per share; therefore,
on the Record Date, the total voting capital stock issued and outstanding amounted to 166,130,069 shares with total voting power of 166,130,069
votes.
What vote was obtained to approve the amendment
to the Certificate of Incorporation described in this Information Statement?
We obtained the written consent in lieu of a meeting
of 166,130,069 shares of Common Stock, representing approximately 95.8% of the voting power of our stockholders (the “Consenting
Stockholders”). Under the NRS and the Certificate of Incorporation, the affirmative vote of the stockholders holding at least a
majority of the voting power of the Company entitled to vote constitutes the vote required to amend the Certificate of Incorporation.
Who is entitled to notice?
Each holder of an outstanding share of Common
Stock, as of the Record Date, will be entitled to notice of the matter voted upon.
Is consent to action in lieu of a meeting authorized
under Nevada law?
NRS provides that any action required or permitted
to be taken at a meeting of stockholders of a corporation may be taken without a meeting if a written consent thereto is signed by the
stockholders holding at least the minimum number of votes that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
This Information Statement is being distributed
pursuant to the requirements of Section 14(c) of the Exchange Act to the Company’s stockholders as of the Record Date. The corporate
actions described herein will be effective approximately 20 days after the mailing of this Information Statement.
Who is bearing the cost of mailing this Information
Statement?
The entire cost of furnishing this Information
Statement will be borne by the Company.
AUTHORIZATION OF REVERSE STOCK SPLIT
On January 19, 2022 the Board recommended
and the Consenting Stockholders approved, believing it to be in the best interests of the Company and its stockholders, the authorization
of the Board, in its sole and absolute discretion, and without further action of the stockholders, to file an amendment to our Certificate
of Incorporation, to effect the Reverse Stock Split of the Company’s issued and outstanding Common Stock, at a ratio of one for
50,000, with the Reverse Stock Split to be effected at such time and date, if at all, as determined by the Board in its sole discretion.
Reason for and Effect of the Reverse Stock
Split
The primary purpose for effecting the Reverse
Stock Split is to increase the per-share trading price of our Common Stock so we can:
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improve the liquidity and marketability of our Common Stock;
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broaden the pool of investors that may be interested in investing in the Company by attracting new investors who would prefer not to invest, or cannot invest, in shares that trade at lower share prices; and
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make our Common Stock a more attractive investment to institutional investors.
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In evaluating the Reverse Stock Split, the Board
has considered and will continue to consider negative factors associated with reverse stock splits. These factors include the negative
perception of reverse stock splits held by many investors, analysts and other stock market participants, including their awareness that
the trading prices of the common stock of some companies that have effected reverse stock splits have subsequently declined to pre-reverse
stock split levels. In recommending the Reverse Stock Split, the Board determined that it believes the potential benefits of the Reverse
Stock Split significantly outweighed these potential negative factors.
Potential Risks from the Reverse Stock Split
We cannot assure you that the total market capitalization
of our Common Stock after the implementation of the Reverse Stock Split will be equal to or greater than the total market capitalization
before the Reverse Stock Split or that the per-share market price of our Common Stock following the Reverse Stock Split will increase
in proportion to the reduction in the number of shares of our Common Stock outstanding in connection with the Reverse Stock Split. Also,
we cannot assure you that the Reverse Stock Split would lead to a sustained increase in the trading price of our Common Stock. The trading
price of our Common Stock may change due to a variety of other factors, including our ability to successfully accomplish our business
goals, market conditions and the market perception of our business. You should also keep in mind that the implementation of the Reverse
Stock Split does not affect the actual or intrinsic value of our business or a stockholder’s proportional ownership in the Company,
subject to the treatment of fractional shares. If the overall value of our Common Stock declines after the proposed Reverse Stock Split,
however, then the actual or intrinsic value of the shares of our Common Stock will also proportionately decrease as a result of the overall
decline in value.
Further, the Reverse Stock Split may reduce the
liquidity of our Common Stock, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly
if the expected increase in stock price as a result of the Reverse Stock Split is not sustained. For instance, the proposed Reverse Stock
Split may increase the number of stockholders who own odd lots (fewer than 100 shares) of our Common Stock, creating the potential for
those stockholders to experience an increase in the cost of selling their shares and greater difficulty in selling those shares. If we
effect the Reverse Stock Split, the resulting per-share stock price may nevertheless fail to attract institutional investors and may not
satisfy the investing guidelines of such investors and, consequently, the trading liquidity of our Common Stock may not improve.
Although we expect the Reverse Stock Split to
result in an increase in the market price of our Common Stock, the Reverse Stock Split may not result in a permanent increase in the market
price of our Common Stock, which would depend on many factors, including general economic, market and industry conditions and other factors
described from time to time in the reports we file with the SEC.
Principal Effects on Outstanding Common Stock
If the Board elects to effect the Reverse Stock
Split, the number of outstanding shares of Common Stock will be reduced to 1/50,000th of the current number of outstanding shares of Common
Stock, subject to the treatment of fractional shares, while the number of authorized shares of Common Stock will be 3,323. As of the effective
time of the Reverse Stock Split, we would also adjust and proportionately decrease the number of shares of our Common Stock reserved for
issuance upon exercise of, and adjust and proportionately increase the exercise price of, all options and warrants and other rights to
acquire our Common Stock. We would also proportionately reduce the number of shares that are issuable on vesting of outstanding restricted
stock units. In addition, as of the effective time of the Reverse Stock Split, we would adjust and proportionately decrease the total
number of shares of our Common Stock that may be the subject of the future grants under our stock plans.
The Reverse Stock Split would be affected simultaneously
for all outstanding shares of our Common Stock. The Reverse Stock Split would affect all of our stockholders uniformly and would not change
any stockholder’s percentage ownership interest in the Company, other than as a result of the payment of cash in lieu of fractional
shares. We would not issue fractional shares in connection with the Reverse Stock Split. Instead, a stockholder who owns a number of shares
not evenly divisible by 50,000 would receive cash in lieu of any fractional share resulting from the Reverse Stock Split upon surrender
to the transfer agent of any certificates and a properly completed and executed transmittal letter. The Reverse Stock Split would not
change the terms of our Common Stock. The Reverse Stock Split is not intended as, and would not have the effect of, a “going private
transaction” covered by Rule 13e-3 under the Exchange Act.
After the effective time of the Reverse Stock
Split, our Common Stock will have a new CUSIP number, which is a number used to identify our equity securities, and investors holding
stock certificates with the older CUSIP number will need to exchange them for stock certificates with the new CUSIP numbers by following
the procedures described below.
Our Common Stock is currently registered under
Section 12(g) of the Exchange Act, and we are subject to the periodic reporting and other requirements of the Exchange Act. The implementation
of the Reverse Stock Split will not affect the registration of our Common Stock under the Exchange Act, and following the Reverse Stock
Split, we would continue to be subject to the periodic reporting requirements of the Exchange Act.
Based on our securities outstanding as of the
Record Date, giving effect to the Reverse Stock Split, without giving effect to the treatment of fractional shares, would result in 3,323
issued and outstanding shares of our Common Stock.
Our directors and executive officers have no substantial
interests, directly or indirectly, in the Reverse Stock Split, except to the extent of their ownership in shares of our Common Stock and
securities convertible or exercisable for our Common Stock, which shares and securities would be subject to the same proportionate adjustment
in accordance with the terms of the Reverse Stock Split as all other outstanding shares of our Common Stock and securities convertible
into or exercisable for our Common Stock.
Authorized Shares of Common Stock
We are currently authorized under our Certificate
of Incorporation to issue up to a total of 8,500,000,000 shares of capital stock, comprised of 7,500,000,000 shares of Common Stock and
1,000,000,000 shares of preferred stock. A total of 166,130,069 shares of our Common Stock are outstanding. While the Reverse Stock Split
would decrease the number of outstanding shares of our Common Stock, it would not change the number of authorized shares under our Certificate
of Incorporation. Consequently, the practical effect of the Reverse Stock Split would be to substantially increase the number of shares
of our Common Stock available for issuance under our Certificate of Incorporation. The Board believes that such an increase is in our
and our stockholders’ best interests because it would give us greater flexibility to issue shares of our Common Stock in connection
with possible future financings, joint ventures and acquisitions as well as under our equity incentive plans and for other general corporate
purposes. Although we do not currently have any plans, understandings, arrangements, commitments or agreements, written or oral, for the
issuance of the additional shares of our Common Stock that would become available for issuance if the Reverse Stock Split is effected,
we believe it would be advantageous in the future to have the shares available for the purposes described above in the future.
By increasing the number of authorized but unissued
shares of Common Stock, the Reverse Stock Split could, under certain circumstances, have an anti-takeover effect, although this is not
the intent of the Board. For example, the Board might be able to delay or impede a takeover or transfer of control of the Company by causing
such additional authorized but unissued shares to be issued to holders who might side with the Board in opposing a takeover bid that the
Board determines, in the exercise of its fiduciary duties, is not in the best interests of the Company or our stockholders. The Reverse
Stock Split could therefore have the effect of discouraging unsolicited takeover attempts. By potentially discouraging initiation of any
such unsolicited takeover attempts, the Reverse Stock Split could limit the opportunity for our stockholders to dispose of their shares
at the higher price generally available in takeover attempts or that may be available under a merger proposal. The Reverse Stock Split
could have the effect of providing the Board with additional means to resist changes that stockholders may wish to make if they are dissatisfied
with the conduct of our business, including making it more difficult for stockholders to remove directors. The Board is not aware of any
attempt to take control of the Company and did not authorize the Reverse Stock Split with the intention of using it as a type of anti-takeover
device.
Procedure for Effecting the Reverse Stock Split
If the Board concludes that the Reverse Stock
Split is in the best interests of the Company and our stockholders, the Board would cause the Reverse Stock Split to be implemented at
a whole number ratio of one for 50,000. We would file the Certificate of Amendment with the Secretary of State of Nevada so that the Certificate
of Amendment becomes effective at the time the Board determines to be appropriate. The Board may delay effecting the Reverse Stock Split
without resoliciting stockholder approval. The Reverse Stock Split would become effective on the date the Certificate of Amendment is
filed with the Secretary of State of Nevada or at such later effective date and time as specified in the Certificate of Amendment.
Record and Beneficial Stockholders
If the Reverse Stock Split is implemented, all
registered holders of our Common Stock who hold their shares electronically in book-entry form with our transfer agent, Daniel Harris
of Transfer Online (“Harris”), will receive a statement from Harris reflecting the number of shares of our Common Stock registered
in their accounts, along with payment in lieu of any fractional shares. No action needs to be taken to receive post-Reverse Stock Split
shares and payment in lieu of fractional shares (if any) because the exchange will be automatic. Stockholders holding certificated shares
(i.e., shares represented by one or more physical stock certificates) will be requested to exchange their old stock certificate or certificates
(“Old Certificates”) for shares held in book-entry form through the Depository Trust Company’s Direct Registration System
representing the appropriate number of whole shares of our Common Stock resulting from the Reverse Stock Split. Harris will furnish to
stockholders of record upon the effective time of the Reverse Stock Split the necessary materials and instructions for the surrender and
exchange of their Old Certificates at the appropriate time. Stockholders will not have to pay any transfer fee or other fee in connection
with such exchange. As soon as practicable after the effective time of the Reverse Stock Split, Harris will send a transmittal letter
to each stockholder advising such holder of the procedure for surrendering Old Certificates in exchange for new shares held in book-entry
form and payment in lieu of fractional shares (if any). You would not be able to use your Old Certificates representing pre-Reverse Stock
Split shares for either transfers or deliveries. Accordingly, you must exchange your Old Certificates to effect transfers or deliveries
of your shares.
Non-registered stockholders holding shares of
our Common Stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures
for processing the Reverse Stock Split and making payment for fractional shares than those that we would put in place for registered stockholders.
If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact
your nominee.
Fractional Shares
No fractional shares of our Common Stock will
be issued as a result of the Reverse Stock Split. Instead, in lieu of any fractional shares to which a stockholder of record would otherwise
be entitled as a result of the Reverse Stock Split, the Company will pay cash (without interest) equal to such fraction multiplied by
the average of the quoted prices of a share of our Common Stock (as adjusted to give effect to the Reverse Stock Split) on the OTC Market,
Inc.’s OTCQX during regular trading hours for the five (5) consecutive trading days immediately preceding the effective date of
the Reverse Stock Split. After the Reverse Stock Split, a stockholder otherwise entitled to a fractional interest will not have any voting,
dividend or other rights with respect to such fractional interest except to receive payment as described above.
We do not anticipate the aggregate cash amount
we pay for fractional interests to be material to us.
Effect on Options, Warrants, Preferred Stock
and Other Securities
All outstanding options, warrants, preferred stock
and other securities entitling their holders to purchase shares of our Common Stock would be adjusted as a result of the Reverse Stock
Split, as required by the terms of each security. In particular, the conversion ratio for each security would be reduced proportionately,
and the exercise price, if applicable, would be increased proportionately, in accordance with the terms of each security and based on
the one-for-50,000 exchange ratio implemented in the Reverse Stock Split. We would also proportionately reduce the number of shares that
are issuable on vesting of outstanding restricted stock units.
Accounting Matters
The Reverse Stock Split would not affect the par
value of our Common Stock per share, which would continue to be $0.001 par value per share, while the number of outstanding shares of
our Common Stock would decrease in accordance with the Reverse Stock Split ratio, without taking into account the payment of cash in lieu
of fractional shares. As a result, as of the effective time of the Reverse Stock Split, the stated capital attributable to our Common
Stock on our balance sheet would decrease and the additional paid-in capital account on our balance sheet would increase by an offsetting
amount. Following the Reverse Stock Split, reported per share net income or loss would be higher because there would be fewer shares of
our Common Stock outstanding, and we would adjust historical per share amounts in our future financial statements.
Discretionary Authority of the Board to Abandon
Reverse Stock Split
The Board reserves the right to abandon the Reverse
Stock Split without further action by our stockholders at any time before the effectiveness of the filing with the Secretary of State
of Nevada of the Certificate of Amendment.
Material U.S. Federal Income Tax Consequences of the Reverse Stock
Split
The following discussion is a summary of the material
U.S. federal income tax consequences of the proposed Reverse Stock Split to U.S. Holders (as defined below) of our Common Stock. This
discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury Regulations promulgated under
the Code, judicial decisions and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”),
in each case in effect as of the date of this Proxy Statement. These authorities may change or be subject to differing interpretations.
Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder. We have
not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance that the IRS or
a court will not take a contrary position to that discussed below regarding the tax consequences of the proposed Reverse Stock Split.
For purposes of this discussion, a “U.S. Holder” is a beneficial
owner of our Common Stock who or that, for U.S. federal income tax purposes, is or is treated as:
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an individual who is a citizen or resident of the United States;
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a corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia;
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an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
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a trust if (1) its administration is subject to the primary supervision of a court within the United States and all of its substantial decisions are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
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This discussion is limited to U.S. Holders who
hold our Common Stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment).
This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a U.S. Holder, including
the effect of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to U.S. Holders
that are subject to special rules, including, without limitation:
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Financial institutions;
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Insurance companies;
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Real estate investment trusts;
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Regulated investment companies;
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Grantor trusts;
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Tax-exempt organizations;
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Dealers or traders in securities or currencies;
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U.S. Holders who hold common stock as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes or U.S. holders that have a functional currency other than the U.S. dollar; or
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U.S. Holders who actually or constructively own 10% or more of our voting stock.
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If a partnership (or other entity treated as a
partnership for U.S. federal income tax purposes) is the beneficial owner of our Common Stock, the U.S. federal income tax treatment of
a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Accordingly, partnerships
(and other entities treated as partnerships for U.S. federal income tax purposes) holding our Common Stock and the partners in such entities
should consult their own tax advisors regarding the U.S. federal income tax consequences of the proposed Reverse Stock Split to them.
In addition, the following discussion does not
address the U.S. federal estate and gift tax, alternative minimum tax, or state, local and non-U.S. tax law consequences of the proposed
Reverse Stock Split. Furthermore, the following discussion does not address any tax consequences of transactions effectuated before, after
or at the same time as the proposed Reverse Stock Split, whether or not they are in connection with the proposed Reverse Stock Split.
This discussion should not be considered as tax or investment advice, and the tax consequences of the proposed Reverse Stock Split may
not be the same for all stockholders.
Tax Consequences to the Company
The proposed Reverse Stock Split is intended to
be treated as a “recapitalization” pursuant to Section 368(a)(1)(E) of the Code. As a result, we should not recognize taxable
income, gain or loss in connection with the proposed Reverse Stock Split.
Tax Consequences to U.S. Holders
A U.S. Holder generally should not recognize gain
or loss upon the proposed Reverse Stock Split for U.S. federal income tax purposes, except with respect to cash received in lieu of a
fractional share of our Common Stock, as discussed below. A U.S. Holder’s aggregate adjusted tax basis in the shares of our Common
Stock received pursuant to the proposed Reverse Stock Split should equal the aggregate adjusted tax basis of the shares of our Common
Stock exchanged therefor (reduced by the amount of such basis that is allocated to any fractional share of our common stock). The U.S.
Holder’s holding period in the shares of our Common Stock received pursuant to the proposed Reverse Stock Split should include the
holding period in the shares of our Common Stock exchanged therefor. U.S. Treasury Regulations provide detailed rules for allocating the
tax basis and holding period of shares of common stock surrendered in a recapitalization to shares received in the recapitalization. U.S.
Holders of shares of our Common Stock acquired on different dates and at different prices should consult their tax advisors regarding
the allocation of the tax basis and holding period of such shares.
A U.S. Holder that, pursuant to the proposed Reverse
Stock Split, receives cash in lieu of a fractional share of our Common Stock should recognize capital gain or loss in an amount equal
to the difference, if any, between the amount of cash received and the portion of the U.S. Holder’s aggregate adjusted tax basis
in the shares of our Common Stock surrendered that is allocated to such fractional share. Such capital gain or loss will be short term
if the pre-Reverse Stock Split shares were held for one year or less at the effective time of the Reverse Stock Split and long term if
held for more than one year. We will not recognize any gain or loss as a result of the proposed Reverse Stock Split.
A U.S. Holder of our Common Stock may be subject
to information reporting and backup withholding on cash paid in lieu of a fractional share in connection with the proposed Reverse Stock
Split. A U.S. Holder of our Common Stock will be subject to backup withholding if such U.S. Holder is not otherwise exempt and such U.S.
Holder does not provide its taxpayer identification number in the manner required or otherwise fails to comply with applicable backup
withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded
or allowed as a credit against a U.S. Holder’s federal income tax liability, if any, provided the required information is timely
furnished to the IRS. U.S. Holders of our Common Stock should consult their own tax advisors regarding their qualification for an exemption
from backup withholding and the procedures for obtaining such an exemption.
This discussion is for general information
only and is not tax advice. It does not discuss all aspects of U.S. federal taxation that may be relevant to a particular stockholder
in light of such stockholder’s circumstances and income tax situation. Accordingly, stockholders should consult their tax advisors
with respect to the application of the U.S. federal income tax laws to their particular situations as well as any tax consequences of
the proposed Reverse Stock Split arising under the U.S. federal estate or gift tax laws or under the laws of any state, local or non-U.S.
taxing jurisdiction or under any applicable income tax treaty.
Dissenters’
and Appraisal Rights
Neither Nevada law, the Certificate of Incorporation,
nor our bylaws provide for appraisal or other similar rights for dissenting stockholders in connection with this proposal. Accordingly,
our stockholders will have no right to dissent and obtain payment for their shares, and we will not independently provide stockholders
with any such right.