| Stockholders’ Equity | 9.
Stockholders’ Equity Preferred
Stock We
have authorized 5,000,000 shares,
$ 0.001 par
value, Preferred Stock (the Preferred Stock”) of which 500,000
shares have been issued and redeemed, and
therefore are not considered outstanding. In addition, 500,000
shares of Preferred Stock have been designated
as Series A Junior Participating Preferred Stock (the “Junior Preferred Stock”) with the designations and the powers, preferences
and rights, and the qualifications, limitations and restrictions specified in the Certificate of Designation of the Junior Preferred
Stock filed with the Delaware Department of State on January 28, 2008. Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided, that no decrease shall reduce the number of shares of Junior Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securities issued by us that is convertible into Junior Preferred Stock. As of
December 31, 2021, there was no
Junior Preferred Stock issued or outstanding. Common
Stock On
October 12, 2021, we entered into a Stock Purchase Agreement (the “SPA”) with Reddington Partners LLC, a California limited
liability company (“Reddington”) providing for the sale of our common stock to Reddington in two tranches. Pursuant to the
SPA, our chief executive officer and three other stockholders (the “Principal Stockholders”) entered into Voting Agreements
with Reddington (the “Voting Agreements”). The
sale of the first tranche of 21,136,250
shares was consummated on October 12, 2021 (the
“First Closing”). At the First Closing, the Principal Stockholders entered into the Voting Agreements with Reddington, covering
an aggregate of 4,434,240
shares. As a result of these transactions, Reddington
obtained ownership or voting power over a total of 25,570,490
shares, constituting 51.8%
of the total outstanding shares, which excluded
all treasury shares held or retired by us. Accordingly, Reddington became our majority stockholder. Pursuant
to the SPA, we will proceed to effectuate a 1-for
50 reverse stock split (the “Reverse Split”).
Within two business days of the Reverse Split and satisfaction of the other conditions set forth in the SPA, Reddington will purchase
an additional tranche of shares of our common stock such that after the issuance thereof Reddington shall own 90% of the total issued
and outstanding shares of our common stock. As of the closing of the second tranche purchase (the “Second Closing”), the
Voting Agreements will terminate. As of the date of the filing of this quarterly report on Form 10-Q, the Reverse Split was not yet
effective. EKIMAS
CORPORATION NOTES
TO FINANCIAL STATEMENTS DECEMBER
31, 2021 (UNAUDITED) The
purchase price for both tranches of shares is $ 400,000 200,000 100,000 100,000 200,000 100,000 The
shares of common stock sold to Reddington were and will be sold in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) of Regulation D under
the Securities Act, based in part on the representations of Reddington. There were no sales commissions paid pursuant to this transaction. We
have 50,000,000 shares
of our common stock authorized. As of December 31, 2021 and March 31, 2021, we have 49,475,313 28,339,063 shares of our common
stock issued, respectively, and 49,398,621 28,262,371
shares of our common stock outstanding, respectively. Treasury
Stock and Other Transactions In
September 2001, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to 250,000 500,000 251,379 498,621 No Stockholder
Rights Plan Our
Board of Directors approved the adoption of a stockholder rights plan (the “Rights Plan”) under which all stockholders of
record as of February 8, 2008 will receive rights to purchase shares of the Junior Preferred Stock (the “Rights”). The Rights
will be distributed as a dividend. Initially, the Rights will attach to, and trade with, our common stock. Subject to the terms, conditions
and limitations of the Rights Plan, the Rights will become exercisable if (among other things) a person or group acquires 15% or more
of our common stock. Upon such an event, and payment of the purchase price, each Right (except those held by the acquiring person or
group) will entitle the holder to acquire shares of our common stock (or the economic equivalent thereof) having a value equal to twice
the purchase price. Our Board of Directors may redeem the Rights prior to the time they are triggered. In the event of an unsolicited
attempt to acquire us, the Rights Plan is intended to facilitate the full realization of our stockholder value and the fair and equal
treatment of all of our stockholders. The Rights Plan does not prevent a takeover attempt. |
