UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
| [X] | Preliminary Information Statement |
| [ ] | Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2)) |
| [ ] | Definitive Information Statement |
| BRIDGEWAY NATIONAL CORP. | ||
| (Name of Registrant As Specified In Its Charter) |
Payment of Filing Fee (Check the appropriate box):
| [X] | No fee required. |
| [ ] | Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. |
| 1) | Title of each class of securities to which transaction applies: | |
| 2) | Aggregate number of securities to which transaction applies: | |
| 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |
| 4) | Proposed maximum aggregate value of transaction: | |
| 5) | Total fee paid: |
| [ ] | Fee paid previously with preliminary materials. |
| [ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| 1) | Amount Previously Paid: | |
| 2) | Form, Schedule or Registration Statement No: | |
| 3) | Filing Party: | |
| 4) | Date Filed: |
BRIDGEWAY NATIONAL CORP.
1015 15TH Street NW, Suite 1030,
Washington, DC 20005
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
This notice and accompanying Information Statement are furnished to the holders of shares of the common stock, par value $0.001 per share (“Common Stock”), of Bridgeway National Corp., a Delaware corporation (“Bridgeway National,” “we.” “us,” “our” or the “Company”), pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C promulgated thereunder, in connection with the approval of the actions described below.
On October 16, 2020, our board of directors (the “Board”) and a stockholder holding a majority of the voting power of our voting stock (the “Majority Stockholder”) took action by joint written consent in lieu of a meeting to:
| ● | Ratify the approval of an amendment to our certificate of incorporation, which amendment was filed with the Delaware Secretary of State on December 19, 2019 and was declared effective on January 20, 2020 (the “December 2019 Amendment”), which (i) changed the Company’s name from “Capital Park Holdings Corp.” to “Bridgeway National Corp.” and (ii) increased our authorized capital stock from 30,000,000 shares to 250,000,000 shares, of which 187,500,000 shares were designated as Class A Common Stock (the “Class A Common Stock”), 18,750,000 shares were designated as Class B Common Stock (the “Class B Common Stock”) and 62,500,000 shares were designated as preferred stock, of which 1,000 shares were previously designated as Series A Preferred Stock (the “Series A Preferred Stock”) and 125,181 shares were previously designated as Series B Preferred Stock (the “Series B Preferred Stock”). | |
| ● | Approve a further amendment to our certificate of incorporation (the “Recapitalization Amendment”) to increase our Common Stock from 187,500,000 shares to 400,000,000 shares, of which 360,000,000 shares will be designated as the Class A Common Stock and 40,000,000 shares will be designated as the Class B Common Stock. | |
| ● | Approve an additional amendment to our certificate of incorporation to effect a reverse stock split of our outstanding shares of our Class A Common Stock and Class B Common Stock at the at the ratio of one-for-4 (the “Reverse Stock Split Amendment,” and together with the December 2019 Amendment and the Recapitalization Amendment, collectively, the “Amendments”). |
The December 2019 Amendment will not be deemed ratified and the Recapitalization Amendment and Reverse Stock Split Amendment will not be made effective until at least twenty (20) calendar days after the mailing of the Information Statement accompanying this Notice. In addition, the Reverse Stock Split Amendment will not be made effective until the Recapitalization Amendment is made effective and we receive FINRA approval for the Reverse Stock Split from the Financial Industry Regulatory Authority (“FINRA”). We anticipate that the Recapitalization Amendment will become effective on or about November 8, 2020 and the Reverse Stock Split will become effective, subject to the receipt of FINRA approval on or after November 15, 2020.
Stockholders of record at the close of business on October 16, 2020 are entitled to notice of this stockholder action by written consent. Because this action has been approved by the written consent of the Board and the Majority Stockholder, no proxies were or are being solicited.
Attached hereto for your review is an Information Statement relating to the above-described actions. Please read this Information Statement carefully. It describes the essential terms of the actions to taken.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
| Washington, D.C. | By Order of the Board of Directors, |
| October 19, 2020 | /s/ Eric Blue |
| Eric Blue | |
| Chief Executive Officer |
BRIDGEWAY NATIONAL CORP.
1015 15TH Street NW, Suite 1030,
Washington, DC 20005
October 19, 2020
INFORMATION STATEMENT
Pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C promulgated thereunder, the notice and this information statement (this “Information Statement”) will be sent or given on or about October 30, 2020, to stockholders of record as of October 16, 2020 (the “Record Date”), of Bridgeway National Corp., a Delaware corporation (“Bridgeway National,” “we.” “us,” “our” or the “Company”). This Information Statement is being circulated to advise stockholders of certain actions already approved and taken without a meeting by joint written consent of our board of directors the “Board”) and a stockholder who holds a majority of the voting power of our voting stock (the “Majority Stockholder”).
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
On October 16, 2020, the Board and the Majority Stockholder took action by joint written consent in lieu of a meeting to:
| ● | Ratify the approval of an amendment to our certificate of incorporation, which amendment was filed with the Delaware Secretary of State on December 19, 2019 and was declared effective on January 20, 2020 (the “December 2019 Amendment”), which (i) changed the Company’s name from “Capital Park Holdings Corp.” to “Bridgeway National Corp.” and (ii) increased our authorized capital stock from 30,000,000 shares to 250,000,000 shares, of which 187,500,000 shares were designated as Class A Common Stock (the “Class A Common Stock”), 18,750,000 shares were designated as Class B Common Stock (the “Class B Common Stock”) and 62,500,000 shares were designated as preferred stock, of which 1,000 shares were previously as Series A Preferred Stock (the “Series A Preferred Stock”) and 125,181 shares were previously designated as Series B Preferred Stock (the “Series A Preferred Stock”). | |
| ● | Approve a further amendment to our certificate of incorporation (the “Recapitalization Amendment”) to increase our authorized common stock from 187,500,000 shares to 400,000,000 shares, of which 360,000,000 shares will be designated as the Class A Common Stock, 40,000,000 shares will be designated as the Class B Common Stock. | |
| ● | Approve an additional amendment to our certificate of incorporation to effect a reverse stock split of our outstanding shares of our Class A Common Stock and Class B Common Stock at the at the ratio of one-for-4 (the “Reverse Stock Split Amendment,” and together with the December 2019 Amendment and the Recapitalization Amendment, collectively, the “Amendments”). |
The December 2019 Amendment will not be deemed ratified and the Recapitalization Amendment and Reverse Stock Split Amendment will not be made effective until at least twenty (20) calendar days after the mailing of this Information Statement to Stockholders. In addition, the Reverse Stock Split Amendment will not be made effective until the Recapitalization Amendment is made effective and we receive approval for the Reverse Stock Split from the Financial Industry Regulatory Authority (“FINRA”). We anticipate that the Recapitalization Amendment will become effective on or about November 8, 2020 and the Reverse Stock Split will become effective, subject to the receipt of FINRA approval on or after November 15, 2020.
Stockholders of record at the close of business on October 16, 2020 are entitled to notice of this stockholder action by written consent. Because this action has been approved by the written consent of the Board and the Majority Stockholder, no proxies were or are being solicited. The following table sets forth, as of the date of this Information Statement, information regarding the stock ownership of and percentage of voting power in the Company held by the Majority Stockholder.
| Name of Majority Stockholder(1) | Type of Stock | Shares Beneficially Held | No. of Votes | Percent of Total Votes (2) | ||||||||||
| VMB Global Holdings LLC | Common | 335,183 | 335,183 | 0.6 | % | |||||||||
| Series A Preferred | 1,000 | 50,000,000 | 83.8 | % | ||||||||||
| Total Shares/Votes | 50,335,183 | 84.4 | % | |||||||||||
(1) Eric C. Blue, our Chief Executive Officer and a Director has voting and dispositive control of the shares held by Capital Park Opportunities Fund Ltd.
(2) See Record Date and Voting Securities below.
Our Common Stock is currently quoted on the OTC Pink tier of the Over-the Counter Market operated by OTC Markets, Inc. and accordingly, the Recapitalization Amendment will require the approval of FINRA prior to it becoming effective.
DISSENTERS’ RIGHTS
There are no rights of appraisal or similar rights of dissenters with respect to any matter described in this Information Statement.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on the Record Date are entitled to notice of the information disclosed in this Information Statement. As of the Record Date, our authorized capital stock consists of (i) 168,750,000 shares of Class A Common Stock, par value $0.001 per share, 18,750,000 shares of Class B Common Stock, $0.001 per share and 62,500,000 shares of preferred stock, par value $0.001 per share, of which 1,000 shares have been designated as Series A Preferred Stock and 125,181 shares have been designated as Series B Preferred Stock. As of the Record Date, there were 9,640,915 shares of Class A Common Stock issued and outstanding and no shares of Class B Common Stock issued and outstanding. Each share of Class A Common Stock is entitled to one vote per share and each share of Class B Common Stock is entitled to 10 votes per share. As of the Record Date, there were 1,000 shares of Series A Preferred Stock issued and outstanding. Each share of Series A Preferred Stock is entitled to 50,000 votes on all matters submitted to a vote of the Company’s stockholders. In the event that such votes do not total at least 51% of all votes, then the votes cast by the holders of the Series A Preferred Stock shall be equal to 51% of all votes cast at any meeting of the Company’s stockholders or any issue put to the stockholders for voting. As of the Record Date, there were 178,371 shares of Series B Preferred Stock issued and outstanding. Each share of Series B Preferred Stock is entitled to one vote per share on all matters submitted to a vote of the Company’s stockholders. The Class A Common Stock, Class B Common Stock, Series A Preferred Stock and Series B Preferred Stock vote together on all matters presented to stockholders for a vote, except as otherwise required by the Delaware General Corporation Law (the “DGCL”).
EXPENSES
The costs of preparing, printing and mailing this Information Statement will be borne by the Company.
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE PURPOSE OF INFORMING YOU OF THE MATTERS DESCRIBED HEREIN.
STOCKHOLDERS’ RIGHTS
The elimination of the need for a meeting of the stockholders to approve the actions described in this Information Statement is authorized by Section 228 of the DGCL, which provides that any action required or permitted to be taken at a meeting of stockholders of a corporation may be taken without a meeting, before or after the action, if a written consent thereto is signed by the stockholders holding at least a majority of the voting power. In order to eliminate the costs and management time involved in holding a special meeting and in order to effect the action disclosed herein as quickly as possible in order to accomplish the purposes of our Company, we chose to obtain the written consent of a majority of our voting power to approve the action described in this Information Statement.
RATIFICATION OF APPROVAL OF AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO (i) CHANGE THE COMPANY’S NAME FROM “CAPITAL PARK HOLDINGS CORP.” TO “BRIDGEWAY NATIONAL CORP.” AND (ii) INCREASE OUR AUTHORIZED CAPITAL STOCK FROM 30,000,000 TO 2500,000,000 SHARES
On December 19, 2020, we filed an amendment to our certificate of incorporation with the Delaware Secretary of State, which was declared effective on January 20, 2020 (the “December 2019 Amendment”). The amendment (i) changed the Company’s name from “Capital Park Holdings Corp.” to “Bridgeway National Corp.” and (ii) increased our authorized capital stock from 30,000,000 shares to 250,000,000 shares, of which 187,500,000 shares were designated as the Class A Common Stock, 18,750,000 shares were designated as the Class B Common Stock and 62,500,000 shares were designated as preferred stock, of which 1,000 shares were previously designated as the Series A Preferred Stock and 125,181 shares were previously designated as the Series B Preferred Stock. The purpose of the amendment was to provide the Company with what management believed was a more suitable corporate name and allow it to avoid confusion with other entities, as well as provide it with additional authorized capital stock, which could be used to raise capital through private or public offerings of its capital stock in order to fund contemplated acquisitions of portfolio companies or as consideration, in whole or in part for such acquisitions.
Although the December 2019 amendment was approved by the joint written consent of the Board and the Majority Stockholder, due to an administrative oversight, the Company failed to comply with Section 14(c) of the Exchange Act and Regulation 14C promulgated thereunder with respect to approval of the December 2019 amendment, by not furnishing stockholders with the required notice and Information Statement. Accordingly, on October 16, 2020, the Board and the Majority Stockholder ratified approval of the December 2019 amendment by written consent in lieu of a meeting and included notice of such ratification in this Information Statement.
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED COMMON STOCK FROM 187,500,000 TO 400,000,000 SHARES
On October 16, 2020, the Board and the Majority Stockholder took action by joint written consent in lieu of a meeting to approve a further amendment to our certificate of incorporation (the “Recapitalization Amendment”) to increase our Common Stock from 187,500,000 shares to 400,000,000 shares, of which 360,000,000 shares will be designated as the Class A Common Stock and 40,000,000 shares will be designated as the Class B Common Stock.
The Board believes that further increasing the number of authorized shares of our Common Stock more appropriately reflects where the Company currently is in terms of its growth, and we believe that the increased number of authorized shares of Common Stock will increase our ability to take prompt action with respect to corporate opportunities that develop and require us to act expeditiously, including the ability raise capital through private or public offerings of our Common Stock in order to fund contemplated acquisitions of portfolio companies or as consideration, in whole or in part for such acquisitions.. There will be no change in the number of authorized preferred shares as a result of the increase in authorized Common Stock to be effected through the Recapitalization Amendment.
As disclosed in a Current Report on Form 8-K filed by Bridgeway National with the SEC on October 2, 2020, the Company and a newly formed Saskatchewan subsidiary intended to be a special purpose vehicle, entered into an arrangement agreement (the “Arrangement Agreement”) with and Input Capital Corp. (“Input”), a Saskatchewan, Canada based company which is engaged in agriculture commodity streaming with a focus on canola, the largest and most profitable crop in Canadian agriculture. Pursuant to the Arrangement Agreement Bridgeway National will acquire all of the issued and outstanding common shares of Input for cash consideration of CDN$1.75 per share (US$1.31 per share based on an exchange rate of CND$1.00 = US$ 0.76) or aggregate consideration of CDN$ 96.152million (US$73.1 million). A portion, if not all of the purchase price for the Input shares may be raised through the sale of our capital stock, although the Company has no definitive arrangements therefor.
As disclosed in a Current Report on Form 8-K filed by Bridgeway National with the SEC on October 19, 2020, the Company has also executed definitive agreements to acquire 100% of the issued and outstanding common stock of Merchandize Liquidators, Inc. (“MLI”), a Miami, Florida based direct wholesale and retail liquidator of surplus merchandise. The shares of MLI held by its minority shareholder will be acquired for $6.999 million in cash and the shares of MLI held by its majority shareholder will be acquired for the issuance to him of 252,644,000 shares of Class A Common Stock. In order to consummate the acquisition, it is necessary to effectuate the Recapitalization Amendment and increase the number of authorized shares of Class A Common Stock available for issuance.
In addition to the foregoing, the authorized shares of our capital stock will be available for issuance at such times and for such corporate purposes as the Board may deem advisable, without further action by our stockholders, except as may be required by the DGCL or by the rules of any national other stock exchange or electronic trading system on which our Class A Common Stock or other shares of capital stock is then listed or traded. Holders of our Class A Common Stock and Class B Common Stock have no preemptive rights and do not have cumulative voting rights.
The issuance of additional shares of the Company’s capital stock could have a dilutive effect on earnings per share. The Company’s capital stock could also be issued to existing stockholders as a dividend or privately placed with purchasers who might side with our Board in opposing a takeover bid, thus, discouraging such a bid.
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE OUTSTANDING SHARES OF OUR COMMON STOCK AT THE RATIO OF ONE-FOR-[4]
General
On October 16, 2020, the Board and the Majority Stockholder took action by joint written consent in lieu of a meeting to approve an additional amendment to our certificate of incorporation to effect a reverse stock split (the “Reverse Stock Split”) of our outstanding shares of our Class A Common Stock and Class B Common Stock (collectively, the “Common Stock”) at the at the ratio of one-for-4 (the “Reverse Stock Split Amendment”). If the Board elects to implement the Reverse Stock Split, it will become effective through filing of the Reverse Stock Split Amendment with the Delaware Secretary of State, which will not occur until after the effective date of the Recapitalization Amendment.
The Board may (but is not required to) effect the Reverse Stock Split at a ratio (the “Reverse Stock Split Ratio”) of one-for-4. The Board reserves its right not to effect the Reverse Stock Split if it determines, in its sole discretion, that the Reverse Stock Split is no longer in the best interests of the Company and its stockholders.
Reasons for the Reverse Stock Split
The Recapitalization Amendment was approved by the Board and the Majority Stockholder to allow the Company to issue the number of shares of Common Stock required to facilitate the raising of additional capital as needed and to consummate the acquisition of ML. The purpose of the proposed Reverse Stock Split is to decrease the number of outstanding shares of Common Stock in order to increase the market value of each share of Class A Common Stock. Immediately following the Reverse Stock Split the per-share price of the Class A Common Stock should generally increase proportionately with the Reverse Stock Split Ratio. For example, immediately following the Reverse Stock Split at the ration of one-for-4, you would expect the price of our shares of Class A Common Stock to quadruple. In the longer term, however, depending upon market and industry conditions and the status of our Company, the Reverse Stock Split may have no effect, a positive effect or a negative effect on the value of the post- Reverse Stock Split Class A Common Stock.
Reducing the number of outstanding shares of our Common Stock through the Reverse Stock Split is intended, absent other factors, to increase the market price of our Class A Common Stock. However, other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our Class A Common Stock. As a result, there can be no assurance that the Reverse Stock Split, if completed, will result in the intended benefits described above, that the market price of our Class A Common Stock will increase (proportionately to the reduction in the number of shares of our Common Stock after the Reverse Stock Split or otherwise) following the Reverse Stock Split or that the market price of our Class A Common Stock will not decrease in the future. Additionally, we cannot assure you that the market price per share of our Class A Common Stock after a Reverse Stock Split will increase in proportion to the reduction in the number of shares of our Class A Common Stock outstanding before the Reverse Stock Split. Accordingly, the total market capitalization of our Class A Common Stock after the Reverse Stock Split could be lower or higher than the total market capitalization before the Reverse Stock Split.
Effects of Reverse Stock Split
Giving pro forma effect to the Recapitalization Amendment and the of the acquisition of ML, of the 400,000,000 shares of pre-Reverse Stock Split Common Stock which will be authorized upon effectiveness of the Recapitalization Amendment, 9,640,915 shares of Class A Common Stock are issued and outstanding as of the Record Date and 262,284,915 shares of Class A Common Stock will be issued and outstanding after giving effect to the closing of the acquisition of ML. The Reverse Stock Split does not itself change the number of our authorized shares of Common Stock. The practical effect of the Reverse Stock Split will be to provide us with (i) 24,428,771 additional authorized but unissued shares of our post-Reverse Stock Split Class A Common Stock and (ii) 9,955,407 authorized but unissued shares of our post-Reverse Stock Split Class B Common Stock.
The following table presents information about our issued and outstanding Common Stock, shares reserved and shares available for future issuance, on a pre-Reverse Stock Split and post-Reverse Stock Split basis:
| Description | Number of Shares | |||||||
| Pre-Reverse Split | Post-Reverse Split(1) | |||||||
| Total Authorized Shares of our Class A Common Stock | 360,000,000 | 90,000,000 | ||||||
| Less: | ||||||||
| Issued and Outstanding Shares of Class A Common Stock | 262,284,915 | 65,571,228 | ||||||
| Shares of Class A Common Stock Available for Future Issuance | 97,715,085 | 24,428,771 | ||||||
(1) Amounts estimated, subject to rounding. The Post-Reverse Split assumes the Recapitalization is completed immediately after the Reverse Stock Split.
The Board and management believe that it is prudent and advisable for us to retain a sufficient number of authorized shares now to better position ourselves with added flexibility to raise additional capital through a variety of possible financing transactions and/or consummate mergers, acquisitions, combinations and various other strategic alternatives, and in order to avoid delays that might otherwise arise if we were required to solicit stockholder approval for additional shares at the time of a proposed transaction.
Our authorized but unissued Common Stock may be issued at the direction of the Board at such times, in such amounts and upon such terms as the Board may determine, without further approval of our stockholders unless, in any instance, such approval is expressly required by law.
The Common Stock that will be available for issuance following effectiveness of the Recapitalization Amendment and the Reverse Stock Split (as well as our authorized but unissued preferred stock) could have material anti-takeover consequences, including the ability of the Board to issue additional Common Stock or preferred stock without additional stockholder approval because unissued Common Stock could be issued by the Board in circumstances that may have the effect of delaying, deterring or preventing takeover bids. For example, without further stockholder approval, the Board could strategically sell Common Stock or preferred stock in a private transaction to purchasers who would oppose a takeover. In addition, because stockholders do not have preemptive rights under our certificate of incorporation, the rights of existing stockholders may (depending on the particular circumstances in which the additional capital stock is issued) be diluted by any such issuance and increase the potential cost to acquire control of our Company. The Company’s stockholders should be aware that approval of the Amendments could facilitate our efforts to deter or prevent changes of control in the future.
Other than as set forth herein, there are currently no plans, agreements, arrangements, or understanding, for the issuance of additional shares of our capital stock. The Board does not intend to issue any additional shares of our capital stock except on terms that it deems to be in the best interest of our Company and our stockholders. It is not anticipated that our financial condition, the percentage ownership of management, the number of stockholders, or any aspect of our business will materially change as a result of the Reverse Stock Split.
At the Effective Time (as defined below), each lot of 4 pre-Reverse Stock Split shares of our Common Stock (the “Old Shares”), as determined by the Board, issued and outstanding immediately prior to the Effective Time will, automatically and without any further action on the part of our stockholders, be combined into and become one (1) post-Reverse Stock Split share of our Common Stock (a “New Share”), subject to the treatment for fractional shares described below, and each certificate which, immediately prior to the Effective Time, represented Old Shares will be deemed, for all corporate purposes, to evidence ownership of New Shares. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
The Reverse Stock Split will be effected simultaneously for all of our then-existing Old Shares and the exchange ratio will be the same for all of our shares of outstanding our Common Stock. The Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in us, subject to the treatment for fractional shares described below. See “Fractional Shares” below. The New Shares issued pursuant to the Reverse Stock Split will be fully paid and non-assessable. Except as contemplated by the share classification set forth in our certificate of incorporation, all New Shares will have the same voting rights and other rights as Old Shares. The following table sets forth the pro forma effect of the Reverse Stock Split based on 65,571,228 shares of our Class A Common Stock outstanding after giving effect to the Recapitalization Amendment and closing of the ML Acquisition.
| Reverse Stock Split | Percentage Reduction in the Outstanding Shares of our Class A Common Stock | Our Class A Common Stock Outstanding after the Reverse Stock Split | Our Class A Common Stock Available for Issuance after the Reverse Stock Split | |||||||||
| 1-for-4 | 85.7 | % | 65,571,228 | 24,428,771 | ||||||||
A new CUSIP number will also be assigned to our Class A Common Stock and Class B Common Stock following the Reverse Stock Split.
Commencing upon effectiveness of the Reverse Stock, to the extent there are any, all outstanding options, warrants and other convertible securities entitling holders thereof to purchase shares of our Common Stock would entitle such holders to receive, upon exercise of their securities, 1/4th of the number of shares of our Common Stock which such holders may purchase upon exercise or conversion of their securities. In addition, commencing at the Effective Time, the exercise or conversion price of all outstanding options, warrants and our other convertible securities will be increased 4 times, based on the exchange ratio of the Reverse Stock Split.
Par Value Per Share of our Common Stock
As a consequence of the Reverse Stock Split, the par value per share of our Common Stock will remain at $0.001 per share.
Fractional Shares
No scrip or fractional shares will be issued if, as a result of the Reverse Stock Split, a stockholder would otherwise become entitled to receive a fractional share of our Common Stock. In lieu of issuing fractional shares, the Company will round up to one whole share of our Common Stock in the event a stockholder would be entitled to receive a fractional share of our Common Stock.
Effect on Voting Rights of, and Dividends on, our Common Stock
Proportionate voting rights and other rights of the holders of our Common Stock will not be affected by the Reverse Stock Split. The percentage of outstanding shares owned by each stockholder prior to the Reverse Stock Split will remain the same, except for adjustment as a consequence of rounding up of any fractional shares created by the Reverse Stock Split. See “Fractional Shares” above.
We do not believe that the Reverse Stock Split will have any effect with respect to future distributions, if any, to our stockholders, other than in respect of the additional shares issued to all of our stockholders in the Reverse Stock Split as a consequence of rounding up of any fractional shares created by the Reverse Stock Split.
Effect on Liquidity
The decrease in the number of shares of our Class A Common Stock outstanding as a consequence of the Reverse Stock Split may decrease the liquidity in our Class A Common Stock if the anticipated beneficial effects do not occur. See “Reasons for the Reverse Stock Split” above.
Certain U.S. Federal Income Tax Consequences
The following summary of certain material federal income tax consequences of the Reverse Stock Split does not purport to be a complete discussion of all of the possible federal income tax consequences and is included for general information only, is not intended as tax advice to any person and is not a comprehensive description of the tax consequences that may be relevant to each stockholder’s own particular circumstances. Further, it does not address any state, local, foreign or other income tax consequences, nor does it address the tax consequences to stockholders that are subject to special tax rules, such as stockholders who are subject to the alternative minimum tax, banks, insurance companies, regulated investment companies, personal holding companies, stockholders who are not “United States persons” as defined in section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the “Code”), broker-dealers and tax-exempt entities. This summary is based on the Code, the U.S. Treasury Department regulations thereunder and proposed regulations, court decisions and current administrative rulings and pronouncements of the Internal Revenue Service, all of which are subject to change, possibly with retroactive effect. This summary addresses only those stockholders who hold their Old Shares as “capital assets” as defined in the Code (generally, property held for investment), and will hold the New Shares as capital assets.
Holders of our Common Stock are advised to consult their own tax advisers regarding the federal income tax consequences of the Reverse Stock Split in light of their personal circumstances and the consequences under state, local and foreign tax laws, and also as to any estate or gift tax considerations.
We are structuring the Reverse Stock Split in an effort to obtain the following consequences:
| ● | the Reverse Stock Split will qualify as a recapitalization under section 368(a)(1)(E) of the Code for U.S. federal income tax purposes; | |
| ● | stockholders should not recognize any gain or loss as a result of the Reverse Stock Split; | |
| ● | the aggregate basis of a stockholder’s Old Shares will become the aggregate basis of the New Shares held by such stockholder immediately after the Reverse Stock Split; and | |
| ● | the holding period of the New Shares will include the stockholder’s holding period for the Old Shares. |
The above discussion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding U.S. federal tax penalties. It was written solely in connection with the proposed Reverse Stock Split of our Common Stock.
Regulatory Effects. The Class A Common Stock is currently registered under Section 12(g) of the Exchange Act, and the Company is subject to the periodic reporting and other requirements of the Exchange Act. The proposed Reverse Stock Split would not affect the registration of the Class A Common Stock under the Exchange Act or the Company’s obligation to publicly file financial and other information with the Securities and Exchange Commission. If the proposed Reverse Stock Split were implemented, the Class A Common Stock would continue to trade on the OTC Pink Marketplace under the symbol “BDGY,” assuming the Company maintains compliance with its listing requirements; however, the Company would be required to obtain a new CUSIP number associated with post-Reverse Stock Split shares of Class A Common Stock. .
No Going Private Transaction. Notwithstanding the decrease in the number of outstanding shares of Common Stock following the proposed Reverse Stock Split, the Board does not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Exchange Act.
The Proposed Reverse Stock Split May Decrease the Liquidity of the Class A Common Stock. The liquidity of the Class A Common Stock may be harmed by the proposed Reverse Stock Split given the reduced number of shares of Class A Common Stock that would be outstanding after the Reverse Stock Split, particularly if the stock price does not increase as a result of the Reverse Stock Split.
FINRA Approval
Our Class A Common Stock is currently quoted on the OTC Pink tier of the over -the-counter market operated by OTC Markets Group, Inc. Accordingly, the Reverse Stock Split will require approval by FINRA pursuant to Rule 10b-17 under the Exchange Act in order for it to be recognized for trading purposes. Accordingly, the Reverse Stock Split, if implemented will not be made effective until we receive FINRA’s approval.
INTEREST OF CERTAIN PERSONS IN THE AMENDMENTS
No director, executive officer, associate of any director or executive officer or any other person has any substantial interest, direct or indirect, by security holdings or otherwise, in the Amendments which is not shared by all other stockholders of the Company.
AVAILABLE INFORMATION
We are subject to the information and reporting requirements of the Exchange Act and in accordance with the Exchange Act we file periodic reports, documents and other information with the SEC. Such reports. documents and other information may be viewed at the Internet site maintained by the SEC at www.sec.gov.
STOCKHOLDERS SHARING AN ADDRESS
The Company will deliver only one Information Statement to multiple stockholders sharing an address unless the Company has received contrary instructions from one or more of the stockholders. The Company undertakes to deliver promptly, upon written or oral request, a separate copy of the Information Statement to a stockholder at a shared address to which a single copy of the Information Statement is delivered. A stockholder can notify the Company that the stockholder wishes to receive a separate copy of the Information Statement by contacting the Company at the telephone number or address set forth above.