UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
INFORMATION STATEMENT PURSUANT TO SECTION 14C OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Filed by the Registrant [ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Definitive Information Statement Only
[ ] Confidential, for Use of the Commission (as permitted by Rule 14c)
ONLINE TELE-SOLUTIONS INC.
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(Name of Registrant as Specified In Its Charter)
Name of Person(s) Filing Information Statement, if other than Registrant:
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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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount of which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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ONLINE TELE-SOLUTIONS INC.
[INSERT LOGO]
BLOCK 225, 02-213, TAMPINES ST. 23
SINGAPORE 521225
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement is first being furnished on or about January ___,
2012 to the holders of record as of the close of business on April ___, 2012 of
the common stock of Online Tele-Solutions Inc., a Nevada corporation ("Online
Tele-Solutions").
The Board of Directors of Online Tele-Solutions and 2 stockholders holding an
aggregate of 1,520,000 shares of common stock issued and outstanding as of March
9, 2012, have approved and consented in writing to the actions described below.
Such approval and consent constitute the approval and consent of a majority of
the total number of shares of outstanding common stock and are sufficient under
the Nevada Revised Statutes ("NRS") and Online Tele-Solutions's Articles of
Incorporation and Bylaws to approve the actions. Accordingly, the actions will
not be submitted to the other stockholders of Online Tele-Solutions for a vote,
and this Information Statement is being furnished to stockholders to provide
them with certain information concerning the action in accordance with the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the regulations promulgated thereunder, including Regulation 14C.
ACTIONS BY BOARD OF DIRECTORS
AND
CONSENTING STOCKHOLDER
GENERAL
Online Tele-Solutions will pay all costs associated with the distribution of
this Information Statement, including the costs of printing and mailing. Online
Tele-Solutions will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending this Information
Statement to the beneficial owners of Online Tele-Solutions's common stock.
Online Tele-Solutions will only deliver one Information Statement to multiple
security holders sharing an address unless Online Tele-Solutions has received
contrary instructions from one or more of the security holders. Upon written or
oral request, Online Tele-Solutions will promptly deliver a separate copy of
this Information Statement and any future annual reports and information
statements to any security holder at a shared address to which a single copy of
this Information Statement was delivered, or deliver a single copy of this
Information Statement and any future annual reports and information statements
to any security holder or holders sharing an address to which multiple copies
are now delivered. You should direct any such requests to the following address:
Online Tele-Solutions Inc., Block 225, 02-213, Tampines St. 23, Singapore
521225, Attn: Mario Jakiri Tolentino, President. Mr. Tolentino may also be
reached by telephone at (702) 553-3026.
INFORMATION ON CONSENTING STOCKHOLDERS
Pursuant to Online Tele-Solutions's Bylaws and the Nevada Revised Statutes
("NRS"), a vote by the holders of at least a majority of Online Tele-Solutions's
outstanding capital stock is required to effect the action described herein.
Online Tele-Solutions's Articles of Incorporation, as amended, does not
authorize cumulative voting. As of the record date, Online Tele-Solutions had
2,200,000 shares of common stock issued and outstanding. The voting power
representing not less than 1,100,001 shares of common stock is required to pass
any stockholder resolutions. The consenting stockholders are the record and
beneficial owner of 1,520,000 shares of common stock, which represents
approximately 69.0% of the issued and outstanding shares of Online
Tele-Solutions's common stock. Pursuant to Chapter 78.320 of the NRS, the
consenting stockholders voted, with the Board of Directors, in favor of the
actions described herein in a joint written consent, dated March 9, 2012. No
consideration was paid for the consent. The consenting stockholders' names,
affiliation with Online Tele-Solutions, and their beneficial holdings are as
follows:
Beneficial Holder
Name and Affiliation Shares Beneficially Held Percentage
---- --------------- ------------------------ ----------
Mario Jakiri Tolentino President, Treasurer, 750,000 shares of common stock 34.0%
Secretary, Director, and (common stock)
Greater than 10% holder of
common stock
Owen A. Orendain Director, and Greater than 770,000 shares of common stock 35.0%
10% holder of common stock
(common stock)
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
None.
PROPOSALS BY SECURITY HOLDERS
None.
DISSENTERS RIGHTS OF APPRAISAL
None.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 9, 2012, certain information
regarding the ownership of Online Tele-Solutions's capital stock by each
director and executive officer of Online Tele-Solutions, each person who is
known to Online Tele-Solutions to be a beneficial owner of more than 5% of any
class of Online Tele-Solutions's voting stock, and by all officers and directors
of Online Tele-Solutions as a group. Unless otherwise indicated below, to Online
Tele-Solutions's knowledge, all persons listed below have sole voting and
investing power with respect to their shares of capital stock, except to the
extent authority is shared by spouses under applicable community property laws.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and generally includes voting or
investment power with respect to securities. Shares of common stock subject to
options, warrants or convertible securities exercisable or convertible within 60
days of March 9, 2012 are deemed outstanding for computing the percentage of the
person or entity holding such options, warrants or convertible securities but
are not deemed outstanding for computing the percentage of any other person, and
is based on 2,200,000 shares of common stock issued and outstanding on a fully
diluted basis, as of March 9, 2012.
2
Name and Address Amount and Nature of Percent of
of Beneficial Owner (1) Beneficial Ownership Class (2)
----------------------- -------------------- ---------
Mario Jakiri Tolentino (3) 750,000 (common stock) 34.0%
President, Secretary, Treasurer,
Director and greater than 10%
holder of common stock
Owen A. Orendain (4) 770,000 (common stock) 35.0%
Director and greater than 10%
holder of common stock
All officer and directors
as a group (2 persons) 1,570,000 (common stock) 69.0%
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(1) Unless otherwise noted, the address of each person listed is c/o Online
Tele-Solutions Inc., Block 225, 02-213, Tampines St. 23, Singapore 521225.
(2) This table is based on 2,200,000 shares of common stock issued and
outstanding on March 9, 2012.
(3) Appointed President, Secretary, Treasurer and Director on June 5, 2008.
(4) Appointed Director on March 1, 2009.
EXECUTIVE COMPENSATION
The following tables set forth certain information about compensation paid,
earned or accrued for services by our President and all other executive officers
(collectively, the "Named Executive Officers") in the fiscal years ended January
31, 2012, 2012 and 2010:
SUMMARY COMPENSATION TABLE
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($)* Awards($)* Compensation($) Earnings($) Compensation($) Total($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- --------
Mario Jakiri 2012 -0- -0- -0- -0- -0- -0- -0- -0-
Tolentino; 2011 -0- -0- -0- -0- -0- -0- -0- -0-
President, 2010 -0- -0- -0- -0- -0- -0- -0- -0-
Secretary,
Treasurer and
Director (1)
----------
(1) Appointed President, Secretary, Treasurer and Director on June 5, 2008.
EMPLOYMENT AGREEMENTS
The Company has no employment agreements or other agreements with any officer.
OTHER COMPENSATION
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors, or employees of our company in the event of retirement at
normal retirement date as there was no existing plan as of December 31, 2007
provided for or contributed to by our company.
DIRECTOR COMPENSATION
The following table sets forth director compensation as of the fiscal year ended
January 31, 2012:
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Fees Non-Equity Nonqualified
Earned or Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Mario Jakiri -0- -0- -0- -0- -0- -0- -0-
Tolentino (1)
Owen A. -0- -0- -0- -0- -0- -0- -0-
Orendain (2)
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(1) Appointed President, Secretary, Treasurer and Director on June 5, 2008.
(2) Appointed Director on March 1, 2009.
Directors of our company who are also employees do not receive cash compensation
for their services as directors or members of the committees of the Board of
Directors. All directors may be reimbursed for their reasonable expenses
incurred in connection with attending meetings of the Board of Directors or
management committees.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth certain information concerning outstanding stock
awards held by the Named Executive Officers and our directors as of the fiscal
year ended January 31, 2012:
Option Awards Stock Awards
--------------------------------------------------------------- -------------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested(#)
---- -------------- ---------------- ---------- ----- ---- --------- --------- --------- ---------
Mario -0- -0- -0- -0- N/A -0- -0- -0- -0-
Jakiri
Tolentino(1)
Owen A. -0- -0- -0- -0- N/A -0- -0- -0- -0-
Orendain(2)
----------
(1) Appointed President, Secretary, Treasurer and Director on June 5, 2008.
(2) Appointed Director on March 1, 2009.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Online Tele-Solutions has no equity compensation plans.
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CHANGE IN CONTROL
To the knowledge of management, there are no present arrangements or pledges of
securities of Online Tele-Solutions which may result in a change in control of
Online Tele-Solutions.
NOTICE TO STOCKHOLDERS OF ACTION APPROVED BY CONSENTING STOCKHOLDER
The following action was taken based upon the unanimous recommendation of the
Board of Directors and the written consent of the consenting stockholders:
I. AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED COMMON STOCK
On March 9, 2012 the Board of Directors the consenting stockholders adopted and
approved a resolution to effect an amendment to our Articles of Incorporation to
increase the number of shares of authorized common stock from 75,000,000 to
300,000,000. The par value of each such common stock shall be increased from
$0.001 per share to $0.0001 per share. Such amendment is referred to herein as
the "Authorized Shares Amendment."
Currently, Online Tele-Solutions has 50,000,000 shares of common stock
authorized, of which 2,200,000 shares are issued and outstanding. As a result of
the Authorized Shares Amendment, Online Tele-Solutions will have 300,000,000
shares of shares of common stock authorized for issuance, of which 234,000,000
will be available for issuance, after also giving effect to a thirty-for-one
(30:1) forward stock split, referenced below.
Any additional issuance of common stock could, under certain circumstances, have
the effect of delaying or preventing a change in control of Online
Tele-Solutions by increasing the number of outstanding shares entitled to vote
and by increasing the number of votes required to approve a change in control of
Online Tele-Solutions. Shares of common stock could be issued, or rights to
purchase such shares could be issued, to render more difficult or discourage an
attempt to obtain control of Online Tele-Solutions by means of a tender offer,
proxy contest, merger or otherwise. The ability of the Board of the Directors to
issue such additional shares of common stock could discourage an attempt by a
party to acquire control of Online Tele-Solutions by tender offer or other
means. Such issuances could therefore deprive stockholders of benefits that
could result from such an attempt, such as the realization of a premium over the
market price that such an attempt could cause. Moreover, the issuance of such
additional shares of common stock to persons interests aligned with that of the
Board of Directors could make it more difficult to remove incumbent managers and
directors from office even if such change were to be favorable to stockholders
generally.
While the increase in the number of shares of common stock authorized may have
anti-takeover ramifications, the Board of Directors believes that the financial
flexibility offered by the amendment outweighs any disadvantages. To the extent
that the increase in the number of shares of common stock authorized may have
anti-takeover effects, the amendment may encourage persons seeking to acquire
Online Tele-Solutions to negotiate directly with the Board of Directors,
enabling the Board of Directors to consider a proposed transaction in a manner
that best serves the stockholders' interests.
The Board believes that it is advisable and in the best interests of Online
Tele-Solutions to have available additional authorized but unissued shares of
common stock in an amount adequate to provide for Online Tele-Solutions's future
needs. The unissued shares of common stock will be available for issuance from
time to time as may be deemed advisable or required for various purposes,
including the issuance of shares in connection with financing or acquisition
transactions. Online Tele-Solutions has no present plans or commitments for the
issuance or use of the proposed additional shares of common stock in connection
with any financing.
The Authorized Shares Amendment is not intended to have any anti-takeover effect
and is not part of any series of anti-takeover measures contained in any debt
instruments or the Articles of Incorporation or the Bylaws of Online
Tele-Solutions in effect on the date of this Information Statement. However,
Online Tele-Solutions stockholders should note that the availability of
additional authorized and unissued shares of common stock could make any attempt
to gain control of Online Tele-Solutions or the Board of Directors more
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difficult or time consuming and that the availability of additional authorized
and unissued shares might make it more difficult to remove management. Online
Tele-Solutions is not aware of any proposed attempt to take over Online
Tele-Solutions or of any attempt to acquire a large block of Online
Tele-Solutions's stock. Online Tele-Solutions has no present intention to use
the increased number of authorized common stock for anti-takeover purposes.
EFFECTIVE DATE
Under Rule 14c-2, promulgated pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Authorized Shares Amendment shall be
effective twenty (20) days after this Information Statement is mailed to
stockholders of Online Tele-Solutions. We anticipate the effective date to be on
or about April 12, 2012.
II. AMENDMENT TO ARTICLES OF INCORPORATION TO EFFECT A FORWARD STOCK SPLIT AT A
RATIO OF THIRTY-FOR-ONE
On March 9, 2012 the Board of Directors and the consenting stockholders adopted
and approved a resolution to effect an amendment to our Articles of
Incorporation to effect a forward split of all issued and outstanding shares of
common stock, at a ratio of thirty-for-one (30:1) (the "Forward Stock Split").
A table illustrating the Forward Stock Split and the amendment to increase the
number of shares of common stock in Online Tele-Solutions's Certificate of
Incorporation (discussed below) is as follows:
Number of shares Number of shares Number of shares
Number of shares of common stock of common stock of common stock
of common stock authorized in authorized and authorized but
issued and Certificate of reserved for unreserved for
outstanding Incorporation issuance issuance
----------- ------------- -------- --------
Before Forward Stock 2,200,000 50,000,000 -0- 47,800,000
Split and amendment
to Certificate of
Incorporation
After Forward Stock 66,000,000 300,000,000 -0- 234,000,000
Split and amendment
to Certificate of
Incorporation
The Board of Directors also reserves the right, notwithstanding stockholder
approval and without further action by stockholders, to not proceed with the
Forward Stock Split if the Board of Directors, in its sole discretion,
determines that the Forward Stock Split is no longer in our best interests and
that of our stockholders. The Board of Directors may consider a variety of
factors in determining whether or not to implement the Forward Stock Split,
including, but not limited to, overall trends in the stock market, recent
changes and anticipated trends in the per share market price of the common
stock, business and transactional developments, and our actual and projected
financial performance.
Though the Forward Stock Split will not change the number of authorized shares
of common stock, the Board of Directors and the consenting stockholders have
also approved a resolution to effect an amendment to our Articles of
Incorporation to increase the number of authorized shares of common stock from
50,000,000 to 300,000,000, as discussed in more detail below. Except for any
changes as a result of the treatment of fractional shares, each stockholder of
Online Tele-Solutions will hold the same percentage of common stock outstanding
immediately following the Forward Stock Split as such stockholder held
immediately prior to the split.
PURPOSE
The Board of Directors believed that it was in the best interests of Online
Tele-Solutions to implement the Forward Stock Split on the basis that the low
number of issued and outstanding shares of common stock of Online Tele-Solutions
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would likely not appeal to brokerage firms and that when trading, the current
projected per share price level of our common stock will reduce the effective
marketability of our common stock because of the reluctance of many brokerage
firms to recommend stock to their clients or to act as market-makers for issuers
which do not have a sufficient number of shares of common stock issued and
outstanding.
CERTAIN RISKS ASSOCIATED WITH THE FORWARD STOCK SPLIT
THERE CAN BE NO ASSURANCE THAT THE TOTAL PROJECTED MARKET CAPITALIZATION OF
ONLINE TELE-SOLUTIONS'S COMMON STOCK AFTER THE PROPOSED FORWARD STOCK SPLIT WILL
BE EQUAL TO OR GREATER THAN THE TOTAL PROJECTED MARKET CAPITALIZATION BEFORE THE
PROPOSED FORWARD STOCK SPLIT OR THAT THE PER SHARE PRICE OF ONLINE
TELE-SOLUTIONS'S COMMON STOCK FOLLOWING THE FORWARD STOCK SPLIT WILL EITHER
EXCEED OR REMAIN HIGHER THAN THE CURRENT ANTICIPATED PER SHARE.
There can be no assurance that the market price per new share of Online
Tele-Solutions common stock (the "New Shares") after the Forward Stock Split
will rise or remain constant in proportion to the reduction in the number of old
shares of Online Tele-Solutions common stock (the "Old Shares") outstanding
before the Forward Stock Split.
Accordingly, the total market capitalization of Online Tele-Solutions's common
stock after the proposed Forward Stock Split may be lower than the total market
capitalization before the proposed Forward Stock Split and, in the future, the
market price of Online Tele-Solutions's common stock following the Forward Stock
Split may not exceed or remain higher than the market price prior to the
proposed Forward Stock Split. In many cases, the total market capitalization of
a company following a Forward Stock Split is lower than the total market
capitalization before the Forward Stock Split.
THERE CAN BE NO ASSURANCE THAT THE FORWARD STOCK SPLIT WILL RESULT IN A PER
SHARE PRICE THAT WILL ATTRACT INVESTORS.
A DECLINE IN THE MARKET PRICE FOR ONLINE TELE-SOLUTIONS'S COMMON STOCK AFTER THE
FORWARD STOCK SPLIT MAY RESULT IN A GREATER PERCENTAGE DECLINE THAN WOULD OCCUR
IN THE ABSENCE OF A FORWARD STOCK SPLIT, AND THE LIQUIDITY OF ONLINE
TELE-SOLUTIONS'S COMMON STOCK COULD BE ADVERSELY AFFECTED FOLLOWING A FORWARD
STOCK SPLIT.
The market price of Online Tele-Solutions's common stock will also be based on
Online Tele-Solutions's performance and other factors, some of which are
unrelated to the number of shares outstanding. If the forward stock split is
effected and the market price of Online Tele-Solutions's common stock declines,
the percentage decline as an absolute number and as a percentage of Online
Tele-Solutions's overall market capitalization may be greater than would occur
in the absence of a forward stock split. In many cases, both the total market
capitalization of a company and the market price of a share of such company's
common stock following a forward stock split are lower than they were before the
Forward Stock Split. Furthermore, the liquidity of Online Tele-Solutions's
common stock could be adversely affected by the reduced number of shares that
would be outstanding after the Forward Stock Split.
ONLINE TELE-SOLUTIONS'S COMMON STOCK TRADES AS A "PENNY STOCK" CLASSIFICATION
WHICH LIMITS THE LIQUIDITY FOR ONLINE TELE-SOLUTIONS'S COMMON STOCK.
Online Tele-Solutions's stock is subject to "penny stock" rules as defined in
Exchange Act Rule 3a51-1. The SEC has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Online
Tele-Solutions's common stock is subject to these penny stock rules. Transaction
costs associated with purchases and sales of penny stocks are likely to be
higher than those for other securities. Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange).
As a result, all brokers or dealers involved in a transaction in which Online
Tele-Solutions's shares are sold to any buyer, other than an established
customer or "accredited investor," must make a special written determination.
These Exchange Act rules may limit the ability or willingness of brokers and
7
other market participants to make a market in our shares and may limit the
ability of Online Tele-Solutions's stockholders to sell in the secondary market,
through brokers, dealers or otherwise. Online Tele-Solutions also understands
that many brokerage firms will discourage their customers from trading in shares
falling within the "penny stock" definition due to the added regulatory and
disclosure burdens imposed by these Exchange Act rules. These disclosure
requirements may have the effect of reducing the level of trading activity in
the secondary market for the common shares in the United States and stockholders
may find it more difficult to sell their shares. An orderly market is not
assured or implied as to Online Tele-Solutions's common stock. Nor are there any
assurances as to the existence of market makers or broker/dealers for Online
Tele-Solutions's common stock.
PRINCIPAL EFFECTS OF THE FORWARD STOCK SPLIT
In addition to those risk factors noted above, the Forward Stock Split will have
the following effects:
GENERAL CORPORATE CHANGE - (i) one (1) Old Share owned by a stockholder would be
exchanged for one hundred fifty (150) New Shares, and (ii) the number of shares
of Online Tele-Solutions's common stock issued and outstanding will be increased
proportionately based on the Forward Stock Split.
As approved and effected, the Forward Stock Split will be effected
simultaneously for all of Online Tele-Solutions's common stock. While the intent
is for the proposed forward split to affect all of Online Tele-Solutions's
stockholders uniformly, the process of rounding up when any of Online
Tele-Solutions's stockholders own a fractional share will result in a
non-material change in each stockholder's percentage ownership interest in
Online Tele-Solutions.
The Forward Stock Split does not materially affect the proportionate equity
interest in Online Tele-Solutions of any holder of common stock or the relative
rights, preferences, privileges or priorities of any such stockholder.
FRACTIONAL SHARES - Any fractional shares of common stock resulting from the
forward split will "round up" to the nearest whole number. No cash will be paid
to any holders of fractional interests in Online Tele-Solutions.
AUTHORIZED SHARES - The forward split will not change the number of authorized
shares of common stock of Online Tele-Solutions, as states in Online
Tele-Solutions's Articles of Incorporation, as amended.
ACCOUNTING MATTERS - The Forward Stock Split will not affect the par value of
Online Tele-Solutions's common stock. As a result, as of the effective time of
the Forward Stock Split, the stated capital on Online Tele-Solutions's balance
sheet attributable to Online Tele-Solutions's common stock will be increased
proportionately based on the Forward Stock Split ratio, and the additional
paid-in capital account will be credited with the amount by which the stated
capital is increased. The per share net income or loss and net book value of
Online Tele-Solutions's common stock will be restated because there will be a
greater number shares of Online Tele-Solutions's common stock outstanding.
PROCEDURE FOR EFFECTING THE FORWARD STOCK SPLIT AND EXCHANGE OF STOCK
CERTIFICATES
Upon effectiveness of the Forward Stock Split, each outstanding share of Online
Tele-Solutions will automatically be converted on the effective date at the
applicable Forward Stock Split ratio. It will not be necessary for stockholders
of Online Tele-Solutions to exchange their existing stock certificates.
Certain of our registered holders of common stock may hold some or all of their
shares electronically in book-entry form with our transfer agent. These
stockholders do not have stock certificates evidencing their ownership of our
common stock. They are, however, provided with a statement reflecting the number
of shares registered in their accounts. If a stockholder holds registered shares
in book-entry form with our transfer agent, no action needs to be taken to
receive post-reverse stock split shares or cash payment in lieu of any
fractional share interest, if applicable. If a stockholder is entitled to
post-Forward Stock Split shares, a transaction statement will automatically be
sent to the stockholder's address of record indicating the number of shares of
common stock held following the reverse stock split.
8
FEDERAL INCOME TAX CONSEQUENCES OF THE FORWARD STOCK SPLIT
The following is a summary of certain material federal income tax consequences
of the Forward Stock Split. It does not purport to be a complete discussion of
all of the possible federal income tax consequences of the Forward Stock Split
and is included for general information only. Further, it does not address any
state, local or foreign income or other tax consequences. Also, it does not
address the tax consequences to holders that are subject to special tax rules,
such as banks, insurance companies, regulated investment companies, personal
holding companies, foreign entities, non-resident alien individuals,
broker-dealers and tax-exempt entities. The discussion is based on the
provisions of the United States federal income tax law as of the date hereof,
which is subject to change retroactively as well as prospectively. This summary
also assumes that the Old Shares were, and the New Shares will be, held as a
"capital asset," as defined in the Internal Revenue Code of 1986, as amended
(i.e., generally, property held for investment). The tax treatment of a
stockholder may vary depending upon the particular facts and circumstances of
such stockholder. Each stockholder is urged to consult with such stockholder's
own tax advisor with respect to the tax consequences of the Forward Stock Split.
No gain or loss should be recognized by a stockholder upon such stockholder's
exchange of Old Shares for New Shares pursuant to the Forward Stock Split. The
aggregate tax basis of the New Shares received in the Forward Stock Split
(including any fraction of a New Share deemed to have been received) will be the
same as the stockholder's aggregate tax basis in the Old Shares exchanged
therefor. The stockholder's holding period for the New Shares will include the
period during which the stockholder held the Old Shares surrendered in the
Forward Stock Split.
TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, STOCKHOLDERS ARE
HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS
INFORMATION STATEMENT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT
BE RELIED UPON BY STOCKHOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE
IMPOSED ON STOCKHOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS
INCLUDED HEREIN BY THE COMPANY IN CONNECTION WITH THE PROMOTION OR MARKETING
(WITHIN THE MEANING OF CIRCULAR 230) BY THE COMPANY OF THE TRANSACTIONS OR
MATTERS ADDRESSED HEREIN; AND (C) STOCKHOLDERS SHOULD SEEK ADVICE BASED ON THEIR
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
Online Tele-Solutions's view regarding the tax consequences of the Forward Stock
Split is not binding on the Internal Revenue Service or the courts. Accordingly,
each stockholder should consult with his or her own tax advisor with respect to
all of the potential tax consequences to him or her of the Forward Stock Split.
EFFECTIVE DATE
Under Rule 14c-2, promulgated pursuant to the Exchange Act, the Forward Stock
Split shall be effective twenty (20) days after this Information Statement is
mailed to stockholders of Online Tele-Solutions. We anticipate the effective
date to be on or about April 12, 2012.
III. AMENDMENT TO THE ARTICLES OF INCORPORATION CREATING "BLANK CHECK" PREFERRED
STOCK.
GENERAL
On March 9, 2012 the Board of Directors, and on March 9, 2012 the consenting
stockholders, approved the filing of an amendment to our Articles of
Incorporation to authorize the creation of 25,000,000 shares, designated as our
Preferred Stock (the "Preferred Stock Amendment"). The Preferred Stock may be
issued from time to time in one or more series by our Board of Directors. Our
Board of Directors will be expressly authorized to provide, by resolution(s)
duly adopted by it prior to issuance, for the creation of each such series and
to fix the designation and the powers, preferences, rights, qualifications,
limitations and restrictions relating to the shares of each such series of
Preferred Stock.
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REASONS FOR THE CREATION OF "BLANK CHECK" PREFERRED STOCK
We believe that for us to successfully execute our business strategy we will
need to raise investment capital and it may be preferable or necessary to issue
preferred stock to investors. Preferred stock usually grants the holders certain
preferential rights in voting, dividends, liquidation or other rights in
preference over a company's common stock. Accordingly, in order to grant us the
flexibility to issue our equity securities in the manner best suited for our
Company, or as may be required by the capital markets, the Preferred Stock
Amendment will create 25,000,000 authorized shares of "blank check" Preferred
Stock for us to issue.
The term "blank check" refers to preferred stock, the creation and issuance of
which is authorized in advance by our Stockholders and the terms, rights and
features of which are determined by our Board of Directors upon issuance. The
authorization of such "blank check" Preferred Stock permits our Board of
Directors to authorize and issue Preferred Stock from time to time in one or
more series without seeking further action or vote of our Stockholders.
PRINCIPAL EFFECTS OF THE CREATION OF "BLANK CHECK" PREFERRED STOCK
Subject to the provisions of the Preferred Stock Amendment and the limitations
prescribed by law, our Board of Directors would be expressly authorized, at its
discretion, to adopt resolutions to issue shares, to fix the number of shares
and to change the number of shares constituting any series and to provide for or
change the voting powers, designations, preferences and relative, participating,
optional or other special rights, qualifications, limitations or restrictions
thereof, including dividend rights (including whether the dividends are
cumulative), dividend rates, terms of redemption (including sinking fund
provisions), redemption prices, conversion rights and liquidation preferences of
the shares constituting any series of the Preferred Stock, in each case without
any further action or vote by our stockholders. Our Board of Directors would be
required to make any determination to issue shares of Preferred Stock based on
its judgment as to what is in our best interests and the best interests of our
stockholders. The Preferred Stock Amendment will give our Board of Directors
flexibility, without further stockholder action, to issue Preferred Stock on
such terms and conditions as our Board of Directors deems to be in our best
interests and the best interests of our stockholders.
The authorization of the "blank check" Preferred Stock will provide us with
increased financial flexibility in meeting future capital requirements. It will
allow Preferred Stock to be available for issuance from time to time and with
such features as determined by our Board of Directors for any proper corporate
purpose. It is anticipated that such purposes may include, without limitation,
exchanging Preferred Stock for Common Stock, the issuance for cash as a means of
obtaining capital for our use, or issuance as part or all of the consideration
required to be paid by us for acquisitions of other businesses or assets.
The issuance by us of Preferred Stock could dilute both the equity interests and
the earnings per share of existing holders of our Common Stock. Such dilution
may be substantial, depending upon the amount of shares issued. The newly
authorized shares of Preferred Stock could also have voting rights superior to
our Common Stock, and therefore would have a dilutive effect on the voting power
of our existing Stockholders.
Any issuance of Preferred Stock with voting rights could, under certain
circumstances, have the effect of delaying or preventing a change in control of
our Company by increasing the number of outstanding shares entitled to vote and
by increasing the number of votes required to approve a change in control of our
Company. Shares of voting or convertible Preferred Stock could be issued, or
rights to purchase such shares could be issued, to render more difficult or
discourage an attempt to obtain control of our Company by means of a tender
offer, proxy contest, merger or otherwise. The ability of our Board of Directors
to issue such shares of Preferred Stock, with the rights and preferences it
deems advisable, could discourage an attempt by a party to acquire control of
our Company by tender offer or other means. Such issuances could therefore
deprive our stockholders of benefits that could result from such an attempt,
such as the realization of a premium over the market price that such an attempt
could cause. Moreover, the issuance of such shares of Preferred Stock to persons
friendly to our Board of Directors could make it more difficult to remove
incumbent managers and directors from office even if such change were to be
favorable to stockholders generally.
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There are currently no plans, arrangements, commitments or understandings for
the issuance of shares of Preferred Stock.
ANTI-TAKEOVER EFFECTS
The Preferred Stock Amendment will provide us with shares of Preferred Stock
which would permit us to issue additional shares of capital stock that could
dilute the ownership of the holders of our Common Stock by one or more persons
seeking to effect a change in the composition of our Board of Directors or
contemplating a tender offer or other transaction for the combination of the
Company with another company. The creation of the Preferred Stock is not being
undertaken in response to any effort of which our Board of Directors is aware to
enable anyone to accumulate shares of our Common Stock or gain control of the
Company. The purpose of the creation of the Preferred Stock is to grant us the
flexibility to issue our equity securities in the manner best suited for our
Company, or as may be required by the capital markets. However, we presently
have no plans, proposals, or arrangements to issue any of the newly authorized
shares of Preferred Stock for any purpose whatsoever, including future
acquisitions and/or financings.
Other than the creation of the "blank check" Preferred Stock, our Board of
Directors does not currently contemplate the adoption of any other amendments to
our Articles of Incorporation that could be construed to affect the ability of
third parties to take over or change the control of the Company. While it is
possible that management could use the additional authorized shares of Common
Stock or Preferred Stock to resist or frustrate a third-party transaction that
is favored by a majority of the independent stockholders, we have no intent,
plans or proposals to use the newly created Preferred Stock as an anti-takeover
mechanism or to adopt other provisions or enter into other arrangements that may
have anti-takeover consequences.
While the creation of the "blank check" Preferred Stock may have anti-takeover
ramifications, our Board of Directors believes that the financial flexibility
offered by such corporate actions will outweigh the disadvantages. To the extent
that these corporate actions may have anti-takeover effects, third parties
seeking to acquire us may be encouraged to negotiate directly with our Board of
Directors, enabling us to consider the proposed transaction in a manner that
best serves the stockholders' interests.
EFFECTIVE DATE
Under Rule 14c-2, promulgated pursuant to the Exchange Act, the Preferred Stock
Amendment shall be effective twenty (20) days after this Information Statement
is mailed to stockholders of Online Tele-Solutions. We anticipate the effective
date to be on or about April 12, 2012.
ADDITIONAL INFORMATION
We are subject to the informational requirements of the Exchange Act, and in
accordance therewith file reports, proxy statements and other information
including annual and quarterly reports on Form 10-K and 10-Q with the SEC.
Copies of these documents can be obtained upon written request addressed to the
SEC, Public Reference Section, 100 F Street, N.E., Washington, D.C., 20549, at
prescribed rates. The SEC also maintains a web site on the Internet
(http://www.sec.gov) where reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC through the
Electronic Data Gathering, Analysis and Retrieval System may be obtained free of
charge.
STATEMENT OF ADDITIONAL INFORMATION
Online Tele-Solutions's Annual Report on Form 10-K for the year ended January
31, 2011 and filed with the SEC May 16, 2011; Quarterly Report on Form 10-Q for
the quarter ended April 30, 2011 and filed with the SEC June 20, 2011; Quarterly
Report on Form 10-Q for the quarter ended July 31, 2011 and filed with the SEC
September 19, 2011; Amended Quarterly Report on Form 10-Q for the quarter ended
July 31, 2011 and filed with the SEC October 13, 2011; and Quarterly Report on
Form 10-Q for the quarter ended October 31, 2011 and filed with the SEC December
16, 2011; have been incorporated herein by this reference.
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Online Tele-Solutions will provide without charge to each person, including any
beneficial owner of such person, to whom a copy of this Information Statement
has been delivered, on written or oral request, a copy of any and all of the
documents referred to above that have been or may be incorporated by reference
herein other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference herein).
All documents filed by Online Tele-Solutions pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Information
Statement shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Information
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Information Statement.
COMPANY CONTACT INFORMATION
All inquiries regarding Online Tele-Solutions should be addressed to Owen A.
Orendain, President, at Online Tele-Solutions's principal executive offices, at:
Online Tele-Solutions Inc., Block 225, 02-213, Tampines St. 23, Singapore
521225, Attn: Mario Jakiri Tolentino, President. Mr. Toelntino may also be
reached by telephone at (702) 553-3026.
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