UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
UPSTREAM BIOSCIENCES INC.
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(Name of Registrant as Specified In Its Charter)
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paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
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UPSTREAM BIOSCIENCES INC.
Three Sugar Creek Center, Suite 100
Sugar Land, TX 77478
CONSENT SOLICITATION STATEMENT
To Our Stockholders:
The board of directors of UPSTREAM BIOSCIENCES INC. ("we," "us," "our," or "our
company") is soliciting your consent on behalf of our company to approve the
following proposals, which have been approved by our board of directors subject
to shareholder approval:
1. To elect Charles El-Moussa as the sole director of our company;
2. To approve the appointment of Dale Matheson Carr-Hilton Labonte LLP as
our independent registered public accounting firm; and
3. To approve a 35-for-1 reverse split of shares of our common stock.
(collectively, the "PROPOSALS")
We are soliciting your approval of the Proposals by written consent in lieu of a
meeting of stockholders because our board of directors believes that it is in
the best interests of our company and our stockholders to solicit such approval
in the most cost effective manner. A written consent form is enclosed for your
use.
This consent solicitation statement and enclosed written consent form is being
sent to our stockholders on or about ____________, 2012. Our board of directors
has fixed the close of business on ____________, 2012 as the record date (the
"RECORD DATE") for determination of our stockholders entitled to give written
consent. Only the stockholders of record on the Record Date are entitled to give
the written consents for the Proposals.
The written consent of stockholders representing a majority of the voting power
of our outstanding common stock as of the Record Date is required to approve the
Proposals.
Your consent is important regardless of the number of shares of stock that you
hold. Although our board of directors has approved the Proposals, the Proposals
require the approval by the vote of stockholders holding a majority of the
voting power of our outstanding common stock as of the Record Date.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU CONSENT TO THE PROPOSALS.
THE PROPOSALS WILL BE APPROVED WHEN WE HAVE RECEIVED CONSENTS TO THE PROPOSALS
FROM OUR STOCKHOLDERS REPRESENTING A MAJORITY OF THE VOTING POWER OF OUR
OUTSTANDING COMMON STOCK. IF YOU APPROVE THE PROPOSALS, PLEASE MARK THE ENCLOSED
WRITTEN CONSENT FORM TO VOTE "FOR" THE PROPOSALS, AND COMPLETE, DATE, SIGN, AND
RETURN YOUR WRITTEN CONSENT TO US.
Please mail or fax the enclosed written consent to us no later than ______
__, 2012 at:
Upstream Biosciences Inc.
Three Sugar Creek Center, Suite 100
Sugar Land, TX 77478
Fax: (281) 342-9994
Important Notice Regarding the Availability of Materials
for This Consent Solicitation
This consent solicitation statement and the written consent form are available
at www.upstreambio.us.
Expense of Consent Solicitation
We will pay for the expense of soliciting the written consents and the cost of
preparing, assembling and mailing material in connection therewith. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of our common stock beneficially
owned by others to forward to the beneficial owners. We may reimburse persons
representing beneficial owners of our common stock for their costs of forwarding
solicitation materials to the beneficial owners. Original solicitation of
written consents by mail may be supplemented by telephone, facsimile, other
approved electronic media or personal solicitation by our director, officer, or
regular employees. These individuals will receive no additional compensation for
such services.
Voting; Record Date; Vote Required
Our board of directors has fixed the close of business on ____________, 2012 as
the record date (the "RECORD DATE") for determination of our stockholders
entitled to give written consents. If you were a stockholder of record on the
Record Date, you are entitled to give written consent to the Proposals. Only
stockholders of record of our common stock on the Record Date will be entitled
to consent to the Proposals and each share of our common stock is entitled to
one vote on the Proposals.
If your shares are registered directly in your name with our transfer agent,
Nevada Agency and Transfer Company, then you are a stockholder of record with
respect to those shares. If your shares are held in a stock brokerage account or
by a bank, or other nominee, then the broker, bank, or other nominee is the
stockholder of record with respect to those shares. However, you still are the
beneficial owner of those shares, and your shares are said to be held in "street
name." Street name holders generally cannot send their written consents directly
and must instead inquire the broker, bank, or other nominee about how to send
their written consents and follow the instructions given.
As of the Record Date, ____________ shares of our common stock were issued and
outstanding and, therefore, a total of ____________ votes are entitled to be
given by written consents.
The Proposals will be approved by our stockholders if we receive the written
consent of our stockholders representing a majority of the voting power of our
outstanding common stock as of the Record Date, or written consents representing
at least ____________ shares of our common stock.
A written consent form that has been signed, dated and delivered to us with the
"For" box checked will constitute consent for the Proposals. A written consent
form that has been signed, dated and delivered to us with the "Against" or
"Abstain" boxes checked or without any of the boxes checked will be counted as a
vote against the Proposals.
Consents, once dated, signed and delivered to us, will remain effective unless
and until revoked by written notice of revocation dated, signed and delivered to
us before the time that we have received written consents of our stockholders
representing a majority of the voting power of our outstanding common stock as
of the Record Date. Please send your notice of revocation via same facsimile
number or by the same mailing address that you would send your written consent,
as disclosed elsewhere in this consent solicitation statement.
The approval of our stockholders of the Proposals is effective when we receive
the written consents to the Proposals from our stockholders representing a
majority of the voting power of our outstanding common stock as of the Record
Date.
2
Please complete, date, sign, and return the enclosed written consent form via
facsimile to (281) 342-9994 or by mail to the following address:
Upstream Biosciences Inc.
Three Sugar Creek Center, Suite 100
Sugar Land, TX 77478
PROPOSAL 1
ELECTION OF DIRECTORS
Our board of directors has nominated the persons named below as candidates for
directors. Unless otherwise directed, the proxy holder will vote the proxies
received by him for the nominees named below.
Our directors hold office until the next annual and special meeting or until
their successors have been elected and qualified, or until they resign or are
removed.
Our board of directors recommends that you vote FOR these nominees.
NOMINEES
Positions Held Date First
Name with Our Company Age Elected or Appointed
---- ---------------- --- --------------------
Charles Chief Executive Officer, 40 February 15, 2012
El-Moussa Chief Financial Officer,
President, Secretary,
Treasurer and Director
BUSINESS EXPERIENCE OF NOMINEES
The following is a brief account of the education and business experience of the
nominees during at least the past five years, indicating their principal
occupation during the period, and the name and principal business of the
organization by which they were employed.
CHARLES EL-MOUSSA, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, PRESIDENT,
SECRETARY, TREASURER AND DIRECTOR
Mr. El-Moussa is currently general counsel and chief operation officer of Remax,
Texas where he directs and oversees all legal and corporate franchise operations
including franchise sales, broker services, corporate development and
sponsorship, advertising, marketing, charities promotions and information
technology. Mr. El-Moussa also held the position of Corporate Fuel Marketing
Manager of Universal Weather & Aviation, in Houston, Texas where he managed the
marketing of a $200 million global fuel card program, managed direct
relationships with fortune 500 clients, fixed base operators and fuel suppliers
worldwide, coordinated the design and implementation of the fuel department's
automated web page, spearheaded the development of the department's in-house
automation project and analyzed fuel sales profitability and productivity.
Mr. El-Moussa obtained his B.B.A at the University of St. Thomas in Houston and
his J.D. at the South Texas College of Law in Houston.
We believe Mr. El-Moussa is qualified to serve on our board of directors because
of his extensive knowledge of our company's history and current operations.
FAMILY RELATIONSHIPS
There are no family relationships between any director or executive officer.
3
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
We know of no material proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial stockholder is a party adverse to
our company or any of our subsidiaries or has a material interest adverse to our
company or any of our subsidiaries.
Except as disclosed below, our directors and executive officers have not been
involved in any of the following events during the past ten years:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities;
4. being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated;
5. being the subject of, or a party to, any federal or state judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of:
(i) any federal or state securities or commodities law or regulation;
or (ii) any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order; or (iii) any law or regulation
prohibiting mail or wire fraud or fraud in connection with any
business entity; or
6. being the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Securities
Exchange Act of 1934), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act), or any equivalent exchange,
association, entity or organization that has disciplinary authority
over its members or persons associated with a member.
On February 5, 2010, the British Columbia Securities Commission (the "BCSC")
issued a cease trade order against our company in British Columbia prohibiting
the trading in the securities of our company, as we had not filed our
comparative annual financial statements, management's discussion and analysis
and annual information form for the period ended September 30, 2009. Our company
was deemed by the BCSC to be a reporting issuer under BCI 51-509 ISSUERS QUOTED
IN THE U.S. OVER-THE-COUNTER MARKETS. We filed the required reports and on June
11, 2012, the BCSC revoked the cease trade order.
CORPORATE GOVERNANCE
MEETINGS
We currently have one director, Charles El-Moussa. As such, we did not have any
board meetings for the year ended September 30, 2011.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE
Charles El-Moussa is the sole member of our audit committee. Charles El-Moussa
is not independent as defined by Rule 4200(a)(15) of the Nasdaq Marketplace
Rules. Our audit committee undertakes an independent review of our company's
4
financial statements, and meets with management to determine the adequacy of
internal controls and other financial reporting matters.
AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that it does not have an audit committee
member that qualifies as an "audit committee financial expert" as defined in
Item 407(d)(5)(ii) of Regulation S-K. We believe that the sole audit committee
member is capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. In
addition, we believe that retaining an independent director who would qualify as
an "audit committee financial expert" would be overly costly and burdensome and
is not warranted in our circumstances given the early stages of our development
and the fact that we have not generated revenues to date.
The audit committee acts in accordance with our Audit Committee Charter which
was filed as an exhibit to our Annual Report on Form 10-K, filed with the
Securities and Exchange Commission on December 22, 2008.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
We do not have a nominating and corporate governance committee. Our board of
directors performed the functions associated with a nominating committee.
Generally, nominees for directors are identified and suggested by the members of
our board of directors or management using their business networks and all of
our director nominees were nominated for a seat on the board of directors based
on prior service as directors to our company. Our board of directors has not
retained any executive search firms or other third parties to identify or
evaluate director candidates in the past and does not intend to in the near
future. We have elected not to have a nominating committee because we are an
exploration stage company with limited operations and resources.
Our board of directors does not have a written policy or charter regarding how
director candidates are evaluated or nominated for our board of directors.
Additionally, our board of directors has not created particular qualifications
or minimum standards that candidates for our board of directors must meet.
Instead, our board of directors considers how a candidate could contribute to
our business and meet our needs and those of our board of directors. As we are
an exploration stage company, our board of directors will not consider
candidates for director recommended by our stockholders, and we have received no
such candidate recommendations from our stockholders.
COMPENSATION COMMITTEE
Charles El-Moussa is the sole member of our compensation committee. Our sole
member of the compensation committee is not independent as defined by Rule
4200(a)(15) of the Nasdaq Marketplace Rules. The purpose of our compensation
committee is to oversee our company's compensation and benefit plans, including
our compensation and equity-based plans. Our compensation committee also
monitors and evaluates matters relating to the compensation and benefits
structure of our company and takes other such actions within the scope of the
compensation committee charter as our board of directors may assign to the
compensation committee from time to time.
The compensation committee acts in accordance with our Compensation Committee
Charter which was filed as an exhibit to our annual report on Form 10-K, filed
with the Securities and Exchange Commission on December 22, 2008.
DIRECTOR INDEPENDENCE
Our common stock is quoted on the OTC Bulletin Board operated by FINRA (the
Financial Industry Regulatory Authority) and on the over-the-counter market
operated by Pink OTC Markets Inc., which do not impose any director independence
requirements. Under NASDAQ rule 5605(a)(2), a director is not independent if he
or she is also an executive officer or employee of the corporation. Using this
definition of independent director, we have determined that Charles El-Moussa is
not an independent director.
5
STOCKHOLDER COMMUNICATIONS WITH OUR BOARD OF DIRECTORS
We welcome comments and questions from our stockholders. Our stockholders can
direct communications to the Chief Executive Officer of our company, Charles
El-Moussa, at Upstream Biosciences Inc., Three Sugar Creek Center, Suite 100,
Sugar Land, TX, 77478. While we appreciate all comments and questions from our
stockholders, we may not be able to individually respond to all communications.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the SECURITIES EXCHANGE ACT OF 1934 requires our executive
officers and directors, and persons who own more than 10% of our common stock,
to file initial statements of beneficial ownership, reports of changes in
ownership and annual reports concerning their ownership of our common stock and
other equity securities with the Securities and Exchange Commission and to
provide us with copies of those filings. Based solely on our review of the
copies of such forms received by us, or written representations from certain
reporting persons, we believe that during year ended September 30, 2011, all
filing requirements applicable to our executive officers and directors, and
persons who own more than 10% of our common stock were complied with.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The particulars of compensation paid to the following persons:
(a) all individuals serving as our principal executive officer during the
year ended September 30, 2011;
(b) each of our two most highly compensated executive officers other than
our principal executive officer who were serving as executive officers
at September 30, 2011 who had total compensation exceeding $100,000;
and
(c) up to two additional individuals for whom disclosure would have been
provided under (b) but for the fact that the individual was not
serving as our executive officer at September 30, 2011,
who we will collectively refer to as the named executive officers, for the years
ended September 30, 2011 and 2010 are set out in the following summary
compensation table:
Name and
Principal Stock Option All Other
Position Year Salary($) Bonus($) Awards($) Awards($)(1) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ---------
Charles El-Moussa (1) 2011 N/A N/A N/A N/A N/A N/A
Chief Executive Officer, 2010 N/A N/A N/A N/A N/A N/A
Chief Financial Officer,
President, Secretary,
Treasurer and Director
Mike McFarland (2) 2011 Nil Nil Nil Nil Nil Nil
Former Chief Executive 2010 Nil Nil Nil Nil Nil Nil
Officer, Chief Financial
Officer, President,
Secretary, Treasurer and
Director
Joel L. Bellenson (3) 2011 N/A N/A N/A N/A N/A N/A
Former Chief Executive 2010 Nil Nil Nil Nil Nil Nil
Officer, Chief Financial
Officer and Director
Dexster L. Smith (4) 2011 N/A N/A N/A N/A N/A N/A
Former President and 2010 Nil Nil Nil Nil Nil Nil
Director
6
NOTES
----------
(1) Charles El-Moussa was appointed as chief executive officer, chief financial
officer, president, secretary, treasurer and a director of our company on
February 15, 2012.
(2) Mike McFarland was the chief executive officer, chief financial officer,
president, secretary, treasurer and a director of our company from December
14, 2009 until February 15, 2012.
(3) Joel Bellenson was appointed director and chief executive officer of our
company on March 1, 2006 and the chief financial officer on August 28,
2009. Mr. Bellenson resigned as an officer and director on December 14,
2009.
(4) Dexster Smith was the president and a director of our company from March 1,
2006 until December 14, 2009.
COMPENSATION FOR EXECUTIVE OFFICERS AND DIRECTORS
Our compensation program for our executive officers is administered and reviewed
by our board of directors and the Compensation Committee. Historically,
executive compensation consists of a combination of base salary and bonuses.
Individual compensation levels are designed to reflect individual
responsibilities, performance and experience, as well as the performance of our
company. The determination of discretionary bonuses is based on various factors,
including implementation of our business plan, acquisition of assets,
development of corporate opportunities and completion of financing. The
objectives of our compensation program are to retain and offer an incentive to
current management, and to carry out our compensation related policies as per
our Compensation Committee Charter.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF NAMED EXECUTIVE OFFICERS
The following table sets forth for each named executive officer certain
information concerning the outstanding equity awards as of September 30, 2011:
Option Awards Stock Awards
-------------------------------------------------------------------- -----------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Number of Value of
Number Unearned Unearned
of Market Shares, Shares,
Number of Number of Shares Value of Units or Units or
Securities Securities or Units Shares or Other Other
Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Option Option That Stock That That That
Options Options Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Price Date Vested Vested Vested Vested
---- ----------- ------------- ----- ---- ------ ------ ------ ------
Charles N/A N/A N/A N/A N/A N/A N/A N/A
El-Moussa(1)
Chief
Executive
Officer,
Chief
Financial
Officer,
President,
Secretary,
Treasurer and
Director
Mike Nil Nil Nil Nil Nil Nil Nil Nil
McFarland(2)
Former Chief
Executive
Officer,
Chief
Financial
Officer,
President,
Secretary,
Treasurer and
Director
7
NOTES
----------
(1) Charles El-Moussa was appointed as chief executive officer, chief financial
officer, president, secretary, treasurer and a director of our company on
February 15, 2012.
(2) Mike McFarland was the chief executive officer, chief financial officer,
president, secretary, treasurer and a director of our company from December
14, 2009 until February 15, 2012.
DIRECTOR COMPENSATION
The following table sets forth for each director certain information concerning
his compensation for the year ended September 30, 2011.
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash($) Awards($)(1) Awards($)(2) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Charles
El-Moussa(1) N/A N/A N/A N/A N/A N/A N/A
Chief Executive
Officer, Chief
Financial Officer,
President,
Secretary,
Treasurer and
Director
Mike
McFarland(2) Nil Nil Nil Nil Nil Nil Nil
Former Chief
Executive Officer,
Chief Financial
Officer, President,
Secretary,
Treasurer and
Director
NOTES
----------
(1) Charles El-Moussa was appointed as chief executive officer, chief financial
officer, president, secretary, treasurer and a director of our company on
February 15, 2012.
(2) Mike McFarland was the chief executive officer, chief financial officer,
president, secretary, treasurer and a director of our company from December
14, 2009 until February 15, 2012.
8
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF DIRECTORS
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Number of Value of
Number Unearned Unearned
of Market Shares, Shares,
Number of Number of Shares Value of Units or Units or
Securities Securities or Units Shares or Other Other
Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Option Option That Stock That That That
Options Options Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Price Date Vested Vested Vested Vested
---- -------------- -------------- ----- ---- --------- --------- --------- ---------
Charles N/A N/A N/A N/A N/A N/A N/A N/A
El-Moussa(1)
Chief Executive
Officer, Chief
Financial
Officer,
President,
Secretary,
Treasurer and
Director
Mike Nil Nil Nil Nil Nil Nil Nil Nil
McFarland(2)
Former Chief
Executive
Officer,
Chief Financial
Officer,
President,
Secretary,
Treasurer and
Director
NOTES
----------
(1) Charles El-Moussa was appointed as chief executive officer, chief financial
officer, president, secretary, treasurer and a director of our company on
February 15, 2012.
(2) Mike McFarland was the chief executive officer, chief financial officer,
president, secretary, treasurer and a director of our company from December
14, 2009 until February 15, 2012.
TRANSACTIONS WITH RELATED PERSONS
Other than as disclosed below, there has been no transaction, since October 1,
2010, or currently proposed transaction, in which our company was or is to be a
participant and the amount involved exceeds the lesser of $120,000 or one
percent of the average of our total assets at year end for the last two
completed fiscal years, and in which any of the following persons had or will
have a direct or indirect material interest:
(i) Any director or executive officer of our company;
(ii) Any beneficial owner of shares carrying more than 5% of the voting
rights attached to our outstanding shares of common stock;
(iii)Any person who acquired control of our company when it was a shell
company or any person that is part of a group, consisting of two or
more persons that agreed to act together for the purpose of acquiring,
holding, voting or disposing of our common stock, that acquired
control of Manas Petroleum Corporation when it was a shell company;
and
(iv) Any immediate family member (including spouse, parents, children,
siblings and in-laws) of any of the foregoing persons.
As at September 30, 2011, we owed $35,000 (2010 - $nil) to our former sole
director and officer of the Company. The balance relates to a loan advances
during the year and is unsecured, does not bear interest and is due on demand.
9
EQUITY COMPENSATION PLAN INFORMATION
In March 2007, our company approved and adopted a stock option plan authorizing
the issuance of up to 5,000,000 shares of common stock upon exercise of the
options granted pursuant to the stock option plan. The purpose of the stock
option plan is to attract and retain the best available personnel and to provide
incentives to employees, officers, directors and consultants, all in an effort
to promote the success of our company. Under the plan, our employees, directors,
officers, consultants and advisors are eligible to receive a grant of our
shares, provided however that bona fide services are rendered by consultants or
advisors and such services are not in connection with the offer or sale of
securities in a capital-raising transaction.
The following table provides a summary of the number of stock options granted
under the stock option plan, the weighted average exercise price and the number
of stock options remaining available for issuance under the stock option plan,
all as at September 30, 2011:
Number of Securities to be Number of Securities
Issued Upon Exercise of Weighted-Average Exercise Remaining Available for
Outstanding Options, Price of Outstanding Options, Future Issuance Under
Warrants and Rights Warrants and Rights Equity Compensation Plans
------------------- ------------------- -------------------------
Equity compensation plans not 800,000 $1.02 4,200,000
approved by security holders
Equity compensation plans approved Nil Nil Nil
by security holders
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Our board of directors is asking our stockholders to ratify the appointment of
Dale Matheson Carr-Hilton LaBonte LLP as our independent registered public
accounting firm. Even if the appointment is ratified, our board of directors in
its discretion may direct the appointment of a different independent registered
public accounting firm at any time during the year if our board of directors
determines that such a change would be in the best interest of our company and
our stockholders.
Unless otherwise directed, the proxy holder will vote the proxies received by
him for the ratification of the appointment of Dale Matheson Carr-Hilton LaBonte
LLP as our independent registered public accounting firm.
Our board of directors recommends that you vote FOR the ratification of the
appointment of Dale Matheson Carr-Hilton LaBonte LLP as our independent
registered public accounting firm.
10
FEES PAID TO OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table sets forth the fees billed to our company for professional
services rendered by Dale Matheson Carr-Hilton LaBonte LLP, our independent
registered public accounting firm, for the years ended September 30, 2011 and
2010:
2011 2010
------ ------
USD$ USD$
Audit Fees and Audit Related Fees 12,500 20,000
Tax-Fees 12,500 Nil
Other Fees Nil Nil
------ ------
TOTAL FEES 25,000 20,000
====== ======
PRE-APPROVAL POLICIES AND PROCEDURES WITH RESPECT TO SERVICES PERFORMED BY
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
Before Dale Matheson Carr-Hilton LaBonte LLP was engaged by us to render any
auditing or permitted non-audit related service, our board of directors approved
the engagement.
Our board of directors has considered the nature and amount of fees billed by
Dale Matheson Carr-Hilton LaBonte LLP and believe that the provision of services
for activities unrelated to the audit was compatible with maintaining Dale
Matheson Carr-Hilton LaBonte LLP's independence.
PROPOSAL 3
APPROVAL TO EFFECT A 35-FOR-1 REVERSE SPLIT
OF SHARES OF OUR COMMON STOCK
GENERAL
The purpose of this proposal is to approve a35-for-1 reverse split (the "REVERSE
SPLIT") of shares of our outstanding common stock without a change in par value
of $0.001 per share and with any resulting fractional share being rounded up to
the next whole share at the effective date and time which our board of directors
determines. The number of authorized shares of common stock will not change as a
result of the Reverse Split, if effected.
Our board of directors believes that by reducing the number of shares of our
common stock outstanding through the Reverse Split, the per share price of our
common stock will, upon such reduction, proportionately increase. Our board of
directors also believes that a higher per share trading price may be more
appealing to institutional investors, institutional funds and brokers, and
thereby result in greater liquidity for stockholders and lower trading costs.
Our board of directors also believes that the additional available authorized
shares of common stock that would result from a reverse split may facilitate
future capital raising needs and acquisitions of companies or assets. In
addition to focusing on the growth of our current business, our board of
directors intends, as part of our business plan, to evaluate opportunities for
growth through the acquisition of companies. We may, from time to time, evaluate
financing transactions involving the sale of our common stock or securities
convertible into shares of our common stock. While we constantly evaluate the
market for opportunities, there are no current proposals or agreements written
or otherwise, at this time to issue any of the additional available authorized
shares of common stock that would result from the Reverse Split.
PURPOSES OF THE PROPOSED REVERSE SPLIT
Our board of directors believes that a reverse split may enhance the
acceptability of our common stock by the financial community and the investing
public, and consequently improve the liquidity of our common stock. The expected
increased price level may encourage interest and trading in our common stock by
institutional investors and funds that may be disinclined or prohibited from
purchasing lower priced stocks. Additionally, a variety of policies and
11
practices of broker-dealers discourage individual brokers from dealing in lower
priced stocks, and brokers may be more inclined to transact in our shares if
they trade at a higher per share price. In addition, the transaction costs
(commissions, markups or markdowns) of lower priced stocks tend to represent a
higher percentage of total share value than higher priced stocks, which can
discourage ownership of lower priced stocks by both institutional and retail
investors.
We cannot assure you that all or any of the anticipated beneficial effects on
the trading market for our common stock will occur. Our board of directors
cannot predict with certainty what effect the Reverse Split will have on the
market price of our common stock, particularly over the longer term. Some
investors may view a reverse split negatively, which could result in a decrease
in our market capitalization. Additionally, any improvement in liquidity due to
increased institutional or brokerage interest or lower trading commissions may
be offset by the lower number of outstanding shares.
HOW A REVERSE SPLIT WILL AFFECT STOCKHOLDERS
The Reverse Split, if approved, will affect all of our stockholders uniformly
and will not affect any stockholders percentage ownership interests or
proportionate voting power in our company, except to the extent that the result
of the Reverse Split results in any of our stockholders owning a fractional
share. If this occurs, the fractional shares will be rounded up to the next
whole share. The common stock issued pursuant to the Reverse Split will remain
fully paid and non-assessable.
The principal effect of the Reverse Split will be that the number of shares of
our common stock issued and outstanding will be reduced as follows (without
taking into account the effect, if any, of rounding up any fractional shares
created by the Reverse Split to the next whole share):
# of Shares Outstanding # of Shares Outstanding
Pre-Reverse Split Post-Reverse Split (approximate)
----------------- --------------------------------
__________ ___________
As such, and for purposes of illustration only, each stockholder holding 35
shares of our common stock (par value $0.001 per share) immediately prior to the
Reverse Split taking effect will become a holder of 1 share of our common stock
(par value $0.001 per share) after the Reverse Split is effective.
The Reverse Split is not part of any plan or proposal to take our company
private.
EFFECTIVE INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
The Reverse Split, if approved, would not change the number of authorized shares
of our common stock, which is 500,000,000 shares of common stock with a par
value of $0.001 and 20,000,000 preferred shares with a par value of $0.001,
under our articles of incorporation. Therefore, because the number of issued and
outstanding shares of our common stock would decrease, the number of shares
remaining available for issuance would increase. As explained in more detail
below, these additional shares of common stock would be available for issuance
from time to time for corporate purposes such as acquisitions of companies or
assets, sales of stock or securities convertible into common stock and raising
additional capital. We believe that the availability of the additional shares
will provide us with the flexibility to meet business needs as they arise, to
take advantage of favorable opportunities and to respond to a changing corporate
environment. We have no plans, proposals or arrangements, written or otherwise,
at this time, to issue any of the additional available authorized shares of
common stock that would result from a reverse split.
The increased reserve of shares available for issuance would give us the
flexibility of using common stock to raise capital and/or as consideration in
acquiring other businesses. We are continuously seeking opportunities to add
more expertise and proprietary products and services to further enhance our core
capabilities through additional acquisitions of technologies or businesses. Such
acquisitions may be effected using shares of common stock or other securities
convertible into common stock and/or by using capital that may need to be raised
by selling such securities. The current number of available authorized shares of
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common stock could limit our ability to effect acquisitions of businesses using
shares of our common stock or issuing shares to raise capital to fund such
acquisitions or for other purposes.
The increased reserve of shares available for issuance may also be used to
facilitate public or private financings. We may need to, among other things,
issue and sell unregistered common stock, or securities convertible into common
stock, in private transactions. We have no plans or agreements in place for any
financing at this time. Such transactions might not be available on terms
favorable to us, or at all. We may sell common stock at prices less than the
public trading price of the common stock at the time, and we may grant
additional contractual rights to purchase not available to other holders of
common stock, such as warrants to purchase additional shares of common stock or
anti-dilution protections.
In addition, the increased reserve of shares available for issuance may be used
for our equity incentive plan for grants to directors, officers, employees, or
consultants.
The flexibility of our company to issue additional shares of common stock could
also enhance our ability to negotiate on behalf of our stockholders in a
takeover situation. The authorized but unissued shares of common stock could be
used by us to discourage, delay or make more difficult a change in the control
of our company. For example, such shares could be privately placed with
purchasers who might align themselves with our board of directors in opposing a
hostile takeover bid. The issuance of additional shares could serve to dilute
the stock ownership of persons seeking to obtain control and thereby increase
the cost of acquiring a given percentage of the outstanding stock. Stockholders
should therefore be aware that approval of the Reverse Split could facilitate
future efforts by our board of directors to deter or prevent changes in control
of our company, including transactions in which the stockholders might otherwise
receive a premium for their shares over then current market prices.
The availability of additional shares of common stock is particularly important
in the event that our board of directors needs to undertake any of the foregoing
actions on an expedited basis and therefore needs to avoid the time (and
expense) of seeking stockholder approval in connection with the contemplated
action. If the Reverse Split is approved by the stockholders and is effected,
our board of directors does not intend to solicit further stockholder approval
prior to the issuance of any additional shares of common stock, except as may be
required by applicable law.
If the Reverse Split is approved, the additional authorized but unissued shares
of common stock may generally be issued from time to time for such proper
corporate purposes as may be determined by our board of directors, without
further action or authorization by our stockholders, except for some limited
circumstances where stockholder approval is required by law.
The possible future issuance of shares of equity securities consisting of common
stock or securities convertible into common stock could affect our current
stockholders in a number of ways, including the following:
* diluting the voting power of the current holders of common stock;
* diluting the market price of the common stock, to the extent that the
shares of common stock are issued and sold at prices below current
trading prices of the common stock, or if the issuance consists of
equity securities convertible into common stock, to the extent that
the securities provide for the conversion into common stock at prices
that could be below current trading prices of the common stock;
* diluting the earnings per share and book value per share of the
outstanding shares of common stock; and
* making the payment of dividends on common stock potentially more
expensive.
EFFECT ON REGISTRATION OF COMMON STOCK UNDER THE SECURITIES EXCHANGE ACT OF 1934
Our common stock is currently registered under the Securities Exchange Act of
1934. A reverse split would not affect the registration of our common stock
under the Securities Exchange Act of 1934. After the Reverse Split, our common
stock would continue to be quoted on the Financial Industry Regulatory
Authority's Over-the-Counter Bulletin Board market. However, we anticipate that
our stock symbol may change with the effectiveness of the Reverse Split.
13
EFFECT ON VOTING RIGHTS OF, AND DIVIDENDS ON, COMMON STOCK
Proportionate voting rights and other rights of the holders of common stock
would not be affected by the Reverse Split. The percentage of outstanding shares
owned by each stockholder prior to the split will remain the same, except for
adjustment as a consequence of rounding up any fractional shares created by the
Reverse Split to the next whole share, which is discussed in more detail under
"Fractional Shares," below. For example, generally, a holder of two percent of
the voting power of the outstanding shares of common stock immediately prior to
the effective time of the Reverse Split would continue to hold two percent of
the voting power of the outstanding shares of common stock after the Reverse
Split.
We have not declared any dividends and we do not plan to declare any dividends
in the foreseeable future. Therefore, we do not believe that the Reverse Split
would have any effect with respect to future distributions, if any, to our
stockholders.
EFFECT ON BENEFICIAL STOCKHOLDERS
Upon the Reverse Split, we intend to treat stockholders holding stock in "street
name," through a bank, broker or other nominee, in the same manner as registered
stockholders whose shares are registered in their names. Banks, brokers or other
nominees will be instructed to effect the Reverse Split for their beneficial
holders, holding the stock in "street name." However, such banks, brokers or
other nominees may have different procedures than registered stockholders for
processing the Reverse Split. If you hold your shares with such a bank, broker
or other nominee and if you have any questions in this regard, we encourage you
to contact your nominee.
EFFECT ON REGISTERED CERTIFICATED SHARES
If you hold any of your shares in certificate form, you will receive a
transmittal letter from our transfer agent as soon as practicable after the
effective date of the Reverse Split. The letter of transmittal will contain
instructions on how to surrender your certificate(s) representing your
pre-reverse split shares to the transfer agent. Any request for new certificates
into a name different from that of the registered holder will be subject to
normal stock transfer requirements and fees, including proper endorsement and
signature guarantee, if required. Any old shares submitted for transfer, whether
pursuant to a sale or other disposition, or otherwise, will automatically be
exchanged for new shares.
STOCKHOLDERS SHOULD NOT DESTROY ANY CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY
CERTIFICATE(S) UNLESS REQUESTED TO DO SO.
INCREASED TRANSACTION COSTS
The number of shares held by each individual stockholder will be reduced if the
Reverse Split is implemented. This will increase the number of stockholders who
hold less than a "round lot," or 100 shares. Typically, the transaction costs to
stockholders selling "odd lots" are higher on a per share basis. Consequently,
the Reverse Split could increase the transaction costs to existing stockholders
in the event they wish to sell all or a portion of their position.
EFFECT ON LIQUIDITY
The decrease in the number of shares of our common stock outstanding as a
consequence of the Reverse Split may decrease the liquidity in our common stock
if the anticipated beneficial effects on the trading market for our common stock
do not occur. See "Purposes of the Proposed Reverse Split," above.
POTENTIAL ANTI-TAKEOVER EFFECT
If the Reverse Split is approved, the increased proportion of authorized but
unissued shares of our common stock to issued and outstanding shares thereof
could, under certain circumstances, have an anti-takeover effect. For example,
such a change could permit future issuances of our common stock that would
dilute the stock ownership of a person seeking to effect a change in composition
of our board of directors or contemplating a tender offer or other transaction
14
for the combination of our company with another entity. The Reverse Split,
however, is not being proposed in response to any effort of which we are aware
to accumulate shares of our common stock or to obtain control of us.
FRACTIONAL SHARES
Each share of our common stock issued and outstanding immediately prior to
effective time of the Reverse Split, will be, automatically and without any
action on the part of our stockholders, converted into and reconstituted into a
fraction of a share of our common stock. However, we will not cash-out any of
our stockholders as a result of the Reverse Split. In the event the Reverse
Split results in a fractional share, we will round up and issue a whole share to
the affected stockholder.
IMPACT ON OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES
If the Reverse Split is approved, the number of shares of our common stock that
may be issued upon the exercise of conversion rights held by holders of other
securities convertible into our common stock will be reduced proportionately
based upon the Reverse Split ratio. Proportionate adjustments will also be made
to the per-share exercise price and the number of shares of our common stock
issuable upon the exercise of all outstanding options and warrants entitling the
holders to purchase shares of our common stock.
EFFECTIVE DATE OF THE REVERSE SPLIT
If the Reverse Split is approved by our stockholders, it will be effective at
the time and date which our board of directors determines. Beginning on the
effective time and date, each certificate representing pre-reverse split shares
will be deemed for all corporate purposes to evidence ownership of post-reverse
split shares.
ACCOUNTING AND TAX CONSEQUENCES
The par value of our common stock would remain unchanged at $0.001 per share
after the Reverse Split. However, the common stock as designated on our balance
sheet would be adjusted downward in respect of the shares of the new common
stock to be issued in the Reverse Split such that the common stock would become
an amount equal to the aggregate par value of the shares of new common stock
being issued in the Reverse Split, and that the additional paid in capital as
designated on our balance sheet would be increased by an amount equal to the
amount by which the common stock was decreased. Additionally, net income (loss)
per share would increase proportionately as a result of the Reverse Split since
there will be a lower number of shares outstanding.
EACH STOCKHOLDER IS URGED TO CONSULT WITH SUCH STOCKHOLDER'S TAX ADVISOR WITH
RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE SPLIT.
NO APPRAISAL RIGHTS
Neither Nevada law nor our articles of incorporation or bylaws provide our
stockholders with dissenters' or appraisal rights in connection with the Reverse
Split.
REQUIRED VOTE
Approval of a reverse split without corresponding decrease in the number of
authorized shares of common stock requires the affirmative vote of the holders
of a majority of the outstanding shares of common stock. As a result,
abstentions and broker non-votes will have the same effect as negative votes.
BOARD OF DIRECTORS RECOMMENDATION
Our board of directors recommends that our stockholders give their "CONSENT" to
the Reverse Split.
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of September 7, 2012, there were 69,112,065 shares of our common stock
outstanding. The following table sets forth certain information known to us with
respect to the beneficial ownership of our common stock as of that date by (i)
our directors and executive officers and (ii) persons known to us to
beneficially own more than 5% of our common stock.
Name and Address Number of Shares Percentage
Title of Class of Beneficial Owner Beneficially Owned(1) of Class(2)
-------------- ------------------- --------------------- -----------
DIRECTOR AND OFFICER
Common Stock Charles El-Moussa 35,000,000 50.6%
Three Sugar Creek Center
Sugar Land, TX 77478
COMMON STOCK DIRECTORS AND OFFICERS 35,000,000 50.6%
AS A GROUP
SHAREHOLDERS HOLDING MORE THAN 5%
Common Stock Mike McFarland 6,800,000 9.8%
71099, 198 - 8060 Silver
Spring Blvd.
Calgary, AB
Common Stock Shareholders holding more 6,800,000 9.8%
than 5%
----------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities Exchange Commission and generally includes voting or investment
power with respect to securities. Except as otherwise indicated, we believe
that the beneficial owners of the common stock listed above, based on
information furnished by such owners, have sole investment and voting power
with respect to such shares, subject to community property laws where
applicable.
(2) Percentage based on 69,112,065 shares of common stock outstanding on
September 7, 2012.
CHANGE IN CONTROL
We are unaware of any contract or other arrangement the operation of which may
at a subsequent date result in a change of control of our company.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No person who has been a director or executive officer of our company at any
time since the beginning of our fiscal year ended September 30, 2011 and no
associate of any of the foregoing persons has any substantial interest, direct
or indirect, by security holding or otherwise, in any matter to be acted upon.
STOCKHOLDER PROPOSALS
The deadline for submitting stockholder proposals for inclusion in our proxy
statement and form of proxy for the next annual meeting of stockholders is a
reasonable time before we begin to print and send our proxy materials. Proposals
received after such time will be considered untimely. In addition, the
acceptance of such proposals is subject to the Securities and Exchange
Commission guidelines.
HOUSEHOLDING OF PROXY MATERIALS
The Securities and Exchange Commission permits companies and intermediaries such
as brokers to satisfy the delivery requirements for proxy materials with respect
to two or more stockholders sharing the same address by delivering a single set
16
of proxy materials addressed to those stockholders. This process, which is
commonly referred to as "householding", potentially provides extra conveniences
for stockholders and cost savings for companies.
Although we do not intend to household for our stockholders of record, some
brokers household our proxy materials, delivering a single set of proxy
materials to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders. Once you have
received notice from your broker that they will be householding materials to
your address, householding will continue until you are notified otherwise or
until you revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate set of proxy
materials, or if you are receiving multiple sets of proxy materials and wish to
receive only one, please notify your broker. Stockholders who currently receive
multiple sets of the proxy materials at their address and would like to request
"householding" of their communications should contact their broker.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information and reporting requirements of the Securities
Exchange Act of 1934 and in accordance with that act, we file periodic reports,
documents and other information with the Securities and Exchange Commission
relating to our business, financial statements and other matters. These reports
and other information may be inspected and are available for copying at the
offices of the Securities and Exchange Commission, 100 F. Street NE, Washington,
DC 20549 or may be accessed at www.sec.gov.
By Order of the Board of Directors
/s/ Charles El-Moussa
--------------------------------------------
Charles El-Moussa
President, Secretary, Treasurer and Director
_____________ , 2012
17
WRITTEN CONSENT SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
OF UPSTREAM BIOSCIENCES INC.
THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. WHEN PROPERLY
EXECUTED, THIS CONSENT WILL BE VOTED AS DESIGNATED BY THE UNDERSIGNED.
The undersigned, without the formality of convening a meeting, does hereby
consent with respect to all of shares of common stock of Upstream Biosciences
Inc. held by the undersigned to the adoption of the proposals set forth below:
Proposal For Against Abstain
-------- --- ------- -------
To appoint Charles El-Moussa as a
director of our company [ ] [ ] [ ]
To ratify and approve the appointment
of Dale Matheson Carr-Hilton LaBonte LLP
as our independent registered public
accounting firm [ ] [ ] [ ]
To approve the 35-for-1 reverse split
of shares of outstanding common stock of
Upstream Bioscience Inc. without a
change in par value of $0.001 per share
and with any resulting fractional share
being rounded up to the next whole share
at the effective date and time which the
board of directors of Upstream
Biosciences Inc. determines. [ ] [ ] [ ]
THE BOARD OF DIRECTORS OF OUR COMPANY RECOMMENDS A VOTE "FOR" THE PROPOSALS.
The undersigned represents that the undersigned owns the following number of
shares of common stock of Upstream Biosciences Inc. (please insert number):
__________________________.
Please sign exactly as the name or names appear on your stock certificate(s). If
the shares are issued in the names of two or more persons, all such persons
should sign the consent form. A consent executed by a corporation should be
signed in its name by its authorized officers. Executors, administrators,
trustees, and partners should indicate their titles when signing.
Date:
----------------------------------------
Stockholder Name (printed):
----------------------------------------
Signature:
----------------------------------------
Title (if applicable):
----------------------------------------
Signature (if held jointly):
----------------------------------------
Title (if applicable):
----------------------------------------
18
IMPORTANT: PLEASE COMPLETE, SIGN, AND DATE YOUR WRITTEN CONSENT PROMPTLY
AND RETURN IT TO:
Upstream Biosciences Inc.
Three Sugar Creek Center, Suite 100
Sugar Land, TX 77478