SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement |_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-12
Discovery Technologies, Inc.
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11(1)
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
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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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(4) Date Filed:
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Discovery Technologies, Inc.
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
September 24, 2007
Dear Shareholder:
Discovery Technologies, Inc. will hold a Special Meeting of
Shareholders on Monday, September 24, 2007, beginning at 10:00 a.m., local time,
at the offices of Discovery Technologies, Inc. at 5353 Manhattan Circle, Suite
101, Boulder, Colorado 80303. The enclosed notice of meeting, the proxy
statement and the proxy card from the Board of Directors describe the proposals
to be acted upon at the meeting.
This special meeting has been called for the purpose of asking our
holders of common stock, no par value (the "Common Stock"), of Discovery
Technologies, Inc., a Kansas corporation ("Discovery Technologies"), to approve
the adoption of a proposed Agreement and Plan of Merger, to reincorporate
Discovery Technologies in the State of Nevada by merger with and into a Nevada
corporation with the same name ("Discovery Technologies Nevada") which Discovery
Technologies formed for such purpose (the "Migratory Merger") . The Board of
Directors of Discovery Technologies (the "Board") recommends that you vote FOR
the adoption of the proposed Agreement and Plan of Merger of Discovery
Technologies, Inc.
On August 27, 2007, the Board unanimously adopted resolutions
approving, subject to shareholder approval, the Agreement and Plan of Merger.
Upon shareholders approving the adoption of the Agreement and Plan of Merger,
Discovery Technologies will adopt the capital structure of Discovery
Technologies Nevada, which includes total authorized capital stock of
800,000,000 shares, of which 780,000,000 are common stock, with a par value of
$.01 per share (the "Discovery Technologies Nevada Common Stock") and 20,000,000
shares are blank check preferred stock, with a par value of $.01 per share (the
"Preferred Stock") . The Preferred Stock may be issued from time to time in one
or more participating, optional, or other special rights and qualifications,
limitations or restrictions thereof, as shall be stated in the resolutions
adopted by Discovery Technologies Nevada's Board of Directors providing for the
issuance of such Preferred Stock or series thereof. In addition, the issued and
outstanding shares of Common Stock will automatically convert into the right to
receive shares of Discovery Technologies Nevada Common Stock at a ratio of nine
(9) shares of Common Stock for one (1) share of Discovery Technologies Nevada
Common Stock (the "Conversion Ratio")
The Board believes that the proposed Migratory Merger will be
beneficial to Discovery Technologies and its shareholders because it will
enhance Discovery Technologies' ability to attract a transaction consistent with
its current business plan and purpose.
Please refer to the enclosed proxy statement for detailed information
on the proposals. If you have any further questions concerning the meeting or
the proposals, please feel free to contact us at (303) 499-6000. Whether or not
you expect to attend the meeting, your shares should be represented. Therefore,
we urge you to complete, sign, date and promptly return the enclosed proxy card.
Sincerely Yours,
Michael Friess
Chairman of the Board, President and Chief Executive Officer
DISCOVERY TECHNOLOGIES, INC.
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
Notice of Special Meeting
To Be Held September 24, 2007
To Shareholders:
A Special Meeting of Shareholders of Discovery Technologies, Inc. will
be held on Monday, September 24, 2007 at 10:00 a.m., local time, at the
Company's offices at 5353 Manhattan Circle, Suite 101, Boulder, Colorado 80303.
In order to approve the adoption of a proposed Agreement and Plan of Merger to
reincorporate Discovery Technologies, Inc., a Kansas corporation ("Discovery
Technologies"), in the State of Nevada by merger with and into a Nevada
corporation with the same name ("Discovery Technologies Nevada") which Discovery
Technologies formed for such purpose (the "Migratory Merger") . Upon shareholder
approval of the adoption of the Agreement and Plan of Merger, Discovery
Technologies will adopt the capital structure of Discovery Technologies Nevada,
which includes total authorized capital stock of 800,000,000 shares, of which
780,000,000 are common stock, with a par value of $.0l per share (the "Discovery
Technologies Nevada Common Stock") and 20,000,000 shares are blank check
preferred stock, with a par value of $.0l per share (the "Preferred Stock") .
The Preferred Stock may be issued from time to time in one or more
participating, optional, or other special rights and qualifications, limitations
or restrictions thereof, as shall be stated in the resolutions adopted by
Discovery Technologies Nevada's Board of Directors providing for the issuance of
such Preferred Stock or series thereof. In addition, the issued and outstanding
shares of Common Stock will automatically convert into the right to receive
shares of Discovery Technologies Nevada Common Stock at a ratio of nine (9)
shares of Common Stock for one (1) share of Discovery Technologies Nevada Common
Stock (the "Conversion Ratio")
No other business may properly be brought before the meeting.
The Board of Directors has fixed the close of business on August 21,
2007 as the record date for the meeting. All shareholders of record on that date
are entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON. IF YOU ATTEND
THE MEETING, YOU MAY CONTINUE TO HAVE YOUR SHARES VOTED AS INSTRUCTED IN THE
PROXY OR YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
Michael Friess
Chairman of the Board, President and Chief Executive Officer
Boulder, Colorado
August 30, 2007
DISCOVERY TECHNOLOGIES, INC.
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why am I receiving these materials?
We are mailing this proxy statement, with the accompanying proxy card,
to you on or about August 30, 2007 in connection with the solicitation of
proxies by the Board of Directors of Discovery Technologies, Inc. (the
"Company') for a special meeting of shareholders to be held on Monday, September
24, 2007, and any adjournment or postponement of that meeting. The meeting will
be held on Monday, September 24, 2007, beginning at 10:00 a.m., local time, at
the offices of Discovery Technologies, Inc. at 5353 Manhattan Circle, Suite 101,
Boulder, Colorado 80303. You are invited to attend the special meeting, and we
request that you vote on the proposals described in this proxy statement. You do
not need to attend the meeting in person to vote your shares. You may simply
complete, sign and return your proxy card in order to have your shares voted at
the meeting on your behalf.
What am I voting on?
You are being asked to approve the adoption of the proposed Agreement
and Plan of Merger, attached hereto as Exhibit A, between Discovery
Technologies, Inc., a Kansas corporation (Discovery Technologies) and Discovery
Technologies, Inc., a Nevada corporation (referred to herein as "Discovery
Technologies Nevada") which Discovery Technologies formed for such purpose (the
"Migratory Merger") . Upon shareholder adoption of the Agreement and Plan of
Merger, the Migratory Merger would result in:
o A change of domicile state of the Company from the State of
Kansas to the State of Nevada;
o Your right to receive shares of common stock, $.0l par value
per share, of Discovery Technologies Nevada at a ratio of
nine (9) shares of Discovery Technologies Common Stock, owned
by you as of the effective date of the reincorporation, for
one (1) share of common stock, $.0l par value of Discovery
Technologies Nevada;
o The persons presently serving as our executive officers and
directors serving in their same respective positions with
Discovery Technologies Nevada;
o The adoption of the Articles of Incorporation of Discovery
Technologies Nevada under the laws of the state of Nevada, in
the form of Exhibit B attached hereto, pursuant to which
Discovery Technologies authorized capital stock will be
changed from 800,000,000 shares of authorized capital stock,
all of which are common stock, no par value, to 800,000,000
shares of authorized common stock, consisting of 780,000,000
shares of common stock, par value $.01 per share, and
20,000,000 shares of "blank check" preferred stock, par value
$.0l per share, with the right conferred upon the Board of
Directors to set the dividend, voting, conversion,
liquidation, and other rights as well as the qualifications,
limitations, and restrictions, with respect to the preferred
stock as the Board of Directors may determine from time to
time; and
o The adoption of the Bylaws of Discovery Technologies Nevada
under the laws of the state of Nevada in the form Exhibit C
attached hereto.
Why are we recommending that shareholders approve these proposals?
The Board of Directors of Discovery Technologies, Inc. (the `Board")
believes that the proposed Migratory Merger will be beneficial to Discovery
Technologies and its shareholders because it will enhance Discovery
Technologies' ability to attract a transaction consistent with its current
business plan and purpose.
Further, the State of Nevada is recognized as a desirable state to do
business because it has favorable corporate income tax treatment and nominal
annual fees. For these reasons, the Board believes that it is in the Company's
best interest if the Company incorporates in the State of Nevada.
Why are these proposals being submitted at a special meeting instead of an
annual meeting?
Our management and Board of Directors believe that the longer we wait
to implement the Migratory Merger we are losing out on potential investment. Per
the Bylaws of Discovery Technologies, the Board of Directors has the discretion
when to call regular meetings of shareholders. Due to the cost of facilitating
such meeting, the Board does not intend to call annual meetings at this time.
Who can attend and vote at the meeting?
Shareholders of record at the close of business on August 21, 2007 are
entitled to attend and vote at the meeting. Each share of our Common Stock is
entitled to one vote on all matters to be voted on at the meeting, and can be
voted only if the record owner is present to vote or is represented by proxy.
The proxy card provided with this proxy statement indicates the number of shares
of Common Stock that you own and are entitled to vote at the meeting.
What constitutes a quorum at the meeting?
The presence at the meeting, in person or represented by proxy, of the
holders of a majority of the Common Stock outstanding on August 21, 2007, the
record date, will constitute a quorum for purposes of the meeting. On the record
date, 18,746,196 shares of Common Stock were outstanding. For purposes of
determining whether a quorum exists, proxies received but marked "abstain" and
so-called "broker non-votes" (described below) will be counted as present.
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How do I vote by proxy?
If you properly fill in your proxy card and we receive it in time to
vote at the meeting, your "proxy" (one of the individuals named on your proxy
card) will vote your shares as you have directed.
If you sign, date and return the proxy card but do not specify how your
shares are to be voted, then your proxy will vote your shares FOR approval of
the proposed Agreement and Plan of Merger described in this proxy statement.
How do I vote if my shares are held by my broker?
If your shares are held by your broker you will need to instruct your
broker concerning how to vote your shares in the manner provided by your broker.
If you wish to vote them in person at the meeting, you must obtain from your
broker a properly executed legal proxy, identifying you as a shareholder of the
Company, authorizing you to act on behalf of the broker at the meeting and
specifying the number of shares with respect to which the authorization is
granted.
Can I change my vote after I return my proxy card?
Yes, prior to the vote of the proxy, by either submitting a later-dated
proxy or by attending the meeting and voting in person. The vote of a proxy at
the meeting is final, binding, and not subject to challenge. Once your vote is
cast, it cannot be changed.
How are votes counted?
The approval of the proposed Agreement and Plan of Merger, and thus the
resulting Migratory Merger, requires the favorable vote of a majority of the
outstanding shares of Common Stock entitled to vote on the matter. Abstentions
and broker non-votes, which are described above, will have the same effect as a
no vote.
How is the Company soliciting proxies?
We bear the cost of preparing, assembling and mailing the proxy
material relating to the solicitation of proxies by the Board of Directors for
the meeting.
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF MERGER
(THE MIGRATORY MERGER)
Background and Purpose
Since the termination of its operating business, the business plan of
Discovery Technologies, Inc., a Kansas corporation ("Discovery Technologies"),
has consisted of exploring potential targets for a business combination with
Discovery Technologies through a business combination through a purchase of
assets, share purchase or exchange, merger or similar type of transaction. In
order to facilitate such a transaction, the Board of Directors believes that,
among other things, Discovery Technologies should reincorporate in the State of
Nevada by merger with and into a Nevada corporation with the same name
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("Discovery Technologies Nevada") which Discovery Technologies formed for such
purpose (the "Migratory Merger") pursuant to the adoption by the shareholders of
Discovery Technologies of the Agreement and Plan of Merger (the "Reincorporation
Merger Agreement").
The Board believes that that Migratory Merger will make Discovery
Technologies more attractive for a potential business combination and therefore
be in the best interest of Discovery Technologies' shareholders and Discovery
Technologies. The Migratory Merger will become effective upon filing of the
Merger Certificates (as described below), which filings are expected to occur as
promptly as practicable after the requisite shareholder approval is obtained of
the Agreement and Plan of Merger (and thus the Migratory Merger) (the "Effective
Date") . The Board reserves the right to elect not to proceed, and abandon, the
Migratory Merger if it determines, in its sole discretion, that this proposal is
not in the best interest of Discovery Technologies' shareholders.
Reasons for Reincorporation in Nevada
The Board believes that the Migratory Merger will benefit Discovery
Technologies and its shareholders giving Discovery Technologies more flexibility
and simplicity in various corporate transactions and reduce costs of doing
business. The State of Nevada is recognized as a desirable state to do business
because it has favorable corporate income tax treatment, nominal annual fees,
and shareholders are not public record. Further, Nevada provides a recognized
body of corporate law that will facilitate corporate governance by our officers
and directors. For these reasons, the Board of Directors believes that it is in
Discovery Technologies' best interest if Discovery Technologies reincorporates
in the State of Nevada.
Principal Features of Proposed Migratory Merger
The Migratory Merger will be effected by merging Discovery Technologies
with and into a newly formed Nevada corporation, Discovery Technologies Nevada.
Discovery Technologies Nevada has not engaged in any activities except in
connection with the Migratory Merger. This Proxy Statement summarizes the
material terms of the proposed Migratory Merger, as well as the Reincorporation
Merger Agreement, Certificate of Incorporation of Discovery Technologies Nevada
and Bylaws of Discovery Technologies Nevada. The full texts of the
Reincorporation Merger Agreement, the Articles of Incorporation, and Bylaws are
attached as Exhibits A, B, and C, respectively. Upon the Effective Date,
Discovery Technologies will be merged with and into Discovery Technologies
Nevada. We will then be subject to Nevada General Corporation Law and the
Articles of Incorporation and Bylaws of the Nevada entity will replace our
current Articles of Incorporation and Bylaws of Discovery Technologies. These
changes may alter the rights of our shareholders.
Conversion Ratio
The issued and outstanding shares of Discovery Technologies Common
Stock, no par value (the "Common Stock") will automatically convert into the
right to receive shares of common stock, par value $.0l per share, of Discovery
Technologies Nevada (the "Discovery Technologies Nevada Common Stock") at a
ratio of nine (9) shares of Common Stock for one (1) share of Discovery
Technologies Nevada Common Stock (the "Conversion Ratio") . The number of shares
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issued and outstanding will be reduced from 18,746,196 to approximately
2,082,910 issued and outstanding.
Following the Effective Date, any and all issued and outstanding
options, warrants, or other rights to acquire any Common Stock will be converted
into an option, warrant or other right, as the case may be, to purchase shares
of Discovery Technologies Nevada Common Stock on the same terms, at the same
Conversion Ratio as Common Stock are converted into Discovery Technologies
Nevada Common Stock, and at a price equal to nine (9) times the current exercise
price.
Our Board believes it is in the best interest of Discovery
Technologies' shareholders and Discovery Technologies to effect such Conversion
Ratio as part of the Migratory Merger. The current number of our unissued
authorized shares of Common Stock may not be sufficient to enable us to respond
to potential business and financing opportunities and pursue important
objectives that may present themselves. Accordingly, our Board believes it is in
our best interests to effectuate this ratio as part of the Migratory Merger.
Capital Structure
The Company will adopt the capital structure of Discovery Technologies
Nevada, which includes total authorized capital stock of 800,000,000 shares of
authorized capital stock, consisting of 780,000,000 shares of Common Stock, par
value $.01 per share, and 20,000,000 shares of "blank check" preferred stock,
par value $.0l per share, with the right conferred upon the Board to set the
dividend, voting, conversion, liquidation, and other rights as well as the
qualifications, limitations, and restrictions, with respect to the Preferred
Stock as the Board may determine from time to time.
In addition, the Migratory Merger may increase the number of
shareholders who own odd lots (less than 100 shares) . Shareholders who own odd
lots typically may experience an increase in the cost of selling their shares
and may have greater difficulty in effecting sales.
Effective Date of Migratory Merger
The Migratory Merger will become effective upon the filing of the
requisite merger documents in Nevada and Kansas, which filings are expected to
occur as promptly as practicable after the requisite shareholder approval is
obtained of the Reincorporation Merger Agreement (and thus the Migratory Merger)
.. As a result of the Migratory Merger, we will cease our corporate existence in
the state of Kansas. Beginning on the Effective Date, each stock certificate
representing Common Stock pre-Reincorporation Merger, subject to the Conversion
Ratio, will be deemed for all corporate purposes to evidence ownership of shares
of Discovery Technologies Nevada Common Stock.
No Change in Business, Management, Board Members, Assets or Liabilities
Upon completion of the Migratory Merger, the daily business operations
of the Company will continue as they are presently conducted. The individuals
who will serve as executive officers of the Company following the Migratory
Merger are those who currently serve as executive officers of the Company. The
Migratory Merger will not effect a change in the Company's name. The name will
remain "Discovery Technologies, Inc." Our daily business operations will
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continue at our principal executive offices at 5353 Manhattan Circle, Suite 101,
Boulder, Colorado 80303.
Certain Risk Factors Associated With Migratory Merger
THERE CAN BE NO ASSURANCE THAT IF THE MIGRATORY MERGER IS EFFECTED, THE
RESULTING COMPANY WILL ATTRACT ANY, OR SATISFY POTENTIAL ACQUISITION, TARGETS
AND THERE IS NO GUARANTEE THAT ANY TRANSACTION WILL BE EFFECTED.
THERE CAN BE NO ASSURANCE THAT THE TOTAL MARKET CAPITALIZATION OF THE DISCOVERY
TECHNOLOGIES NEVADA COMMON STOCK (THE AGGREGATE VALUE OF ALL ISSUED AND
OUTSTANDING DISCOVERY TECHNOLOGIES NEVADA COMMON STOCK AT THE THEN MARKET PRICE)
WILL BE EQUAL TO OR GREATER THAN THE TOTAL MARKET CAPITALIZATION OF DISCOVERY
TECHNOLOGIES BEFORE THE MIGRATORY MERGER OR THAT THE PER SHARE MARKET PRICE OF
THE DISCOVERY TECHNOLOGIES NEVADA COMMON STOCK WILL INCREASE IN PROPORTION TO
THE REDUCTION IN THE NUMBER OF SHARES OUTSTANDING AFTER THE MIGRATORY MERGER.
IF CONVERSION OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK, NO PAR
VALUE, OF DISCOVERY TECHNOLOGIES' COMMON STOCK INTO DISCOVERY TECHNOLOGIES
NEVADA COMMON STOCK IS EFFECTED AT THE CONVERSION RATIO. THE RESULTING PER-SHARE
STOCK PRICE MAY NOT ATTRACT OR SATISFY POTENTIAL ACQUISITION TARGETS AND THERE
IS NO GUARANTEE THAT ANY TRANSACTION WILL BE EFFECTED.
A DECLINE IN THE MARKET PRICE OF THE DISCOVERY TECHNOLOGIES NEVADA COMMON STOCK
MAY RESULT IN A GREATER PERCENTAGE DECLINE THAN WOULD OCCUR IN THE ABSENCE OF
THE CONVERSION OF DISCOVERY TECHNOLOGIES COMMON STOCK AT THE CONVERSION RATIO,
AND THE LIQUIDITY OF DISCOVERY TECHNOLOGIES NEVADA COMMON STOCK COULD BE
ADVERSELY AFFECTED FOLLOWING SUCH CONVERSION.
Impact of Migratory Merger
General
Your proportionate ownership interest will not be affected by the
Migratory Merger.
IF VOTED FOR, THE MIGRATORY MERGER WILL AFFECT ALL OF THE COMPANY'S SHAREHOLDERS
UNIFORMLY AND WILL NOT AFFECT ANY SHAREHOLDER'S PERCENTAGE OWNERSHIP INTERESTS
IN THE COMPANY OR PROPORTIONATE VOTING POWER.
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Fractional Shareholders
You will not receive fractional shares of Discovery Technologies Nevada Common
Stock in connection with the Migratory Merger. All Discovery Technologies Nevada
Common Stock ownership will be rounded to the nearest full share.
Registered and Beneficial Shareholders
Upon effecting the Migratory Merger, we intend to treat shareholders holding
Discovery Technologies Nevada Common Stock in "street name", through a bank,
broker or other nominee, in the same manner as registered shareholders whose
shares are registered in their names. If you hold your shares with a bank,
broker or nominee and if you have questions in this regard, we encourage you to
contact your nominee.
Effect on Registered and Beneficial Shareholders
Some of our registered shareholders hold all their shares in certificate form.
If any of your shares are held in certificate form, you will receive a letter of
transmittal from our transfer agent, Corporate Stock Transfer, Inc. as soon as
practicable after the Effective Date. The letter of transmittal will contain
instructions on how to surrender your certificate(s) representing the shares of
Common Stock owned by you to the transfer agent. Upon receipt of your
certificate, subject to the aforementioned Conversion Ratio of nine (9) shares
of Common Stock for one (1) share of Discovery Technologies Nevada Common Stock,
you will be issued a new stock certificate for shares of Discovery Technologies
Nevada Common Stock.
SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT
ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Significant Changes Caused by the Migratory Merger
Change in Authorized Capital
On the Effective Date, Discovery Technologies will adopt the capital
structure of Discovery Technologies Nevada which includes total authorized
capital stock of 800,000,000 shares, consisting of 780,000,000 shares of common
stock, par value $.01 per share, and 20,000,000 shares of preferred stock, par
value $.0l per share, with the right conferred upon the Board to set the
dividend, voting, conversion, liquidation and other rights, as well as the
qualifications, limitations or restrictions thereof, as shall be stated in the
resolutions adopted by Discovery Technologies Nevada's Board of Directors
providing for the issuance of such Preferred Stock or series thereof. A draft of
the Articles of Incorporation of Discovery Technologies Nevada is attached
hereto as Exhibit B. On the record date of this Proxy Statement, Discovery
Technologies had 800,000,000 shares of authorized Common Stock of which
18,746,196 shares are issued and outstanding. Authorized but unissued shares of
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Discovery Technologies Nevada will be available for issuance, and Discovery
Technologies Nevada may issue such shares in the future. If Discovery
Technologies Nevada issues additional shares, the ownership interest of
Discovery Technologies Nevada's shareholders will be diluted.
Further, the authorized shares of common stock in excess of those
issued or reserved for issuance and the newly authorized shares of preferred
stock, will be available for issuance at such times and for such corporate
purposes as our Board of Directors may deem advisable without further action by
our shareholders, except as may be required by applicable laws or the rules of
any stock exchange or national securities association trading system on which
the securities may be listed or traded. This issuance could result in a
significant dilution of the voting rights and the shareholders' equity of
then-existing shareholders. The holders of the Company's Common Stock have no
preemptive right to purchase any of the additional shares of common stock when
issued.
Change in Charter and By-Laws
We are incorporated under the laws of the State of Kansas and Discovery
Technologies Nevada is incorporated under the laws of the State of Nevada. The
Company's corporate affairs are currently governed by Kansas corporate law and
our Articles of Incorporation and By-laws, which were created pursuant to Kansas
law. On the Effective Date, issues of corporate governance and control will be
controlled by Nevada law and Discovery Technologies Nevada's Articles of
Incorporation and Bylaws, which were created under Nevada law.
There are certain significant differences between Kansas corporate law
and Nevada corporate law. Shareholders should refer to the Nevada General
Corporation Law and the Kansas General Corporation Code to understand how these
laws apply to Discovery Technologies Nevada and our company, respectively. For
example, Nevada law provides that, unless the articles/certificate of
incorporation provide otherwise, any action required or permitted to be taken at
a meeting of the shareholders may be taken without a meeting if the holders of
outstanding stock having at least the minimum number of votes that would be
necessary to authorize or take such action at a meeting consent to the action in
writing. Kansas law requires an action required or permitted to be taken at a
meeting of the shareholders may be taken without a meeting by written action
signed, or consented to by authenticated electronic communication, by all of the
shareholders entitled to vote on that action.
Potential Anti-Takeover Effect
The increase in the proportion of unissued of authorized shares
available for issuance and the Preferred Stock, could adversely affect the
ability of third parties to takeover or effect a change in control of Discovery
Technologies Nevada by, for example, permitting issuances that would dilute the
stock ownership of a person seeking to effect change in the composition of the
Discovery Technologies Nevada's Board of Directors or contemplating a tender
offer or other transaction for the combination of Discovery Technologies Nevada
with another company. Although the increased proportion of unissued authorized
shares to issued shares could, under certain circumstances, have an
anti-takeover effect, neither the adoption of the Conversion Ratio or the
Preferred Stock is in response to any effort of which Discovery Technologies is
aware to accumulate its shares or shares of Discovery Technologies Nevada or
obtain control of Discovery Technologies or Discovery Technologies Nevada, nor
is it part of a plan by management to recommend a series of similar amendments
to the Board and shareholders.
8
Accounting Matters
The Migratory Merger will have no affect on the par value of Common
Stock. As a result, as of the Effective Date, the stated capital attributable to
Discovery Technologies Nevada Common Stock on the balance sheet as compared to
Common Stock will be lowered in proportion to the Conversion Ratio, and the
additional paid-in capital attributable to Discovery Technologies Nevada Common
Stock on the balance sheet as compared to Common Stock will be increased by the
amount by which the stated capital is reduced. The per-share net income or loss
and net book value of Common Stock will be restated because there will be fewer
shares of Discovery Technologies Nevada Common Stock outstanding.
Procedure for Effecting the Migratory Merger
As soon as practicable after the requisite shareholder approval of the
Reincorporation Merger Agreement Discovery Technologies will promptly cause
Articles of Merger to be filed with the Secretary of State of Kansas and
Articles of Merger to be filed with the Secretary of State of Nevada
(collectively both are "Merger Certificates") . The Migratory Merger will become
effective on the date of filing of the Merger Certificates or on such later date
as determined by the Board, which is referred to as the "Effective Date."
Beginning on the Effective Date, each stock certificate representing Common
Stock, pre-Migratory Merger, subject to the Conversion Ratio, will be deemed for
all corporate purposes, to evidence ownership of Discovery Technologies Nevada
Common Stock.
Dissenters' Right of Appraisal
Certain common shareholders of our company not holding registered
shares that follow the appropriate procedures are entitled to dissent from the
consummation of the Migratory Merger and receive payment of the fair value of
their shares under Section 17-6712 of the Kansas General Corporation Code.
The following information is intended as a brief summary of the
material provisions of the statutory procedures you must follow in order to
perfect your appraisal rights. You are urged to read the full text of the Kansas
dissenters' rights statute, which is reprinted in its entirety and attached as
Exhibit D to this document. A person having a beneficial interest in shares of
our Common Stock that are held of record in the name of another person, such as
a bank, broker or other nominee, must act promptly to cause the record holder to
follow the steps summarized below, properly and in a timely manner, if such
person wishes to perfect any dissenters' rights such person may have.
This discussion and Exhibit D should be reviewed carefully by you if
you wish to exercise statutory dissenters' rights or wish to preserve the right
to do so, because failure to strictly comply with any of the procedural
requirements of the Kansas dissenters' rights statute may result in a
termination or waiver of dissenters' rights under the Kansas dissenters' rights
statute.
Under the Kansas dissenters' rights statute, you have the right to
dissent from the reincorporation and demand payment of the fair value of your
shares of Common Stock. If you elect to dissent, you must file with us a written
notice of dissent stating that you intend to demand payment for your shares of
Common Stock if the reincorporation is consummated. Such written notice of
9
dissent must be filed with us no later than September 24, 2007. If you fail to
comply with this notice requirement, you will not be entitled to dissenters'
rights. The "fair value" of the shares as used in the Kansas dissenters' rights
statute is the value of the shares immediately before the effectuation of the
proposed reincorporation, not including any appreciation or depreciation in
anticipation of the reincorporation.
After the proposed action of reincorporation has been approved, we will
give written notice of the effective time of the reincorporation by certified
mail to each shareholder who filed a written notice of dissent. The notice will
also state where demand for payment must be sent and where share certificates
shall be deposited, among other information. Within the twenty (20) days
following the date notice is delivered, the dissenting shareholder must make a
written demand on us for payment of the fair value of his or her shares.
After the corporate action takes effect, or after the Company receives
a valid demand for payment, whichever is later, we will pay to each dissenter
who complied with the required procedures, the amount we estimate to be the fair
value of the dissenters' shares, plus accrued interest. Additionally, we will
mail to each dissenting shareholder a statement as to how interest was
calculated, a statement of the dissenters' right to demand payment of fair value
under Kansas law, and a copy of the relevant provisions of Kansas law.
If a demand for payment remains unsettled, either we or the dissenting
shareholder may petition the court to determine fair value and accrued interest.
If we fail to commence an action within one hundred twenty (120) days following
the receipt of the shareholder's demand, we will pay to the shareholder the
amount demanded by the shareholder in the shareholder's notice containing the
shareholder's estimate of fair value and accrued interest.
If you wish to seek dissenters' rights, you are urged to review the
applicable Kansas statutes attached to this Proxy Statement as Exhibit D.
Miscellaneous
We will pay all of the costs of reincorporation in Nevada, including
the costs of preparing and distributing this Proxy Statement. We may also pay
brokerage firms and other custodians for their reasonable expenses for
forwarding information materials to the beneficial owners of Common Stock. We do
not anticipate contracting for other services in connection with the
reincorporation.
10
Certain Federal Income Tax Consequences of the Reincorporation
The following is a discussion of certain federal income tax
consequences to holders of our Common Stock who receive shares of Discovery
Technologies Nevada Common Stock in exchange for their Discovery Technologies
Common Stock as a result of the Migratory Merger. The discussion is based on the
Internal Revenue Code of 1986, as amended ("Code"), and laws, regulations,
rulings and decisions in effect as of the date of this Proxy Statement, all of
which are subject to change, possibly with retroactive effect, and to differing
interpretations. No state, local or foreign tax consequences are addressed
herein.
This discussion is for general information only and does not purport to
be a complete discussion or analysis of all potential tax consequences that may
apply to a shareholder. In view of the varying nature of such tax consequences,
shareholders are urged to consult their own tax advisors as to the specific tax
consequences to them of the Migratory Merger, including the applicability of
federal, state, local or foreign tax laws.
We believe that, for federal income tax purposes, no gain or loss will
be recognized by our Company, Discovery Technologies Nevada or our shareholders
who receive Discovery Technologies Nevada Common Stock for their shares of our
Common Stock in connection with the Migratory Merger. The adjusted tax basis of
each whole share of Discovery Technologies Nevada Common Stock received by a
shareholder of the Company as a result of the Conversion Ratio will be the same
as the shareholder's aggregate adjusted tax basis in the shares of Common Stock
converted into such shares of Discovery Technologies Nevada's Common Stock. A
shareholder who holds our Common Stock will include in his holding period for
the Discovery Technologies Nevada Common Stock that he receives as a result of
the reincorporation, his holding period for our Common Stock.
Because of the complexity of the capital gains and loss provisions of
the Code and the uniqueness of each individual's capital gain or loss situation,
shareholders contemplating exercising statutory dissenters' rights should
consult their own tax advisors regarding the federal income tax consequences of
exercising such rights. Additionally, state, local or foreign income tax
consequences to shareholders may vary from the federal income tax consequences
described above. Further, our view regarding the tax consequences of the
Conversion Ratio is not binding on the Internal Revenue Service or the courts.
ACCORDINGLY, SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
CONSEQUENCES TO THEM OF THE CONVERSION OF COMMON STOCK AT THE CONVERSION RATIO
UNDER ALL APPLICABLE TAX LAWS.
VOTING SECURITIES
Who owns more than 5% of our stock?
On August 21, 2007, there were 18,746,196 shares of our Common Stock
issued and outstanding. On that date, to our knowledge there were two
shareholders who owned beneficially more than 5% of our Common Stock. The table
below contains information, as of that date, regarding the beneficial ownership
11
of these persons or entities. Unless otherwise indicated, we believe that each
of the persons or entities listed below has sole voting and investment power
with respect to all the shares of Common Stock indicated.
Number of Shares
Name and Address of Beneficial Owner Beneficially Owned Percent of Class
- ------------------------------------ ------------------ ----------------
Michael Friess 7,500,000 40%
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
Sanford Schwartz 7,500,000 40%
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
How much stock do the Company's directors and executive officers own?
The following information is furnished as of August 21, 2007, with
respect to Common Stock beneficially owned by: (1) our directors (including our
chief executive officer); (2) our executive officers other than the chief
executive officer; and (3) all directors and executive officers as a group.
Information relating to the beneficial ownership of Common Stock by our
principal shareholders and management is based upon information furnished by
each person using "beneficial ownership" concepts under the rules of the
Securities and Exchange Commission. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security.
Number of Shares
Name and Position Beneficially Owned Percent of Class
----------------- ------------------ ----------------
Michael Friess, Chairman of the
Board, President and CEO 7,500,000 40%
John Venette, Director, Treasurer,
Secretary and CFO None --
Sanford Schwartz, Director 7,500,000 40%
All directors and executive
officers as a group (3 persons) 15,000,000 80%
What is the amount and nature of beneficial ownership following the Migratory
Merger?
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Name and Address
of Beneficial Owner Pre-Migratory Merger Post-Migratory Merger
- ------------------------ -------------------- ---------------------
Michael Friess 7,500,000 833,333
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
Sanford Schwartz 7,500,000 833,333
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
Total 15,000,000 1,666,666
INTEREST OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON.
No Director, executive officer, associate of any Director or executive
officer or any other person has any substantial interest, direct or indirect, by
security holdings or otherwise, in the Migratory Merger proposal which is not
shared by all other holders of Common Stock. See "Voting Securities"
FUTURE SHAREHOLDER PROPOSALS
You may request inclusion in the Discovery Technologies' proxy
statement for shareholder meetings certain proposals for action which you intend
to introduce at such meeting. Shareholder proposals must be presented at a
reasonable time before the proxy materials for the next meeting are sent to
shareholders. The submission of a proposal does not guarantee its inclusion in
the proxy statement and is subject to limitations under the federal securities
laws. Discovery Technologies is not required to hold regular meetings of
shareholders and in order to minimize its costs, does not intend to hold
meetings of the shareholders unless so required by applicable law, regulatory
policy, or if otherwise deemed advisable by the Discovery Technologies'
management. Therefore, it is not practicable to specify a date by which
proposals must be received in order to be incorporated in an upcoming proxy
statement for a meeting of shareholders.
OTHER MATTERS
No other business may be presented at the meeting.
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IF YOU HAVE ANY QUESTIONS REGARDING THIS PROXY STATEMENT, PLEASE CONTACT:
Michael Friess
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
(303) 499-6000
By the Order of the Board of Directors
Michael Friess
Chairman of the Board, President and Chief Executive Officer
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
August 30, 2007
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Exhibit A
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of August 27, 2007, is entered into between Discovery
Technologies, Inc., a Nevada corporation (the "Discovery Technologies Nevada")
and Discovery Technologies, Inc., a Kansas corporation (the "Company")
RECITALS
WHEREAS, the board of directors of each of Discovery Technologies
Nevada and the Company deems it advisable, upon the terms and subject to the
conditions herein stated, that the Company be merged with and into Discovery
Technologies Nevada, and that Discovery Technologies Nevada be the surviving
corporation (the "Reincorporation Merger"); and
WHEREAS, the Company will submit this Agreement for approval by
separate vote of the holders of shares of common stock, no par value, of the
Company ("common stock") at a special meeting.
NOW, THEREFORE, in consideration of the premises and of the agreements
of the parties hereto contained herein, the parties hereto agree as follows:
ARTICLE I
THE REINCORPORATION MERGER; EFFECTIVE TIME
1.1. The Reincorporation Merger. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.2), the Company shall be merged with and into Discovery Technologies
Nevada, whereupon the separate existence of the Company shall cease. Discovery
Technologies Nevada shall be the surviving corporation (sometimes hereinafter
referred to as the "Surviving Corporation") in the Reincorporation Merger and
shall continue to be governed by the laws of the State of Nevada. The
Reincorporation Merger shall have the effects specified in the Kansas General
Corporation Code of the State of Kansas as amended (the "KGCC") and in the
Nevada Revised Statutes as amended (the "NRS") and the Surviving Corporation
shall succeed, without other transfer, to all of the assets and property
(whether real, personal or mixed), rights, privileges, franchises, immunities
and powers of the Company, and shall assume and be subject to all of the duties,
liabilities, obligations and restrictions of every kind and description of the
Company, including, without limitation, all outstanding indebtedness of the
Company.
1.2. Effective Time. Provided that the condition set forth in Section
5.1 has been fulfilled or waived in accordance with this Agreement and that this
Agreement has not been terminated or abandoned pursuant to Section 6.1, on the
date of the closing of the Reincorporation Merger, the Company and Discovery
Technologies Nevada shall cause Articles of Merger to be executed and filed with
the Secretary of State of Nevada (the "Nevada Articles of Merger") and a
Articles of Merger to be executed and filed with the Secretary of State of
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Kansas (the "Kansas Articles of Merger") . The Reincorporation Merger shall
become effective upon the date and time specified in the Nevada Articles of
Merger and the Kansas Articles of Merger (the "Effective Time")
ARTICLE II
CHARTER AND BYLAWS OF THE SURVIVING CORPORATION
2.1. The Certificate of Incorporation. The certificate of incorporation
of Discovery Technologies Nevada in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation, until amended in
accordance with the provisions provided therein or applicable law.
2.2. The Bylaws. The bylaws of Discovery Technologies Nevada in effect
at the Effective Time shall be the bylaws of the Surviving Corporation, until
amended in accordance with the provisions provided therein or applicable law.
ARTICLE III
OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1. Officers. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation,
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal.
3.2. Directors. The directors of the Company at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation, until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal.
ARTICLE IV
EFFECT OF MERGER ON CAPITAL STOCK
4.1. Effect of Merger on Capital Stock. At the Effective Time, as a
result of the Reincorporation Merger and without any action on the part of the
Company, Discovery Technologies Nevada or the shareholders of the Company:
(a) Each share of common stock (other than shares ("Dissenting Shares")
that are owned by shareholders ("Dissenting Shareholders") exercising
dissenters' rights pursuant to Section 17-6712 of the KGCC), issued and
outstanding immediately prior to the Effective Time shall be converted at a
ratio of nine (9) shares of common stock, no par value, for one (1) share of
Discovery Technologies Nevada Common Stock, par value $.01, ("Nevada Common
Stock"), with the same rights, powers and privileges as the shares so converted
and all shares of common stock shall be cancelled and retired and shall cease to
exist. No fractional shares will be issued and all Nevada Common Stock ownership
will be rounded to the nearest full share.
(b) Each option, warrant or other security of the Company issued and
outstanding immediately prior to the Effective Time shall be (i) converted into
and shall be an identical security of Discovery Technologies Nevada at the ratio
of nine (9) shares of common stock for one (1) share of Nevada Common Stock and
(ii) in the case of securities to acquire common stock, converted into the right
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to acquire shares of Nevada Common Stock on the same terms and at the same ratio
as the common stock of the Company are converted into Nevada Common Stock, and
at a price equal to nine (9) times the current exercise price. The same number
of shares of Nevada common stock shall be reserved for purposes of the exercise
of such options, warrants or other securities as is equal to the number of
shares of the common stock so reserved as of the Effective Time.
(c) Each share of Nevada common stock owned by the Company shall no
longer be outstanding and shall be cancelled and retired and shall cease to
exist.
4.2. Certificates. At and after the Effective Time, all of the
outstanding certificates which immediately prior thereto represented shares of
common stock (other than Dissenting Shares), options, warrants or other
securities of the Company shall be deemed for all purposes to evidence ownership
of and to represent the shares of the respective Nevada common stock, options,
warrants or other securities of Discovery Technologies Nevada, as the case may
be, into which the shares of common stock, options, warrants or other securities
of the Company represented by such certificates have been converted as herein
provided and shall be so registered on the books and records of the Surviving
Corporation or its transfer agent. The registered owner of any such outstanding
certificate shall, until such certificate shall have been surrendered for
transfer or otherwise accounted for to the Surviving Corporation or its transfer
agent, have and be entitled to exercise any voting and other rights with respect
to, and to receive any dividends and other distributions upon, the shares of
Nevada Common Stock, options, warrants or other securities of Discovery
Technologies Nevada, as the case may be, evidenced by such outstanding
certificate, as above provided.
Further, as soon as practicable after the Effective Date, Corporate
Stock Transfer, Inc. will send shareholders, who hold all of their shares in
certificate form, a letter of transmittal. The letter of transmittal will
contain instructions on how to surrender your certificate(s) representing the
shares of common stock of the Company owned by you to the transfer agent. Upon
receipt of such shareholder's certificate, subject to the aforementioned ratio
of nine (9) shares of common stock of the Company for one (1) share of Nevada
Common Stock, such shareholder will be issued a new stock certificate for shares
of Nevada Common Stock.
4.3. Dissenters' Rights. No Dissenting Shareholder shall be entitled to
shares of Nevada Common Stock under this Article IV unless and until the holder
thereof shall have failed to perfect or shall have effectively withdrawn or lost
such holder's right to dissent from the Reincorporation Merger under the KGCC,
and any Dissenting Shareholder shall be entitled to receive only the payment
provided by Section 17-6712 with respect to Dissenting Shares owned by such
Dissenting Shareholder. If any person or entity who otherwise would be deemed a
Dissenting Shareholder shall have failed to properly perfect or shall have
effectively withdrawn or lost the right to dissent with respect to any shares
which would be Dissenting Shares but for that failure to perfect or withdrawal
or loss of the right to dissent, such Dissenting Shares shall thereupon be
treated as though such Dissenting Shares had been converted into shares of
Nevada Common Stock pursuant to Section 4.1 hereof.
A-3
ARTICLE V
CONDITION
5.1. Condition to Each Party's Obligation to Effect the Reincorporation
Merger. The respective obligation of each party hereto to effect the
Reincorporation Merger is subject to receipt prior to the Effective Time of the
requisite approval of this Agreement and the transactions contemplated hereby by
the holders of common stock pursuant to the KGCC and the Articles of
Incorporation of the Company.
ARTICLE VI
TERMINATION
6.1. Termination. This Agreement may be terminated, and the
Reincorporation Merger may be abandoned, at any time prior to the Effective
Time, whether before or after approval of this Agreement by the shareholders of
the Company, if the board of directors of the Company determines for any reason,
in its sole judgment and discretion, that the consummation of the
Reincorporation Merger would be inadvisable or not in the best interests of the
Company and its shareholders. In the event of the termination and abandonment of
this Agreement, this Agreement shall become null and void and have no effect,
without any liability on the part of either the Company or Discovery
Technologies Nevada or any of their respective shareholders, directors or
officers.
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.1. Modification or Amendment. Subject to the provisions of applicable
law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement; provided, however, that an amendment made subsequent to
the approval of this Agreement by the holders of common stock shall not (i)
alter or change the amount or kind of shares and/or rights to be received in
exchange for or on conversion of all or any of the shares or any class or series
thereof of such corporation, (ii) alter or change any provision of the
certificate of incorporation of the Surviving Corporation to be effected by the
Reincorporation Merger, or (iii) alter or change any of the terms or conditions
of this Agreement it such alteration or change would adversely affect the
holders of any class or series of capital stock of any of the parties hereto.
7.2. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
7.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEVADA WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
A-4
7.4. Entire Agreement. This Agreement constitutes the entire agreement
and supersedes all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof.
7.5. No Third Party Beneficiaries. This Agreement is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
7.6. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is determined by any court or other authority of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted thereof or in order to carry out, so far as may
be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
7.7. Headings. The headings therein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed to limit
or otherwise affect any of the provisions hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
Discovery Technologies, Inc.
a Nevada corporation
By /s/ Michael Friess
---------------------
Name: Michael Friess,
Title: Chief Executive Officer
Discovery Technologies, Inc.
a Kansas corporation
By /s/ Michael Friess
---------------------
Name: Michael Friess
Title: Chief Executive Officer
A-5
Exhibit B
ARTICLES OF INCORPORATION
OF
DISCOVERY TECHNOLOGIES, INC.
KNOW ALL BY THESE PRESENTS, that the undersigned, desiring to be
incorporated as a Corporation in accordance with the laws of the State of
Nevada, hereby certifies and adopts the following Articles of Incorporation, the
terms whereof have been agreed upon to be equally obligatory upon the party
signing this instrument and all others who may from time to time hereafter
become members of this Corporation and who may hold stock therein.
ARTICLE I
The name of the Corporation is: DISCOVERY TECHNOLOGIES, INC.
ARTICLE II
The name and address of the registered agent of the Corporation in the
State of Nevada is:
National Registered Agents, Inc.
1000 East William, Suite 204
Carson City, NV 89701
Principal and branch offices may hereinafter be established at such place or
places, either within or without the State of Nevada as may from time to time be
determined by the Board of Directors.
ARTICLE III
The nature and purpose of this business shall be to conduct any lawful
activity as governed by the laws of the State of Nevada.
ARTICLE IV
The authorized capital stock of this Corporation is 800,000,000 shares
of capital stock, consisting of 780,000,000 shares of common stock with full
voting rights and with a par value of $0.01 per share, and 20,000,000 shares of
preferred stock, with a par value of $.0l per share (the "Preferred Stock") .
The Preferred Stock may be issued from time to time in one or more
series with such designations, preferences and relative participating, optional
or other special rights and qualifications, limitations or restrictions thereof,
as shall be stated in the resolutions adopted by the Corporation's Board
providing for the issuance of such Preferred Stock or series thereof; and the
Board is hereby vested with authority to fix such designations, preferences and
B-1
relative participating, optional or other special rights or qualifications,
limitations, or restrictions for each series, including, but not by way of
limitation, the power to fix the redemption and liquidation preferences, the
rate of dividends payable and the time for and the priority of payment thereof
and to determine whether such dividends shall be cumulative or not and to
provide for and fix the terms of conversion of such Preferred Stock or any
series thereof into Common Stock of the Corporation and fix the voting power, if
any, of shares of Preferred Stock or any series thereof.
Pursuant to NRS 78.385 and NRS 78.390, and any successor statutory
provisions, the Board is authorized to adopt a resolution to increase, decrease,
add, remove or otherwise alter any current or additional classes or series of
this Corporation's capital stock by a board resolution amending these Articles,
in the Board's sole discretion for increases or decreases of any class or series
of authorized stock where applicable pursuant to NRS 78.207 and any successor
statutory provision, or otherwise subject to the approval of the holders of at
least a majority of shares having voting rights, either in a special meeting or
the next annual meeting of shareholders. Notwithstanding the foregoing, where
any shares of any class or series would be materially and adversely affected by
such change, shareholder approval by the holders of at least a majority of such
adversely affected shares must also be obtained before filing an amendment with
the Office of the Secretary of State of Nevada. The capital stock of this
Corporation shall be non-assessable and shall not be subject to assessment to
pay the debts of the Corporation.
ARTICLE V
Members of the Board shall be known and styled as "Directors" and the
number thereof shall be one (1) and may be increased or decreased from time to
time pursuant to the Bylaws. The name and address of the first Board of
Directors is as follows:
Michael Friess
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
The number of members of the Board shall not be less than one (1) or
more than nine (9). The officers of the Corporation shall be a President,
Secretary and Treasurer. The Corporation may have such additional officers as
may be determined from time to time in accordance with the Bylaws. The officers
shall have the powers, perform the duties, and be appointed as may be determined
in accordance with the Bylaws and laws of the State of Nevada. Any person may
hold two (2) or more offices in this Corporation.
ARTICLE VI
The Corporation shall have perpetual succession by its corporate name
and shall have all the powers herein enumerated or implied herefrom and the
powers now provided or which may hereafter be provided by law for corporations
in the State of Nevada.
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ARTICLE VII
No shareholder shall be liable for the debts of the Corporation beyond
the amount that may be due or unpaid upon any share or shares of stock of this
Corporation owned by that person.
ARTICLE VIII
Each shareholder entitled to vote at any election for Directors shall
have the right to vote, in person or by proxy, the number of shares owned by
such shareholder for each Director to be elected. Shareholders shall not be
entitled to cumulative voting rights.
ARTICLE IX
The Directors shall have the powers to make and alter the Bylaws of the
Corporation. Bylaws made by the Board under the powers so conferred may be
altered, amended, or repealed by the Board or by the shareholders at any meeting
called and held for that purpose.
ARTICLE X
The Corporation specifically elects not to be governed by NRS 78.411 to
NRS 78.444, inclusive, and successor statutory provisions.
ARTICLE XI
The Corporation shall indemnify all Directors, officers, employees, and
agents to the fullest extent permitted by Nevada law as provided within NRS
78.7502 and NRS 78.751 or any other law then in effect or as it may hereafter be
amended. The Corporation shall indemnify each present and future Director,
officer, employee or agent of the Corporation who becomes a party or is
threatened to be made a party to any suit or proceeding, whether pending,
completed or merely threatened, and whether said suit or proceeding is civil,
criminal, administrative, investigative, or otherwise, except an action by or in
the right of the Corporation, by reason of the fact that he is or was a
Director, officer, employee, or agent of the Corporation, or is or was serving
at the request of the Corporation as a Director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including, but not limited to, attorneys' fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit, proceeding or settlement, provided such person
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
The expenses of Directors, officers, employees or agents of the
Corporation incurred in defending a civil or criminal action, suit, or
proceeding may be paid by the Corporation as they are incurred and in advance of
the final disposition of the action, suit, or proceeding, if and only if the
Director, officer, employee or agent undertakes to repay said expenses to the
Corporation if it is ultimately determined by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, that he is not entitled to be
indemnified by the Corporation. No indemnification shall be applied, and any
advancement of expenses to or on behalf of any Director, officer, employee or
agent must be returned to the Corporation, if a final adjudication establishes
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that the person's acts or omissions involved a breach of any fiduciary duties,
where applicable, intentional misconduct, fraud or a knowing violation of the
law which was material to the cause of action.
ARTICLE XII
The name and address of the incorporator of this Corporation is:
Lindley S. Branson
80 South Eighth Street
Suite 500
Minneapolis, Minnesota 55402
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation of DISCOVERY TECHNOLOGIES, INC. on August 23, 2007.
/s/ Lindley S. Branson
----------------------
Lindley S. Branson, incorporator
B-4
Exhibit C
BYLAWS OF
DISCOVERY TECHNOLOGIES, INC.
ARTICLE I: OFFICES
1.1 REGISTERED OFFICE The registered office shall be in the City of Carson City,
County of Carson City, State of Nevada.
1.2 ADDITIONAL OFFICES.. The corporation may also have offices at such other
places both within and without the State of Nevada as the Board of Directors may
from time to time determine or the business of the corporation may require.
ARTICLE II: SHAREHOLDERS' MEETINGS
2.1 ANNUAL MEETINGS
Regular meetings of the shareholders of this corporation may be held at
the discretion of the Board of Directors on an annual or less frequent periodic
basis on such date and at such time and place as may be designated by the Board
of Directors in the notice of meeting. At regular meetings the shareholders
shall elect a Board of Directors and transact such other business as may be
appropriate for action by shareholders. If a regular meeting of shareholders has
not been held for a period of fifteen (15) months, one or more shareholders
entitled to vote may call a regular meeting of shareholders by delivering to the
President or Treasurer a written demand for a regular meeting. Within thirty
(30) days after the receipt of such written demand by the President or
Treasurer, the Board of Directors shall cause a regular meeting of shareholders
to be called and held on notice no later than ninety (90) days after the receipt
of written demand, all at the expense of the corporation.
2.2 SPECIAL MEETINGS
Special meetings of the shareholders for any purpose may be called at
any time by the President, or by the Board of Directors, or by any two or more
members thereof, or by one or more shareholders holding not less than twenty
percent (20%) of the voting power of the Corporation. Such meetings shall be
held at the principal office of the Corporation or at such other place within or
without the State of Nevada as may be designated in the notice of meeting. No
business shall be transacted at any special meeting of the shareholders except
as is specified in the notice calling for such special meeting.
2.3 NOTICE OF MEETINGS
2.3.1 Notices of meetings, annual or special, to shareholders entitled
to vote shall be given in writing and signed by the President or a
Vice-President or the Secretary or the Assistant Secretary, or by any other
natural person designated by the Board of Directors.
2.3.2 Such notices shall be sent to the shareholder's address appearing
on the books of the Corporation, or supplied by him to the Corporation for the
purpose of notice, not less than ten (10) nor more than sixty (60) days before
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such meeting. Such notice shall be deemed delivered, and the time of the notice
shall begin to run, upon being deposited in the mail.
2.3.3 Notice of any meeting of shareholders shall specify the place,
the day and the hour of the meeting, and in case of a special meeting shall
state the purpose(s) for which the meeting is called.
2.3.4 When a meeting is adjourned to another time, date or place,
notice of the adjourned meeting need not be given if announced at the meeting at
which the adjournment is given.
2.3.5 Any shareholder may waive notice of any meeting by a writing
signed by him, or his duly authorized attorney, either before or after the
meeting.
2.3.6 No notice is required for matters handled by the consent of the
shareholders pursuant to NRS 78.320.
2.3.7 No notice is required of the annual shareholders meeting, or
other notices, if two annual shareholder notices are returned to the corporation
undelivered pursuant to NRS 78.370(7).
2.4 CONSENT TO SHAREHOLDER MEETINGS AND ACTION WITHOUT MEETING
2.4.1 Any meeting is valid wherever held by the written consent of all
persons entitled to vote thereat, given either before or after the meeting.
2.4.2 The transactions of any meeting of shareholders, however called
and noticed, shall be valid as though if taken at a meeting duly held after
regular call and notice if a quorum be present either in person or by proxy, and
if, either before or after the meeting, each of the shareholders entitled to
vote, not present in person or by proxy, signs a written waiver of notice, or
consent to the holding of such meeting, or an approval of the minutes thereof.
2.4.3 Any action that could be taken by the vote of shareholders at a
meeting, may be taken without a meeting if authorized by the written consent of
shareholders holding at least a majority of the voting power (NRS 78.320), and
any actions at meetings not regularly called shall be effective subject to the
ratification and approval provisions of NRS 78.325.
2.4.4 All such waivers, consents or approvals shall be filed with the
corporate records, or made a part of the minutes of the meeting.
2 .5 QUORUM
The holders of a majority of the shares entitled to vote thereat,
present in person or by proxy, shall constitute a quorum for the transaction of
business.
2.6 VOTING RIGHTS
Except as may be otherwise provided in the Corporation's Articles of
Incorporation, Bylaws or by the Laws of the State of Nevada, each shareholder
shall be entitled to one (1) vote for each share of voting stock registered in
his name on the books of the Corporation, and the affirmative vote of a majority
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of voting shares represented at a meeting and entitled to vote thereat shall be
necessary for the adoption of a motion or for the determination of all questions
and business which shall come before the meeting.
2.7 PROXIES
Subject to the limitation of NRS 78.355, every person entitled to vote
or to execute consents may do so either in person or by proxy executed by the
person or by his duly authorized agent.
ARTICLE III: DIRECTORS - MANAGEMENT
3.1 POWERS
Subject to the limitation of the Articles of Incorporation, of the
Bylaws and of the Laws of the State of Nevada as to action to be authorized or
approved by the shareholders, all corporate powers shall be exercised by or
under authority of, and the business and affairs of this Corporation shall be
controlled by, a Board of at least one (1) Director.
3.2 ELECTION AND TENURE OF OFFICE
The number of Directors which shall constitute the whole board shall be
one (1)
The number of Directors may from time to time be increased to not less
than one (1) nor more than nine (9) by action of the Board of Directors. The
Directors shall be elected at the annual meeting of shareholders and except as
provided in Section 3.3 of this Article, each Director elected shall hold office
until his successor is elected and qualified. Directors need not be
shareholders. A Director need not be a resident of the State of Nevada.
3.3 REMOVAL AND RESIGNATION
3.3.1 Any Director may be removed either with or without cause, as
provided by NRS 78.335.
3.3.2 Any Director may resign at any time by giving written notice to
the Board of Directors or to the President, or to the Secretary of the
Corporation. Any such resignation shall take effect at the date of the receipt
of such notice or any later time specified therein; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
3.4 VACANCIES
Vacancies in the Board of Directors may be filled by a majority of the
remaining Directors, though such action by less than a quorum or by a sole
remaining Director shall be adequate, and each Director so elected shall hold
office until his successor is elected at an annual meeting of shareholders or at
a special meeting called for that purpose. The shareholders may at any time
elect a Director to fill any vacancy not filled by the directors.
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3.5 PLACE OF MEETINGS AND MEETINGS BY TELEPHONE
Meetings of the Board of Directors may be held at any place within or
without the State of Nevada that has been designated by the Board of Directors.
In the absence of such designation, meetings shall be held at the principal
office of the Corporation. Any meeting, regular or special, may be held by
conference telephone or similar communication equipment, and all such Directors
shall be deemed to be present in person at the meeting, so long as all Directors
participating in the meeting can hear one another.
3.6 ANNUAL ORGANIZATIONAL MEETINGS
The annual organizational meetings of the Board of Directors shall be
held immediately following the adjournment of the annual meetings of the
shareholders. No notice of such meetings need be given.
3.7 OTHER REGULAR MEETINGS
There shall be no requirement for the Board of Directors to hold
regular meetings, other than the annual organizational meeting.
3.8 SPECIAL MEETINGS - NOTICES
3.8.1 Special meetings of the Board of Directors for any purpose shall
be called at any time by the President or if he is absent or unable or refuses
to act, by any Vice President or by any two Directors.
3.8.2 Written notice of the time and place of special meetings of the
Board of Directors shall be delivered personally to each Director or sent to
each Director by mail or other form of written communication at least
forty-eight (48) hours before the meeting. Notice of the time and place of
holding an adjourned meeting need not be given to absent Directors if the time
and place are fixed at the meeting adjourned.
3.9 CONSENT TO DIRECTORS MEETINGS AND ACTION WITHOUT MEETING
3.9.1 Any meeting is valid wherever held by the written consent of all
persons entitled to vote thereat, given either before or after the meeting.
3.9.2 The transactions of any meetings of the Board of Directors,
however called and noticed or wherever held, shall be as valid as though had at
a meeting duly held after regular call and notice if all the Directors are
present, or if a quorum is present and either before or after the meeting, each
of the Directors not present signs a written waiver of notice, a consent to the
holding of the meeting, or an approval of the minutes thereof.
3.9.3 Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting, if all members of the Board shall
individually or collectively consent in writing to such action. Such action by
written consent shall have the same force and effect as a unanimous vote of the
Board of Directors.
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3.9.4 All such waivers, consents, or approvals shall be filed with the
Corporate records or made part of the minutes of the meeting.
3.10 QUORUM AND VOTING RIGHTS
So long as the Board of Directors is composed of one or two Directors,
one of the authorized Directors constitutes a quorum for the transaction of
business. If there are three or more Directors, a majority thereof shall
constitute a quorum. Except as may be otherwise provided in the Corporation's
Articles of Incorporation, Bylaws or by the Laws of the State of Nevada, the
affirmative vote of a majority of Directors represented at a meeting and
entitled to vote thereat shall be necessary for the adoption of a motion or
resolution or for the determination of all questions and business which shall
come before the meeting.
3.11 COMPENSATION
Directors may receive such reasonable compensation for their services
as Directors and such reimbursement for expenses incurred in attending meetings
as may be fixed from time to time by resolution of the Board of Directors. No
such payment shall preclude a Director from serving in any other capacity and
receiving compensation therefor.
ARTICLE IV: OFFICERS
4.1 OFFICERS
The Board of Directors shall appoint a President, a Secretary and a
Treasurer. The Board of Directors, in their discretion, may also appoint a Chair
of the Board, a Chief Executive Officer, a Chief Financial Officer, one or more
Vice Presidents and such other officers and assistant officers as they shall
from time to time deem proper. Any two or more offices may be held by the same
person. The Board may choose not to fill any of the other officer positions for
any period.
4.2 APPOINTMENT AND TERM OF OFFICE
The officers of the corporation shall be appointed by the Board of
Directors at the first meeting of the Directors. If the appointment of officers
shall not be held at such meeting, such appointment shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until a
successor shall have been duly appointed and qualified or until the officer's
death or until the officer resigns or is removed in the manner hereinafter
provided.
4.3 REMOVAL
Any officer or agent appointed by the Board of Directors may be removed
by the Board of Directors at any time with or without cause, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
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4.4 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, or otherwise, may be filled by the Board of Directors.
4.5 CHAIR OF THE BOARD
The Chair of the Board, if there be such an office, shall, if present,
preside at all meetings of the Board of Directors and meetings of the
shareholders, and exercise and perform such other powers and duties as may be
from time to time assigned to the Chair by the Board of Directors. In the event
that there is no Chair of the Board designated or present, the Secretary of the
Board of Directors shall preside over the meeting, or if there is no Secretary
of the Board of Directors designated or present at the meeting, the Directors
present at any meeting of the Board of Directors shall designate a Director of
their choosing to serve as temporary chair to preside over the meeting.
4.6 CHIEF EXECUTIVE OFFICER
Subject to the control of the Board of Directors and such supervisory
powers, if any, as may be given by the Board of Directors to another person or
persons, the powers and duties of the Chief Executive Officer shall be: To act
as the general manager and, subject to the control of the Board of Directors, to
have general supervision, direction and control of the business and affairs of
the Corporation; To see that all orders and resolutions of the Board of
Directors are carried into effect; To maintain records of and, whenever
necessary, certify all proceedings of the Board of Directors and the
shareholders; and To affix the signature of the Corporation to all deeds,
conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and
other papers and instruments in writing which have been authorized by the Board
of Directors or which, in the judgment of the Chief Executive Officer, should be
executed on behalf of the Corporation; to sign certificates for the
Corporation's shares; and, subject to the direction of the Board of Directors,
to have general charge of the property of the Corporation and to supervise and
control all officers, agents and employees of the corporation.
4.7 CHIEF FINANCIAL OFFICER OR TREASURER
Subject to the control of the Board of Directors and such supervisory
powers, if any, as may be given by the Board of Directors to another person or
persons, the powers and duties of the Chief Financial Officer or Treasurer shall
be to: keep accurate financial records for the Corporation; deposit all money,
drafts and checks in the name of and to the credit of the Corporation in the
banks and depositories designated by the board of directors; endorse for deposit
all notes, checks, drafts received by the Corporation as ordered by the Board of
Directors, making proper vouchers therefore; disburse corporate funds and issue
checks and drafts in the name of the Corporation, as ordered by the Board of
Directors; render to the Chief Executive Officer and the Board of Directors,
whenever requested, an account of all transactions by the Chief Financial
Officer and the financial condition of the Corporation; and perform all other
duties prescribed by the Board of Directors or the Chief Executive Officer.
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4.8 PRESIDENT
Unless otherwise determined by the Board of Directors, the President
shall be the Chief Executive Officer of the Corporation. If an officer other
than the President is designated as the Chief Executive Officer, the President
shall perform such duties as may from time to time be assigned by the Board of
Directors. The President shall have the duty to call meetings of the
shareholders or Board of Directors, as set forth in Section 3.8.1, above, to be
held at such times and, subject to the limitations prescribed by law or by these
Bylaws, at such places as the President shall deem proper.
4.9 VICE PRESIDENTS
In the absence of the President or in the event of the President's
death, inability or refusal to act, the Vice President (or in the event there
shall be more than one Vice President, the Vice Presidents in the order
designated at the time of their appointment, or in the absence of any
designation then in the order of their appointment) shall perform the duties of
the President, and when so acting shall have all the powers of and be subject to
all the restrictions upon the President; and shall perform such other duties as
from time to time may be assigned to the Vice President by the President or by
the Board of Directors. In the event there are no Vice Presidents, the Board of
Directors may designate a member of the Board of Directors or another officer of
the Corporation to serve in such capacity until a new President is appointed.
4.10 SECRETARY
The Secretary shall: (a) prepare the minutes of the shareholders' and
Board of Directors' meetings and keep them in one or more books provided for
that purpose; (b) authenticate such records of the Corporation as shall from
time to time be required; (c) see that all notices are duly given in accordance
with the provisions of these Bylaws or as required by law; (d) be custodian of
the corporate records and of the corporate seal, if any, and see that the seal
of the Corporation, if any, is affixed to all documents the execution of which
on behalf of the Corporation under its seal is duly authorized; (e) keep a
register of the post office address of each shareholder; (f) if requested, sign
with the President certificates for shares of the Corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (g)
have general charge of the stock transfer books of the Corporation; and (h) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to the Secretary by the Chief
Executive Officer or the Board of Directors.
4.11 DELEGATION OF AUTHORITY
The Board of Directors may from time to time delegate the powers of any
officer to any other officer or agent, notwithstanding any provision hereof,
except as may be prohibited by law.
4.12 COMPENSATION
Officers shall be awarded such reasonable compensation for their
services and provisions made for their expenses incurred in attending to and
promoting the business of the Corporation as may be fixed from time to time by
resolution of the Board of Directors.
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ARTICLE V: COMMITTEES
The Board of Directors may appoint and prescribe the duties of an
executive committee and such other committees, as it may from time to time deem
appropriate. Such committees shall hold office at the pleasure of the Board.
ARTICLE VI: RECORDS AND REPORTS - INSPECTION
6.1 INSPECTION OF BOOKS AND RECORDS
All books and records provided for by Nevada Revised Statutes shall be
open to inspection of the directors and shareholders to the extent provided by
such statutes. (NRS 78.105)
6.2 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these Bylaws, as amended or otherwise altered
to date, certified by the Secretary, shall be open to inspection by the
shareholders of the company in the manner provided by law.
6.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as
shall be determined from time to time by resolution of the Board of Directors.
6.4 ANNUAL REPORT
No annual report to shareholders shall be required; but the Board of
Directors may cause to be sent to the shareholders annual or other reports in
such form as may be deemed appropriate by the Board of Directors.
ARTICLE VII: AMENDMENTS TO BYLAWS
New Bylaws may be adopted or these Bylaws may be repealed or amended by
a vote or the written assent of either shareholders entitled to exercise a
majority of the voting power of the Corporation, or by a majority of the number
of Directors authorized to conduct the business of the Corporation.
ARTICLE VIII: CORPORATE SEAL
This Corporation shall have the power to adopt and use a common seal or
stamp, and to alter the same, at the pleasure of the Board of Directors. The use
or nonuse of a seal or stamp, whether or not adopted, shall not be necessary to,
nor shall it in any way effect, the legality, validity or enforceability of any
corporate action or document (NRS 78.065)
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ARTICLE IX: CERTIFICATES OF STOCK
9.1 FORM
Certificates for shares shall be of such form and device as the Board
of Directors may designate and shall state the name of the record holder of the
shares represented thereby, its number; date of issuance; the number of shares
for which it is issued; a statement of the rights, privileges, preferences and
restrictions, if any; and statement of liens or restrictions upon transfer or
voting, if any; and, if the shares be assessable, or, if assessments are
collectible by personal action, a plain statement of such facts.
9.2 EXECUTION
Every certificate for shares must be signed by the President or the
Secretary or must be authenticated by facsimile of the signature of the
President or Secretary. Before it becomes effective, every certificate for
shares authenticated by a facsimile of a signature must be countersigned by an
incorporated bank or trust company, either domestic or foreign as registrar of
transfers.
9.3 TRANSFER
Upon surrender to the Secretary or transfer agent of the Corporation of
a certificate for shares duly endorsed or accompanied by a proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
9.4 LOST OR DESTROYED CERTIFICATES
Any person claiming a certificate of stock to be lost or destroyed
shall make an affidavit or affirmation of that fact and advertise the same in
such manner as the Board of Directors may require and shall, if the Directors so
require, give the Corporation a bond of indemnity, in form and with one or more
sureties satisfactory to the Board, in at least double the value of the stock
represented by said certificate, whereupon a new certificate may be issued of
the same tenor and for the same number of shares as the one alleged to be lost
or destroyed.
9.5 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, which shall be an incorporated bank
or trust company, either domestic or foreign, who shall be appointed at such
times and places as the requirements of the Corporation may necessitate and the
Board of Directors may designate.
9.6 CLOSING STOCK TRANSFER BOOKS
The Board of Directors may close the transfer books in their discretion
for a period not exceeding the sixty (60) days preceding any meeting, annual or
special, of the shareholders, or the date appointed for the payment of a
dividend.
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CERTIFICATE OF SECRETARY
I, John Venette, the undersigned, the duly elected and acting Secretary of
Discovery Technologies, Inc., do hereby certify that the above and foregoing
Bylaws were adopted as the Bylaws of said Corporation on the 27th day of August
2007 by the Directors of said Corporation.
/s/ John Vennette
---------------------------
John Vennette, Secretary
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Exhibit D - Dissenting Shareholder Statutes
17-6712 PAYMENT FOR "STOCK" OF "STOCKHOLDER" OBJECTING TO MERGER OR
CONSOLIDATION; "STOCKHOLDER," "STOCK" AND "SHARE" DEFINED; NOTICE TO OBJECTING
STOCKHOLDERS; DEMAND FOR PAYMENT; APPRAISAL AND DETERMINATION OF VALUE BY
DISTRICT COURT, WHEN; TAXATION OF COSTS; RIGHTS OF OBJECTING STOCKHOLDERS;
STATUS OF STOCK; SECTION INAPPLICABLE TO CERTAIN SHARES OF STOCK
(a) When used in this section, the word "stockholder" means a
holder of record of stock in a stock corporation and also a member of
record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock
corporation.
(b)(1) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a merger
or consolidation to be effected pursuant to K.S.A. 17-6701, and
amendments thereto, other than a merger effected pursuant to
subsection (g) of K.S.A. 17-6701, and amendments thereto, K.S.A.
17-6702, 17-6704, 17-6707, 17-6708 or 17-7703, and amendments thereto,
except that: (A) No appraisal rights under this section shall be
available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote
at the meeting of stockholders to act upon the agreement of merger or
consolidation, were either listed on a national securities exchange or
designated as a national market system security on an interdealer
quotation system by the national association of securities dealers,
inc., or held of record by more than 2,000 holders; (B) no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f of K.S.A. 17-6701, and amendments thereto.
(2) Notwithstanding the provisions of subsections (b)(1)(A)
and (b)(l)(B), appraisal rights under this section shall be
available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the
terms of an agreement of merger or consolidation pursuant to
K.S.A. 17-6701, 17-6702, 17-6704, 17-6707, 17-6708 and 17-7703,
and amendments thereto, to accept for such stock anything except:
(A) Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect of such shares of stock;
(B) shares of stock of any other corporation, or
depository receipts in respect of such shares of stock, which
shares of stock, or depository receipts in respect of such
shares of stock, or depository receipts at the effective date
of the merger or consolidation will be either listed on a
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national securities exchange or designated as a national
market system security on an interdealer quotation system by
the national association of securities dealers, Inc. or held
of record by more than 2,000 holders;
(C) cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs
(A) and (B); or
(D) any combination of the shares of stock,
depository receipts and cash in lieu of fractional shares or
fractional depository receipts described in the foregoing
subparagraphs (A), (B) and (C).
(3) In the event all of the stock of a subsidiary Kansas
corporation party to a merger effected under K. S.A. 17-6703, and
amendments thereto, is not owned by the parent corporation
immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Kansas corporation.
(c) Any corporation may provide in its articles of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as a
result of an amendment to its articles of incorporation, any merger or
consolidation in which the corporation is a constituent corporation or
the sale of all or substantially all of the assets of the corporation.
If the articles of incorporation contains such a provision, the
procedures of this section, including those set forth in subsections
(d) and (e), shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal
rights are provided under this section is to be submitted for
approval at a meeting of stockholders, the corporation, not less
than 20 days prior to the meeting, shall notify each of its
stockholders who was such on the record date for such meeting with
respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) that appraisal rights are
available for any or all of the shares of the constituent
corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the
taking of the vote on the merger or consolidation, a written
demand for appraisal of such stockholder's shares. Such demand
will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholder's shares. A
proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such
action must do so by a separate written demand as herein provided.
Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify
each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to
the merger or consolidation of the date that the merger or
consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to
K.S.A. 17-6518 or K.S.A. 17-6703, and amendments thereto, then,
either a constituent corporation before the effective date of the
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merger or consolidation, or the surviving or resulting corporation
within 10 days thereafter, shall notify each of the holders of any
class or series of stock of such constituent corporation who are
entitled to appraisal rights of the approval of the merger or
consolidation and that appraisal rights are available for any or
all shares of such class or series of stock of such constituent
corporation, and shall include in such notice a copy of this
section. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation.
Any stockholder entitled to appraisal rights may, within 20 days
after the date of mailing of such notice, demand in writing from
the surviving or resulting corporation the appraisal of such
holder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and
that the stockholder intends thereby to demand the appraisal of
such holder's shares. If such notice did not notify stockholders
of the effective date of the merger or consolidation, either: (A)
Each such constituent corporation shall send a second notice
before the effective date of the merger or consolidation notifying
each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of
the effective date of the merger or consolidation; or (B) the
surviving or resulting corporation shall send such a second notice
to all such holders on or within 10 days after such effective
date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such
second notice need only be sent to each stockholder who is
entitled to appraisal rights and who has demanded appraisal of
such holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of
fraud, be prima facie evidence of the facts stated therein. For
purposes of determining the stockholders entitled to receive
either notice, each constituent corporation may fix, in advance, a
record date that shall be not more than 10 days prior to the date
the notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is
fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next
preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any
stockholder who has complied with subsections (a) and (d) and who is
otherwise entitled to appraisal rights, may file a petition in the
district court demanding a determination of the value of the stock of
all such stockholders. Notwithstanding the foregoing, at any time
within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective
date of the merger or consolidation, any stockholder who has complied
with the requirements of subsection (a) and (d), upon written request,
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shall be entitled to receive from the corporation surviving the merger
or resulting from the consolidation a statement setting forth the
aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have
been received and the aggregate number of holders of such shares. Such
written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is
received by the surviving or resulting corporation or within 10 days
after expiration of the period for delivery of demands for appraisal
under subsection (d), whichever is later.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after such service
file in the office of the clerk of the court in which the petition was
filed a duly verified list containing the names and addresses of all
stockholders who have demanded payment for their shares and with whom
agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed
by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The clerk of the court, if
so ordered by the court, shall give notice of the time and place fixed
for the hearing of such petition by registered or certified mail to
the surviving or resulting corporation and to the stockholders shown
on the list at the addresses therein stated. Such notice shall also be
given by one or more publications at least one' week before the day of
the hearing, in a newspaper of general circulation published in the
county in which the court is located or such publication as the court
deems advisable. The forms of the notices by mail and by publication
shall be approved by the court, and the costs thereof shall be borne
by the surviving or resulting corporation.
(g) At the hearing on such petition, the court shall determine
the stockholders who have complied with this section and who have
become entitled to appraisal rights. The court may require the
stockholders who have demanded an appraisal for their shares and who
hold stock represented by certificates to submit their certificates of
stock to the clerk of the court for notation thereon of the pendency
of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the court may dismiss the proceedings as to such
stockholder.
(h) After determining the stockholders entitled to an
appraisal, the court shall appraise the shares, determining their fair
value exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation, together
with a fair rate of interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value, the
court shall take into account all relevant factors. In determining the
fair rate of interest, the court may consider all relevant factors,
including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency
of the proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the
appraisal proceeding, the court may, in its discretion, permit
discovery or other pretrial proceedings and may proceed to trial upon
the appraisal prior to the final determination of the stockholder
entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting corporation pursuant to
subsection (f) and who has submitted such stockholder's certificates
of stock to the clerk of the court, if such is required, may
participate fully in all proceedings until it is finally determined
that such stockholder is not entitled to appraisal rights under this
section.
D-4
(i) The court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto. Interest
may be simple or compound, as the court may direct. Payment shall be
so made to each such stockholder, in the case of holders of
uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of
the certificates representing such stock. The court's decree may be
enforced as other decrees in the district court may be enforced,
whether such surviving or resulting corporation be a corporation of
this state or of any state.
(j) The costs of the proceeding may be determined by the court
and taxed upon the parties as the court deems equitable in the
circumstances. Upon application of a stockholder, the court may order
all or a portion of the expenses incurred by any stockholder in
connection with the appraisal proceeding, including, without
limitation, reasonable attorney's fees and the fees and expenses of
experts, to be charged pro rata against the value of all the shares
entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights as
provided in subsection (d) shall be entitled to vote such stock for
any purpose or to receive payment of dividends or other distributions
on the stock, except dividends or other distributions payable to
stockholders of record at a date which is prior to the effective date
of the merger or consolidation; provided, however, that if no petition
for an appraisal shall be filed within the time provided in subsection
(e), or if such stockholder shall deliver to the surviving or
resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or
consolidation, either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the
foregoing, no appraisal proceeding in the district court shall be
dismissed as to any stockholder without the approval of the court, and
such approval may be conditioned upon such terms as the court deems
just.
(1) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall have
the status of authorized and unissued shares of the surviving or
resulting corporation. (Last amended by Ch. 143, L. `04, eff. 1-1-05.)
D-5
PROXY
DISCOVERY TECHNOLOGIES, INC.
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael Friess, with full power of
substitution, as proxy to represent the undersigned at the Special Meeting of
Shareholders of Discovery Technologies, Inc. to be held on September 24, 2007 at
10:00 a.m., local time, at the offices of Discovery Technologies, Inc., 5353
Manhattan Circle, Suite 101, Boulder, Colorado 80303, and at any adjournments or
postponements thereof, to vote in the name and place of the undersigned, with
all powers which the undersigned would possess if personally present, upon the
proposal described in the proxy statement furnished herewith and set forth on
the reverse side of this proxy card.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES REPRESENTED WILL BE VOTED FOR THE APPROVAL OF
THE PROPOSED AGREEMENT AND PLAN OF MERGER DESCRIBED IN THE PROXY STATEMENT.
PLEASE VOTE, DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED ON THE REVERSE SIDE
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING IN PERSON.
Discovery Technologies, Inc.
NAME:
DESIGNATION (IF ANY)
ADDRESS LINE
NUMBER OF SHARES HELD:
[ ] Mark this box with an X if you have made changes to
your name or address details above
[CONTINUED AND TO BE SIGNED ON REVERSE SIDE]
Special Meeting Proxy Card
A: Issues
The Board of Directors recommends a vote FOR the following proposal:
For Against Abstain
To approve the proposed Agreement [ ] [ ] [ ]
and Plan of Merger described in
the Proxy Statement
B: Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
___________________________
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Special Meeting of Shareholders and the Proxy Statement with respect
thereto and hereby revoke(s) any proxy or proxies heretofore given.
Please sign exactly as your name(s) appear(s) on this proxy card. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Signature 1 - __________________________ Please keep Signature within the box.
Signature 2 - __________________________ Please keep Signature within the box.
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY
DISCOVERY TECHNOLOGIES, INC.
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303