QUANTUM ENERGY, INC. Item 5.01 Other Events.
OnFebruary 23, 2022 (the "Record Date"), the holders of 53.45% of the shares ofQuantum Energy Inc. , (the "Company", "us", "we" or "our") entitled to vote on matters submitted to our shareholders approved by written consent (i) an amendment to our Articles of Incorporation, as amended, to effect a reverse stock split (the "Reverse Split"), of our common stock, whereby each of one hundred fifty (150) shares of our Common Stock, par value$.001 per share, issued and outstanding immediately prior to the Effective Time (the "Old Common Stock") shall automatically and without any action on the part of the holder thereof, be reclassified as and changed, pursuant to the Reverse Split, into one (1) share of our outstanding common stock (the "New Common Stock"), subject to the treatment of fractional share interests as described herein, and (ii) a change of our stock trading symbol. The Reverse Split and change of our stock trading symbol will become effective (the "Effective Time") upon processing by theFinancial Industry Regulatory Authority ("FINRA"). We will file a Current Information Report on Form 8-K announcing the processing date of the Reverse Split and the change of our stock trading symbol. -------------------------------------------------------------------------------- Our Amended and Restated Articles of Incorporation currently authorizes the issuance of Five Hundred Million (500,000,000) shares divided into four hundred ninety-five million (495,000,000) shares of common stock with a par value of$.001 each and five million (5,000,000) shares of preferred stock with a par value of$.001 each. We presently have 23,016,330 shares of common stock outstanding. From and after the Effective Time, we will have approximately 153,442 shares of New Common Stock outstanding. From and after the Effective Time, certificates representing the Old Common Stock shall be deemed for all corporate purposes to evidence ownership of New Common Stock in the appropriately reduced whole number of shares. No certificates or script representing fractional share interests in New Common Stock will be issued, and no cash payments will be made therefore. In lieu of any fraction of a share of New Common Stock to which the holder would otherwise be entitled, the holder will receive one (1) whole share of the New Common Stock.
Reasons for the Reverse Split
We believe the Reverse Split will potentially increase the trading price of our
stock price on the OTC Markets. On
Impact of the Reverse Split
Upon effectiveness, the Reverse Split will automatically apply to all issued and outstanding shares of our common stock, and each shareholder will own a reduced number of shares of our common stock. Based on our capitalization as of the Record Date, the principal effect of the amendment to our Articles of Incorporation, as amended, to effect the Reverse Split not taking into account the treatment of fractional shares, would be that:
• the number of shares of our authorized common stock would remain unchanged at 495,000,000 shares;
• the number of shares of our common stock issued and outstanding would be reduced from 23,016,330 shares to approximately 153,442 shares;
• the rights, preferences and designations of the 5 million shares of our authorized preferred stock, 1,500,000 of which are designated as Series D preferred stock of which 915,000 shares are outstanding and 1,500,000 of which are designated as Series E Preferred Stock of which no shares are outstanding, would remain unchanged; and
• the par value of our common stock and preferred stock would remain
unchanged at
Beneficial Ownership
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following tables set forth, as of the Record Date, the ownership of each
class of our securities by each person known by us to be the beneficial owner of
more than 5% of each class of our securities, and by our directors, and our
executive officers and directors as a group. To the best of our knowledge, the
persons named have sole voting and investment power with respect to such shares,
except as otherwise noted. There are not any pending or anticipated arrangements
that may cause a change in control
Owner Signatory or Number Class Percent of Class Percent of Vote
Control Shares (1)(2) (3)(4)
Hinz Family William Hinz -
Trust Trustee 120,000 Preferred D 13.11 % (5) 10.48 %
Elizabeth
Danzik Applied Danzik-
Sciences, LLC Manager 200,000 Preferred D 21.86 % (6) 17.46 %
Douglas C.
Kifu, LLC Bean - Manager 105,000 Preferred D 11.48 % (7) 9.17 %
Elizabeth
Sandia Energy Danzik -
Partners, LLC Manager 200,000 Preferred D 21.86 % (8) 17.46 %
Kitchen Family Craig Kitchen
Trust - Trustee 30,000 Preferred D 3.28 % (9) 2.62 %
Anthony Ker Anthony Ker 30,000 Preferred D 3.28 % (10) 2.62 %
Elizabeth
John Rolfe, Danzik-
LLC Manager 40,000 Preferred D 4.37 % (11) 3.49 %
William William
Westbrook Westbrook 15,000 Preferred D 1.64 % (12) 1.31 %
Elizabeth
Danzik -
DEJA II, LLC Manager 160,000 Preferred D 17.49 % (13) 13.97 %
Harry Ewert Harry Ewert 15,000 Preferred D 1.64 % (14) 1.31 %
John and John and or
Laurie Suprock Laurie Suprock 3,400,000 Common 14.77 % (15) 2.97 %
(1) The number and percentage of shares beneficially owned is determined under
rules of the SEC and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which the individual has sole or shared voting power or
investment power and also any shares which the individual has the right to
acquire within 60 days through the exercise of any stock option or other right.
The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws where applicable and the information
contained in the footnotes to this table.
(2) Based on 23,016,330 shares of Common Stock issued and outstanding and
915,000 shares of Series D Preferred Stock issued and outstanding as of the
Record Date.
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(3) Each share of Common Stock is entitled to one vote per share. Each share of
the Series D Preferred Stock is entitled to 100 votes per share and vote on all
matters submitted to a vote of our common stockholders.
(4) Based on 23,016,330 total votes held by the holders of our Common Stock and
91,500,000 total votes by the holders of the Series D Preferred Stock.
(5) Includes 120,000 shares of Series D Preferred Stock (Voting only), owned by
Hinz Family Trust , which is controlled by William Hinz Chairman of the Company.
(6) Includes 200,000 shares of Series D Preferred Stock (Voting only), owned by
Danzik Applied Sciences, LLC , which is managed by Elizabeth J. Danzik .
(7) Includes 105,000 shares of Series D Preferred Stock (Voting only), owned by
Kifu LLC , which is managed by Douglas C Bean a Director of the Company.
(8) Includes 200,000 shares of Series D Preferred Stock (Voting only), owned by
Sandia Energy Partners, LLC , which is managed by Elizabeth J. Danzik .
(9) Includes 30,000 shares of Series D Preferred Stock (Voting only), owned by
Kitchen Family Trust which is controlled by Craig Kitchen an independent
Director of the Company.
(10) Includes 30,000 shares of Series D Preferred Stock (Voting only), owned by
Anthony Ker , the Secretary, Treasurer and Director of the Company.
(11) Includes 40,000 shares of Series D Preferred Stock (Voting only), owned by
John Rolfe, LLC , which is managed by Elizabeth J. Danzik .
(12) Includes 15,000 shares of Series D Preferred Stock (Voting only), owned by
William Westbrook , Chief Financial Officer of the Company.
(13) Includes 160,000 shares of Series D Preferred Stock (Voting only), owned by
DEJA II, LLC , which is managed by Elizabeth J. Danzik .
(14) Includes 15,000 shares of Series D Preferred Stock (Voting only), owned by
Harry Ewert , Chief Executive Officer of the Company.
(15) Includes 400,000 shares of Common Stock owned by Consortium LLC , a company
controlled by John and Laurie Suprock , 1,825,000 shares of Common Stock owned by
John Suprock individually, 325,000 shares of Common stock owned by Laurie
Suprock individually and 825,000 shares of Common Stock owned by John and Laurie
Suprock jointly.
Certain Risk Factors Associated with the Reverse Split or Nasdaq Delisting
A Reverse Split may negatively impact the market for our common stock.
Factors such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our common stock. As a result, there can be no assurance that the total market capitalization of our common stock after the Reverse Split will be equal to or greater than the total market capitalization before the Reverse Split or that the per share market price of our common stock following the Reverse Split will increase in proportion to the reduction in the number of shares of common stock outstanding before the Reverse Split. A decline in the market price of our common stock after the Reverse Split may result in a greater percentage decline than would occur in the absence of a Reverse Split, and the liquidity of our common stock could be adversely affected following such a Reverse Split. In addition, the Reverse Split may increase the number of shareholders who own odd lots (less than 100 shares). Any shareholder who owns fewer than 15,000 shares of common stock prior to the Reverse Split will own fewer than 100 shares of common stock following the Reverse Split. Shareholders who hold odd lots typically experience an increase in the cost of selling their shares and may have greater difficulty in effecting sales. Furthermore, some shareholders may cease being shareholders of ours following the Reverse Split. Any shareholder who owns fewer than 150 shares of common stock prior to the Reverse Split will own less than one share of common stock following the Reverse Split, and therefore such shareholder will cease being a shareholder of ours. The Reverse Split would increase our number of authorized but unissued shares of stock, which could negatively impact a potential investor if they purchased our common stock. Because the number of authorized shares of our common stock will not be reduced proportionately, the Reverse Split will increase the Board's ability to issue authorized and unissued shares without further shareholder action. After the Reverse Split, we will be authorized to issue 495,000,000 shares of common stock and 5,000,000 shares of preferred stock and have 153,442 shares of common stock and 915,000 shares of preferred stock outstanding. As such, at the Effective Time of the Reverse Split, our board of directors may issue 494,846,558 shares of common stock and 4,085,000 shares of preferred stock. At the Effective Time, the Reverse Split will dilute your ownership and voting interests because both before and after the Reverse Split the Series D Preferred Stock will have 100 and the Series E will have one (1) vote per share on all matters submitted to a vote of our common shareholders. Without taking into account the impact of the Reverse Split, we already have a substantial number of authorized but unissued shares of stock, the issuance of which would be dilutive to our existing shareholders and may cause a decline in the trading price of our common stock. With respect to authorized but unissued and unreserved shares, we could use such shares to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management, including transactions that are favored by a majority of the shareholders or in which the shareholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner. We could also use the shares that are available for future issuance in dilutive equity financing transactions. We plan to seek additional financing in the last second quarter of 2022. Other than the foregoing, we have no existing plans to issue any of the authorized but unissued and unreserved shares, whether available as a result of the Reverse Split or otherwise. -------------------------------------------------------------------------------- We believe that we will need to raise additional capital to fund our operations, and if additional capital is not available, we will have to delay, reduce or cease operations. We believe that we will need to raise additional capital to fund our operations. Changing circumstances may cause us to consume capital significantly faster than we currently anticipate and could adversely affect our ability to raise additional capital. Additional financing may not be available when we need it or may not be available on terms that are favorable to us. In addition, the risk that we may not be able to continue as a going concern may make it more difficult to obtain necessary additional funding on terms favorable to us or at all. If we raise additional funding through the issuance of equity securities, our shareholders may suffer dilution and our ability to use our net operating losses to offset future income may be limited. If we raise additional funding through debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, require us to use our cash to make payments under such indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. If we are unable to secure additional funding, our development programs and our commercialization efforts would be delayed, reduced, or eliminated, our . . .
Item 9. Financial Statements and Exhibits.
(c) Exhibits.
3.13 Amended and Restated Articles of Incorporation104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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