UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Consent
Statement Pursuant to Section 14(a) of The Securities Exchange Act
of 1934
(Amendment
No. )
Filed
by the Registrant ☐
Filed
by a Party other than the Registrant ☒
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the appropriate box:
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Preliminary
Consent Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Consent Statement
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Definitive
Additional Materials
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Soliciting
Material Under Rule 14a-12
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CREATIVE
LEARNING CORPORATION
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(Name
of Registrant as Specified in Its Charter)
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CHRISTOPHER
REGO
ROD
WHITON
JOHN
SIMENTO
R. GARY
ZELL, II
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(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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Rule 0-11(a)(2) and identify the filing for which the offsetting
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(1)
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Amount
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Form,
Schedule or Registration Statement No.:
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December
6, 2019
Dear
Fellow Stockholder:
Christopher Rego
and Rod Whiton (collectively, “we,” “our,”
or “us”), are the beneficial owners of an aggregate of
858,501 shares of common stock, par value $0.0001 per share (the
“Common Stock”) of Creative Learning Corporation, a
Delaware corporation (the “Company”), representing
approximately 7% of the outstanding shares of Common Stock. Through
the enclosed Consent Statement, we are soliciting your consent for
the following proposals:
Proposal 1 – Remove from the board
of directors of the Company (the “Board”) without cause
Blake Furlow, Bart Mitchell, Gary Herman, and JoyAnn
Kenny-Charlton, and any other person elected or appointed to the
Board after November 18, 2019 (other than those elected by this
consent solicitation) (the “Removal Proposal”);
and
Proposal 2 – Elect Christopher
Rego, Rod Whiton, John Simento, and R. Gary Zell, II, to serve as
directors of the Company (or, if any such nominee is unable or
unwilling to serve as a director of the Company, any other person
designated as a nominee by the remaining nominee or nominees) (the
“Nominees”) (the “Election Proposal” and
together with the Removal Proposal, the
“Proposals”).
We
urge you to carefully consider the information contained in the
attached Consent Statement and then support our efforts by signing,
dating, and returning the enclosed WHITE consent card today. The
attached Consent Statement and the enclosed WHITE consent card are
first being furnished to the stockholders on or about December 9,
2019. We urge you not to sign any revocation of the WHITE consent
card that may be sent to you by the Company. If you have done so,
you may revoke that revocation of consent by delivering a later
dated consent card to Christopher Rego at 212 Bellerose Drive, San
Jose, California 95128, to Rod Whiton at 10 Canal Street, Suite
334, Bristol, Pennsylvania 19007, or to the principal executive
offices of the Company.
If you
have any questions or require any assistance with your consent,
please contact Christopher Rego at (408) 596-1459 or Rod Whiton at
(917) 648-4424 or at the addresses listed above.
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Thank you for your support.
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/s/ Christopher Rego
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Christopher Rego
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/s/ Rod Whiton
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Rod Whiton
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CREATIVE LEARNING CORPORATION
_________________________
CONSENT STATEMENT
OF
CHRISTOPHER REGO AND ROD WHITON
_________________________
PLEASE MARK AN “X” IN EACH BOX LABELED
“CONSENT,”
THEN SIGN, DATE, AND
MAIL THE ENCLOSED WHITE CONSENT CARD
TODAY
This
Consent Statement and the accompanying WHITE consent card are being
furnished to you as a stockholder of Creative Learning Corporation,
a Delaware corporation (the “Company”), by Christopher
Rego and Rod Whiton (collectively, “we,”
“our,” or “us”) in connection with our
solicitation of written consents to remove four members of the
current Board of Directors of the Company (the “Board”)
representing all the directors of the Company, and replace them
with our highly-qualified nominees. As significant stockholders of
the Company, with aggregate ownership of 858,501 shares of the
Company’s common stock, par value $0.0001 per share (the
“Common Stock”), constituting approximately 7% of the
outstanding shares, we believe that the Board should be
reconstituted with directors who will bring a fresh perspective
into the boardroom and who we believe would be more effective in
evaluating and executing on initiatives to improve the success of
the Company.
A
solicitation of written consents is a process that allows a
company’s stockholders to act by submitting written consents
to any proposed stockholder actions in lieu of voting in person or
by proxy at an annual or special meeting of stockholders. We are
soliciting written consents from the holders of shares of the
Common Stock to take the following actions (each, as more fully
described in this Consent Statement, a “Proposal” and
together, the “Proposals”), in the following order,
without a stockholders’ meeting, as authorized by Delaware
law:
Proposal 1 – Remove from the board
of directors of the Company (the “Board”) without cause
Blake Furlow, Bart Mitchell, Gary Herman, and JoyAnn
Kenny-Charlton, and any other person elected or appointed to the
Board after November 18, 2019 (other than those elected by this
consent solicitation) (the “Removal Proposal”);
and
Proposal 2 – Elect Christopher
Rego, Rod Whiton, John Simento, and R. Gary Zell, II, to serve as
directors of the Company (or, if any such nominee is unable or
unwilling to serve as a director of the Company, any other person
designated as a nominee by the remaining nominee or nominees) (the
“Nominees”) (the “Election Proposal” and
together with the Removal Proposal, the
“Proposals”).
This
Consent Statement and the enclosed WHITE consent card are first
being sent or given to the stockholders of the Company on or about
December 9, 2019. This Consent Statement is also available at
https://discuss.cf/.
We are
soliciting your consent in favor of the adoption of the Removal
Proposal and the Election Proposal because we believe the Nominees
possess the business and financial experience needed to improve the
performance of the Company to the benefit of all
stockholders.
The
effectiveness of each of the Proposals requires the affirmative
consent of the holders of record of a majority of the shares of
outstanding voting securities as of the close of business on the
Record Date (as defined below).1 Each Proposal will be effective without
further action when we deliver to the Company such requisite number
of consents. The Removal Proposal (Proposal 1) is not subject to or
conditioned upon the effectiveness of the Election Proposal. The
Election Proposal (Proposal 2) is conditioned, in part, upon the
Removal Proposal. If none of the members of (or appointees to) the
Board are removed pursuant to the Removal Proposal, and there are
no vacancies to fill, none of the Nominees can be elected pursuant
to the Election Proposal. If fewer than four directors are removed
pursuant to the Removal Proposal and there are more Nominees
receiving the requisite number of consents to fill vacancies
pursuant to the Election Proposal than the number of such resulting
vacancies, then we intend to fill the vacancies in the following
order: Christopher Rego, Rod Whiton, John Simento, and R. Gary
Zell, II.
On
November 18, 2019, we delivered a written consent to the Company by
delivery to its registered office in Delaware, which established
November 18, 2019 as the record date (the “Record
Date”) for the determination of the Company’s
stockholders who are entitled to execute, withhold, or revoke
consents relating to this consent solicitation. According to the
Company’s transfer agent in an inquiry made on November 21,
2019, as of the Record Date there were 12,649,051 shares of Common
Stock outstanding, each of which is entitled to one consent on each
Proposal.
In
addition, none of the Proposals will be effective unless the
delivery of the written consents complies with Section 228(c)
of the Delaware General Corporation Law (“DGCL”). For
the Proposals to be effective, properly completed and unrevoked
written consents must be delivered to the Company within 60 days of
the earliest dated written consent delivered to the Company. On
November 18, 2019, we delivered the initial written consent to the
Company by delivery to its registered office in Delaware.
Consequently, by January 17, 2020, we will need to deliver properly
completed and unrevoked written consents to the Proposals from the
holders of record of a majority of the outstanding voting
securities as of the close of business on the Record Date. We
intend to set January 10, 2020, as the goal for submission of
written consents.
WE URGE YOU TO ACT TODAY TO ENSURE THAT YOUR CONSENT WILL
COUNT
We
reserve the right to submit to the Company consents at any time
within 60 days of the earliest dated written consent delivered to
the Company. See “Consent Procedures” for additional
information regarding such procedures.
As of
the date of this Consent Statement, we are the beneficial owners of
an aggregate of 858,501 shares of Common Stock, representing
approximately 7% of the outstanding shares of Common Stock. We
intend to express consent in favor of the Proposals with respect to
all of such shares of Common Stock.
According to the
Company’s transfer agent in an inquiry made on November 21,
2019, as of the Record Date there were 12,649,051 shares of Common
Stock outstanding. The mailing address of the principal executive
offices of the Company is 701 Market Street, Suite 113, St.
Augustine, Florida 32095.
The
failure to sign and return a consent will have the same effect as
voting against the Proposals. Please note that in addition to
signing the enclosed WHITE consent card, you must also date it to
ensure its validity.
1 We note that
Sections 1.11 and 2.14(a) of Company’s Amended and Restated
Bylaws, dated June 21, 2016, purport to require the unanimous
consent of stockholders to the Removal Proposal. This requirement
is unenforceable under Section 141(k) of the DGCL (“Any
director or the entire board of directors may be removed, with or
without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors…”)
(emphases added) and Section 228(a) of the DGCL (“Unless
otherwise provided in the certificate of incorporation,
any action required by this chapter to be taken at any annual or
special meeting of stockholders of a corporation, or any action
which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice
and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were
present and voted…”) (emphases added). While the
Company’s Amended and Restated Bylaws includes a unanimity
requirement, the Company’s certificate of incorporation
contains no such requirement, and pursuant to Section 228(a) of the
DGCL, any such restrictions must be contained in the certificate of
incorporation, and therefore the unanimity requirement is invalid.
If,
however, a Delaware court of competent jurisdiction disagrees with
our analysis, and should we obtain less than unanimous consent of
the stockholders, then the current Board would not be removed and
our Nominees would not be elected.
THIS CONSENT SOLICITATION IS BEING MADE BY CHRISTOPHER REGO AND ROD
WHITON AND NOT BY OR ON BEHALF OF THE COMPANY. WE URGE YOU TO SIGN,
DATE, AND RETURN THE WHITE CONSENT CARD IN FAVOR OF THE PROPOSALS
DESCRIBED HEREIN
Important Notice Regarding the Availability of Consent Materials
for this Consent Solicitation
This Consent Statement is available at www.sec.gov pursuant to the
EDGAR system
IMPORTANT INSTRUCTIONS
PLEASE READ THIS CAREFULLY
Your
shares of Common Stock may either be registered in your own name
(that is, you are the record holder) or you may hold your shares in
“street” name with a bank, broker firm, dealer, trust
company, or other nominee, in which case only they can exercise
your right to consent with respect to your shares of Common Stock
upon receipt of your instructions. To exercise your right to
consent:
If
you are the record holder of your shares:
Please
complete the enclosed WHITE consent card by marking either the
“Consent,” “Withhold Consent,” or
“Abstain” box for each of the two Proposals, then sign,
date, and return the consent to us using the postage-paid envelope
provided.
If
your shares are held in “street” name:
To
provide instructions to your bank, broker firm, dealer, trust
company, or other nominee, please complete the enclosed WHITE
consent instruction form by placing an “X” in the box
labeled “Consent,” “Withhold Consent,” or
“Abstain” next to each of the nine items under the two
Proposals on the enclosed WHITE consent card, then sign and date
your card and return it using the enclosed pre-paid return
envelope.
Execution and
delivery of a consent by a record holder of shares of Common Stock
will be presumed to be a consent with respect to all shares held by
such record holder unless the consent specifies
otherwise.
Only
holders of record of voting securities of the Company as of the
close of business on the Record Date will be entitled to consent to
the Proposals. If you are a stockholder of record as of the close
of business on the Record Date, you will retain your right to
consent even if you sell your shares of Common Stock after the
Record Date.
IF YOU
TAKE NO ACTION, YOU WILL IN EFFECT BE ELECTING TO KEEP THE CURRENT
BOARD IN PLACE AND NOT ELECT OUR NOMINEES.
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CHRISTOPHER REGO
212 BELLEROSE DRIVE
SAN JOSE, CALIFORNIA 95128
(408) 596-1459
ROD WHITON
10 CANAL STREET, SUITE 334
BRISTOL, PENNSYLVANIA 19007
(917) 648-4424
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BACKGROUND TO THE SOLICITATION
Our concerns with the current Board and management of the Company
include:
1.
The
Company’s failure to file Form 10-Ks and Form 10-Qs on a
timely basis as required by the Securities Exchange Administration
(“SEC”). For
example:
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The
Form 10-Q for the period ending December 31, 2018 was not filed
until November 22, 2019 (over nine months late).
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The
Form 10-K for the fiscal year ending September 30, 2018 was not
filed until September 9, 2019 (nearly nine months
late).
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No
Form 10-Qs for any quarterly period ending subsequent to December
31, 2018 have been filed.
2.
The
Company’s failure to hold regular annual meetings of
stockholders. For example, no annual meeting of stockholders has
been held for at least the past five years.
3.
The
Company’s failure to issue regular press releases to keep
stockholders informed as to Company developments. For example, the
most recent press release available on the Company’s website
was issued on September 20, 2018.
4.
A
decline of the Company’s stock price from $0.23 per share in
November 2018 to a low of $0.03 per share in October
2019.
5.
Failure
to provide tools and resources to franchisees needed to
successfully operate a Bricks 4 Kidz franchise business. For
example:
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The
franchise management system that replaced the Company’s
franchise management tool is buggy, lacks necessary functionality,
and is non-intuitive to navigate, thus making it hard for users to
operate.
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The
Company removed needed staff that provided franchise curriculum and
model plan development.
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Franchisees
have not received any new curriculum/programs or training for
approximately the past two years, and the Company lacks a mentoring
program for franchisees to share knowledge and best
practices.
6.
Concerns
that the current Board fails to develop long-term goals, fails to
communicate adequately with its stockholders and franchisees, fails
to hold regular meetings of franchisees, and fails to innovate the
dated curriculum. For example:
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Programs
for older children such as robotics and coding were last developed
and delivered in 2016.
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The
last annual franchise owners conference was held in
2016.
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No monthly or weekly franchisee meetings have been
held for approximately the past
three years.
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Although
franchise owners have paid marketing fees to the Company, no
marketing or PR campaigns have been done locally for approximately
the past three years.
7.
The
current Board has rewarded themselves and prior CEO Blake Furlow
with numerous shares of stock while the stock price
has significantly declined, thus diluting shareholders
and rewarding themselves for poor performance.
8.
A
decline in the number of new Bricks 4 Kidz franchises being sold
and no Sew Fun Studios franchises
being sold. For example, according to the Company’s Form 10-Q
filed on November 22, 2019, as of December 31, 2018, Bricks 4 Kidz
franchises operated in 526 territories, and in the Company’s
Form 10-Q filed on August 14, 2017, as of June 30, 2017, the
Company operated in 632 territories – a decline of 106
territories. Additionally, the Company’s failure to complete
audited financial statements in a timely manner has led to
suspensions in selling domestic franchises. For example, as
disclosed in the Company’s most recent Form 10-K
filing:
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On
January 29, 2016, the Company temporarily suspended domestic
franchise offers and sales of Bricks 4 Kidz and Sew Fun Studios
franchises in compliance with FTC Franchise Rule due to delay in
completion of the Company’s fiscal year 2015 consolidated
audited financial statements. This delayed completion of the
Company’s 2016 Franchise Disclosure Documents for the Bricks
4 Kidz and Sew Fun Studios franchise offerings. The Company did not
restart selling efforts of Bricks 4 Kidz until September
2016.
●
The
Company temporarily suspended domestic franchise offers and sales
of Bricks 4 Kidz and Sew Fun Studios franchises in compliance with
FTC Franchise Rule due to delay in completion of the
Company’s fiscal year 2018 consolidated audited financial
statements. This delayed completion of the Company’s 2018 and
2019 Franchise Disclosure Documents.
9.
The
decision to move the Company’s corporate offices to Boise,
Idaho (when its offices in St. Augustine, Florida were already
owned by the Company) meant that the Company now has to pay rent
where it did not before, leading to unnecessary cost
increases.
Christopher Rego
purchased two Bricks 4 Kidz franchise territories in California in
2013 and the master franchise territory for the United Arab
Emirates (“UAE”) in 2015. Mr. Rego has a dispute with
the Company involving the master franchise in the UAE and the
payment of fees under his franchise agreement that is as yet
unresolved.
Mr.
Rego has contacted then-CEO Mr. Furlow multiple times to offer his
services to help resolve Company concerns. As part of these
discussion, Mr. Rego stated his willingness to take the Company
private by making a tender offer to purchase all outstanding shares
of Common Stock at a premium of approximately 100% over the
then-current share price. To Mr. Rego’s belief, this proposal
was never brought before the Board.
Mr.
Whiton is an early investor and long term stockholder in the
Company and served as its Interim CEO from July 22, 2015 to May 11,
2017.
As
strong innovative leaders, Mr. Rego and Mr. Whiton believe that
they and the other Nominees can reorganize the Company’s
priorities, revise the Company’s content and curriculum to
make it more effective, work closely with franchise owners to
address concerns, build and grow franchise brands, build and manage
a professional website, build partnerships with technology
companies, manage and maintain cloud supporting software, add new
innovative concepts, rebuild the Company’s online presence
and brand, and ultimately increase Company revenue.
To
accomplish these goals, the Nominees plans include the
following:
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Providing ongoing
training, support, and tools to the franchise owners;
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Conducting regular
meeting with franchise owners;
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Teaching and
training franchise owners that are struggling to execute the
program;
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Removing outside
territory fees;
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Revamping the
curriculum to provide a technology rich experience that includes
elements such as augmented reality/virtual reality, drones, 3D
printing, Lego Mindstorms EV3 robotics kits, and VEX
robots;
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Forming
partnerships with technology companies like Google, Facebook, and
Microsoft;
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Enhancing the
Company’s website;
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Filing the
Company’s Form 10-Ks and 10-Qs on a timely
basis;
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Releasing regular
press releases to keep stockholders and the public informed about
Company developments;
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Holding annual
meetings of the stockholders; and
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Adding a new STREAM
enrichment programs.
We
believe that the price of the Company’s common stock will
recover if better management is hired. If the Proposals are
approved, we anticipate that Mr. Rego will be appointed new CEO and
Mr. Whiton will be appointed Vice-President of the Company, and
that Messrs. Rego and Whiton will be appointed Co-Chairmen of the
Board.
QUESTIONS AND ANSWERS ABOUT THIS CONSENT SOLICITATION
The
following are some of the questions you, as a stockholder, may have
and answers to those questions. The following is not meant to be a
substitute for the information contained in the remainder of this
Consent Statement, and the information contained below is qualified
by the more detailed descriptions and explanations contained
elsewhere in this Consent Statement. We urge you to carefully read
this entire Consent Statement prior to making any decision on
whether to grant any consent hereunder.
WHO IS MAKING THE SOLICITATION?
Stockholders
Christopher Rego and Rod Whiton are making this
solicitation.
WHAT ARE THE PROPOSALS FOR WHICH CONSENTS ARE BEING
SOLICITED?
We are
asking you to consent to two corporate actions: (1) the Removal
Proposal and (2) the Election Proposal.
We are
asking you to consent to the Removal Proposal and the Election
Proposal to remove the Company’s four current directors,
including any appointees to the Board prior to the effectiveness of
the Election Proposal, and to elect the Nominees.
WHY ARE WE SOLICITING YOUR CONSENT?
As
discussed in the Background To The Solicitation section above, we
have concerns about the current Board and current management
failing to act in the best interest of the Company and believe that
the Board should be removed and replaced by directors who better
represent stockholder interests.
WHO ARE THE NOMINEES?
We are
asking you to elect each of Christopher Rego, Rod Whiton, John
Simento, and R. Gary Zell, II, as a director of the Company.
Collectively, they have significant operating, financial, and
transaction experience across a variety of sectors. The business
experience of our highly qualified Nominees is set forth in this
Consent Statement under the section entitled “The
Nominees,” which we urge you to read.
WHO IS ELIGIBLE TO GRANT WRITTEN CONSENTS IN FAVOR OF THE
PROPOSALS?
Stockholders of
record of voting securities at the close of business on the Record
Date have the right to consent to the Proposals. On November 18,
2019, we delivered a written consent to the Company by delivery to
its registered office in Delaware, which set November 18, 2019, as
the Record Date for this consent solicitation. According to the
Company’s transfer agent in an inquiry made on November 21,
2019, as of the Record Date there were 12,649,051 shares of Common
Stock outstanding, each of which is entitled to one consent on each
Proposal.
WHEN IS THE DEADLINE FOR SUBMITTING CONSENTS?
We urge
you to submit your consent as soon as possible. In order for our
Proposals to be adopted, the Company must receive written unrevoked
consents signed by a sufficient number of stockholders to adopt the
Proposals within 60 calendar days of the date of the earliest dated
consent delivered to the Company. On November 18, 2019, we
delivered the initial written consent to the Company by delivery to
its registered office in Delaware. Consequently, we will need to
deliver properly completed and unrevoked written consents to the
Proposals from the holders of record of a majority of the
outstanding voting securities as of the close of business on the
Record Date no later than January 17, 2020. Nevertheless, we intend
to set January 10, 2020, as the goal for submission of written
consents. Effectively, this means that you have until January 10,
2020, to consent to the Proposals.
HOW MANY CONSENTS MUST BE RECEIVED IN ORDER TO ADOPT THE
PROPOSALS?
The
Proposals will be adopted and become effective when properly
completed, unrevoked consents are signed by the holders of a
majority of the outstanding voting securities as of the close of
business on the Record Date, provided that such consents are
delivered to the Company within 60 calendar days of the date of the
earliest dated consent delivered to the Company. According to the
Company’s transfer agent in an inquiry made on November 21,
2019, as of the Record Date there were 12,649,051 shares of Common
Stock outstanding, each of which is entitled to one consent on each
Proposal. This means that the consent of the holders of at least
6,324,526 shares of outstanding voting securities would be
necessary to effect these Proposals. As of the Record Date, we
beneficially owned in the aggregate 858,501 shares of Common Stock,
representing approximately 7% of the outstanding shares of Common
Stock of the Company.
HOW DO I SUBMIT MY WRITTEN CONSENT?
Your
shares of Common Stock may either be registered in your own name
(that is, you are the record holder) or you may hold your shares in
“street” name with a bank, broker firm, dealer, trust
company, or other nominee, in which case only they can exercise
your right to consent with respect to your shares of Common Stock
upon receipt of your instructions. To exercise your right to
consent:
If
you are the record holder of your shares:
Please
complete the enclosed WHITE consent card by marking either the
“Consent,” “Withhold Consent,” or
“Abstain” box for each of the two Proposals, then sign,
date, and return the consent to us using the postage-paid envelope
provided.
If
your shares are held in “street” name:
To
provide instructions to your bank, broker firm, dealer, trust
company, or other nominee, please complete the enclosed WHITE
consent instruction form by placing an “X” in the box
labeled “Consent,” “Withhold Consent,” or
“Abstain” next to each of the nine items under the two
Proposals on the enclosed WHITE consent card, then sign and date
your card and return it using the enclosed pre-paid return
envelope.
WHOM SHOULD YOU CALL IF YOU HAVE QUESTIONS ABOUT THE
SOLICITATION?
You may
call Christopher Rego at (408) 596-1459 or Rod Whiton at (917)
648-4424.
OUR FOUR NOMINEES HAVE THE EXPERIENCE, QUALIFICATIONS, AND
COMMITMENT NECESSARY TO UNLOCK VALUE FOR STOCKHOLDERS
We have
identified four highly-qualified, independent directors with
valuable and relevant business and financial experience who we
believe will bring a fresh perspective into the boardroom and would
be more effective in evaluating and executing on initiatives to
improve the success of the Company. Further, we believe that
decline in the Company’s stock price justifies the election
of stockholders to the Board whose interests we believe are more
closely aligned with those of all stockholders generally. While
current director Blake Furlow is the Company’s single largest
stockholder and the Company’s current Board holds in the
aggregate more shares of Common Stock than our Nominees, we believe
our Nominees will bring a needed fresh perspective to the Board and
improve the performance of the Company to the benefit of all
stockholders. Although Mr. Simento and Mr. Zell are not
stockholders of the Company, we believe each of our Nominees
possesses business, financial, executive, and management experience
that will strengthen management of the Company. All of our Nominees
have experience in owning and/or managing high technology or high
growth companies. Biographies of each of the Nominees are in the
discussion of Proposal 2 below.
PROPOSAL 1 — THE REMOVAL PROPOSAL
We are
asking you to consent to the Removal Proposal to remove all four
members of the existing Board, including any other person or
persons appointed to the Board to fill any vacancy or any
newly-created directorships (which, for the avoidance of doubt,
excludes persons elected pursuant to this consent solicitation).
The following is the text of the Removal Proposal:
“RESOLVED,
that Blake Furlow, Bart Mitchell, Gary Herman, and JoyAnn
Kenny-Charlton, and any other person elected or appointed to the
board of directors of the Company (the “Board) after the
Record Date (other than those elected by this consent
solicitation), be and hereby is removed from the
Board.”
The
Board is currently composed of four directors.
Section
141(k) of the DGCL provides that any director or the entire board
of directors of a Delaware corporation may be removed, with or
without cause, by the holders of a majority of the shares then
entitled to vote at an election of the corporation’s
directors, subject to exceptions if the corporation has a
classified board or permits cumulative voting in the election of
its directors. The Company does not have a classified board or
cumulative voting in the election of its directors. Consequently,
Section 141(k) of the DGCL permits the stockholders of the Company
to remove any director or the entire Board without cause. If a
stockholder wishes to consent to the removal of certain of the
members of the Board, but not all of them, such stockholder may do
so by checking the appropriate “consent” box on the
enclosed WHITE consent card and writing the name of each such
person that the stockholder does not wish to be removed. We do not
intend to seek to increase the number of Board members if
stockholders do not consent to the removal of one or more
directors. If fewer than four directors are removed pursuant to the
Removal Proposal and there are more Nominees receiving the
requisite number of consents to fill vacancies pursuant to the
Election Proposal than the number of such resulting vacancies, then
we intend to fill the vacancies in the following order: Christopher
Rego, Rod Whiton, John Simento, and R. Gary Zell, II.
According to the
Company’s transfer agent in an inquiry made on November 21,
2019, as of the Record Date there were 12,649,051 shares of Common
Stock outstanding, each entitled to one consent per
share.
The
consent of the holders of at least 6,324,526 shares of outstanding
voting securities would be necessary to effect Proposal 1 and
remove the four members of the Board. Therefore, at least 5,466,025
shares, in addition to the 858,501 shares entitled to consent held
by us, will be needed to effect Proposal 1 and remove the four
members of the Board. If any stockholder consenting to Proposal 1
writes in the name of any existing directors that such stockholder
does not wish to be removed, then the total number of shares
represented by any such consent card will be subtracted from the
total number of shares consenting to the removal of such director
pursuant to Proposal 1. In the event that holders of less than
6,324,526 shares of outstanding voting securities consent to the
removal of any existing director, then such director will not be
removed pursuant to Proposal 1. The actual number of consents
necessary to effect the Proposals will depend on the facts as they
exist on the Record Date.
The
WHITE consent card delivered with this Consent Statement provides
stockholders with the opportunity to consent to the removal of only
some of the current directors.
WE URGE YOU TO CONSENT TO THE REMOVAL PROPOSAL.
PROPOSAL 2 — THE ELECTION PROPOSAL
We do
not believe the current Board has been acting in the best interests
of the stockholders, as discussed in further detail in the
“Reasons for the Solicitation” section of this Consent
Statement. Accordingly, we are asking you to consent to elect,
without a stockholders’ meeting, each of the following
individuals to serve as a director of the Company: Christopher
Rego, Rod Whiton, John Simento, and R. Gary Zell, II. The following
is the text of the Election Proposal:
“RESOLVED,
that Christopher Rego, Rod Whiton, John Simento, and R. Gary Zell,
II, are hereby elected to serve as directors of the Company (or, if
any such nominee is unable or unwilling to serve as a director of
the Company, any other person designated as a nominee by the
remaining nominee or nominees).”
All of
the Nominees, if elected, would serve as a single class together on
the Board. Each would hold office until such person’s
successor has been elected or until such person’s death,
resignation, retirement, or removal. If four incumbent directors
are removed pursuant to the Removal Proposal, then your consent to
elect the Nominees will have the legal effect of electing to the
Board our four highly qualified director Nominees to serve on a
Board composed of four members.
If we
are successful in its solicitation of written consents to remove
and replace at least three existing members of the Board, then a
change in control of the Board may be deemed to have occurred under
certain of the Company’s material contracts and agreements.
Such a change in control may trigger change in control provisions
or payments in certain of the Company’s plans and agreements,
including in the Company’s employment/severance agreements
with its named executive officers and potentially certain equity
plans. Based on a review of the
agreements disclosed in the Company’s most recent Form 10-K
filed on September 4, 2019, the subsequently filed Form 8-Ks, and
the Form 10-Q filed on November 22, 2019, we do not believe there
would be any material consequences that would occur under any
agreements should more than two of our Nominees be elected to the
Board. If the Company has entered into other agreements that are in
effect but not disclosed in the Form 10-K or subsequent filings, we
would not be privy to them and thus would not know what if any
consequences might result.
THE
NOMINEES
The
following information sets forth the name, age, present principal
occupation, and employment and material occupations, positions,
offices, or employments for the past five years of each of the
Nominees. The specific experience, qualifications, attributes, and
skills that led us to conclude that the Nominees should serve as
directors of the Company is set forth in the bios
below.
Christopher Rego, age 49, has over 20
years of software quality development experience building complex
enterprise applications with high-performance requirements in the
business-to-business, software-as-a-service, and consumer
advertising industries. Mr. Rego is an accomplished corporate
strategist and drives the vision and strategic direction of his
software company, Teknowland, Inc., and his STREAM education
company, Bricknowland, Inc. Mr. Rego has assembled a dedicated team
of engineers that focuses on building STREAM education that
includes AR/VR learning technology, drones, artificial intelligent
education, 3-D printing, coding, and more. Mr. Rego has been the
CEO of Teknowland, Inc. since 2013, and the founder and managing
partner of Bricknowland, Inc., since 2015. From March 2014 until
April 2016, Mr. Rego was Quality Assurance Consulting/Manager at
Tibco Software. Mr. Rego has also held various management and
architect roles to contribute to the success of rapidly growing
technology companies such as Oracle, Yahoo!, Tapjoy, and Intuit.
Mr. Rego has been a Bricks 4 Kidz franchisee since November 2013.
Mr. Rego earned a Bachelor of Science degree from Andhra Loyola
College in Andhra Pradesh India and an MBA in Marketing and
Finance from Acharya Nagarjuna University Andhra
Pradesh, India.
Rod Whiton, age 50, has over 20 years of
experience managing public and private investments. His experience
focuses largely on early stage and turnaround operations in
franchising, technology, biometrics, manufacturing, and payment
processing. In addition, Mr. Whiton was an early investor in the
Company and has served as its Interim CEO from July 22, 2015 to May
11, 2017. He has owned and managed a successful private cosmetics
company for over 10 years. From October 2016 to the present, Mr.
Whiton has been managing member of Trew Pharma LLC, which
manufactures, markets, and distributes beauty products, and from
January 2019 to the present has been CEO of Smart Tires USA LLC, a
franchise company that provides a rent-to-own program for tires.
Mr. Whiton does not have a formal college degree.
John Simento, age 58, is the co-founder
and managing partner of Almoe Group of Companies, founded in 1994,
Specktron Educational Products, founded in 2011 and Bricknowland
founded in 2015. Mr. Simento has over three decades of executive
leadership experience managing high-technology and high-growth
companies, having been responsible for strategic direction,
execution of business plans, technology development, and
development of corporate infrastructure. Almoe Group of Companies
consists of six divisions, employs over 400 staff spread across
four countries, and has over 40 renowned audio visual and IT
products and solutions. The Almoe Group of Companies partners with
over 55 audio and video and software companies that provide AV and
software solutions to retail, corporate, and education
institutions. Mr Simento created his own product line, Specktron
(www.specktron.com) that is a leading brand pioneering in Audio
Visual and Information & Communication Technology. Specktron
has championed the use of Interactive Touch Technology for the
education, corporate, government, and hospitality sectors. Mr.
Simento has been a Bricks 4 Kidz franchisee since May 2015. Mr.
Simento does not have a formal college degree.
R. Gary Zell, II, age 52, has been a
Multiple Line General Agent with American National Insurance
Company since 1994, responsible for sales, profitability, and
recruiting of a $62 million+ insurance agency with over 70 agents
and subproducers. From 2016 to the present, Mr. Zell has been
president of ThirdPatent Holdings and ThirdPro HMM, which provide
social media audits for parents, colleges, universities, human
resources professionals, and professional sports. Mr. Zell earned a
Bachelors Degree in Economics from Sewanee: The University of the
South in Sewanee, Tennessee.
None of
the Nominees received any compensation from the Company during its
last completed fiscal year. Additionally, Mr. Whiton did not
receive a salary or other compensation for his role as Interim-CEO
of the Company other than reimbursement for travel expenses. Mr.
Whiton has discussed purchasing 3 million shares of Common Stock at
$0.20 per share with Blake Furlow, although no such agreement has
been reached. In 2018, Mr. Rego discussed making a tender offer for
Company stock with Mr. Furlow, initially for $0.14 per share, and
later for $0.33 per share at a time when the stock price was
approximately $0.16 per share. Mr. Furlow rejected the offer,
refused to allow Mr. Rego to meet the then-current Board, and
ultimately no such tender offer was made.
As of
the date hereof, Mr. Rego owns 360,000 shares of Common Stock. Mr.
Whiton and his children collectively own 498,501 shares of Common
Stock of the Company. The shares of Common Stock owned directly by
Mr. Rego were purchased in the open market with personal funds. The
shares of Common Stock owned by Mr. Whiton and his children were
purchased in the open market with personal funds.
If the
Proposals are approved, we anticipate that Mr. Rego will be
appointed new CEO and Mr. Whiton will be appointed Vice-President
of the Company, and that Messrs. Rego and Whiton will be appointed
Co-Chairmen of the Board. Other than as otherwise disclosed,
there are no arrangements or
understandings between us and any of the Nominees or any other
person or persons pursuant to which the nomination of the Nominees
described herein is to be made, other than the consent by each of
the Nominees to be named in this Consent Statement and to serve as
a director of the Company if so elected. Other than as otherwise
disclosed, no Nominee is a party adverse to the Company or any of
its subsidiaries or has a material interest adverse to the Company
or any of its subsidiaries in any material pending legal
proceedings.
The
Election Proposal to elect the Nominees is conditioned, in part,
upon the effectiveness of the Removal Proposal. If none of the
members of (or appointees to) the Board are removed pursuant to the
Removal Proposal, and there are no vacancies to fill, none of the
Nominees can be elected pursuant to the Election Proposal. If fewer
than four directors are removed pursuant to the Removal Proposal
and there are more Nominees receiving the requisite number of
consents to fill vacancies pursuant to the Election Proposal than
the number of such resulting vacancies, then we intend to fill the
vacancies in the following order: Christopher Rego, Rod Whiton,
John Simento, and R. Gary Zell, II.
Although we have no
reason to believe that any of the Nominees will be unable or
unwilling to serve as directors, if any of the Nominees are not
available for election, we may designate such other nominee or
nominees to be elected to the Board. In such case, we would
identify and properly designate such substitute nominees in
accordance with the Bylaws as well as file an amended consent
statement that (1) identifies the substitute nominee, (2) discloses
whether such nominee has consented to being named in the revised
consent statement and to serve if elected, and (3) includes the
disclosure required by Items 5(b) and 7 of Schedule 14A with
respect to such nominee, and shares of Common Stock represented by
the enclosed WHITE consent card will be voted for such substitute
nominee(s). Each of the Nominees has agreed to be named in this
Consent Statement and to serve as a director of the Company, if
elected. The WHITE consent card delivered with this Consent
Statement provides each stockholder with the opportunity to approve
the Election Proposal in part by designating the names of any of
the Nominees whom such stockholder does not want elected to the
Board.
With
respect to each of the Nominees, none of the events enumerated in
Item 401(f)(1)-(8) of Regulation S-K of the Exchange Act occurred
during the past 10 years.
WE URGE YOU TO CONSENT TO THE ELECTION OF ALL FOUR OF THE
NOMINEES.
CONSENT PROCEDURES
Section
228 of the DGCL provides that, absent a contrary provision in a
Delaware corporation’s certificate of incorporation, any
action that is required or permitted to be taken at a meeting of
the corporation’s stockholders may be taken without a
meeting, without prior notice, and without a vote, if consents in
writing, setting forth the action so taken, are signed by the
holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted and such consents are properly delivered to
the corporation by delivery to its registered office in Delaware,
its principal place of business, or an officer or agent of the
corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. the Company’s
Certificate of Incorporation, as amended, does not contain any such
contrary provision.
Section
141(k) of the DGCL provides that any director or the entire board
of directors of a Delaware corporation may be removed, with or
without cause, by the holders of a majority of the shares then
entitled to vote at an election of the corporation’s
directors, subject to exceptions if the corporation has a
classified board or cumulative voting in the election of its
directors. The Company does not have a classified board or
cumulative voting in the election of its directors. Accordingly,
under Delaware law, the entire Board or any individual director may
be removed from office, with or without cause, by the affirmative
vote of stockholders holding at least a majority of the then
outstanding shares of the Company entitled to vote at an election
of directors.
Article
II, Section 2.14(a) of the Bylaws currently provides, in relevant
part, that “any vacancy in the Board caused by any removal of
one or more directors, with or without cause, may be filled at the
stockholder meeting at which such removal is effected or in the
written instrument effecting such removal, if the removal is
effected by unanimous consent without a meeting by the stockholders
entitled to vote for the election of the director so
removed.” The Nominees believe that to the extent this bylaw
purports to restrict the ability of the Company’s
shareholders to act on written consent, it is contrary to
Section 228 of the DGCL and therefore
unenforceable.
Delaware law
provides that if a corporation’s bylaws do not reserve the
power of the Board to set a record date for the determination of
the stockholders entitled to express consent to corporate action in
writing without a meeting, the date of the delivery of the first
signed written consent to corporate action by a stockholder shall
establish the record date.
For the
Proposals to be effective, properly completed and unrevoked written
consents must be delivered to the Company within 60 days of the
earliest dated written consent delivered to the Company. On
November 18, 2019, we delivered the initial written consent to the
Company by delivery to its registered office in Delaware.
Consequently, we will need to deliver properly completed and
unrevoked written consents to the Proposals from the holders of
record of a majority of the outstanding voting securities as of the
close of business on the Record Date no later than January 17,
2020. Nevertheless, we intend to set January 10, 2020, as the goal
for submission of written consents. WE URGE YOU TO ACT TODAY TO
ENSURE THAT YOUR CONSENT WILL COUNT. We reserve the right to submit
to the Company consents at any time within 60 days of the earliest
dated written consent delivered to the Company.
If the
Proposals become effective as a result of this consent solicitation
by less than unanimous written consent, prompt notice of the
Proposals will be given under Section 228(e) of the DGCL to
stockholders who have not executed written consents. All
stockholders will be notified as promptly as possible by press
release of the results of the solicitation.
Revocation
of Written Consents
An
executed consent card may be revoked at any time by delivering a
written consent revocation before the time that the action
authorized by the executed consent becomes effective. Revocations
may only be made by the record holder that granted such consent. A
revocation may be in any written form validly signed by the record
holder as long as it clearly states that the consent previously
given is no longer effective. The delivery of a subsequently dated
consent card that is properly executed will constitute a revocation
of any earlier consent. The revocation may be delivered either to
us or to the principal executive offices of the Company. Although a
revocation is effective if delivered to the Company, we request
that either the original or photostatic copies of all revocations
of consents be mailed or delivered to Christopher Rego at 212
Bellerose Drive, San Jose, California 95128, so that we will be
aware of all revocations and can more accurately determine if and
when sufficient unrevoked consents to the actions described in this
Consent Statement have been received.
Procedural
Instructions
Your
shares of Common Stock may either be registered in your own name
(that is, you are the record holder) or you may hold your shares in
“street” name with a bank, broker firm, dealer, trust
company, or other nominee, in which case only they can exercise
your right to consent with respect to your shares of Common Stock
upon receipt of your instructions. To exercise your right to
consent:
If
you are the record holder of your shares:
Please
complete the enclosed WHITE consent card by marking either the
“Consent,” “Withhold Consent,” or
“Abstain” box for each of the two Proposals, then sign,
date, and return the consent to us using the postage-paid envelope
provided.
If
your shares are held in “street” name:
To
provide instructions to your bank, broker firm, dealer, trust
company, or other nominee, please complete the enclosed WHITE
consent instruction form by placing an “X” in the box
labeled “Consent,” “Withhold Consent,” or
“Abstain” next to each of the nine items under the two
Proposals on the enclosed WHITE consent card, then sign and date
your card and return it using the enclosed pre-paid return
envelope.
WE URGE YOU TO CONSENT TO ALL OF THE PROPOSALS ON THE ENCLOSED
WHITE CONSENT CARD
SOLICITATION OF CONSENTS
The
solicitation of consents pursuant to this consent solicitation is
being made by Christopher Rego and Rod Whiton. It is anticipated
that the participants will participate in the solicitation of
consents in support of our Nominees set forth in this Consent
Statement. The participants will receive no additional
consideration if they assist in the solicitation of consents.
Solicitations of consents may be made in person, by telephone, by
email, through the internet, by mail, and by facsimile. Although no
precise estimate can be made at the present time, it is estimated
that the total expenditures in furtherance of, or in connection
with, the solicitation of stockholders will not exceed $25,000. The
total expenditures to date in furtherance of, or in connection
with, the solicitation of stockholders is approximately
$15,000.
Costs related
to this solicitation of consents, including expenditures for
attorneys, accountants, public relations, and financial advisors,
proxy solicitors, advertising, printing, transportation, and
related expenses will be borne by Messrs. Rego and Whiton. To the
extent legally permissible, Messrs. Rego and Whiton will seek
reimbursement from the Company for those expenses if any of our
Nominees is elected. Messrs. Rego and Whiton do not currently
intend to submit the question of such reimbursement to a vote of
the stockholders.
ADDITIONAL PARTICIPANT INFORMATION
Christopher Rego,
Rod Whiton, John Simento, and R. Gary Zell, II are participants in
this solicitation.
As of
the date hereof, Mr. Rego owns 360,000 shares of Common Stock. Mr.
Whiton and his children collectively own 498,501 shares of Common
Stock of the Company.
Except
as set forth in this Consent Statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this
solicitation has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors); (ii) no participant in
this solicitation directly or indirectly beneficially owns any
securities of the Company; (iii) no participant in this
solicitation owns any securities of the Company which are owned of
record but not beneficially; (iv) no participant in this
solicitation has purchased or sold any securities of the Company
during the past two years; (v) no part of the purchase price or
market value of the securities of the Company owned by any
participant in this solicitation is represented by funds borrowed
or otherwise obtained for the purpose of acquiring or holding such
securities; (vi) no participant in this solicitation is, or within
the past year was, a party to any contract, arrangements, or
understandings with any person with respect to any securities of
the Company, including, but not limited to, joint ventures, loan or
option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving
or withholding of proxies; (vii) no associate of any participant in
this solicitation owns beneficially, directly or indirectly, any
securities of the Company; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any
securities of any parent or subsidiary of the Company; (ix) no
participant in this solicitation or any of his associates was a
party to any transaction, or series of similar transactions, since
the beginning of the Company’s last fiscal year, or is a
party to any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was
or is to be a party, in which the amount involved exceeds the
lesser of $120,000 or 1% of the average of the Company’s
total assets at year-end for the last two completed fiscal years;
(x) no participant in this solicitation or any of his associates
has any arrangement or understanding with any person with respect
to any future employment by the Company or its affiliates, or with
respect to any future transactions to which the Company or any of
its affiliates will or may be a party; and (xi) no participant in
this solicitation has a substantial interest, direct or indirect,
by securities holdings or otherwise, in any of the Proposals to be
acted on in this solicitation.
There
are no material proceedings to which any participant in this
solicitation or any of his associates is a party adverse to the
Company or any of its subsidiaries or has a material interest
adverse to the Company or any of its subsidiaries.
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Since
the Company did not hold an annual meeting of stockholders in the
previous year, Rule 14a-8 of the Exchange Act provides that
proposals of stockholders intended to be presented at the
Company’s next annual meeting of stockholders (the
“Next Annual Meeting”), in order to be included in the
Company’s proxy statement and the form of proxy for the Next
Annual Meeting, must be delivered to the Company’s principal
executive officers a reasonable time before the Company begins to
print and send its proxy materials for the Next Annual Meeting. As
of the date hereof, the Company has not announced publicly the date
of the Next Annual Meeting.
Under
the Bylaws, any stockholder intending to present any proposal
(other than a proposal made by, or at the direction of, the Board)
at the Next Annual Meeting, must give written notice of that
proposal to the Company’s Secretary not less than ninety days
nor more than one hundred and twenty days prior to the first
anniversary of the preceding year’s annual meeting of
stockholders or, if there was no annual meeting held in the
preceding year or if the date of the current year’s annual
meeting is not within thirty days before or after such anniversary,
by the close of business on the tenth day following the day on
which public announcement of the date of the current year’s
annual meeting is first made. As of the date hereof, the Company
has not announced publicly the date of the Next Annual Meeting and
has not previously held an annual meeting of stockholders.
Therefore, we are unable to provide a date by which a proposal not
intended to be included in the Company’s proxy materials for
the Next Annual Meeting must be received by the Company to be
considered timely under the Bylaws.
The
information set forth above regarding the procedures for submitting
stockholder proposals for consideration at the Company’s next
annual meeting of stockholders is based on information contained in
the Company’s Bylaws and the DGCL. The incorporation of this
information in this Consent Statement should not be construed as an
admission us that such procedures are legal, valid, or
binding.
SPECIAL INSTRUCTIONS
Your
shares of Common Stock may either be registered in your own name
(that is, you are the record holder) or you may hold your shares in
“street” name with a bank, broker firm, dealer, trust
company, or other nominee, in which case only they can exercise
your right to consent with respect to your shares of Common Stock
upon receipt of your instructions.
If you
were a holder of shares of Common Stock as of the close of business
on the Record Date, you may elect to consent to, withhold consent
to, or abstain with respect to the removal or election of any
person from or to the Board by placing an “X” in the
“CONSENT,” “WITHHOLD CONSENT,” or
“ABSTAIN” box, as applicable, opposite each person on
the accompanying WHITE consent card and signing, dating, and
returning it promptly in the enclosed post-paid envelope. To
exercise your right to consent:
If
you are the record holder of your shares:
Please
complete the enclosed WHITE consent card by marking either the
“Consent,” “Withhold Consent,” or
“Abstain” box for each of the two Proposals, then sign,
date, and return the consent to us using the postage-paid envelope
provided.
IF YOU
EXECUTE AND DELIVER A WHITE CONSENT CARD, BUT FAIL TO CHECK A BOX
MARKED “CONSENT,” “WITHHOLD CONSENT,” OR
“ABSTAIN” FOR A PARTICULAR PROPOSAL, YOU WILL BE DEEMED
TO HAVE CONSENTED TO THAT PROPOSAL, EXCEPT THAT YOU WILL NOT BE
DEEMED TO CONSENT TO EITHER (1) THE REMOVAL OF ANY DIRECTOR WHOSE
NAME IS WRITTEN IN THE SPACE THE INSTRUCTION TO THE REMOVAL
PROPOSAL PROVIDES ON THE CARD, OR (2) THE ELECTION OF ANY NOMINEE
WHOSE NAME IS WRITTEN ON THE SPACE THE INSTRUCTION TO THE ELECTION
PROPOSAL PROVIDES ON THE CARD.
If
your shares are held in “street” name:
To
provide instructions to your bank, broker firm, dealer, trust
company, or other nominee, please complete the enclosed WHITE
consent instruction form by placing an “X” in the box
labeled “Consent,” “Withhold Consent,” or
“Abstain” next to each of the nine items under the two
Proposals on the enclosed WHITE consent card, then sign and date
your card and return it using the enclosed pre-paid return
envelope.
IF YOU
EXECUTE AND DELIVER A WHITE CONSENT CARD, BUT FAIL TO CHECK A BOX
MARKED “CONSENT,” “WITHHOLD CONSENT,” OR
“ABSTAIN” FOR A PARTICULAR PROPOSAL, YOU WILL BE DEEMED
TO HAVE CONSENTED TO THAT PROPOSAL.
YOUR
CONSENT IS IMPORTANT. PLEASE MARK AN “X” IN EACH BOX
LABELED “CONSENT,” THEN SIGN AND DATE THE ENCLOSED
WHITE CONSENT CARD AND RETURN IT IN THE ENCLOSED POST-PAID ENVELOPE
PROMPTLY. YOU MUST DATE YOUR CONSENT IN ORDER FOR IT TO BE VALID.
FAILURE TO SIGN, DATE, AND RETURN YOUR CONSENT WILL HAVE THE SAME
EFFECT AS VOTING AGAINST THE PROPOSALS.
If you
have any questions or require any assistance in executing your
consent, please contact Christopher Rego or Rod Whiton at the
following phone numbers and addresses:
|
CHRISTOPHER REGO
212 BELLEROSE DRIVE
SAN JOSE, CALIFORNIA 95128
(408) 596-1459
ROD WHITON
10 CANAL STREET, SUITE 334
BRISTOL, PENNSYLVANIA 19007
(917) 648-4424
|
INFORMATION CONCERNING THE COMPANY
For
information regarding the security ownership of certain beneficial
owners and management of the Company, see Schedule I.
The
information concerning the Company contained in this Consent
Statement and the Schedule attached hereto has been taken from, or
is based upon, publicly available information. Although we do not
have any information that would indicate that any information
contained in this Consent Statement that has been taken from such
documents is inaccurate or incomplete, we do not take any
responsibility for the accuracy or completeness of such
information.
SCHEDULE I
The following table is reprinted from the Company’s Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on September 4, 2019.
The
following table shows, as of March 31, 2019, information with
respect to those persons owning beneficially 5% or more of the
Company’s common stock and the number and percentage of
outstanding shares owned by each Director and named executive
officer and by all current executive officers and directors as a
group.
Applicable percentage ownership is based on
12,075,875 shares of
Common Stock outstanding at March 31,
2019. In computing the number of shares of Common Stock
beneficially owned by a person and the
percentage ownership of that person, the Company deemed to be
outstanding all shares of Common Stock subject to options, restricted stock units (RSUs)
or other convertible securities held by that person or entity that
are currently exercisable or releasable or that will become
exercisable or releasable within 60 days of March 31, 2019. The
Company did not deem these shares outstanding, however, for the
purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, each owner has sole voting and
investment powers over their shares of Common
Stock, and the address of each owner
listed is c/o the Company, 701 Market Street, Suite 113, St.
Augustine, Florida 32095.
|
|
|
|
|
|
Percent of
|
|
|
|
|
Shares
|
|
|
Outstanding
|
|
|
Name
|
|
Owned
|
|
|
Shares
|
|
|
Blake
Furlow
|
|
|
2,435,558
|
(1)
|
|
|
20.2
|
%
|
|
Michele
Cote
|
|
|
1,401,700
|
(2)
|
|
|
11.6
|
%
|
|
Rod
Whiton
|
|
|
498,501
|
|
|
|
4.1
|
%
|
|
Gary
Herman
|
|
|
-
|
|
|
|
0.0
|
%
|
|
Christian
Miller
|
|
|
-
|
|
|
|
0.0
|
%
|
|
JoyAnn
Kenny-Charlton
|
|
|
-
|
|
|
|
0.0
|
%
|
|
All
officers and directors as a group
|
|
|
4,335,759
|
|
|
|
35.9
|
%
|
(1) Includes 51,029
shares owned by Mr. Furlow’s wife, which he may be deemed to
beneficially own.
(2)
Shares are held of record by Cote Trading Company, LLC, a limited
liability company controlled by Ms. Cote.
WHITE CONSENT CARD
CONSENT OF STOCKHOLDERS OF CREATIVE LEARNING CORPORATION TO ACTION
WITHOUT A MEETING:
THIS CONSENT IS SOLICITED BY CHRISTOPHER REGO AND ROD
WHITON
C O N S E N T
Unless
otherwise indicated below, the undersigned, a stockholder of record
of Creative Learning Corporation (the “Company”) on
November 18, 2019 (the “Record Date”), hereby consents
pursuant to Section 228(a) of the Delaware General Corporation
Law with respect to all shares of the Company’s common stock,
$0.0001 par value per share (the “Shares”) held by the
undersigned to the taking of the following actions without a
meeting of the stockholders of the Company:
IF NO BOX IS MARKED FOR A PROPOSAL, THE UNDERSIGNED WILL BE DEEMED
TO CONSENT TO SUCH PROPOSAL, EXCEPT THAT THE UNDERSIGNED WILL NOT
BE DEEMED TO CONSENT TO THE REMOVAL OF ANY CURRENT DIRECTOR OR TO
THE ELECTION OF ANY NOMINEE WHOSE NAME IS WRITTEN IN THE SPACE
PROVIDED. WE RECOMMEND THAT YOU CONSENT TO PROPOSALS 1 AND
2.
|
Proposal
1.
|
Remove
from the board of directors of the Company (the
“Board”) without cause Blake Furlow, Bart Mitchell,
Gary Herman, and JoyAnn Kenny-Charlton, and any other person
elected or appointed to the Board after November 18, 2019 (other
than those elected by this consent solicitation).
|
|
☐
|
☐
|
☐
|
|
Consent
|
Withhold
Consent
|
Abstain
|
TO
CONSENT, WITHHOLD CONSENT, OR ABSTAIN FROM CONSENTING TO THE
REMOVAL OF ALL THE PERSONS NAMED IN PROPOSAL 1, CHECK THE
APPROPRIATE BOX ABOVE. IF YOU WISH TO CONSENT TO THE REMOVAL OF
CERTAIN OF THE PERSONS NAMED IN PROPOSAL 1, BUT NOT ALL OF
THEM, CHECK THE “CONSENT” BOX ABOVE AND WRITE THE NAME
OF EACH SUCH PERSON YOU DO
NOT WISH REMOVED IN THE SPACE PROVIDED BELOW:
________________________________________________________________
|
Proposal
2.
|
Elect
Christopher Rego, Rod Whiton, John Simento, and R. Gary Zell, II,
to serve as directors of the Company (or, if any such nominee is
unable or unwilling to serve as a director of the Company, any
other person designated as a nominee by the remaining nominee or
nominees).
|
|
☐
|
☐
|
☐
|
|
Consent
|
Withhold
Consent
|
Abstain
|
INSTRUCTION:
TO CONSENT, WITHHOLD CONSENT, OR ABSTAIN FROM CONSENTING TO THE
ELECTION OF ALL THE PERSONS NAMED IN PROPOSAL 2, CHECK THE
APPROPRIATE BOX ABOVE. IF YOU WISH TO CONSENT TO THE ELECTION OF
CERTAIN OF THE PERSONS NAMED IN PROPOSAL 2, BUT NOT ALL OF
THEM, CHECK THE “CONSENT” BOX ABOVE AND WRITE THE NAME
OF EACH SUCH PERSON YOU DO
NOT WISH ELECTED IN THE SPACE PROVIDED BELOW:
________________________________________________________________
The
Removal Proposal (Proposal 1) is not subject to or conditioned upon
the effectiveness of the Election Proposal. The Election Proposal
(Proposal 2) is conditioned, in part, upon the Removal Proposal. If
none of the members of (or appointees to) the Board are removed
pursuant to the Removal Proposal, and there are no vacancies to
fill, none of the Nominees can be elected pursuant to the Election
Proposal. If fewer than four directors are removed pursuant to the
Removal Proposal and there are more Nominees receiving the
requisite number of consents to fill vacancies pursuant to the
Election Proposal than the number of such resulting vacancies, then
we intend to fill the vacancies in the following order: Christopher
Rego, Rod Whiton, John Simento, and R. Gary Zell, II.
IN THE ABSENCE OF DISSENT OR ABSTENTION BEING INDICATED ABOVE, THE
UNDERSIGNED HEREBY CONSENTS TO EACH ACTION LISTED
ABOVE.
IN ORDER FOR YOUR CONSENT TO BE VALID, IT MUST BE
DATED.
|
|
Date:
|
|
|
|
|
|
|
|
|
|
Signature
of Stockholder
|
|
|
|
|
|
|
|
|
Signature
(if held jointly)
|
|
|
|
|
|
|
|
|
Name
and Title of Representative (if applicable)
|
|
|
|
|
|
If a
corporation, partnership, or other entity:
|
|
|
|
|
|
|
|
|
Name of
Entity
|
|
|
|
|
|
|
|
|
Signature
of Authorized Officer
|
|
|
|
|
|
IMPORTANT NOTE TO STOCKHOLDERS:
|
|
|
|
|
|
Please
sign exactly as name appears hereon. If the Shares are held by
joint tenants or as community property, both should sign. When
signing as executor, administrator, trustee, guardian, or other
representative, please give full title. If a corporation,
partnership, or other business entity, please sign in full entity
name by a duly authorized officer.
|
Creative Learning (PK) (USOTC:CLCN)
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De May 2024 a Jun 2024
Creative Learning (PK) (USOTC:CLCN)
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De Jun 2023 a Jun 2024
