DEF 14C 1 def14c0318_veltinternation.htm DEFINITIVE INFORMATION STATEMENT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

SCHEDULE 14C INFORMATION

 

Information Statement Pursuant to Section 14(c)

of the Securities Exchange Act of 1934

 

Check the appropriate box:

 

☐ Preliminary Information Statement
   
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
   
☒ Definitive Information Statement   

 

VELT INTERNATIONAL GROUP INC.

(Name of Registrant as Specified In Its Charter)

 

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☒ No fee required.
   
☐ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.

 

  1) Title of each class of securities to which transaction applies:

 

  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:

 

☐ 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:

 

  2) Form, Schedule or Registration Statement No.:

 

  3) Filing Party:

 

  4) Date Filed:

 

 

 

 

 

VELT INTERNATIONAL GROUP INC.

1313 N. Grand Ave., #16

Walnut, California 91789

 

To:The Holders of the Common Stock of Velt International Group Inc.

 

Re:Action by Written Consent In lieu of Annual Meeting of Stockholders

 

This Information Statement is furnished by the Board of Directors of Velt International Group Inc., a Nevada corporation (the “Company”, or “VELT”), to holders of record of the Company’s common stock, $0.001 par value per share, at the close of business on February 27, 2018. The purpose of this Information Statement is to inform the Company’s stockholders of certain actions taken by the written consent of the holders of a majority of the Company’s voting stock, dated as of February 27, 2018, in lieu of an Annual Meeting of stockholders.

 

  1. To elect two (2) directors to serve until the next Annual Meeting of Shareholders and thereafter until their successors are elected and qualified; and
  2. To grant the Board of Directors the discretionary authority to amend the Company’s articles of incorporation to affect a reverse stock split (the “Reverse Split Proposal”) of the Company’s common stock (“Common Stock”); and
  3. Increase the authorized common shares from 50,000,000 shares to 100,000,000 shares and authorize 20,000,000 preferred shares.
  4. A proposal to ratify the appointment of Simon & Edward, LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2018.

 

The foregoing actions were approved on February 27, 2018 by our Board of Directors. In addition, on February 27, 2018 the holders of 60% of the Company’s outstanding voting securities, as of the record date, approved the foregoing actions. The number of shares voting for the proposals was sufficient for approval.

 

Section 78.320 of the Nevada Revised Statutes (the “NRS”) provides in part that any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.

 

In order to eliminate the costs and management time involved in obtaining proxies and in order to affect the above actions as early as possible in order to accomplish the purposes of the Company as herein described, the Board consented to the utilization of, and did in fact obtain, the written consent of the Consenting Stockholders who collectively own shares representing a majority of our Common Stock.

 

The above actions taken by the Company’s stockholders will become effective on or about April 2, 2018 and are more fully described in the Information Statement accompanying this Notice. Under the rules of the Securities and Exchange Commission, the above actions cannot become effective until at least 20 days after the accompanying Information Statement has been distributed to the stockholders of the Company.

 

The entire cost of furnishing this Information Statement will be borne by the Company. The Company may request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the Common Stock held of record by them and will reimburse such persons for their reasonable charges and expenses in connection therewith.

 

WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

 

No action is required by you. The accompanying Information Statement is furnished only to inform our stockholders of the actions described above before they take place in accordance with Rule 14c-2 of the Securities Exchange Act of 1934. This Information Statement will be first distributed to you on or about March13, 2018.

   

  By Order of the Board of Directors
   
  /s/ Chin Kha Foo
  Chin Kha Foo, Chief Executive Officer

  

March 12, 2018

Walnut, CA 

 

 

 

VELT INTERNATIONAL GROUP INC

 

WE ARE NOT ASKING YOU FOR A PROXY

AND YOU ARE REQUESTED NOT TO SEND US A PROXY

 

INFORMATION STATEMENT

 

INFORMATION STATEMENT PURSUANT TO SECTION 14C OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

THIS IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN. THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF OUR COMMON STOCK. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT TO THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT.

  

INTRODUCTION

 

This Information Statement is being mailed or otherwise furnished to the holders of common stock, $0.001 par value per share (the “Common Stock”) of Velt International Group Inc., a Nevada corporation (“We” or the “Company”) by the Board of Directors to notify them about a certain action that the holders of a majority of the Company’s outstanding voting stock have taken by written consent, in lieu of an Annual Meeting of the stockholders. The action was taken on February 27, 2018. Copies of this Information Statement are first being sent on or about March 13, 2018 to the holders of record on February 27, 2018 of the outstanding shares of the Company’s Common Stock.

 

General Information

 

Stockholders of the Company owning a majority of the Company’s outstanding voting securities have approved the following action (the “Action”) by written consent dated February 27, 2018, in lieu of a meeting of the stockholders:

 

  1. To elect two (2) directors to serve until the next Annual Meeting of Shareholders and thereafter until their successors are elected and qualified; and
  2. To grant the Board of Directors the discretionary authority to amend the Company’s articles of incorporation to affect a reverse stock split (the “Reverse Split Proposal”) of the Company’s common stock (“Common Stock”); and
  3. To increase the authorized common shares from 50,000,000 shares to 100,000,000 shares and authorize the creation of a class of stock by authorizing 20,000,000 shares of Preferred Stock.
  4. A proposal to ratify the appointment of Simon & Edward, LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2018.

 

The Company may ask brokers and other custodians, nominees, and fiduciaries to forward this Information Statement to the beneficial owners of the common stock held of record by such persons and will reimburse such persons for out-of-pocket expenses incurred in forwarding such material.

 

Dissenters’ Right of Appraisal

 

No dissenters’ or appraisal rights under the Nevada Revised Statutes are afforded to the Company’s stockholders as a result of the approval of the actions set forth above.

 

Vote Required

 

The vote, which was required to approve the above actions, was the affirmative vote of the holders of a majority of the Company’s voting stock. Each holder of Common Stock is entitled to one (1) vote for each share of Common Stock held. The date used for purposes of determining the number of outstanding shares of voting stock of the Company entitled to vote is February 27, 2018. The record date for determining those shareholders of the Company entitled to receive this Information Statement is the close of business on February 27, 2018 (the “Record Date”). As of the Record Date, the Company had outstanding 37,731,495 shares of Common Stock. Holders of the Common Stock have no preemptive rights. All outstanding shares are fully paid and nonassessable. The transfer agent for the Common Stock is West Coast Stock Transfer, Inc., 721 N. Vulcan Ave., Suite 205, Encinitas, CA 92024. Telephone: 619-664-4780.

 

 1 

 

Vote Obtained - Section 78.320 of the Nevada Revised Statutes

 

Section 78.320 of the Nevada Revised Statutes Law provides that any action required 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. 

 

To eliminate the costs and management time involved in soliciting and obtaining proxies to approve the actions and to effectuate the Actions as early as possible to accomplish the purposes of the Company as hereafter described, the Board of Directors of the Company voted to utilize, and did in fact obtain, the written consent of the holders of a majority of the voting power of the Company. The consenting shareholder and his respective approximate ownership percentage of the voting stock of the Company is as follows: Chin Kha Foo, CEO, President and a Director of the Company (60%).

 

This Information Statement is being distributed pursuant to the requirements of Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to the Company’s stockholders on the Record Date. The corporate action described herein will be effective approximately 20 days (the “20-day Period”) after the distributing of this Information Statement. The 20-day Period is expected to conclude on or about April 2, 2018.

 

The entire cost of furnishing this Information Statement will be borne by the Company.

 

ACTION ONE

ELECTION OF DIRECTORS

 

Directors are normally elected by the shareholders at each annual meeting to hold office until their respective successors are elected and qualified and need not be shareholders of the Company. Directors may receive compensation for their services as determined by the Board of Directors. See “Compensation of Directors.” Presently, the Board of Directors consists of two (2) members, namely, Chin Kha Foo and Liew Meng Leong. These current directors of the Board have been nominated to continue to be directors.

 

Voting for the election of directors is non-cumulative, which means that a simple majority of the shares voting may elect all of the directors. Each share of common stock is entitled to one (1) vote and, therefore, has a number of votes equal to the number of authorized directors.

 

Although the Company’s management expects that each of the following nominees will be available to serve as a director, in the event that any of them should become unavailable prior to being appointed, a replacement will be appointed by a majority of the then-existing Board of Directors. Management has no reason to believe that any of its nominees, if elected, will be unavailable to serve. All nominees are expected to serve until the next Annual Meeting of Shareholders or until their successors are duly elected and qualified.

 

Nominees for Election as Director

 

The following table sets forth certain information with respect to persons nominated by the Board of Directors of the Company for election as Directors of the Company and who will be elected following the effective date of the actions in this Information Statement:

  

Name   Age   Position Held   Held Office Since
Chin Kha Foo   44   President/CEO/CFO and Director   2017
Liew Meng Leong   40   Director   2017

 

The directors will serve until the next annual meeting of stockholders of the Company and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. The following is information concerning the business backgrounds of the two nominees.

 

Chin Kha Foo was born in Sarawak, Malaysia. He has served as an operating manager in Singapore Airlines SATS from 1994 to 2006. His duties included operating management, employee training and schedule arrangement. Since 2008 he has served as sales adviser and marketing manager for OTS Group, a Malaysian company engaged in the business of life insurance. His duties included business development and service quality control. In 1992, Mr. Foo graduated from SMK Sungai Tapang Kuching Sarawak, Malaysia.

 

 2 

 

Liew Meng Leong has over 10 years of management experiences in the fields of business development and strategy plan. From May 2013 until July 2016, Mr. Liew was the president of Yee Koo Hardware Trading and from August 2007 until April 2013, he was the president for Golden Dynasty SND BHD. From April 2001 until June 2007, he was the engineering assistant on Asahi Denka (Singapore). Mr. Liew graduated with a Diploma degree from College Linton where he majored in Electrical and Electronics Engineering.

 

Each of our director’s primary qualification to serve as such involves his or her extensive experience with different aspects of managing and advising businesses.

 

Involvement in Certain Legal Proceedings

 

None of our directors and officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. There have been no events under any bankruptcy act, no criminal proceedings or judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of our directors, executive officers, promoters or control persons during the past ten years.

 

Family Relationships

 

There are no family relationships between or among the above Directors, executive officers or persons nominated or charged by us to become directors or executive.

 

Historical Compensation of Directors

 

Other than as set forth herein no compensation has been given to any of the directors, although they may be reimbursed for any pre-approved out-of-pocket expenses.    

 

Compliance with Section 16(a) of the Securities Exchange Act of 1934

 

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. During the most recent fiscal year, to the Company’s knowledge, other than the inadvertence in filing the Form 3’s for Messrs. Chin and Liew late, no filing delinquencies occurred.

 

Legal Proceedings

 

The Company is not aware of any legal proceedings in which any director, officer, or any owner of record or beneficial owner of more than 5% of any class of voting securities of the Company, or any affiliate of any such director, officer, affiliate of the Company, or security holder, or any person who will become a director upon completion of the transactions contemplated by the Agreement is a party, or any information that any such person is adverse to the Company or has a material interest adverse to the Company.

 

CORPORATE GOVERNANCE

 

We are a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act and an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. We do not have standing audit, compensation and corporate governance committees, or committees performing similar functions. Our Board, as a whole, handles the matters usually addressed by such committees.

 

At this time, we have not adopted corporate governance guidelines, a code of business conduct, a code of ethics or a related party transaction policy. We anticipate that as we become more familiar with the obligations of U.S. public companies, we will implement appropriate corporate governance structures to comply with SEC and/or stock exchange requirements that would be applicable to us at such time.

 

We maintain a corporate website and intend to post our SEC filings on a page of that website. The information on our website is not, and shall not be deemed to be, a part of this proxy statement or incorporated by reference into this or any other filing we make with the SEC.

 

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Board of Directors

 

Director Independence

 

The Board will consist of two members, none of whom meet the independence requirements of the Nasdaq Stock Market as currently in effect.

 

Meetings of the Board

 

Each of the directors attended 100% of the aggregate number of meetings of the Board in 2017 through the date hereof. 

 

Board Leadership

 

Our Company is led by Chin Kha Foo, who has served as both our Chief Executive Officer and Chairman of the Board since July 2007. Our Board leadership structure is the traditional one most commonly utilized by other public companies in the United States, and we believe that this leadership structure has been effective for our Company. We believe that having a combined Chief Executive Officer/Chairman of the Board provides the right form of leadership and balance for our Company, given our small size. This structure provides us with a single leader for our company to ensure continuity of our operational, executive and Board functions.

 

Other Corporate Governance

 

We do not have standing audit, compensation and corporate governance committees, or committees performing similar functions. We have not adopted a code of ethics. We anticipate that as we become more familiar with the obligations of U.S. public companies, we will implement appropriate corporate governance structures to comply with SEC and/or stock exchange requirements. We intend to comply with all corporate governance requirements applicable to us at this time.

 

Communications with the Board

 

Shareholders and any interested parties may send correspondence to the Board or to any individual director, by mail to Corporate Secretary, Velt International Group Inc., 1313 N. Grand Ave. #16, Walnut CA 91789 or by e-mail to kent2906@163.com.

 

EXECUTIVE COMPENSATION

 

The compensation programs presently in effect with respect to the Chief Executive Officer, Chief Financial Officer and Chairman of the Board were established by the Board of Directors.

 

Executive Compensation

 

The following table sets forth the compensation paid to each of our principal executive officers (the “Named Executive Officers”) during the last two completed fiscal years:

 

SUMMARY COMPENSATION TABLE

 

Management Compensation

 

Name and Fiscal

Year Ended
September 30, 2017 and 2016

 

Fees

earned

or paid

in cash

($)

  

Stock

awards

($)

  

Option

awards

($)

  

Non-equity

incentive plan

compensation

($)

  

Nonqualified

deferred

compensation

earnings

($)

  

All other

compensation

($)

  

Total

($)

 
Chin Kha Foo FY 2017 (1)   0    0    0    0    0    0    0 
Yidan (Andy) Liu FY 2017(2)   45,000    0    0    0    0    0    45,000 
FY 2016   60,000    0    0    0    0    0    60,000 

 

 

(1) Mr. Foo was appointed a Director and President/CEO/CFO on July 2, 2017.
(2) Mr. Liu resigned as a Director and officer of the Company effective July 2, 2017.

 

 4 

 

Compensation of Directors

 

Each Director that is not an officer is reimbursed the reasonable out-of-pocket expenses in connection with their travel to attend meetings of the Board of Directors.

 

The following table summarizes the compensation paid to our directors for the fiscal year ended September 30, 2017:

 

Name and Fiscal

Year Ended
September 30, 2017

 

Fees

earned

or paid

in cash

($)

  

Stock

awards

($)

  

Option

awards

($)

  

Non-equity

incentive plan

compensation

($)

  

Nonqualified

deferred

compensation

earnings

($)

  

All other

compensation

($)

  

Total

($)

 
Chin Kha Foo FY 2017 (1)   0    0    0    0    0    0    0 
Liew Meng Leong FY 2017 (2)   0    0    0    0    0    0    0 

 

 

(1) Mr. Chin was appointed a Director and President/CEO/CFO on July 2, 2017.
(2) Mr. Liew was appointed a Director on July 26, 2017.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

Security Ownership of Certain Beneficial Owners and Management  

 

The following table sets forth information as of the Record Date with respect to the beneficial ownership of Common Stock by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock as of the Record Date (ii) our current directors, (iii) each person who will become a director on or after the tenth day following our mailing of this Information Statement, (iv) each of newly named executive officers and (v) all of our newly named executive officers and directors as a group.

 

Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated by footnote and subject to community property laws, where applicable, to our knowledge the persons named in the table below have sole voting and investment power with respect to all shares of Common Stock that are shown as beneficially owned by them. In computing the number of shares of Common Stock owned by a person and the percentage ownership of that person, any such shares subject to options and warrants held by that person that are exercisable as of the Record Date or that will become exercisable within 60 days thereafter are deemed outstanding for purposes of that person’s percentage ownership but not deemed outstanding for purposes of computing the percentage ownership of any other person. The percent of class is based on 37,731,495 shares of common stock issued and outstanding as of the date of this report. Unless otherwise indicated, the mailing address of each individual is c/o Velt International Group Inc., 1313 N. Grand Ave., #16, Walnut, California 91789

 

Name 

Number of

Shares of

Common stock

   Percentage 
         
Yidan (Andy) Liu [1]   2,510,000    7%
           
Jiwen Zhang [1]   2,510,000    7%
           
Jun (Charlie) Huang   2,815,000    7%
           
Chin Kha Foo   22,640,000    60%
           
Liew Meng Leong   -0-    -0- 

 

 

[1] Includes 10,000 shares owned by Jiwen Zhang, wife of Mr. Liu.

 

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.  

 

Director Independence

 

Our board of directors has determined that we do not have a board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.

 

PROPOSAL 2

 

APPROVAL OF GRANT TO THE BOARD OF DIRECTORS THE DISCRETIONARY AUTHORITY TO AFFECT A REVERSE STOCK SPLIT TO THE COMPANY'S COMMON STOCK

 

We are seeking shareholder approval to grant the Board discretionary authority to amend the Company's Articles of Incorporation to affect a reverse stock split of the issued and outstanding shares of our Common Stock, par value $0.001 per share, such split to combine a whole number of outstanding shares of our Common Stock in a range of not less than ten (10) shares and not more than twenty (20) shares, into one share of Common Stock at any time prior to September 30, 2018 (the “Reverse Split Proposal”).

 

The amendments will not change the number of authorized shares of Common Stock, or the relative voting power of our shareholders. Because the number of authorized shares will not be reduced, the number of authorized but unissued shares of our Common Stock will materially increase and will be available for reissuance by the Company. The reverse stock split, if affected, would affect all of our holders of Common Stock uniformly.

 

The Board unanimously approved and recommended seeking shareholder approval of this Reverse Split Proposal, on February 27, 2018.

 

Although the majority shareholder approved the Reverse Split Proposal, we reserve the right not to affect any reverse stock split if the Board does not deem it to be in the best interests of our shareholders. The Board believes that granting this discretion provides the Board with maximum flexibility to act in the best interests of our shareholders. Therefore, the Board will have the authority, in its sole discretion, without further action by the shareholders, to affect a reverse stock split.

 

The Board's decision as to whether and when to affect the reverse stock split will be based on a number of factors, including prevailing market conditions, existing and expected trading prices for our Common Stock, actual or forecasted results of operations, and the likely effect of such results on the market price of our Common Stock.

 

Following a reverse stock split, the number of our outstanding shares of Common Stock will be significantly reduced. The reverse stock split is not being proposed in response to any effort of which we are aware to accumulate our shares of Common Stock or obtain control of the Company, nor is it a plan by management to recommend a series of similar actions to our Board or our shareholders.

 

There are certain risks associated with a reverse stock split, and we cannot accurately predict or assure the reverse stock split will produce or maintain the desired results (for more information on the risks see the section below entitled “Certain Risks Associated with a Reverse Stock Split”). However, our Board believes that the benefits to the Company and our shareholders outweigh the risks and recommends that you vote in favor of granting the Board the discretionary authority to affect a reverse stock split.

 

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Reasons for the Reverse Stock Split

 

The primary purpose for effecting the reverse stock split, should the Board of Directors choose to effect one, would be to increase the per share price of our Common Stock. The Board of Directors believes that, should the appropriate circumstances arise, affecting the reverse stock split would, among other things, help us to:

 

  ● Meet certain initial listing requirements of the New York Stock Exchange (“NYSE”) and/or NASDAQ;
     
  ● Appeal to a broader range of investors to generate greater investor interest in the Company; and
     
  ● Improve the perception of our Common Stock as an investment security.

 

Meet the NASDAQ or NYSE Listing Requirements - Our Common Stock is currently listed on the OTC:QB (“VIGC”). Both the NYSE and the NASDAQ require a minimum trading price per share in order to list on either exchange. The NYSE and the NASDAQ Rules and Regulations, require among other things, that in order to list on their exchanges, the average closing price of a company's common stock must be at least $3.00 or $4.00 per share over a consecutive 30 trading-day period.

 

Appeal to a Broader Range of Investors to Generate Greater Investor Interest in the Company - An increase in our stock price may make our Common Stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their clients. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential purchasers of our Common Stock. Investment funds may also be reluctant to invest in lower-priced stocks. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower-priced stocks. Giving the Board of Directors the ability to affect a reverse stock split, and thereby increase the price of our Common Stock, would give the Board the ability to address these issues if it is deemed necessary. 

 

Improve the Perception of Our Common Stock as an Investment Security - We believe that the overall economic environment in the industry in which we are currently operating has been a significant contributing factor in the decline in the price of our Common Stock. Our Board of Directors unanimously approved the discretionary authority to affect a reverse stock split as one potential means of increasing the share price of our Common Stock to improve the perception of our Common Stock as a viable investment security. Lower-priced stocks have a perception in the investment community as being risky and speculative, which may negatively impact not only the price of our Common Stock, but also our market liquidity.

 

Certain Risks Associated with a Reverse Stock Split

 

Even if a reverse stock split is affected, some or all of the expected benefits discussed above may not be realized or maintained. The market price of our Common Stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares outstanding.

 

The reverse stock split will reduce the number of outstanding shares of our Common Stock without reducing the number of shares of available but unissued Common Stock, which will also have the effect of increasing the number of authorized but unissued shares. The issuance of additional shares of our Common Stock may have a dilutive effect on the ownership of existing shareholders.

 

The current economic environment, in which we operate, the substantial debt we carry and other risks which affect our ability to operate as a going concern, along with otherwise volatile equity market conditions, could limit our ability to raise new equity capital in the future.

 

Principal Effects of a Reverse Stock Split

 

If our shareholders approve this Reverse Split Proposal and the Board of Directors elects to affect a reverse stock split, our issued and outstanding shares of Common Stock would decrease at a rate of approximately one share of Common Stock for every ten (10) to twenty (20) shares of Common Stock currently outstanding, with adjustment for any fractional shares. The reverse stock split would be affected simultaneously for all of our Common Stock, and the exchange ratio would be the same for all shares of Common Stock. The reverse stock split would affect all of our shareholders uniformly and would not affect any shareholder's percentage ownership interests in the Company, except to the extent that it results in a shareholder receiving whole shares in lieu of fractional shares. Shareholders holding fractional shares as a result of the Reverse Stock Split will be rounded up to the next whole share. The reverse stock split would not affect the relative voting or other rights that accompany the shares of our Common Stock, except to the extent that it results in a shareholder receiving a whole share in lieu of fractional shares. Common Stock issued pursuant to the reverse stock split would remain fully paid and non-assessable. The reverse stock split would not affect our securities law reporting and disclosure obligations, and we would continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have no current plans to take the Company private. Accordingly, a reverse stock split is not related to a strategy to do so.

 

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In addition to the change in the number of shares of Common Stock outstanding, a reverse stock split would have the following effects:

 

Increase the Per Share Price of our Common Stock - By effectively condensing a number of pre-split shares into one share of Common Stock, the per share price of a post-split share is generally greater than the per share price of a pre-split share. The amount of the initial increase in per share price and the duration of such increase, however, are uncertain. If appropriate circumstances exist, the Board may utilize the reverse stock split as part of its plan to obtain listing on the NYSE or NASDAQ to meet their listing standards noted above.

 

Increase in the Number of Shares of Common Stock Available for Future Issuance - By reducing the number of shares outstanding without reducing the number of shares of available but unissued Common Stock, a reverse stock split will increase the number of authorized but unissued shares. The Board believes the increase is appropriate for use to fund the future operations of the Company. Although the Company does not have any pending acquisitions for which shares are expected to be used, the Company may also use authorized shares in connection with the financing of future acquisitions.

 

The following table contains approximate information relating to our common stock, based on share information as of February 27, 2018:

 

   Current   After Reverse Split if 1:10
Ratio is Selected		   After Reverse Split if 1:20
Ratio is Selected		 
Authorized Common Stock   50,000,000    50,000,000    50,000,000 
Common Stock issued and outstanding   37,731,495    3,773,150    1,886,575 
Authorized but unissued   12,268,505    46,226,850    48,113,425 

 

Although a reverse stock split would not have any dilutive effect on our shareholders, a reverse stock split without a reduction in the number of shares authorized for issuance would reduce the proportion of shares owned by our shareholders relative to the number of shares authorized for issuance, giving our Board an effective increase in the authorized shares available for issuance, in its discretion. Our Board from time to time may deem it to be in the best interests of the Company and our shareholders to enter into transactions and other ventures that may include the issuance of shares of our Common Stock. If our Board authorizes the issuance of additional shares subsequent to the reverse stock split described above, the dilution to the ownership interest of our existing shareholders may be greater than would occur had the reverse stock split not been affected. Many stock issuances not involving equity compensation do not require shareholder approval, and our Board generally seeks approval of our shareholders in connection with a proposed issuance only if required at that time.  

 

In addition, a reverse stock split may result in some shareholders owning “odd lots” of less than 100 shares of Common Stock, which may be more difficult to sell and may cause those holders to incur greater brokerage commissions and other costs upon sale.

 

Authorized Shares of Common Stock

 

The Reverse Stock Split Proposal will not change the number of authorized shares of Common Stock but will increase the number of authorized shares available for future issuance for corporate needs such as equity financing, retirement of outstanding indebtedness, stock splits and stock dividends, employee benefit plans, or other corporate purposes as may be deemed by the Board to be in the best interests of the Company and its shareholders. The Board believes the increase in available shares for future issuance is appropriate to fund the future operations of the Company. It will also provide the Company with greater flexibility to respond quickly to advantageous business opportunities. However, we may from time to time explore opportunities to make acquisitions through the use of stock. As a result, the Company's current number of authorized shares of Common Stock may enable the Company to better meet its future business needs.

 

We believe that the increase in the amount of authorized Common Stock from 50,000,000 to 100,000,000 will make a sufficient number of shares available, should the Company decide to use its shares for one or more of such previously mentioned purposes or otherwise. The current capital will provide the Board with the ability to issue additional shares of stock without further vote of the shareholders of the Company, except as provided under Nevada corporate law or under the rules of any national securities exchange on which shares of stock of the Company are then listed.

 

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Procedure for Effecting Reverse Stock Split and Exchange of Stock Certificates

 

If the Reverse Split Proposal is approved by our shareholders, our Board, in its sole discretion, will determine whether such an action is in the best interests of the Company and our shareholders, taking into consideration the factors discussed above. If our Board believes that a reverse stock split is in our best interests and the best interest of our shareholders, our Board will then implement the reverse stock split.

 

We would then file a certificate of amendment to our Articles of Incorporation with the Secretary of the State of Nevada at such time as our Board of Directors had determined as the appropriate effective time for the reverse stock split to affect the reverse split. The certificate of amendment would add a new provision providing that holders of our Common Stock immediately prior to the filing of the amendment will receive one share of Common Stock for each number of shares selected by the Board. Upon the filing of the certificate of amendment, and without any further action on the part of the Company or our shareholders, the issued shares of Common Stock held by shareholders of record as of the effective date of the reverse stock split would be converted into a lesser number of shares of Common Stock calculated in accordance with the reverse stock split ratio of not less than one-for-ten (1:10) or not more than one-for-twenty (1:20), as selected by our Board and set forth in the certificate of amendment.

 

For example, if a shareholder presently holds 1,000 shares of our Common Stock, he or she would hold 100 shares of Common Stock following a one-for-ten reverse stock split, or 50 shares of Common Stock following a one-for-twenty reverse stock split, in each case with an adjustment for any fractional shares. Beginning on the effective date of the split, each certificate representing pre-split shares would be deemed for all corporate purposes to evidence ownership of post-split shares.

 

As soon as practicable after the effective date of the reverse stock split, shareholders would be notified that the reverse stock split had been affected.

 

Effect on Beneficial Holders (i.e., Shareholders Who Hold in “Street Name”)

 

Upon the reverse stock split, we intend to treat Common Stock held by shareholders in “street name,” through a bank, broker or other nominee, in the same manner as shareholders whose shares are registered in their own names. Banks, brokers or other nominees will be instructed to affect the reverse stock split for their customers holding Common Stock in “street name.” However, these banks, brokers or other nominees may have different procedures than registered shareholders for processing the reverse stock split. If you hold shares of Common Stock with a bank, broker or other nominee and have any questions in this regard, you are encouraged to contact your bank, broker or other nominee.

 

Effect on Registered “Book-Entry” Holders (i.e., Shareholders that are Registered on the Transfer Agent's Books and Records but do not Hold Certificates)

 

Some of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with our transfer agent, West Coast Stock Transfer Inc. These shareholders do not have stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If a shareholder holds registered shares in book-entry form with our transfer agent, no action needs to be taken to receive post-reverse stock split shares. If a shareholder is entitled to post-reverse stock split shares, a transaction statement will be available to be sent to the shareholder's address of record indicating the number of shares (adjusted for any fractional shares) of Common Stock held following the reverse stock split, if required by the shareholder.

   

Effect on Certificated Shares

 

Upon the reverse stock split our transfer agent will act as our exchange agent and assist holders of Common Stock in implementing the exchange of their certificates.

 

Commencing on the effective date of a reverse stock split, shareholders holding shares in certificated form will be sent a transmittal letter by our transfer agent. The letter of transmittal will contain instructions on how a shareholder should surrender his or her certificates representing Common Stock (“Old Certificates”) to the transfer agent in exchange for certificates representing the appropriate number of whole post-reverse stock split Common Stock, as applicable (“New Certificates”). No New Certificates will be issued to a shareholder until that shareholder has surrendered all Old Certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. The letter of transmittal will also contain instructions on how you may obtain New Certificates if your Old Certificates have been lost. If you have lost your certificates, you will have to pay any surety premium and the service fee required by our transfer agent.

 

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Until surrendered, we will deem outstanding Old Certificates held by shareholders to be canceled and only to represent the number of whole shares to which these shareholders are entitled.

 

Any Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of shares, will automatically be exchanged for New Certificates.

 

Shareholders should not destroy any stock certificates and should not submit any certificates until requested to do so by the transfer agent. Shortly after the reverse stock split the transfer agent will provide registered shareholders with instructions and a letter of transmittal for converting Old Certificates into New Certificates. Shareholders are encouraged to promptly surrender Old Certificates to the transfer agent (acting as exchange agent in connection with the reverse stock split) in order to avoid having shares become subject to escheat laws.  

 

Fractional Shares

 

The effect of the Reverse Split upon existing shareholders of the common stock will be that the total number of shares of the Company’s common stock held by each shareholder will automatically convert into the number of whole shares of common stock equal to the number of shares of common stock owned immediately prior to the Reverse Split divided by the reverse stock split ratio chosen by the Board, with an adjustment for any fractional shares. (Fractional shares will be rounded up to the next whole share).

 

Upon effectuation of the Reverse Split, each common shareholder’s percentage ownership interest in the Company’s common stock will remain virtually unchanged, except for minor changes and adjustments that will result from rounding fractional shares into whole shares. The rights and privileges of the holders of shares of common stock of the Company will be substantially unaffected by the Reverse Split. All issued and outstanding options, warrants, and convertible securities would be appropriately adjusted for the Reverse Split automatically on the effective date of the Reverse Split. Shareholders holding a fractional as a result of the Reverse Split will be rounded up to the next whole share. 

 

No Appraisal Rights

 

Our shareholders are not entitled to appraisal rights with respect to a reverse stock split, and we will not independently provide shareholders with any such right.

 

Interests of Directors and Executive Officers

 

Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Reverse Split Proposal except to the extent of their ownership of shares of our Common Stock.

 

Reservation of Right to Abandon Reverse Stock Split

 

We reserve the right to abandon a reverse stock split without further action by our shareholders at any time before the effectiveness of the filing with the Secretary of the State of Nevada of the certificate of amendment to our Articles of Incorporation, even if the authority to affect a reverse stock split has been approved by our shareholders at the Annual Meeting. By voting in favor of a reverse stock split, you are expressly also authorizing the Board to delay, not to proceed with, and abandon, a reverse stock split if it should so decide, in its sole discretion, that such action is in the best interests of the shareholders.

 

Vote Required

 

The Majority Shareholder executed and delivered to the Company a written consent approving the action set forth herein. Since the action has been approved by the Majority Stockholder, no proxies are being solicited with this Information Statement.

 

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PROPOSAL 3

 

The form of Certificate of Amendment to be filed with the Secretary of the State of Nevada is set forth as Appendix A to this information statement. 

 

Outstanding Shares and Purpose of the Amendment

 

Our articles of incorporation currently authorize us to issue a maximum of 50,000,000 shares, $0.001 par value, of Common Stock, and no preferred stock. As of the Record Date, we had 37,731,495 shares of Common Stock issued and outstanding.

 

The board of directors believes that the increase in our authorized Common Stock to 100,000,000 shares, par value $0.001 and the authorization of 20,000,000 shares of preferred stock, par value $0.001, will provide us with greater flexibility with respect to our capital structure for business purposes including additional equity financings and stock-based acquisitions.

 

Effects of the Increase in Authorized Common Stock

 

The additional shares of Common Stock will have the same rights as the presently authorized shares, including the right to cast one vote per share of Common Stock. Although the authorization of additional shares will not, in itself, have any effect on the rights of any holder of our Common Stock, the future issuance of additional shares of Common Stock (other than by way of a stock split or dividend) would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per share of existing stockholders.

 

At present, the board of directors has no plans to issue the additional shares of Common Stock authorized by the Amendment. However, it is possible that some of these additional shares could be used in the future for various other purposes without further stockholder approval, except as such approval may be required in particular cases by our charter documents, applicable law or the rules of any stock exchange or other quotation system on which our securities may then be listed. These purposes may include: raising capital, settlement of debt, providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies, and expanding our business or product lines through the acquisition of other businesses or products.

 

We could also use the additional shares of Common Stock that will become available pursuant to the Amendment to oppose a hostile takeover attempt or to delay or prevent changes in control or management of our company. Although the board’s approval of the Amendment was not prompted by the threat of any hostile takeover attempt (nor is the board currently aware of any such attempts directed at us), nevertheless, stockholders should be aware that the Amendment could facilitate future efforts by us to deter or prevent changes in control of our company, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices.

 

Interests of Certain Persons in the Action

 

Certain of the Company’s officers and directors have an interest in the Amendment as a result of their ownership of shares of our common stock, as set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” below. However, we do not believe that our officers or directors have interests in the Amendment that are different from or greater than those of any other of our stockholders.

 

Purpose of the Amendment to Authorize Preferred Stock

 

Currently the Company’s Articles do not designate preferred stock.  By amending the Articles of Incorporation to authorize preferred stock, the Board can designate different series of preferred stock to issue to investors when the Company is seeking to raise capital. In addition, the Board can issue, under certain circumstances, a new series of preferred stock as a method of discouraging, delaying or preventing a change in control of the Company, which could be unfavorable to our stockholders. 

 

The Board of Directors is not currently aware of any attempt to take over or acquire the Company. While it may be deemed to have potential anti-takeover effects, the Amendment to the Articles of Incorporation is not prompted by any specific effort or takeover threat currently perceived by management.

 

Effect of the Certificate of Amendment to Authorize Preferred Stock

 

The Amendment to authorize preferred stock will not have any immediate effect on the rights of existing stockholders. However, when the amendment is effective, the Board will have the authority in its absolute and sole discretion to designate series of preferred stock without requiring future stockholder approval of such designation, except as may be required by the Company’s Articles of Incorporation or applicable law or the rules of any stock exchange on which the Company’s Common Stock is or may be listed. To the extent that an additional series of preferred stock is designated that is convertible into shares of common stock in the future, such issuance may decrease the existing stockholders’ percentage equity ownership and, depending on the price at which they are issued, could be dilutive to the existing stockholders.

 

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Shares of authorized and unissued preferred stock could, within the limits imposed by applicable law, be issued in one or more transactions which would make a change in control of the Company more difficult, and therefore less likely. Any such issuance of additional convertible preferred stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common Stock and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company.

 

Vote Required

 

Pursuant to NRS 78.385 and NRS 78.390, the affirmative vote of the holders of a majority of the Company’s outstanding voting stock is sufficient to take the actions described above, which vote was obtained by written consent of the holders of the issued and outstanding shares of Common Stock having in the aggregate 60 % of the voting power of the Company. As a result, the corporate actions were approved, and no further votes will be needed.

 

Effective Date

 

Under applicable federal securities laws, the amendment to the Articles of Incorporation to provide for an increase in the authorized common stock and the authorization of preferred stock cannot be effective until at least 20 calendar days after this Information Statement is distributed to the Company’s stockholders.

 

Dissenters’ Rights of Appraisal

 

The Nevada Revised Statutes do not provide for appraisal rights in connection with the action described above.

 

PROPOSAL 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

 

(a) On September 19, 2017, the board of directors of Velt International Group Inc. (the “Company”) dismissed its independent registered public accounting firm, De Leon & Company, P.A. (“De Leon”), effective as of September 19, 2017.

 

(b) On September 19, 2017, the Company, based on the decision of its board of directors, approved the engagement of Simon & Edward, LLP, Diamond Bar, California (“S&E”) to serve as the Company’s independent registered public accounting firm, commencing September 20, 2017.

 

The Board has appointed the firm of Simon & Edward, LLP to act as our independent registered public accounting firm for the fiscal year ending September 30, 2018, and such appointment is being submitted to our shareholders for ratification of which a majority of such shareholders entitled to vote approved of the ratification on February 27, 2018 by written consent in lieu of a shareholder meeting.  Simon & Edward, LLP is considered by our management to be well qualified.

 

WHERE YOU CAN FIND MORE INFORMATION

 

The Company is subject to the informational requirements of the Exchange Act and files reports and other information with the SEC. Such reports and other information filed by the Company may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549-2736.

 

  By order of the Board of Directors
   
  /s/ Chin Kha Foo
  Chin Kha Foo, Chief Executive Officer

March 12, 2018

Walnut, California  

 

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Appendix A

 

CERTIFICATE OF AMENDMENT TO

ARTICLES OF INCORPORATION

OF

VELT INTERNATIONAL GROUP INC.

 

VELT International Group Inc., a corporation organized and existing under the laws of the State of Nevada (the “Corporation”), does hereby certify as follows:

 

1.            The name of the Corporation is Velt International Group Inc.

 

2.            The articles have been amended as follows:

 

Article 3 AUTHORIZED SHARES

 

“The total number of shares the corporation is authorized to issue is 120,000,000 shares, consisting of 100,000,000 shares of Common Stock $0.001 par value, and 20,000,000 shares of Preferred Stock $0.001 par value, of which the rights, preferences, series and designations shall be determined by the Board of Directors.”

 

3.            The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is: 60%

 

4.           Effective date and time of filing: (optional) 

 

SIGNATURE

 

        
Signature of Officer  

 

 A-1