Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
Information
Statement pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
Check the
appropriate box:
o Preliminary
Information Statement
o Confidential, for use
of the Commission only (as permitted by Rule 14c-5(d)(2))
x Definitive Information
Statement
CONSPIRACY
ENTERTAINMENT HOLDINGS, INC.
(Name of
Registrant as Specified in its Charter)
Payment
of Filing Fee (Check the appropriate box):
x No fee
required.
o 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:
(4)
Proposed maximum aggregate value of securities:
(5) Total
fee paid:
o Fee paid previously
with preliminary materials.
o 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:
NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS
CONSPIRACY
ENTERTAINMENT HOLDINGS, INC.
612 Santa
Monica Blvd.
Santa
Monica, CA 90401
Important
Notice Regarding the Availability of Proxy Materials
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
This
Information Statement including the required Financial and Other Information are
available at
http://www.ir-site.com/comnspiracy/sec/asp.
Notice is
hereby given that, pursuant to action taken by the written consent of the
stockholder holding a majority of the shares of the common stock of Conspiracy
Entertainment Holdings, Inc. (the “Company”), the Company intends to take
certain action as more particularly described in its Information Statement filed
with the Securities and Exchange Commission on November 10, 2009, and available
on the Internet at http://
www.ir-site.com/comnspiracy/sec/asp.
The
action conforms with Regulation 14c-2(b) of the Securities Exchange Act of 1934,
as amended, and will be effected on or after November 30, 2009, which is 20
calendar days after the date that this Notice was first mailed to
shareholders.
The
following materials are available at the website shown above:
Annual
Report on Form 10-K for the year ended December 31, 2008; and
Quarterly
Report on Form 10-Q for the period ended June 30, 2009.
CONSPIRACY
ENTERTAINMENT HOLDINGS, INC.
612 Santa
Monica Blvd.
Santa
Monica, CA 90401
NOTICE
OF ACTION BY
WRITTEN
CONSENT OF STOCKHOLDERS
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
To our
Stockholders:
This
Information Statement is furnished by the Board of Directors of Conspiracy
Entertainment Holdings, Inc., a Utah corporation (the “Company”), to holders of
record of the Company’s common stock, $.001 par value per share, at the close of
business on October 13, 2009, pursuant to Rule 14c-2 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). The purpose of
this Information Statement is to inform the Company’s stockholders of action
taken by the written consent of the holders of a majority of the Company’s
voting stock, dated as of October 13, 2009. This Information Statement shall be
considered the notice required under the Utah Business Corporation
Act.
The
action taken by the Company’s stockholders will not become effective until at
least 20 days after the date of this Information Statement.
THIS
IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING
WILL BE HELD TO CONSIDER ANY MATTER WHICH WILL BE DESCRIBED HEREIN.
Santa
Monica, CA
November
10, 2009
By
Order of the Board of
Directors:
|
|
/s/Sirus
Ahmadi
|
Chairman
|
CONSPIRACY
ENTERTAINMENT HOLDINGS, INC.
612 Santa
Monica Blvd.
Santa
Monica, CA 90401
INFORMATION
STATEMENT
Introductory
Statement
NOTICE
OF ACTION TO BE TAKEN PURSUANT TO THE WRITTEN CONSENT OF MAJORITY STOCKHOLDERS
IN LIEU OF A SPECIAL MEETING OF THE STOCKHOLDERS, DATED NOVEMBER 10,
2009
Conspiracy
Entertainment Holdings, Inc. (the “Company”) is a Utah corporation with its
principal executive offices located at 612 Santa Monica Blvd., Santa Monica,
California 90401. The Company’s telephone number is (310) 260-6150. This
Information Statement is being sent to the Company’s stockholders by the Board
of Directors to notify them about action that the holders of a majority of the
Company’s outstanding voting capital stock have taken by written consent, in
lieu of a special meeting of the stockholders. The action was approved on
October 13, 2009, and will not become effective until at least 20 days after the
date of this Information Statement.
General
Information
The
following action will be taken pursuant to the written consent of a majority of
the holders of the Company’s voting capital stock, dated October 13, 2009,
in lieu of a special meeting of the stockholders:
|
1.
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The
filing of an amendment to the Company’s Articles of Incorporation to
increase the Company’s authorized shares of common stock from 100,000,000
shares, par value $0.001 to 1,000,000,000 shares, par value
$0.001;
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|
2.
|
To
elect two directors to serve subject to the provisions of the By-laws,
until the next Annual Meeting of Shareholders and until their respective
successors have been duly elected and qualified;
and
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|
3.
|
To
ratify the selection of Chisholm, Bierwolf, Nilson & Morrill, LLC as
the Company’s independent auditor for the year ended December 31,
2009.
|
Pursuant
to Rule 14c-2 under the Securities Exchange Act of 1934, as amended, the action
will not be adopted until a date at least 20 days after the date of this
Information Statement. The Company anticipates that the actions contemplated
herein will be effected on or about the close of business on November 3,
2009.
The
Company has asked 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.
OUTSTANDING
SHARES AND VOTING RIGHTS
The
Company's authorized capital consists of 100,000,000 shares of common stock, par
value $.001 per share. As of October 22, 2009, there were 56,189,065 shares
of common stock outstanding.
Holders
of the Company’s common stock are entitled to one vote per share on all matters
on which shareholders may vote at all shareholder meetings. The common stock
does not have cumulative voting rights.
Because
stockholders holding at least a majority of the voting rights of all outstanding
shares of capital stock have voted in favor of the foregoing proposals by
resolution dated October 13, 2009; and having sufficient voting power to approve
such proposals through their ownership of capital stock, no other stockholder
consents will be solicited in connection with this Information
Statement.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information regarding the beneficial ownership of our
common stock as of October 22, 2009. The information in this table provides the
ownership information for: each person known by us to be the beneficial owner of
more than 5% of our common stock; each of our directors; each of our executive
officers; and our executive officers and directors as a group.
Unless
otherwise indicated, the persons named in the table below have sole voting and
investment power with respect to the number of shares indicated as beneficially
owned by them.
Name and Address
of Beneficial Owner
|
|
Common Stock
Beneficially
Owned (3)
|
|
|
Percentage of
Common Stock
(3)
|
|
Sirus
Ahmadi (1)
|
|
|
14,269,131 |
|
|
|
25.4
|
% |
|
|
|
|
|
|
|
|
|
Keith
Tanaka (1)
|
|
|
2,155,190 |
|
|
|
3.8
|
% |
|
|
|
|
|
|
|
|
|
Whalehaven
Capital Fund Ltd. (2)
|
|
|
5,814,142 |
(4) |
|
|
10.3
|
% |
|
|
|
|
|
|
|
|
|
All Directors and Executive Officers as a Group (2
persons)
|
|
|
16,424,421 |
|
|
|
29.2
|
% |
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(1)
|
The
address of the listed beneficial owners is c/o Conspiracy Entertainment
Holdings, Inc., 612 Santa Monica Blvd., Santa Monica,
California 90401
|
|
(2)
|
The
address of the listed beneficial owner Is 560 Sylvan Avenue, Englewood
Cliffs, NJ 07632. Brian Mazzella has voting and dispositive
control over such shares.
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|
(3)
|
Applicable
percentage ownership is based on 56,189,065 shares of common stock
outstanding as of October 22, 2009, together with securities exercisable
or convertible into shares of common stock within 60 days of October 22,
2009 for each stockholder. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
generally includes voting or investment power with respect to securities.
Shares of common stock that are currently exercisable or exercisable
within 60 days of October 22, 2009 are deemed to be beneficially owned by
the person holding such securities for the purpose of computing the
percentage of ownership of such person, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other
person.
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(4)
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Of
the 5,814,142 shares of the Company’s common stock beneficially owned by
Whalehaven Capital Fund Ltd. 111,800 shares are issuable upon the
conversion of a Zero Coupon Secured Note and 113,889 shares of
our common stock are issuable upon conversion of a 10% Secured
Note. The amount of shares of our common stock beneficially
owned by Whalehaven does not include 12,000,000 shares of common stock
issuable upon the exercise of warrants having an exercise price of $0.02
per share.
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ACTION
1
TO
AUTHORIZE THE FILING OF AN AMENDMENT TO THE COMPANY’S ARTICLES OF
INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK,
PAR
VALUE $0.001 PER SHARE, OF THE COMPANY FROM 100,000,000 SHARES TO
1,000,000,000
SHARES
Our board
of directors and the holders of a majority of our outstanding shares of common
stock have approved an amendment to our articles of incorporation, which will
increase the Company’s authorized shares of Common Stock to
1,000,000,000. The amendment to our articles of incorporation, in the
form of Appendix A hereto, will be filed with the Secretary of State of the
State of Utah 20 days from the date of this Information
Statement. The Company currently has authorized (i) Common Stock of
100,000,000 shares and 56,189,065 shares of Common Stock are issued and
outstanding as of October 22, 2009. The creation of additional shares of
authorized Common Stock will not alter the current number of issued shares. The
relative rights and limitations of the shares of Common Stock will remain
unchanged under this amendment.
The terms
of the additional shares of Common Stock will be identical to those of the
currently outstanding shares of Common Stock. However, because holders of Common
Stock do not have any preemptive or similar rights to subscribe for or purchase
any additional shares of Common Stock that may be issued in the future, the
issuance of additional shares of Common Stock may, depending on the
circumstances, have a dilutive effect on the earnings per share, voting power
and other interests of the existing shareholders in the total outstanding shares
of Common Stock.
The
increase in the number of authorized but unissued shares of Common Stock will
enable the Company, without further shareholder approval, to issue shares to
holders of the certain convertible debentures and warrants of the Company (as
further described below) upon the conversion of their respective notes and/or
exercise of their respective warrants. In addition, it will enable
the Company to issue shares without further shareholder approval from time to
time, as may be required, for other proper business purposes, such as raising
additional capital for ongoing operations, business and asset acquisitions,
stock splits and dividends, present and future employee benefit programs and
other corporate purposes.
The
increase in the authorized number of shares of Common Stock could have a number
of effects on the Company's shareholders depending upon the exact nature and
circumstances of any actual issuances of authorized but unissued shares. The
increase could have an anti-takeover effect, in that additional shares could be
issued (within the limits imposed by applicable law) in one or more transactions
that could make a change in control or takeover of the Company more difficult.
For example, additional shares could be issued by the Company so as to dilute
the stock ownership or voting rights of persons seeking to obtain control of the
Company. Similarly, the issuance of additional shares to certain persons allied
with the Company's management could have the effect of making it more difficult
to remove the Company's current management by diluting the stock ownership or
voting rights of persons seeking to cause such removal. Except as further
discussed herein, the Board of Directors is not aware of any attempt, or
contemplated attempt, to acquire control of the Company, and this proposal is
not being presented with the intent that it be utilized as a type of
anti-takeover device.
Except as
described below, there are currently no plans, arrangements, commitments or
understandings for the issuance of the additional shares of common stock which
are proposed to be authorized:
August
31, 2004 Financing and October 6, 2004 Financing
On August
31, 2004, we sold an aggregate of $1,050,000 principal amount of 5% Secured
Convertible Debentures, 21,000,000 Class 2004-A Common Stock Purchase Warrants,
and 21,000,000 Class 2004-B Common Stock Purchase Warrants, to four
institutional investors. On October 6, 2004, we issued an additional $50,000
principal amount of 5% Secured Convertible Debentures, 1,000,000 Class 2004-A
Common Stock Purchase Warrants and 1,000,000 Class 2004-B Common Stock Purchase
Warrants to one institutional investor. We received gross proceeds
totaling $1,100,000 from the sale of the Secured Convertible Debentures and the
Class 2004-A and Class 2004-B Common Stock Purchase Warrants in the foregoing
transactions. The purchasers of the Debentures and Warrants were as
follows:
Investor
|
|
Principal Amount
of Debentures
|
|
|
Class A 2004
Warrants
|
|
|
Class B 2004
Warrants
|
|
Alpha
Capita; AG
|
|
$ |
500,000 |
|
|
|
10,000,000 |
|
|
|
10,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stonestreet
Limited Partnership
|
|
$ |
350,000 |
|
|
|
7,000,000 |
|
|
|
7,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
Whalehaven
Fund Limited
|
|
$ |
100,000 |
|
|
|
2,000,000 |
|
|
|
2,000,000 |
|
|
|
|
|
|
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|
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Whalehaven
Capital LP
|
|
$ |
100,000 |
|
|
|
2,000,000 |
|
|
|
2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
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|
Whalehaven Capital Fund
Limited
|
|
$ |
50,000 |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Principal and accrued interest on each
of the Debentures was due on August 30, 2006. Interest is payable on the earlier
of a conversion of the Debentures (as described below) or on the maturity date.
At our election accrued interest on the Debentures may be paid by us in shares
of common stock at the conversion price then in effect; provided, however, that
we may only make this election if the registration statement covering the resale
of such shares is then effective. The conversion ratio is the lesser of $0.05
per share or 70% of the average of the five lowest closing bid prices for our
common stock for the 30 trading days prior to a conversion date, subject to
adjustment for subsequent lower price issuances by us, as well as customary
adjustment provisions for stock splits, combinations, dividends and the like.
Payment of all amounts due pursuant to the Debentures, as well as our other
obligations to these selling stockholders, is secured by a lien on all of our
assets.
Each Class 2004-A Warrant is currently
exercisable at a price of $0.20 per share and is exercisable until expiration on
August 31, 2009. Each Class 2004-B Warrant is currently exercisable at a price
of $0.05 per share and, based on an amendment to Class 2004-B Warrant terms
entered into in connection with the February 9, 2005 financing discussed below,
is exercisable until expiration 18 months after the date on which the resale of
the shares of common stock issuable upon exercise of the Class 2004-B Warrants
are registered under the Securities Act of 1933 (subject to extension under
certain circumstances). The exercise price of each of the Warrants is subject to
adjustment for subsequent lower price issuances by us, as well as customary
adjustment provisions for stock splits, combinations, dividends and the
like.
Pursuant to the terms of a registration
rights agreement, we agreed to include the shares of common stock issuable upon
conversion of the Debentures and upon exercise of the Warrants in a registration
statement under the Securities Act of 1933 to be filed no later than October 15,
2004 and to use our best efforts to cause such registration statement to be
declared effective no later than November 29, 2004. These deadlines
have not been met. Accordingly, we will be required to issue
additional shares of common stock and/or pay cash liquidated damages to the
investors under the terms of the registration rights agreement.
February
9, 2005 Financing
On
February 9, 2005, we completed the sale of an aggregate of $650,000 principal
amount of 5% Secured Convertible Debentures, 13,000,000 Class 2005-A Common
Stock Purchase Warrants, and 13,000,000 Class 2005-B Common Stock Purchase
Warrants, to three accredited institutional investors. We received
gross proceeds totaling $650,000 from the sale of the Secured Convertible
Debentures and the Class 2005-A and Class 2005-B Common Stock Purchase Warrants
in the foregoing transactions. The purchasers of the Debentures and Warrants
were as follows:
Investor
|
|
Principal Amount
of Debentures
|
|
Class A 2004
Warrants
|
|
Class B 2004
Warrants
|
|
Alpha
Capita; AG
|
|
$ |
250,000
|
|
5,000,000
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
Stonestreet
Limited Partnership
|
|
$ |
150,000
|
|
3,000,000
|
|
3,000,000
|
|
|
|
|
|
|
|
|
|
|
Whalehaven
Capital Fund Limited
|
|
$ |
250,000
|
|
5,000,000
|
|
5,000,000
|
|
Interest is payable on the earlier of a
conversion of the Secured Convertible Debentures (as described below) or on the
maturity date of February 9, 2007. At our election, accrued interest on the
Secured Convertible Debentures may be paid by us in shares of common stock at
the conversion price then in effect; provided, however, that we may only make
this election if the registration statement covering the resale of such shares
is then effective. The conversion price is the lower of $0.05 per share or 70%
of the average of the five lowest closing bid prices for our common stock for
the 30 trading days prior to a conversion date, subject to adjustment for
subsequent lower price issuances, as well as customary adjustment provisions for
stock splits, combinations, dividends and the like. Payment of all amounts due
pursuant to the Secured Convertible Debentures, as well as our other obligations
to the investors, is secured by a lien on all of our assets.
Each Class 2005-A Warrant is currently
exercisable at a price of $0.20 per share and is exercisable until expiration on
February 28, 2010. Each Class 2005-B Warrant is currently exercisable at a price
of $0.05 per share until expiration 18 months after the date on which the resale
of the shares of common stock issuable upon exercise of the Class 2005-B
Warrants are registered under the Securities Act of 1933 (subject to extension
under certain circumstances). The exercise price of each of the Warrants is
subject to adjustment for subsequent lower price issuances, as well as customary
adjustment provisions for stock splits, combinations, dividends and the
like.
The Secured Convertible Debentures and
the Warrants were issued in a private placement transaction pursuant to Section
4(2) and Regulation D under the Securities Act of 1933. Pursuant to the terms of
a registration rights agreement, we agreed to include the shares of common stock
issuable upon conversion of the Secured Convertible Debentures and upon exercise
of the Warrants in a registration statement under the Securities Act of 1933 to
be filed not later than 30 days after the effective date of the registration
statement, as amended, originally filed by us on November 24, 2004 (the
“Required Filing Date”) and to use our best efforts to cause such registration
statement to be declared effective no later than 60 days after the Required
Filing Date. In the event we do not meet these deadlines, we may be
required to issue additional shares of common stock to the investors under the
terms of the registration rights agreement.
Palladium Capital Advisors, LLC acted
as placement agent in connection with the sale of Debentures, Class 2005-A
Common Stock Purchase Warrants and Class 2005-B Common Stock Purchase
Warrants. In consideration for its services, we (i) paid Palladium
Capital Advisors, LLC a cash amount equal to 5.5% of the total purchase price of
the Debentures and Warrants; (ii) issued Palladium Capital Advisors, LLC or its
designees 300,000 shares of common stock with piggy-back registration rights;
and (iii) agreed to pay Palladium Capital Advisors, LLC a cash fee equal to 10%
of the cash exercise price of any Warrants that are exercised for
cash.
In
connection with the February 9, 2005 financing, we agreed to extend the
expiration date of the 2004-B Common Stock Purchase Warrants to a date which is
18 months after the effective date of the registration statement covering the
resale of those warrant shares.
August 5, 2005 Financing and
Amendments to Secured Convertible Debentures
On August
5, 2005 and August 8, 2005, two accredited investors loaned us an aggregate of
$223,600 in gross proceeds in exchange for two notes payable. The
notes bear no interest and were due on February 1, 2006. Under the
terms of the loans, we agreed to share 50% of the profit earned from the
development, production and commercialization of the videogame originally
released under the name ‘Kollon’ in Japan by Cyberfront Corporation on the Sony
PSP platform.
In
connection with the August 5, 2005 and August 8, 2005 loans, we entered into an
agreement amending the terms of our August 31, 2004, October 6, 2004 and
February 9, 2005 financings. In connection with the loans, we
re-affirmed all representations and warranties made in the contained in the
August 31, 2004, October 6, 2004 and February 9, 2005 financings and all
covenants and conditions from such financings were adopted and
renewed. In addition, the $223,600 principal amount notes payable
were added to the Security Interest Agreements executed in connection with the
August 31, 2004, October 6, 2004 and February 9, 2005
financings. Further, the conversion price of the debentures issued in
connection with the August 31, 2004, October 6, 2004 and February 9, 2005
financings was amended from $0.05 per share to be the lesser of $0.05 or 70% of
the average of the five lowest closing bid prices for our common stock for the
30 trading days prior to a conversion date.
May 21, 2009
Financing
On May
21, 2009, we entered into a subscription agreement (the “Subscription
Agreement”) with two accredited investors. Pursuant to the
Subscription Agreement, the Company issued and sold secured convertible notes in
the aggregate principal amount of $150,000.
The notes
mature one year from the date of issuance and will accrue interest at the rate
of 15%. Upon a default in the payment of any amounts due under the
notes, the interest rate will be increased to 18%. Upon the
occurrence of an event of default (as such term is defined in the notes), all
principal and interest then remaining unpaid shall be immediately due and
payable. Events of Default include but are not limited to (i)
the Company’s failure to make payments when due, (ii) breaches by the Company of
its representations, warranties and covenants, and (iii) delisting of the
Company’s common stock from the OTC Bulletin Board.
Pursuant
to the terms of the notes, the subscribers have the right, so long as the notes
are not fully repaid, to convert the notes into shares of the Company’s common
stock at a conversion price of $.01 per share, as may be
adjusted. The notes contain anti-dilution provisions, including but
not limited to if the Company issues shares of its common stock at less than the
then existing conversion price, the conversion price of the notes will
automatically be reduced to such lower price. The notes contain limitations on
conversion, including the limitation that the holder may not convert its note to
the extent that upon conversion the holder, together with its affiliates, would
own in excess of 4.99% of the Company’s outstanding shares of common stock
(subject to an increase upon at least 61-days’ notice by the subscriber to the
Company, of up to 9.99%).
The Notes
are secured by a security interest in certain assets of the
Company. The purchasers of the notes were as follows:
Investor
|
|
Principal Amount
of Debentures
|
|
Alpha
Capita Anstalt
|
|
$ |
75,000
|
|
|
|
|
|
|
Whalehaven
Capital Fund Limited
|
|
$ |
75,000
|
|
|
|
$ |
150,000
|
|
ACTION
2
ELECTION
OF DIRECTORS
Our board of directors and the holders
of a majority of our outstanding shares of common stock have approved the
election of the following two persons as directors, both of whom are
currently members of the Board of Directors, to hold office until the next
annual meeting of shareholders and until their respective successors have been
elected and qualified.
Name
|
|
Age
|
|
Position
|
|
Director Since
|
Sirus
Ahmadi
|
|
39
|
|
Chief
Executive Officer and Director
|
|
1997
|
Keith
Tanaka
|
|
39
|
|
Chief
Financial Officer, Principal Accounting Officer, Secretary and
Director
|
|
2003
|
MANAGEMENT
Directors
and Executive Officers
The following table sets forth the
names and ages of our Board of Directors and our executive officers and the
positions held by each as of October 22, 2009. There are no family
relationships among our Directors and Executive Officers.
Name
|
|
Age
|
|
Position
|
Sirus
Ahmadi
|
|
39
|
|
Chief
Executive Officer and Director
|
Keith
Tanaka
|
|
39
|
|
Chief
Financial Officer, Principal Accounting Officer, Secretary and
Director
|
SIRUS
AHMADI, Chief Executive Officer and Director. Mr. Ahmadi has been our Chief
Executive Officer and a Director since August 2003. Prior to joining us, Mr.
Ahmadi was the President and Chief Executive Officer of Conspiracy Entertainment
Corporation since 1997. Mr. Ahmadi is currently a member of the Board of
Directors of Giant Mobile Corporation, a wireless gaming
company.
KEITH
TANAKA, Chief Financial Officer, Principal Accounting Officer, Secretary and
Director. Mr. Tanaka has been our Chief Financial Officer, Principal Accounting
Officer, Secretary and a Director since August 2003. Prior to joining us, Mr.
Tanaka was the Controller and Chief Financial Officer of Conspiracy
Entertainment Corporation since 2000. Before joining Conspiracy Entertainment
Corporation, he was an independent consultant for Conspiracy Entertainment
Corporation since 1997. As a consultant for Conspiracy Entertainment
Corporation, Mr. Tanaka's roles consisted of providing advice and direction and
operations support in the areas of accounting, computer hardware and operations.
Mr. Tanaka is currently a member of the Board of Directors of Giant Mobile
Corporation, a wireless gaming company.
MEETINGS
AND COMMITTEES OF THE BOARD OF DIRECTORS
During
the fiscal year ended December 31, 2008, the Board of Directors held 1 meeting
and acted by written consent in lieu of a meeting on 1 occasion. All of the
directors attended all of the meetings of the Board of Directors.
The Board
of Directors does not have a standing audit, compensation, or nominating
committee/
The
Company considers the independence of directors in accordance with Rule
4200(a)(15) of Nasdaq’s listing standards. Under such standard,
neither Sirus Ahmadi or Keith Tanaka are independent due to their
position as executive officers of the Company.
Audit
Committee
The
Company does not maintain a standing Audit Committee. An audit committee
typically reviews, acts on and reports to the Board of Directors with respect to
various auditing and accounting matters, including the recommendations and
performance of independent auditors, the scope of the annual audits, fees to be
paid to the independent auditors, and internal accounting and financial control
policies and procedures. All members of the Board of Directors act in the
capacity of and perform the duties of an audit committee. Certain stock
exchanges currently require companies to adopt a formal written charter that
establishes an audit committee that specifies the scope of an audit committee’s
responsibilities and the means by which it carries out those responsibilities.
In order to be listed on any of these exchanges, the Company will be required to
establish an audit committee.
The
Company does not have an audit committee financial expert. The
Company and its Board of Directors have experienced difficulties in identifying
a suitable candidate to serve as its audit committee financial expert because of
the size of the Company, the perceived additional liability to the public by
prospective candidates and the excessive additional costs associated with the
selection of a candidate, including director fees for the audit committee
financial expert and director liability insurance.
Nominating
Committee
The
Company does not maintain a standing Nominating Committee and does not have a
Nominating Committee charter. Due to the Company’s capital restraints and the
size of its current Board of Directors, creating, constituting and administering
such a committee would be excessively burdensome and costly. As such,
members of the Board of Directors generally participate in the director
nomination process.
The Board
of Directors will consider qualified nominees recommended by shareholders.
Shareholders desiring to make such recommendations should submit such
recommendations to Conspiracy Entertainment Holdings, Inc. 612 Santa Monica
Blvd., Santa Monica, CA 90401, Attn: Sirus Ahmadi. The Board of
Directors will evaluate candidates properly proposed by shareholders in the same
manner as all other candidates.
With
respect to the nominations process, the Board of Directors does not operate
under a written charter, but under resolutions adopted by the Board of
Directors. The Board of Directors is responsible for reviewing and interviewing
qualified candidates to serve on the Board of Directors, for making
recommendations for nominations to fill vacancies on the Board of Directors, and
for selecting the nominees for selection by the Company’s shareholders at each
annual meeting. The Board of Directors has not established specific minimum age,
education, experience or skill requirements for potential directors. The Board
of Directors takes into account all factors they consider appropriate in
fulfilling their responsibilities to identify and recommend individuals as
director nominees. Those factors may include, without limitation, the
following:
|
·
|
an individual’s business or
professional experience, accomplishments, education, judgment,
understanding of the business and the industry in which the Company
operates, specific skills and talents, independence, time commitments,
reputation, general business acumen and personal and professional
integrity or character;
|
|
·
|
the size and composition of the
Board of Directors and the interaction of its members, in each case with
respect to the needs of the Company and its shareholders;
and
|
|
·
|
regarding any individual who has
served as a director of the Company, his or her past preparation for,
attendance at, and participation in meetings and other activities of the
Board of Directors or its committees and his or her overall contributions
to the Board of Directors and the
Company.
|
The Board
of Directors may use multiple sources for identifying and evaluating nominees
for directors, including referrals from the Company’s current directors and
management as well as input from third parties, including executive search firms
retained by the Board of Directors. The Board of Directors will obtain
background information about candidates, which may include information from
directors’ and officers’ questionnaires and background and reference checks, and
will then interview qualified candidates. The Board of Directors will then
determine, based on the background information and the information obtained in
the interviews, whether to recommend that a candidate be nominated to the Board
of Directors.
Compensation
Committee
The Company does not maintain a
standing Compensation Committee.
EXECUTIVE
COMPENSATION
The
following table sets forth information concerning the annual and long-term
compensation of our Chief Executive Officer and the other named executive
officers, for services as executive officers for the last three fiscal
years.
Name &
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Sirus
Ahmadi - CEO
|
|
2008
|
|
$ |
324,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
324,000 |
|
|
|
2007
|
|
$ |
279,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
279,500 |
|
Keith
Tanaka – CFO
|
|
2008
|
|
$ |
134,400 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
134,400 |
|
|
|
2007
|
|
$ |
143,200 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
143,200 |
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END
During
the year ended December 31, 2008, there were no grants of options to purchase
shares of common stock of the Company.
Director
Compensation
The
directors of the Company did not receive any compensation during the fiscal year
ended December 31, 2008.
Executive
Employment Agreements
On
January 1, 2002, we entered into three-year employment agreements with Sirus
Ahmadi, our Chief Executive Officer, and Keith Tanaka, our Chief Financial
Officer, providing for annual salaries of $324,000, plus benefits, and $134,400,
plus benefits, respectively. In addition, per the agreements, each employee is
entitled to a corporate vehicle monthly allowance of $800 and $500,
respectively. Mr. Tanaka is also entitled to 10% of our total issued and
outstanding common shares as of the date of the agreement. Although the
employment agreements expired as of December 31, 2004, we continue to
compensate both Sirus Ahmadi and Keith Tanaka under the terms of their prior
agreement with the Company.
COMMUNICATING WITH OUR
DIRECTORS
Any
shareholder wishing to send written communications to the Company’s Board of
Directors may do so by sending them in care of the Corporate Secretary, at the
Company’s principal executive offices. All such communications will
be forwarded to the intended recipients.
ACTION
3
RATIFICATION
OF SELECTION OF AUDITORS
Our board
of directors and the holders of a majority of our outstanding shares of common
stock have approved the selection of Chisholm, Bierwolf, Nilson & Morrill,
LLC as the Company’s auditors for the fiscal year ending December 31,
2009.
Audit
Fees
The
aggregate fees billed for professional services rendered by our principal
accountants for the audit of our financial statements, for the reviews of the
financial statements included in our annual report on Form 10-K or 10-KSB, and
for other services normally provided in connection with statutory filings were
$52,090 and $31,500 ended December 31, 2008 and December 31, 2007,
respectively.
Tax
Fees
The
aggregate fees billed for professional services rendered by our principal
accountants for tax compliance, tax advice, and tax planning were $3,200 and
$1,500 for the years ended December 31, 2008 and December 31, 2007,
respectively. The services for which such fees were paid consisted of tax return
preparation.
All
Other Fees
We did
not incur any fees for other professional services rendered by our principal
accountants during the years ended December 31, 2008 and December 31,
2007.
Audit
Committee Pre-Approval Policies and Procedures
Our Board
of Directors acts as our audit committee, and consults with respect to audit
policy, choice of auditors, and approval of out of the ordinary financial
transactions.
ADDITIONAL
INFORMATION
We are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and in accordance therewith files
reports, proxy statements and other information including annual and quarterly
reports on Form 10-K and 10-Q with the Securities and Exchange Commission.
Reports and other information filed by us can be inspected and copied at the
public reference facilities maintained at the SEC at 100 F Street, N.E.,
Washington, DC 20549. Copies of such material can be obtained upon written
request addressed to the Commission, Public Reference Section, 100 F Street,
N.E., Washington, D.C. 20549, at prescribed rates. The SEC maintains a web site
on the Internet (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the SEC through the Electronic Data Gathering, Analysis and
Retrieval System.
FINANCIAL
STATEMENTS
The Company filed its Annual Report for
this fiscal year ended December 31, 2008 on Form 10-K with the Securities and
Exchange Commission on April 15, 2009. The Company filed its Quarterly Report on
Form 10-Q for the period ended June 30, 2009 with the Securities and
Exchange Commission on August 19, 2009. Copies of the Annual Report and
amendment and the Quarterly Report are available on the internet at
http://www.ir-site.com/comnspiracy/sec/asp.
Copies of
our Annual Report and Quarterly Report (including Exhibits) are also available
free of charge in print to investors who request them in writing from the
Company’s Secretary (at the address on the cover page). Filings which the
Company makes with the Securities and Exchange Commission also contain
additional information and may be obtained on the SEC’s website at
http://www.sec.gov.
|
By
Order of the Board of Directors,
|
|
|
Santa
Monica, California
|
|
November 10,
2009
|
|
|
/s/
Sirus Ahmadi
|
|
Chief
Executive Officer and Director
|
Appendix
A
[AMENDMENT
TO ARTICLES OF INCORPORATION]
|
State
of Utah
DEPARTMENT
OF COMMERCE
Division
of Corporations & Commercial Code
Articles
of Amendment to Articles of Incorporation
(Profit)
|
File
Number:
Non-Refundable
Processing Fee: $37.00
Pursuant
to UCA § 16-10a part 10, the individual named below causes this Amendment to the
Articles of Incorporation to be delivered to the Utah Division of Corporations
for filing, and states as follows:
1.
The name of the corporation is:
|
Conspiracy
Entertainment Holdings, Inc.
|
2.
The date the following amendment(s) was adopted:
|
October
13, 2009
|
3.
If changing the corporation name, the new name of the corporation
is:
|
|
4.
The text of each amendment adopted (include attachment if additional space
needed):
|
Article IV
is hereby amended and restated as follows:
ARTICLE
IV
The
aggregate number of shares which the corporation shall have the authority to
issue is 1,000,000,000 shares with a par value of $0.001 per share. There shall
be no pre-emptive rights or cumulative voting.
5.
If providing for an exchange, reclassification or cancellation of issued
shares, provisions for implementing the amendment if not contained in the
amendment itself:
|
|
6.
Indicate the manner in which the amendment(s) was adopted (mark only
one):
|
o
|
No
shares have been issued or directors elected - Adopted by
Incorporator(s) |
o
|
No
shares have been issued but directors have been elected - Adopted by the
board of directors |
o
|
Shares
have been issued but shareholder action was not required - Adopted by the
board of directors |
þ
|
The
number of votes cast for the amendments(s) by each voting group entitled
to vote separately on the amendment(s) was sufficient for approval by that
voting group - Adopted by the
shareholders |
7. Delayed effective date (if not
to be effective upon filing) (not
to exceed 90 days)
|
Under
penalties of perjury, I declare that this Amendment of Articles of Incorporation
has been examined by me and is, to the best of my knowledge and belief, true,
correct and complete.
Dated
this day
of ,
20 9
Under
GRAMA {63-2-201}, all registration information maintained by the Division is
classified as public record. For confidentiality purposes, you may use the
business entity physical address rather than the residential or private address
of any individual affiliated with the entity.
Mailing/Faxing
Information:
|
www.corporations.
utah.gov/contactus.html
|
Division's
Website:
|
www.corporations.utah.gov
|