About Energy Source, Inc.
N.E.C. Properties, Inc. (“NEC”) was incorporated on September 16, 1995, under the laws in the State of Nevada. NEC was organized as a blank check company with no operations or plan of business. On September 30, 1995, NEC had 25,000 shares at no par value authorized and 18,600 shares outstanding, which were issued for $1,860 in cash. On November 19, 1998, the amended and restated Articles of Incorporation were filed with the Secretary of State of Nevada that increased NEC’s authorized common shares from 25,000 to 25,000,000, and established a par value of $.001 per share. In November 1998, the NEC stockholders approved two forward stock splits. The first was a 100 for 1 split increasing the number of the outstanding common shares to 1,860,000 and the second was a 1.77 for 1 stock split resulting in 3,292,200 common shares outstanding. On November 10, 1999, NEC acquired all of the outstanding stock of March Indy International, Inc. (“March”), in exchange for 7,706,575 shares of NEC (the “Share Exchange”). March was incorporated in Delaware on November 24, 1998 (“inception”). For accounting purposes, the transaction was accounted for as a reverse acquisition under the purchase method for business combinations, and accordingly the transaction was treated as a recapitalization of March, with March having acquired NEC. On June 17, 2000, March declared a one-for-three reverse stock split, effective September 26, 2000. This reverse stock split reduced the number of our outstanding common stock shares from 12,090,234 to 4,030,078. From the Share Exchange through September 30, 2000, we were in the preliminary stages of engaging in the business of designing, building and racing cars for Formula One, Cart and Indy competition both in the United States and abroad. We also planned to develop an internet website to offer and sell merchandise products related to our racing efforts. In October 2000, because of our inability to successfully organize an Indy car race team and our failure to compete in the Indianapolis 500, we discontinued our racing and related promotional activities. In 2001, we changed our name from March to Bancorp International Group, Inc. On August 19, 2005, our Board of Directors approved and adopted the Certificate of Designation Preferences and Right of Preferred Stock (“Certificate of Designation”). The Certificate of Designation sets forth the preferences and rights of our 15,000,000 authorized shares of preferred stock, $.0001 parvalue, designated as the Series A Convertible Preferred Stock (“Series A Preferred Stock”). On August 19, 2005, our stockholders voted to amend our Articles of Incorporation to increase the number of authorized shares of common stock from 25,000,000 at a par value of $.001 to 500,000,000 at a par value of $.0001. In a second amendment on August 19, 2005, effective January 6, 2006, our stockholders approved another amendment to our Articles of Incorporation that increased the number of our authorized shares of common stock from 500,000,000 at $.0001 par value to 2,000,000,000 at $.0001 par value. In September 2005, we entered into a non-binding joint venture agreement with an oil export concern pursuant to which we would acquire rights to sell and market the oil and natural gas production from the petroleum reserves of Papua, New Guinea. The conditions to this joint venture were not satisfied by the other party, and the prospective joint venture did not become effective. On January 11, 2006, in accordance with a Settlement Agreement relating to a lawsuit brought by us against certain parties, the Company issued 244,748,000 shares of our common stock. The lawsuit and resulting Settlement Agreement are discussed under “Legal Proceedings.” These shares were issued in accordance with the registration exemption afforded under Section 3(a)(10) of the Securities Act of 1933. In June 2006, we entered into a letter of intent with a Midwestern oil company in effort to enable us to acquire the working interest in producing wells and proven non-developed reserves. The conditions to the letter of intent were not satisfied by the oil company, and the letter of intent was abandoned. As of December 31, 2007, management intends to pursue potential oil and gas exploration and development opportunities outside the United States, particularly in Papua, New Guinea. Annual Meeting of Shareholders. On June 3, 2008, Energy Source, Inc. (f/k/a Bancorp International Group, Inc.) (the “Company”) held its 2008 Annual Shareholder Meeting (the “Annual Meeting”). At the Annual Meeting, the shareholders of the Company:
Each of the foregoing proposals was approved by a vote of 1,752,691,870 shares in favor and no shares voting against. Please see below for further discussion of the terms of the 1-for-200 reverse stock split. As previously disclosed in our Proxy Statement, filed with the Securities and Exchange Commission (the “Commission”) on May 12, 2008, the persons eligible to vote with respect to the foregoing matters were shareholders of record on May 8, 2008. On May 8, 2008, our record books reflected that we had outstanding 525,035,229 shares of common stock and 15,000,000 shares of Series A Convertible Preferred Stock (“Series A Preferred”) that were eligible to vote. Each share of common stock was entitled to one vote, and each share of Series A Preferred was entitled to 100 votes, which equals the votes of the shares of common stock in to which the Series A Preferred may be converted. As a result, the owners of 252,691,870 shares of common stock and 15,000,000 shares of Series A Preferred voted in favor of each proposal. In addition to the 525,035,229 shares of common stock reflected on our stock records, (the “Stock Record Shares”), Broadridge, the Company’s proxy processing agent, identified approximately 350,200,000 shares of our common stock registered in “street name” that the holders thereof may consider to be outstanding, but which we believe were invalidly issued (the “Other Shares”). The votes tabulated by Broadridge with respect to the Other Shares were not counted for purposes of the proposals set forth at the Annual Meeting, because the Other Shares were not reflected on our record books on May 8, 2008. According to Section 78.350 of the Nevada Revised Statutes “…every stockholder of record of a corporation is entitled at each meeting of stockholders thereof to one vote for each share of stock standing in his name on the records of the corporation.” In addition, our Bylaws provide that “only persons in whose names shares entitled to vote stand on the stock records of the corporation on the date of any meeting of stockholders…shall be entitled to vote at such meeting.” Based on the Nevada Revised Statutes and our Bylaws, the Other Shares were not entitled to vote at the Annual Meeting, because the holders of such shares were not listed in the stock records of the Company on May 8, 2008. Nevertheless, each proposal would have carried still, if each share included with the Other Shares (approximately 350,200,000 shares) voted against each proposal, resulting in 1,752,691,870 shares in favor and 350,200,000 shares against. Reverse Stock Split. At the Annual Meeting the shareholders voted to give the Board of Directors authority to effect a 1-for-200 reverse stock split as to the Company’s common stock providing the following terms (the “Reverse Stock Split”):
Pursuant to the authority granted by the shareholders at the Annual Meeting, on June 11, 2008, the Board of Directors approved the implementation of the Reverse Stock Split to be effective on June 27, 2008, and the filing of a Certificate of Amendment to the Company’s Restated Articles of Incorporation effecting the same, a copy of which is attached hereto as Exhibit 3(i).2 and is incorporated herein by reference. Based on the results of our recent proxy solicitation, Broadridge identified approximately 350,200,000 shares of our common stock registered in “street name,” which is approximately 349,554,194 shares (the “Additional Shares”) more than the 645,806 shares reflected on the Company’s stock records in “street name” as of May 8, 2008. The Additional Shares will be recognized by the Company for purposes of the Reverse Stock Split. Therefore, effective June 27, 2008, pursuant to the Reverse Stock Split, approximately 874,589,423 shares of the Company’s validly and invalidly issued and outstanding common stock, which includes both the Stock Record Shares and the Additional Shares, will be combined into approximately 4,372,947 shares. Cash will be issued in lieu of fractional shares, equal to the fraction to which the shareholder would be otherwise entitled multiplied by $.0001, which is the par value of one share of common stock and the amount determined in good faith by the Board of Directors to be reasonable payment for one share of common stock. Because the Company’s common stock is not currently actively traded on a published market, the Board of Directors is unable to rely upon actual sales prices to determine the value of a share of our common stock. The Company has issued and outstanding 15,000,000 shares of Series A Preferred, of which 7,500,000 shares are held by Thomas Megas, the Company’s Chief Executive Officer, President and Acting Chief Financial Officer, and 7,500,000 shares are held by Stewart Sytner, a significant stockholder of the Company. Messrs. Megas and Sytner are each considered to be an affiliate of the Company. Prior to the Reverse Stock Split, one share of Series A Preferred was convertible into 100 shares of the Company’s common stock (the “Set Conversion Rate”). As a result of the Reverse Stock Split and in accordance with the terms of the Series A Preferred, the Set Conversion Rate was adjusted so that one share of Series A Preferred is now convertible into one-half share of common stock, as more fully discussed in the Certificate of Amendment to Restated Articles of Incorporation, a copy of which is attached hereto as Exhibit 3(i).2.
ENERGY SOURCE, INC. Transfer Agent: |