Report of Organizational Actions – Form 8937
01/17/2012
SAN MATEO, Calif. – January 17th, 2012 – Gazillion Entertainment, a leading developer, publisher and operator of premium browser-based games, today publicly reports two organizational action (stock conversion and reverse stock split) by posting the required information on our web site. We are posting the information required on lines 14 through 19 from Form 8937.
LN14: Organizational Action
Effective July 2011, the Company received additional funds through the issuance of Series A-1 preferred stock.
Under the terms of the Series A-1 preferred stock financing, the Company’s then outstanding share of preferred stock (Series A through E) were converted to shares of common stock (“exchangeable common”). In addition, existing preferred stockholders that purchased the Series A-1 preferred stock automatically had their exchangeable common converted into additional Series A-1 preferred stock based on a formula. As a part of this transaction the Company affected a reverse stock split for the remaining shares of exchangeable common and existing common stock
After giving effect to the stock conversion and reverse stock split, the Company is authorized to issue two classes of stock to be designated, respectively, common stock and preferred stock.
LN15: Quantitative Effect
The stock conversion and reverse stock split are treated as an exchange of the existing preferred stock and common stock and qualify as tax-free.
LN16: Calculation
The stock conversion (1 to 1 ratio) and reverse stock split (1 for 10 reverse stock split) are treated as an exchange of the existing preferred stock and common stock and qualify as tax-free.
LN17: IRS Revenue Code
Section 368, 356, and 358
LN18: Resulting Loss
No loss was recognized.
LN19: Additional Information
No additional information or reporting is required.