Aspyra, Inc.

 4360 Park Terrace Drive, Suite 220

Westlake Village, CA 91361

NOTICE OF ACTION BY WRITTEN CONSENT OF STOCKHOLDERS

 

     NOTICE IS HEREBY GIVEN that the holders of more than a majority of the outstanding common stock of Aspyra, Inc., a California corporation (the “Company” “we”, “us”, or “our”), have approved the following action without a meeting of stockholders in accordance with Section 603 of the California General Corporation Law:

 

     The approval of an amendment to our articles of incorporation to effect a 101-to-1 reverse stock split. The action will become effective on the 20 th day after the definitive Information Statement is mailed to our stockholders.

 

The enclosed information statement contains information pertaining to the matters acted upon.

 

Pursuant to rules adopted by the Securities and Exchange Commission, you may access a copy of the information statement at www.aspyra.com.

 

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

	By Order of the Board of Directors
	Rodney Schutt
	Chief Executive Officer
October __ , 2009

 

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ASPYRA, INC.

4360 Park Terrace Drive, Suite 220

Westlake Village, CA 91361

 

  

 

AMENDMENT TO ARTICLES OF INCORPORATION TO EFFECT 101-TO-1 REVERSE STOCK SPLIT

 

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 to effect a 101-to-1 reverse stock split. The reverse split will become effective upon the filing of the amendment to the articles of incorporation with the Secretary of State of the State of California. We will file the amendment to our articles of incorporation to effect the reverse stock split approximately (but not less than) 20 days after this Information Statement is mailed to stockholders.

The amendment to the articles of incorporation will effect a 101-to-1 reverse split in our common stock, no par value (“Common Stock”). As a result of the reverse split, each 101 shares of Common Stock (the “Old Shares”) will become and be converted into one share of Common Stock (the “New Shares”). We will pay cash for fractional shares. As a result, any shareholder who owns less than 101 shares will cease to be a shareholder.

Our certificate of incorporation presently authorizes the issuance of 75,000,000 shares of common stock, no par value (“Common Stock”), and 500,000 shares of preferred stock, no par value (“Preferred Stock”).  As of the date of this information statement, 17,201,327 shares of Common  Stock and no shares of Preferred Stock are outstanding. The number of authorized shares of Common Stock and Preferred Stock and the par value of our Common Stock and Preferred Stock will not be affected by the amendment to our articles of incorporation.

No fractional shares of common stock will be issued in the reverse split.  We will pay cash in lieu of fractional shares based on the last closing price of our common stock as of the effective date of the reverse split.

 

 

By effecting the reverse split and paying cash for fractional shares, we will reduce the number of record owners of our Common Stock so that we will have fewer than 300 stockholders of record.  When we have fewer than 300 record owners of our Common Stock we will be able to terminate our registration under the Exchange Act.  As a result of the termination of our registration under the Exchange Act:

·

We will not be required to file annual reports, quarterly and current reports which are due after we file the notice of termination of registration.  We currently file annual reports on Form 10-K, which include our audited year-end financial statements, quarterly reports on Form 10-Q, which include unaudited quarterly and year-to-date financial statements, and current reports on Form 8-K, which report significant matters.  If the reverse split becomes effective prior to March 30, 2010, we will not be required to file a Form 10-K for the year ended December 31, 2009.

·

We will not be required to provide you with a proxy statement in connection with a meeting of stockholders or with an information statement in connection with action taken without a meeting.  We will be required to give you notice of the meeting or notice of action taken without a meeting under the California General Corporation Law, but we will not be required to provide you with the information that is required to be included in a proxy statement or an information statement.

·	Our officers, directors and 10% stockholders will not be required to file beneficial ownership reports on Forms 3, 4 and 5.

·	Holders of 5% of our stock would not be required to file statements of beneficial ownership on Schedules 13D or 13G.

In addition, many brokerage firms may have policies which discourage purchases and sales of stock of companies that are not reporting companies.

We presently have 75,000,000 authorized shares of Common Stock, of which 17,201,327 shares are outstanding, 8,653,078 shares are reserved for issuance upon exercise of outstanding debentures, 6,797,233 shares are reserved for issuance upon exercise of outstanding warrants, and 1,865,000 shares are reserved for issuance under outstanding options.

The reverse stock split will not change the number of authorized shares of the Company’s common stock under the Company’s articles of incorporation. Because the number of issued and outstanding shares of Common Stock will decrease, the number of shares of Common Stock remaining available for issuance will increase. The Company does not currently have any plans, proposal or arrangement to issue any of its authorized but unissued shares of Common Stock.

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Exchange of Certificate and Elimination of Fractional Share Interests

 

On the effective date of the reverse split, each Old Share will automatically be combined and changed into 1/101 New Share. No additional action on our part or on the part of any stockholder will be required in order to effect the reverse split. Stockholders will be requested to exchange their certificates representing Old Shares held prior to the reverse split for new certificates representing New Shares issued as a result of the reverse split. Stockholders will be furnished the necessary materials and instructions to enable them to effect such exchange promptly after the effective date. Certificates representing Old Shares subsequently presented for transfer will not be transferred on our books and records, but we will effect the conversion of the Old Shares into New Shares. Stockholders should not submit any certificates until requested to do so.

  

In the event any certificate representing Old Shares is not presented for exchange upon our request, any dividends or other distributions that may be declared after the effective date of the reverse split with respect to the New Shares represented by such certificate will be withheld by us until the certificate for the Old Shares has been properly presented for exchange, at which time all such withheld dividends which have not yet been paid to a public official pursuant to relevant abandoned property laws will be paid to the holder thereof or his designee, without interest.

 

No fractional New Shares will be issued to any stockholder. Accordingly, stockholders of record who would otherwise be entitled to receive fractional New Shares will be paid for their fractional shares based on the last closing price of the Common Stock as of the effective date of the Reverse Split.

Federal Income Tax Consequences of the Reverse Stock Split

 

The combination and change of each 101 Old Shares into one New Share should be a tax-free transaction, and the holding period and tax basis of the Old Shares will be transferred to the New Shares received in exchange therefore.  Provided that the Old Shares are held as a capital asset, the cash paid for fractional shares will be treated as a payment in redemption of the fractional shares and the stockholder will recognize a capital gain or loss, as the base may be, on the difference between the stockholder’s basis in the fractional share and the payment in lieu of the fractional share.

This discussion should not be considered as tax or investment advice, and the tax consequences of the reverse split may not be the same for all stockholders. Stockholders should consult their own tax advisors to know their individual federal, state, local and foreign tax consequences.

Accounting Consequences of the Reverse Stock Split

 

 

The par value of the Common Stock will remain unchanged at no par value after the reverse stock split. Also, the capital account of the Company will remain unchanged, and the Company does not anticipate that any other accounting consequences will arise as a result of the reverse stock split.

 

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BENEFICIAL OWNERSHIP OF SECURITIES AND SECURITY OWNERSHIP OF MANAGEMENT

 

     The following table provides information about shares of common stock beneficially owned as of October 20, 2009 by:

 

	▪	each of our directors, executive officers and our executive officers and directors as a group; and
	▪	each person owning of record or known by us, based on information provided to us by the persons named below, to own beneficially at least 5% of our common stock;

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