The Law Office of Stephen E. Rounds
4635 East Eighteenth Avenue
Denver, Colorado, USA 80220
Tel. 303.377.6997 Fax 303.377.0231
November 24, 1999
Securities and Exchange
Commission
Division of Corporation Finance
450 5th Street NW
Washington, DC 20546
Attn: Small Business Office
SEC File No. 0-27083
Re: W3 Group, Inc.
Preliminary Proxy - Modification of Series B Convertible
Preferred Stock
Dear Sir or Madam:
This office represents the registrant, and files on its
behalf a preliminary proxy for the proposed adjustment in
conversion rights of shares of outstanding Series B preferred
stock, into shares of common stock. Directors will not be elected
at the meeting. The adjustment in conversion ratio is favorable
to the Series B holders, and dilutive to the common stock
holders. Hence, under the law of registrant's domicile
(Colorado), only the common stock holders are entitled to vote on
the proposal.
Periodic reports are incorporated by reference.
Although the proposal seeks to modify securities (an item
12, 14A matter), no financial information is delivered (item 13),
because the financial impact of the proposal will be (1) pro
forma only in the event of future conversion, and (2) even then,
limited to the equity section of the balance sheet (issued common
stock numbers will increase). No other financial statement of the
registrant will be impacted.
No fee is paid because this filing does not relate to an
acquisition, merger, spinoff, consolidation or disposition of
assets. See rule 14a-6(i)(1).
We understand it is unlikely, but if the staff has any
questions or needs further information in the course of review
and prior comments being issued, please advise the undersigned
directly.
Thank you.
Yours Sincerely,
/s/Stephen E. Rounds
Stephen E. Rounds
SER/gl
cc: W3 Group, Inc.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E) (2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
W3 GROUP, INC.
- -------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Stephen E. Rounds
- -------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check
the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules
14a-6(1)(4) and 0-11.
(1) Title of each class of securities of 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:
_/ Set forth the amount on which the filing fee is
calculated and state how it was determined.
- ---------------------------------------------------------------------
(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:
- --------------------------------------------------------------------
W3 GROUP, INC.
444 Madison Avenue, Suite 1710
New York, NY 10022
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on Tuesday, January 18, 2000
\
TO THE SHAREHOLDERS OF W3 GROUP, INC.
PLEASE TAKE NOTICE that a Special Meeting of Shareholders of
W3 Group, Inc., a Colorado corporation (the "Company"), will be
held at the Company's executive offices, 444 Madison Avenue,
Suite 1710, New York, New York 10022, on Tuesday, January 18,
2000 at 10:00 a.m., local time, or at any adjournments thereof,
for the purpose of acting upon:
1. Amending the Articles of Incorporation to adjust the
conversion right of the Series B Convertible Preferred Stock from
an amount equal to .0416 shares to an amount equal to .5 (one
half) share of Common Stock for each one share of Series B
Convertible Preferred Stock.
2. Such other business as may properly come before such
meeting.
Only shareholders of record of Common Stock at the close of
business on Thursday, December 9, 1999, will be entitled to
notice of and to vote at the Special Meeting or any adjournment
thereof. The Company's transfer books will
not be closed for the Meeting.
A list of shareholders entitled to vote at the Meeting will
be available for inspection by any record shareholder at the
Company's principal executive offices in New York City, New York.
By Order of the Board of Directors
/s/ Robert Gordon
November 24, 1999 Robert Gordon, Executive Vice President
Please date, sign and return your Proxy so that your shares
may be voted as you wish, and to assure quorum. The prompt return
of your signed Proxy, regardless of the number of shares you
hold, will save the Company money by reducing the expense of
soliciting you to sign your Proxy. If you sign your Proxy, you
still may attend the Special Meeting and vote in person.
YOUR VOTE IS IMPORTANT
W3 GROUP, INC.
444 Madison Avenue, Suite 1710
New York, NY 10022
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, JANUARY 18, 2000
The enclosed Proxy is solicited on behalf of the board of directors
of W3 Group, Inc. (The "Company") for use at the Special Meeting of Shareholders
to be held at 10:00 a.m. local time on Tuesday, January 18, 2000.
The Notice of Meeting, Proxy Statement and Proxy will be mailed
to record shareholders on or about December 13, 1999.
REVOCABILITY OF PROXY
The Proxy may be revoked
at any time, to the extent it has not been exercised, by: (i)
written revocation; (ii) executing a later-dated Proxy and
delivering it to the Company; (iii) requesting (in writing) a
return of the Proxy; or (iv) the shareholder voting in person at
the Special Meeting.
VOTING OF PROXY
If the enclosed Proxy is
executed and returned, it will be voted as indicated by the
shareholder on the proposal: Unless otherwise instructed to the
contrary in the Proxy, the appointees named in the Proxy will:
1. VOTE FOR amending the Articles of Incorporation to
adjust the conversion right of the Series B Convertible Preferred
Stock from an amount equal to .0416 shares to an amount equal to
.5 (one half) shares of Common Stock for each one share of Series
B Convertible Preferred Stock.
2. VOTE in accordance with their best judgement on such
other business as may properly come before the Special Meeting.
As of the date of the Notice of Meeting and Proxy Statement,
the management of the Company has no knowledge of other matters
that may be brought before the Special Meeting.
SOLICITATION
The costs of preparing,
assembling and mailing the Notice of Meeting, Proxy Statement and
Proxy (the "Proxy Materials") as well as solicitations of the
Proxies and miscellaneous related costs, will be paid by the
Company. Solicitation will be done by the U.S. Mail; the Company
may also use the services of its directors, officers and
employees to solicit Proxies, personally, or by telephone, but
they will not be paid for such work. It is not expected that the
Company will hire special employees or paid solicitors, although
it reserves the right to do so.
The Company will ask banks, brokerage houses and other
custodian, nominees and fiduciaries to forward copies of the
Proxy Materials to those persons for whom they hold shares and
request authority for the execution of the Proxies. The Company
will reimburse the nominees for their reasonable out-of-pocket
expenses.
VOTING SECURITIES
Only holders of record of
shares of the Company's no par value common stock at the close of
business on Friday, October 29, 1999, will be entitled to vote at
the Special Meeting. On the record date, the Company has
3,413,582 shares of common stock outstanding and entitled to
vote. The Company has no other class of voting securities
outstanding. Each share of common stock is entitled to one vote,
in person or by proxy, on all matters. Cumulative voting is not
allowed on any matters. A majority of the issued and outstanding
shares of common stock represented in person or by Proxy,
constitutes a quorum at any shareholders' meeting. Approval of
the proposal presented herein requires an affirmative vote of a
majority of the shares represented at the meeting, either in
person or by proxy.
Management has been informed that shareholders (including
management) owning 75.2 percent of the outstanding shares of the
Common Stock have agreed to vote their shares in favor of
Proposal One, which is in excess of the amount of votes required
for approval.
THE RESTRUCTURING OF THE COMPANY
At a special meeting of
shareholders on August 12, 1999, a restructuring of the Company
was approved by shareholders. The Company developed a new
business strategy which is focused on seeking acquisition
opportunities with Internet related technology companies. As the
first step in its reorganization process, the Company divested
its sole operating subsidiary, L'Abbigliamento, Ltd., effective
March 31, 1999, since this subsidiary did not fit the Company's
new direction. Also, the Company completed an Agreement and
Plan of Share Exchange with W3 Group, Inc., effective October 1,
1999. Under the terms of this Agreement, the Company's name was
changed to W3 Group, Inc., and a reverse split was effected of
its Common Stock on the basis of one new share for each 30
existing shares, after which 3,275,000 new shares (post reverse
split) of Common Stock were issued to W3 shareholders in exchange
for 100 percent of the capital stock of W3 Group, Inc. Also, a
special distribution was made of Common Stock Purchase Warrants
to holders of the Company's Common Stock, Series B Convertible
Preferred Stock and Series B Convertible Preferred Stock Purchase
Warrants. The special distribution was made in October, 1999 to
the holders of record as of September 30, 1999 on the basis of
one Common Stock Purchase Warrant for each ten shares of Common
Stock either held on the record date or committed to be issued
upon the conversion of the Series B Preferred Shares, or the
Series B Preferred Warrants. The Common Stock Purchase Warrants
are redeemable by the Company under certain conditions and each
Common Warrant represents the right to purchase one share of
Common Stock at a price of $6.00 per share during a two year
exercise period which expires on October 1, 2001.
OWNERSHIP OF COMMON STOCK BY MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS
The following is a list
of all record holders who, as of October 29, 1999 beneficially
owned more than five percent of the outstanding shares of common
stock, as reported in filings with the Securities Exchange
Commission (the "SEC") or as otherwise known to the Company, and
a list of the ownership of shares of Common Stock by each officer
and director of the Company, and by all officers and directors as
a group. Except as otherwise noted, each holder exercises the
sole voting and dispositive powers over the shares listed
opposite the holder's name.
Name and Address of Amount and nature of
Beneficial Owner beneficial ownership Percent of Class
Sirbu Enterprises, LLLP a
Colorado Limited
Liability Limited Partnership(1)*
16414 Sandstone Drive
Morrison, CO 90465 625,000 18.31%
Wilmont Holdings Corp.(2) *
444 Madison Avenue, Ste 1710
New York, NY 10022 630,000 18.46%
Lomar Corp.(3) *
444 Madison Avenue, Ste 1710
New York, NY 10022 625,0000 18.31%
Thomas C. Hushen*
33278 Bluebell Circle
Evergreen, CO 80439 500,000 14.65%
Robert Gordon *
444 Madison Avenue, Suite 1710
New York, NY 10022 103,667 3.04%
Dunhill Limited (4) *
444 Madison Avenue
New York, NY 10022 3,333 0.10%
Remsen Group, Ltd. (5) *
21 Schermerhorn Street
Brooklyn, NY 11201 7,617 0.22%
Ameristar Group Incorporated (6)*
444 Madison Avenue
New York, NY 10022 22,500 0.66%
Officers and Directors
as a Group (5 Persons) 2,517,117 73.74%
* Officer and/or Director
(1) Sirbu Enterprises, LLLP, a Colorado Limited Liability
Limited Partnership is
privately owned and controlled equally by P. Richard
Sirbu, Chairman and CEO, and
President of the Company and his wife Karen K. Sirbu.
(2) Wilmont Holdings Corp. is a privately held corporation
principally owned and
controlled by Joseph J. Messina, a Director of the
Company.
(3) Lomar Corp. is privately held corporation principally
owned and controlled by
Martin I. Saposnick, a Director of the Company.
(4) Dunhill Limited is a privately held corporation
principally owned and controlled
by Joseph J. Messina and Martin I. Saposnick, Directors of
the Company.
(5) Remsen Group, Ltd. is a privately held corporation
principally owned and
controlled by Martin I. Saposnick, a Director of the
Company.
(6) Ameristar Group Incorporated is a privately held
corporation principally owned and
controlled by Joseph J. Messina and Martin I. Saposnick,
Directors of the Company.
DIRECTORS
The following table sets forth as of the date hereof, each of
the Company's directors
and their positions:
NAME AGE POSITION WITH THE COMPANY
P. Richard Sirbu 56 Chairman and Chief Executive Officer and Director
Thomas C. Hushen 56 Senior Vice President and Chief Technology
Officer, Secretary and Director
Martin I. Saposnick 53 Director of Corporate Development, and Director
Joseph J. Messina 44 Director
The directors will serve until the next annual meeting of
stockholders and until their
successors are qualified and elected.
Profiles of Officers and Directors:
P. Richard Sirbu is Chairman and Chief Executive Officer of
the Company. Mr.
Sirbu has a strong track record of building profitable companies
and emerging
technologies. His many strengths include the ability to develop
comprehensive strategic
and tactical directions and implement plans for results, analyze
and solve complex
problems, organizational development, and a bottom-line
orientation.
Previously, Mr. Sirbu was President of On Money Financial
Service Corp. a
subsidiary of AmeriTrade Holding Corporation. Mr. Sirbu
initiated and sold Internet
based programs to firms that provided for the launch with access
to 25 million
consumers.
Mr. Sirbu was also President of AmeriTrade Clearing, Inc., a
subsidiary of
AmeriTrade Holding Corporation, and created the first Internet
"financial services mall"
for financial professionals. He created a new strategic
direction for the company that
resulted in a very significant reduction of corporate asset risk,
a six fold increase
in customer accounts, and a substantial increase in pre-tax
profits. He created and
managed a staff of 500 technology, marketing and finance
personnel.
Thomas C. Hushen is Senior Vice President and Chief Technology
Officer, Secretary
and a Director of the Company. Mr. Hushen has broad based
technology and management
experience, with a record of creating sustained growth,
exploiting emerging
technologies, exceptional team building skills and customer
orientation. He is very
experienced in developing and implementing strategic plans for
information technology
systems, and has been involved in starting up new organizations
and turn-around
projects. Mr. Hushen was responsible for the over-all technology
implementation of the
first professional financial services mall on the Internet.
Previously, Mr. Hushen was Director - General Manager for
Gateway 2000 and
responsible for the development and implementation of their
Internet strategy. The web
site developed is generating significant daily order revenue and
experiencing over two
million hits daily, and the system includes over 300 private
Extranet sites.
Prior to Gateway 2000, Mr. Hushen was Vice President and Chief
Information Officer
for AmeriTrade Holding Corporation, and was responsible for all
aspects of technology
and corporate management information systems. He implemented the
company's first Web
server providing on-line securities trading and establishing
AmeriTrade as an Internet
leader in the brokerage industry. He also managed the company's
legacy systems to
facilitate a ten-fold increase in business, with 70 per cent of
the business conducted
over the Internet.
Mr. Hushen was also Vice President and Chief Information
Officer of Southwest
Securities, a regional brokerage firm. Mr. Hushen was Director of
Information Technology
for SABRE division of American Airlines, where he held several
management positions. Mr.
Hushen has 18 years of diverse technology experience with major
airline carriers. Mr.
Hushen was President of Compudata Systems, Inc., a business
software development firm.
Mr. Hushen has a B.S. in Business Administration from the
University of New Hampshire.
Martin I. Saposnick is Director of Corporate Development and a
Director of the
Company. Mr. Saposnick is also President of Ameristar Group
Incorporated, a private
investment and financial consulting firm specializing in "micro
cap" and "small cap"
companies, and was a Director of Concorde Strategies Group, Inc.
until February, 1999.
Previously Mr. Saposnick was President of Remsen Group, an
independent investment
banking and financial consulting services company. Prior to
Remsen Group, Mr. Saposnick
was Chairman of the Board and President of Marsan Securities Co.,
Inc., a financial
services firm, which was a wholly owned subsidiary of Marsan
Capital Corporation, a
publicly held company. Mr. Saposnick was also Chairman of the
Board and President of
Marsan Capital Corporation. In 1985, Mr. Saposnick entered into
a consent decree with
the Commission; the agreement ended administrative proceedings
initiated by the
Commission in connection with Mr. Saposnick's alleged
participation in the initial
public offering of securities of North Atlantic Airlines, Inc.
Previously, Mr.
Saposnick was Vice President of Chestman Securities, Co., Inc.
and had been Assistant
Manager of Specialist Surveillance Division of the New York Stock
Exchange. Mr.
Saposnick is a graduate of Hunter College and completed graduate
studies in Finance and
Investments at Baruch College.
Joseph J. Messina is a Director of the Company. He is also
Chairman and CEO of both Ameristar Capital Corporation,
a lease financing ans asset based lender and Ameristar Group
Incorporated, an investment banking and financial consulting form
specializing in "small cap" companies. Mr. Messina is a former
Director of Concorde Strategies Group, Inc. Mr. Messina was
previously President and Chief Operating officer of Vendor
Funding Co., Inc. a subsidiary of Bank of Ireland First Holdings.
Vendor
Funding, a national middle market lessor and asset based lender,
was co-founded by Mr. Messina and subsequently sold to First NH
Banks of Manchester, New Hampshire. Mr. Messina is a Director of
Credit America Venture Capital, an entity formed to acquire
the manufacturing and distribution network of Mako Marine
International, Inc. He is a former Director of Mako Marine
International, Inc., a publicly held corporation, and past
President of the Eastern Association of Equipment Lessors.
PROPOSAL ONE
Each share of Series B Convertible Preferred Stock was
originally convertible into
1.25 shares of Common Stock at the election of the shareholder
until the close of
business on October 14, 2002. As a result of the 1 for 30 reverse
split of Common Stock
effected of October 1, 1999, each share of Series B Stock is
convertible into .0416
shares of Common Stock.
Upon further review of the effect of the reverse split of the
Common Stock on the
Series B conversion right, the Board of Directors has approved a
modification of the
existing conversion right in order to make it more equitable to
holders of Series B
Stock. Under this proposed conversion right, each share of Series
B Stock would be
convertible into .5 (one half) of a share of Common Stock.
If the proposal being presented herein is approved, and shares
of Series B
Convertible Preferred Stock are converted into Common Stock, all
of the Common Stock
Shareholders, including officers, directors, and principal
shareholders, will be diluted
equally with respect to the percentage of outstanding shares such
persons own after
conversion of Preferred Stock. On a pro forma basis, assuming all
Series B Stock was
converted, there would be 3,457,512 shares of Common Stock issued
and outstanding using
the current conversion ratio, if the new conversion ratio is
approved, and all Series
B Stock is converted, there would be 3,941,582 shares of Common
Stock issued and
outstanding.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE CHANGE
IN THE CONVERSION RIGHT FOR SERIES B CONVERTIBLE PREFERRED STOCK.
INCORPORATION BY REFERENCE
W3 Group, Inc., a Colorado corporation, is registered with the
SEC under section
12(g) of the Exchange Act and, in accordance therewith, files
periodic and other
reports with the Securities and Exchange Commission. As part of
this Proxy Statement,
the Company incorporates by reference its annual report contained
in Form 10-KSB for the
fiscal year ended December 31, 1998, Form 10-QSB for the interim
periods ended March
31, June 30 and September 30, 1999, and interim report on Form
8-K filed on October 15,
1999. The Company will provide, without charge, to each person to
whom a proxy statement
is delivered, upon written or oral request of such person and by
first class mail or
other equally prompt means within one business day of receipt of
such request, a copy
of any and all of the information that has been incorporated by
reference in the proxy
statement (not including exhibits to the information that is
incorporated by reference).
Please contact Robert Gordon, Executive Vice President by
telephone at 212 317-0060 or
mail at 444 Madison Avenue, Suite 1710, New York, NY 10022 to
request a copy of these
materials.
OTHER MATTERS
The Board does not know of any other matters which may
properly come before the
Special Meeting. However, if any other matters properly come
before the Special Meeting,
it is the intention of the appointees named in the enclosed form
of Proxy to vote said
Proxy in accordance with their best judgement on such matters.
Your cooperation in giving these matters your immediate
attention, and in
returning your Proxy promptly, will be appreciated.
By Order of the Board of
Directors
W3 Group, Inc.
/s/ Robert Gordon
Robert Gordon, Executive
Vice President
Dated: November 24, 1999
PROXY
W3 GROUP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, THE SHARES
REPRESENTED HEREBY
WILL BE VOTED AS SPECIFIED HEREON WITH RESPECT TO THE ABOVE
PROPOSALS.
KNOW ALL MEN BY THESE PRESENTS: That the undersigned
shareholder of W3 Group, Inc.
(The "Company") in the amount noted below, hereby constitutes and
appoints Robert
Gordon, Executive Vice President, with full power of
substitution, and proxies, to
appear, attend and vote all of the shares of stock standing in
the name of the
undersigned at the Special Meeting of the Company's shareholders
to be held at the
Company's executive offices at 444 Madison Avenue, Suite 1710,
New York, NY 10022 on
Tuesday, January 18, 2000 at 10:00 a.m., local time, or any
adjournment thereof, upon
the following:
Where no vote is specified, the proxyholder will cast votes in
their discretion on any
other matters that may come before the Meeting. To vote, check
the box: to abstain, do
not check either box opposite the proposal.
Sign your name exactly as it appears on the mailing label
below. It is important
to return this Proxy properly signed in order to exercise your
right to vote, if you do
not attend in person. When signing as an attorney, executor,
administrator, trustee,
guardian, corporate officer, etc., indicate your full title as
such.
PROPOSAL 1 FOR ___ AGAINST ___ 1. Approve amending the articles of
incorporation to adjust the conversion
right of the Seris B Convertible
Preferred Stock from an amount equal
to .0416 shares to .5 (one half) share
of Common Stock for each one share of
Series B Convertible Preferred
Stock.
X
(Sign on this line - joint holders
may sign appropriately)
(Date) (Number of Shares)
PLEASE NOTE: Please sign, date and
place this Proxy in the enclosed self-
addressed, postage prepaid envelope
and deposit it in the mail as soon as
possible. Please check if you are
planning to attend the meeting
If the address on the mailing label is
not correct, please provide the
correct address in the following
space.