SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
(RULE 14C-101)
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF
THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-5(d) (1))
[X] Definitive Information Statement
24 HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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 (set forth the amount on which the filing fee is
calculated and state how it was determined):
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
Fee previously paid 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:
---------------------------------------------------------------------------
24 HOLDINGS, INC.
47 SCHOOL STREET
CHATHAM, NEW JERSEY 07928
(973) 635-4047
November 25, 2005
Dear Shareholder:
This Information Statement is furnished to holders of shares of common stock,
par value $.01 per share (the "Common Stock"), of 24 HOLDINGS, INC. (the
"Company"). We are sending you this Information Statement to inform you that on
October 25, 2005, the Board of Directors of the Company unanimously adopted a
resolution seeking shareholder approval to amend the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's common stock.
Thereafter, on October 26, 2005, pursuant to the By-Laws of the Company and
Delaware General Corporation Law ss.228, certain principal stockholders of the
Company (identified in the section entitled "Voting Securities and Principal
Holders Thereof") holding 74,711,681 shares of Common Stock, representing
approximately 77.7% of the total issued and outstanding shares of the Company's
Common Stock, adopted a resolution to authorize the Board of Directors, in its
sole discretion, to effect a reverse split of the Company's Common Stock based
upon a ratio of not less than one-for-twenty nor more than one-for-one hundred
fifty shares at any time prior to October 25, 2006. In addition, notwithstanding
approval of this proposal by the stockholders, the Board of Directors may, in
its sole discretion, determine not to effect, and abandon, the reverse stock
split without further action by our stockholders.
The Board of Directors believes that the proposed reverse stock split is
beneficial to the Company because it provides the Company with the flexibility
it needs to attract a transaction consistent with its business plan.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A PROXY.
The enclosed Information Statement is being furnished to you to inform you that
the foregoing action has been approved by the holders of a majority of the
outstanding shares of our Common Stock. The resolutions will not become
effective before the date which is 20 days after this Information Statement was
first mailed to stockholders. You are urged to read the Information Statement in
its entirety for a description of the action taken by the Board of Directors and
a majority of the stockholders of the Company.
This Information Statement is being mailed on or about November 25, 2005 to
stockholders of record on November 21, 2005 (the "Record Date").
/s/ ARNOLD KLING
-----------------------
Arnold Kling, President
24 HOLDINGS, INC.
47 SCHOOL STREET
CHATHAM, NEW JERSEY 07928
(973) 635-4047
-------------------------------------------
INFORMATION STATEMENT
PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14C-2 THEREUNDER
-------------------------------------------
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED
IN CONNECTION WITH THIS INFORMATION STATEMENT.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Company is distributing this Information Statement to its stockholders in
full satisfaction of any notice requirements it may have under Securities and
Exchange Act of 1934, as amended, and the Delaware General Corporation Law. No
additional action will be undertaken by the Company with respect to the receipt
of written consents, and no dissenters' rights with respect to the receipt of
the written consents, and no dissenters' rights under the Delaware General
Corporation Law are afforded to the Company's stockholders as a result of the
adoption of these resolutions.
Expenses in connection with the distribution of this Information Statement,
which are anticipated to be less than $2,000.00, will be paid by the Company.
BACKGROUND
Since the Company's disposition of its 24STORE (Europe) Limited subsidiary in
September 2005, the Company's business plan has consisted of exploring potential
targets for a business combination with the Company through a purchase of
assets, share purchase or exchange, merger or similar type of transaction. In
order to facilitate such a transaction, the Company's Board of Directors
requires the flexibility to adjust the number of issued and outstanding shares
of the Company's common stock to meet the requirements of any such transaction.
The Board of Directors believes that it is in the best interest of the Company's
stockholders and the Company for the Board to have the authority to effect a
reverse stock split of the Company's common shares in order to make the Company
more attractive for a potential business combination. The Board of Directors
believes that shareholder approval of a range of potential exchange ratios
(rather than a single exchange ratio) provides the Board of Directors with the
flexibility to best achieve the desired results of the reverse stock split. The
Board of Directors would effect a reverse stock split only upon its
determination that a reverse stock split would be in the best interests of the
stockholders at that time. To effect a reverse stock split, the Board of
Directors would set the timing for such a split and select the specific ratio
within the range approved by the stockholders. No further action on the part of
stockholders will be required to either implement or abandon the reverse stock
split. The Board of Directors reserves its
right to elect not to proceed, and abandon, the reverse stock split if it
determines, in its sole discretion, that this proposal is no longer in the best
interests of the Company's stockholders. The Company presently has no specific
plans to issue any shares of its common stock after effectuating the reverse
stock split.
CERTAIN RISK FACTORS ASSOCIATED WITH THE REVERSE STOCK SPLIT
THERE CAN BE NO ASSURANCE THAT THE TOTAL MARKET CAPITALIZATION OF THE COMPANY'S
COMMON STOCK (THE AGGREGATE VALUE OF ALL COMPANY COMMON STOCK AT THE THEN MARKET
PRICE) AFTER THE PROPOSED REVERSE STOCK SPLIT WILL BE EQUAL TO OR GREATER THAN
THE TOTAL MARKET CAPITALIZATION BEFORE THE PROPOSED REVERSE STOCK SPLIT OR THAT
THE PER SHARE MARKET PRICE OF THE COMPANY'S COMMON STOCK FOLLOWING THE REVERSE
STOCK SPLIT WILL INCREASE IN PROPORTION TO THE REDUCTION IN THE NUMBER OF SHARES
OF THE COMPANY'S COMMON STOCK OUTSTANDING BEFORE THE REVERSE STOCK SPLIT.
IF THE REVERSE STOCK SPLIT IS EFFECTED, THE RESULTING PER-SHARE STOCK PRICE MAY
NOT ATTRACT OR SATISFY POTENTIAL ACQUISITION TARGETS AND THERE IS NO GUARANTEE
THAT ANY TRANSACTION WILL BE EFFECTED.
A DECLINE IN THE MARKET PRICE OF THE COMPANY'S COMMON STOCK AFTER THE REVERSE
STOCK SPLIT MAY RESULT IN A GREATER PERCENTAGE DECLINE THAN WOULD OCCUR IN THE
ABSENCE OF A REVERSE STOCK SPLIT, AND THE LIQUIDITY OF THE COMPANY'S COMMON
STOCK COULD BE ADVERSELY AFFECTED FOLLOWING SUCH A REVERSE STOCK SPLIT.
IMPACT OF THE PROPOSED REVERSE STOCK SPLIT IF IMPLEMENTED
If approved and effected, the reverse stock split will be realized
simultaneously for all of the Company's common stock and the ratio will be the
same for all of the Company's common stock. The reverse stock split will affect
all of the Company's stockholders uniformly and will not affect any
shareholder's percentage ownership interests in the Company. In addition, the
reverse stock split will not affect any shareholder's percentage ownership or
proportionate voting power. However, because the number of authorized shares of
the Company's common stock will not be reduced, the reverse stock split will
increase the Board of Directors' ability to issue authorized and unissued shares
without further shareholder action.
The principal effect of the reverse stock split will be that:
o the number of shares of the Company's common stock issued and outstanding
will be reduced from 96,147,395 shares to a range of approximately 4,807,370
to 640,983 shares, depending on the reverse stock split ratio determined by
the Board of Directors;
o the number of shares of the Company's common stock issued and outstanding,
assuming the conversion of all of the Company's outstanding shares of
preferred stock into common stock, will be reduced from 130,606,895 shares
to a range of approximately 6,530,345 to 870,713 shares, depending on the
reverse stock split ratio determined by the Board of Directors;
o the number of shares that may be issued upon the exercise of conversion
rights by holders of securities convertible into the Company's common stock
will be reduced proportionately based upon the reverse stock split ratio
selected by the Board of Directors; and
o based on the reverse stock split ratio selected by the Board of Directors,
proportionate adjustments will be made to the per-share exercise price and
the number of shares issuable upon
the exercise of all outstanding options entitling the holders to purchase
shares of the Company's common stock, which will result in approximately the
same aggregate price being required to be paid for such options upon
exercise immediately preceding the reverse stock split.
In addition, the reverse stock split may increase the number of stockholders who
own odd lots (less than 100 shares). Stockholders who hold odd lots typically
may experience an increase in the cost of selling their shares and may have
greater difficulty in effecting sales.
EFFECT ON FRACTIONAL STOCKHOLDERS
You will not receive fractional post-reverse stock split shares in connection
with the reverse stock split. All post-split shareholdings will be rounded to
the nearest full share.
EFFECT ON REGISTERED AND BENEFICIAL STOCKHOLDERS
Upon a reverse stock split, we intend to treat stockholders holding the
Company's common stock in "street name", through a bank, broker or other
nominee, in the same manner as registered stockholders whose shares are
registered in their names. Banks, brokers or other nominees will be instructed
to effect the reverse stock split for their beneficial holders holding the
Company's common stock in "street name." However, these banks, brokers or other
nominees may have different procedures than registered stockholders for
processing the reverse stock split. If you hold your shares with a bank, broker
or other nominee and if you have any questions in this regard, we encourage you
to contact your nominee.
EFFECT ON REGISTERED CERTIFICATED SHARES
Some of our registered stockholders hold all their shares in certificate form.
If any of your shares are held in certificate form, you will receive a
transmittal letter from our transfer agent, Corporate Stock Transfer, as soon as
practicable after the effective date of the reverse stock split. The letter of
transmittal will contain instructions on how to surrender your certificate(s)
representing your pre-reverse stock split shares to the transfer agent. Upon
receipt of your stock certificate, you will be issued the appropriate number of
shares electronically in book-entry form under the direct registration system.
The reverse stock split could adversely affect the ability of third parties to
takeover or change the control of the Company by, for example, permitting
issuances that would dilute the stock ownership of a person seeking to effect a
change in the composition of the Company's Board or contemplating a tender offer
or other transaction for the combination of the Company with another company.
Although the increased proportion of unissued authorized shares to issued shares
could, under certain circumstances, have an anti-takeover effect, the reverse
stock split is not in response to any effort of which we are aware to accumulate
the Company's shares of common stock or obtain control of the Company, nor is it
part of a plan by management to recommend a series of similar amendments to the
Company's Board and stockholders.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND
SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
AUTHORIZED SHARES
The reverse stock split would affect all issued and outstanding shares of the
Company's common stock and outstanding rights to acquire the Company's common
stock. Upon the effectiveness of the reverse stock split, the number of
authorized shares of the Company's common stock that are not issued or
outstanding would increase due to the reduction in the number of shares of the
Company's common stock issued and outstanding based on the reverse stock split
ratio selected by the Board of Directors. As of November 1, 2005, we had
100,000,000 shares of authorized common stock and 96,147,395 shares of common
stock issued and outstanding, and 5,000,000 authorized shares of preferred
stock, of which 344,595 are issued and outstanding. Authorized but unissued
shares will be available for issuance, and we may issue such shares in the
future. If we issue additional shares, the ownership interest of holders of the
Company's common stock will be diluted.
ACCOUNTING MATTERS
The reverse stock split will not affect the par value of the Company's common
stock. As a result, as of the effective time of the reverse stock split, the
stated capital attributable to the Company's common stock on its balance sheet
will be reduced proportionately based on the reverse stock split ratio selected
by the Board of Directors, and the additional paid-in capital account will be
credited with the amount by which the stated capital is reduced. The per-share
net income or loss and net book value of the Company's common stock will be
restated because there will be fewer shares of the Company's common stock
outstanding.
PROCEDURE FOR EFFECTING REVERSE STOCK SPLIT
If the Board of Directors decides to implement the reverse stock split at any
time prior to October 25, 2006, we will promptly file a Certificate of Amendment
with the Secretary of State of the State of Delaware to amend our existing
Certificate of Incorporation. The reverse stock split will become effective on
the date of filing the Certificate of Amendment, which is referred to as the
"effective date." Beginning on the effective date, each certificate representing
pre-reverse stock split shares will be deemed for all corporate purposes to
evidence ownership of post-reverse stock split shares. The text of the
Certificate of Amendment is set forth in Exhibit A to this information
statement. The text of the Certificate of Amendment is subject to modification
to include such changes as may be required by the office of the Secretary of
State of the State of Delaware and as the Board of Directors deems necessary and
advisable to effect the reverse stock split, including the applicable ratio for
the reverse stock split.
NO APPRAISAL RIGHTS
Under the General Corporation Law of the State of Delaware, the Company's
stockholders are not entitled to appraisal rights with respect to the reverse
stock split, and we will not independently provide stockholders with any such
right.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The following is a summary of certain material United States federal income tax
consequences of the reverse stock split, does not purport to be a complete
discussion of all of the possible federal income tax consequences of the reverse
stock split and is included for general information only. Further, it does not
address any state, local or foreign income or other tax consequences. Also, it
does not address the tax consequences to holders that are subject to special tax
rules, such as banks, insurance companies, regulated investment companies,
personal holding companies, foreign entities, nonresident alien individuals,
broker-dealers and tax-exempt entities. The discussion is based on the
provisions of the United States federal income tax law as of the date hereof,
which is subject to change retroactively as well as prospectively. This summary
also assumes that the pre-reverse stock split shares were, and the post-reverse
stock split shares will be, held as a "capital asset," as defined in the
Internal Revenue Code of 1986, as amended (i.e., generally, property held for
investment). The tax treatment of a shareholder may vary depending upon the
particular facts and circumstances of such shareholder. Each shareholder is
urged to consult with such shareholder's own tax advisor with respect to the tax
consequences of the reverse stock split. As used herein, the term United States
holder means a shareholder that is, for federal income tax purposes: a citizen
or resident of the United States; a corporation or other entity taxed as a
corporation created or organized in or under
the laws of the United States, any State of the United States or the District of
Columbia; an estate the income of which is subject to federal income tax
regardless of its source; or a trust if a U.S. court is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust.
No gain or loss should be recognized by a shareholder upon such shareholder's
exchange of pre-reverse stock split shares for post-reverse stock split shares
pursuant to the reverse stock split. The aggregate tax basis of the post-reverse
stock split shares received in the reverse stock split will be the same as the
shareholder's aggregate tax basis in the pre-reverse stock split shares
exchanged therefor. The shareholder's holding period for the post-reverse stock
split shares will include the period during which the shareholder held the
pre-reverse stock split shares surrendered in the reverse stock split.
Our view regarding the tax consequences of the reverse stock split is not
binding on the Internal Revenue Service or the courts. ACCORDINGLY, EACH
SHAREHOLDER SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR WITH RESPECT TO ALL
OF THE POTENTIAL TAX CONSEQUENCES TO HIM OR HER OF THE REVERSE STOCK SPLIT.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table lists, as of November 1, 2005, the number of shares of
common stock beneficially owned by (i) each person or entity known to the
Company to be the beneficial owner of more than 5% of the outstanding common
stock; (ii) each officer and director of the Company; and (iii) all officers and
directors as a group. Information relating to beneficial ownership of common
stock by our principal stockholders and management is based upon information
furnished by each person using "beneficial ownership" concepts under the rules
of the Securities and Exchange Commission. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting
power, which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest.
The percentages below assume that the outstanding shares of the Company's
preferred stock owned by the holder listed below have been converted into share
of the Company's common stock. Accordingly, the calculations assume that
130,606,895 are outstanding (comprised of the 96,147,395 shares currently
outstanding and 34,459,500 issuable upon conversion of the Company's outstanding
preferred stock).
Percentage of
Name and Address of Number of Shares Shares
Beneficial Owner Beneficially Owned (1) Beneficially Owned
- ------------------------ ---------------------- ------------------
R&R Biotech Partners, LLC 87,336,945 (2) 66.90%
1270 Avenue of the Americas
16th Floor
New York, NY 10017
Attention: Thomas Pinou, CFO
Moyo Partners, LLC 21,834,236 (3) 16.70%
c/o Arnold Kling, Esq.
712 Fifth Avenue, 11th Floor
New York, NY 10019
Officers and Directors
as a group (2 persons) 21,834,236 (3) 16.70%
(1) Unless otherwise indicated, the Company believes that all persons
named in the table have sole voting and investment power with respect
to all shares of the Common Stock beneficially owned by them. A person
is deemed to be the beneficial owner of securities which may be
acquired by such person within 60 days from the date indicated above
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or convertible securities that are held by such
person (but not those held by any other person) and which are
exercisable within 60 days of the date indicated above, have been
exercised.
(2) Includes 59,769,345 shares of common stock currently outstanding and
27,567,600 shares of common stock issuable upon conversion of 275,676
shares of preferred stock owned by R&R Biotech Partners, LLC.
(3) Includes 14,942,336 shares of common stock currently outstanding and
6,891,900 shares of common stock issuable upon conversion of 68,919
shares of preferred stock owned by Moyo Partners, LLC.
INTEREST OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON.
No director, executive officer, associate of any director or executive officer
or any other person has any substantial interest, direct or indirect, by
security holdings or otherwise, in the proposal to amend the Certificate of
Incorporation and take all other proposed actions which is not shared by all
other holders of the Company's Common Stock. See "Security Ownership of Certain
Beneficial Owners and Management."
OTHER MATTERS
The Board knows of no other matters other than those described in this
Information Statement which have been approved or considered by the holders of a
majority of the shares of the Company's voting stock.
IF YOU HAVE ANY QUESTIONS REGARDING THIS INFORMATION STATEMENT, PLEASE CONTACT:
Kirk Warshaw
47 School Street
Chatham, New Jersey 07928
(973) 635-4047
BY ORDER OF THE BOARD OF DIRECTORS OF 24 HOLDINGS, INC.
EXHIBIT A
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
24 HOLDINGS, INC.
24 Holdings, Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify the following:
FIRST: The Certificate of Incorporation is hereby amended by inserting the
following three new paragraphs following the current text of Article FOURTH:
Upon the filing of this amendment with the office of the Secretary of
State of the State of Delaware (the "Effective Date"), each [number determined
by the Corporation's Board of Directors] shares of Common Stock then issued,
which are the only voting securities of the Corporation issued and outstanding,
shall be automatically reclassified into one share of Common Stock. No
fractional interests in shares shall be issued, nor shall any shareholder be
entitled to any cash compensation for any fractional interests after such
reclassification.
From and after the Effective Date, the amount of capital represented
by the Common Stock immediately after the Effective Date shall be the same as
the amount of capital represented by such shares immediately prior to the
Effective Date, until thereafter reduced or increased in accordance with
applicable law. The par value of a Share of Common Stock shall remain unchanged
after the reverse Stock Split at $0.01 per share.
From and after the Effective Date, the total number of shares of all
classes of capital stock which the Corporation shall have authority to issue
shall remain unchanged.
SECOND: The Corporation's directors took action to authorize this amendment
pursuant to authority granted by certain principal stockholders of the
Corporation pursuant to the By-Laws of the Company and ss.228of the General
Corporation Law of the State of Delaware. The resolutions adopted by the Board
of Directors which set forth the foregoing amendment, declared that this
amendment is advisable and consistent with the authority granted by the
Corporation's stockholders.
THIRD: In accordance with Section 228 of the General Corporation Law of the
State of Delaware, a majority of outstanding stock entitled to vote thereon, and
a majority of the outstanding stock of each class entitled to vote thereon as a
class, approved the foregoing amendment.
FOURTH: The foregoing amendment has been duly adopted in accordance ss.242of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, 24 Holdings, Inc. has caused this Certificate of Amendment
to be signed and executed in its name and behalf by its duly authorized
President in accordance with provisions of the Business Corporation Act of the
State of Delaware.
DATED: _______________, 2005
24 HOLDINGS, INC.
By: _______________________________
Arnold Kling, President