SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
[X ] Preliminary information [ ] Confidential, for use of the
statement Commission Only (as permitted
by Rule 14c-5(d)(2))
[ ] Definitive information statement
SILK BOTANICALS.COM, 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 transactions applies:
(3) Per unit price of 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 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.:
1
Preliminary Information Statement
Dated: May 28, 2002
Silk Botanicals.Com, Inc.
975 S. Congress Avenue, Suite 102
Delray Beach, Florida 33445
INFORMATION STATEMENT
This Information Statement is furnished to shareholders of Silk
Botanicals.Com, Inc., a Florida corporation, ("Silk") in connection
with certain corporate actions approved by the majority consent of
shareholders on December 5, 2001 and January 24, 2001. The corporate
actions have already been effected by Silk as of December
5, 2001 (acquisition of assets of BTSL Technologies Limited and
appointment of two new directors) and as of February 8, 2002 (name
change) and information concerning these actions is being provided
pursuant to Rule 14f-1 and Rule 14c-101 of the Securities Exchange
Act of 1934 ("Exchange Act"). All of the corporate actions were
unanimously approved and recommended by the board of directors of
Silk who obtained the consent of the majority of Silk's shareholders
to the actions.
The corporate actions (hereafter the "Corporate Actions")
provide for the following matters.
1. The acquisition of all of the assets of BTSL Technologies
Limited, an Irish limited liability company ("BTSL"), pursuant to the
terms of an Asset Purchase Agreement dated December 5, 2001 (the
"Acquisition Agreement"). Under the terms of the Acquisition
Agreement, Silk acquired the assets of BTSL and transferred the assets
into a newly formed, wholly owned subsidiary of Silk, and the
shareholders of BTSL received an aggregate of twenty million
(20,000,000) shares of Silk's common stock (the "Acquisition") at
January 6, 2002, the date of closing of the transaction (the
"Closing"). The twenty million (20,000,000) shares represented 87.8%
of the then issued and outstanding shares of Silk at the Closing.
2. The appointment as of December 5, 2001 of the following
nominees to serve as the directors of Silk in connection with the
Acquisition: Joseph R. Bergmann, Tim Coburn and Padraic Maloney.
3. The amendment to the articles of incorporation of Silk as of
February 28, 2002 to change the name of Silk to Consolidated
Resources Group, Inc.
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ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON May 2, 2002
(THE"RECORD DATE"), WERE ENTITLED TO NOTICE OF AND TO VOTE ON THE
CORPORATE ACTIONS. MEMBERS OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
WHO, COLLECTIVELY HOLD IN EXCESS OF 50% OF SILK'S ISSUED AND
OUTSTANDING SHARES HAVE VOTED IN FAVOR OF THE CORPORATE ACTIONS. AS A
RESULT, THE CORPORATE ACTIONS HAVE BEEN APPROVED WITHOUT THE
AFFIRMATIVE VOTE OF ANY OTHER SHAREHOLDER.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
3
CORPORATE ACTIONS
Introduction
- ------------
Silk has acquired (the "Acquisition") all of the assets (the
"Assets") of BTSL Technologies Limited ("BTSL"), an Irish limited
liability company, through the issuance of shares of its Common
Stock to BTSL. As part of the Acquisition, Silk has created a
wholly owned Irish limited liability company subsidiary
("TecEnergy Limited") into which the Assets were assigned. The
appointment of Tim Coburn and Padraic Maloney on December 5,
2001, to serve as additional members of the board of directors of
Silk constituted a change of control of Silk on that date
Each of the Corporate Actions set forth below, except for the
name change, was a negotiated term of the Acquisition with BTSL.
The board of directors approved the Corporate Actions believing
they were in Silk's and its shareholders' best interest.
ACQUISITION
-----------
The acquisition of the Assets from BTSL by Silk resulted in a
change of control of Silk with shareholders and management of
BTSL assuming control positions in Silk. The acquisition of the
Assets resulted in 20,000,000 shares of Silk Common Stock being
issued to BTSL. Additionally, since the Acquisition Agreement was
entered, Silk has issued 8,356,844 shares of Silk Common Stock
for acquisitions and professional services. Silk may seek to
raise capital in the future, but, at this time, the terms of any
such future capital is still unknown. The raising of future
capital would likely have a dilutive effect on current
shareholders. After the acquisition of the Assets and the
issuance of 20,000,000 shares of Silk Common Stock to BTSL, there
were 22,765,455 shares of Silk Common Stock outstanding, and
1,533,687 shares of Silk Preferred Stock with voting rights of
one vote per share outstanding. Accordingly, the present
shareholders of Silk, including those who own the additional
8,356,844 shares of Silk Common Stock recently issued, had
approximately 73.1% of Silk's outstanding shares of Silk Common
Stock and Preferred Stock with voting rights following the
Acquisition.
Reasons for the Transaction
- ---------------------------
Silk has been focused on the development, marketing and
distribution of
three lines of high-quality artificial flowers. These efforts
have produced barely profitable operations. Silk has limited
resources and has had to rely on funds from its officers and
shareholders to support its operations. Its artificial flowers
operations are only now reaching a break-even point and without
additional capital to develop new markets management feels its
artificial flowers operations, will, at best, only continue to
break even or produce a slight profit. After an extensive review
of Silk's history, current operations and future prospects, the
board of directors and management of Silk believed it is in the
best interest of Silk and its shareholders to explore alternative
business opportunities. These efforts led to BTSL Technologies
Limited, which is located in Dublin, Ireland.
4
Neither Silk nor BTSL had any prior dealings, contracts or
arrangements with the other party. Joseph R. Bergmann, the
President of Silk, handled the negotiations by Silk to acquire
the Assets from BTSL. Mr. Bergmann did not seek the advise of
any other experts or advisors in the determination of the
consideration to be offered to acquire BTSL. The eventual number
of shares to be received by BTSL came after extensive
negotiations between the two parties. Given the present state of
both companies at the time of the negotiations with neither
profitable, much of the negotiations on consideration was based
on non- empirical data. Instead the parties relied on their own
business acumen to come to the terms of the deal and what each
party thought would be fair to their shareholders given the state
of the Silk and BTSL. The negotiations took place over several
months as both parties explored other business deals, none of
which advanced beyond initial discussions. Silk had explored
potential acquisitions in the silk floral industry or potential
sale to a company in the decorative home accessories industry but
found no interest. Eventually the board of directors of the two
companies decided the acquisition by Silk of the Assets from BTSL
was the best alternative. Both sides recognized the risk involved
in the acquisition given neither company was profitable and both
needed additional funding. However, in the end the board of
directors of Silk felt the deal with BTSL was in the best
interest of Silk and its shareholders and BTSL's board of
directors felt the offer by Silk greatly enhanced BTSL's
potential to fulfill the opportunities provided by the Assets,
and was in the best interest of BTSL and its shareholders.
5
Although BTSL is in the beginning cycle of its product development,
the board of directors and management of Silk reviewed BTSL's
industry, its management, and products and decided it presented an
opportunity for potential growth that was not present in Silk's
current business. With BTSL having commenced product development on
several products, Silk's board of directors and management believed it
would be the right time to structure a deal with BTSL before it
started full product development and marketing efforts. Silk's board
of directors and management did weigh the potential risks associated
with a transaction with BTSL. However, after reviewing the potential
market for BTSL products, and Silk's current financial position,
Silk's board of directors and management believed the potential risks
associated with BTSL and its operations were outweighed by the
potential upside in BTSL's business. Additionally, Silk's board of
directors and management believed BTSL was the best business
opportunity the management of Silk had found in which a deal was
possible. Silk's management had found that Silk was somewhat limited
in potential deals based on Silk's own financial position.
Even in considering a transaction with BTSL, one of the requirements
was additional capital be raised to help fund BTSL's operations. Given
Silk's past performance in the artificial flowers industry, management
of Silk did not feel it was feasible to continue to raise capital for
the artificial flowers operations. However, after discussing BTSL and
its business with potential investors, Silk's management did find
interest in financing BTSL's business through Silk. The board of
directors and management felt the potential benefits outweighed the
risk of entering into a transaction with a company like BTSL which did
not have a proven operation, had a negative working capital and no
revenue. The board of directors and management of Silk believes the
market being pursued by BTSL has growth opportunity, that BTSL has
products that will be well received by potential customers, and BTSL
is ahead of its competitors in the development of certain products,
particularly its oxygen generation and gasification products which
Silk's management believes have strong potential.
Silk is and was limited in its ability to perform extensive research
on BTSL's product capabilities and future market potential given
Silk's limited resources. The ultimate decisions were based on a
belief in BTSL's management, discussions with potential customers of
BTSL and a review of existing and potential contracts held and being
sought by BTSL. Additionally, Silk's decisions were based on the
current state of Silk's business and financial position and the need
to move in another direction than the artificial flowers market.
Terms of the Acquisition
- ------------------------
On December 5, 2001, Silk entered into an Asset Purchase Agreement
with BTSL. Pursuant to the terms of the Acquisition Agreement, Silk
acquired the assets of BTSL through the exchange of twenty million
(20,000,000) shares of Silk Common Stock for all of BTSL's assets.
BTSL's business will be the main focus of Silk's operations going
forward. Management of BTSL will also assume similar roles with Silk.
The current director, Joseph R. Bergmann, and management of Silk
remained at the closing of the transaction, and Tim Coburn and Padraic
Maloney were appointed to fill vacancies as directors on December 5,
2001. Additional negotiated terms of the Acquisition call for the
appointment of two additional directors.
6
At the time of the negotiations with Silk, both Silk and BTSL were
looking at several financing alternatives. It is anticipated that
additional capital will need to be raised. At this time, the terms of
any future capital raising are not known. Current investors in BTSL
and Silk may be interested in making further investments but no
discussions have been had with current investors on whether they would
be interested in making further investments, and if so, on what terms
they would make the investments.
Upon completion of the Acquisition, Silk had the following shares of
Silk Common Stock and Voting Preferred Stock outstanding:
Class of Shareholder Shares of Silk Common Stock Percentage
- -------------------- --------------------------- ----------
Shareholders of 1,533,687 6.3%
Silk (Voting Preferred)
Shareholders of
Silk (Common) 2,765,455 11.4%
BTSL 20,000,000 82.3%
---------- ------
Total 24,299,142 100.00%
There are no provisions in the Acquisition Agreement or otherwise
which restrict the new management of Silk, following the Acquisition,
from issuing stock options or awards which would provide additional
dilution to current shareholders. There are no warrants and options
outstanding in Silk other than those reported in Silk's Form 10-KSB
for the period ended May 31, 2001.
Although current shareholders will be diluted by the acquisition, the
board of directors and management of Silk believe this transaction is
in Silk's and its shareholders' best interests. By acquiring the
assets of BTSL, management believes Silk is receiving operations with
a business plan that offers more potential than Silk's current
business model. As Silk currently is barely profitable and does not
have the resources to expand its artificial flowers operations, the
board of directors and management feels this acquisition is important
to creating value in Silk for its shareholders. The Acquisition
provides BTSL with a public market for its Silk stock for the future
benefit of its current shareholders and to enhance BTSL's ability to
seek future funding of its operations.
Effective Date
- --------------
The Acquisition became effective upon January 6, 2002.
Conditions to the Acquisition
- -----------------------------
The obligation of Silk and BTSL to consummate the Acquisition were
subject to certain conditions, including the following:
1) BTSL had to pay $50,000 to Silk's auditors to enable the
completion and filing by Silk of reports on Form 10-QSB and Form 10-
KSB (which reports were filed), and BTSL paid an additional $200,000
to Silk for operating capital for Silk's artificial flower business.
2) The representations and warranties made by or on behalf of each of
the parties in the Acquisition Agreement or in any certificate or
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document delivered by a party pursuant to the provisions of the
Acquisition Agreement shall be true in all material respects at and as
of the Closing as though such representations and warranties were made
at and as of such time.
3) The parties shall each have performed and complied with all
covenants, agreements and conditions required by the Acquisition
Agreement to be performed or complied with prior to or at the Closing.
These conditions include Silk delivering financial information to
BTSL, and BTSL providing funds to allow Silk to complete its financial
reporting requirements to the SEC.
4) The present board of directors of Silk caused the appointment of
all BTSL nominees to the board of directors of Silk as directed by
BTSL and arranged for the retention of the existing officers and
director of Silk.
Representations and Warranties
- ------------------------------
Silk and BTSL have made certain representations and warranties to each
other with respect to, among other things, the organization and good
standing of each of Silk and BTSL, authorization of the Acquisition
Agreement, capitalization, stock ownership, validity and legality of
stock, ownership of assets, contractual and other commitments,
liabilities, financial statements, absence of material adverse
changes, disclosure of material facts, availability of certain
documents and records, accuracy of certain documents, and legal and
other proceedings. Each party verified the accuracy of these
representations up through the Closing of the Acquisition.
Expenses
- --------
Silk and BTSL each paid their own expenses of the Acquisition.
Presently, the only expenses of the parties are for legal, accounting,
printing and mailing cost. Silk's costs were approximately $20,000
for legal and accounting, and Silk estimates its printing and mailing
cost to be around $2,000 but may be higher. BTSL's legal and
accounting costs were approximately $20,000. Neither party paid
outside consultants to assist in the acquisition other than the
attorneys and accountants.
Accounting Treatment
- --------------------
The Acquisition of Assets is accounted for as a "reverse acquisition"
which results in a recapitalization treatment on the financial
statements of Silk with BTSL deemed to be the acquiring entity for
financial accounting purposes. The legal status of Silk as the parent
corporation will not change.
Regulatory Approval
- -------------------
No specific federal or state regulatory approvals must be obtained by
Silk in order to consummate the Acquisition other than general
compliance with applicable corporation law and state and federal
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securities laws.
BTSL Reasons for the Acquisition
- --------------------------------
BTSL has been in need of capitalization to continue to develop its
products. BTSL's board of directors and management had reviewed
several financing possibilities and believed that the potential to
raise capital through the sale of securities and the ability to
potentially have a trading market for those securities was in the best
interest of BTSL's shareholders.
Interest of Certain Persons in the Acquisition
- ----------------------------------------------
In considering the recommendation of Silk's board of directors and
management with respect to the Acquisition Agreement, neither Silk's
board of directors or management nor BTSL's board of directors or
management will receive any benefits arising from their ownership of
Silk's common stock as a result of the acquisition that will not be
equally extended to all of Silk's and BTSL's shareholders. No member
of Silk's management had an ownership interest in BTSL, and BTSL
shareholders had no material ownership interest in Silk prior to the
completion of the acquisition. Management and employees of both Silk
and BTSL may receive options in Silk for ongoing services to Silk.
Tax Aspects of the Acquisition
- ------------------------------
The proposed acquisition of BTSL by Silk is intended to qualify as a
tax-free reorganization under the Internal Revenue Code of 1986. If
the acquisition qualifies as a tax-free reorganization, no gain or
loss will be recognized for income tax purposes by either Silk or BTSL
as a result of the acquisition. There will not be any material tax
effects on Silk's existing shareholders after the merger. However,
neither Silk nor BTSL has requested a tax ruling from the Internal
Revenue Service with respect to the merger. Accordingly, no assurance
can be given that the merger will qualify as a tax-free
reorganization. If the acquisition does not qualify for tax free
treatment, BTSL will be deemed to have sold its Assets for Silk stock
and be taxed on the difference between their basis in BTSL Assets and
the value of the Silk stock. Silk shareholders should have no tax
effect since they are not receiving any new shares.
Restricted Nature of Securities
- -------------------------------
The shares of Silk's Common Stock issued to BTSL in connection with
the sale of Assets will not be registered under the Securities Act of
1933, as amended (the "Act") and will be deemed "restricted
securities" as that term is defined in the Act. Accordingly, such
shares were issued in reliance on the exemption from such registration
requirements provided by Section 4(2) of the Act. BTSL has made
representations to Silk with respect to the acquisition of Silk's
shares, including that it has such knowledge and experience in
financial and business matters that he or she is capable of evaluating
the merits and risks of the prospective investment, such that Silk
reasonably believes that BTSL comes within the scope of the exemption.
Such shares will be restricted securities, and the certificates will
bear legends restricting their subsequent resale in the absence of
registration under the Securities Act or the availability of an
exemption therefrom. BTSL has been provided information regarding Silk
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and its business and financial condition including copies of Silk's
most recent annual report on Form 10-KSB for the year ended May 30,
2001.
No Dividends
- ------------
Silk has not paid dividends in the past and there are no
dividends in
arrears or interest due on Silk Securities.
ELECTION OF DIRECTORS
---------------------
In accordance with the terms of the Acquisition Agreement, the sole
director of Silk, Joseph R. Bergmann, agreed to appoint nominees of
BTSL to the board of directors to serve with Mr. Bergmann. BTSL
nominated Tim Coburn and Padraic Maloney for the board of directors.
The individuals will serve until the next annual shareholders' meeting
and until their successors are duly elected and qualified. Certain
biographical information on Joseph R. Bergmann and the appointees is
set forth below.
Joseph R. Bergmann, age 54, President, Chief Executive Officer and
Director, oversees the entire operation of Silk. He is responsible for
merchandising of products, as well as the formation and implementation
of the Company's marketing plans. From October 1990 to the present
Mr. Bergmann serves as President of JRB Enterprises Inc. Prior to his
tenure with JRB Enterprises, from 1986 to 1989 he was President of
Jewelmasters, Inc., a public multimillion dollar fine jewelry company.
Prior to Jewelmasters, from 1972 through 1986 Bergmann also served as
Senior Vice President of Federated Department Stores. Mr. Bergmann.is
a graduate of Queens College in New York with a degree in Economics.
Padraic Maloney, age 36, Director, has many business interests in
property, leisure and blood stock industries. He has been involved in
the waste industry for the past number of years and in 1998 founded a
company that carried out a feasibility study and completed research
and development for the manufacture of a refuse derived fuel in pellet
form for the production of electricity. This fuel consisted totally of
material such as garbage and other waste products which are in today's
world an unused source of energy. Mr. Maloney's knowledge and
experience in this field is a valuable asset to Silk.
Having qualified as an Engineer in 1985, Mr. Tim Coburn, age 40,
Director, was immediately recruited by a multinational company based
in Holland to spearhead international turnkey projects in various
countries. This involved extensive travel in the Middle East and
Africa, where he was responsible for the setting up of an integrated
project for the production of food. This involved the building of
state of the art production facilities, integrating these facilities
into one operation, and designing and developing a complete software
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system to monitor and control production operations. During this
period he became proficient in the Arabic language. In 1989, Mr.Coburn
was recruited by an Irish company, as Development Manager in charge of
all production facilities, where he successfully directed and
implemented several company reorganizations that resulted in
substantial increase in production, and a dramatic increase to
profitability.
In 1993, Mr. Coburn set up an environmental control system in Canada
for the monitoring of commercial greenhouses, and gained valuable
experience in environmental control regulations. He returned to
Ireland where he successfully directed and implemented several company
reorganizations, refinancing programs, and company turnabouts. He then
became a major shareholder in a precision engineering manufacturing
company, creating an international market in precision engineering
products. He has created an extensive marketing network worldwide
based on product development and customer satisfaction. In 1995 Mr.
Coburn met Jacques Ribesse, founder of Jarix Limited, an international
scientist and expert in the fields of gas and chemical engineering and
research. Together they have developed technologies for gas separation
and combustion.
MANAGEMENT
The names of Silk's executive officers and directors and the
positions held by each of them are set forth below:
Name Position
---- --------
Joseph R. Bergmann President, Secretary & Director
Padraic Maloney Director
Tim Coburn Director
The term of office of each director is one year and until his
successor is elected at Silk's annual shareholders' meeting and is
qualified, subject to removal by the shareholders. The term of office
for each officer is for one year and until a successor is elected at
the annual meeting of the board of directors and is qualified, subject
to removal by the board of directors.
Silk does not have a standing audit, nominating or compensation
committee. The size of Silk's board has not permitted the board of
directors to divide up some of the corporate governance provisions. It
is anticipated as BTSL's nominees assume control and the business
develops, that board of director committees will be formed. At this
time, however, the exact timing and the nature of such committees is
unknown. The enlarged board of directors has had five meetings with
most action handled through unanimous consents given the fact there
were only three directors.
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Biographical Information
- ------------------------
Biographical information with respect to each
of Silk's officers and directors has been set forth above.
EXECUTIVE COMPENSATION
The table below summarizes the annual compensation for services in all
capacities to the company for the (i) person(s) serving as our Chief
Executive Officer; and (ii) our four most highly compensated executive
officers other than the CEO as determined at May 31, 2001, the end of
Silk's last completed fiscal year:
NAME TITLE SALARY/FISCAL YR. BONUS AWARDS
- ---- ----- ----------------- ----- ------
Joseph R. Bergmann President $35,000.00 N/A N/A
(ii) Not applicable
Joseph R. Bergmann is also an officer and director of JRB Enterprises,
Inc. Together Silk and JRB Enterprises, Inc. have engaged in numerous
transactions including, but not limited to, a Manufacturing
Agreement, a Sub-Lease Agreement, and a Licensing Agreement. Mr.
Bergmann's role in these transactions was to negotiate and procure the
agreements and he received no compensation save for his income
received in the ordinary course of business.
For the Officers and Directors of JRB Enterprises, Inc. the following
outlines compensation received for the last three fiscal years:
NAME TITLE YEARS COMPENSATION PER YEAR
- ---- ----- ----- ---------------------
Joseph R. Bergmann Director 1996-2001 0
Joseph R. Bergmann President 1996-2001 $150,000
Regina M. Bergmann Director 1996-2001 0
Regina M. Bergmann Secretary 1996-2001 $ 25,000
Options/SAR Grants in Last Fiscal Year
- --------------------------------------
None
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Bonuses and Deferred Compensation:
- ---------------------------------
None
Compensation Pursuant to Plans:
- ------------------------------
None
Pension Table:
- -------------
Not Applicable
Other Compensation:
- ------------------
None
Compensation of Directors:
- -------------------------
Silk has no policy for compensation of Directors.
Termination of Employment and Change of Control Arrangement
- -----------------------------------------------------------
None of Silk's officers have employment contracts.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information regarding the
beneficial ownership of the Company's common stock as of April 20,
2002, by (i) each person or entity known by the Company to be
beneficial owner of more than 5% of the outstanding shares of common
stock, (ii) each of the Company's directors and named executive
officers, and (iii) all directors and executive offices of the
Company as a group.
Amount and Nature of Percent of
Title of Class Name & Address Beneficial Owner Class
- -------------- -------------- -------------------- ----------
Common Joseph R. Bergmann 3,569,000 Shares(1) 10.9%
Stock 975 S. Congress Ave. President & Director
Delray Beach, Fl 33445
Common BTSL Technologies 20,000,000 Shares(2) 51.4%
Stock Limited
975 S. Congress Ave.
Delray Beach, Fl 33445
Common Graham Energy, Inc. 4,000,000 Shares 12.3%
Stock 975 S. Congress Ave.
Delray Beach, Fl 33445
Common Vance Energy Ltd. 3,316,000 Shares 10.2%
Stock 975 S. Congress Ave.
Delray Beach, Fl 33445
Common Directors & Officers 23,569,000 Shares 62.3%
Stock as a group (3 persons)
(1) Includes 1,000,000 shares of Series 2000 Convertible Preferred
stock convertible into 1,000,000 shares of Common Stock. Of this
number of Common Stock, 1,042,687 shares are issued to Joseph R.
Bergmann IRA.
(2) Tim Coburn and Padraic Maloney, directors of Silk, are also
managing directors of BTSL Technologies Limited.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Silk shares office facilities, certain office equipment and certain
employees with JRB Enterprises, Inc. At May 31, 1999, Silk had issued
1,900 shares of preferred stock to JRB Enterprises, Inc. for the
license rights to the trademark "Living Silk" and certain manufacturing
processes. JRB Enterprises, Inc. is owned by Joseph R. Bergmann,
President of Silk.
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On January 2, 2001 Silk and JRB Manufacturing, Inc. ("JRB"), the
primary manufacturer of Silk's silk botanical products (and which is
owned by Silk's President, Joseph R. Bergmann and his wife) entered
into a marketing, manufacturing and distribution agreement with an
established out-of-state assembler and
manufacturer of high quality artificial plants, trees and floral
arrangements.
On February 15, 2002, JRB Manufacturing, Inc. ("JRB")
and its two shareholders completed a Stock Purchase Agreement with
Silk regarding the sale of 100% of the outstanding shares of
JRB to Silk in exchange for 100,000 shares of Silk's common
stock in a tax-free reorganization. The transaction was effective as
of January 1, 2002. JRB has been Silk's primary manufacturer of its
silk botanical products, and Silk intends that JRB will continue to
do so. JRB's assets consist of certain inventory and equipment for
manufacturing silk botanical products. The main purpose of
the reorganization transaction was to simplify and consolidate Silk's
silk botanical products business.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Information Statement contains certain forward-looking statements
with respect to the financial condition, results of operations,
business strategies, operating efficiencies or synergies, competitive
positions, growth opportunities for existing products, plans and
objectives of management, markets for stock of Silk and other matters.
Statements in this Information Statement that are not historical facts
are hereby identified as "forward-looking statements." Such forward-
looking statements, including, without limitation, those relating to
the future business prospects, revenues and income, in each case
relating to Silk, wherever they occur in this Information Statement,
are necessarily estimates reflecting the best judgment of the
management of Silk and involve a number of risks and uncertainties
that could cause actual results to differ materially from those
suggested by the forward-looking statements. Such forward-looking
statements should, therefore, be considered in light of various
important factors, including those set forth in this Information
Statement. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-
looking statements include without limitation:
the performance of Silk's products within, and the overall strength
of,
- - the prevailing business environment
- - customer acceptance of newly-introduced product lines
- - changes in the costs of raw materials and labor and advertising
- - the effects of vigorous competition in the markets in which Silk
intends to operate
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Words such as 'estimate', 'project', 'plan,' 'intend', 'expect',
'believe' and similar expressions are intended to identify forward-
looking statements. These forward-looking statements are found at
various places throughout this Information Statement. Silk's
stockholders are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they were
made.
BUSINESS OF TECENERGY LIMITED
Introduction
- ------------
As a result of the Acquisition Agreement with Silk, the assets and
business opportunities owned by BTSL Technologies Limited ("BTSL") and
described below were assigned to the newly formed Irish company,
TecEnergy Limited, which is a 100% owned subsidiary of Silk. Four
subsidiary companies required to operate the business were
subsequently formed as wholly owned subsidiaries of TecEnergy Limited.
BTSL Technologies Limited ("BTSL") is an Irish Limited Company whose
principal business is the acquisition and development of proven
technologies and businesses with a high potential for future revenue
and profits. The focus of BTSL has been on two technologies,
Gasification and Oxygen Generation.
a. Gasification: The gasification process converts any carbon-
containing material into a synthesis gas composed primarily of
carbon monoxide and hydrogen, which can be used as a fuel to
generate electricity or steam or used as a basic chemical
building block for a large number of uses in the petrochemical
and refining industries. Gasification adds value to low- or
negative-value feed stocks by converting them to marketable
fuels and products.
b. Oxygen Generation: Oxygen Generation is the process of
separating oxygen from air using a Pressure Swing Adsorption
(PSA) or Vacuum Swing Adsorption system. Oxygen generators have
many uses in Medical (Hospital) and Industrial applications.
BTSL acquired registered worldwide patents and the technology
rights in the areas of Gasification, Oxygen Generation and other
products from a Belgium company, Jarix Scrl, that is owned and
managed by a European scientist, Mr. Jacques Ribesse. These products
were to be manufactured in Ireland by international engineering
manufacturing companies who have many years experience of exporting
products worldwide. BTSL intended to provide and operate a turnkey
solution for its customers.
BTSL had entered into a contract for the processing of certain
materials using its proprietary Gasification technology and was in
discussions with foreign governments that it is believed will result
in orders for the company's Oxygen Generation equipment.
BTSL had earlier agreed to form four operating subsidiary companies
for manufacture and sales of its products. These four subsidiaries
were subsequently formed as wholly owned subsidiaries of TecEnergy
Limited on completion of the Acquisition Agreement with Silk.
The Assets transferred to Silk include patents, equipment, prototypes
and the investments that were advanced to Silk which were part of the
acquisition transaction. The total orders pending approval by foreign
governments approximates US $7,500,000.
The Assets transferred to Silk include operating expenses related to
the patents and development costs. For further information on the
Acquisition Agreement and the Assets, see Silk's Form 10-QSB for the
quarter ending February 28, 2002 and its Form 8-KA filed January 16,
2002.
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VOTE
----
Silk received the votes of 4,042,687 shares of its issued and
outstanding shares totaling 97.1% of its 4,159,713 outstanding shares
on December 5, 2001, the record date, to approve (a) the acquisition
of all of the assets of BTSL, pursuant to the terms of an Asset
Purchase Agreement dated December 5, 2001, and (b) the appointment of
Tim Coburn and Padraic Maloney to serve as directors of Silk. All
shareholders who voted on the transaction were contacted by Joseph R.
Bergmann who received no compensation for contacting the shareholders.
AMENDMENT TO THE ARTICLES OF INCORPORATION-NAME CHANGE
------------------------------------------------------
Subsequent to completion of the Acquisition, Silk's board of directors
and management agreed that a corporate name change would be beneficial
for Silk and recommended amending the articles of incorporation to
change its name to "Consolidated Resources Group, Inc." The articles
of incorporation have been amended to change the name to "Consolidated
Resources Group, Inc."
Silk wanted to change the corporate name to better reflect the changed
nature of its business after the Acquistion, and to reflect the fact
that the technologies acquired in the Assets are applicable to natural
resources.
Silk received the votes of 24,042,687 shares of its issued and
outstanding shares totaling 99.5% of its 24,159,713 outstanding shares
on January 24, 2002, to approve the corporate name change set forth
herein at Exhibit A below and the name change was effected on February
8, 2002. All shareholders who voted on the transaction were contacted
by Joseph R. Bergmann who received no compensation for contacting the
shareholders.
FURTHER INFORMATION
-------------------
All references to each document referred to in this Information
Statement are qualified in their entirety by reference to the complete
contents of such document. Additional information concerning Silk,
including its annual and quarterly reports for the past twelve months
which have been filed with the Securities and Exchange Commission, may
be accessed through the Securities and Exchange Commission's EDGAR
archives at www.sec.gov.
Silk Botanicals.Com, Inc.
By order of the Board of Directors
Joseph R. Bergmann, President
Delray, Florida
May 28, 2002
17
EXHIBIT A
ARTICLE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
SILK BOTANICALS.COM, INC.
1. The following provision of the Articles of Incorporation of
Silk Botanicals.Com, Inc., a Florida corporation (the
"Company") filed in Tallahassee on November 20, 1998, and
pursuant to Sections 607.0704, 607.0726, 607.1001 and 607.1003
of the Florida Business Corporation Act, be and hereby is
amended to read as follows:
ARTICLE FIRST be and hereby is amended to read as follows:
The name of the corporation is Consolidated Resources
Group, Inc.
2. The foregoing amendment was adopted by a majority of the
Company's Shareholders on the 24th of January, 2002, in
accordance with the provisions of the Florida Business
Corporation Act. The number of votes cast by the shareholders
were sufficient for approval.
IN WITNESS WHEREOF, the undersigned President and Secretary of the
Company has executed this Article of Amendment on the 26th day of
January, 2002.
SILK BOTANICALS.COM, INC.
______________________________
Joseph R. Bergman,
President and Secretary
[notary acknowledgment]
18