INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[ X ] Preliminary information statement
[ ] Confidential, for use of the Commission only
(as permitted by Rule 14c-5(d)(2))
[ ] Definitive information statement
TELCO-TECHNOLOGY, INC.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules
14c-5(g) and 0-11.
(1) Title of each class of securities to which
transaction applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] 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: N/A
(2) Form, schedule or registration statement no.: N/A
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(4) Date filed: N/A
TELCO-TECHNOLOGY, INC.
60 Bowers Lane
Closter, New Jersey 07624
INFORMATION STATEMENT
CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING
_____________________________
This Information Statement is being furnished to
stockholders of Telco-Technology, Inc., a Delaware corporation
(the "Company"), in connection with action to be taken by written
consent of stockholders (the "Written Action") with respect to the
proposal set forth below. The Board of Directors is not
soliciting proxies in connection with the Written Action and
proxies are not requested from stockholders. This Information
Statement is first being mailed to stockholders of the Company on
or about December 11, 2002.
The proposal, subject of this Information Statement, is as
follows: A proposal to approve an amendment to the Company's
Certificate of Incorporation (the "Certificate of Incorporation")
to increase the number of authorized shares of Common Stock, par
value $.001 per share, of the Company (the "Common Stock") from
13,000,000 to 200,000,000 and increase the number of authorized
shares of Preferred Stock, par value $.001 per share, of the
Company (the "Preferred Stock") from 2,000,000 to 20,000,000 (the
"Capitalization Amendment").
The principal executive office of the Company is located
at 60 Bowers Lane, Closter, New Jersey 07624. The telephone
number of the principal executive office of the Company is (201)
768-2310.
_________________________________
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
The date of this Information Statement is December 11, 2002
GENERAL INFORMATION
Section 228 of the General Corporation Law of the State of
Delaware states that, unless otherwise provided in the certificate
of incorporation, any action that may be taken at any annual or
special meeting of stockholders, may be taken without a meeting,
without prior notice and without a vote, if consents in writing,
setting forth the action so taken, shall be signed by the holders
of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were
present and voted, and those consents are delivered to the
corporation by delivery to its registered office in Delaware, its
principal place of business or an officer or agent of the
corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. The Company's Certificate
of Incorporation contains no provision or language in any way
limiting the right of stockholders of the Company to take action
by written consent.
The Board has fixed the close of business on November 15,
2002 as the record date for the determination of stockholders
entitled to receive notice of, and consent to, the matter set
forth herein (the "Record Date"). Accordingly, only stockholders
of record on the books of the Company at the close of business on
the Record Date will be entitled to consent to the matter set
forth herein. On the Record Date, the Company had outstanding
12,984,944 shares of Common Stock, par value $.001 per share (the
"Common Stock") which are the only outstanding voting securities
of the Company. On all matters, each share of Common Stock is
entitled to one vote.
Donald R. McKelvey and Donalson Capital Corporation have
advised the Company that they presently intend to execute written
consents in favor of the proposal listed above on or about the
date of this Information Statement. However, the proposal listed
above will not be effected until at least 20 days after this
Information Statement has first been sent to stockholders. Donald
R. McKelvey and Donalson Capital Corporation hold in the aggregate
7,552,125 shares of Common Stock (58.2% of the outstanding Common
Stock) entitled to vote hereon. Accordingly, if they execute such
written consents in accordance with such intentions, approval of
the matter set forth herein is assured.
PROPOSED INCREASE IN THE COMPANY'S AUTHORIZED SHARES
OF COMMON STOCK AND PREFERRED STOCK
The Board of Directors has adopted, subject to stockholder
approval, an amendment to the Certificate of Incorporation of the
Company for the purpose of increasing the number of authorized
shares of Common Stock of the Company from 13,000,000 to
200,000,000 and increase the number of authorized shares of
Preferred Stock of the Company from 2,000,000 to 20,000,000 (the
"Capitalization Amendment"). The Certificate of Incorporation
presently authorizes the Company to issue 13,000,000 shares of
Common Stock and 2,000,000 shares of Preferred Stock. As of the
date hereof, there are 12,984,944 shares of Common Stock and no
shares of Preferred Stock outstanding. Based upon the foregoing
number of outstanding shares of Common Stock, the Company has
15,056 shares of Common Stock remaining available.
The Board of Directors believes it is in the Company's
best interest to increase the number of authorized but unissued
shares of Common Stock and Preferred Stock in order to have
additional authorized shares available for issuance to meet
business needs as they arise, including acquiring or merging with
a business opportunity, meeting future financing needs of the
Company, raising additional capital and such other corporate
purposes. As to each series of Preferred Stock, the Board of
Directors has the power to fix the dividend rights, dividend or
interest rates, conversion rights, voting rights, rights and terms
of redemption (including sinking fund provisions), redemption
prices and liquidation preferences, and any other powers,
designations, preferences and relative participating, optional or
other rights of the series, as well as any qualifications,
limitations or restrictions on any of the rights of the series,
and the number of shares constituting the series and the
designation thereof, all without further approval of the
stockholders, except
as may be required by application of applicable law or stock
exchange rules.
It should be noted that the Company has no current
business operations and, as such, the Company can now be defined
as a "shell" corporation, whose principal business purpose at this
time is to locate and consummate a merger or acquisition with a
private entity. In implementing a structure for a particular
business acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. It may also
purchase stock or assets of an existing business. It should be
noted that the Company likely has insufficient capital with which
to make any acquisitions. Accordingly, in any of the transactions
alluded to herein, it is likely that the consideration utilized
to make any acquisitions will consist of equity securities. In
the event the Company does successfully acquire or merge with a
business opportunity, it is likely that the Company's present
shareholders will experience substantial dilution and there will
be a probable change in control of the Company.
The Board of Directors strongly believes that
opportunities may arise which will require prompt action and in
which any delay incurred in seeking stockholder approval for
issuance of additional shares could be detrimental to the Company
and its stockholders. In the Board's opinion, the proposed
amendment to the Company's Certificate of Incorporation will give
the Company the flexibility to take advantage of such
opportunities and to operate more effectively, including
consummating a merger or acquisition with a private entity.
Shares of Common Stock or Preferred Stock would be issued only as,
if, and when the Board of Directors believed the issuance to be
in the best interests of the Company and its stockholders.
As a result, any acquisition effected by the Company will
likely result in the issuance of additional Common Stock or
Preferred Stock without shareholder approval and may result in
substantial dilution in the percentage of the Company's securities
held by the Company's then-shareholders. No stockholder of the
Company presently has, or would have, any preemptive rights
relating to the future issuance of any shares of Common Stock or
Preferred Stock. Management has had and continues to have
discussions with certain parties concerning acquisitions of
business opportunities and capital raising possibilities in the
future but as of the date hereof there are no plans, arrangements,
firm intentions or agreements which have been made with respect
to additional shares proposed to be authorized.
The proposed Capitalization Amendment to increase the
authorized number of shares of Common Stock and Preferred Stock
could, under certain circumstances, have an anti-takeover effect,
although this is not the intention of this proposal. For example,
the issuance of additional shares could be used to create
impediments to or otherwise discourage persons attempting to gain
control of the Company. Shares of Common Stock or Preferred Stock
could be issued to persons or entities who would support the Board
in opposing a takeover bid which the Board determines to be not
in the best interests of the Company and its stockholders.
However, the Board of Directors is not aware of any attempt to
take control of the Company and the Board of Directors has not
authorized this proposal with the intent that it may be utilized
as a type of anti-takeover device.
Other than as described above, there are no present plans,
arrangements, firm intentions or agreements for the issuance of
any additional shares of Common Stock or Preferred Stock.
The text of the proposed Capitalization Amendment is as
follows:
That the first sentence of Article FOURTH of the
Certificate of Incorporation be and it hereby is amended to read
in its entirety as follows:
"FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 220,000,000 of which
200,000,000 shares with a par value of $0.001 each shall be Common
Stock and of which 20,000,000 shares with a par value of $0.001
each shall be Preferred Stock."
The Board of Directors believes that authorization of the
additional shares of Common Stock and Preferred Stock is in the
best interests of the Company and its stockholders.
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of the Record Date, (i)
the number of shares of Common Stock owned of record or
beneficially, or both, by each person who owned of record, or is
known by the Company to have beneficially owned, individually, or
with his associates, more than 5% of such shares then outstanding;
(ii) the number of shares owned beneficially by each Director of
the Company and each executive officer of the Company; and (iii)
the number of shares owned beneficially by all Directors and
executive officers as a group. Except as otherwise indicated
below, each of the persons listed below has sole voting and
investment power with respect to his or her shares.
Amount and Nature Percent
Title of Class Name of Beneficial Owner of Beneficial Ownership of Class
Common Stock Donald R. McKelvey 7,552,125(1) 58.2%
Common Stock Robert W. McKelvey (2)
Common Stock All Executive Officers
and Directors as a Group 7,552,125 58.2%
(1) Includes 5,012,500 shares held by Donald R. McKelvey and
2,539,625 shares held by Donalson Capital Corporation
("Donalson"). Mr. McKelvey is the sole shareholder of
Donalson and, by virtue of such ownership, Mr. McKelvey
may be deemed the beneficial owner of the shares held by
Donalson. The address for Mr. McKelvey is 60 Bowers
Lane, Closter, New Jersey.
(2) The address for Mr. McKelvey is 126 Barley Road, Ivyland,
Pennsylvania.
ADDITIONAL INFORMATION
The Company is presently subject to the informational
requirements of the Securities Exchange Act of 1934, and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected
and copied at the public reference room maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission may be called at 1-800-SEC-0330 to obtain further
information on the public reference room. The Commission
maintains a Web site that contains reports, proxy and information
statements and other information regarding the Company; the
address of such site is http://www.sec.gov.
By Order of The Board of Directors
Donald R. McKelvey,
Chairman of the Board
Dated: December 11, 2002