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SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Information Statement [ ] Confidential, for Use of
[X] Definitive Information Statement the Commission Only (as
permitted by Rule 14c-5(d)(2))
DYNAMIC INTERNATIONAL, LTD.
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(Name of Registrant as Specified In Its Charter)
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DYNAMIC INTERNATIONAL, LTD.
58 Second Avenue
Brooklyn, New York 11215
INFORMATION STATEMENT
This Information Statement is furnished by the Board of Directors of Dynamic
International, Ltd., a Nevada corporation (the "Company"), to inform the
stockholders of the Company of the approval of certain corporate actions. This
Information Statement will be mailed on or about September 4, 1997 to holders of
record of Common Stock, par value $.001 ("Common Stock") of the Company as of
the record date. The record date for determining stockholders entitled to
receive this Information Statement has been established as the close of business
on August 25, 1997. On that date, the Company had outstanding and entitled to
vote 15,993,990 shares of Common Stock. Specifically, this Information Statement
relates to the following corporate actions:
1. Stockholders' approval of an amendment to the Company's Certificate
of Incorporation effectuating a one for five reverse stock split of the
issued and outstanding shares of Common Stock.
2. Stockholders' approval of an amendment to the Company's Certificate
of Incorporation authorizing the Company to issue 10,000,000 shares of
Preferred Stock.
3. Stockholders' ratification of the appointment of Moore Stephens, P.C.
as the Company's independent auditors for the fiscal year ending April 30,
1998.
During August 1997, holders of 14,880,000 shares of Common Stock (or
approximately 93% of the total entitled to vote on the matters set forth herein)
consented in writing without a meeting to the matters set forth herein. As a
result, the corporate actions were approved by the majority required by law and
no further votes will be needed. Unless expressly stated otherwise, numbers of
shares do not account for the contemplated reverse stock split described herein.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
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AMENDMENTS TO ARTICLES OF INCORPORATION
The Board of Directors of the Company and the holders of a majority of the
shares entitled to vote thereon have adopted by written consent in lieu of a
meeting a proposal declaring advisable amendments to the Articles of
Incorporation of the Company to (i) effect a one for five reverse stock split of
the Company's currently issued and outstanding Common Stock (the "Reverse Stock
Split") and (ii) authorize the Company to issue 10,000,000 shares of Preferred
Stock. As of the date hereof, there are issued and outstanding 15,993,990 shares
of Common Stock. The Amendments will become effective upon the filing of a
certificate of amendment to the Company's certificate of incorporation with the
Nevada Secretary of State. It is anticipated that the filing will take place on
or about September 24, 1997.
REVERSE STOCK SPLIT
The Board of Directors of the Company and a majority of the Common Stock
entitled to vote thereon have approved a one for five reverse stock split (the
"Reverse Stock Split"). Adoption of the Reverse Stock Split will reduce the
presently issued and outstanding shares of Common Stock from 15,993,990 to
approximately 3,198,798 (as a result of rounding, the actual number may be
slightly higher). There currently exists no active trading market for the
Company's securities. However, the Company believes that, if and when a trading
market develops, the decrease in the number of shares of Common Stock
outstanding as a consequence of the proposed Reverse Stock Split should increase
the per share price of the Common Stock, which may encourage greater interest in
the Common Stock and possibly promote greater liquidity for the Company's
stockholders. It may also facilitate the Company's plan to undertake a
registered public offering of its securities. However, the increase in the per
share price of the Common Stock as a consequence of the proposed Reverse Stock
Split may be proportionately less than the decrease in the number of shares
outstanding. In addition, any increased liquidity due to any increased per share
price could be partially or entirely off-set by the reduced number of shares
outstanding after the proposed Reverse Stock Split. Nevertheless, the proposed
Reverse Stock Split could result in a per share price that adequately
compensates for the adverse impact of the market factors noted above. There can,
however, be no assurance that the favorable effects described above will occur,
or that any increase in per share price of the Common Stock resulting from the
proposed Reverse Stock Split will be maintained for any period of time. In
addition, there can be no assurance that a public market for the Company's
securities will develop.
No fractional shares will be issued. All fractional interests resulting from
the Reverse Stock Split will be increased to the next higher whole number of
shares. The Company believes that the approximate total number of beneficial
holders of the Common Stock of the Company is in excess of 600. After the
Reverse Stock Split the Company estimates that it will continue to have
approximately the same number of stockholders.
As a result of the Reverse Stock Split, the Company believes that more than
600 beneficial holders of Common Stock will own less than 100 shares of Common
Stock. These so-called "odd lot holders" may be subject to additional brokerage
commissions in the event of trading of their securities. The Company is not
currently contemplating an odd lot program.
The number of issued shares after the Reverse Stock Split is approximate.
Except for changes resulting from the Reverse Stock Split, the rights and
privileges of holders of shares of Common Stock will remain the same, both
before and after the proposed Reverse Stock Split.
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There can be no assurance that the market price of the Common Stock after
the proposed Reverse Stock Split will be proportionately greater than the market
price before the proposed Reverse Stock Split, or that such price will either
exceed or remain in excess of the current market price.
Federal Income Tax Consequences
The following information is based on discussions with counsel. No opinion
of counsel has been obtained. Stockholders are advised to consult with their own
tax advisors for more detailed information relating to their individual federal
state and local tax circumstances.
1. The proposed Reverse Stock Split will be a reorganization described in
section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended.
2. The Company will recognize no gain or loss as a result of the proposed
Reverse Stock Split.
3. Stockholders will recognize no gain or loss to the extent that currently
outstanding shares of Common Stock are exchanged for new shares of Common Stock
pursuant to the proposed Reverse Stock Split.
4. The tax basis of the new Common Stock received in exchange for Common
Stock pursuant to the proposed Reverse Stock Split will be the same as the
stockholders' basis in the stock exchanged. Therefore, the new shares of Common
Stock in the hands of a stockholder will have an aggregate basis for computing
gain or loss equal to the aggregate basis of shares of Common Stock held by that
stockholder immediately prior to the proposed Reverse Stock Split.
AUTHORIZATION TO ISSUE SHARES OF PREFERRED STOCK
The Board of Directors of the Company and a majority of the Common Stock
entitled to vote thereon have approved the creation of a class of Preferred
Stock. The Company is currently not authorized to issue Preferred Stock. Shares
of Preferred Stock will be readily available for use in any acquisition or
financing or upon the exercise of options, if granted.
Shares of Preferred Stock that will be authorized but not issued are
issuable at any time and from time to time, by action of the Board of Directors
without further authorization from the Company's stockholders, except as
otherwise required by applicable law or rules and regulations, to such persons
and for such consideration as the Board of Directors determines. This will
permit the Company to consider financings, acquisitions or other transactions
which may require the issuance of shares of Preferred Stock. The Company is not
currently considering any financing transactions which would involve the
issuance of Preferred Stock, and the Company has no commitments which would
require the issuance of any shares of Preferred Stock.
The issuance of preferred stock by the Board of Directors could adversely
affect the rights of the holders of Common Stock. For example, such issuance
could result in a class of securities outstanding that would have preferences
with respect to voting rights and dividends and in liquidation over the Common
Stock, and could (upon conversion or otherwise) enjoy all of the rights
appurtenant to Common Stock. The authority possessed by the Board of Directors
to issue preferred stock could potentially be used to discourage attempts by
others to obtain control of the Company through a merger, tender offer,
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proxy contest or otherwise by making such attempts more difficult or more costly
to achieve. There are no issued and outstanding shares of preferred stock, and
there are no agreements or understandings regarding the issuance of preferred
stock.
APPROVAL REQUIRED
The affirmative vote of the majority of the outstanding stock entitled to
vote thereon is required to approve the Amendments. The necessary majority was
obtained during August 1997 and no further vote will therefore be required.
Stockholders are urged to carefully review the form of amendment to be filed
with the Secretary of State of the State of Nevada. A copy of the form of
amendment is attached hereto as Attachment A.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On July 11, 1996, the Board of Directors appointed Moore Stephens, P.C.
("Moore Stephens") as the new independent auditors of the Company, subject to
ratification by the Company's stockholders. Moore Stephens was appointed upon
the dismissal of Hoberman, Miller & Co., P.C. ("Hoberman"). This action had been
approved by the Company's Board of Directors. During the past two years Hoberman
did not issue a report on the Company's financial statements that either
contained an adverse opinion or a disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope or accounting principles.
During the period of their engagement from June 30, 1973 until June 26,
1996, there were no disagreements between the Company and Hoberman on any matter
of accounting principles or practices, financial statement disclosure, or audit
scope and procedure, which disagreement, if not resolved to the satisfaction of
Hoberman, would have caused them to make reference to the subject matter of the
disagreement in connection with any report that was to have been, or will be,
prepared for the Company.
APPROVAL REQUIRED
The affirmative vote of the majority of the outstanding stock entitled to
vote thereon is required to ratify the appointment of Moore Stephens. The
necessary majority was obtained during August 1997 and no further vote will
therefore be required.
BY ORDER OF THE BOARD OF DIRECTORS
THE SECRETARY
Brooklyn, New York
September 3, 1997
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ATTACHMENT A
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
DYNAMIC INTERNATIONAL, LTD.
We the undersigned, Marton Grossman, President, and Isaac Grossman,
Secretary of Dynamic International, Ltd.
do hereby certify:
That the Board of Directors of said corporation by unanimous written consent
in lieu of a meeting adopted a resolution to amend the original articles as
follows:
Article 3 is hereby amended as follows:
(a) The aggregate number of shares which the corporation shall be authorized
to issue shall be SIXTY MILLION (60,000,000) divided in FIFTY MILLION
(50,000,000) shares of Common Stock, par value $0.001 and TEN MILLION
(10,000,000) shares of Preferred Stock, par value $.001. At 5:00 p.m. on the
date of the filing of these Articles of Amendment to its Articles of
Incorporation all issued and outstanding shares of Common Stock shall without
further action by the holders thereof or the corporation be combined at the rate
of 0.20 (one fifth) for one. No fractional shares shall be issued. All
fractional shares shall be increased to the next higher whole number of shares.
(b) PREFERRED STOCK. (1) Shares of Preferred Stock may be issued from time
to time in one or more series as may from time to time be determined by the
Board of Directors, each of said series to be distinctly designated. All shares
of any one series of Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends, if any, thereon shall be
cumulative, if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each such series,
and the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding; and the Board of
Directors of the Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and the designation,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(A) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may be
increased (except where otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof by like action of
then outstanding) from time to time by like action by the Board of
Directors;
(B) The rate and times at which, and the terms and conditions on which,
dividends, if any, on Preferred Stock of such series shall be paid, the
extent of the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or series of the same
or other classes of stock and whether such dividends shall be cumulative
or noncumulative;
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(C) The right, if any, of the holders of Preferred Stock of such series
to convert the same into or exchange the same for, shares of any other
class or classes, or of any series of the same or any other class or
classes of stock of the Corporation and the terms and conditions of such
conversion or exchange;
(D) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times at
which, and the terms and conditions on which, Preferred Stock of such
series may be redeemed;
(E) The rights, if any, of the holders of Preferred Stock of such series
upon the voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding up, of the
Corporation;
(F) The terms of the sinking fund or redemption or purchase account, if
any, to be provided for the Preferred Stock of such series; and
(G) The voting powers, if any, of the holders, of such series of
Preferred Stock which may, without limiting the generality of the
foregoing, include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of Preferred
Stock as a class, to elect one or more directors of the Corporation if
there shall have been a default in the payment of dividends on any one
or more series of Preferred Stock or under such other circumstances and
on such conditions as the Board of Directors may determine.
(2) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each other
series of Preferred Stock shall, in each case, be as fixed from time to time by
the Board of Directors in the resolution or resolutions adopted pursuant to
authority granted in paragraph (b)(1) of this ARTICLE 3 and the consent, by
class or series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock
whether or not the powers, preferences and rights of such other series shall be
fixed by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution or
resolutions as to any series of Preferred Stock adopted pursuant to paragraph
(b)(1) of this ARTICLE 3 that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of such
series voting therein shall be required for the issuance of any or all other
series of Preferred Stock.
(3) Subject to the provisions of subparagraph 2 of this paragraph (b),
shares of Common Stock or any series of Preferred Stock may be issued from time
to time as the Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of Directors.
(4) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from time
to time by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon.
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The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 15,993,990; that the said
change(s) and amendment have been consented to and approved by a majority of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
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Marton Grossman, President
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Isaac Grossman, Secretary
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State of New York )
)ss
County of Kings )
On _________________, personally appeared before me, a Notary Public,
______________________________, who acknowledged that they executed the above
instrument.
__________________________
(Notary Stamp or Seal)
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