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SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(c) OF THE
SECURITIES EXCHANGE ACT OF 1934
CHECK THE APPROPRIATE BOX: [ ] Confidential, For
[X] Preliminary Information Statement Use of the Commission only
[ ] Definitive Information Statement as permitted by Rule 14c-5(d)(2)
TELETRAK ADVANCED TECHNOLOGY SYSTEMS, INC.
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing fee for which the offsetting fee was
previously paid. 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:
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TELETRAK ADVANCED TECHNOLOGY SYSTEMS, INC.
537 STEAMBOAT ROAD
GREENWICH, CONNECTICUT 06830
(203) 629-1400
INFORMATION STATEMENT
This Information Statement is being furnished in connection with the
adoption by the Board of Directors of Teletrak Advanced Technology Systems, Inc.
(the "Company") of an amendment to the Company's Certificate of Incorporation
which:
1. effects a one for ten reverse stock split, changes the par value of
the capital stock after the reverse stock split to $.001 and establishes
the number of authorized shares of the Company's capital stock after the
reverse stock split to 30,000,000; and
2. changes the name of the Company to "Teletrak Environmental Systems,
Inc."
These actions are conditions to the consummation of the merger of a subsidiary
of the Company with and into Advanced Environmental Systems, Inc. and other
transactions related thereto including, without limitation, the change in
control of the Company. Such merger and related transactions are described in
detail in this Information Statement. See "The Merger with Advanced
Environmental Systems, Inc." on page 6. Helm Capital Group, Inc., a Delaware
corporation ("Helm") and certain members of management who own, in the
aggregate, approximately 76% of the outstanding common stock of the Company,
have consented to these corporate actions. These actions will be effective upon
the filing of the Certificate of Amendment no earlier than twenty days after the
dissemination of this Information Statement.
Notice of the above action is hereby given to stockholders of record on
August 1, 1998 in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware. Copies of this Information Statement
are being sent or given to stockholders on or about August , 1998. For
additional information about the Company, refer to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1997. Copies of this report will
be furnished to any stockholder, without charge, upon written request to David
S. Lawi, Secretary, 537 Steamboat Road, Greenwich, CT 06830. There reports are
not, however, to be considered or deemed part of this Information Statement or
any soliciting material of the Company.
The Company currently has 30,229,268 shares of common stock outstanding.
As described in this Information Statement, the Company's principal stockholder,
Helm, which owns 61.2% of the outstanding shares of common stock, and management
of the Company, which in the aggregate owns 14.8% of the outstanding shares of
the Company's common stock (collectively with Helm, the "Majority
Stockholders"), have consented, by
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written consent in lieu of a special meeting of stockholders dated July 2, 1998
(the "Consent"), to the adoption of the proposed amendments. A copy of the
consent is attached hereto as EXHIBIT A. The affirmative vote or consent of the
majority of the outstanding shares of common stock of the Company is required
to authorize the proposed amendments to the Company's Certificate of
Incorporation. SINCE THE CONSENT OF THE MAJORITY STOCKHOLDERS IS SUFFICIENT TO
PROVIDE STOCKHOLDER APPROVAL AND ADOPTION OF THE PROPOSALS UNDER SECTION 228 OF
THE DELAWARE GENERAL CORPORATION LAW, THE COMPANY IS NOT ASKING AND IS NOT
REQUIRED TO ASK ITS OTHER STOCKHOLDERS FOR THEIR CONSENT TO THE PROPOSED
AMENDMENT.
The Company is also providing notice to its stockholders of a change in
composition of the Board of Directors pursuant to Rule 14(f)-1, promulgated
under the Securities Act of 1934, as amended (the "1934 Act"). As of the
effective date of the Merger (as defined herein), the Board of Directors will
consist of Gerald P. McNamara, Gerd E. Reinig, Heinz Buhr, Glen Wegner, Fred S.
Zeidman and Daniel T. Murphy.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The principal executive offices of the Company are located at 537
Steamboat Road, Greenwich, CT 06830. This Information Statement is being mailed
to stockholders of the Company of record on August 1, 1998.
The date of this Information Statement is August , 1998.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as of July 1, 1998, of each
person who beneficially owned more that five (5%) percent of the Company's
Common shares and by each current officer and director and all current officers
and directors as a group. Messrs. Pearlman, Lawi, Lerner and Farley are
directors, and Mr. Murphy is an officer, of Helm, the Company's principal
stockholder. In addition, beneficial ownership information is included with
respect to the directors to be elected effective upon completion of the Merger
(as defined herein), at which time Messrs. Pearlman, Lawi, Lerner and Farley
will resign from all positions with the Company. Except as otherwise indicated,
each named holder has, to the best of the Company's knowledge, sole voting and
investment power with respect to the shares indicated.
NAME AND ADDRESS OF COMMON STOCK PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF OUTSTANDING
- ---------------- ------------------ --------------
Helm Capital Group, Inc. 21,030,126(1) 61.2%
537 Steamboat Road
Greenwich, CT 06830
Current Officers and Directors:
Herbert M. Pearlman 2,215,475(2) 5.7%
Chairman of the Board**
Joseph J. Farley 1,683,833(3) 4.5%
Chief Executive Officer;
President, Director **
David S. Lawi 1,564,333(4) 4.4%
Secretary, Director **
William Lerner 48,000 *
423 East Beau Street
Washington, PA 15301
Director
Daniel T. Murphy 80,000(5) *
Director **
All Current Officers
and Directors as a
group (5 persons) 5,591,641(6) 14.8%
New Officers and Directors
Gerald P. McNamara 0 -
2 Sutton Road
Webster, MA 01570-1190
Gerd E. Reining 0 -
2 Sutton Road
Webster, MA 01570-1190
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NAME AND ADDRESS OF COMMON STOCK PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF OUTSTANDING
- ---------------- ------------------ --------------
Heinz Buhr 0 -
AM Hambuch 18
D53340 Meckenheim,
Germany
Glen Wegner 0 -
2 Sutton Road
Webster, MA 01570-1190
Fred S. Zeidman 0 -
7715 Clinton Drive
Houston, Texas 77020
- -----------
* Less than 1%
** address is 537 Steamboat Road, Greenwich, CT 06830
(l) Includes 2,500,000 shares which may be acquired within 60 days upon the
exercise of common stock purchase warrants expiring on December 31, 1999
exercisable at $.20 per share (the "1999 Warrants").
(2) Includes 400,000 shares that may be acquired within 60 days upon
exercise of outstanding common stock purchase warrants expiring on July
31, 1998 at $.20 per share (the "1998 Warrants") and 105,000 1999
Warrants.
(3) Includes 200,000 1998 Warrants and 37,500 1999 Warrants.
(4) Includes 300,000 1998 Warrants and 37,500 1999 Warrants.
(5) Includes 50,000 1998 Warrants.
* * *
THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO EFFECT A ONE FOR TEN REVERSE STOCK SPLIT, AND TO ADJUST
THE AUTHORIZED CAPITAL STOCK AND PAR VALUE
The Board of Directors of the Company has adopted a proposal to effect a
one for ten reverse split of the Company's outstanding common stock in the
manner described below (the "Reverse Split"). On July 2, 1998, the Company's
Board of Directors adopted resolutions authorizing such proposed reverse stock
split and recommending submission of the proposal to shareholders for their
approval. Such approval was obtained by the Consent of the Majority
Stockholders.
Pursuant to its Certificate of Incorporation, as amended, the Company is
currently authorized to issue 100,000,000 shares of capital stock, par value
$.01 per share, consisting of 80,000,000 shares of common stock and 20,000,000
shares of preferred stock. At July 1, 1998, there were outstanding 30,229,268
shares of common stock and no shares of preferred stock. Neither presently
authorized shares of common stock nor any additional shares that may be
authorized carry pre-emptive rights.
An amendment to Article Fourth of the Certificate of Incorporation of
the Company is required to effect the Reverse Split. A copy of the proposed
Certificate of Amendment (the "Certificate of Amendment") is attached hereto as
EXHIBIT B.
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Upon the effective date of the Reverse Split and upon the filing of the
Certificate of Amendment, each ten outstanding shares of common stock, par value
$.01 (the "Old Common Stock"), will automatically be converted into one share of
new common stock (the "New Common Stock"). The then outstanding stock
certificates for shares of Old Common Stock will represent one-tenth as many
shares of New Common Stock after the reverse stock split is effective.
As soon as practicable after the filing of the Certificate of Amendment
and upon their delivery of their Old Common Stock certificates to the Company
pursuant to the Letter of Transmittal accompanying this Information Statement,
stockholders will be sent stock certificates representing New Common Stock
rounded up to the nearest whole number. No scrip or fractional share
certificates will be issued in connection with the Reverse Split. See "Exchange
of Shares and Distribution of Warrants" on page 13.
As of July 1, 1998, the Company had approximately 280 stockholders of
record. Assuming the same record holdings on the date the Reverse Split is
effectuated, after the Reverse Split there will be approximately an equal number
of stockholders of record.
The effect of the Reverse Split will be to reduce the authorized shares
of common stock to 8,000,000 shares and to increase the par value of the common
stock to $.10 per share. Similarly, pursuant to the Reverse Split, the number
of authorized shares of preferred stock will be reduced to 2,000,000 and the
par value of the preferred stock increased to $.10. There are no shares of
preferred stock outstanding at this time. Accordingly, the Board of Directors
is recommending that the Company's Certificate of Incorporation be amended to
increase the Company's authorized common stock, after the Reverse Split, from
8,000,000 shares to 25,000,000 shares, to increase the Company's authorized
preferred stock from 2,000,000 shares to 5,000,000 shares and to reduce the par
value to $.001 per share for both common stock and preferred stock. The purpose
of the increase in authorized common stock and preferred stock is to have a
sufficient number of shares of common stock and preferred stock available, as
the occasion may arise, for possible future financings and acquisition
transactions, stock dividends or splits, stock issuances pursuant to employee
benefit plans and other proper corporate purposes and to have sufficent shares
reserved for issuance upon exercise of the Warrants (as defined and described
below). See "Terms of and Reasons for the Merger." Although the Company has no
plans, understandings or negotiations underway at this time for the issuance of
unissued and reserved shares, except for the issuance of shares of New Common
Stock in connection with the Merger with AES, discussed below, having such
additional shares available for issuance in the future will give the Company
greater flexibility by allowing shares to be issued without the delay and
expense of a stockholder's meeting. After completion of the Merger, there will
be approximately 7,523,000 shares of New Common Stock and 2,386,464 Warrants
(as hereinafter defined) outstanding.
The Reverse Split will not affect a stockholder's proportionate interest
in the Company and the proportionate voting rights of stockholders will remain
the same, except for the minor adjustment due to the rounding up for fractional
shares. The Reverse Split will produce proportional adjustments in the Company's
1998 and 1999 Warrants
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outstanding prior to the effective date of the split; however, these warrants
will be cancelled in the Merger as discussed below.
The principal reasons for effecting the proposed amendment is to enhance
the acceptability of the common stock to AES for purposes of the Merger and
generally to the financial community and investing public. The reduction in the
number of shares of common stock outstanding will increase the per share market
price for the common stock. Theoretically, the number of shares outstanding
should not, by itself, affect the marketability of the stock, the hope of the
investor who acquires it, or the Company's reputation in the financial
community, but in practice, this is not necessarily the case, as many investors
look upon a stock selling below $1.00 per share as unduly speculative in nature
and, as a matter of policy, avoid investment in such stock. In addition, many
leading brokerage firms are reluctant to recommend lower-priced securities to
their clients and a variety of brokerage house policies and practices currently
tend to discourage individual brokers within firms from dealing with
lower-priced stock. Some of those policies and practices pertain to the payment
of brokerage commissions and to time consuming procedures that function to make
the handling of lower-priced stock unattractive to brokers from an economic
standpoint. In addition, the structure of trading commissions tends to have an
adverse impact upon the holders of lower-priced stocks because the brokerage
commission on a sale of a lower priced stock generally represents a higher
percentage of the sales price than the commission on a relatively higher priced
issue. Although there can be no assurance that the price of the Company's shares
after the proposed amendment is effected will actually increase in an amount
proportionate to the decrease in the number of outstanding shares, the proposed
amendment is intended to result in a price level for the common stock that will
reduce the effect of the above-decribed policies and practices, broaden investor
interest and provide a market that will more closely reflect the Company's
underlying values. There is no assurance that the market liquidity for the
common stock will be improved, or if so, whether it will be sustainable.
Stockholders should note that the Board of Directors cannot predict what affect
the proposed amendment will have on the market price of the common stock.
However, AES has made the proposed amendment a condition of the Merger.
THE MERGER WITH ADVANCED ENVIRONMENTAL SYSTEMS, INC.
BACKGROUND
Historically, the Company's principal business activity had been the
marketing of optical data software and the development of enhancements thereto
to provide mass data storage capability in multimedia applications that combine
data, voice, image and text on mass storage erasable and nonerasable optical
disks (the "System"). In the fall of 1993, the Company assigned to an
Atlanta-based corporation all of its rights to sell, manufacture, develop and
distribute its products in exchange for a royalty, while retaining title,
copyright and other proprietary rights to the System. As a result of this
assignment of rights, in 1993 the Company classified its activities related to
the marketing and development of the System as discontinued operations. To date,
no significant revenues have been derived from the assignment of revenues, and
the Company anticipates that no significant revenues will be recognized from
this arrangement in the future. In addition, the Company believes that the
technology of the System is currently obsolete.
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Management has maintained the Company with a view towards a possible
merger or combination with another entity. During 1997 and 1996, the Company
realized no revenues, and recorded a net loss of approximatley $30,000 in each
year as a result of the expenses associated with maintaining the corporate
existence and compliance with public reporting obligations. Since January 1,
1994, the Company has had no employees. All financial and accounting services
are performed by employees of Helm. All other management decisions are reviewed
by the Company's Board of Directors. The Company shares office space in
Greenwich, Connecticut for its corporate headquarters with other affiliates of
Helm. The Company does not pay any rent to Helm or its affiliates for this
space.
TERMS OF AND REASONS FOR THE MERGER
On July 2, 1998, the Company's Board of Directors approved and
authorized the execution of a definitive merger agreement between the Company,
AES Acquisition Corp., a newly formed Massachusetts subsidiary of the Company
("Merger Sub") and Advanced Environmental Systems, Inc. ("AES"), with a
principal place of business at 2 Sutton Road, Webster, Massachusetts 01570, in
a merger transaction in which Merger Sub will merge with and into AES and AES
will survive as a wholly owned subsidiary of Teletrak (the "Merger") and the
AES stockholders will receive an aggregate of 3,750,000 shares of New Common
Stock in exchange for their AES stock. Immediately prior to the Merger, Helm
will contribute 5,000,000 shares of Old Common Stock to the Company which will
be cancelled. The holders of all currently outstanding warrants to purchase Old
Common Stock shall waive and surrender all rights with respect to such
warrants, which shall be cancelled. A copy of the Agreement and Plan of Merger,
which was executed on July 24, 1998, will be furnished to any stockholder,
without charge, upon written request to David S. Lawi, Secretary, 537 Steamboat
Road, Greenwich, CT 06830.
Simultaneously with, and as a condition to, the closing of the Merger,
the Company will sell to certain AES stockholders or affiliates 1,000,000 shares
of New Common Stock plus warrants (the "Warrants") to purchase up to 500,000
shares of New Common Stock at an exercise price of $2.00 per share for a period
of three years, redeemable at $.05 per Warrant, at the option of the Company, if
the New Common Stock trades for three consecutive days at $3.00 per share on any
national securities exchange, or the average of the bid and asked prices of the
New Common Stock in the over the counter markets is over $3.00 for three
consecutive trading days. The purchase price in such transaction (the "Purchase
Price") will be $.50 for one share of New Common Stock and one Warrant. In
addition, simultaneously with, and as a condition to, the closing of the Merger,
the Company will sell to Herbert M. Pearlman, David Lawi and certain other Helm
affiliates 250,000 shares of New Common Stock and 125,000 Warrants at the
Purchase Price.
In addition, immediately prior to the Merger, the Company will
distribute to the pre-Merger stockholders of the Company one-half Warrant for
each share of New Common Stock held by them upon the effectiveness of the
Merger, and, in addition thereto, 500,000 Warrants will be issued to Helm and
the Company's former management for pro rata distribution in exchange for the
1998 and 1999 Warrants which will be cancelled in the Merger. See "Exchange of
Shares and Distribution of Warrants" on page 13.
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As noted above, the Company has been inactive with no revenues or active
assets, and a negative net worth for several years. There is currently no
trading market for the stock, and prior to the announcement of this transaction,
the shares were quoted at $.02 bid and $.04 ask on the OTC Bulletin Board. For
the past several years, management has maintained the corporate existence of the
Company as a public reporting company with a view towards a potential business
combination as a means for retrieving value for the stockholders of the Company.
Management believes that the merger with AES presents an opportunity to redirect
the Company's operations into a growing business with a unique product line, and
to thereby achieve increased stockholder value.
THE BUSINESS OF AES
AES, a privately held company incorporated in January 1996, specializes
in the manufacture, distribution and licensing of industrial "mucking pumps" and
related equipment. The design of these pumps, based upon jet pump technology,
makes this equipment a highly effective portable tool for the removal of
granular wet or dry materials (including sludge, scale and slurries) --
particularly for environmental cleanup of hazardous matter such as asbestos and
lead. The motive power, compressed air or pressurized liquid, provides operating
flexibility for hopper loading, vacuum cleaning and submersible application, as
well as the ability to collect and transport materials over long distances. With
no moving parts, the AES pump is designed to be virtually maintenance free and
to require no skilled labor.
AES believes that more than 1,000 pumps are in use today in a wide range
of industries, including power plants, steel mills and foundries, oil
refineries, chemical and petrochemical plants, food processing facilities,
shipyards and marine vessel, operators and water treatment plants. The pumps,
driven by compressed air, have a production capacity of up to 5 tons per hour,
and can transport materials a maximum of 1000 feet horizontally and 500 feet
vertically; the pumps driven by pressurized liquid have a production capacity of
up to 40 tons per hour, and can transport materials a maximum of 500 feet
horizontally and 150 feet vertically. The pumps weigh 150 pounds and are more
easily transportable than other larger environmental remediation equipment.
For the year ended December 31, 1997, AES recorded net sales of
$1,216,886, and a net loss of $464,369, as compared to net sales of $749,383
and a net loss for the year of $4,855 for the year ended December 31, 1996. For
the six months ended June 30, 1998, AES reported sales of $836,686 and net
income of $52,439. Of these 1998 sales, $200,000 are attributable to AES'
international distributor. Copies of AES' audited financial statements for the
years ended December 31, 1997 and 1996 will be furnished to any stockholder,
without charge, upon written request to David S. Lawi, Secretary, 537 Steamboat
Road, Greenwich, CT 06830. These reports are not, however, to be considered or
deemed part of this Information Statement or any soliciting material of the
Company.
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CURRENT MANAGEMENT OF THE COMPANY
Set forth below is a description of current management of the Company.
Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
Herbert M. Pearlman ........................... 65 1983
Mr. Pearlman has been the Chairman of the Board of Directors of the Company
since March l983. Since 1980, he has served as President, Chief Executive
Officer and Chairman of the Board of Directors of Helm, a public holding
company. Since March l984, Mr. Pearlman has been Chairman of InterSystems, Inc.
("ISI"), a public company engaged in providing custom compounding and packaging
and distribution services to the thermoplastic resin industry, and in the
manufacture and sale of sampling and weighing devices to the agricultural and
other industries. Mr. Pearlman is Chairman of the Board of Directors of Seitel,
Inc. ("Seitel"), a public company engaged in acquiring and marketing seismic
information to the oil and gas industry. In March 1990, he became Chairman of
the Board of Directors of Unapix Entertainment, Inc. ("Unapix"), which is
engaged in marketing and distributing films and television products.
Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
Joseph J. Farley .............................. 75 1983
Mr. Farley was elected President of the Company in April l983 and served in that
capacity until April 1990, at which time he became Chairman of the Executive
Committee. In December 1991, Mr. Farley resumed the position of President and
Chief Executive officer following the retirement of the existing President. From
l982 until February 1991, he served as Vice-President of Marketing and
Engineering for Helm. Mr. Farley has been a Director of Helm since l982. Prior
to his employment at Helm, he was a senior executive with International Business
Machines Corporation where he was employed for 32 years.
Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
David S. Lawi ................................. 63 1983
Mr. Lawi has been Secretary of the Company since January 1983, Secretary and a
Director of Helm since l980, Chairman of the Executive Committee of Helm since
1997, a Director and the Secretary of ISI since March l984 and Chairman of its
Executive Committee since 1986, and a Director of Seitel since 1982. In 1989 he
was elected Chairman of Seitel's Executive Committee. In 1990 he became a
Director and Secretary-Treasurer of Unapix.
Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
William Lerner ................................ 65 1985
Mr. Lerner is an attorney engaged in the private practice of Law. From May 1990
until December 1990, he was General Counsel to Hon Development Company, a
California real estate development company. Mr. Lerner has been a director of
Helm since 1985 and a director of Seitel since l984. Mr. Lerner is also a
director of Rent-Way, Inc., the owner of a chain of retail stores in the
rental-purchase industry, and a director of Micros-to-Mainframes, Inc., a
provider of advanced technology services and computer equipment to Fortune 2000
companies with headquarters and significant operations in the states of New
Jersey, New York and Connecticut.
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Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
Daniel T. Murphy .............................. 59 1988
Mr. Murphy served as Executive Vice President and Chief Financial Officer of ISI
since July 1985 until 1997. He became a Director of ISI in October 1986. Mr.
Murphy joined Helm in May 1984 as Vice-President and Chief Financial Officer,
and in 1992 he became Executive Vice President--Finance. In 1995, Mr. Murphy
was appointed Vice President and Chief Financial Officer of Unapix.
Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
Scott Altman ............................ 34 --
Mr. Altman joined Helm in September 1987, and he was appointed Treasurer of the
Company in August 1988.
MANAGEMENT OF THE COMPANY AFTER COMPLETION OF THE MERGER
On July 2, 1998, the Board of Directors resolved to elect four
designees of AES and one Helm designee to the Board to take effect on completion
of the Merger. These designees are Mr. Gerald P. McNamara, Mr. Gerd E. Reinig,
Mr. Heinz Buhr and Mr. Glen Wegner for AES, and Mr. Fred Zeidman for Helm.
Effective on the date of the Merger, Messrs. Pearlman, Lawi, Farley and Lerner
will resign from the Board, transferring control of the Board of Directors to
the AES designees. It is anticipated that all administrative and accounting
duties will be performed through AES after the Merger and that the Company's
principal executive offices will be relocated to the principal executive offices
of AES in Webster, Massachusetts. In addition, on the effective date of the
Merger, all officers of the Company will resign, and the Board of Directors will
appoint AES representatives to the officerships as set forth below:
Gerald P. McNamara President and Chief Executive Officer
Gerd E. Reinig Chairman
Marcel Landry Secretary
Set forth below is information concerning the directors to be elected to
the Board upon competion of the Merger.
Name, Principal Occupation Over the Past Five Director of
Years and Other Directorships of Individual Age Company Since
- ------------------------------------------- --- -------------
GERALD P. MCNAMARA 50 1997
Mr. McNamara is a founder and director of AES and has served as its
president and chief executive officer since its inception in 1996. Mr. McNamara
has worked in a variety of executive positions at companies in the environmental
and remediation industry for more than 20 years. He served as president of IPEC
Advanced Systems, a manufacturer of surface preparation and remediation
equipment from 1983 to 1993. From 1993 to 1996, he was a consultant to
environmental equipment manufacturers.
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Name, Principal Occupation Over the Past Five
Years and Other Directorships of Individual Age
- ------------------------------------------- ---
GERD E. REINIG 59
Mr. Reinig is a co-founder of AES and has served as Director and
Treasurer of AES since its inception in 1996. Mr. Reinig is the majority
stockholder and, since 1975, President and Chief Executive Officer of Gould &
Eberhardt Corp., a prominent manufacturer of machine tools and large gear
cutting machinery. Prior to this, he held executive and engineering positions at
Orban Company and Lurgi Inc. Mr. Reinig has a masters degree in mechanical
engineering from the Institute of Engineering, Frankfurt, Germany.
Name, Principal Occupation Over the Past Five
Years and Other Directorships of Individual Age
- ------------------------------------------- ---
HEINZ BUHR 48
Mr. Buhr is a private investor and has served as a director of AES since
its inception in 1996. Mr. Buhr, a resident and citizen of Germany, is an
investor and active partner in several real estate partnerships and industrial
development companies. Prior to 1994, Mr. Buhr served as president and chief
executive officer of Metek GmbH, a major supplier of brake shoes for the
automotive industry.
Name, Principal Occupation Over the Past Five
Years and Other Directorships of Individual Age
- ------------------------------------------- ---
GLEN WEGNER 58
Mr. Wegner has served as an advisor and director of AES since 1996. He
is also a private investor and director of Hobie Cat, Inc. and Basic
Telepresence, Inc. He has served as president and vice chairman of Optical
Corporation of America since 1990. Dr. Wegner is trained and licensed in both
law and medicine and prior to 1990 served in an executive capacity with several
successful ventures utilizing advanced technologies in the health and
environmental industries.
Name, Principal Occupation Over the Past Five
Years and Other Directorships of Individual Age
- ------------------------------------------- ---
FRED S. ZEIDMAN 51
Mr. Zeidman was appointed president, chief executive officer and a director of
ISI in July 1993. Previously, Mr. Zeidman served as president of Interpak
Terminals, Inc., a former subsidiary of Helm engaged in plastics packaging and
distribution, from 1993 until the sale of that subsidiary in July 1997, and as
chairman of Unibar Energy Services Corporation, one of the largest independent
drilling fluids company in the United States, from 1985 to 1991, when it was
acquired by Anchor Drilling Fluids of Norway. From April 1992 until July 1993,
Mr. Zeidman served as president of Service Enterprises, Inc., which is primarily
engaged in plumbing, heating, air conditioning and electrical installation and
repair. From 1983 to 1993, Mr. Zeidman served as president of Enterprise Capital
Corporation, a federally licensed small business investment company specializing
in venture capital financings.
Name, Principal Occupation Over the Past Five
Years and Other Directorships of Individual Age
- ------------------------------------------- ---
DANIEL T. MURPHY 59
Mr. Murphy has been a director of the Company since 1988. See "Current
Management of the Company."
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EXECUTIVE COMPENSATION
For the fiscal years ended December 3l, l996 and 1997, no compensation was
paid to the Company's Chief Executive Officer or to any other executive officer.
The Company's outside directors received no cash fees during l996 and 1997.
Mr. Gerald McNamara draws a salary of $100,000 from AES, and this arrangement
is expected to continue after the Merger.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Helm is the owner of 61.2% of the Company's outstanding common stock.
Historically, the Company financed its operations and operating deficits with
advances from Helm. Since 1996, Helm has made no advances to the Company,
although financial and accounting services are provided by Helm to the Company.
During 1996 and 1997, no transactions were entered into between Helm and the
Company, or the current directors and officers, on the one hand, and the
Company, on the other hand, involving in excess of $60,000 except that in August
1997 the Company issued 3,582,268 shares of common stock to Helm in
extinguishment of $895,567 of indebtedness owing to Helm, and 5,000,000 shares
of common stock to Helm upon conversion of 1,000,000 shares of outstanding
preferred stock at $.20 per share.
COMPLIANCE WITH SECTION 16(1) OF THE 1934 ACT
The Company believes that during 1996 and 1997, all filing requirements
under Section 16 of the 1934 Act applicable to its current directors and
officers, and the current beneficial owners of more than 10% of the Company's
equity securities, were complied with.
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME
The Board of Directors of the Company has adopted a proposal to change
the name of the Company to Teletrak Environmental Systems, Inc., as the
Company's current name is associated with the Company's historical operating
activities and will no longer accurately reflect the Company's current planned
business operations upon completion of the Merger with AES. On July 2, 1998,
the Company's Board of Directors adopted resolutions authorizing such change of
name and recommended submission of the proposal to stockholders for their
approval. Such approval was obtained by the Consent of the Majority Shareholders
on July 2, 1998. The Certificate of Amendment to the Certificate of
Incorporation giving effect to the change of name is attached as EXHIBIT B.
* * *
APPRAISAL RIGHTS
In connection with the Merger, no appraisal rights will be available to
dissenting stockholders under the laws of the State of Delaware, the
jurisdiction of incorporation in which the Company is incorporated, nor are
such rights provided under the Company's Certificate of Incorporation in
connection with the Reverse Split.
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APPROVAL REQUIRED
The Certificate of Amendment must be approved by not less than a
majority of the shares outstanding and entitled to vote. The General Corporation
Law of the State of Delaware, specifically Section 228(a) thereof, provides that
". . . any such action required by this chapter to be taken at any annual or
special meeting of such stockholders of a corporation, or any action which may
be taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum 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. . ." Helm, the holder of 61.2%,
and management, the holders in the aggregate of 14.8%, of the outstanding stock
of the Company have executed a written consent approving the Certificate of
Amendment. Consequently, no additional vote of other stockholders will be
required for approval of these matters.
EXCHANGE OF SHARES AND DISTRIBUTION OF WARRANTS
No earlier than twenty-one days following the dissemination of this
Information Statement to the stockholders of the Company, the Board of Directors
will cause the Certificate of Amendment to be filed with the Secretary of State
of Delaware. This Information Statement serves as a notice of such filing under
Section 228 of the General Corporation Law of Delaware, and is being sent to the
stockholders of record on August 1, 1998 together with a Letter of Transmittal
and instructions regarding the exchange of certificates. American Stock Transfer
& Trust Company has been appointed exchange agent (the "Exchange Agent") to
carry out the exchange of the certificates representing Old Common Stock for
shares of New Common Stock.
As noted above, upon the filing of the Certificate of Amendment, each
ten outstanding shares of Old Common Stock will automatically be converted into
one share of New Common Stock. The then outstanding stock certificates for
shares of Old Common Stock will represent one-tenth as many shares of New Common
Stock after the reverse stock split is effective.
Upon the delivery by the stockholders of their Old Common Stock
certificates to the Company accompanied by a properly executed and completed
Letter of Transmittal, they will be sent (i) stock certificates representing New
Common Stock rounded up to the nearest whole number and (ii) a Warrant
Certificate representing one-half Warrant for each share of New Common Stock to
which they are entitled. No scrip or fractional share certificates will be
issued in connection with the reverse stock split. STOCKHOLDERS WHO WILL REMAIN
SUCH AFTER THE EFFECTIVE DATE OF THE MERGER AND FILING OF THE PROPOSED AMENDMENT
WILL NOT RECEIVE CERTIFICATES FOR SHARES OF NEW COMMON STOCK UNLESS AND UNTIL
THE CERTIFICATES REPRESENTING OLD COMMON STOCK ARE SURRENDERED.
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STOCKHOLDERS SHOULD SURRENDER THEIR CERTIFICATES ONLY TO THE
EXCHANGE AGENT WITH A DULY COMPLETED AND EXECUTED
LETTER OF TRANSMITTAL.
There will be no service charges payable by the stockholders in
connection with the exchange of their certificates. These costs will be borne by
the Company.
For additional information about the Company, refer to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1997, copies of
which will be furnished to any shareholder, without charge, upon written request
to David S. Lawi, Secretary, 537 Steamboat Road, Greenwich, CT 06830. This
report is not, however, to be considered part of this Information Statement or
any soliciting material of the Company.
By Order of the Board of Directors
HERBERT M. PEARLMAN
Chairman of the Board of Directors
Greenwich, Connecticut
August , 1998
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EXHIBIT A
CONSENT OF THE STOCKHOLDERS OF
TELETRAK ADVANCED TECHNOLOGY SYSTEMS, INC.
The undersigned, constituting a majority of the stockholders of TELETRAK
ADVANCED TECHNOLOGY SYSTEMS, Inc., a Delaware corporation (the "Company"),
hereby consent to and adopt the following resolutions as of the 2nd day of
July, 1998, as if such resolutions were approved at a duly called meeting of
the stockholders of the Company:
WHEREAS, on October 12, 1997, the Company entered into a Letter of
Intent with Advanced Environmental Systems, Inc., a Massachusetts corporation
("AES"), providing for the merger of AES with and into a newly formed wholly
owned subsidiary of the Company ("Merger Sub"), with AES surviving, and the
issuance of 3,750,000 shares of New Common Stock (hereinafter defined) to the
stockholders of AES in exchange for and in cancellation of their AES shares
pursuant to the merger (the "Merger"); and
WHEREAS, a condition precedent to the Merger is the completion by the
Company of a one for ten reverse stock split of the Company's outstanding common
stock and the change of the name of the Company to "Teletrak Environmental
Systems, Inc."
NOW, THEREFORE, in consideration of the foregoing, it is:
RESOLVED, that a Certificate of Amendment to the Certificate of
Incorporation in the form attached hereto as Exhibit A (the "Certificate
of Amendment") which provides for (i) the change of the Company's name
to "Teletrak Environmental Systems, Inc."; (ii) the one for ten reverse
stock split pursuant to which each outstanding share of common stock and
preferred stock will become one-tenth of a share of common stock (the
"New Common Stock") or preferred stock (the "New Preferred Stock"), as
the case may be; (iii) the increase in the post-reverse stock split
authorized number of shares of New Common Stock from 8,000,000 to
25,000,000; (iv) the increase in the post-reverse stock split authorized
number of shares of New Preferred Stock which may be issued from time to
time by the board of directors with such designations, preferences,
relative, participating, optional and other special rights, and
qualifications, limitations or restrictions as the board of directors
may fix by resolution from 2,000,000 to 5,000,000; and (v) the decrease
in the post-reverse stock split par value of the New Common Stock and
New Preferred Stock from $.10 to $.001 per share, is hereby approved.
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IN WITNESS WHEREOF, the undersigned have executed this written consent
as of the 2nd day of July, 1998.
/s/ Herbert M. Pearlman /s/ Joseph J. Farley
- ------------------------------- -------------------------------
Herbert M. Pearlman Joseph J. Farley
(1,710,475 shares) (1,446,333 shares)
/s/ David S. Lawi /s/ William Lerner
- ------------------------------- -------------------------------
David S. Lawi William Lerner
(1,226,833 shares) (48,000 shares)
/s/ Daniel T. Murphy
- -------------------------------
Daniel T. Murphy
(30,000 shares)
HELM CAPITAL GROUP, INC.
By:/s/ Herbert M. Pearlman
----------------------------
Herbert M. Pearlman, President
(18,530,126 shares)
Total shares consenting to these actions: 22,991,767
Total shares outstanding: 30,229,268
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EXHIBIT B
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TELETRAK ADVANCED TECHNOLOGY SYSTEMS, INC.
Pursuant to the provisions of Section 242 of the Delaware Corporation
Law, the undersigned, being the President and Secretary of Teletrak Advanced
Technology Systems, Inc., a Delaware corporation (the "Corporation"), hereby
certify as follows:
FIRST: The name of the Corporation is Teletrak Advanced Technology
Systems, Inc.
SECOND: The amendments to the Certificate of Incorporation of the
Corporation effected by this Certificate of Amendment are as follows:
Paragraph First of the Certificate of Incorporation, relating to the
name of the Corporation, is hereby amended to read as follows:
FIRST: The name of the corporation is TELETRAK ENVIRONMENTAL
SYSTEMS, INC.
Paragraph Fourth of the Certificate of Incorporation, relating to the
authorized capital stock of the Corporation, is hereby amended to read as
follows:
FOURTH: The aggregate number of shares of capital stock which
the Corporation shall have authority to issue shall be thirty
million (30,000,000), which shall be classified as follows:
twenty five million (25,000,000) shares of Common Stock (the
"Common Stock") and five million (5,000,000) shares of Preferred
Stock, (the "Preferred Stock") and the par value of each such
share is $.001. The board of directors may authorize the
issuance from time to time of the Preferred Stock in one or more
series and with such designations, preferences, relative,
participating, optional and other special rights, and
qualifications, limitations or restrictions (which may differ
with respect to each series) as the board may fix by resolution.
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THIRD: That the foregoing amendments to the Certificate of Incorporation
were duly adopted under Section 242 of the Delaware Corporation Law by the
affirmative vote of a majority of the outstanding shares entitled to vote
thereon by written consent dated January , 1998, said authorization being
subsequent to the affirmative vote of the Board of Directors.
FOURTH: That the capital of the Corporation will not be reduced under or
by reason of the foregoing amendments.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under penalties of perjury, this th day of
August, 1998.
-------------------------------
President
ATTEST:
- -------------------------------
Secretary
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