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Preliminary Information Statement
Dated: January 5, 2001
EZCONNECT, INC.
2900 TOWNSGATE ROAD
SUITE 200
WESTLAKE VILLAGE, CALIFORNIA 91361
(805) 557-9906
INFORMATION STATEMENT
This information statement ("Information Statement") is furnished to the
shareholders of EZConnect, Inc. (the "Company"), in connection with certain
corporate actions.
The corporate actions involve a proposal (hereafter the "Proposal")
providing for the following matter:
The adoption of amended Articles of Incorporation of EZConnect which
change the name of EZConnect to Encore Wireless, Inc., or some
derivation thereof as the board of directors may determine.
ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON JANUARY 2, 2001
(THE "RECORD DATE"), WERE ENTITLED TO NOTICE OF AND TO VOTE ON THE PROPOSAL.
MEMBERS OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS WHO, COLLECTIVELY HOLD IN
EXCESS OF 50% OF THE COMPANY'S 6,824,342 ISSUED AND OUTSTANDING SHARES
ENTITLED TO VOTE ON THE PROPOSAL HAVE VOTED IN FAVOR OF THE PROPOSAL. AS A
RESULT, THE PROPOSALS WAS APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER
SHAREHOLDER.
BY ORDER OF THE BOARD OF DIRECTORS
Kevin Hamilton, President
Westlake Village, California
January 5, 2001
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SELECTED AND SUMMARY INFORMATION ABOUT EZCONNECT
HISTORY
EZConnect, Inc. ("EZConnect") was organized under the laws of the state
of Nevada on September 21, 1999, in connection with an Agreement and Plan of
Reorganization (the "Acquisition Agreement") relating to the acquisition of EZ
Connect USA, Inc., a Utah corporation ("EZ") through a share exchange. The
Acquisition Agreement was approved by the board of directors and shareholders
of EZ and the board of directors of EZConnect, and was approved by EZConnect's
shareholders at a special meeting on October 15, 1999. EZConnect was formed to
engage in the remote establishment and disconnection of utility services and
should be considered a start-up or development stage business.
Following the acquisition of EZConnect USA, Inc. the board of directors
actively recruited qualified individuals to serve in senior executive
management positions and assist it in the further development of EZConnect's
business plan. After evaluating EZConnect's business plan and its viability,
management proposed to the board of directors that EZConnect pursue an
alternative, but related business strategy. That strategy involved entering
into the private label wireless service industry.
EZConnect is developing the capability to become a private label wireless
provider. On July 8, 2000, EZConnect entered into an Agreement and Plan of
Merger ("Merger Agreement") with Encore Wireless, Inc., a California
corporation ("Encore"), wherein EZConnect had the right to acquire Encore in a
stock and cash transaction, subject to certain closing conditions. Encore,
headquartered in Westlake Village, California, is a provider of private label
wireless Internet solutions to the marketplace. EZConnect completed the
acquisition of Encore on October 17, 2000.
Now that EZConnect's capability to become a private label wireless
provider is completed, EZConnect expects to grow rapidly within several
metropolitan areas within the United States as part of the forecasted
expansion in new wireless. This growth is possible without the typical
infrastructure and subscriber acquisition costs of traditional service
providers by providing services to end users as a reseller on the national
networks of industry leading facilities-based carriers and by leveraging
marketing activities of the well recognized, name brands of EZConnect's
marketing partners and their distribution channels. EZConnect now offers its
end users wireless communications services (voice and data), voice over
internet protocol communications services, and other enhanced services and
software solutions, all fully branded with the trade names of EZConnect's
marketing partners. EZConnect expects to provide the customers of its
marketing partners with a full suite of wireless and Internet access services
in a way that promotes the marketing partners' own brand and affinity with
their customers while increasing the profitability of their business through
on-going residual commission participation for the life of the customer.
EZConnect expects to be able to provide its end users with bundled service
offerings and convergent billing of its various services. Through the
offering and bundling of its services on a private label basis, EZConnect is
providing a unique and much needed marketing solution to its distribution
partners.
Through Encore, EZConnect has entered into a relationship with one of the
strongest carriers in wireless service. EZConnect is able to offer its
customers 100% digital wireless voice and data services on the Sprint PCS
Nationwide Network. The Sprint PCS Nationwide Network provides digital
service in over 300 metropolitan areas across the United States. Encore has
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entered into a six year reselling agreement with Sprint PCS with favorable
forward pricing and activation credits. Under this agreement, EZConnect is
able to deliver wireless voice and data services to its end users on a
national coverage area basis, all fully branded with its marketing partner's
trade name, including, billing, customer care and in certain cases, the
handset itself.
Security Ownership of Certain Beneficial Owners:
The following table sets forth as of January 1, 2001, the name, address
and the number of shares of EZConnect's voting securities held of record or
beneficially by each person who was known by EZConnect to own beneficially,
more than 5% of the issued and outstanding 6,824,342 voting securities
[consisting of 4,324,342 shares of Common Stock and 2,500,000 shares of
Preferred Stock]. In addition, the table sets forth the name and
shareholdings of each director and of all officers and directors as a group.
Security Ownership of Certain Beneficial Owners
- -----------------------------------------------
Title
of Name and Address Amount and Nature of Percentage
Class Beneficial Owner Beneficial Ownership(1) of Class(2)
- ----- ---------------- -------------------- ----------
Common Philip R. Lacerte 1,445,467 (3) D 19.74
3535 Gillespie #7-D
Dallas, TX 75219
Common Kelly Trimble 353,289 D 5.18
175 South Main Street, #1230
Salt Lake City, UT 84111
Common Robert M. Proznik 300,000 D
#600, 10240-124 Street 236,472 I
Edmonton, Alberta -------
Canada T5N 3W6 536,472 (4) 7.53
Common Kevin S. Hamilton 750,000 D
Preferred 2900 Townsgate, Suite 200 1,106,611 I
Westlake Village, CA 91361 ---------
1,856,611 (5) 24.51
Common Tod M. Turley 750,000 D
Preferred 2900 Townsgate, Suite 200 1,102,459 I
Westlake Village, CA 91361 ---------
1,852,459 (6) 24.51
Security Ownership of Management of EZConnect
- -----------------------------------------------
Title
of Name and Position of Amount and Nature of Percentage
Class Officer and/or Director Beneficial Ownership(1) of Class(2)
- ----- ----------------------- -------------------- ----------
Common Philip R. Lacerte, CEO and
Director -----See Table Above-----
Common Robert M. Proznik, Director -----See Table Above-----
Common Kevin S. Hamilton, President -----See Table Above-----
Preferred and Director
Common Tod M. Turley, Senior Vice -----See Table Above-----
Preferred President and Director
Preferred M.G. Meador, Jr., CFO and
Secretary 74,751 (7) D
All Officers and Directors
as a Group (5 persons) 3,320,218 D
2,445,542 I
--------- -----
Total Beneficial Ownership 5,765,760 63.19
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[Footnotes contained on next page]
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(1) Indirect and Direct ownership are referenced by an "I" or "D",
respectively. All shares owned directly are owned beneficially and of record
and such shareholder has sole voting, investment, and dispositive power,
unless otherwise noted. Total beneficial ownership assumes the exercise of any
right to acquire beneficial ownership (i.e. option exercise or conversion).
(2) The percentage calculation takes into account the concomitant increase in
the number of issued and outstanding voting securities represented by the
exercise or conversion of the shareholder's right to acquire beneficial
ownership.
(3) Represent 945,467 shares of common stock and options to acquire 500,000
shares of common stock.
(4) Represents 236,472 shares of common stock held of record by Inter-Pro
Property Corporation (USA), of which Mr. Proznik is the principal owner and
options to acquire 300,000 shares of common stock.
(5) Represents (i) 1,106,611 shares of preferred stock, each share convertible
to one share of Common Stock, at the option of the record holder, subject to
automatic conversion on the occurrence of certain events, prior to and
including October 17, 2002. 937,500 shares have been placed in escrow to be
released subject to certain earn-out provisions; and (ii) options to acquire
750,000 shares of common stock, subject to certain vesting requirements
associated with the shareholder's term of employment and management business
objectives (MBOs); provided, that none of the options shall be deemed fully
vested until October 1, 2001, regardless of the achievement of quarterly MBOs
prior to that date.
(6) Represents (i) 1,102,459 shares of preferred stock, each share convertible
to one share of Common Stock, at the option of the record holder, subject to
automatic conversion on the occurrence of certain events, prior to and
including October 17, 2002. 937,500 shares have been placed in escrow to be
released subject to certain earn-out provisions; and (ii) options to acquire
750,000 shares of common stock, subject to certain vesting requirements
associated with the shareholder's term of employment and management business
objectives (MBOs); provided, that none of the options shall be deemed fully
vested until October 1, 2001, regardless of the achievement of quarterly MBOs
prior to that date.
(7) Each share of preferred stock is convertible to one share of Common Stock
at the option of the record holder, subject to automatic conversion on the
occurrence of certain events, prior to and including October 17, 2002.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The table below sets forth, for the respective periods indicated, the prices
for EZConnect's common stock in the over-the-counter market as reported by
the NASD's OTC Bulletin Board. The bid prices represent inter-dealer
quotations, without adjustments for retail mark-ups, mark-downs or commissions
and may not necessarily represent actual transactions.
Period Ended June 30, 2000 High Bid Low Bid
- -------------------------- -------- -------
First Quarter N/A N/A
Second Quarter $3.125 $0.47
Third Quarter $7.125 $2.50
Fourth Quarter $5.75 $2.00
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At January 4, 2001, EZConnect's Common Stock was quoted on the OTC
Bulletin Board at a bid and asked price of $0.656 and $1.00, respectively.
Since its inception, EZConnect has not paid any dividends on its Common Stock,
and EZConnect does not anticipate that it will pay dividends in the
foreseeable future. At January 3, 2001, EZConnect had approximately 1,890
shareholders of record based on information provided by EZConnect's transfer
agent.
THE PROPOSAL
Following the acquisition of Encore Wireless, Inc., EZConnect has focused
almost exclusively on the wireless industry and the business of Encore. With
such a focus anticipated to continue, management of EZConnect believes it is
important to re-brand EZConnect to focus on its new business and to
distinguish itself from prior operations. Accordingly, it was proposed by
management that the name of EZConnect be changed to Encore Wireless, Inc. As
part of the name change, EZConnect's subsidiary, Encore Wireless, Inc., name
will be changed to Encore Telecommunications, Inc.
This change in name has been approved by the board of directors and by a
majority of the shareholders, through a majority consent.
Vote Required
The name change requires the approval of a majority of the 6,824,342
issued and outstanding shares of common stock. Members of management and
other principal shareholders holding or controlling the vote of 3,744,298
shares which represents in excess of fifty percent (50%) of the issued and
outstanding shares entitled to vote on the Proposal voted in favor of the name
change. The board of directors unanimously voted in favor of the name change.
Effective Date
The name change will become effective upon the completion of all matters
referred to herein. The name change is scheduled to be completed on or about
February 5, 2001.
Exchange of Stock Certificates
In order to effectuate the name change, each shareholder will be entitled
to submit his or her old stock certificate (any certificate issued prior to
the effective date of the name change), to EZConnect's transfer agent,
Colonial Stock Transfer Company, 455 East 400 South, Suite 100, Salt Lake
City, Utah 84111, and be issued in exchange therefor, one new certificate in
the new name of EZConnect. EZConnect shall pay the cost of such issuance, if
presented to Colonial Stock Transfer Company, within 60 days of the effective
date of February 5, 2001. After 60 days from the effective date, all exchange
requests must be accompanied by a check payable to Colonial Stock Transfer
Company in the amount of $18 per certificate to be issued. EZConnect will not
pay for any additional certificates requested or for the transfer of
certificates into names other than those in which the certificates are in
presently. To eliminate confusion regarding the Common Stock, the board of
directors urges the shareholders to surrender their certificates for exchange;
however, shareholders are not required to do so.
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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. Copies of these documents may be obtained upon request from
management at the address of EZConnect, 2900 Townsgate Road, Suite 200,
Westlake Village, California 91361. Any shareholder and his advisor may,
during normal business hours prior to completion of the name change, (1) have
access to the document referred to herein, and (2) ask questions of management
with respect to the name change and request additional information necessary
to verify accuracy of the information provided. Management will seek to
provide answers and such information to the extent possessed by management or
obtainable by them without unreasonable effort or expense.
Exhibits
Exhibit A Amended Articles of Incorporation
EZConnect, Inc.
By Order of the Board of Directors