SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted
/ / Definitive Proxy Statement by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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SAFE AID PRODUCTS INCORPORATED
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock
(2) Aggregate number of securities to which transaction applies:
585,819,936 shares
(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): $.008 per share, average of the bid and ask on
September 9,1997.
(4) Proposed maximum aggregate value of transaction:
$4,696,600.00
(5) Total fee paid:
$937.32
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PRELIMINARY PROXY MATERIALS
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SAFE AID PRODUCTS INCORPORATED
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NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD SEPTEMBER __, 1997
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TO THE STOCKHOLDERS OF SAFE AID PRODUCTS INCORPORATED:
We invite you to attend a Special Meeting of Stockholders of Safe Aid
Products Incorporated ("Safe Aid") to be held at the offices of Lazer, Aptheker,
Feldman, Rosella & Yedid, LLP, 250 Old Country Road, Melville, New York 11747 on
September __, 1997, beginning at _______, local time. The limited purpose of the
Special Meeting is to consider and vote upon the following proposals, all of
which are more completely set forth in the accompanying Proxy Statement:
1. To consider and vote upon a proposal to amend Safe Aid's
Certificate of Incorporation to effectuate a ten-for-one reverse
stock split of Safe Aid's Common Stock.
2. To consider and vote upon a proposal to amend Safe Aid's
Certificate of Incorporation to increase the authorized common
stock to 999,999,000 shares of common stock.
3. To consider and vote upon a proposal to amend Safe Aid's
Certificate of Incorporation to change Safe Aid's name to Safe
Technologies International, Inc.
4. To consider and vote upon a proposal to approve and adopt a merger
agreement dated August 29, 1997, between Safe Aid and Intelligence
Network International, Inc. and the transactions contemplated
thereby.
5. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on August 29,
1997, are entitled to notice of and to vote at the Special Meeting or any
adjournments thereof.
Whether or not you plan to attend the Special Meeting in person, you
are requested to complete, date, sign and return the enclosed proxy card in the
enclosed envelope which requires no postage if mailed in the United States. If
you attend the Special Meeting, you may vote in person if you wish, even if you
have previously returned your proxy card.
By order of the Board of Directors,
SAFE AID PRODUCTS INCORPORATED
Stanley Snyder, President
Melville, New York
Date: September __, 1997
SAFE AID PRODUCTS INCORPORATED
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Safe Aid Products Incorporated, a Delaware
corporation ("Safe Aid") of proxies from the holders of Safe Aid's common stock,
par value $.00001 per share (the "Safe Aid Common Stock"), for use at the
Special Meeting of Stockholders to be held at the offices of Lazer, Aptheker,
Feldman, Rosella & Yedid, LLP on September __, 1997, beginning at ____ local
time and at all adjournments and postponements thereof (the "Special Meeting").
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to stockholders is September __, 1997. Safe Aid's
principal executive offices are located at c/o Lazer, Aptheker, Feldman, Rosella
& Yedid, LLP, 225 Old Country Road, Melville, New York 11747 and its telephone
number is (516) 364-3887.
PURPOSES OF THE SPECIAL MEETING
At the Special Meeting, Safe Aid's stockholders will consider and vote
upon the following matters:
1. An amendment to Safe Aid's Certificate of Incorporation to
effectuate a ten-for-one reverse stock split of Safe Aid's Common
Stock (the "Reverse Stock Split");
2. An amendment to Safe Aid's Certificate of Incorporation to
increase the authorized common stock to 999,999,000 shares of
common stock (the "Common Stock Amendment");
3. An amendment to Safe Aid's Certificate of Incorporation to change
Safe Aid's name to Safe Technologies International, Inc. (the
"Name Change Amendment");
4. The proposed merger of Intelligence Network International, Inc., a
Florida corporation ("INI") with and into Safe Aid pursuant to the
terms and condition of the merger agreement between INI and Safe
Aid dated August 29, 1997 (the "Merger Proposal"); and
5. Such other business as may properly come before the Special
Meeting, including any adjournments or postponements thereof.
In order to consummate the Merger with INI, Safe Aid stockholders need
to adopt and approve each of the proposals presented at the Special Meeting: (i)
the Reverse Stock Split, (ii) the Common Stock Amendment, (iii) the Name Change
Amendment, and (iv) the Merger Proposal. The Merger Agreement provides that
approval of each of these proposals is a condition precedent to closing the
Merger.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance
with the procedures set forth herein) will be voted FOR the Reverse Stock Split,
FOR the Common Stock Amendment, FOR the Name Change Amendment, and FOR the
Merger Proposal. In the event a stockholder specifies a different choice by
means of the enclosed proxy, his or her shares will be voted in accordance with
the specifications so made. The Board does not know of any other matters that
may be brought before the Special Meeting. In the event that any other matter
should come before the Special Meeting, the persons named in the enclosed proxy
will have discretionary authority to vote all proxies not marked to the contrary
with respect to such matters in accordance with their best judgment.
SUMMARY
The following is a summary of certain information contained elsewhere
in this Proxy Statement. Reference is made to, and this Summary is qualified in
its entirety by, the more detailed information contained elsewhere in this Proxy
Statement.
General
This Proxy Statement, Notice of Safe Aid Special Meeting to be held
September __, 1997, and form of proxy solicited in connection therewith are
being mailed to holders of Safe Aid Common Stock on or about September __, 1997.
Special Meeting
At the Special Meeting, holders of shares of Safe Aid Common Stock will
consider and vote upon (i) a proposal to amend Safe Aid's Certificate of
Incorporation to effectuate a ten-for-one reverse stock split (the "Reverse
Stock Split"), (ii) a proposal to amend Safe Aid's Certificate of Incorporation
to increase the authorized common stock to 999,999,000 shares of common stock
(the "Common Stock Amendment"), (iii) a proposal to amend Safe Aid's Certificate
of Incorporation to change Safe Aid's name to Safe Technologies International,
Inc. (the "Name Change Amendment"), (iv) a proposal to approve and adopt the
Merger Agreement and the transactions contemplated thereby (the "Merger
Proposal") and (v) on such other matters as may properly be submitted to a vote
at the Special Meeting.
In order to consummate the Merger with INI, Safe Aid stockholders need
to adopt and approve each of the proposals presented at the Special Meeting: (i)
the Reverse Stock Split, (ii) the Common Stock Amendment, (iii) the Name Change
Amendment, and (iv) the Merger Proposal. The Merger Agreement provides that
approval of each of these proposals is a condition precedent to the closing of
the Merger.
INI Shareholder Approval
By written consent, the shareholders of INI have approved and adopted
the Merger Agreement and the transactions contemplated thereby.
Safe Aid
Safe Aid was incorporated under Delaware law on May 21, 1987 to engage
in manufacturing and marketing of a disinfectant product for sale in dental and
medical offices and hotel and motel markets, as well as in the retail over-the
counter market, and to engage in research and development regarding nasal and
transdermal delivery of aspirin and other drugs.
During the past several years, Safe Aid has been virtually inactive
with nominal sales and operations and has remained in its development stage.
During the past year, Safe Aid's principal
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business objective has been to find and merge with an operating company that
management believes could increase shareholder value.
Safe Aid's executive offices are located at c/o Lazer, Aptheker,
Feldman, Rosella & Yedid, LLP, 225 Old Country Road, Melville, New York 11747
and its telephone number is (516) 364- 3887.
INI
INI offers a broad range of Internet services and products through its
three wholly owned subsidiaries: (i) CyberPlan, Inc, a company which specializes
in preparing bundled software packages, (ii) Property Intelligence
International, Inc., an Internet information and content service provider and
(iii) In CyberMall, Inc., an Internet directory for upmarket products and
services. (collectively, these companies may sometimes be referred to herein as
the "Internet Companies").
INI also intends to expands its products and services into two new
industries with two recent acquisitions. On August 2, 1997, INI acquired Total
Micro Computers, Inc. ("TMC"), a wholesaler and retailer of custom designed and
assembled computer systems and related products. On August 28, 1997, INI
acquired GMG Computer Consultants, Inc. d.b.a. Precision Imaging ("GMG"), a
digital pre-press company which specializes in producing high quality full color
magazine publications and catalogs (collectively, GMG and TMC sometimes may be
referred to herein as the "Acquisition Companies."). See "Information about INI"
and "Acquisition Companies."
INI's executive offices are located at 249 Peruvian Avenue, Palm Beach,
Florida 33480 and its telephone number is (561) 659-6227.
The Merger
Prior to the closing date of the Merger (the "Closing Date"), Safe Aid
shall effect a ten-for-one reverse stock split pursuant to which its outstanding
common stock will be reduced to 70,547,720 shares. At the Effective Time, INI
shall be merged with and into Safe Aid pursuant to the terms and conditions of
the Merger Agreement. As of the Effective Time, the separate corporate existence
of INI will terminate, and each issued and outstanding share of INI Common Stock
will be converted into the right to receive one share of Safe Aid Common Stock.
In the aggregate, INI shareholders will receive 585,819,936 shares of Safe Aid
Common Stock in the Merger. At the Closing, Safe Aid will also issue 49,109,500
shares of Safe Aid Common Stock to certain brokers, finders and consultants for
services rendered in the Merger transaction. After the consummation of the
Merger, the former INI shareholders will own approximately 83% of Safe Aid's
Common Stock.
Conditions to the Merger
The obligations of Safe Aid and INI to effect the Merger are subject to
certain conditions, including, among other things, (i) approval and adoption of
the Reverse Stock Split, the Common Stock Amendment, the Name Change Amendment
and the Merger Agreement by Safe Aid's
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stockholders, (ii) the accuracy of representations and warranties included in
the Merger Agreement and other customary conditions. Other than the required
approval of the Merger by the Safe Aid stockholders, substantially all of the
obligations of Safe Aid and INI to consummate the Merger may be waived or
modified by the party that is, or whose stockholders are, entitled to the
benefits thereof.
Termination of the Merger Agreement
Either INI or Safe Aid may terminate the Merger Agreement upon written
notice to the other if the closing of the Merger (the "Closing") has not
occurred by October 31, 1997, without liability to either party.
Management and Operations after the Merger
At the Effective Time, all of the existing officers and directors of
Safe Aid will resign, and the new officers and directors of Safe Aid after the
Merger will be as follows: Barbara L. Tolley, Chairman of the Board and CEO,
Michael Bhathena, Vice President and Chief Information Officer, Bradford L.
Tolley, Secretary and Treasurer, Charles N. Martus, Director, Jack W. Tolley,
Director, Franklin L. Frank, Director and Robert L. Alexander, Director.
After the Merger, new management will develop Safe Aid's New Media and
New Technology Services. New management intends to (i) expand the operations of
the Acquisition Companies by providing these companies with marketing expertise,
financial expertise and administration, (ii) integrate Internet services into
the daily operations of the Acquisition Companies and (iii) make selective
vertical or horizontal acquisitions in strategic locations of companies which
are compatible to Safe Aid's target niche profile of products and services.
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RISK FACTORS
Stockholders of Safe Aid, in considering whether to approve the Merger
Proposal should consider the following matters. These matters should be
considered in conjunction with the other information included and incorporated
by reference in this Proxy Statement.
Limited Operating History of INI
INI commenced operations on October 2, 1996 and since its inception has
had limited operations. As a result, the likelihood of success of INI's
operations must be considered in view of all the risks, expenses and delays
inherent in the establishment of a new business, including, but not limited to,
unforeseen expenses, complications and delays, the initiation of marketing
activities, the initiation of marketing activities, the uncertainty of market
acceptance of new services, intense competition from larger more established
competitors and other factors. Accordingly, there can be no assurance that the
business of INI will be successful.
Merger Consideration and Dilution
The consideration to be given to INI and Safe Aid stockholders in the
Merger has been determined by arms-length negotiations between INI and Safe Aid,
and does not have any direct relation to Safe Aid or INI's earnings, results of
operations, book value, asset value or other criteria of value. There can be no
assurances that the merger consideration represents an accurate valuation of
Safe Aid's or INI's business. If the Merger is consummated, it will result in
substantial dilution to the shareholders of Safe Aid. Pursuant to the Merger
Agreement, Safe Aid will issue 585,819,936 shares of its common stock to INI's
shareholders or approximately 83% of Safe Aid's Common Stock to be outstanding
after the Merger. The former Safe Aid stockholders will own approximately 10% of
Safe Aid Common Stock to be outstanding after the Merger and certain brokers,
consultants and finders will own approximately 7% of Safe Aid's Common Stock to
be outstanding after the Merger. See "The Proposed Merger-Brokerage and Finder's
Fees" and "The Proposed Merger-Consultant's Fees".
Developing Market; Unproven Market for INI's Services
INI's Internet Companies offer a broad selection of Internet based
products and services. The services which the Internet Companies intend to offer
have only recently begun to develop and are services which are rapidly
developing and evolving. There can be no assurance that INI's specialization in
new marketing methods and technologies will be readily accepted on a world wide
or other significant basis. Moreover, critical issues such as market resistance
to change from traditional marketing methods of conducting commerce and
exchanging information may negatively impact the pace of INI's growth.
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Acquisition Strategy
INI has experienced significant growth through acquisitions of
five-wholly owned subsidiaries doing business in the Internet and technology
related fields. After the consummation of the Merger, Safe Aid's success is
dependent, in part, upon its ability to integrate the operations of, and manage
over time, the acquired companies. There can be no assurance that Safe Aid will
successfully integrate the acquired operations of GMC or TMC into its operations
or that the anticipated benefits of the acquisitions will be achieved. The
failure to successfully integrate GMG or TMC or future acquisitions into Safe
Aid's operations would adversely affect Safe Aid's financial condition and
results of operations.
Capital Requirements
If the Merger is consummated, Safe Aid's capital requirements will be
significant, and it will be an important ongoing function and responsibility of
management to secure such necessary capital. Following the Merger, management
will seek to raise capital (if necessary) through public or private offerings of
equity or debt securities. A vital part of Safe Aid's growth will depend upon
the successful attainment of capital. Safe Aid will need capital to grow the
existing Acquisition Companies and to make additional appropriate vertical and
horizontal market industry acquisitions. There can be no assurance that any such
additional financing will be available to Safe Aid on commercially reasonable
terms, or at all. In light of Safe Aid's limited resources, its anticipated
expenses and the competitive environment in which it operates, any inability to
obtain additional financing, if required, would have a material adverse effect
on Safe Aid.
Dependence on Key Personnel
After the Merger, the success of Safe Aid will be highly dependent on
its management. Safe Aid's success will depend to a significant extent upon the
efforts and ability of its Chief Executive Officer and Chairman, Barbara Tolley,
and certain other key executives, including executives of its acquired
subsidiaries. Upon Closing, Ms. Tolley will enter into a two year employment
agreement with Safe Aid, with an option exercisable by Ms. Tolley to extend the
employment agreement for an additional year. See "Business after the Merger
Employment Agreements." The loss of the services of Ms. Tolley or other key
executives could have a material adverse effect on Safe Aid's business.
Competition
The market for companies providing Internet Services is highly
competitive and there are many new participants entering the market Many
companies offering the services provided by the Internet Companies already have
large customer bases and have greater financial capabilities than INI initially
will have. The market competition for companies providing computer sales and
services is also highly competitive and requires that companies such as this,
operate with very small profit margins.
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Possible Depressing Effect of Future Sales of Safe Aid Common Stock
Future sales of the shares of Safe Aid Common Stock to be issued in the
Merger, or the perception that such sales could occur, could adversely affect
the market price of Safe Aid Common Stock. There can be no assurance as to when,
and how many of, the shares of Safe Aid Common Stock to be issued in the Merger
will be sold and the effect such sales may have on the market price of Safe Aid
Common Stock. Such securities are subject to resale restrictions in accordance
with the Securities Act of 1933, as amended (the "Securities Act") and the
regulations promulgated thereunder. As such restrictions lapse or if such
securities are registered for sale to the public, such securities may be sold to
the public.
Forward-Looking Statements
The management of INI and Safe Aid believe that this Proxy Statement
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934, including
statements regarding, among other items, (i) the business plan for Safe Aid
after the Merger and (ii) anticipated trends in the Internet and technology
related fields. These forward-looking statements are based largely on
management's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond INI and Safe Aid's control. Actual
results could differ materially from these forward-looking statements as a
result of the factors described in "Risk Factors," including, among others,
general economic conditions, the limited operating history of INI, the unproven
market for INI's services, governmental regulation and competitive factors. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Proxy Statement will in fact
transpire.
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Special Meeting
Matters to be Considered at the Special Meeting
At the Special Meeting, holders of Safe Aid Common Stock will be asked
to consider and vote upon (i) the Reverse Stock Split, (ii) the Common Stock
Amendment, (iii) the Name Change Amendment, (iv) the Merger Proposal, and (v)
such other proposals as may be properly brought before the Special Meeting.
In order to consummate the Merger with INI, Safe Aid stockholders need
to adopt and approve each of the proposals presented at the Special Meeting: (i)
the Reverse Stock Split, (ii) the Common Stock Amendment, (iii) the Name Change
Amendment, and (iv) the Merger Proposal. The Merger Agreement provides that
approval of each of these proposals is a condition precedent to the closing the
Merger.
Record Date; Stock Entitled to Vote; Quorum
Only stockholders of record of Safe Aid Common Stock at the close of
business on August 29, 1997 (the "Safe Aid Record Date") are entitled to receive
notice of, and to vote at, the Special Meeting. At the close of business on the
Safe Aid Record Date, Safe Aid had issued and outstanding 705,477,200 shares of
Safe Aid Common Stock. A majority of the outstanding shares of Safe Aid Common
Stock on the Safe Aid Record Date must be represented in person or by proxy at
the Special Meeting in order for a quorum to be present. Each share of Safe Aid
Common Stock issued and outstanding on the Safe Aid Record Date will entitle the
holder thereof to one vote on each proposal presented at the Special Meeting.
Shares of Safe Aid Common Stock represented at the Special Meeting by a
properly executed, dated and returned proxy will be treated as present at the
Special Meeting for purposes of determining a quorum, without regard to whether
the proxy is marked as casting a vote or abstaining. Proxies relating to "street
name" shares that are properly executed and returned by brokers will be counted
as shares present for purposes of determining the presence of a quorum, but will
not be treated as shares having voted at the Special Meeting with respect to (i)
the Reverse Stock Split, (ii) the Common Stock Amendment, (iii) the Name Change
Amendment, or (iv) the Merger Proposal if authority to vote is withheld from the
broker (a "broker non-vote").
Votes Required
The affirmative vote of the holders of a majority of the outstanding
shares of Safe Aid Common Stock is required to approve and adopt (i) the Reverse
Stock Split, (ii) the Common Stock Amendment, (iii) the Name Change Amendment,
and (iv) the Merger Proposal.
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Voting of Proxies
Proxies properly executed and returned in a timely manner will be voted
at the Special Meeting in accordance with the directions noted thereon. Proxies
which are properly executed, but for which no voting direction is indicated,
will be voted FOR the Reverse Stock Split, FOR the Common Stock Amendment, FOR
the Name Change Amendment and FOR the Merger Proposal. Abstentions will be
recorded as such by the Inspector of Elections for the Special Meeting.
Abstentions and broker non-votes (as well as any other failure to vote) will not
be considered as votes cast with respect to any of the proposals.
Revocability of Proxies
Any stockholder giving a proxy has the power to revoke it at any time
before it is voted, either by voting in person at the meeting, by written notice
to the Secretary of Safe Aid or by delivery of a later-dated proxy.
Ownership by Executive Officers and Directors
As of August 29, 1997, directors and executive officers of Safe Aid may
be deemed to be beneficial owners of shares (including shares underlying certain
options and warrants) of 195,596,000 Safe Aid Common Stock, or approximately
27.8% of the then outstanding shares of Safe Aid Common Stock.
Recommendation of the Safe Aid Board
The Safe Aid Board has unanimously approved the (i) the Reverse Stock
Split, (ii) the Common Stock Amendment, (iii) the Name Change Amendment, and
(iv) the Merger Proposal (collectively, all such proposals shall be referred to
as the "Safe Aid Proposals"). The Safe Aid Board believes that the Safe Aid
Proposals are in the best interests of Safe Aid and its stockholders and
recommends that the Safe Aid Stockholders vote FOR the Reverse Stock Split, FOR
the Common Stock Amendment, FOR the Name Change Amendment and FOR the Merger
Proposal.
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THE PROPOSED MERGER
The following summary of the material terms of the Merger Agreement is
qualified in its entirety by reference to the provisions of the Merger
Agreement, which is attached as Exhibit A to this Proxy Statement and is
incorporated by reference herein.
General
The respective Board of Directors of Safe Aid and INI, meeting
separately, each approved and adopted the Merger Agreement and the Merger and
authorized the execution and performance of the Merger Agreement. The
shareholders of INI have approved and adopted the Merger Agreement and the
Merger and authorized the execution and performance of the Merger Agreement.
Background of the Merger
The Presidents of Safe Aid and INI were introduced in July 1996, and
became aware of each other's situations and needs. Pursuant to that meeting, the
Presidents of the two entities stayed in contact and communication with each
other during the year of 1996. In early Spring 1997, the Presidents met, again,
in Florida and initiated serious conversations about the possibility of a
potential merger which could benefit both companies.
In July 1997, the parties came to an agreement as to the terms of a
potential merger. On August 18, 1997, Safe Aid and INI entered into a letter of
intent. On August 29, 1997, the parties entered into a definitive Merger
Agreement.
Reasons for the Merger; Recommendation of the Safe Aid Board
Safe Aid has been unsuccessful in effecting its original business
purpose and had virtually no active operations for the past several years. In
addition, Safe Aid has no capital available to renew active operations. As a
result, management adopted a strategy of locating an operating company to engage
in a business combination with Safe Aid that could increase shareholder value.
In considering the merits of the Merger with INI, Safe Aid's Board of
Directors gave substantial weight to its belief that marketing through the
Internet, and related fields of INI, represent a significant growth opportunity.
Management has reviewed the business plan of INI and believes that it represents
a viable business opportunity and an opportunity to increase shareholder value.
Safe Aid's Board of Directors also considered the risk factors attributable to
INI's business discussed in "Risk Factors" above, particularly INI's limited
operating history and need for additional capital and disadvantages of the
Merger, such as the substantial dilution of the existing stockholders' ownership
of Safe Aid.
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Safe Aid's Board of Directors determined that the benefits outweighed
the disadvantages and unanimously approved the terms of the Merger and
recommends that Safe Aid stockholders adopt the Merger Agreement. See "The
Proposed Merger."
Reasons for the Merger; Recommendation of the INI Board
The decision of the INI board, based upon the recommendation of Barbara
Tolley, the Chairman of the Board, was based upon INI's interest in growing and
securing market share for the private acquisition companies, as quickly as
possible, and believing that it was in the interests of INI's global expansion
plans to become part of a public company entity.
Effective Time
The Merger will become effective upon the filing of (i) a Certificate
of Merger with the Secretary of State of Delaware and (ii) Articles of Merger
with the Secretary of State of Florida (the "Effective Time"). The Effective
Time is expected to occur as promptly as practicable after the required approval
of Safe Aid stockholders at their Special Meeting, subject to the terms and
conditions contained in the Merger Agreement.
Structure of the Merger; Conversion of Shares
Prior to the Closing Date, Safe Aid shall effect a ten-for-one reverse
stock split pursuant to which its outstanding common stock will be reduced to
70,547,720 shares. At the Effective Time, INI shall be merged with and into Safe
Aid pursuant to the terms and conditions of the Merger Agreement. As of the
Effective Time, the separate corporate existence of INI will terminate, and each
issued and outstanding share of INI Common Stock will be converted into the
right to receive one share of Safe Aid Common Stock. In the aggregate, INI
shareholders will receive 585,819,936 shares of Safe Aid's Common Stock in the
Merger. At the Closing, Safe Aid will also issue 49,109,544 shares of Safe Aid
Common Stock to certain brokers, finders and consultants for services rendered
in the Merger transaction. After the consummation of the Merger, the former INI
shareholders will own approximately 83% of Safe Aid's Common Stock.
Procedure to Exchange of Certificates
As soon as is practicable after the Effective Time, Safe Aid's transfer
agent, United States Transfer of Englewood, Colorado (the "Transfer Agent") will
mail a form of transmittal letter to holders of INI Common Stock. The form of
transmittal letter will contain instruction with respect to the surrender of
certificates representing INI Common Stock.
INI STOCK CERTIFICATES SHOULD NOT BE RETURNED WITH THE ENCLOSED PROXY
AND SHOULD NOT BE FORWARDED TO THE TRANSFER AGENT UNLESS AND UNTIL THE INI
SHAREHOLDER RECEIVES A LETTER OF TRANSMITTAL FOLLOWING THE EFFECTIVE TIME.
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Governmental Approvals
Safe Aid and INI do not need to obtain any federal or state
governmental approvals in order to effectuate the Merger.
Conditions to the Merger
The obligations of INI to effect the Merger are subject to certain
conditions; including (i) approval and adoption of the Reverse Stock Split by
Safe Aid's stockholders, (ii) approval and adoption of the Common Stock
Amendment by Safe Aid's stockholders, (iii) approval and adoption of the Name
Change Amendment by Safe Aid's stockholders, (iv) approval and adoption of the
Merger Agreement by Safe Aid's stockholders, and (v) the accuracy of
representations and warranties of Safe Aid made in the Merger Agreement and
other customary conditions.
The obligation of Safe Aid to effect the Merger are subject to certain
conditions, including (i) simultaneously with or prior to closing, INI shall
have closed acquisitions of at least two companies active in industries relating
to that of INI and reasonably acceptable to Safe Aid, and as of the Closing Date
shall have not less than $280,000 in cash or cash equivalent assets, (ii) Safe
Aid and Barbara Tolley shall have entered into an employment agreement pursuant
to which Ms. Tolley will be employed as the Chief Executive Officer and Chairman
of the Board of Safe Aid, and (iii) the accuracy of representations and
warranties of INI made in the Merger Agreement and other customary conditions.
Termination of the Merger Agreement
Either INI or Safe Aid may terminate the Merger Agreement upon written
notice to the other if the Closing of the Merger has not occurred by October 31,
1997, without liability to either party.
Federal Income Tax Consequences
For federal income tax purposes the merger of INI with and into Safe
Aid, in accordance with the terms of the Merger Agreement, will qualify as a
"reorganization" within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"). Provided that the Merger
qualities as a "reorganization" within the meaning of Section 368(a)(1)(A) of
the Code, (i) no gain or loss will be recognized by either Safe Aid or INI as a
result of the consummation of the Merger, (ii) no gain or loss will be
recognized by a shareholder of INI upon the receipt by such shareholder of
shares of Safe Aid's Common Stock in exchange for such shareholder's shares of
INI's Common Stock in accordance with the terms of the Merger Agreement, (iii)
the aggregate tax basis of the shares of Safe Aid Common Stock received by a
shareholder of INI will be the same as the aggregate tax basis of the shares of
INI Common Stock surrendered in exchange therefor reduced by the amount of any
cash received and increased by the amount of any gain recognized, and (iv) the
holding period of the shares of Safe Aid Common Stock received by an INI
shareholder in exchange for shares of INI Common Stock will include the period
during which the shares of INI
11
Common Stock surrendered in exchange therefor were held, provided the shares of
INI Common Stock were held as capital assets at the Effective Time.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY. INI SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS FOR MORE SPECIFIC AND DEFINITIVE ADVICE AS TO THE FEDERAL INCOME TAX
CONSEQUENCES TO THEM OF THE CONVERSION OF THEIR SHARES OF INI COMMON STOCK
PURSUANT TO THE MERGER, AS WELL AS ADVICE AS TO THEIR APPLICATION AND EFFECT OF
STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS AND POSSIBLE AMENDMENTS TO
SUCH LAWS.
Accounting Treatment of the Merger
It is anticipated that the Merger will be accounted for using the
"purchase" method of accounting, in accordance with generally accepted
accounting principals. Therefore, the aggregate consideration paid by Safe Aid
in connection with the Merger will be allocated to INI's assets and liabilities
based on their fair values, with any excess being treated as goodwill. The
assets, liabilities and results of operation of INI will be consolidated into
the assets, liabilities and results of operation of Safe Aid subsequent to the
Effective Time.
Resale of Safe Aid Common Stock
The shares of Safe Aid Common Stock which will be received by INI
shareholders pursuant to the Merger Agreement will be restricted securities as
defined in Rule 144 of the Securities Act. Restricted securities can be sold
into the public market pursuant to Rule 144 or pursuant to an effective
registration statement. Additionally, such sales are subject to any applicable
state securities laws.
Brokerage and Finder's Fees
In connection with the Merger, both INI and Safe Aid have incurred
obligations to pay certain brokerage and finder's fees. INI and Safe Aid will
pay for these obligations by issuing certain parties shares of Safe Aid's Common
Stock. All such issuances will be on a post-split basis.
At the Closing of the Merger, Safe Aid will pay a finder's fee to
Robert Weinberg and Norman and Bernie Moskowitz. At the Closing, Safe Aid will
issue 3,527,386 shares of its common stock to Mr. Weinberg and 3,527,386 shares
of its common stock to Norman and Bernie Moskowitz. At the Closing, INI will
issue 1,100,000 shares of INI Common Stock to Lockwood Realty, 100,000 shares of
INI Common Stock to Jay Shapiro and 106,200 shares of INI Common Stock to First
Venture, which shares will be exchanged for Safe Aid Common Stock pursuant to
the Merger.
12
At the Closing of the Merger, Safe Aid will pay a finder's fee to
Private Trust Corp. Ltd., as Trustee for New Amsterdam Investment Trust (the
"Trustee"). At the Closing, Safe Aid will issue 7,054,772 shares of its common
stock to the Trustee.
Except for the above finder's fee neither INI nor Safe Aid has incurred
any liability for brokerage, finder's fees or similar charges in connection with
the Merger.
Consultant's Fees
Stanley Snyder, a President and Director of Safe Aid, and Lawrence
Feldman, Safe Aid's former counsel, have served as consultants to Safe Aid
during the Merger. As payment for their services, Safe Aid will issue 17,500,000
shares of its common stock (on a post-split basis) to each of Mr. Feldman and
Mr. Snyder at the Closing of the Merger.
13
BUSINESS AFTER THE MERGER
Following the Merger, the new management of Safe Aid intends to (i)
expand the operations of the Acquisition Companies by providing these companies
with marketing expertise, financial expertise and administration, (ii) integrate
Internet services into the daily operations of the Acquisition Companies and
(iii) make selective vertical or horizontal acquisitions in strategic locations
of companies which are compatible to Safe Aid's target niche profile of products
and services.
New management will help develop marketing plans for each acquired
company, and will provide the companies with continual reviews to monitor
progress and growth. Each Acquisition Company will, pursuant to the marketing
plan, implement and be responsible for its own sales goals and projections,
sales force, sales contacts and all sales processing.
New management also intends to integrate Internet services provided by
the Internet Companies into the day to day business operations of each of the
Acquisition Companies, as well as any future business acquisition companies. The
Internet Companies have already begun creating web sites for GMG and TMC and
also have made available installation of AT &T WorldNet Internet Services for
both GMG and TMC usage. The Internet Companies have also made these services
available to the companies' own customers. Any sophisticated or in depth
Internet services, i.e. Intranets, system integration, etc., which the customers
of the Acquisition Companies might require, will be referred to the Internet
Companies.
The Internet Companies will also be responsible for the Internet
electronic commerce of the Acquisition Companies, and will be responsible for
set up and maintenance of web sites, up to the point of processing the order. As
the Acquisition Companies become more familiar with the Internet and doing
business electronically, the Internet Companies will begin to transfer more and
more of the Acquisition Companies procedures and processes (i.e. inventory,
ordering, field sales management, pricing) onto the Internet via a private
company Intranet for each company.
Management after the Merger
As of the Effective Time, all of the existing officers and directors of
Safe Aid will resign, and the new executive officers and directors of Safe Aid
after the Merger will be as follows:
Name Age Position Held with Registrant
---- --- -----------------------------
Barbara L. Tolley 60 CEO and Chairman of the Board
Charles N. Martus 74 Director
Jack W. Tolley 74 Director
Franklin L. Frank 61 Director
14
Robert L. Alexander 54 Director
Bradford L. Tolley 33 Secretary and Treasurer
Michael Bhathena 29 Vice President and Chief Information
Officer
Barbara L. Tolley received her BA from Ohio State University in 1959.
She founded Westchester Ltd., Inc., in 1975, a privately held company
specializing in international marketing and advertising in which she held the
office of President until 1989. In 1990, Ms. Tolley founded one of the Internet
companies, Property Intelligence International, Inc.("PII"), an international
consulting and online real estate business service currently on the Internet.
Since 1996, Ms. Tolley has been one of the majority stockholders in Villas
International Realty, Inc., an international holiday rental agency. Ms. Tolley
has been a President and Director of INI since its inception in October 1996.
Ms. Tolley is the wife of Jack W. Tolley and the mother of Bradford L. Tolley.
Charles N. Martus is a graduate of Dartmouth College, Hanover, New
Hampshire in 1944, and attended Amos Tuck School. Mr. Martus was a principal in
a gourmet food operation in Manhattan from 1946 until 1990. During the past five
years, Mr. Martus has been retired.
Jack W. Tolley is a graduate of Dartmouth College, Hanover, New
Hampshire in 1947, and attended Cornell University in Ithaca, New York. Mr.
Tolley founded J.W. Tolley & Associates in 1953, a national marketing and
advertising agency and served as President until 1975. Mr. Tolley was a Director
and consultant to Westchester Ltd., Inc. until 1982. Mr. Tolley has been
pursuing a career as an artist and painter of Southwestern American art and as
an author of several books on Florida and immigration for foreign nationals. Mr.
Tolley has been a Director of INI since October 1996. Mr. Tolley is the husband
of Barbara L. Tolley and the father of Bradford L. Tolley.
Franklin L. Frank has been Director and President of a privately held
real estate development company, based in Hicksville, New York, as well as a
stockholder in other real estate asset companies. Mr. Frank is currently
involved with mining operations in the State of Nevada. Mr. Frank has been a
Director of INI since October 1996.
Robert L. Alexander has been in management with Fortune 500 companies,
and has had start up responsibility with privately held corporations during his
career. Mr. Alexander was President of International Communications Systems
(ICS) from 1991 to 1993. He was President of United Communications Systems (USC)
from 1993-1994, a telephone reseller company in select markets. Mr. Alexander
founded his own company, Comstar International, Inc., with master distributor
contracts with GE Capital Communications Services in 1994. He was recruited by
Systems Communications, Inc. as CEO, responsible for operations of
communications companies acquired and merged into the public company. Since
April 1997 Mr. Alexander has been President of International Teledata
Corporation, responsible for its transition from a privately held company to a
public company.
15
Bradford L. Tolley is a graduate of Phillips Academy in Andover,
Massachusetts in 1982, and attended Rollins College in Winter Park, Florida. He
was employed by Westchester Ltd., Inc., as an account executive from 1984 to
1989. From 1990-1992, Mr. Tolley was employed by Bilfinger & Berger's American
subsidiary, Fru-Con Corporation, both subsidiaries of Dresdner Bank in Germany.
From 1990-1992, Mr. Tolley was Vice President of PII, one of the Internet
Companies. Mr. Tolley is currently President of Tolley Investments, Inc., a
privately held company. Mr. Tolley has been the Treasurer, Secretary and a
Director of INI since October 1996. Mr. Tolley is the son of Jack W. Tolley and
Barbara L. Tolley.
Michael Bhathena holds a B.A. in Computing & Statistics and a masters
degree in computing science, from the University of Kent in Great Britain. Mr.
Bhathena served as an assistant trader and then in the finance department at the
Hong Kong & Shanghai Banking Corporation's (HSBC) City of London Offices from
1986-1988. Mr. Bhathena served as a voice and data communications executive for
the Infocheck Group, Ltd. from 1992-93, a pioneer in providing on-line credit
information to British companies. Mr. Bhathena was employed and served as
President of PII Ltd., United Kingdom an affiliate of PII, one of the Internet
Companies from 1993-1995.
Employment Agreements
Upon Closing, Barbara Tolley will enter into a two year employment
agreement with Safe Aid with an option exercisable by Ms. Tolley to extend the
employment agreement for an additional year. Ms. Tolley's compensation will be
$120,000 per year for the initial two year term. At Ms. Tolley's option, this
sum can be paid with half cash and half stock, all cash or on an accrual basis.
Ms. Tolley will be entitled to bonus compensation based on a percentage of the
annual net pre-tax profits of Safe Aid. As an officer of Safe Aid, she will be
entitled to participate in an overall group insurance plan providing health,
life and disability insurance benefits for employees of Safe Aid. The employment
agreement will also provide for the use of an automobile and/or a monthly
automobile allowance, payment of club dues and other fringe benefits
commensurate with her duties and responsibilities.
Significant Employees
Four significant employees of GMG and TMC, the Acquisition Companies,
have entered into employment agreements with their respective companies for a
one year period after the Closing of the Merger.
On August 21, 1997, Gary Bart and Dean Constantine, the President and
Vice President of GMG each entered into an employment agreement with GMG
relating to the employment of such individuals with GMG effective as of the
Closing Date of the Merger. The employment agreements contain non-competition
and confidentiality provisions and provide that Gary Bart will be the President
of GMG and that Dean Constantine will be the Vice President of GMG. Mr. Bart and
Mr. Constantine will respectively receive salaries of $84,000 and $60,000 per
annum and will be entitled to receive an annual bonus equal to the net profits
of GMG after tax for the 1997 fiscal year.
16
Anthony Diaz and Gerardo Toquica each entered into an employment
agreement with TMC dated August 1, 1997, relating to the employment of such
individuals with TMC effective as of the Closing Date of the Merger. The
employment agreements contain non-competition and confidentiality provisions.
Mr. Diaz and Mr. Toquica will each receive a salary of $72,000 per annum.
The foregoing summary of the terms of the employment agreements for the
significant employees is qualified in its entirety by reference to the
provisions of these employment agreements, a copy of which can be obtained from
Safe Aid's management pursuant to the instructions contained on page 36 hereof.
PRINCIPAL STOCKHOLDERS AFTER THE MERGER
The following table sets forth certain information regarding the
identity of the persons who will be the principal stockholders of Safe Aid if
the Merger is consummated. The following table sets forth the number of shares
of Safe Aid's Common Stock that will be beneficially owned by (i) each person
who will be named a director and/or executive officer of Safe Aid after the
Merger, (ii) all directors and executive officers of Safe Aid after the Merger
as a group and (iii) each shareholder who will be a beneficial owner of more
than 5% of Safe Aid's Common Stock after the Merger. In addition to the shares
issued in the Merger, this table also reflects stock to be issued immediately
prior to the Merger for capital contributions and services rendered to INI in
connection with the Merger. After the Merger, Safe Aid will have issued an
outstanding 705,477,200 shares of its common stock. An asterisk indicates
beneficial ownership of less than 1% of the outstanding Safe Aid Common Stock
after the Merger.
Name and Future Position Amount and Nature of Percentage of Shares
Beneficial Ownership
Barbara L. Tolley 1 259,595,536 36.8
Chairman and CEO
Ruth Deutsch 2 141,595,535 20.1
Shareholder
Franklin L. Frank 3 68,000,000 9.6
Director
Bradford L. Tolley 25,000,000 3.5
Treasurer and Secretary
Jack W. Tolley 4 8,060,114 1.2
Director
Michael Bhathena 11,000,000 1.6
Vice President and Chief
Information Officer
Charles N. Martus 200,000 *
Director
Robert L. Alexander 200,000 *
Director
All officers and directors 372,055,650 52.7%
as a group
1 Excludes 8,060,114 shares held by Jack W. Tolley, Barbara Tolley's husband,
and of which Ms. Tolley disclaims beneficial interest.
2 Excludes 68,000,000 shares beneficial held by Franklin L. Frank, Ms. Deutsch's
and of which Ms. Deutsch disclaims beneficial interest.
3 Includes 34,000,000 shares held by LVDB, Inc., a corporation controlled by
Mr. Frank.
4 Excludes 259,595,536 shares held by Barbara Tolley, Jack W. Tolley's wife,
and of which Mr. Tolley disclaims beneficial interest.
INFORMATION ABOUT SAFE AID
Business
Safe Aid was incorporated under Delaware law on May 21, 1987 to engage
in manufacturing and marketing of a disinfectant product for sale in dental and
medical offices and hotel and motel markets, as well as in the retail over-the
counter market, and to engage in research and development regarding nasal and
transdermal delivery of aspirin and other drugs.
During the past several years, Safe Aid has been virtually inactive
with nominal sales and operations and has remained in its development stage.
During the past year, Safe Aid's principal business objective has been to find
and merge with an operating company that management believes could increase
shareholder value.
Employees
At present, Safe Aid has one part-time clerical employee and one
officer working part-time with respect to Safe Aid's business activities.
Inasmuch as Safe Aid is not currently and does not plan to market any products
in the near future, Safe Aid does not have any sales force.
Properties
Inasmuch as there was limited activity, Safe Aid made arrangements to
have access to office and conference facilities on an as needed basis at 300
Rabro Drive, Hauppauge, New York 11788. The cost of maintaining these office
facilities was $150 per month. This arrangement was terminated during the fiscal
year ending November 30, 1995.
Legal Proceedings
There are no legal proceedings pending to which Safe Aid is subject,
nor to the knowledge of Safe Aid are any such legal proceedings threatened.
17
Changes in and Disagreements with Accountants
There have been no changes in or disagreements with Safe Aid's
accountants, Scott & Guilfoyle.
Price Range of Common Stock
Safe Aid's Common Stock is traded in the over-the-counter market under
the symbol "SFAD". The following table sets forth the high and low stock closing
bid, as reported by the National Quotation Bureau, Inc., for Safe Aid's Common
Stock for the calendar periods indicated. These quotations reflect intermediate
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions.
Common Stock
------------
Bid Asked
Period High/Low High/Low
- - - ------ -------- --------
1997
- - - - - - - - -
1st Quarter .0136/.00705 .0137/.0073
2nd Quarter .016/.0045 .0163/.005
1996
- - - - - - - - -
1st Quarter .002/.0015 .003/.003
2nd Quarter .06/.002 .07/.003
3rd Quarter .025/.0075 .026/.0081
4th Quarter .021/.008 .024/.0085
1995
- - - - - - - - -
1st Quarter .003/.001 .007/.004
2nd Quarter .0025/.001 .007/.004
3rd Quarter .0025/.001 .05/.003
4th Quarter .0015/.001 .05/.003
On September ___, 1997, the last trading day prior to the announcement
of the proposed Merger, the closing price per share of Safe Aid's Common Stock
was $___
The approximate number of common stockholders of record of Safe Aid as
of February 5, 1996 was 1,162.
18
Dividend Policy
Safe Aid has never paid cash dividends on its Common Stock. Payment of
dividends will be within the sole discretion of Safe Aid's Board of Directors
and will depend, among other factors, upon earnings, capital requirements and
the operating and financial condition of Safe Aid. At the present time, Safe
Aid's anticipated financial capital requirements are such that it intends to
follow a policy of retaining earnings in order to finance the development of its
business.
PRINCIPAL STOCKHOLDERS
Following table contains information as of August 29, 1997, as to the
beneficial ownership of shares of Common Stock of Safe Aid of all officers and
directors of Safe Aid, each person who to the knowledge of Safe Aid at that
date, was the beneficial owner of 10% or more of the outstanding shares, and all
officers and directors of Safe Aid as a group.
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
Estate of Martin J. Feldman* 63,048,000 9.0%
Officer, Director
David J. Magid* 35,678,000 5.1%
40 Woodview Drive Shareholder
Doylestown, P.A.
Robert Reiner* 72,838,456 10.4%
3 Doyle Court Shareholder
Port Jefferson, NY
Melvin M. Fritz, D.O., M.D. 0 0%
15 Dewey Street Director
Huntington, NY
Stanley Snyder 129,798,000 18.5%
One Penn Plaza Officer, Director
Suite 1503
New York, NY
Barney Melsky 2,750,000 .4%
16 Tuxedo Drive Officer, Director
Melville, NY
All Officers and Directors as a 195,596,000 27.8%
group (including Estate of
Martin J. Feldman)
19
*These individuals may be deemed "parents" and "promoters" of Safe Aid under the
rules and regulations of the Securities Act by virtue of their common stock
ownership and their effort in the organization of Safe Aid.
20
MANAGEMENT'S PLAN OF OPERATIONS
Safe Aid was incorporated under Delaware law on May 21, 1987 to engage
in manufacturing and marketing of a disinfectant product for sale in dental and
medical offices and hotel and motel markets, as well as in the retail over-the
counter market, and to engage in research and development regarding nasal and
transdermal delivery of aspirin and other drugs.
During the past several years, Safe Aid has been virtually inactive
with nominal sales and operations and has remained in its development stage.
During the past year, Safe Aid's principal business objective has been to find
and merge with an operating company that management believes could increase
shareholder value.
Safe Aid's audited financial statements for its fiscal year ended
November 31, 1996 are attached hereto as Exhibit D to this Proxy Statement and
are incorporated herein by reference. Safe Aid's unaudited financial statements
for its quarters ended February 28, 1997 and May 31, 1997, respectively, are
attached as Exhibit E to this Proxy Statement and are incorporated herein by
reference.
INFORMATION ABOUT INI
Overview
INI was incorporated under Florida law on October 2, 1996. Since its
inception, INI has grown primarily through acquisition. On January 10, 1997, INI
completed an acquisition of three Internet related companies in stock for stock
exchanges. The principal shareholder of each of the Internet related companies
was Barbara Tolley. In its January 1997 acquisition, INI acquired the following
subsidiaries: CyberPlan, Inc., a Florida corporation ("CyberPlan"), Property
Intelligence International, Inc., a Florida corporation ("PII") and In
CyberMall, Inc., a Florida company ("In CyberMall").
INI intends to expand its products and services through two more recent
acquisitions. On August 2, 1997, INI acquired TMC, a wholesaler and retailer of
custom designed and assembled computer systems and related products. On August
28, 1997, INI acquired GMG, a printer and publisher of magazines and catalogues.
See "Acquisition Companies" for more detail regarding the terms and conditions
of these acquisition agreements.
Internet Related Businesses
INI's Internet related companies are (i) CyberPlan, a company which
specializes in preparing bundled software packages, (ii) PII, an Internet
information and content service provider, and (iii) In CyberMall, an Internet
Directory for upmarket products and services.
CyperPlan is a full service marketing cyberagency specializing in what
is known as New Media. This refers specifically to the Internet, computer
network technologies, CD-ROM creations, electronic commerce, Internet software
development, and web sites with Intranet development for businesses.
21
CyberPlan entered into a contract with AT&T in 1996 with AT&T's
Internet WorldNet Division. The contract calls for CyberPlan to create and
develop bundled software packages, designed around the AT&T WorldNet Internet
Service, for specialized industry communications and Internet applications. The
first product, Real Estate 2001, has recently been completed and passed AT&T
testing standards, and is now ready for market launch. Real Estate 2001 features
Internet access, Internet telephone, Internet video conferencing, and important
hyperlinks/content to the real estate industry. Additional planned Internet
software packages in the developmental stages are for the legal industry,
Spanish speaking community, and Internet desktop software for children.
PII is an Internet information and content service provider,
established in 1992 in collaboration with AT&T for their business information
services to Fortune 500 companies. With the advent of the Internet phenomenon,
PII was relocated over to the Internet and is currently located on AT&T's
InterNic Web Site, as one of eighteen public access web sites.
PII delivers online to users specialized global real estate news and
information, global financial information, global properties for sale, global
property industry employment, global property events, builder products and
services, global golf course information, as well as global hotels and resort
information. PII saves significant time in locating, searching, and sorting
specific industry data for the user.
PII maintains an Internet radio station called PII RADIO which features
various real estate personalities discussing various topics of interest to the
public or to professionals serving the real estate industry.
In CyberMall is an Internet directory exclusively containing upmarket
products and services web sites which are marketing on the Internet.
Current Internet directories, over 1,000 in total, are organized by
word search and category and they accept for inclusion into their directories
every possible type and size of industry and individuals web sites. In 1994,
there were approximately 1,250 web sites online. Currently there are over
1,000,000 web sites on the Internet. Finding the information or products that
one is looking for has become a major time factor for Internet users.
In CyberMall was designed as a 'niche Directory Locator' and a time
saver for people wanting information and access to the upmarket products and
services only. In CyberMall provides this information conveniently and easily to
them. In CyberMall is known on the Internet as 'the Mall for The Rich and
Famous.'
Within the last year, In CyberMall has begun offering Internet
electronic commerce services at the web sites of small business clients who
prefer to out source this function rather than make the sizeable investment to
offer these services directly themselves.
22
Relationships between the Companies
INI's Internet and New Technology Companies offers a full service of
New Media services and Internet communications, where a client is able to have a
one stop source for his brochure, Annual Report, catalog, magazine, etc. The
client can also have those quality color collateral materials easily duplicated
and reproduced electronically for other purposes, CD-ROM, laptop presentations,
or uploaded to his web site.
Clients will also have immediate access to specially designed Internet
software for their business development, and/or special assembled specifications
for their computer hardware systems and networks for their Internet desktops.
Clients' offices can easily be connected with compatible computer network
systems with high speed electronic information transfer systems and also
directly to any of the Internet Companies creating an environment of cost
savings and speed of production.
ACQUISITION COMPANIES
TMC
Description of Business. TMC operates as a wholesaler and retailer of
custom designed and assembled computer systems and related products to dealers,
corporations and schools in the Southeast United States. TMC has focused its
efforts on the education market and has built a significant presence in
Florida schools. As a result of its school presence, TMC is now realizing
additional private sales as parents interested in PC's for the home are turning
to the same company that supplies the PC's at their children's schools. In
addition to their own retail outlet they distribute to five additional retail
stores in Central Florida.
Terms of the TMC Acquisition Agreement. Pursuant to an acquisition
agreement dated June 16, 1997 and a closing agreement dated August 2, 1997
(collectively, the "TMC Acquisition Agreement"), INI acquired all the issued and
outstanding shares of TMC in exchange for the issuance of 1,062,500 shares of
INI's common stock to the TMC shareholders.
The TMC acquisition is subject to reversal if the merger of INI with
and into Safe Aid is not closed on or before November 1, 1997. The TMC
Acquisition Agreement provides the shareholders of TMC with a guarantee of their
share price. If Safe Aid's Common Stock is trading at a price of less than $.40
per share upon the date one year after the Effective Time, Safe Aid will either
issue additional Safe Aid Common Stock so that the total value of Safe Aid
Common Stock issued to the TMC shareholders is $425,000, or pay to the TMC
shareholders in cash the difference between the value of the 1,062,500 shares
issued to the TMC shareholders and $425,000, as determined by Safe Aid.
The foregoing summary of the terms of the TMC Acquisition Agreement is
qualified in its entirety by reference to the provisions of the TMC Acquisition
Agreement, a copy of which can be obtained from Safe Aid's management pursuant
to the instructions provided on page 36 hereof.
23
GMG
Description of Business. GMG is a digital pre-press company which
specializes in producing high quality full color magazine publications and
catalogs.
GMG assists in the publication of magazines by working with publishers,
advertising agencies and companies which are placing advertisements in the
publication. GMG receives the editorial content of the magazine from the
publisher and combines it on a computer with the advertising material which it
receives directly from the advertisers. Once the magazine content has been put
together, the computer is used to enhance the image quality of the magazine and
ensure there are no mistakes. The entire magazine is then produced on color
separated film that is sent to the printer.
GMG's high quality work in this field was recognized when The Boca
Raton Magazine recently won "1996 Best Produced Magazine" award. The award has
been a springboard to prestigious new accounts that have been won by GMG in
1997.
GMG also works on jewelry catalogs, which require the highest quality
work and are priced accordingly. GMG ensures that the product pictures are
scanned into a computer flawlessly and the full capabilities of GMG's computer
systems and its software are used to produce the highest quality output. Color
separations are then produced on film to be sent to the printer.
Terms of the Acquisition Agreement. Pursuant to an acquisition
agreement dated July 22, 1997 and a closing agreement dated August 28, 1997
(collectively, the "GMG Acquisition Agreement"), INI acquired all the issued and
outstanding shares of GMG in exchange for 14,000,000 shares of INI's common
stock to the GMG shareholders.
The GMG acquisition is subject to reversal if the merger of INI with
and into Safe Aid is not closed on or before November 1, 1997. The GMG
Acquisition Agreement provides the shareholders of GMG with a right of reversion
if Safe Aid's Common Stock is trading at a price lower than $.10 per share upon
the date one year from the Effective Time. If GMG's shareholders elect the right
of reversion, Safe Aid will be required to return to the GMG shareholders all of
their GMG stock, contingent upon the following terms: (i) GMG's former
shareholders must return all Safe Aid Common Stock held by them, a minimum of
10,000,000 shares, (ii) any monies which Safe Aid might have advanced to GMG as
working capital will be repaid per the terms which were established at the time
of funding by Safe Aid and (iii) Safe Aid shall be released from any lease
facility equipment guarantees which it made on behalf of GMG.
The foregoing summary of the terms of the TMC Acquisition Agreement is
qualified in its entirety by reference to the provisions of the TMC Acquisition
Agreement, a copy of which can be obtained from Safe Aid's management pursuant
to the instructions contained on page 36 hereof.
24
Employees
As of September 1, 1997, INI employed 18 persons, including employees
of GMG and TMC, which are operating as wholly-owned subsidiaries.
Property
INI leases executive offices located at 249 Peruvian Avenue, Palm
Beach, Florida. TMC and GMG each lease office space in Tampa and North Miami,
respectively.
Legal Proceedings
INI is not a party to any material litigation presently pending nor, to
the best knowledge of INI, have any such proceedings been threatened. Similarly,
TMC and GMG are not parties to any material litigation presently pending nor, to
the best of their knowledge, have any such proceedings been
threatened.
Market Price and Dividends on Common Stock
INI is a privately-owned corporation; therefore there is no public
market price available with respect to INI's Common Stock. Since its inception,
INI has not paid any dividends with respect to INI's Common Stock.
On September 6, 1997, INI had 15 stockholders.
MANAGEMENT'S PLAN OF OPERATIONS
Organization and Development Stage Activities
INI was incorporated under Florida law on October 2, 1996. INI intends
to become known as a company that provides a wide range of New Media and New
Technology Services. Since its inception, INI's activities has been primarily
related to (i) acquiring the Internet Companies, (ii) negotiating and executing
the Merger Agreement with Safe Aid, (iii) acquiring the Acquisition Companies
and (iv) searching for additional acquisition companies.
On January 10, 1997, INI acquired CyberPlan, PII and In CyberMall in
stock-for-stock exchanges. The principal shareholder of each of these companies
was Barbara Tolley, the CEO and Chairman of INI. On August 29, 1997, INI entered
into the Merger Agreement with Safe Aid. Consummation of the Merger is subject
to the approval of Safe Aid stockholders at the Special Meeting and other
customary conditions. Pursuant to the Merger Agreement, an aggregate of
585,819,936 shares of Safe Aid Common Stock will be issued in exchange for all
of the issued and outstanding shares of INI. Safe Aid will also issue 49,109,544
shares of Safe Aid Common Stock to certain brokers, finders and consultants for
services rendered in the Merger transaction.
25
On August 2, 1997, INI acquired TMC, a wholesaler and retailer of
custom designed and assembled computer systems and related products, in a stock
for stock exchange, subject to the closing of the Merger by November 1, 1997. On
August 28, 1997, INI acquired GMG, a digital pre-press company, in a stock for
stock exchange, subject to the closing of the Merger by November 1, 1997.
Results of Operations
Since its inception, INI has been engaged in organizational activities
and has had no sales. Its operating expenses from January 1, 1997 through June
30, 1997 have been approximately $61,857. These operating expenses have
consisted primarily of the following: office expenses, salaries, travel, legal,
accounting, consulting fees, licensing and supplies.
Liquidity and Capital Resources
INI has financed its operations and acquisitions primarily with sales
of its common stock and capital contributions from its shareholders. Since its
inception, INI has raised approximately $520,000 through sales of its common
stock in private transactions. These transactions have included sales to third
parties for cash, as well as issuances of common stock to third parties in lieu
of compensation and fees. Net cash used in operating expenses since INI's
inception was approximately $61,857.
INI has completed five acquisitions since its formation, and intends to
continue to achieve growth through acquisitions. To pursue its acquisition
strategy, INI may incur short-term or long-term borrowings and/or issue
additional shares of its common stock or other securities. Except for the
Merger, INI has no current plans or commitments for any other acquisitions.
INI believes that its current cash reserves will allow INI to continue
to meets its expected operating expenses for at least six months following the
date of this Proxy Statement. INI believes that its future working capital
requirements will be satisfied from net income, future borrowings and/or sales
by INI of additional securities. Additionally, to achieve INI's acquisition
strategy, INI may be required to seek additional financing and/or issue
additional shares of common stock or other securities. If INI is unable to
obtain adequate financing, it may be required to curtail its acquisitions plans.
No additional funding for any of these purposes has been committed to date.
26
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of INI's Common Stock as of September 6, 1997, with respect
to (i) each of INI's directors and executive officer, (ii) all directors and
officers of INI as a group and (iii) each person known by INI to own
beneficially more than 5% of INI's Common Stock. An asterisk indicates
beneficial ownership of less than 1% of the outstanding INI Common Stock. Except
as otherwise indicated, each of the shareholders listed below has sole voting
and investment power over the shares beneficially owned and the address of each
beneficial owner is c/o INI, 249 Peruvian Avenue, Palm Beach, Florida 33480. As
of September 5, 1997, there were issued and outstanding 584,513,686 shares of
common stock of INI.
Name and address of Beneficial Amount and Nature of Percentage of Shares
Owner Beneficial Ownership
Barbara L. Tolley 1 259,595,536 44.4
Ruth Deutsch 2 141,595,535 24.2
Franklin L. Frank 3 68,000,000 11.6
Bradford L. Tolley 25,000,000 4.3
Jack W. Tolley 4 8,060,114 1.4
All officers and directors 36,0655,650 61.7
as a group
- - - --------
1 Excludes 8,060,114 shares held by Jack W. Tolley, Barbara Tolley's
husband, and of which Ms. Tolley disclaims beneficial interest.
2 Excludes 68,000,000 shares beneficially held by Franklin L. Frank,
Ms. Deutsch's husband, and of which Ms. Deutsch disclaims beneficial interest.
3 Includes 34,000,000 shares held by LVDB, Inc., a corporation
controlled by Mr. Frank. Excludes 141,595,535 shares held by Ms. Deutsch, Mr.
Frank's wife, and of which Mr. Frank disclaims beneficial interest.
4 Excludes 259,595,536 shares held by Barbara Tolley, Jack W. Tolley's
wife, and of which Mr. Tolley disclaims beneficial interest.
27
PROPOSALS TO THE SAFE AID STOCKHOLDERS
The Safe Aid Board of Directors unanimously approved each of the
following proposals effective as of August 29, 1997, for presentation to Safe
Aid's stockholders. In order for Safe Aid to consummate the Merger, its
stockholders need to approve and adopt each of the proposals presented at the
Special Meeting.
PROPOSAL 1. REVERSE STOCK SPLIT
The Board of Directors of Safe Aid has adopted, subject to stockholder
approval, an amendment to its Certificate of Incorporation to effect a reverse
stock split pursuant to which each ten shares of Safe Aid Common Stock ("Old
Common Stock") will become one share of Safe Aid's then outstanding common stock
("New Common Stock").
Purpose and Effects of the Reverse Stock Split
In the Merger Agreement, Safe Aid covenants that it will effect a
ten-for-one reverse stock split prior to the Closing of the Merger. As of the
Safe Aid Record Date, 705,477,720 shares of Safe Aid Common Stock were issued
and outstanding. The ten-for-one Reverse Stock Split would reduce the number of
issued and outstanding shares of Safe Aid Common Stock to 70,547,720 shares,
with no change in the par value of Safe Aid Common Stock.
If the Reverse Stock Split is approved by the stockholders, the Reverse
Stock Split will become effective at such time as Safe Aid files a
Certificate of Amendment with the Secretary of State of Delaware (the "Delaware
Secretary of State"). Safe Aid will not file a Certificate of Amendment with the
Delaware Secretary of State unless the Safe Aid stockholders approve each of the
Safe Aid Proposals described in this Proxy Statement. Exhibit B contains the
full text of the amendment that will be filed with the Delaware Secretary of
State if INI's stockholders approve the Reverse Stock Split, the Common Stock
Amendment and the Name Change Amendment.
Upon the filing of the Certificate of Amendment, all of the Old Common
Stock will be converted into New Common Stock as set forth in the Certificate of
Amendment. From and after the Effective Time, certificates representing shares
of Old Common Stock shall be deemed to represent only the right to receive
shares of New Common Stock to which an individual stockholder is entitled.
As soon as practicable after the Effective Date, Safe Aid will request
all stockholders to return their stock certificates representing issued shares
of Old Common Stock outstanding at the Effective Time ("Old Certificates") in
exchange for certificates representing the number of whole shares of New Common
Stock into which the shares of Common Stock have been converted ("New
Certificates") as a result of the Reverse Stock Split. No certificates
representing fractional share
28
interests in the New Common Stock will be issued, and no such fractional share
interest will entitle the holder thereof to vote, or to any rights of a
stockholder of Safe Aid. Any fractional share interest will result in the
adjustment of the number of shares upward or downward to the nearest whole
share. Each stockholder will receive a letter of transmittal from the Transfer
Agent containing instructions on how to exchange certificates. In order to
receive New Certificates, stockholders must surrender their Old Certificates
pursuant to the Transfer Agent's instructions, together with the properly
executed and completed letter of transmittal and such evidence of ownership of
such shares as Safe Aid may require.
STOCKHOLDERS SHOULD NOT SUBMIT THEIR OLD CERTIFICATES TO THE TRANSFER
AGENT UNTIL THEY RECEIVE THESE INSTRUCTIONS.
Beginning at the Effective Time, each Old Certificate will, until
surrendered and exchanged as described above, will be deemed for all corporate
purposes to evidence ownership of the whole number of shares of common stock
into which the shares evidenced by such Old Certificate have been converted.
The affirmative vote of the holders of a majority of Safe Aid's Common
Stock is required to approve and adopt the Reverse Stock Split.
The Safe Aid Board Recommends a Vote in Favor of the Reverse Stock
Split.
PROPOSAL 2. INCREASING AUTHORIZED COMMON STOCK
The Board of Directors of Safe Aid has adopted, subject to stockholder
approval, an amendment to its Certificate of Incorporation to increase the
number of authorized shares of common stock, par value $.00001 per share, from
950,000,000 to 999,999,000 shares. The Common Stock Amendment will not be filed
with the Delaware Secretary of State unless the Safe Aid stockholders approve
each of the Safe Aid Proposals described in this Proxy Statement.
The Common Stock Amendment provides for authorization of 49,999,000
additional shares of Safe Aid Common Stock. After the Reverse Stock Split and
the Merger are effectuated, 705,477,200 shares of Safe Aid Common Stock will be
issued and outstanding. In addition, at the time Safe Aid will have reserved
14,727,280 shares for issuance upon the exercise of certain outstanding
warrants.
If the Common Stock Amendment is adopted and the Certificate of
Amendment is filed with the Delaware Secretary of State, the first paragraph of
Article 4 of Safe Aid's Certificate of Incorporation shall be as follows:
"The total number of shares of stock which the Corporation
shall have the authority to issue is Nine Hundred Ninety Nine
Million Nine Hundred Ninety Nine Thousand (999,999,000)
shares, par value
29
$.00001 per share. All such shares are of one class and are
shares of Common Stock."
The Board of Directors of Safe Aid believes that it is desirable to
have additional authorized shares of common stock available for possible future
financings, acquisition transactions and other general corporate purposes.
Having such additional authorized shares of common stock available for issuance
in the future would give Safe Aid greater flexibility and may allow such shares
to be issued without the expense and delay of a special stockholders meeting.
Although such issuance of additional shares in respect of future acquisitions
and financings would dilute existing stockholders, management believes that such
transactions would increase the value of Safe Aid to its stockholders.
The affirmative vote of the holders of a majority of Safe Aid's Common
Stock is required to approve and adopt the Common Stock Amendment.
The Safe Aid Board recommends a vote in favor of the Common Stock
Amendment.
PROPOSAL 3. NAME CHANGE
The Board of Directors of Safe Aid has adopted, subject to stockholder
approval, an amendment to its Certificate of Incorporation to change its name to
"Safe Technologies International, Inc." The Name Change Amendment will not be
filed with the Delaware Secretary of State unless the stockholders approve each
of the Safe Aid Proposals.
One of the conditions of the Merger Agreement is that Safe Aid change
its name to "Safe Technologies International, Inc.," which management believes
is more descriptive of Safe Aid's new combined business activities.
The following is the text of the proposed amendment to Article 1 of
Safe Aid's Certificate of Incorporation:
"The name of this corporation shall be Safe Technologies International,
Inc."
The affirmative vote of the holders of a majority of Safe Aid's Common
Stock is required to approve and adopt the Name Change Amendment.
The Safe Aid Board recommends a vote in favor of the Name Change
Amendment.
30
PROPOSAL 4. Merger Proposal
The Board of Directors of Safe Aid has unanimously approved and adopted
the Merger Agreement and the Merger and has determined that the Merger is in the
best interests of, and is on terms that are fair to, Safe Aid and its
stockholders and unanimously recommends that Safe Aid stockholders vote in favor
of the approval and adoption of the Merger Agreement and the Merger. The
determination of the Safe Aid Board was based upon consideration of a number of
factors described in the "Proposed Merger - Reasons for the Merger;
Recommendations of the Safe Aid Board".
The affirmative vote of the holders of a majority of Safe Aid's Common
Stock is required to approve and adopt the Merger Proposal.
The Safe Aid Board recommends a vote in favor of the Merger Proposal.
DESCRIPTION OF SAFE AID'S CAPITAL STOCK
The following description of Safe Aid's securities does not purport to
be complete and is subject in all respects to applicable Delaware law and to the
provisions of Safe Aid's Certificate of Incorporation.
General
The Certificate of Incorporation of Safe Aid authorizes 950,000,000
shares of Common Stock, $.00001 par value per share.
Common Stock
Safe Aid currently has outstanding 705,477,200 shares of common stock.
Holders of Safe Aid's Common Stock are entitled to cast one vote for each share
held of record on all matters submitted to a vote of holders of Safe Aid's
Common Stock, including the election of directors. There is no right to cumulate
votes for the election of directors. Stockholders holding a majority of the
voting power of the capital stock issued and outstanding and entitled to vote,
represented in person or by proxy, are necessary to constitute a quorum at any
meeting of Safe Aid's stockholders, and the vote by the holders of a majority of
such outstanding shares is required to effect certain fundamental corporate
changes such as liquidation, merger or amendment of Safe Aid's Certificate of
Incorporation.
31
Holders of Safe Aid's Common Stock are entitled to receive dividends
pro rata based on the number of shares held, when, as and if declared by Safe
Aid's Board of Directors, from funds legally available therefore. In the event
of liquidation, dissolution or winding up of the affairs of Safe Aid, all assets
and funds of Safe Aid remaining after the payment of all debts and other
liabilities shall be distributed, pro rata, among the holders of Safe Aid Common
Stock. Holders of Safe Aid Common Stock are not entitled to preemptive or
subscription or conversion rights and there are no redemption or sinking fund
provisions applicable to Safe Aid Common Stock. All outstanding shares of Safe
Aid Common Stock are, and the shares of Safe Aid Common Stock offered hereby
will be when issued, fully paid and non-assessable.
Redeemable Common Stock Purchase Warrants.
In June of 1988, Safe Aid completed a sale of 150,000 units to the
public at a price of $10 per unit. Each unit consisted of 1,000 shares of common
stock, $.00001 par value, and 500 redeemable common stock warrants designated
Redeemable Warrant A. Each Redeemable Warrant A would upon exercise, entitled
the holder to purchase one share of common stock for $.02 per share and to
receive one Redeemable Class B Common Stock Purchase Warrant. Each Redeemable
Class B Common Stock Purchase Warrant would, upon exercise, entitled the holder
to purchase one share of common stock for $.05 per share. The exercise periods
of both Class A and Class B Warrants have been extended by the Board of
Directors through January 9, 1998. At May 31, 1997, 147,272,800 shares of common
stock were reserved in connection with such warrants, which number of shares
will be reduced to 14,727,280 as a result of the proposed reverse stock split.
Business Combination Provision
Safe Aid is subject to a Delaware statute regulating "business
combinations," defined to include a broad range of transactions between
Delaware corporations and "interested stockholders," defined as persons who have
acquired at least 15% of a corporation's stock. Under the law, a corporation may
not engage in any business combination with any interested stockholder for a
period of three years from the date such person became an interested stockholder
unless certain conditions are satisfied. Safe Aid has not sought to "elect out"
of the statute and, therefore the restrictions imposed by such statute apply to
Safe Aid.
APPRAISAL RIGHTS
Safe Aid
Holders of record of Safe Aid Common Stock who do not vote in favor of
the Merger Proposal and who otherwise comply with the applicable statutory
procedures summarized herein will be entitled to appraisal rights under Section
262 ("Section 262") of the Delaware General Corporation Law ("DGCL"). A person
having a beneficial interest in shares of Safe Aid Common Stock held of record
in the name of another person, such as a broker or nominee, must act promptly to
cause the record holder to follow the steps summarized below properly and in a
timely manner to perfect appraisal rights.
32
The following discussion is not a complete statement of the law
pertaining to appraisal rights under the DGCL and is qualified in its entirety
by the full text of Section 262 which is reprinted in its entirety as Exhibit C.
All references in Section 262 and in this summary to a "stockholder" or "holder"
are to the record holder of the shares of Safe Aid Common Stock as to which
appraisal rights are asserted.
Under the DGCL, holders of shares of Safe Aid Common Stock ("Appraisal
Shares") who follow the procedures set forth in Section 262 will be entitled to
have their Appraisal Shares appraised by the Delaware Chancery Court and to
receive payment in cash of the "fair value" of such Appraisal Shares,
exclusive of any element of value arising from the accomplishment or expectation
of the Merger, together with a fair rate of interest, if any, as determined by
such court.
Under Section 262, where a proposed merger is to be submitted for
approval at a meeting of stockholders, the corporation, not less than 20 days
prior to the meeting, must notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal rights
are available, that appraisal rights are so available, and must include in such
notice a copy of Section 262.
This Proxy Statement constitutes such notice to the holders of
Appraisal Shares and the applicable statutory provisions of the DGCL are
attached to this Proxy Statement as Exhibit C. Any stockholder who wishes to
exercise such appraisal rights or who wishes to preserve his right to do so
should review the following discussion and Exhibit C carefully, because failure
to timely and properly comply with the procedures specified will result in the
loss of appraisal rights under the DGCL.
A holder of Appraisal Shares wishing to exercise such holders'
appraisal rights (a) must not vote in favor of the Merger Proposal and (b) must
deliver to Safe Aid prior to the vote on the Merger at the Safe Aid meeting to
be held on September __, 1997, a written demand for appraisal of such holder's
Appraisal Shares.
All written demands for appraisal should be sent or delivered to
English, McCaughan & O'Bryan, P.A., 100 N.E. Third Avenue, Suite 1100, Fort
Lauderdale, Florida 33301, Attention: Gerald W. Gritter, Esq.
Within 10 days after the consummation of the Merger, Safe Aid will
notify each stockholder who has properly asserted appraisal rights under Section
262 and has not voted in favor of the Merger Proposal of the date the Merger
became effective.
Within 120 days after the consummation of the Merger, but not
thereafter, Safe Aid or any stockholder who has complied with the statutory
requirements summarized above may file a petition in the Delaware Chancery Court
demanding a determination of the fair value of the Safe Aid Common Stock. Safe
Aid is under no obligation to and has no present intention to file a petition
with respect to the appraisal of the fair value of the Appraisal Shares.
Accordingly, it is the
33
obligation of the stockholders to initiate all necessary action to perfect their
appraisal rights within the time prescribed in Section 262.
Within 120 days after the consummation of the Merger, any stockholder
who has complied with the requirements for exercise of appraisal rights will be
entitled, upon written request, to receive from Safe Aid a statement setting
forth the aggregate number of Appraisal Shares not voted in favor of adoption of
the Merger Proposal and with respect to which demands for appraisal have been
received and the aggregate number of holders of such Appraisal Shares. Such
statements must be mailed with ten days after a written request therefor has
been received by Safe Aid.
If a petition for an appraisal is timely filed, after a hearing on such
petition, the Delaware Chancery Court will determine the stockholders entitled
to appraisal rights and will appraise the "fair value" of their Appraisal
Shares, exclusive of any element of value arising from the accomplishment or
expectation of the Merger together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. Stockholders considering
seeking appraisal should be aware that the fair value of their Appraisal Shares
as determined under Section 262 could be more than, the same as or less than the
value of the consideration they would receive pursuant to the Merger Agreement
if they did not seek appraisal of their Appraisal Shares and that investment
banking opinions as to fairness from a financial point of view are not
necessarily opinions as to fair value under Section 262. The Delaware Supreme
Court has stated that "proof of value by any techniques or methods which are
generally considered acceptable in the financial community and otherwise
admissible in court" should be considered in the appraisal proceedings.
The Delaware Chancery Court will determine the amount of interest, if
any, to be paid upon the amounts to be received by persons whose Appraisal
Shares have been appraised. The costs of the action may be determined by the
Delaware Chancery Court and taxed upon the parties as the Delaware Chancery
Court deems equitable. The Delaware Chancery Court may also order that all or a
portion of the expenses incurred by any stockholder in connection with an
appraisal, including, without limitation, reasonable attorneys fees and the fees
and expenses of experts utilized in the appraisal proceeding, be charged pro
rata against the value of all of the Appraisal Shares entitled to appraisal.
Any holder of Appraisal Shares who has duly demanded an appraisal in
compliance with Section 262 will not, after the consummation of the Merger, be
entitled to vote the Appraisal Shares subject to such demand for any purpose or
be entitled to the payment of dividends or other distributions on those
Appraisal Shares (except dividends or other distributions payable to holders of
record of Appraisal Shares as of a record date prior to the consummation of the
Merger).
If any stockholder who properly demands appraisal of his Appraisal
Shares under Section 262 fails to perfect, or effectively withdraws or loses,
his right to appraisal, as provided in the DGCL the Appraisal Shares of such
stockholder will be converted into the right to receive the consideration
receivable with respect to such Appraisal Shares in accordance with the Merger
Agreement. A stockholder will fail to perfect, or effectively lose or withdraw,
his right to appraisal if, among other
34
things, no petition for appraisal is filed within 120 days after the
consummation of the Merger, or if the stockholder delivers to Safe Aid a written
withdrawal of his demand for appraisal. Any such attempt to withdraw an
appraisal demand more than 60 days after the consummation of the Merger will
require the written approval of Safe Aid.
The foregoing discussion only summarizes Section 262. Safe Aid
stockholders are urged to review such section in its entirety which is included
as Exhibit C to this Proxy Statement. Any holder of Safe Aid Common Stock who
intends to dissent from the Merger should review the text of Section 262
carefully and should also consult with his or her attorney. Any Safe Aid
stockholder who fails to strictly follow the procedures set forth in Section 262
will forfeit such dissenters' rights.
OTHER MATTERS
As of the date of this Proxy Statement, the Safe Aid Board knows of no
matters that will be presented for consideration at the Special Meeting other
than as described in this Proxy Statement. If any other matters shall properly
come before either such meeting or any adjournments or postponements thereof and
be voted upon, the enclosed proxies will be deemed to confer discretionary
authority on the individuals named as proxies therein to vote the shares
represented by such proxies as to any such matters. The persons named as proxies
intend to vote or not to vote in accordance with the recommendation of the
management of Safe Aid.
LEGAL MATTERS
The validity of the Safe Aid Common Stock to be issued in the Merger
will be passed upon by Lazer, Aptheker, Feldman, Rosella & Yedid,
LLP, Melville, New York.
EXPERTS
The audited financial statements of Safe Aid at November 31, 1996 and
1995, and for the years then ended appearing in this Proxy Statement have been
audited by Scott & Guilfoyle, independent auditor, as set forth in their report
thereon and incorporated herein by reference. Such audited financial statements
have been incorporated herein by reference in reliance upon such report given
upon the authority of such firms as experts in accounting and auditing.
INDEPENDENT ACCOUNTANTS
Representatives of Scott & Guilfoyle are expected to be present at the
Special Meeting. These representatives will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
35
INCORPORATION BY REFERENCE
Safe Aid incorporates by reference herein the following documents filed
pursuant to the Exchange Act under Safe Aid's Exchange Act File No. 0-17746:
1. Safe Aid's Annual Report on Form 10-KSB for the year ended
November 31, 1996;
2. Safe Aid's Quarterly Reports on Form 10-QSB for the quarters ended
February 28, and May 31, 1997;
3. Safe Aid's Current Reports on Form 8-K filed on February 25, 1997,
March 4, 1997 and June 17, 1997, respectively;
4. The description of Safe Aid's capital stock which is contained in
Safe Aid's registration statement on Form 8-A dated May 9, 1989.
All documents and reports filed by Safe Aid pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this Proxy Statement
and prior to the date of the Special Meeting shall be deemed to be incorporated
by reference in this Proxy Statement and to be a part hereof from the dates of
filing of such documents or reports. Any statement contained in a document
incorporated or deemed to incorporated by reference herein shall be deemed to be
modified or superseded for the purpose of this Proxy Statement to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement.
This Proxy Statement incorporates documents by reference which are not
presented herein or delivered herewith. Such documents (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference)
are available, without charge, to any person, including any beneficial owner, to
whom this Proxy Statement is delivered, on written or oral request to Safe Aid
Products Incorporated, c/o Lazer, Aptheker, Feldman, Rosella & Yedid, LLP, 225
Old Country Road, Melville, New York 11747-2712 (telephone number (516)
364-3887) Attention: Barney Melsky, Secretary. In order to ensure timely
delivery of the documents prior to the Special Meeting, request should be made
by ______________, 1997.
36
SAFE AID PRODUCTS INCORPORATED
THIS STOCKHOLDER PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS SEPTEMBER __, 1997
The undersigned hereby appoints Stanley Snyder, Barney Melsky, or either of
them, as proxies, each with the power to appoint his substitute, to represent,
and vote all share of Common Stock of and on behalf of the undersigned as
designated on the reverse side at the Special Meeting of Stockholders of Safe
Aid Products Incorporated, to be held September __, 1997, and any adjournments
thereof, with all powers the undersigned would possess if personally present and
voting at such meeting. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the Special Meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2, 3 AND 4
1. PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO EFFECT A TEN-FOR-ONE
REVERSE STOCK SPLIT
FOR _____ AGAINST ____ ABSTAIN ____
2. PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED COMMON STOCK
FOR _____ AGAINST ____ ABSTAIN ____
3. PROPOSAL TO CHANGE SAFE AID'S NAME TO SAFE TECHNOLOGIES INTERNATIONAL, INC.
FOR _____ AGAINST ____ ABSTAIN ____
4. PROPOSAL TO APPROVE AND ADOPT THE MERGER AGREEMENT WITH INI AND THE
TRANSACTIONS CONTEMPLATED THEREBY
FOR _____ AGAINST ____ ABSTAIN ____
This Proxy, when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is indicated, the Proxy will be
voted FOR Proposals 1, 2, 3 & 4.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Date:____________________________ , 1997.
______________________________________________________________
Signature
______________________________________________________________
Signature if held jointly
PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S) HEREON. If shares are held in the name
of two or more persons, all must sign. When signing as Attorney, Executor,
Administrator, Personal Representative, Trustee, or Guardian, give full title as
such. If signer is a corporation, sign full corporate name by duly authorized
officer.