THE ENCHANTED VILLAGE, INC.
(A Delaware Corporation)
INFORMATION STATEMENT PURSUANT TO SECTION 14(f)
OF THE SECURITIES EXCHANGE ACT OF 1934 AND
RULE 14f-1 THEREUNDER
NOVEMBER 24, 2003
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT. NO PROXIES ARE BEING SOLICITED
AND YOU ARE REQUESTED NOT TO SEND THE COMPANY A PROXY.
This Information Statement is being mailed to all persons who were
record holders of the common stock of The Enchanted Village, Inc. at the close
of business on November 21, 2003. The anticipated mailing date is November 26,
2003. This Information Statement is being furnished to our stockholders in
connection with the appointment of Kevin R. Keating to our board of directors.
Mr. Keating is being appointed a director of our company in connection with a
series of transactions that have resulted in a change in control of our company.
On December 8, 2003, Sally A. Fonner, who is currently the sole member
of our board, will appoint Mr. Keating to serve as a board member until the next
annual meeting of our stockholders. Ms. Fonner will then resign for medical
reasons and Mr. Keating will be the sole continuing director of our company. Mr.
Keating is the designee of the Keating Reverse Merger Fund LLC, a Colorado
limited liability company that has recently purchased a controlling interest in
our company.
BACKGROUND INFORMATION
Our company was incorporated in Delaware on March 24, 1982. In July
1983, we completed an initial public offering of our common stock and in May
1984 we filed a Form 8-A for the purpose of registering our securities under the
Securities Exchange Act of 1934. In April 1986, we completed a second public
offering of Convertible Series A $25 Preferred Stock and Class A Common Stock.
Our business was conducted through of a chain of 15 retail stores that
sold educational toys and related goods and services. We filed a voluntary
petition under Chapter 11 of the Bankruptcy Act on April 24, 1987 in the U.S.
Bankruptcy Court for the Eastern District of New York, (case no. 887-70613). On
May 11, 1988, we voluntarily converted our Chapter 11 case into a case in
Chapter 7. As a result of this conversion, all of our properties were
transferred to the trustee on May 11, 1988 and we terminated all business
operations. Since, we did not file our franchise tax returns during our
bankruptcy, our Certificate of Incorporation was revoked by the State of
Delaware on March 1, 1989. Our Chapter 7 case was closed by an order of the
Court on April 14, 1992 and the trustee was discharged.
On April 18, 2002, Karen H. Mounts and Stirling Corporate Services, LLC
("Stirling"), commenced a civil action in the Delaware Court of Chancery
demanding an annual meeting of the stockholders. On May 20, 2002, the Court of
Chancery, acting in accordance with ss.211 of the General Corporation Law of
Delaware, ordered an annual meeting of our company's stockholders. The meeting
was duly noticed in accordance with the order of the Court of Chancery and held
in Wilmington Delaware on June 18, 2002.
The Court order provided that notwithstanding the quorum requirements
of our bylaws, the stockholders who attended the meeting in person would
constitute a quorum for the election of directors. Two stockholders who
collectively owned a total of 1,050 shares of our common stock attended and
participated in the meeting. The only action taken at the meeting was the
election of three directors who assumed office immediately after the meeting.
The following table identifies the individuals who were elected directors at the
court ordered meeting:
Name Age Residence
Sally A. Fonner 53 Dunedin, Florida
Michael Manion 52 Apopka, Florida
Robert R. Williams 72 Bowie, Maryland
A meeting of the newly elected board was called and held immediately
after the stockholders meeting. At this meeting, the board voted to revive and
restore our Certificate of Incorporation in accordance with Delaware law; and to
amend our by laws to permit a single member board. Immediately thereafter,
Messrs. Manion and Williams resigned from the board and Ms. Fonner, acting as
our sole remaining director, took the following additional actions:
o She determined that it was in the best interest of our company and
our stockholders to sell 9,600,000 shares of common stock and
1,400,000 shares of Class A Common Stock to Stirling for a total
consideration of $30,000, consisting of $6,724 in cash and a
release of Stirling's claims for $23,276 in out-of-pocket costs
associated with obtaining the Court order and holding the meeting;
o She determined that it was in the best interest of our company and
our stockholders to file certain reports and other documents under
the Exchange Act; and
o She determined that it was in the best interest of our company and
our stockholders to develop a plan to restructure our company as a
public shell that would subsequently seek to engage in a merger or
other business combination with a private company that wants to
become publicly held.
We filed a Certificate of Revival and Restoration of our Certificate of
Incorporation with on June 27, 2002. As a result, our company is now duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
On July 3, 2002, we filed an omnibus report on Form 10-K as of May 11,
1988 and for the fiscal years ended January 31, 1989 through 2002. Since July of
2002, we have filed all quarterly and annual reports required by Commission
rules on a timely basis. While these filings cannot wholly expunge our prior
delinquencies, we are "current" with respect to our SEC reporting obligations at
the date of this Information Statement.
On January 16, 2003, we issued 170,375 shares of Preferred Stock to
Stirling and 30,000 shares of Preferred Stock to Ms. Fonner for a total
consideration of $200,375, consisting of:
o 4,160,000 shares of common stock owned by Stirling $101,340
o 1,400,000 shares of Class A Common Stock owned by Stirling 34,105
o $4,930 in operating costs and expenses paid by Stirling
during the 6-month period ended December 31, 2002 4,930
o $30,000 in compensation for services rendered by Stirling
during the 6-month period ended December 31, 2002 30,000
o $30,000 in compensation for services rendered by Ms. Fonner
during the 6-month period ended December 31, 2002 30,000
When these transactions were complete, Stirling and Ms. Fonner
collectively owned 5,440,050 shares, or approximately 51%, of our outstanding
common stock and 200,375 shares, or approximately 68%, of our outstanding
Preferred Stock.
On February 10, 2003 we mailed an Information Statement Pursuant to
Section 14(c) of the Securities Exchange Act of 1934 to all of our stockholders.
Our Schedule 14C Information Statement provided detailed information on a
planned restructuring of our affairs that was approved by written consent on
March 3, 2003. As a result of the restructuring:
o Our authorized capital stock was increased to 50,000,000 shares of
common stock and 5,000,000 shares of preferred stock;
o Our outstanding Class A Common Stock was reclassified as common stock;
o Our outstanding Preferred Stock was reclassified as common stock;
o We implemented a reverse split in the ratio of one (1) new share
for each 4,000 shares of common stock outstanding after the
reclassification of the Class A Common Stock and Preferred Stock;
and
o We implemented a 100 for 1 forward split of the common stock
outstanding immediately after the implementation of the reverse
split.
Our Certificate of Incorporation was amended to implement the
reclassification and reverse split described in our Schedule 14C Information
Statement on March 10, 2003. We did not, however, promptly exchange stock
certificates to reflect the reclassification and reverse split. While our common
stock is quoted on the Over-the-Counter Bulletin Board (Symbol: ENCV), the
market price is nominal and trading is sporadic. Accordingly, we believe the
delay did not prejudice any purchasers of our common stock. On November 21,
2003, we notified the OTCBB that we intend to finalize the reclassification and
reverse split as of the close of business on December 5, 2003. Thereafter, our
shares will trade on a post-split basis.
After giving effect to the reclassification and reverse split, we had
772,500 shares of common stock and no other securities outstanding on March 10,
2003. We subsequently issued 70,000 shares of common stock to the firm of
Petersen & Fefer as partial payment for services rendered in connection with the
preparation of our delinquent SEC filings and the development of our
restructuring plan. All record holders of our common stock own at least 100
shares.
CHANGE IN CONTROL
In the summer of 2003, Ms. Fonner was advised that she had an illness
that would require surgery and a lengthy recovery period. She subsequently
learned that a follow-up operation would be required. Ms. Fonner's illness has
negatively impacted our business for several months and additional surgery is
expected to negatively impact her ability to devote adequate time to our affairs
in the future. Accordingly, Ms. Fonner concluded that the most reasonable course
of action would be to divest her interest in our company and turn our affairs
over to an organization that has the experience, staff and other resources
required for the implementation of our business plan.
On November 21, 2003, we agreed to sell 500,000 shares of common stock
to the Keating Reverse Merger Fund LLC at a price of $.10 per share.
Concurrently, Ms. Fonner, Stirling and Petersen & Fefer agreed to exchange
$309,100 in accrued liabilities and deferred compensation that our company owed
them for 3,091,000 newly issued shares of our common stock. As a condition of
this exchange Ms. Fonner and Petersen & Fefer waived their rights to receive
102,500 shares of common stock as compensation for services previously rendered.
Immediately thereafter Ms. Fonner, Stirling and Petersen & Fefer agreed to sell
3,502,700 shares of our common stock to the Keating Reverse Merger Fund LLC for
$225,000. Under the agreements with the Keating Reverse Merger Fund LLC, Ms.
Fonner also agreed to:
o File a Current Report on Form 8-K and this Information Statement
pursuant to Rule 14f-1 with the Securities and Exchange
Commission;
o Promptly resign as our president and appoint Kevin R. Keating
as her successor; and
o Upon compliance with Rule 14f-1, appoint Kevin R. Keating as a
member of our board and then resign her position as a director.
Ms. Fonner's resignation and Mr. Keating's appointment as president
became effective on November 24, 2003. Concurrently, the principal executive
office of our company was moved to 645 Beachland Boulevard, Vero Beach, FL
32963. On December 8, 2003, Ms. Fonner will appoint Mr. Keating to serve as a
board member until the next annual meeting of our stockholders. Ms. Fonner will
then promptly resign for medical reasons and Mr. Keating will become the sole
director of our company.
At the date of this Information Statement, the Keating Reverse Merger
Fund LLC owns 4,002,700 shares, or 90.3% of our common stock and our other
stockholders own 430,700 shares, or 9.7% of our common stock. Ms. Fonner,
Stirling and Petersen & Fefer have no continuing economic interest in our
company as either stockholders or creditors.
No action is required by our stockholders in connection with Mr.
Keating's appointment as a member of our board. However, Section 14(f) of the
Exchange Act and Rule 14f-1 require us to mail the information set forth in this
Information Statement to our stockholders at least 10 days before the date a
change in a majority of the company's directors occurs.
VOTING SECURITIES
The following table contains information concerning the beneficial
ownership of our common stock on the date of this Information Statement, by (i)
each person who is known to be the beneficial owner of more than 5 percent of
our common stock; (ii) all directors and executive officers of our company; and
(iii) directors and executive officers of our company as a group. For purposes
of the table, beneficial ownership includes the contractual right to acquire
shares.
Amount of
Name and Address Beneficial Percent
of Beneficial Owner Ownership of Class
===============================================================================
Keating Reverse Merger Fund LLC (1)(2) 4,002,700 90.3%
Sally A. Fonner (2)(3) 1,330,800 30.0%
Stirling Corporate Services LLC (2)(3) 901,900 20.3%
Petersen & Fefer (2)(4) 1,270,000 28.6%
Executive Officers and Directors 4,002,700 90.3%
as a Group (1 persons)
(1) 5251 DTC Parkway, Suite 1090, Greenwood Village CO 80110-2739. (2) Includes
500,000 shares that the Keating Reverse Merger Fund LLC
purchased from our company; 1,330,800 shares that the Fund LLC purchased
from Ms. Fonner; 901,900 shares that the Fund LLC purchased from
Stirling; and 1,270,000 shares that the Fund LLC purchased from Petersen
& Fefer.
(3) 1407 N. Fort Harrison, Clearwater, Florida 33755. (4) Chateau de
Barbereche, Switzerland 1783 Barbereche
INFORMATION REGARDING
DIRECTORS AND EXECUTIVE OFFICERS
Mr. Keating was appointed president of our company on November 24,
2003. The anticipated mailing date of this Information Statement is November 26,
2003. On December 8, 2003, Ms. Fonner will appoint Kevin R. Keating to serve as
a member of our board until the next annual meeting of the stockholders. Ms.
Fonner will then promptly resign for medical reasons and Mr. Keating will be the
sole remaining director of our company.
The following table contains information regarding the directors and
executive officers of our company.
Name Age Positions
Kevin R. Keating 63 President and Director Designee
Kevin R. Keating was appointed president on November 24, 2003 and will be
appointed to the board on December 8, 2003. Mr. Keating is an investment
executive and for the past nine years has been the Branch Manager of the Vero
Beach, Florida, office of Brookstreet Securities Corporation ("Brookstreet").
Brookstreet is a full-service, national network of independent investment
professionals. Mr. Keating services the investment needs of private clients with
special emphasis on equities. For more than 35 years, he has been engaged in
various aspects of the investment brokerage business. Mr. Keating began his Wall
Street career with the First Boston Corporation in New York in 1965. From 1967
through 1974, he was employed by several institutional research boutiques where
he functioned as Vice President Institutional Equity Sales. From 1974 until
1982, Mr. Keating was the President and Chief Executive Officer of Douglas
Stewart, Inc., a New York Stock Exchange member firm. Since 1982, he has been
associated with a variety of firms as a registered representative servicing the
needs of individual investors. Mr. Keating is also a director of 99 Cent Stuff,
Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The following persons, who were directors, officers, or beneficial
owners of more than 10% of our common stock, have failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act:
o Ms. Fonner did not timely file a Form 4 when she purchased 200,375
shares of our preferred stock and surrendered 4,160,000 shares of
common stock and 1,400,000 shares of Class A Common Stock as
partial payment of the purchase price.
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
The company has no standing audit, nominating or compensation
committees of the Board, or committees performing similar functions. During the
fiscal year ended January 31, 2003, the Board held one meeting that was attended
by all directors. All other Board actions were approved by the written consent
of our company's sole director.
EXECUTIVE COMPENSATION
Ms. Fonner was the sole officer of the company during the year ended
January 31, 2003 and the subsequent interim period ended October 31, 2003.
For services rendered during the six months ended January 31, 2003, Ms.
Fonner earned officer and director fees of $70,000 and Stirling earned
administrative fees of $35,000. All of these fees were accrued as liabilities of
our company and none of these fees were paid in cash.
For services rendered during the nine months ended October 31, 2003,
Ms. Fonner earned officer and director fees of $90,000 and Stirling earned
administrative fees of $45,000. All of these fees were accrued as liabilities of
our company and none of these fees were paid in cash.
In connection with their purchase of 200,375 shares of preferred stock
in January 2003, Ms. Fonner and Stirling released their claims for a total of
$60,000 in accrued compensation as partial payment of the purchase price of the
preferred shares.
In connection with Ms. Fonner's resignation and the divestment of her
interest in our company, the compensation agreements described in our Schedule
14C Information Statement were terminated effective October 31, 2003.
Concurrently, our agreement with the law firm of Petersen & Fefer was terminated
effective October 31, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the company has duly caused this statement to be signed on its behalf by the
undersigned; thereunto duly authorized this 24th day of November 2103.
The Enchanted Village, Inc.
By: /s/ Sally A. Fonner
Sally A. Fonner, President and Sole Director