SCHEDULE 14C INFORMATION STATEMENT
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
CENTREX, INC.
-------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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 No.:
(3) Filing Party:
(4) Date Filed:
CENTREX, INC.
9202 South Toledo Avenue
Tulsa, OK 74137
INFORMATION STATEMENT
This Information Statement has been filed with the Securities and
Exchange Commission and is being mailed or otherwise furnished to the registered
stockholders of Centrex, Inc. (the "Company") in connection with the prior
approval by the board of directors of the Company, and receipt by the board of
approval by written consent of the holders of a majority of the Company's
outstanding shares of Common Stock, of a resolution to:
(1) Authorize the Company's board of directors to amend the Company's
amended certificate of incorporation to effect a twenty-for-one reverse stock
split of the issued and outstanding shares of the Company's common stock, such
number consisting of only whole shares, and authorizing the Company's board of
directors to file one such amendment.
The Company has obtained all necessary corporate approvals in
connection with the foregoing actions and your consent is not required and is
not being solicited in connection with the approval of the foregoing actions.
Section 18-1073 of the Oklahoma General Corporation Act and the By-laws of the
Company provide that any action required or permitted to be taken at a meeting
of the stockholders may be taken without a meeting if stockholders holding at
least a majority of the voting power sign a written consent approving the
action.
You are being provided with this Information Statement pursuant to Section 14(c)
of the Securities Exchange Act of 1934, as amended, and Regulation 14C and
Schedule 14C thereunder. The actions taken will not become effective until at
least 20 days after the mailing of this Information Statement. The Company
anticipates mailing this notice and information statement on or about November
22, 2004.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
By Order of the Board of Directors:
/s/ Thomas R. Coughlin, Jr.
------------------------------------
Thomas R. Coughlin, Jr.
Chairman and Sole Member of the Board
We are sending this Information Statement to the Company's stockholders of
record who owned common stock of the Company as of November 18, 2004 (the
"Record Date"). As of the Record Date, the Company had 170,139,794 shares of
common stock issued and outstanding, and each share of Common Stock is entitled
to one vote.
The actions will not become effective until (i) 21 days from the date
this Information Statement is first mailed to stockholders, or, (ii) such later
date as approved by the board of directors, in its sole discretion.
This Information Statement is dated November 11, 2004 and is first
being mailed to stockholders on or about November 22, 2004.
All expenses incurred in connection with the preparation and mailing of
this Information Statement will be borne by the Company. This Information
Statement is prepared and distributed by the Company.
Interest of Certain Persons in Matters to Be Acted Upon
No director, executive officer, nominee for election as a director,
associate of any director, executive officer or nominee or any other person has
any substantial interest, direct or indirect, by security holdings or otherwise,
resulting from the actions set forth herein, which is not shared by all other
stockholders pro-rata, and in accordance with their respective interests.
Certain Questions and Answers
What am I being asked to Approve?
You are not being asked to approve anything. This Information Statement is
being provided to you solely for your information. Stockholders holding a
majority of the outstanding voting common stock of the Company have already
agreed to:
1. Authorize the Company's board of directors to amend the Company's
amended certificate of incorporation to effect a twenty-for-one reverse stock
split of the issued and outstanding shares of the Company's common stock, such
number consisting of only whole shares, and authorizing the Company's board of
directors to file one such amendment.
Do I have appraisal rights?
No. you are not entitled to appraisal rights under Oklahoma Law.
Who can help answer my questions?
You can contact our corporate headquarters at (918) 494-2880 with any questions
about the action described in this information statement.
Householding of Annual Disclosure Documents
In December 2000, the Securities and Exchange Commission adopted a rule
concerning the delivery of annual disclosure documents. The rule allows us or
your broker to send a single set of our annual report and information statement
to any household at which two or more of our shareholders reside, if we or your
broker believe that the shareholders are members of the same family. This
practice, referred to as "householding," benefits both you and the Company. It
reduces the volume of duplicate information received at your household and helps
to reduce our expenses. The rule applies to our annual reports, proxy statements
and information statements. Once you receive notice from your broker or from us
that communications to your address will be "householded," the practice will
continue until you are otherwise notified or until you revoke your consent to
the practice.
If your household receives a single set of disclosure documents and you
do not wish to participate in "householding" and would like to receive your own
set of our annual disclosure documents in future years, follow the instructions
described below. Or, if you share an address with another shareholder of the
Company and together both of you would like to receive only a single set of our
annual disclosure documents please contact the corporate headquarters at (918)
494-2880, or write to us at 9202 South Toledo Avenue, Tulsa, Oklahoma 74137.
Reverse Stock Split
General
The Board of Directors and holders of a majority of the outstanding
Common Stock of the Company authorized and approved by written consent a reverse
stock split of twenty for one of the Company's outstanding Common Stock (the "
Reverse Stock Split") whereby each holder of our Common Stock will receive one
shares of our Common Stock for every twenty shares of our Common Stock held on
the effective date of the Reverse Stock Split. It is currently anticipated that
the effective date of the Reverse Stock Split will occur no sooner than twenty
(20) days after the date this Information Statement is first mailed to our
current stockholders.
Our board of directors has unanimously adopted a resolution approving,
declaring advisable and recommending to the stockholders for their approval, a
proposal that Article IV of the Company's amended certificate of incorporation
be amended to effect a twenty-for-one reverse stock split of the issued and
outstanding shares of the Company's common stock, such number consisting of only
whole shares.
The form of the amendment to effect the reverse stock split, as more
fully described herein, will effect the reverse stock split but will not change
the number of authorized shares of common stock or preferred stock, or the par
value of our common stock or preferred stock. The amendment to our amended
certificate of incorporation is attached to this information statement as
Exhibit A.
Purpose
Our board of directors approved the proposal authorizing the reverse
stock split as the Board believes this action will attract additional investment
in the Company which will in turn allow the Company to focus on opportunities to
accelerate its growth.
On November 8, 2004, our common stock closed at $.011 per share. In approving
the proposal authorizing the reverse stock split, our board of directors
considered that our common stock may not appeal to brokerage firms that are
reluctant to recommend lower priced securities to their clients. Investors may
also be dissuaded from purchasing lower priced stocks because the brokerage
commissions, as a percentage of the total transaction, tend to be higher for
such stocks. Moreover, the analysts at many brokerage firms do not monitor the
trading activity or otherwise provide coverage of lower priced stocks. Also, our
board of directors believes that most investment funds are reluctant to invest
in lower priced stocks.
There are risks associated with the reverse stock split, including that
the reverse stock split may not result in an increase in the per share price of
our common stock or that any increase in the per share price of our common stock
will not be sustained.
We cannot predict whether the reverse stock split will increase the
market price for our common stock. The history of similar stock split
combinations for companies in like circumstances is varied. The market price of
our common stock will also be based on our performance and other factors, some
of which are unrelated to the number of shares outstanding. If the reverse stock
split is effected and the market price of our common stock declines, the
percentage decline as an absolute number and as a percentage of our overall
market capitalization may be greater than would occur in the absence of a
reverse stock split. Furthermore, the liquidity of our common stock could be
adversely affected by the reduced number of shares that would be outstanding
after the reverse stock split.
Determination of Ratio
In determining the twenty-for-one reverse stock split ratio, our board
of directors considered numerous factors including the historical and projected
performance of our common stock, prevailing market conditions and general
economic trends.
Principal Effects of the Reverse Stock Split
In implementing the twenty-for-one reverse stock split we will amend
the existing provision of our amended certificate of incorporation relating to
our authorized capital to add the following paragraph at the end thereof:
"Upon the effectiveness (the "Effective Date") of the certificate of
amendment to the amended certificate of incorporation containing this sentence,
each twenty shares of the Common Stock issued and outstanding as of the date and
time immediately preceding [date on which the certificate of amendment is
filed], the effective date of a Reverse Stock Split (the "Split Effective
Date"), shall be automatically changed and reclassified, as of the Split
Effective Date and without further action, into one (1) fully paid and
nonassessable share of Common Stock. There shall be no fractional shares issued.
A holder of record of Common Stock on the Split Effective Date who would
otherwise be entitled to a fraction of a share shall, in lieu thereof, be
entitled to receive a cash payment in an amount equal to the fraction to which
the stockholder would otherwise be entitled multiplied by the closing price of
the Common Stock, as reported in the Wall Street Journal, on the last trading
day prior to the Split Effective Date (or if such price is not available, the
average of the last bid and asked prices of the Common Stock on such day or
other price determined by the Company's board of directors)."
The reverse stock split will be effected simultaneously for all our
common stock and the exchange ratio will be the same for all of our common
stock. The reverse stock split will affect all of our stockholders uniformly and
will not affect any stockholder's percentage ownership interests in the Company,
except to the extent that the reverse stock split results in any of our
stockholders owning a fractional share. Common stock issued pursuant to the
reverse stock split will remain fully paid and nonassessable. The reverse stock
split will not affect our continuing to be subject to the periodic reporting
requirements of the Securities and Exchange Act of 1934, as amended.
For illustrative purposes only, the following table shows approximately
the effect on our common stock of the reverse stock split:
Prior to
Reverse
Stock Split 1-for-20
------------ -----------
Authorized 250,000,000 250,000,000
Issued and Outstanding
series B Preferred
Stock 4,000,000 4,000,000
Issued and Outstanding 170,139,794 8,506,990
Common Stock
Available for future 30,327,109 1,316,355
issuance*
* Note: Amounts of common stock do not include shares that may be
issued between now and effective date upon the conversion/exercise of
outstanding convertible instruments, options, warrants and preferred stock of
the Company.
Based on stock information as of the record date, after completion of
the twenty-for-one reverse stock split we will have approximately 241,493,010
shares of authorized but unissued shares of common stock. These additional
shares would be available from time to time for corporate purposes including
raising additional capital, acquisitions of companies or assets, for strategic
transactions, including a sale of all or a portion of the Company, and sales of
stock or securities convertible into common stock. We currently have no present
intention, plan, arrangement or agreement, written or oral, to issue shares of
our common stock for any purpose, except for the issuance of shares of common
stock upon (1) the exercise of outstanding options or warrants to purchase our
common stock or (2) the conversion of outstanding shares of our series B
convertible preferred stock. Although we have no present intention to issue
shares of common stock, except as noted above, because of our significant
long-term capital requirements, we may in the future raise funds through the
issuance of common stock when conditions are favorable, even if we do not have
an immediate need for additional capital at such time. We believe that the
availability of the additional shares will provide us with the flexibility to
meet business needs as they arise, to take advantage of favorable opportunities
and to respond to a changing corporate environment. If we issue additional
shares, the ownership interests of holders of our common stock may be diluted.
Procedure for Effecting Reverse Stock Split and Exchange of Stock Certificates
The form of certificate of amendment is attached as Appendix A to this
information statement. The reverse stock split will become effective on the
split effective date, on or around December 27, 2004. Beginning on the split
effective date, each certificate representing old shares will be deemed for all
corporate purposes to evidence ownership of new shares.
As soon as practicable after the split effective date, stockholders
will be notified that the reverse stock split has been effected. We expect that
we will act as exchange agent for purposes of implementing the exchange of stock
certificates. Holders of old shares will be asked to surrender to us
certificates representing old shares in exchange for certificates representing
new shares in accordance with the procedures to be set forth in a letter of
transmittal to be sent by us. No new certificates will be issued to a
stockholder until such stockholder has surrendered such stockholder's
outstanding certificate(s) together with the properly completed and executed
letter of transmittal to the exchange agent. Any old shares submitted for
transfer, whether pursuant to a sale or other disposition, or otherwise, will
automatically be exchanged for new shares.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT
ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
The Reverse Stock Split will become effective as soon as practicable
after the filing with the Secretary of State of the State of Oklahoma of a
Certificate of Amendment to our Certificate of Incorporation in substantially
the form annexed hereto. Upon the effectiveness of the Reverse Stock Split, the
number of shares of our Common Stock issued and outstanding would be decreased
to a number that would be equal to the number of shares of our Common Stock
issued and outstanding immediately prior to the effectiveness of the Reverse
Stock Split, divided by twenty. The actual number of authorized shares of our
Common Stock would not be changed.
With the exception of the number of shares issued and outstanding, the
rights and preferences of the shares of our Common Stock prior to and subsequent
to the Reverse Stock Split would remain the same. After the effectiveness of the
Reverse Stock Split, we do not anticipate that our financial condition or any
aspect of our business would materially change as a result of the Reverse Stock
Split.
The Reverse Stock Split alone will decrease the number of outstanding
shares of Common Stock to approximately 8,506,990 shares. The number of shares
of capital stock authorized by the Certificate of Incorporation will not change
as a result of the Reverse Stock Split. The Common Stock issued pursuant to the
Reverse Stock Split will be fully paid and non-assessable. The Reverse Stock
Split will not alter the voting and other rights that presently characterize the
Common Stock.
Fractional Shares
No fractional shares will be issued in connection with the reverse
stock split. Stockholders of record who otherwise would be entitled to receive
fractional shares because they hold a number of old shares not evenly divisible
by the number of new shares for which each old share is to be exchanged, will be
entitled, upon surrender to the exchange agent of certificates representing such
shares, to a cash payment in lieu thereof at a price equal to the fraction to
which the stockholder would otherwise be entitled multiplied by the closing
price of the common stock, as reported in the Wall Street Journal, on the last
trading day prior to the split effective date (or if such price is not
available, the average of the last bid and asked prices of the common stock on
such day or other price determined by our board of directors). The ownership of
a fractional interest will not give the holder thereof any voting, dividend, or
other rights except to receive payment therefor as described herein.
Stockholders should be aware that, under the escheat laws of the
various jurisdictions where stockholders reside, where the Company is domiciled,
and where the funds will be deposited, sums due for fractional interests that
are not timely claimed after the split effective date may be required to be paid
to the designated agent for each such jurisdiction, unless correspondence has
been received by the Company or the exchange agent concerning ownership of such
funds within the time permitted in such jurisdiction. Thereafter, stockholders
otherwise entitled to receive such funds will have to seek to obtain them
directly from the state to which they were paid.
Accounting Matters
The reverse stock split will not affect total stockholders' equity on
our balance sheet. However, because the par value of our common stock will
remain unchanged on the split effective date, the components that make up total
stockholders' equity will change by offsetting amounts. Given the proposed
twenty-for-one reverse stock split, the stated capital component will be reduced
by one-twentieth ( 1/20th) of its present amount, and the additional paid-in
capital component will be increased with the amount by which the stated capital
is reduced. The per share net income or loss and net book value of our common
stock will be increased because there will be fewer shares of our common stock
outstanding.
Potential Anti-Takeover Effect
Although the increased proportion of unissued authorized shares to be
issued could, under certain circumstances, have an anti-takeover effect (for
example, by permitting issuances that would dilute the stock ownership of a
person seeking to effect a change in the composition of our board of directors
or contemplating a tender offer or other transaction for the combination of the
Company with another Company), the reverse stock split proposal is not being
proposed in response to any effort of which we are aware to accumulate shares of
our common stock or obtain control of us, nor is it part of a plan by management
to recommend a series of similar amendments to our board of directors and
stockholders. Other than the reverse stock split proposal, our board of
directors does not currently contemplate recommending the adoption of any other
actions that could be construed to affect the ability of third parties to take
over or change control of the Company.
No Dissenter's Rights
Under the Oklahoma General Corporation Act, our stockholders are not
entitled to dissenter's rights with respect to the reverse stock split, and we
will not independently provide stockholders with any such right.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain material federal income tax
consequences of the reverse stock split and does not purport to be a complete
discussion of all of the possible federal income tax consequences of the reverse
stock split and is included for general information only. Further, it does not
address any state, local or foreign income or other tax consequences. For
example, the state and local tax consequences of the reverse stock split may
vary significantly as to each stockholder, depending upon the state in which
such stockholder resides. Also, it does not address the tax consequences to
holders that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding companies, foreign
entities, nonresident alien individuals, broker-dealers and tax-exempt entities.
The discussion is based on the provisions of the United States federal income
tax law as of the date hereof, which is subject to change retroactively as well
as prospectively. This summary also assumes that the old shares were, and the
new shares will be, held as a "capital asset," as defined in the Internal
Revenue Code of 1986, as amended (the "Code") (generally, property held for
investment). The tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of such stockholder. Each stockholder is
urged to consult with such stockholder's own tax advisor with respect to the tax
consequences of the reverse stock split.
Other than the cash payments for fractional shares discussed herein, no
gain or loss should be recognized by a stockholder upon such stockholder's
exchange of old shares for new shares pursuant to the reverse stock split. The
aggregate tax basis of the new shares received in the reverse stock split
(including any fraction of a New Share deemed to have been received) will be the
same as the stockholder's aggregate tax basis in the old shares exchanged
therefor. In general, stockholders who receive cash upon redemption of their
fractional share interests in the new shares as a result of the reverse stock
split will recognize gain or loss based on their adjusted basis in the
fractional share interests redeemed. The federal income tax liability, if any,
generated by the receipt of cash in lieu of a fractional interest should be
minimal in view of the low value of the fractional interest. The stockholder's
holding period for the new shares will include the period during which the
stockholder held the old shares surrendered in the reverse stock split.
Our view regarding the tax consequence of the reverse stock split is
not binding on the Internal Revenue Service or the courts. Accordingly, each
stockholder should consult with such stockholder's own tax advisor with respect
to all of the potential tax consequences to such stockholder of the reverse
stock split.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of November 8, 2004, the
beneficial ownership of the Company's Common Stock (i) by any person or group
known by the Company to beneficially own more than 5% of the outstanding Common
Stock, (ii) by each Director and executive officer and (iii) by all Directors
and executive officers as a group. Unless otherwise indicated, the holders of
the shares shown in the table have sole voting and investment power with respect
to such shares. The address of all individuals for whom an address is not
otherwise indicated is 9202 South Toledo Avenue, Tulsa, Oklahoma 74137.
Number of Shares Percentage
Name and Address Beneficially Owned Class of Class
- ---------------- ------------------ ------------------ --------
Thomas R. Coughlin, Jr. 2,079,000 Common 1%
4,000,000 Series B Preferred(1) 100%
All directors and
executive officers 2,079,000 Common 1%
(1 person) 4,000,000 Series B Preferred 100%
(1) - Series B Preferred stock is entitled to 50 votes per share on all
shareholder matters.
This table is based upon information derived from our stock records.
Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, it believes that each of the
shareholders named in this table has sole or shared voting and investment power
with respect to the shares indicated as beneficially owned. Applicable
percentages are based upon 170,139,794 shares of common stock and 4,000,000
shares of Series B Preferred Stock outstanding as of November 8, 2004.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This Information Statement includes forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. You can identify our forward-looking statements by the words "expects,"
"projects," "believes," "anticipates," "intends," "plans," "predicts,"
"estimates" and similar expressions. We have based the forward-looking
statements relating to our operations on our current expectations, estimates and
projections. We caution you that these statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that we cannot
predict. In addition, we have based many of these forward-looking statements on
assumptions about future events that may prove to be inaccurate. Accordingly,
our actual outcomes and results may differ materially from what we have
expressed or forecast in the forward-looking statements.
These risks include, but are not limited to, risks relating to the
volatility of our stock price, general market and economic conditions, the
nature of the Company's stockholders and potential stockholders and unexpected
delays in preparing, filing and mailing definitive information statement
materials for the reverse stock split. For a discussion of these and other risk
factors that could affect our business, see "Risk Factors" in our filings with
the Securities and Exchange Commission, including our Annual Report on Form 10-K
for the year ended December 31, 2003 and our Quarterly Report on Form 10-Q for
the quarters ended March 31, 2004 and June 30, 2004.
You should rely only on the information we have provided or
incorporated by reference in this Information Statement. We have not authorized
any person to provide information other than that provided here. We have not
authorized anyone to provide you with different information. You should not
assume that the information in this Information Statement is accurate as of any
date other than the date on the front of the document.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and periodic reports, proxy statements and
other information with the Securities and Exchange Commission using the
Commission's EDGAR system. You can find Centrex's SEC filings on the SEC's web
site, www.sec.gov.
We furnish our shareholders with annual reports containing audited
financial statements and with such other periodic reports as we, from time to
time, deem appropriate or as may be required by law. We use the calendar year as
our fiscal year.
INDEX OF EXHIBITS
EXHIBIT A AMENDED CERTIFICATE OF INCORPORATION