INFORMATION STATEMENT
SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant [X]
Filed by Party other than the Registrant [ ]
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
FTS APPAREL, INC.
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(Name of Registrant As Specified in Charter)
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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FTS APPAREL, INC.
301 Oxford Valley Rd.
Suite 1202
Yardley, Pennsylvania 19067
(215) 369-9979
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To Our Stockholders:
The purpose of this letter is to inform you that we intend to take the
following action by written consent of our stockholders:
(i) To amend our Articles of Incorporation to increase our authorized
shares of common stock, par value $.001, from 25,000,000 shares to
100,000,000 shares of common stock, par value, $.001.
(ii) To amend our Articles of Incorporation to change our name to
"THE FTS GROUP, INC."
OUTSTANDING SHARES AND VOTING RIGHTS
As of the Record Date, the Company's authorized common stock capitalization
consisted of 20,000,000 shares of common stock, $.001 par value per share (the
"Common Stock"), of which 17,380,240 shares were issued and outstanding as of
the Record Date. Holders of a majority of our outstanding common stock owning
more than 51% of the outstanding shares of our Common Stock (the "Majority
Stockholders"), have executed a written consent in favor of the actions
described above. This consent will satisfy the stockholder approval requirement
for the proposed action. Pursuant to Rule 14c-2 under the Securities Exchange
Act of 1934, as amended, the proposals will not be adopted until a date at least
20 days after the date on which this Information Statement has been mailed to
the stockholders. The Company anticipates that the actions contemplated herein
will be effected on or about the close of business on May 15, 2003.
The Company has asked or will ask brokers and other custodians, nominees and
fiduciaries to forward this Information Statement to the beneficial owners of
the Common Stock held of record by such persons and will reimburse such persons
for out-of-pocket expenses incurred in forwarding such material.
WE ARE NOT ASKING FOR YOUR PROXY. Because the written consent of the
Majority Stockholders satisfies any applicable stockholder voting requirement of
the Colorado Law and our Articles of Incorporation and By-Laws, we are not
asking for a proxy and you are not requested to send one.
The accompanying Information Statement is for information purposes only and
explains the terms of the amendment to our Amended Articles of Incorporation.
Please read the accompanying Information Statement carefully.
By Order of the Board of Directors,
/s/ Scott Gallagher
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Scott Gallagher
Chief Executive Officer
April 14, 2003
FTS APPAREL, INC.
301 Oxford Valley Rd.
Suite 1202
Yardley, Pennsylvania 19067
(215) 369-9979
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INFORMATION STATEMENT
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement is being mailed on or about April 26, 2003 to
the stockholders of record of FTS APPAREL, INC. (the "Company") at the close of
business on March 22, 2003 (the "Record Date"). This Information Statement is
being sent to you for information purposes only. No action is requested on your
part.
This Information Statement is being furnished to our stockholders to inform
you of the adoption of resolutions by written consent by the holders of a
majority of the outstanding shares of our common stock, par value $.001. The
resolutions adopted by such holders of a majority of the outstanding Common
Stock (the "Majority Stockholders") give us the authority to take the following
actions (collectively, the "Stockholder Resolutions"):
(i) To amend our Articles of Incorporation to increase our authorized
shares of common stock, par value $.001, from 25,000,000 shares to
100,000,000 shares of common stock, par value, $.001.
(ii) To amend our Articles of Incorporation to change our name to
"THE FTS GROUP, INC."
The board of directors of the Company (the "Board of Directors") has
adopted resolutions authorizing the Company to amend its Articles of
Incorporation to (i) increase our authorized shares of common stock, par value
$.001, from 25,000,000 shares to 100,000,000 shares of common stock, par value,
$.001 and (ii) to change our name to "THE FTS GROUP, INC."
The Company will pay all costs associated with the distribution of the
Information Statement, including the costs of printing and mailing.
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK OF THE COMPANY
(ACTION NO. 1)
The Certificate of Incorporation of the Company currently authorizes the
Company to issue 25,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share. As of April 14, 2003, the Company had
issued and outstanding 17,380,240 shares of its Common Stock, leaving the
Company (in the opinion of its Board of Directors) with an insufficient number
of shares of Common Stock available for issuance necessary for the Company to
efficiently continue or grow its operations. Accordingly, the Board of Directors
has adopted and the stockholders have approved, an amendment to the Company's
Certificate of Incorporation to increase the number of shares of Common Stock
the Company is authorized to issue from 25,000,000 shares to 100,000,000 shares.
The additional shares of Common Stock to be authorized for issuance upon
the adoption of such amendment would possess rights identical to the currently
authorized Common Stock. The stockholders of Common Stock are entitled to one
vote for each share held of record on all matters to be voted on by the
stockholders. All voting is on a non-cumulative basis. The stockholders of
Common stock do not have any preemptive rights, conversion rights, or applicable
redemption or sinking fund provisions. The amendment to authorize the issuance
of additional shares of Common Stock will not have any effect on the par value
of the Common Stock. Nevertheless, the issuance of such additionally authorized
shares of Common Stock would affect the voting rights of the current
stockholders of the Company because there would be an increase in the number of
outstanding shares entitled to vote on corporate matters, including the election
of directors, if and when any such shares of Common Stock are issued in the
future.
If the Board of Directors determines that an issuance of shares of the
Company's Common Stock is in the best interest of the Company and
the Company's stockholders, the issuance of additional shares could have the
effect of diluting the earnings per share or book value per share of the
outstanding shares of Common Stock or the stock ownership or voting rights of a
stockholder.
An increase in the number of authorized shares of Common Stock will enable
the Company to take advantage of various potential business opportunities
through the issuance of the Company's securities, including, without limitation,
issuing stock dividends to existing stockholders, providing equity incentives to
employees, officers or directors, establishing certain strategic relationships
with other companies and expanding the Company's business through certain
acquisitions. The Company has no present agreements to acquire any such
businesses.
An increase in the number of authorized shares of Common Stock will also
enable the Company to have a sufficient number of shares available for
conversion of the Company's outstanding 6% secured convertible debentures. The
terms of the debentures provide for full payment on or before February 14, 2007,
with interest of 6% per annum, which may be converted at any time at the lesser
of (i) 80% of the average of the five lowest closing bid price during the
fifteen (15) trading days prior to the conversion date or (ii) 100% of the
average of the closing bid prices for the twenty (20) trading days immediately
preceding the closing date. The Company intends to register all of the shares
underlying such convertible debentures on a registration statement on Form SB-2
to be filed with the Securities and Exchange Commission.
Potential Anti-takeover Effects of the Amendment
The increase in the number of authorized shares of Common Stock and the
subsequent issuance of all or a portion of those shares could have the effect of
delaying or preventing a change of the Company's control without further action
by the stockholders. Subject to applicable law and stock exchange requirements,
the Company could issue shares of authorized and unissued Common Stock in one or
more transactions that would make a change of control of the Company more
difficult and therefore less likely. Any issuance of additional shares could
have the effect of diluting the earnings per share and book value per share of
the outstanding shares of Common Stock or the stock ownership and voting rights
of a person seeking to obtain control of the Company.
The amendment to the Company's Certificate of Incorporation increasing the
Company's authorized shares of Common Stock to 100,000,000 shares will become
effective upon the filing of a certificate of amendment relating thereto with
the Secretary of State of the State of Colorado, which will occur on or about
May 15 22, 2003. Under federal securities laws, the Company cannot file the
certificate of amendment until at least 20 days after the mailing of this
Information Statement.
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME
(ACTION NO. 2)
The amendment to the Company's Certificate of Incorporation, as amended,
will change the Company's name from FTS Apparel, Inc. to The FTS Group, Inc. The
Company is changing its name in order to provide a new identity for the
Company's operations. Accordingly, the Board of Directors has approved such an
amendment to our Articles of Incorporation.
The currently outstanding stock certificates evidencing shares of our
common stock bearing the name "FTS Apparel, Inc. " will continue to be valid and
represent shares of our common stock following the name change. In the future,
new certificates will be issued bearing our new name, but this will in no way
effect the validity of your current stock certificates.
ADDITIONAL INFORMATION
The Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 2002 and quarterly report on Form 10-QSB for the quarter ended
September 30, 2002 are being delivered to you with this Information Statement.
The Company will furnish a copy of any exhibit thereto or other information upon
request by a stockholder to the Company's principal offices at FTS APPAREL,
INC., Attention: Scott Gallagher, 301 Oxford Valley Rd., Suite 1202, Yardley,
Pennsylvania 19067 or call (215) 369-9979.
By Order of the Board of Directors,
/s/ Scott Gallagher
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Scott Gallagher
Yardley, Pennsylvania
April 14, 2003
EXHIBIT A
Certificate of Amendment of the Certificate of Incorporation
Of
FTS APPAREL, INC.
______________________
The undersigned, being all of the directors of FTS APPAREL, INC. (the
"Corporation"), a Colorado corporation, hereby certify to the Secretary of
State of Colorado that:
FIRST: The Corporation desires to amend its Articles of Incorporation in
accordance with Section 7-110-106 of the Colorado Business Corporation Act, as
currently in effect as hereinafter provided.
SECOND: The provisions set forth in these Articles of Amendment to the
Articles of Incorporation amend and supersede the original provisions of the
Articles of Incorporation.
THIRD: The Articles of Incorporation of the Corporation are hereby amended
by striking in their entirety Article FIRST, inclusive, and by substituting in
lieu thereof the following:
"FIRST: The name of the Corporation is THE FTS GROUP, INC."
FOURTH: The Certificate of Incorporation is hereby amended to increase the
aggregate number of shares of COMMON stock which the Corporation shall have the
authority to issue.
FIFTH: To accomplish the amendment relating to the increase in the
aggregate number of shares of common stock which the Company shall have
authority to issue, from 25,000,000 shares, par value $.001 per share, to
100,000,000 shares, par value $.001, the text of Article Five, Section 1, of the
Certificate of Incorporation is hereby amended to read in full as follows:
"ARTICLE V. Capital Structure.
Section 1. Authorized Capital. The total number of shares of all
classes which the Corporation shall have authority to issue is 105,000,000
of which 5,000,000 shall be Preferred Shares, par value $.01 per share, and
100,000,000 shall be Common Shares, par value $.001 per share, and the
designations, preferences, limitations and relative rights of the shares of
each class are as follows: "
SIXTH: The amendment was unanimously approved by the Board of Directors of
the Corporation, pursuant to and in accordance Section 7-108-202 and Section
7-110-103 of the Colorado Business Corporation Act on the 19th day of March,
2003.
SEVENTH: The amendment was adopted by formal action taken by the majority
of the shareholders of the Corporation pursuant to and in accordance with the
Colorado Business Corporation Act, and the number of votes cast approving the
amendment was sufficient for approval under the provisions of Section 7-110-103
of the Colorado Business Corporation Act.
IN WITNESS WHEREOF, the undersigned have executed this Certificate this __
day of March, 2003 and affirm that the statements contained herein are true
under penalties of perjury.
BOARD OF DIRECTORS:
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Scott Gallagher
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James H. Gilligan
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Scott McBride
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David R. Rasmussen