UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 (AMENDMENT NO. __ )
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
Safetek International, Inc.
(Name of Registrant As Specified in Charter)
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|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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Safetek International, Inc.
5509 11th Avenue
Brooklyn, New York 11219
Dear Stockholder:
This Information Statement is furnished to holders of shares of common
stock, par value $0.0001 per share (the "Common Stock"), of Safetek
International, Inc. (the "Company"). The purpose of this Information Statement
is to notify the stockholders that on May 13, 2004, the Company received written
consent (the "Written Consent") from certain principal stockholders of the
Company (identified in the section entitled "Voting Securities and Principal
Holders Thereof") holding 250,744,000 shares of Common Stock, representing
approximately 50.2% of the total issued and outstanding Common Stock, adopting a
resolution to amend the Company's Articles of Incorporation to (i) authorize up
to 50,000,000 shares of a new class of undesignated Preferred Stock ("Preferred
Stock") which would allow the Board of Directors of the Company to issue,
without further shareholder action, one or more series of Preferred Stock and
(ii) authorize a one-for-thousand reverse stock split of the issued and
outstanding shares of our Common Stock by changing each one-thousand shares into
one share
The Board believes that the terms of the amendment to the Certificates of
Incorporation (the "Amended Certificate") are beneficial to the Company. The
full text of the Amended Certificate is attached as Annex I to this Information
Statement.
The enclosed Information Statement is being furnished to you to inform you
that the foregoing action has been approved by the holders of a majority of the
outstanding shares of Common Stock. The Board is not soliciting your proxy in
connection with the adoption of these resolutions and proxies are not requested
from stockholders. The resolutions will not become effective before the date
which is 20 days after this Information Statement was first to stockholders. You
are urged to read the Information Statement in its entirety for a description of
the action taken by the majority stockholders of the Company.
This Information Statement is being mailed on or about _______, 2004 to
stockholders of record on August 17, 2004 (the "Record Date").
By Order of the Board of Directors
/s/ Shmuel M. Shneibalg
- -----------------------
August 4, 2004
Safetek International, Inc.
5509 11th Avenue
Brooklyn, NY 11219
---------------------------------
INFORMATION STATEMENT
PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14C-2 THEREUNDER
-------------------------------------
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
---------------------------------------------------------------
We are sending you this Information Statement to inform you of the
adoption of various resolutions on May 13, 2004 by consent (the "Written
Consent") from the Board of Directors (the "Board") and certain principal
stockholders of the Company (identified in the section entitled "Voting
Securities and Principal Holders Thereof") holding 250,740,000 shares of Common
Stock, representing approximately 50.2% of the total issued and outstanding
Common Stock adopting a resolution to amend the Company's Articles of
Incorporation to (i) authorize up to 50,000,000 shares of a new class of
undesignated Preferred Stock ("Preferred Stock") which would allow the Board of
Directors of the Company to issue, without further shareholder action, one or
more series of Preferred Stock and (ii) authorize a one-for-thousand reverse
stock split of the issued and outstanding shares of our Common Stock by changing
each one-thousand shares into one share.
The adoption of the foregoing resolutions will become effective 21
calendar days after the mailing of this Information Statement. The Board of
Directors is not soliciting your proxy in connection with the adoption of these
resolutions and proxies are not requested from stockholders.
The Company is distributing this Information Statement to its stockholders
in full satisfaction of any notice requirements it may have under the Delaware
General Corporation Law ("DGCL"). No additional action will be undertaken by the
Company with respect to the receipt of written consents, and no dissenters'
rights with respect to the receipt of the written consents, and no dissenters'
rights under the DGCL are afforded to the Company's stockholders as a result of
the adoption of these resolutions.
Expenses in connection with the distribution of this Information
Statement, which are anticipated to be less than $7,500, will be paid by the
Company.
Our principal executive offices are located at 5509 11th Avenue, Brooklyn,
NY 11219. Our telephone number is 718-436-8246.
GENERAL
The Company's current Certificate of Incorporation provide for an
authorized capitalization consisting of 500,000,000 shares of Common Stock. As
of August 3, 2004, there were 499,472,707 shares of Common Stock issued and
outstanding. The Board of Directors believes that the Amended Certificate is in
the best interests of both the Company and its stockholders to (i) authorize a
one-for-thousand reverse stock split of the issued and outstanding shares of our
Common Stock by changing each thousand shares into one share, and (ii) authorize
the Board to issue up to fifty million (50,000,000) shares of preferred stock.
The Company is currently authorized to issue one million shares of
preferred stock. The Board of Directors believes that it is in the best
interests of both the Company and its stockholders to increase the class of
preferred stock as a part of the Company's capital stock. The Preferred Stock
will be "blank check" preferred stock, giving the Board the authorization to
issue preferred stock from time to time in one or more series and to fix the
number of shares and the relative dividend rights, conversion rights, voting
rights and special rights and qualifications of any such series. Any issuance of
preferred stock with voting rights could, under certain circumstances, have the
effect of delaying or preventing a change in control of the Company by
increasing the number of outstanding shares entitled to vote and increasing the
number of votes required to approve a change in control of the Company. The
Company also believes that the one-for-thousand reverse stock split will be
beneficial for the market price of the Company.
The Amended Certificate has been approved by the Board of Directors of the
Company and the stockholders holding more than approximately 50.2% of the
outstanding voting shares.
VOTE REQUIRED; MANNER OF APPROVAL
Approval to amend and restate the current Certificate of Incorporation of
the Company under the DGCL requires the affirmative vote of the holders of a
majority of the voting power of the Company. The Company has no class of voting
stock outstanding other than the Common Stock.
Section 228 of the DGCL provides in substance that, unless the Company's
Certificate of Incorporation provides otherwise, stockholders may take action
without a meeting of stockholders and without prior notice if a consent or
consents in writing, setting forth the action so taken, is signed by the holders
of outstanding voting stock holding not less than the minimum number of votes
that would be necessary to approve such action at a stockholders meeting. Under
the applicable provisions of the DGCL, this action is effective when written
consents from holders of record of a majority of the outstanding shares of
voting stock are executed and delivered to the Company.
In accordance with the DGCL, the affirmative vote on the Amended
Certificate of at least a majority of the outstanding shares has been obtained.
As a result, no vote or proxy is required by the stockholders to approve the
adoption of the Amended Certificate.
Under Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), the Restated Certificate cannot take effect until 20 days
after this Information Statement is sent to the Company's stockholders. As
mentioned earlier, the Amended Certificate will become effective upon its filing
with the Secretary of State of the State of Delaware which is anticipated to be
on or about September 7, 2004, 20 days after the mailing of this Information
Statement.
PURPOSES AND EFFECT OF THE CHANGES
Preferred Stock
It is not possible to state the effects of the increase of the authorized
preferred stock upon the rights of the holders of common stock until the Board
determines the respective rights of the holders of one or more series of
preferred stock. The effects of such issuance could include, however, (i)
reductions of the amount otherwise available for payment of dividends on common
stock; (ii) restrictions on dividends on common stock; (iii) dilution of the
voting power of common stock; and (iv) restrictions on the rights of holders of
common stock to share in the Company's assets on liquidation until satisfaction
of any liquidation preference granted to the holders of such subsequently
designated series of preferred stock.
The amendment will give the Company increased financial flexibility as it
will allow shares of preferred stock to be available for issuance from time to
time as determined by the Board of Directors for any proper corporate purpose.
Such purpose could include, without limitation, issuance for cash as a means of
obtaining capital for use by the Company, or issuance as part or all of the
consideration required to be paid by the Company for acquisitions of other
businesses or properties.
Shares of voting or convertible preferred stock could be issued, or rights
to purchase such shares could be issued, to create voting impediments or to
frustrate persons seeking to effect a takeover or otherwise gain control of the
Company. The ability of the Board to issue such additional shares of preferred
stock, with rights and preferences it deems advisable, could discourage an
attempt by a party to acquire control of the Company by tender offer or other
means. Such issuances could therefore deprive stockholders of benefits that
could result from such an attempt, such as the realization of a premium over the
market price for their shares in a tender offer or the temporary increase in
market price that such an attempt could cause. Moreover, the issuance of such
additional shares of preferred stock to persons friendly to the Board could make
it more difficult to remove incumbent managers and directors from office even if
such change were to be favorable to stockholders generally. At the present time,
the Company is not aware of any contemplated mergers, tender offers or other
plans by a third party to attempt to effect a change in control of the Company
through the issuance of preferred stock. While the amendment may have
anti-takeover ramifications, the Board of Directors believes that financial
flexibility offered by the amendment outweighs any disadvantages.
Reverse Stock Split
The purpose of the reverse stock split is to increase the market price per
share of our common stock. The Board believes that by decreasing the number of
shares outstanding we will have an increased stock price. Our management
believes that the low per share market price of our Common Stock impairs the
acceptability of the stock by the financial community and the investing public.
Theoretically, the number of shares outstanding should not, by itself, affect
the marketability of the stock, the type of investor who acquires it, or our
reputation in the financial community, but in practice this is not necessarily
the case, as many investors look upon low-priced stocks as unduly speculative in
nature and, as a matter of policy, avoid investment in such stocks. Our
management also believes that a low share price reduces the effective
marketability of our shares because of the reluctance of many leading brokerage
firms to recommend low-priced stocks to their clients. Certain institutional
investors have internal policies preventing the purchase of low-priced stocks
and many brokerage houses do not permit low-priced stocks to be used as
collateral for margin accounts. A variety of brokerage house policies and
practices tends to discourage individual brokers within those firms from dealing
in low-priced stocks. Some of those policies and practices pertain to the
payment of brokers' commissions and to time-consuming procedures that function
to make the handling of low-priced stocks unattractive to brokers from an
economic standpoint. In addition, the structure of trading commissions also
tends to have an adverse impact upon holders of low-priced stocks because the
brokerage commission on a sale of a low-price stock generally represents a
higher percentage of the sales price than the commission on a relatively
higher-priced stock.
Our Board of Directors is hopeful that the decrease in the number of
shares of our outstanding Common Stock as a consequence of the reverse stock
split will result in an anticipated increased price level, which will encourage
interest in our Common Stock and possibly promote greater liquidity for our
stockholders, although such liquidity could be adversely affected by the reduced
number of shares outstanding after the reverse stock split. In addition,
although it may be anticipated that the increase in the price level of our
Common Stock as a result of the reverse stock split will be proportionately less
than the decrease in the number of shares outstanding, the reverse stock split
could result in a price level for the shares that will overcome the reluctance,
policies and practices referred to above and diminish the adverse impact of
trading commissions on the market for the shares. However, there can be no
assurance that the foregoing effects will occur, or that the share price level
of the Common Stock immediately after the reverse stock split will be maintained
for any period of time.
FRACTIONAL SHARES
In order to save the expense and inconvenience of issuing fractional
shares, we will not issue scrip or fractional share certificates evidencing
shares of Common Stock in connection with the reverse stock split. We will issue
100 shares to stockholders who would otherwise be entitled to less than 100
shares as a result of the split. If the same stockholder is the owner of shares
under multiple share certificates, then the number of shares we will issue in
connection with the reverse stock split shall be computed on the basis of the
aggregate shares owned under all certificates.
PRINCIPAL EFFECTS OF THE REVERSE SPLIT
As of May 13, 2004, we had issued and outstanding 499,472,707 shares of
Common Stock. If we do not issue any shares of common stock prior to the date
the reverse stock split becomes effective, the number of outstanding shares of
Common Stock will be reduced to approximately 499,472. In addition, the stated
capital of our outstanding Common Stock as reflected on our balance sheet will
be reduced, and our additional paid in capital account will be increased, by an
equal amount. The number of authorized shares of common stock will remain at
500,000,000 shares of Common Stock. Except for the issuance of additional round
lots of 100 whole shares of common stock for fractional shares, the reverse
stock split will not result in any immediate change in the economic interests or
the voting power of a stockholder relative to other common stockholders.
However, the reverse stock split will result in a substantial increase in the
number of shares of common stock available for issuance by our Board of
Directors.
INCREASE IN AUTHORIZED UNISSUED SHARES
The following table shows how the one-for-thousand reverse stock split
will increase the number of shares of common stock available for issuance by our
Board of Directors. The information presented in the table is as of August 3,
2004. The table assumes that no shares or other securities convertible into or
exercisable for shares of Common Stock will be issued prior to the date upon
which the reverse stock split is effected.
Number of Shares
- -----------------------------------------------------------------------------------------------------------------------------
Prior to Reverse Stock Split After Reverse Stock Split
---------------------------- -------------------------
------------- ------------
Common Stock Common Stock
------------ ------------
Authorized 500,000,000 500,000,000
Outstanding 499,472,707 499,472
Reserved for issuance
Convertible Debentures (1) (1) (1)
Redeemable Convertible Preferred Stock 5,183 100
(2)
Options that may be granted in 300,000,000 300,000
future under existing option
plan(3)
Available for future issuance 0 499,200,428
(1) The Company has an aggregate principal amount of $135,027 8% Series A
Senior Subordinated Convertible Debentures currently outstanding. The
Debentures, which are currently past due and in default, are convertible at the
option of the holder thereof into shares of Common Stock at a conversion price
equal to 70% of the lowest bid price of the Common Stock on the date a notice of
conversion is received by the Company. Given the stock price of the Company, it
is difficult to estimate the conversion price of the Debentures.
Notwithstanding, given the fact that the Company will have 500,000,000 shares of
Common Stock authorized for issuance and an estimated 499,200,418 shares
available for issuance subsequent to the one-for-thousand reverse, the Company
will have sufficient shares to issue upon the conversion of the Debentures.
(2)There are 10,365 shares of redeemable convertible preferred stock
issued which management believes are convertible at a rate of 2 shares of
preferred stock for one share of Common Stock.
(3) Under the Company's 2001 Stock Option Plan, the Company could issue
300,000,000 shares of Common Stock. As of December 31, 2002 there were
98,337,207 options still outstanding. Upon the reverse stock split, the number
of shares into which these options are convertible and the number of options
which can be issued under the plan will be adjusted accordingly.
Following the reverse stock split, our Board of Directors will be able to
issue 499,200,428 shares of Common Stock without further stockholder approval.
Other than the outstanding convertible debentures, the preferred shares
and options under the 2001 Option Plan, we do not presently have any agreement,
understanding, or arrangement which would result in the issuance of any of the
additional shares of our authorized and unissued common stock following the
reverse stock split. Our Board of Directors does not intend to seek stockholder
approval prior to any issuance of additional shares of our common stock, except
as otherwise required by law or regulation. Our outstanding shares of common
stock have no pre-emptive rights; accordingly, if we issue additional shares of
common stock, our stockholders will not have any preferential right to purchase
any of the additional shares. Although our Board of Directors believes the
increase in authorized unissued shares is in the best interests of our company
and our stockholders, the issuance of additional shares of common stock may,
depending on the circumstances under which such shares are issued, reduce the
stockholders' equity per share and may reduce the percentage ownership of common
stock of existing stockholders.
The increase in the number of shares available for issuance by our Board
of Directors could, under certain circumstances, have the effect of deterring
unsolicited tender offers for our common stock. In the event of a hostile
takeover attempt, it might be possible for us to try to impede such attempt by
issuing shares of common stock to a friendly party, thereby diluting the voting
power of the other outstanding shares and increasing the potential cost to
acquire control of our Company. Although the overall effect of such a course of
action may be to deter unwanted takeover offers, our Board of Directors did not
approve the reverse split and the increase in the amount of authorized shares of
Common Stock for that purpose and believes the reverse split and the increase in
the amount of authorized shares of Common Stock is in the best interests of our
Company and our stockholders and that the advantages of the reverse stock split,
including the increase in the number of shares available for issuance by the
Board of Directors, outweigh any potential disadvantages. Our management is not
aware of any attempts to obtain control or take over our Company.
EFFECT ON PRICE OF COMMON STOCK
Our Board of Directors believes that the current per share price level
adversely affects the marketability of our common stock. The proposed reverse
stock split is intended to result in a higher per share market price that will
increase the interest of investors, analysts and other members of the financial
community in the common stock.
The per share price for our Common Stock after the reverse split may not
be one-thousand times the market price before the reverse split and it is
possible that the aggregate market value of a stockholder's investment in our
company may be lower after the reverse split.
Furthermore, the market for shares of common stock may not be improved.
The Board of Directors cannot predict what effect the reverse stock split will
have on the market for, or the market price of, the Common Stock.
IMPLEMENTATION OF REVERSE STOCK SPLIT AND INCREASE IN AUTHORIZED COMMON
STOCK
We will file the Amended Certificate with the Secretary of State of
Delaware, and upon such filing the reverse stock split of issued shares of
Common Stock will become effective as of the opening of business on that date.
The reverse stock split will be formally implemented by deleting Article IV of
the Company's current Certificate of Incorporation, as amended, in its entirety
and substituting the following in lieu thereof:
"ARTICLE IV
SHARES OF STOCK
(a) The total number of shares which the Corporation is authorized to
issue shall be Five Hundred Fifty Million (550,000,000) shares of which Five
Hundred Million (500,000,000) shares shall be designated as common stock with a
par value of $.0001 per share and Fifty Million (50,000,000) shares shall be
designated as with a par value of $.0001 per share.
The Corporation is authorized to issue the shares of preferred stock from
time to time in one or more series with such designations, relative rights,
preferences and limitations of qualifications as shall be fixed by the Board of
Directors in the resolution or resolutions providing for the issue of such
shares. The Board of Directors is expressly authorized to adopt such resolution
or resolutions providing for the issue of such shares from time to time as the
Board of Directors, in its discretion, may deem desirable. The authority of the
Board with respect to each series of Preferred Stock shall include, but not be
limited to, the determination or fixing of the following:
(i) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board
increasing such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by like action of the
Board;
(ii) The dividend rate of such series, the conditions and time upon which
such dividends shall be payable, the relation which such dividends shall
bear to the dividends payable on any other class or classes of Stock or
series thereof, or any other series of the same class, and whether such
dividends shall be cumulative or non-cumulative;
(iii) The conditions upon which the shares of such series shall be subject
to redemption by the Corporation and the times, prices and other terms and
provisions upon which the shares of the series may be redeemed;
(iv) Whether or not the shares of the series shall be subject to the
operation of a retirement or sinking fund to be applied to the purchase or
redemption of such shares and, if such retirement or sinking fund be
established, the annual amount thereof and the terms and provisions
relative to the operation thereof;
(v) Whether or not the shares of the series shall be convertible into or
exchangeable for shares of any other class or classes, with or without par
value, or of any other series of the same class, and, if provision is made
for conversion or exchange, the times, prices, rates, adjustments and
other terms and conditions of such conversion or exchange;
(vi) Whether or not the shares of the series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the terms of
such voting rights;
(vii) The rights of the shares of the series in the event of voluntary or
involuntary liquidation, dissolution or upon the distribution of assets of
the Corporation; and
(viii) Any other powers, preferences and relative participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, of the shares of such series, as the Board may deem advisable and
as shall not be inconsistent with the provisions of this Certificate of
Incorporation.
The holders of shares of the Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board, out of funds legally
available for the payment of dividends, dividends (if any) at the rates fixed by
the Board for such series before any cash dividends shall be declared and paid
or set apart for payment, on the Common Stock with respect to the same dividend
period.
The holders of shares of the Preferred Stock of each series shall be
entitled, upon liquidation or dissolution or upon the distribution of the assets
of the Corporation, to such preferences as provided in the resolution or
resolutions creating such series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the holders of
shares of the Common Stock. Whenever the holders of shares of the Preferred
Stock shall have been paid the full amounts to which they shall be entitled, the
holders of shares of the Common Stock shall be entitled to share ratably in all
remaining assets of the Corporation. (b) Upon this Certificate of Amendment to
the Certificate of Incorporation of the Corporation becoming effective pursuant
to the General Corporation Law of the State of Delaware (the "Effective Time"),
shares of common stock held by each holder of record on such date shall be
automatically combined according to class at the rate of one-for-thousand
without any further action on the part of the holders of the Corporation (the
"Reverse Split"). All fractional shares owned by each holder of record will be
aggregated and to the extent after aggregating all fractional shares any
registered holder is entitled to a fraction of a share, he shall be entitled to
receive one whole share in respect of such fraction of a share. (c) Each stock
certificate issued prior to the Effective Time shall, from and after the
Effective Time, automatically and without the necessity of presenting the same
for exchange, represent that number of shares of common stock, as the case may
be, into which the shares represented by such certificate shall have been
reclassified pursuant to the Reverse Split. Each holder of record of a
certificate that represented shares of common stock immediately prior to the
Effective Time, shall receive, upon surrender of such certificate, a new
certificate representing the number of shares of common stock immediately after
the Reverse Split. (d) Following the effectiveness of the amendment, each
certificate representing shares of Common Stock outstanding immediately prior to
the reverse stock split will be deemed automatically, without any action on the
part of the stockholders, to represent one-one-thousandth of the pre-split
number of shares. However, no fractional shares will be issued as a result of
the reverse stock split. Each stockholder of record owning shares of Common
Stock prior to the reverse stock split which are not evenly divisible by
one-thousand (1,000) will receive one additional share for the fractional share
that such stockholder would otherwise have been entitled to receive as a result
of the reverse stock split. After the reverse stock split becomes effective,
stockholders will be asked to surrender their stock certificates in accordance
with the procedures set forth in a letter of transmittal. Stockholders should
not submit any certificates until requested to do so. Upon such surrender, a new
certificate representing the number of shares owned as a result of the reverse
stock split will be issued and forwarded to stockholders. However, each
certificate representing the number of shares owned prior to the reverse stock
split will continue to be valid and represent a number of shares equal to one-
one-thousandth of the pre-split number of shares. "
EXCHANGE OF STOCK CERTIFICATES The exchange of shares of Common Stock resulting
from the reverse stock split will occur on the date we file the Amended
Certificate effecting the reverse stock split, without any further action on the
part of our stockholders and without regard to the date or dates certificates
formerly representing shares of Common Stock are physically surrendered for
certificates representing the post-split number of shares such stockholders are
entitled to receive. Securities Transfer Corporation, the transfer agent for our
Common Stock, will act for the stockholders in effecting the exchange of their
certificates. In the event that the number of shares of Common Stock into which
shares of Common Stock will be exchanged or converted includes a fraction, we
will issue to the holder of such fraction, in lieu of the issuance of fractional
shares, additional shares so that the holder has a round lot consisting of 100
shares. As soon as practicable after the date the reverse stock split becomes
effective, transmittal forms will be mailed to each holder of record of
certificates formerly representing shares of Common Stock to be used in
forwarding their certificates for surrender and exchange for certificates
representing the post-split number of shares of Common Stock such stockholders
are entitled to receive. After receipt of such transmittal form, each holder
should surrender the certificates formerly representing shares of Common Stock
and such holder will receive in exchange therefore certificates representing the
whole number of shares to which he is entitled, plus one whole share in lieu of
any fractional share. The transmittal forms will be accompanied by instructions
specifying other details of the exchange. Stockholders should not send in their
certificates until they receive a transmittal form. On the date the reverse
stock split becomes effective, each certificate representing shares of Common
Stock will, until surrendered and exchanged as described above, be deemed, for
all corporate purposes, to evidence ownership of the number of shares of Common
Stock into which the shares evidenced by such certificate have been converted,
except that the holder of such unexchanged certificates will not be entitled to
receive any dividends or other distributions payable by us after that date with
respect to the shares which the stockholder is entitled to receive because of
the reverse stock split until the certificates representing such shares of
Common Stock have been surrendered. Such dividends and distributions, if any,
will be accumulated and, at the time of such surrender, all such unpaid
dividends or distributions will be paid without interest. FEDERAL INCOME TAX
CONSEQUENCES The following description of federal income tax consequences is
based upon the Internal Revenue Code of 1986, as amended, the applicable
Treasury Regulations promulgated thereunder, judicial authority, and current
administrative rulings and practices as in effect on the date of this
Information Statement. This discussion is for general information only and does
not discuss consequences that may apply to special classes of tax payers (e.g.,
non-resident aliens, broker-dealers or insurance companies). We urge you to
consult with your own tax advisors to determine the particular consequences to
you. The exchange of shares resulting from the reverse stock split will be a
tax-free recapitalization for the company and our stockholders to the extent
that shares of pre-split common stock are exchanged for post-split common stock.
Therefore, stockholders will not recognize gain or loss as a result of that
transaction. A stockholder's holding period for shares of post-split common
stock, including any additional shares issued in lieu of issuing fractional
shares, will include the holding period of shares of pre-split common stock
exchanged therefore, provided that the shares of pre-split common stock were
capital assets in the hands of the stockholder. The shares of post-split common
stock in the hands of a stockholder, including any additional shares issued in
lieu of issuing fractional shares, will have an aggregate basis for computing
gain or loss equal to the aggregate basis of shares of pre-split common stock
held by that stockholder immediately prior to the split. Although the issue is
not free from doubt, additional shares received in lieu of fractional shares,
including shares received as a result of the rounding up of fractional
ownership, should be treated in the same manner. However, it is possible that
the receipt of additional shares could be wholly or partially taxable.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table lists, as of August 3, 2004, the number of shares of
common stock beneficially owned by (i) each person or entity known to the
Company to be the beneficial owner of more than 5% of the outstanding common
stock; (ii) each officer and director of the Company; and (iii) all officers and
directors as a group. Information relating to beneficial ownership of common
stock by our principal stockholders and management is based upon information
furnished by each person using "beneficial ownership" concepts under the rules
of the Securities and Exchange Commission. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting
power, which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest.
The percentages below are calculated based on 499,472.707 shares of common
stock issued and outstanding. The Company has no options, warrants or other
securities convertible into shares of common stock.
Officers, Directors,
5% Shareholder No. of Shares Beneficial Ownership %
-------------- ------------- ----------------------
Shmuel Shneibalg 120,000,000 24%
Officers and directors* 120,000,000 24%
- ----------
* These shares are attributed to Shmuel Shneibalg, our current sole officer and
director.
The persons or entities named in this table, based upon the information they
have provided to us, have sole voting and investment power with respect to all
shares of common stock beneficially owned by them.
INTEREST OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON
No other person has any interest, direct or indirect, by security holdings
or otherwise, in the Amended Articles which is not shared by all other
stockholders.
OTHER MATTERS
The Board knows of no other matters other than those described in this
Information Statement which have been approved or considered by the holders of a
majority of the shares of the Company's voting stock.
IF YOU HAVE ANY QUESTIONS REGARDING THIS INFORMATION STATEMENT AND/OR THE
RESTATED ARTICLES, PLEASE CONTACT Safetek International, Inc., 5509 11th Avenue,
Brooklyn, NY 11219.
By order of the Board of Directors of:
Safetek International, Inc.
/s/ Shmuel M. Shneibalg
----------------------------------------------
Shmuel M. Shneibalg, sole officer and director
ANNEX I
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF
SAFETEK INTERNATIONAL, INC.
------------
The undersigned, for the purposes of amending the Certificate of Incorporation
of Safetek International, Inc. (the "Corporation") does hereby certify as
follows:
1. The name of the Corporation is Safetek International, Inc.
2. The original certificate of incorporation of the Corporation was filed
with the Secretary of State of Delaware on April 19, 1988. The original
certificate was amended on each of January 4, 1989, June 24, 1991 and June
8, 2001.
3. Article 4 of the certificate of incorporation of the Corporation is hereby
amended in its entirety to read as follows:
"ARTICLE IV
SHARES OF STOCK
(a) The total number of shares which the Corporation is authorized to
issue shall be Five Hundred Fifty Million (550,000,000) shares of which Five
Hundred Million (500,000,000) shares shall be designated as common stock with a
par value of $.0001 per share and Fifty Million (50,000,000) shares shall be
designated as with a par value of $.0001 per share.
The Corporation is authorized to issue the shares of preferred stock from
time to time in one or more series with such designations, relative rights,
preferences and limitations of qualifications as shall be fixed by the Board of
Directors in the resolution or resolutions providing for the issue of such
shares. The Board of Directors is expressly authorized to adopt such resolution
or resolutions providing for the issue of such shares from time to time as the
Board of Directors, in its discretion, may deem desirable. The authority of the
Board with respect to each series of Preferred Stock shall include, but not be
limited to, the determination or fixing of the following:
(i) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board
increasing such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by like action of the
Board;
(ii) The dividend rate of such series, the conditions and time upon which
such dividends shall be payable, the relation which such dividends shall
bear to the dividends payable on any other class or classes of Stock or
series thereof, or any other series of the same class, and whether such
dividends shall be cumulative or non-cumulative;
(iii) The conditions upon which the shares of such series shall be subject
to redemption by the Corporation and the times, prices and other terms and
provisions upon which the shares of the series may be redeemed;
(iv) Whether or not the shares of the series shall be subject to the
operation of a retirement or sinking fund to be applied to the purchase or
redemption of such shares and, if such retirement or sinking fund be
established, the annual amount thereof and the terms and provisions
relative to the operation thereof;
(v) Whether or not the shares of the series shall be convertible into or
exchangeable for shares of any other class or classes, with or without par
value, or of any other series of the same class, and, if provision is made
for conversion or exchange, the times, prices, rates, adjustments and
other terms and conditions of such conversion or exchange;
(vi) Whether or not the shares of the series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the terms of
such voting rights;
(vii) The rights of the shares of the series in the event of voluntary or
involuntary liquidation, dissolution or upon the distribution of assets of
the Corporation; and
(viii) Any other powers, preferences and relative participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, of the shares of such series, as the Board may deem advisable and
as shall not be inconsistent with the provisions of this Certificate of
Incorporation.
The holders of shares of the Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board, out of funds legally
available for the payment of dividends, dividends (if any) at the rates fixed by
the Board for such series before any cash dividends shall be declared and paid
or set apart for payment, on the Common Stock with respect to the same dividend
period.
The holders of shares of the Preferred Stock of each series shall be
entitled, upon liquidation or dissolution or upon the distribution of the assets
of the Corporation, to such preferences as provided in the resolution or
resolutions creating such series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the holders of
shares of the Common Stock. Whenever the holders of shares of the Preferred
Stock shall have been paid the full amounts to which they shall be entitled, the
holders of shares of the Common Stock shall be entitled to share ratably in all
remaining assets of the Corporation.
(b) Upon this Certificate of Amendment to the Certificate of Incorporation
of the Corporation becoming effective pursuant to the General Corporation Law of
the State of Delaware (the "Effective Time"), shares of common stock held by
each holder of record on such date shall be automatically combined according to
class at the rate of one-for-thousand without any further action on the part of
the holders of the Corporation (the "Reverse Split"). All fractional shares
owned by each holder of record will be aggregated and to the extent after
aggregating all fractional shares any registered holder is entitled to a
fraction of a share, he shall be entitled to receive one whole share in respect
of such fraction of a share.
(c) Each stock certificate issued prior to the Effective Time shall, from
and after the Effective Time, automatically and without the necessity of
presenting the same for exchange, represent that number of shares of common
stock, as the case may be, into which the shares represented by such certificate
shall have been reclassified pursuant to the Reverse Split. Each holder of
record of a certificate that represented shares of common stock immediately
prior to the Effective Time, shall receive, upon surrender of such certificate,
a new certificate representing the number of shares of common stock immediately
after the Reverse Split."
4. This Amendment to the Certificate of Incorporation has been duly
adopted by the written consent of the Board of Directors and the majority
written consent of the common stockholders of the Corporation in accordance with
the provisions of Sections 228 and 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, Safetek International, Inc. has caused this
Certificate of Amendment to be executed by its duly authorized officer on this
__ day of September, 2004.
---------------------------
Shmuel Shneibalg, President