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:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only [as permitted by Rule
14c-5(d)(2)]
[X] 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.
(1) Title of each class of securities to which transaction applies:
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calculated and state how it was determined):
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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
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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 August 20, 2004
to stockholders of record on August 17, 2004 (the "Record Date").
By Order of the Board of Directors
/s/ Shmuel M. Shneibalg
- ------------------------
August 17, 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 (2) 5,183 100
Options that may be granted in
future under existing option
plan(3) 300,000,000 300,000
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
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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