UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
PURSUANT TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: FEBRUARY 9, 2006
Reality Wireless Networks, Inc.
Nevada
000-26369
(Commission File Number)
88-0422026
(IRS Employer Identification No.)
4916 Point Fosdick Dr., Suite 102, Gig Harbor, WA 98335
Registrant's telephone number, including area code: (253) 853-3632
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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
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14(c)-5(g) and 0-11.
1) Title of each class of securities to which transaction applies: Common Stock
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2) Aggregate number of securities to which transaction applies: 498,140,212
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount of which the filing fee is
calculated and state how it was determined): N/A
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4) Proposed maximum aggregate value of transaction: N/A
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5) Total fee paid: N/A
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| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_______________________________________________
2) Form, Schedule or Registration No.:___________________________________
3) Filing Party:________________________________________________________
4) Date
Reality Wireless Networks, Inc.
4916 Point Fosdick Dr., Suite 102,
Gig Harbor, WA 98335
We Are Not Asking You For a Proxy and You Are Requested Not to Send Us A Proxy
The Board of Directors has approved and has submitted to shareholders proposals
for the recapitalization and change in entity name in connection with the merger
of the Company with Arabian Recab For Trading Co., on August 19, 2005 (the
"Merger"). Each of the proposals must be approved by the shareholders for the
recapitalization and change in entity name to take effect. The proposals are the
following:
1. A reverse split of the issued and outstanding Reality common stock
and preferred stock on a five hundred-to-one (500:1) basis;
2. The approval of the change in the Company name from "Reality
Wireless Networks, Inc.," to "Recab International, Inc."; and
3. The expansion of the Board of Directors (the Board") of the Company
from one to three directors, which will be appointed by the current
directors of Arabian Recab for Trading Co., and serve on the Board
until the next annual election of the Board.
4. Ratification of the transfer of the opportunity to merge with
Genesis Electronics, Inc., to Genesis Acquisitions, Corp., ("GAq")
thereby approving a proposed distribution of up to three percent
(3%) of the common stock of Genesis Electronics, Inc. to the
shareholders of the Company existing at the time of the Merger
between Reality Acquisition, Inc. and Arabian Recab for Trading Co.
on a pro rata basis. The distribution shall occur following that
time at which Genesis Electronics, Inc., files a registration
statement with the Securities and Exchange Commission (the "SEC")
and such registration statement is declared effective;
Shareholders holding voting capital stock providing for the right to
542,150,000 votes have consented in writing to these proposals, constituting
approval of approximately 52% of the shares entitled to vote, which action, if
taken will not, under Federal Securities laws, rules and regulations, be
effective until at least 20 days after mailing of this information statement.
Such approval and consent constitute the approval and consent of a majority of
the total number of shares of outstanding voting capital stock and are
sufficient under the Nevada General Corporation Law and the Company's Bylaws to
approve the action. Accordingly, the action will not be submitted to the other
stockholders of the Company for a vote, and this Information Statement is being
furnished to stockholders to provide them with certain information concerning
the action in accordance with the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the regulations promulgated
thereunder, including Regulation 14C.
Stockholders of record at the close of business on the date of the first
delivery of this information statement to any stockholder of the company shall
be given a copy of this Information Statement. The date of first delivery of
this information statement to any stockholder is expected to be February 9,
2006.
By Order of the Board of Directors
/s/ Steve Careaga
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Steve Careaga, President
This information statement is being furnished to all holders of the common
stock and preferred stock of Reality in connection with the proposed action by
written consent to authorize the board of directors to carry out a 500 to 1
reverse stock split of the currently issued and outstanding common stock and
preferred stock, but not the total authorized common stock or preferred stock of
the Company, a change in the entity name of the Corporation to "Recab
International, Inc.", a change in the number of Directors of the Board of the
Company, and ratification of the transfer of the opportunity to merge with
Genesis Electronics, Inc., to GAq, approval of the conditional distribution of
certain assets or dividends to the shareholders..
ITEM 1.
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INFORMATION STATEMENT
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ACTION BY THE BOARD OF DIRECTORS AND CONSENTING STOCKHOLDERS
GENERAL
The Company will pay all costs associated with the distribution of this
Information Statement, including the costs of printing and mailing. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending this Information Statement
to the beneficial owners of The Company's common stock.
The Company will only deliver one Information Statement to multiple
security holders sharing an address unless The Company has received contrary
instructions from one or more of the security holders. Upon written or oral
request, The Company will promptly deliver a separate copy of this Information
Statement and any future annual reports and information statements to any
security holder at a shared address to which a single copy of this Information
Statement was delivered, or deliver a single copy of this Information Statement
and any future annual reports and information statements to any security holder
or holders sharing an address to which multiple copies are now delivered. You
should direct any such requests to the following address: The Company, Inc.,
4916 Point Fosdick Drive, Suite 102, Gig Harbor, WA 98335 Attn: Steve Careaga,
President.
This information statement is being furnished to all holders of the common
stock and preferred stock of Reality Wireless Group, Inc., a Nevada Company
("Reality"), in connection with resolutions of the Board of Directors and the
written consent of the holders of in excess of 52% of the voting capital stock
of Reality providing for a reverse split of the common stock and Series B
Preferred stock of Reality on a basis of up to five hundred-for-one (500:1)
shares, the approval of the change in the Company name from "Reality Wireless
Networks, Inc.," to "Recab International, Inc.," the expansion of the Board of
Directors (the Board") of the Company from one to three directors, which will be
appointed by the current directors of Arabian Recab for Trading Co., and serve
on the Board until the next annual election of the Board, and ratification of
the transfer of the opportunity to merge with Genesis Electronics, Inc., to
Genesis Acquisitions, Corp., and subsequent distribution of up to 3% of the
common stock in Genesis Electronics, Inc., to shareholders of thee Company on a
pro rata basis. The reverse split and name change will be conducted at a time to
be determined by the board of directors subject to filing of required notices
with the Nevada Secretary of State's office.
The Form 10QSB for the quarterly period ended September 30, 2005,
pursuant to its change in fiscal year end of September 30 to December 31, as
reported on Form 8-K filed October 20, 2005, and the form 10KSB for the year
ended September 30, 2004 and for the year ended September 30, 2003, and the
audited financial statements for Arabian Recab for Trading, Co., for the fiscal
years ended 2004 and 2003 and the unaudited financials for the period commencing
January 1, 2005 and ending September 30, 2005, filed on Form 8-K by the Company
with the Securities and Exchange Commission may be viewed on the Securities and
Exchange Commission's web site at www.sec.gov in the Edgar Archives. Reality is
presently current in the filing of all required reports. See the caption
Additional Information, below.
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INFORMATION ON CONSENTING STOCKHOLDERS
Pursuant to the Company's Bylaws and the Nevada General Corporation Act, a
vote by the holders of at least a majority of the Company's outstanding capital
stock is required to effect the action described herein. As of the record date,
the Company had voting rights equivalent to 1,023,140,212 shares of voting
capital stock issued and outstanding of which 511,570,106 voting rights are
required to pass any stockholder resolutions. The consenting stockholders, who
consist of 1 current stockholder of the Company, is the record holder of
542,150,000 shares of voting capital stock, which represents approximately 52%
of the issued and outstanding shares of the Company's voting capital stock.
Pursuant to NRS 78.320 of the Nevada General Corporation Act, the consenting
stockholders voted in favor of the actions described herein in a written
consent, dated February 9, 2006. The consenting stockholder's name, affiliation
with the Company, and its beneficial holdings are as follows:
Beneficial Holder and
AMOUNT/NATURE/ % OWNERSHIP NAME/ADDRESS
TITLE OF CLASS OF CLASS BENEFICIAL OWNER
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1,050,000 100% Steve Careaga (1)
(.01 par value) 4916 Point Fosdick Dr.,
Preferred Series B Suite 102
Gig Harbor, WA 98335
17,150,000 3.4% Steve Careaga
(.001 par value) 4916 Point Fosdick Dr.
Common Stock Suite 102
Gig Harbor, WA 98335
(1) Steve Careaga, Chairman of the Board of Directors and Chief Executive
Officer of the Company, is the beneficial holder of approximately 52.9 % of the
issued and outstanding voting capital stock of the Company.
PROPOSALS BY SECURITY HOLDERS
None.
DISSENTERS RIGHTS OF APPRAISAL
None.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 9, 2006, certain
information regarding the ownership of the Company's capital stock by each
director and executive officer of the Company, each person who is known to the
Company to be a beneficial owner of more than 5% of any class of the Company's
voting stock, and by all officers and directors of the Company as a group, and
is based on 1,050,000 shares of preferred stock issued and outstanding and
498,140,212 shares of common stock issued and outstanding on a fully diluted
basis, as of February 9, 2006.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and generally includes voting or
investment power with respect to securities. Shares of common stock subject to
options, warrants or convertible securities exercisable or convertible within 60
days of February 9, 2006 are deemed outstanding for computing the percentage of
the person or entity holding such options, warrants or convertible securities
but are not deemed outstanding for computing the percentage of any other person.
AMOUNT/NATURE/ % OWNERSHIP NAME/ADDRESS
TITLE OF CLASS OF CLASS BENEFICIAL OWNER
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1,050,000 100% Steve Careaga (1)
(.01 par value) 4916 Point Fosdick Dr.
Preferred Series B Suite 102
Gig Harbor, WA 98335
Directors
1,050,000 100% Steve Careaga (1)
(.01 par value) 4916 Point Fosdick Dr.
Preferred Series B Suite 102
Gig Harbor, WA 98335
17,150,000 3.4% Steve Careaga
(.001 par value) 4916 Point Fosdick Dr.
Common Stock Suite 102
Gig Harbor, WA 98335
Shareholder Executives
1,050,000 100% Steve Careaga (1)
(.01 par value) 4916 Point Fosdick Dr.
Preferred Series B Suite 102
Gig Harbor, WA 98335
17,150,000 3.4% Steve Careaga
(.001 par value) 4916 Point Fosdick Dr.
Common Stock Suite 102
Gig Harbor, WA 98335
(1) Steve Careaga, holder of shares of class B Preferred stock, the approval of
this class of stock is also required to approve the actions set forth herein;
Steve Careaga has provided his written consent to such actions.
As of January 31, 2004, Reality had 498,140,212 shares of its common voting
stock And 1,050,000 shares of Series B Preferred issued and outstanding.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all the compensation earned by the person serving
as the Chief Executive Officer (Named Executive Officer) during the fiscal years
ended December 31, 2005 and 2004 and any other officers who have earned greater
than $100,000 in total salary and bonuses during the 2005 or 2004 fiscal years.
Annual Compensation Long-Term Compensation
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Awards Pay-Outs
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Securities
Other Restricted
Annual Underlying
Name and Compen- Stock All Other LTIP
Principal Salary Bonus sation Award(s) Options/ Compensation
Position Year ($) ($) ($) ($) SARs(#) Payouts ($)
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Steve 2005 -0- -0- -0- note (1) $183,750 -0- -0- -0-
Careaga (1) 2004 -0- -0- -0- -0- -0- -0- -0-
CEO and
Director
(1) Mr. Careaga was awarded 17,150,000 shares of restricted common stock valued
at approximately $0.0015/per share and 1,050,000 of preferred stock valued at
$0.15 per share as consideration for his services as CEO and Director of the
company since February of 2004.
Stock Options Granted in Fiscal 2004
The following table sets forth certain information concerning grants of options
made during fiscal year 2005 to the named executive officers.
Number of
Securities Percent of Total Exercise
Underlying Options Grante To or Base Fair Market Value on Expiration
Name Options Granted(#) Employees in 2004 Price ($/SH) Date of
Grant Date
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Steve Careaga -0- N/A N/A N/A N/A
Aggregate Stock Option Exercises and Year-End Option Value Table
The following table sets forth certain information concerning option exercises
in fiscal 2005, the number of stock options held by the Named Executive Officers
as of December 31, 2005 and the value (based on the fair market value of a share
of stock at fiscal year-end) of in-the-money options outstanding as of such
date.
Number of Number of Unexercised Value of Unexercised
Shares Options Held In-the-Money Options
Acquired on Value at Fiscal Year-End(#) at Fiscal Year-End(1)
Realized ($)
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
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Steve -0- N/A N/A N/A N/A N/A
Careage -0- N/A N/A N/A N/A N/A
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NOTICE TO STOCKHOLDERS OF ACTION APPROVED BY CONSENTING STOCKHOLDERS
The following actions were taken based upon the unanimous recommendation and
approval of the Company's Board of Directors (the "Board") and the written
consent of the consenting stockholders:
GRANT OF AUTHORITY TO THE BOARD OF DIRECTORS TO CONDUCT UP TO A FIVE
HUNDRED-FOR-ONE SHARE REVERSE STOCK SPLIT OF THE COMPANY'S COMMON STOCK AND
PREFERRED STOCK
The board has indicated that fractional shares will not be issued.
Instead, the Company will issue one full share of the post-reverse stock split
common stock to any shareholder who is entitled to receive a fractional shares
as a result of the process. Each shareholder will hold the same percentage of
the outstanding common stock immediately following the reverse stock split as
that shareholder did immediately prior to the stock split, except for minor
adjustment as a result of the additional shares that will need to be issued a
result of the treatment of fractional shares.
Reality's board had determined that it would be in the Company's best
interest to conduct a reverse split of its common stock and preferred stock on
up to a five hundred-for-one (500:1) basis and has received the consent of
holders of a majority of the votes available as to the capital stock and Series
B Preferred stock to authorize the board to conduct such a reverse split in the
Board's discretion.
A decline in the market price for the Company's common stock after the
reverse stock split may result in a greater percentage decline than would occur
in the absence of a reverse stock split, and the liquidity of the Company's
common stock could be adversely affected following a reverse stock split.
The market price of the Company's common stock will also be based on the
Company's performance and other factors, some of which are unrelated to the
number of shares outstanding. If the reverse stock split is effected and the
market price of the Company's common stock declines, the percentage decline as
an absolute number and as a percentage of the Company's overall market
capitalization may be greater than would occur in the absence of a reverse stock
split. In many cases, both the total market capitalization of a company and the
market price of a share of such company's common stock following a reverse stock
split are lower than they were before the reverse stock split. Furthermore, the
liquidity of the Company's common stock could be adversely affected by the
reduced number of shares that would be outstanding after the reverse stock
split.
The Company's common stock trades as a "penny stock" classification which
limits the liquidity for the Company's common stock.
The Company's stock is subject to "penny stock" rules as defined in 1934
Securities and Exchange Act rule 3151-1. The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. The
Company's common stock is subject to these penny stock rules. Transaction costs
associated with purchases and sales of penny stocks are likely to be higher than
those for other securities. Penny stocks generally are equity securities with a
price of less than U.S. $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system).
As a result, all brokers or dealers involved in a transaction in which the
Company's shares are sold to any buyer, other than an established customer or
"accredited investor," must make a special written determination. These Exchange
Act rules may limit the ability or willingness of brokers and other market
participants to make a market in our shares and may limit the ability of the
Company's stockholders to sell in the secondary market, through brokers, dealers
or otherwise. The Company also understands that many brokerage firms will
discourage their customers from trading in shares falling within the "penny
stock" definition due to the added regulatory and disclosure burdens imposed by
these Exchange Act rules. These disclosure requirements may have the effect of
reducing the level of trading activity in the secondary market for the common
shares in the United States and stockholders may find it more difficult to sell
their shares. An orderly market is not assured or implied as to the Company's
common stock; nor are there any assurances as to the existence of market makers
or broker/dealers for the Company's common stock.
REASONS FOR THE REVERSE STOCK SPLIT:
The primary purposes of the reverse stock split are to accomplish the following:
a) increase the per share price of the common stock to help maintain the
interest of the markets;
b) reduce the number of outstanding shares of common stock to a level more
consistent with other public companies with a similar anticipated market
capitalization; and
c) provide the management of the Company with additional flexibility to
issue shares to facilitate future stock acquisitions and financing for the
Company.
For the above reasons, the board believes that the reverse stock split is
in the best interest of the Company and its shareholders. There can be no
assurance, however, that the reverse stock split will have the desired benefits.
EFFECTS OF THE REVERSE STOCK SPLIT:
The reverse stock split will be effected by filing an amendment to the
Company's Articles of Incorporation with the Nevada Secretary of State's office
and will become effective upon such filing and final approval of the board of
directors of the Company. The actual timing of any such filing will be made by
the board of directors based upon its evaluation as to when the filing will be
most advantageous to the Company and its shareholders.
The Company is currently authorized to issue 500,000,000 shares of its
common stock of which 498,140,212 shares are currently issued and outstanding
and 100,000,000 shares of Preferred Stock of which 1,050,000 shares of Series B
Preferred are issued and outstanding as of February 9, 2006. Currently,
shareholders voting capital stock providing for the right to 542,150,000 votes
have consented in writing to the reverse-split proposal, constituting approval
of approximately 52% of the shares entitled to vote. A reverse split on a on
hundred for one (500:1) basis reduces the number of issued and outstanding
shares to approximately 996,280,424 shares of common stock and 2,100 shares of
Series B Preferred stock but will not reduce the number of shares of common or
preferred stock which the Board of the Company is authorized to issue. The
reverse split will not have any effect on the stated par value of the common
stock.
The effect of the reverse split upon existing shareholders of the voting
capital stock will be that the total number of shares of the Company's voting
capital stock held by each shareholder will automatically converted into the
number of whole shares of voting capital stock equal to the number of shares of
voting capital stock, respectively, owned immediately prior to the reverse stock
split divided by to 500, with an adjustment for any fractional shares.
(Fractional shares will be rounded up into a whole share).
If acted upon by the Company's board of directors, the consent by the
majority of the available votes, as voting capital stock provides, reported
herein would result in each shareholder's percentage ownership interest in the
company and proportional voting power to remain virtually unchanged except for
minor changes and adjustments that will result from rounding fractional shares
into whole shares. The rights and privileges of the holders of shares of voting
capital stock will be substantially unaffected by the reverse stock split. All
issued and outstanding options, warrants, and convertible securities would be
appropriately adjusted for the reverse stock split automatically on the
effective date of the reverse stock split. All shares, options, warrants or
convertible securities that the Company has agreed to issue (or agrees to issue
prior to the effective date of the reverse stock split) also will be
appropriately adjusted for the reverse stock split.
The reverse stock split may also result in some shareholders holding "odd
lots" of less than 100 shares of common stock. Brokerage commissions and other
costs of transactions in odd lots may be higher, particularly on a per-share
basis, than the cost of transactions in even multiples of 100 shares. If in the
future the Company issues additional equity or quasi-equity securities combined
with a reverse stock split there is a significant risk of shareholder value
represented by the common stock being diluted. The proposed increase to the
number of authorized shares of common stock creates a risk that current
shareholders of the common stock will see the value of those shares diluted
through the issuance of the additional authorized shares. The current net
tangible book value per share will be diluted if additional shares are issued
without a concurrent increase in the net book value of the assets of the
Company. The current book value of shares held by existing shareholders would
not be maintained in the event additional shares are issued. If all additional
shares of authorized common stock were issued, without any increase in the net
book value of the assets of the Company, the net book value per share would
decrease by a factor of 100.
After the reverse split there is not a requirement that shareholders
obtain new or replacement share certificates. Each holders of record of shares
of the Company's common stock that is outstanding on the effective date of the
reverse stock split may contact the Company's transfer agent to exchange the
certificates for new certificates representing the number of whole shares of
post-reverse stock split into which the existing shares have been converted as a
result of the reverse stock split.
Until the shareholder forwards a completed letter of transmittal, together
with certificates representing such shareholder's shares of pre-reverse stock
split common stock to the transfer agent and receives in return a new
certificate representing shares of post-reverse stock split common stock, such
shareholder's pre-reverse stock split common stock shall be deemed equal to the
number of whole shares of post- reverse stock split common shares to which such
shareholder is entitled as a result of the reverse stock split.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion describes certain material federal income tax
considerations relating to the proposed reverse stock split. This discussion is
based upon the Internal Revenue Code, existing and proposed regulations
thereunder, legislative history, judicial decisions, and current administrative
rulings and practices, all as amended and in effect on the date hereof. Any of
these authorities could be repealed, overruled, or modified at any time. Any
such change could be retroactive and, accordingly, could cause the tax
consequences to vary substantially from the consequences described herein. No
ruling from the Internal Revenue Service (the "IRS") with respect to the matters
discussed herein have been requested, and there is no assurance that the IRS
would agree with the conclusions set forth in this discussion.
This discussion may not address federal income tax consequences that may
be relevant to particular shareholders in light of their personal circumstances
or to shareholders who may be subject to special treatment under the federal
income tax laws. This discussion also does not address any tax consequences
under state, local or foreign laws.
SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR
TAX CONSEQUENCE OF THE REVERSE STOCK SPLIT FOR THEM, INCLUDING THE APPLICABILITY
OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, CHANGES IN APPLICABLE TAX LAWS AND ANY
PENDING OR PROPOSED LEGISLATION.
The reverse stock split is intended to be a tax-free recapitalization to
the Company and its shareholders, except for those shareholders who receive a
whole share of stock in lieu of fractional shares. Hence, shareholders will not
recognize any gain or loss for federal income tax purposes as a result of the
reverse stock split, except for those shareholders receiving a whole share of
common stock in lieu of a fractional share (as described below). The holding
period for such shares of stock after the reverse split will include the holding
period of shares of stock before the reverse stock split, provided that such
shares of stock are held as a capital asset at the effective date of the
amendment. The adjusted basis of the shares of common stock after the reverse
stock split will be the same as the adjusted basis of the shares of stock before
the reverse stock split excluding the basis of fractional shares.
A shareholder who receives a whole share of common stock in lieu of a
fractional share generally may recognize gain in an amount not to exceed the
excess of the fair market value of such whole share over the fair market value
of the fractional shares to which the shareholder was otherwise entitled.
QUESTIONS AND ANSWERS REGARDING THE PROPOSED REVERSE STOCK SPLIT OF THE
COMMON STOCK.
Q. HAS THE BOARD OF DIRECTORS APPROVED THE PROPOSED REVERSE STOCK SPLIT?
A. The sole member of the Board of Directors has approved the reverse stock
split of the of issued capital stock in the best interest of Reality and the
best interest of the current shareholders of Reality.
Q. WILL I RECEIVE ANY ADDITIONAL SHARES OR A DIFFERENT CLASS OF SHARES AS A
RESULT OF THESE PROPOSALS?
A. As a current shareholder of Reality your class of stock and the number of
shares that you hold will be affected only as a result of the adoption of the
proposal to authorize a reverse stock split. For example, a current holder of
500 shares of common stock will remain a holder of 1 share of common stock in
the event that the board declares the 500 for 1 reverse stock split; none of the
other proposed changes will result in different or additional shares being sent
to existing shareholders.
Q. WILL THE CHANGES TO THE ARTICLES OF INCORPORATION RESULT IN ANY TAX LIABILITY
TO ME?
A. The proposed changes are intended to be tax free for federal income tax
purposes.
Q. WHAT VOTE OF THE SHAREHOLDERS WILL RESULT IN THE PROPOSALS BEING PASSED?
A. To approve the proposal, the affirmative vote of a majority of the votes of
eligible voting securities is required. Consents in favor of the proposal have
already been received from shareholders holding a majority of the votes of
eligible voting securities of Reality.
Q. WHO IS PAYING FOR THIS INFORMATION STATEMENT?
A. The Company will pay for the delivery of this information statement.
---------------------------------
GRANT OF AUTHORITY TO THE BOARD OF DIRECTORS TO UNDERTAKE THE APPROVED CHANGE IN
THE COMPANY NAME
The Company intends to change the Company name from "Reality Wireless
Networks, Inc.," to "Recab International, Inc." as consistent with its August
19, 2005 merger Arabian Recab for Trading Co. The name change will be conducted
at a time to be determined by the board of directors subject to filing of
required notices with the Nevada Secretary of State's office.
Concurrent with the change in the corporate name of the Company from
"Reality Wireless Networks, Inc.," to "Recab International, Inc.", the Company
will undertake the necessary action to change its trading symbol from "RWNW.OB"
on the Over The Counter Bulletin Board to a symbol that has yet to be
determined. The Company expects to receive a new trading symbol at the
approximate time that its name change becomes effective and will disclose the
new symbol to its shareholders in a subsequent filing with the Securities and
Exchange Commission.
---------------------------------
APPROVAL OF EXPANSION OF THE BOARD OF DIRECTORS OF THE COMPANY
The Company intends to expand the Board of Directors of the Company from
one to three directors as consistent with its August 19, 2005 merger Arabian
Recab for Trading Co. The newly appointed Board will be appointed by the current
directors of Arabian Recab for Trading Co., and serve on the Board until the
next annual election of the Board within forty-five (45) days following the
dtate that the Company files a Form 14C in definitive form.
RATIFICATION OF THE TRANSFER OF MERGER OPPORTUNITY TO GAQ
Prior to the Merger agreement between the Company and Arabian Recab for
Trading Co., on November 10, 2004 the Company and Genesis Electronics, Inc.
("Genesis"), entered into an agreement to merge Genesis with and into Registrant
and to rename the Company Genesis Electronics, Inc., (the "Genesis Merger"). The
agreement provided that all of the shares of common stock of Genesis issued and
outstanding at the time the merger would be converted into common stock of
Registrant such that the current holder of Genesis common stock will hold 97% of
all shares of Registrant's common stock outstanding immediately after the
closing of the merger transaction. While the parties mutually agreed to
terminate the Genesis Merger, they agreed to preserve for the shareholders of
Reality substantially the same opportunity to participate in the equity
ownership of Genesis as if the Genesis Merger had been consummated.
Hence, under a revised agreement between the Company and Genesis, the
Company transferred of the opportunity to merge with Genesis Electronics, Inc.,
to GAq, a wholly-owned subsidiary of the Company, and completed a merger of GAq
with and into Genesis, such that the Company acquired a 3% interest in Genesis
Electronics, Inc. The company plans to distribute this Genesis common stock to
the shareholders of the Company existing at the time of the Merger between
Reality Acquisition, Inc. and Arabian Recab for Trading Co., on a pro rata
basis, which distribution shall be conditioned upon Genesis filing a
registration statement including such shares and upon the Securities Exchange
Commission (the "SEC") declaring such registration statement effective (the
"Distribution"). The shares distributed as part of the Distribution will be
freely tradable when the registration has become effective and all comments of
the SEC have been cleared, subject to the 1993 Securities Act and the 1934
Exchange Act.
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ITEM 5.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, nominee for election as a director,
associate of any director, executive officer or nominee or any other person has
any substantial interest, direct or indirect, by security holdings or otherwise,
in the proposed amendment to Reality's Articles of Incorporation or in any
action covered by the related resolutions adopted by the Board of Directors,
which is not shared by all other stockholders.
ADDITIONAL INFORMATION
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Additional information concerning the Company including its Annual Report
on Form 10KSB for the year ended September 30, 2004 and for the year ended
September 30, 2003, and the 10QSB for the quarterly period ended September 30,
2005, pursuant to its change in fiscal year end of September 30 to December 31,
as reported on Form 8-K filed October 20, 2005, and the audited financial
statements for Arabian Recab for Trading, Co., for the fiscal years ended 2004
and 2003 and the unaudited financials for the period commencing January 1, 2005
and ending September 30, 2005, filed on Form 8-K by the Company with the
Securities and Exchange Commission may be viewed on the Securities and Exchange
Commission's web site at www.sec.gov in the Edgar Archives. Reality is presently
current in the filing of all required reports.
Dated: February 9, 2006
By Order of the Board of Directors
/s/ Steve Careaga
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Chief Executive Officer and Director