UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
|_| Definitive Information Statement Rule 14c-5 (d)(2))
HOMELIFE, INC.
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
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PRELIMINARY INFORMATION STATEMENT
DATED: MAY 19, 2006
HOMELIFE, INC.
1503 South Coast Drive, Suite 204
Costa Mesa, CA 92626
(714) 241-3030
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is furnished by the Board of Directors of HomeLife,
Inc. (the "Company") to provide notice to the stockholders of the taking of
action by written consent of the holder of a majority of the outstanding voting
stock in lieu of a special meeting of stockholders of the Company. The action to
be taken by such stockholder in lieu of a meeting will consist of amending the
Company's Certificate of Incorporation, increasing the Company's authorized
common stock and approving a spinout of all of the Company's assets to a
separate entity controlled by the Company's majority stockholder upon the
completion of a possible transaction in which voting control of the Company is
acquired through a merger or share exchange.
The record date for determining stockholders entitled to receive this
Information Statement has been established as the close of business on
__________, 2006 (the "Record Date"). This Information Statement will be first
mailed on or about _______________, 2006 to stockholders of record at the close
of business on the Record Date.
ONLY THE COMPANY'S SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON THE RECORD
DATE ARE ENTITLED TO NOTICE OF THE PROPOSALS. THE PRINCIPAL SHAREHOLDER OF THE
COMPANY WHO, AS OF THE RECORD DATE, HOLDS IN EXCESS OF 50% OF THE COMPANY'S
ISSUED AND OUTSTANDING SHARES ENTITLED TO VOTE ON THE PROPOSALS HAS INDICATED
THAT HE WILL VOTE IN FAVOR OF THE PROPOSALS. AS A RESULT, THE PROPOSALS SHOULD
BE APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER SHAREHOLDERS OF THE
COMPANY.
ABOUT THE INFORMATION STATEMENT
What is the purpose of the information statement?
This Information Statement is being provided pursuant to Section 14 of the
Securities Exchange Act of 1934 to notify the Company's shareholders, as of the
close of business on the Record Date, of corporate action expected to be taken
by the Company's principal shareholder by written resolutions in lieu of a
special meeting of shareholders. The Company's principal shareholder, who holds
in excess of fifty percent (50%) of the Company's outstanding capital stock, is
expected to act upon the corporate matters outlined in this Information
Statement, which action is expected to be approved on May 19, 2006.
Who is entitled to notice?
Each holder of an outstanding share of common or preferred stock of record on
the close of business on the Record Date will be entitled to notice of each
matter to be voted upon.
What corporate matters will the principal shareholder vote for and how will he
vote?
The Company's principal shareholder, Mr. Andrew Cimerman, who holds a majority
of the Company's outstanding capital stock, has indicated that he will vote in
favor of the following matters:
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FOR increasing the number of shares of authorized common stock, par value
$0.001 per share (the "Common Stock"), from 100,000,000 shares of Common Stock
to 500,000,000 shares of Common Stock.
FOR amending the Company's Articles of Incorporation to increase the
number of shares of authorized Common Stock from 100,000,000 shares of Common
Stock to 500,000,000 shares of Common Stock.
FOR authorizing the spinout of all of the Company's assets to a separate
entity controlled by Mr. Andrew Cimerman, the Company's President, Principal
Shareholder and Director, upon completion of a merger or share exchange with
another entity.
What vote is required to approve the proposals?
Amending the company's articles of incorporation to increase the authorized
common stock. For approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 100,000,000 shares to 500,000,000 shares, the affirmative vote
of a majority of the shares of capital stock outstanding on the Record Date will
be required for approval. A shareholder holding in excess of fifty percent of
the shares has indicated that he will vote for the amendment.
Authorizing a spinout of all of the company's assets to a separate entity
controlled by Andrew Cimerman upon completion of a merger or share exchange. For
approval of the transfer of all of the Company's assets to a separate entity
controlled by Mr. Cimerman in exchange for his shares of the Company's Class A
Preferred stock, a significant portion of his shares of the Common Stock, the
full satisfaction of all of the debts and liabilities owed by the Company to him
and his assumption of the Company's liabilities and obligations for repayment of
bank lines of credit and commercial office leases, the affirmative vote of a
majority of the shares of capital stock outstanding on the Record Date will be
required for approval. A shareholder holding in excess of fifty percent of the
shares has indicated that he will vote in favor of such approval.
PROPOSAL NO. 1
AMENDMENT TO THE ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Company's Directors propose an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of common stock, par
value $0.001 per share, from 100,000,000 to 500,000,000 shares of common stock,
par value $0.001 per share.
Purpose of Increasing the Company's Authorized Shares of Common Stock
To Facilitate a Possible Merger or Share Exchange
The Board of Directors has received inquiries from third parties concerning
interest in possible acquisitions of controlling interests in the Company and
the simultaneous acquisition by the Company of an operating entity through such
transactions as a reverse merger, share exchange, a share exchange followed by a
reverse merger or other similar transaction (an "Acquisition Transaction"). In
each case, the inquiries were made on behalf of operating companies interested
in the acquisition of control of a publicly traded shell company. Under the
right circumstances, although control of the Company would become vested in
others, the Board of Directors believes that the Company's acquisition of a
financially sound operating company through such a transaction would be prudent
and in the best interests of the Company and its shareholders. As a result, the
Board of Directors believes that it is desirable to have additional shares of
common stock available for such possible future transactions for the acquisition
of control of the Company
While the Company has engaged in discussions with persons expressing a possible
interest in entering into an Acquisition Transaction with the Company, the
Company has not entered into any letter of intent or any binding agreement for
such a transaction. There can be no assurance that the Company will be presented
with a proposal acceptable to both the Board of Directors and the Company's
controlling shareholder or that the Company will ultimately enter into a binding
agreement for an Acquisition Transaction if one is presented. Since there is no
pending transaction, it is currently impracticable to describe the ultimate
terms of an Acquisition Transaction for which the increase in the number of
authorized shares of Common Stock is principally proposed.
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General Corporate Purposes
Even in the absence of such an acquisition transaction, the Company's directors
believe that it is desirable to have additional shares of common stock available
for other possible future financings, possible future acquisition transactions,
stock dividends, stock splits and other general corporate purposes. The
Company's directors believe that having such additional authorized shares of
common stock available for issuance in the future should give the Company
greater flexibility and may allow such shares to be issued without the expense
and delay of a further information statement, holding a special shareholders'
meeting or otherwise obtaining further shareholder approval. Although such
issuance of additional shares with respect to future financings and acquisitions
would dilute existing shareholders, management believes that such transactions
would increase the value of the Company to its shareholders. No such financings
or transactions are currently in process and none are expected to occur in the
immediate future.
Amendment to Certificate Of Incorporation
The Company's Articles of Incorporation currently authorize the issuance of a
maximum of 100,000,000 shares of Common Stock, of which 12,371,886 shares are
currently issued and outstanding. The proposed amendment to the Company's
Articles of Incorporation provides for the authorization of 400,000,000
additional shares of the Company's Common Stock. Such an amendment would permit
the Company to issue a maximum of 500,000,000 shares of Common Stock.
The amendment to the Company's Articles of Incorporation shall be filed with the
Nevada Secretary of State so that Article 4 of the Articles of Incorporation
shall be changed as follows. The first sentence of Article shall be deleted in
its entirety and substituted with the following:
This Corporation is authorized to issue two classes of capital
stock, designated respectively "Common Stock" and "Preferred Stock" The
total number of shares of Common Stock which this Corporation is
authorized to issue is Five Hundred Million (500,000,000) shares with a
par value of $0.001 per share.
A proposed draft of the amendment to the Company's Articles of Organization is
attached hereto as Exhibit A.
Advantages and Disadvantages Of Increasing Authorized Shares
There are certain advantages and disadvantages of voting for an increase in the
Company's authorized common stock.
The advantages include:
- - The ability to raise capital by issuing capital stock.
- - The ability to complete a transaction for the acquisition of a financially
sound operating company through a share exchange, reverse merger or other
transaction described above or other possible financing transactions.
- - To have shares of common stock available to pursue business expansion
and/or other corporate opportunities, if any.
The disadvantages include:
- - Dilution to the existing shareholders.
- - A decrease in our net income per share in future periods. This could cause
the market price of our stock to decline.
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- - Once the increase in the number of authorized shares is approved, the
Board of Directors will have the authority to approve the issuance of up
to the full amount of the authorized but unissued shares of Common Stock
without the consent of, or any vote by, the Company's stockholders.
- - The issuance of additional authorized shares of Common Stock will likely
result in a change in control of the Company. Additionally, an Acquisition
Transaction may require some or all of the current officers and/or
directors of the Company to resign their positions.
- - Either the current Board of Directors or those who may acquire control of
the Company following an Acquisition Transaction may seek to implement a
reverse split of the Company's outstanding Common Stock in order to, for
example, further increase the number of shares of authorized but unissued
Common Stock. Any such action may be implemented by the Board of
Directors, and no further approval by the shareholders will be required.
The current Board of Directors, however, has no present intention of
authorizing a reverse split of the shares of outstanding Common Stock
following the approval of this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY (WITH ANDREW CIMERMAN ABSTAINING) RECOMMENDS
A VOTE "FOR" AMENDING THE ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED
COMMON STOCK OF THE COMPANY FROM 100,000,000 TO 500,000,000 SHARES.
PROPOSAL NO. 2
SPINOUT OF ALL OF THE COMPANY'S ASSETS TO A SEPARATE ENTITY CONTROLLED BY
ANDREW CIMERMAN, THE COMPANY'S PRESIDENT, PRINCIPAL SHAREHOLDER AND MEMBER
OF ITS BOARD OF DIRECTORS, UPON COMPLETION OF A MERGER OR SHARE EXCHANGE
WITH ANOTHER ENTITY
The Company's directors propose that, simultaneous with the completion of an
acceptable Acquisition Transaction pursuant to which the Company acquires a
financially sound operating company and voting control of the Company is
acquired by others, the Company spinout all of its assets to a separate entity
controlled by Mr. Andrew Cimerman in exchange for all of his shares of the
Company's Class A Preferred stock, a significant block of his shares of the
Company's common stock, the satisfaction of all of the Company's debts and
obligations to him and his assumption of all of the Company's debts and
liabilities under its bank lines of credit and its commercial office leases.
Given the personal interest of Andrew Cimerman in the proposal, Mr. Cimerman has
abstained from voting as a member of the Board of Directors on the issue of
whether or not to recommend approval of the proposed spinout of assets. Other
than Mr. Cimerman, no officer or director of the Company has an interest in this
proposal.
Purpose
The Board of Directors has received inquiries from third parties concerning
interest in entering into possible Acquisition Transactions. In each case, the
inquiry was made on behalf of an operating entity interested in the reverse
acquisition of a publicly-traded company having no operations or significant
assets or liabilities. None of those third parties expressed an interest in
acquiring the Company's operating subsidiaries or other assets.
The Board of Directors believes it would be prudent and in the best interests of
the Company and its shareholders to pursue possible acquisition transactions in
which the Company either acquires or is acquired by a financially sound
operating entity. In any such transaction, it is likely that voting control of
the Company would be acquired by those in control of such operating entity. In
order to make the Company more attractive for such a potential transaction, the
Board of Directors believes it would be prudent to authorize the spinout of all
of the Company's assets to a separate entity controlled by Andrew Cimerman, the
Company's President, Principal Shareholder and Director. Such a spinout,
however, would be contingent upon, and would only occur upon completion of, an
acceptable acquisition transaction of the type described above.
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Assets to be Transferred to Mr. Cimerman
The Company's assets consist primarily of: (1) the capital stock of four active
wholly-owned subsidiaries and six inactive wholly-owned subsidiaries; (2) the
capital stock of two corporations in which the Company owns a majority interest;
(3) 3,000 freely tradable shares of Berkshire Asset Management; (4) the
Company's rights under various franchise agreements; and (5) the Company's
rights under various licensing agreements. The following is a summary of each:
Wholly-owned Subsidiaries:
Active: HomeLife Realty Services, Inc., MaxAmerica Financial Services, Inc.,
HomeLife California Properties, Inc. (formerly named HomeLife Properties Inc.),
Real Estate School of Southern California, and Red Carpet Broker Network, Inc.
Inactive: FamilyLife Realty Services, Inc., National Sellers Network, Inc.,
Aspen Benson & May LLC, HomeLife California Realty, Inc., and Builders Realty
(Calgary) Ltd.
Majority-owned Subsidiaries:
The Keim Group Ltd. and MaxAmerica Home Warranty Company - 93.33% and 82.72%
respectively.
Franchise Agreements
The Company operates its real estate services through franchises. The franchise
allows independently operated real estate offices to have national brand name
recognition and to share in regional advertising. The Company's franchisor
management periodically visits each real estate office to conduct in-house sales
and marketing training. The franchisor also trains the real estate office
manager on how to recruit new sales personnel.
Franchises are granted to licensed brokers to operate under the business system
and plan developed by the Company and to use one of the following HomeLife
trademarks for such operations: HomeLife, HomeLife (Words & Design), HomeLife
Realty Services and HomeLife Realty, and such other and substitute trade names,
trademarks, service marks, graphics and logotypes as may from time to time be
designated by the Company.
Franchises are operated in Arizona, California, Florida, Illinois, Michigan,
Nevada, South Carolina, Texas, and Wisconsin and comprise 106 offices. The
franchise relationship is governed by the franchise offering circular applicable
to the state in which the franchisee operates and according to the terms and
conditions of the "Participating Independent Broker Franchise Agreement". The
terms of the franchise agreements vary depending upon the market in which the
franchisee operates. From time to time, the Company offers incentive or bonus
plans to attract new franchise members. These programs may directly or
indirectly decrease initial franchise fees of those franchisees entitled to such
bonuses or incentives.
The Franchise Agreement also requires the payment of "Other Fees." These fees
include monthly franchise fees on a fixed fee or percentage of gross revenues
basis, termed royalty fees and advertising contributions. Other fees also
include transfer fees, training fees, interest on overdue accounts, fees related
to accounting and bookkeeping system materials, and renewal fees. There are also
fees that may be incurred under special circumstances such as indemnification
responsibilities, insurance costs, costs of enforcing the franchise agreements
and audit costs.
In addition to the above fees, the franchisee has certain obligations under the
Franchise Agreement including but not limited to compliance with standards and
policies set forth in operating manuals, territorial development and sales
quotas, initial and on-going training and certain advertising and participation
requirements. In exchange for the franchisee's obligations and fees, the Company
provides training programs, the use of its marketing system, its business system
and plan, on-going education, advertising and general support to its
franchisees.
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Licensing Agreements
The Company also operates its business through licensing of the HomeLife
trademarks. According to the terms of the standard licensing agreement,
franchisees are obligated to pay a membership fee to the Company's Red Carpet
Real Estate Services in exchange for the right to use certain trademarks and
service marks owned by the Company and to operate its business under the Red
Carpet trade name to the Company, and the Company is obligated to provide these
licensees with the right to use its proprietary trademarks and service marks.
Transaction Information
Summary Term Sheet
The material terms of the Asset Sale are as follows:
- - The Company will sell substantially all of its assets to a separate entity
("Newco") controlled by Andrew Cimerman, the Company's President and
Director, including but not limited to all of the Company's ownership
interest in it's wholly-owned and majority-owned subsidiaries
- - Mr. Cimerman will deliver all of his shares of the Company's Class A
Preferred stock and a large block of his shares of the Company's common
stock.
- - Mr. Cimerman will forgive all of the Company's indebtedness to him,
including loans he extended to the Company and the cumulated but unpaid
dividends on his shares of Preferred stock.
- - Newco will assume all of the Company's debts and obligations under its
bank lines of credit and its commercial office leases.
- - In connection with this transaction, It is anticipated that a potential
acquiror of the Company would make a cash payment to Mr. Cimerman in the
approximate amount of $250,000, which he would use (in part) to satisfy
the company's outstanding lines of credit.
Contact Information
Andrew Cimerman, 1503 South Coast Drive, Suite 204, Costa Mesa, CA 92626
Homelife, Inc., 1503 South Coast Drive, Suite 204, Costa Mesa, CA 92626
Business Conducted
Homelife, Inc. offers consumer-oriented real estate brokerage and finance
services through subsidiaries and franchises. It presently operates in nine
states in the United States.
Newco - TBD
Terms of the Transaction
(i) Brief Summary of the Transaction
In a spinout, the Company's assets would be transferred to a separate entity
controlled by Mr. Cimerman in exchange for all of his shares of the Company's
Class A Preferred stock, a large block of his shares of the Company's common
stock, the satisfaction of all of the Company's indebtedness to Mr. Cimerman
(including loans he extended to the Company and the cumulated but unpaid
dividends on his shares of Preferred stock) and his assumption of the Company's
debts and obligations under its bank lines of credit and its commercial office
leases. Additionally, it is anticipated that a potential acquiror in such a
transaction would make a cash payment to Mr. Cimerman in the approximate amount
of $250,000, which he would use (in part) to satisfy the company's outstanding
lines of credit.
(ii) Consideration Offered to the Security Holders
Although the security holders will not receive direct compensation as a result
of this transaction, the following table illustrates the value the Company will
receive from Andrew Cimerman in a spinout of all of its assets to him:
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The figures presented in the following table are based on the Board of
Director's reasonable estimates and such figures in any particular transaction
will be subject to negotiation and may be materially greater or less than this
estimated amount. In addition, the figures below do not account for unpaid
interests and dividends which may accrue between the date of this information
statement and the date on which the transaction is consummated.
Satisfaction of Assumption of Line
Preferred Shares Common Shares Indebtedness of Credit Assumption of Leases
- ----------------------------------------------------------------------------------------------------------------
1,000,000 8,000,000 (1) $120,000 (2) $90,000 (3) $38,000 (4)
(1) This figure represents the Board of Director's estimate of the
likely minimum number of shares of common stock Mr. Cimerman will be
required to relinquish.
(2) This indebtedness by the Company to Mr. Cimerman consists of $95,000
of principal and accrued interest (as of May 19, 2006) on loans
extended by Mr. Cimerman to the Company, and $25,000 of cumulated
but unpaid dividends on the shares of the Company's Class A
Preferred stock held by Mr. Cimerman.
(3) This figure represents the outstanding balance of principal and
accrued interest (as of May 19, 2006) owed by the Company to various
banks on outstanding lines of credit.
(4) The Company is the tenant under leases of office space in Costa
Mesa, California (the "California Lease") and in Troy, Michigan (the
"Michigan Lease"). The California Lease provides for rent in the
amount of $1,850.00 per month, and its term expires in October 2007.
The Michigan Lease provides for rent in the amount of $2,125 per
month, and its term expires in September 2006.
Andrew Cimerman has indicated that he will accept all of the Company's assets in
exchange for such consideration and that he will vote in favor of a spinout of
all the Company's asset to him as proposed above if: (1) the acquisition
transaction (whether through a merger, reverse merger, share exchange or other
transaction) is otherwise acceptable; and (2) the spinout in conditioned upon,
and takes place simultaneous with, the completion of such a transaction.
(iii) Reasons for Engaging in the Transaction
There are certain advantages and disadvantages of authorizing a transfer of all
of the Company's assets to Andrew Cimerman as described above.
The advantages include:
- - In pursuing possible transactions with persons who may be interested in
acquiring a publicly traded company without operating subsidiaries or
other assets, the Company will be in a position to complete such a
transaction.
- - A spinout of all of the Company's assets in the manner described will
eliminate all or substantially all of the Company's outstanding debts,
liabilities and obligations, including those owed to the Company's bank,
its landlords and Andrew Cimerman.
The disadvantages include:
- - Through such a spinout, the Company will not have the option of attempting
to sell its assets for their fair market value and the shareholders will
not have the ability to share in any liquidation proceeds of such assets
to the extent they may exceed the amount of the Company's outstanding
debts, liabilities and obligations.
(iv) The Vote Required for Approval of the Transaction
The vote which is required to approve the spinout of assets to a separate entity
controlled by Mr. Cimerman is the affirmative vote of the holders of a majority
of our voting stock.
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(v) An Explanation of Any Material Differences in the Rights of Security
Holders as a Result of the Transaction, if Material.
The differences in the rights of security holders as a result of the transaction
are not material.
(vi) A Brief Statement as to the Accounting Treatment of the Transaction,
if Material.
The accounting treatment of the transaction is not material.
(vii) The Federal Income Tax Consequences of the Transaction, if Material.
The federal income tax consequences of the transaction are not material.
Regulatory Approval
No federal or state regulatory requirements must be complied with or approval
obtained in connection with the Asset Sale.
Reports, Opinions, Appraisals
No reports, opinions or appraisals materially relating to the Asset Sale have
been received from an outside party or are referred to in the proxy statement.
Past Contacts, Transactions or Negotiations
Not applicable.
Selected Financial Data of HomeLife, Inc.
FY Ended FY Ended FY Ended FY Ended FY Ended
2001 2002 2003 2004 2005
Net Sales or $ 2,989,526 $ 1,572,870 $ 928,808 $ 769,230 $ 627,808
Operating Revenues
Income (Loss) from (715,936) (217,216) (310,364) (123,043) (139,323)
Continuing Operations
Income (Loss) from (0.13) (0.04) (0.05) (0.02) (0.01)
Continuing Operations
per
Common Share
Total Assets 1,616,555 1,101,444 829,359 662,055 510,879
Cash Dividends Declared 0 0 0 0 0
per Common Share
Pro Forma Selected Financial Data
The pro forma selected financial data for the acquiring company is not material.
Pro Forma Information
(i) Historical and Equivalent Pro Forma per Share Data of the acquiring
company
Selected historical and equivalent pro forma per share data of the acquiring
company is not material.
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(ii) Historical and Equivalent Pro Forma per Share Data of the Company
FY Ended 2001 FY Ended 2002 FY Ended 2003
Historical Pro-Forma Historical Pro-Forma Historical Pro-Forma
Book Value $ 0.10 N/A $ 0.06 N/A $ 0.01 N/A
per Share
Cash Dividends 0 N/A 0 N/A 0 N/A
Declared
per Common Share
Income (Loss) from $(0.13) N/A $(0.04) N/A $(0.05) N/A
Continuing Operations
per Common Share
FY Ended 2004 FY Ended 2005
Historical Pro-Forma Historical Pro-Forma
Book Value $ 0.01 N/A $ 0.00 N/A
per Share
Cash Dividends 0 N/A 0 N/A
Declared
per Common Share
Income (Loss) from $(0.02) N/A $(0.01) N/A
Continuing Operations
per Common Share
10
Financial Information
The information required by Article 11 of Regulation S-X with respect to the
spinout of assets to a separate entity controlled by Andrew Cimerman is attached
hereto as Exhibit B.
Limitations
The Company has not sought an appraisal of its assets or made any determinations
as to whether there may be an interest by persons in purchasing such assets.
Additionally, the Company has not made any determination that, even if a ready
market existed for such assets, the amount of proceeds which might be derived
from their liquidation would be sufficient to satisfy all of the Company's
debts, liabilities and obligations (including those owed to Mr. Cimerman) and to
have sufficient excess proceeds to pay a liquidating distribution to the
Company's shareholders. If such excess proceeds could be obtained, however, a
significant portion of those proceeds would be paid to Mr. Cimerman as the
holder of 72.8% of the Company's capital stock. Mr. Cimerman holds both a
significant portion of the Company's outstanding common stock and all of the
outstanding shares of its Class A Preferred stock. As a result, the Board of
Directors is unable to predict with any certainty whether the disinterested
shareholders would achieve a better economic result through liquidation rather
than a spinout.
Moreover, the Board of Directors believes that the Company should remain a going
concern and maintain its assets and operations prior to the completion of any
acquisition transaction. The directors are unable to predict, however, whether
liquidating sales of the Company's assets (whether in one or multiple
transactions) can be closed simultaneous with, or even made contingent upon, the
completion of an acquisition transaction as described above.
THE BOARD OF DIRECTORS UNANIMOUSLY (WITH ANDREW CIMERMAN ABSTAINING) RECOMMENDS
A VOTE "FOR" AUTHORIZING THE TRANSFER OF ALL OF THE COMPANY'S ASSETS TO ANDREW
CIMERMAN UPON COMPLETION OF A MERGER, SHARE EXCHANGE OR OTHER TRANSACTION
ACCEPTABLE TO THE BOARD OF DIRECTORS.
DISSENTERS' RIGHTS
The Company is incorporated under the laws of the State of Nevada, and Nevada
law does not provide for dissenter's rights for any of the proposals described
above. If the Company ultimately enters into an Acquisition Transaction
involving a share exchange, however, any stockholder will be entitled to dissent
from the transaction and obtain payment of the fair value of his or her shares,
but only if his or her shares would be acquired in the share exchange.
Presently, the Company does not anticipate agreeing to any Acquisition
Transaction involving a share exchange in which the shares of any shareholder
other than Mr. Cimerman will be acquired.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the 12,371,886 shares of our common stock as of May 19, 2006 by (i)
each person who is known by us to be the beneficial owner of more than five
percent (5%) of our issued and outstanding shares of common stock, (ii) each of
our directors and executive officers, and (iii) all directors and officers as a
group.
Name and Address Number of Percent
Title of Class Of Beneficial Owner(1) Position Shares of Class
- ----------------------------------------------------------------------------------------------------------------------
Common Andrew Cimerman(2) President and Director 9,013,194(3) 72.8%(4)
Common Marie M. May(2) Chief Financial Officer, 60,000 0.5%(4)
Secretary and Director
Common Charles Goodson(2) Vice President 0 0.0%(4)
Common F. Bryson Farrill(2) Director 10,000 0.1%(4)
Common Terry A. Lyles, Ph.D.(2) Director 10,000 0.1%(4)
Common All Officers and Directors 9,093,194 73.5%(4)
as a group
Class A Preferred(5) Andrew Cimerman(2) President and Director 10,000 100%(6)
Class A Preferred(5) All Officers and Directors 10,000 100%(6)
as a group
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(1) Except as otherwise indicated, the Company believes that the beneficial
owners of Common Stock listed above, based on information furnished by
such owners, have sole investment and voting power with respect to such
shares, subject to community property laws where applicable. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable, or exercisable within 60 days, are deemed
outstanding for purposes of computing the percentage of the person holding
such options or warrants, but are not deemed outstanding for purposes of
computing the percentage of any other person.
(2) The address of our executive officers and directors is the same as our
address: 1503 South Coast Drive, Suite 204, Costa Mesa, CA 92626.
(3) 249,594 of these shares are held in the name of Cimerman Real Estate Ltd.
Cimerman Real Estate Ltd. was created as a Real Estate Sales Company. Mr.
Cimerman has certain voting powers associated with the shares held by
Cimerman Real Estate Ltd., as 100% of the financial benefits derived from
the shares held by Cimerman Real Estate Ltd. are for the benefit of Mr.
Cimerman.
(4) Based on 12,371,886 outstanding shares consisting of the following as of
May 19, 2006.
(5) Each Class A Preferred share carries 1,000 votes as compared with 1 vote
for each Common share.
(6) Based on 10,000 outstanding shares of our Class A Preferred stock as of
May 19, 2006.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
(a) Except as set forth in this Schedule 14C with regard to Mr. Cimerman,
no officer or director of the Company has any substantial interest, direct or
indirect, in the matters to be acted upon, other than his or her role as an
officer of director of the Company and the holder of shares of Common Stock as
described above.
(b) No director of the Company has indicated that he or she intends to
oppose any of the actions proposed in this Information Statement.
COMPANY CONTACT INFORMATION
Only one Information Statement is being delivered to multiple security holders
sharing an address unless the Company has received contrary instructions from
one or more of the security holders. The Company shall deliver promptly, upon
written or oral request, a separate copy of the Information Statement to a
security holder at a shared address to which a single copy of the document was
delivered. A security holder can notify the Company that the security holder
wishes to receive a separate copy of the Information Statement by sending a
written request to the Company at 1503 South Coast Drive, Suite 204, Costa Mesa,
CA 92626; or by calling the Company at (714) 241-3030 and requesting a copy of
the Information Statement. A security holder may utilize the same address and
telephone number to request either separate copies or a single copy for a single
address for all future information statements and annual reports.
12
All inquires regarding our Company should be addressed to the attention of
the Company's corporate Secretary, Ms. Marie May, at the Company's principal
executive office:
HOMELIFE, INC.
Attn: Ms. Marie May, Secretary
1503 South Coast Drive, Suite 204
Costa Mesa, CA 92626
(714) 241-3030
By Order of the Board of Directors
/s/ Andrew Cimerman
-------------------
Andrew Cimerman
President, Chief Executive Officer & Director
Costa Mesa, CA
May 19, 2006
13
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
HOMELIFE, INC.
A NEVADA CORPORATION
Andrew Cimerman and Marie May hereby certify that:
1. They are, respectively, the President and Secretary of HOMELIFE, INC., a
Nevada corporation.
2. Article IV of the Articles of Incorporation of this Corporation is amended
and restated in its entirety to read as follows:
ARTICLE IV This Corporation is authorized to issue two classes of capital
stock, designated respectively "Common Stock" and "Preferred Stock" The total
number of shares of Common Stock which this Corporation is authorized to issue
is Five Hundred Million (500,000,000) shares with a par value of $0.001 per
share. Each share of Common Stock shall be entitled to the same dividend
liquidation, and voting rights as all other shares of Common Stock The total
number of shares of Preferred Stock which this Corporation is authorized to
issue is One Hundred Thousand (100,000) shares with no par value. Such Preferred
Stock may be issued from time to time in one or more classes or series with such
dividend rates, voting rights, rights of conversion, rights upon dissolution or
liquidation, and with such designations, preferences, limitations, restrictions
and rights as shall be determined by resolution adopted by the Board of
Directors of the Corporation.
3. Except as expressly amended by the foregoing Amendment, the Articles of
Incorporation of this Corporation remain in full force and effect.
4. The foregoing Amendment of the Articles of Incorporation has been duly
approved by the board of directors.
5. The foregoing Amendment of the Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with Section
78.390 of the Nevada Revised Statutes. The undersigned further declare
under the penalty of perjury under the laws of the State of Nevada that
the matters set forth in this certificate are true and correct of their
own knowledge.
Dated: ___________________, 2006
/s/ Andrew Cimerman
-------------------
President
/s/ Marie May
-------------------
Secretary
14
EXHIBIT B
Pro Forma Financial Information
The Pro Forma Financial Information required by Article 11 of Regulation
S-X is presented herewith:
PRO FORMA CONDENSED FINANCIAL DATA
The Unaudited Pro Forma Statements of Operations of the Company for the
year ended May 31, 2005 and for the nine months ended February 28, 2006 (the
"Pro Forma Statements of Operations"), and the Unaudited Pro Forma Balance Sheet
of the Company as of February 28, 2006 (the "Pro Forma Balance Sheet" and,
together with the Pro Forma Statements of Operations, the "Pro Forma Financial
Statements"), have been prepared to illustrate the estimated effect of the
disposition of the assets and liabilities of HomeLife, Inc and all of its
majority- and wholly-owned subsidiaries ("HomeLife Disposition"). The Pro Forma
Financial Statements do not reflect any anticipated cost savings from the
HomeLife Disposition, or any synergies that are anticipated to result from the
HomeLife Disposition, and there can be no assurance that any such cost savings
or synergies will occur. The Pro Forma Statements of Operations give pro forma
effect to the HomeLife Disposition as if it had occurred on June 1, 2004. The
Pro Forma Balance Sheet gives pro forma effect to the HomeLife Disposition as if
it had occurred on February 28, 2006. The Pro Forma Financial Statements do not
purport to be indicative of the results of operations or financial position of
the Company that would have actually been obtained had such transaction been
completed as of the assumed dates and for the period presented, or which may be
obtained in the future. The pro forma adjustments are described in the
accompanying notes and are based upon available information and certain
assumptions that the Company believes are reasonable. The Pro Forma Financial
Statements should be read in conjunction with the historical financial
statements of the Company and the notes thereto as reported in the annual Form
10-KSB and the quarterly Form 10-QSB's and the audited and interim reviewed
financial reports included therein.
These pro forma adjustments represent the Company's preliminary
determination of accounting adjustments and are based upon available information
and certain assumptions that the Company believes to be reasonable.
Consequently, the amounts reflected in the Pro Forma Financial Statements are
subject to change, and the final amounts may differ, however, the Company's
management believes that any differences in the amounts reflected will be
immaterial.
15
Unaudited Pro Forma Statements of Operations
For the Year Ended May 31, 2005
================================================================================
HomeLife Disposition
----------------------------------
Historical
Historical HomeLife, Inc.
HomeLife, Inc. Assets and
and Liabilities and Pro Forma Pro Forma
Subsidiaries Subsidiaries Adjustments HomeLife, Inc.
- -------------------------------------------------------------------------------------------------------------------
Revenue
Royalty and franchise fees $ 482,007 $ 482,007 $ -- $ --
Warranty fees 105,311 105,311 -- --
Brokerage income 33,975 33,975 -- --
Other income 6,515 6,515 -- --
- -------------------------------------------------------------------------------------------------------------------
Total Revenue 627,808 627,808 -- --
Direct Costs 111,545 111,545 -- --
- -------------------------------------------------------------------------------------------------------------------
Gross Profit 516,263 516,263 -- --
- -------------------------------------------------------------------------------------------------------------------
Expenses
Salaries and fringe benefits 199,183 179,183 -- 20,000
General and administrative 273,660 273,660 -- --
Occupancy 49,804 49,804 -- --
Financial 13,862 13,862 -- --
Depreciation 67,225 67,225 -- --
Amortization 51,852 51,852 -- --
- -------------------------------------------------------------------------------------------------------------------
Total Expenses 655,586 635,586 -- 20,000
- -------------------------------------------------------------------------------------------------------------------
Net Loss $ (139,323) $ (119,323) $ -- $ (20,000)
===================================================================================================================
Weighted Average Number of
Common Shares 12,371,886 12,371,886
Basic and fully diluted loss per
Common Share $ (0.01) $ (0.00)
===================================================================================================================
16
Unaudited Pro Forma Statements of Operations
For the Nine Months Ended February 28, 2006
================================================================================
HomeLife Disposition
----------------------------------
Historical
Historical HomeLife, Inc.
HomeLife, Inc. Assets and
and Liabilities and Pro Forma Pro Forma
Subsidiaries Subsidiaries Adjustments HomeLife, Inc.
- -------------------------------------------------------------------------------------------------------------------
Revenue
Royalty and franchise fees $ 350,217 $ 350,217 $ -- $ --
Warranty fees 68,648 68,648 -- --
Brokerage income 53,601 53,601 -- --
Other income 16,495 16,495 -- --
- -------------------------------------------------------------------------------------------------------------------
Total Revenue 488,961 488,961 -- --
Direct Costs 118,604 118,604 -- --
- -------------------------------------------------------------------------------------------------------------------
Gross Profit 370,357 370,357 -- --
- -------------------------------------------------------------------------------------------------------------------
Expenses
Salaries and fringe benefits 159,437 144,437 -- 15,000
General and administrative 216,582 216,582 -- --
Occupancy 35,016 35,016 -- --
Financial 14,297 14,297 -- --
Depreciation 45,000 45,000 -- --
Amortization 38,889 38,889 -- --
- -------------------------------------------------------------------------------------------------------------------
Total Expenses 509,221 494,221 -- 15,000
- -------------------------------------------------------------------------------------------------------------------
Net Loss $ (138,864) $ (123,864) $ -- $ (15,000)
===================================================================================================================
Weighted Average Number of
Common Shares 12,371,886 12,371,886
- -------------------------------------------------------------------------------------------------------------------
Basic and fully diluted loss per
Common Share $ (0.01) $ (0.00)
===================================================================================================================
17
Unaudited Pro Forma Balance Sheet
As of February 28, 2006
================================================================================
HomeLife Disposition
----------------------------------
Historical
Historical HomeLife, Inc.
HomeLife, Inc. Assets and
and Liabilities and Pro Forma Pro Forma
Subsidiaries Subsidiaries Adjustments HomeLife, Inc.
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Current Assets
Cash $ 82,876 $ 82,876 $ -- $ --
Marketable securities, at fair value 900 900 -- --
Accounts receivable, net 6,875 6,875 -- --
Prepaid expenses and deposits 35,395 35,395 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Current Assets 126,046 126,046 -- --
Property and Equipment 19,458 19,458 -- --
Other Assets
Goodwill 225,943 225,943 -- --
Other Intangible Assets, net 55,948 55,948 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 427,395 $ 427,395 $ -- $ --
==================================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Lines of Credit $ 59,384 $ 59,384 $ -- $ --
Accounts Payable 184,904 184,904 -- --
Reserve for Warranty 41,953 41,953 -- --
Note Payable 4,576 4,576 -- --
Deferred Revenue 52,847 52,847 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 343,664 343,664 -- --
Other Liabilities
Note Payable 14,770 14,770 -- --
Due to Stockholder 162,132 117,965 -- 44,167
- ----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 520,566 476,399 -- 44,167
- ----------------------------------------------------------------------------------------------------------------------------------
Minority Interest 20,843 20,843 -- --
Stockholders' Deficit
Capital Stock 1,037,372 -- -- 1,037,372
Additional Paid-In Capital 3,731,741 -- -- 3,731,741
Accumulated Other Comprehensive Income 4,715 -- -- 4,715
Accumulated Deficit (4,887,842) (69,847) (69,847)(a)
69,847 (b) (4,817,995)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Deficit (114,014) (69,847) -- (44,167)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit $ 427,395 $ 427,395 $ -- $ --
==================================================================================================================================
18
Notes to the Unaudited Pro Forma Balance Sheet at February 28, 2006
================================================================================
(a) Reflects net asset value of the assets and liabilities of HomeLife, Inc.
and all of its majority- and wholly-owned subsidiaries disposed.
(b) Reflects estimated gain on disposition of net assets of the assets and
liabilities of HomeLife, Inc. and all of its majority- and wholly-owned
subsidiaries.
19