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ABAZIAS, INC
- ------------------------------------
(Name of Registrant as Specified In Its Charter)
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ABAZIAS, INC.
5214 SW 91st Terrace Suite A
Gainesville, FL 32608
To the stockholders of Abazias, Inc.
Abazias, Inc., a Delaware corporation (the "Company") has obtained the
written consent of the stockholders holding a majority of the issued and
outstanding shares of Common Stock of the Company on June 8, 2006 (the
"Consent"). The Consent provides that the board of directors is granted the
authority to amend our certificate of incorporation to effect a reverse stock
split of our common stock at a specific ratio to be determined by our board of
directors within a range of one-for-ten to one-for-forty (the "Reverse Split.")
Additionally, this proposal has been approved by the Board of Directors as of
June 8, 2006.
The accompanying Information Statement is being provided to you for your
information to comply with requirements of the Securities and Exchange Act of
1934. The Information Statement also constitutes notice of corporate action
without a meeting by less than unanimous consent of the Company's stockholders
pursuant to Section 228 (e) of the Delaware General Corporation Law. You are
urged to read the Information Statement carefully in its entirety. However, no
action is required on your part in connection with the Amendment and the Reverse
Split. No meeting of the Company's stockholders will be held or proxies
requested for these matters since they have already been approved by the
requisite written consent of the holders of a majority of its issued and
outstanding capital stock.
Under the rules of the Securities and Exchange Commission, the Amendment
and the Reverse Split cannot become effective until at least 20 days after the
accompanying Information Statement has been distributed to the stockholders of
the Company.
By order of the Board of Directors
/s/ Oscar Rodriguez
------------------
Oscar Rodriguez, CEO
2
ABAZIAS, INC.
5214 SW 91st Terrace Suite A
Gainesville, FL 32608
INFORMATION STATEMENT PURSUANT TO SECTION 14C OF THE SECURITIES EXCHANGE ACT OF
1934
This information statement is being mailed on or about July 1, 2006, to
the holders of record at the close of business on June 1, 2006 of the shares of
common stock, par value $0.001 per share (the "Shares"), of Abazias, Inc., a
Delaware corporation (the "Company"). You are receiving this information
statement in connection with a written consent approved on June 8, 2006 by
shareholders owning the majority of our issued and outstanding shares of common
stock, which consent provides that the board of directors is granted the
authority to amend our certificate of incorporation to effect a reverse stock
split of our common stock at a specific ratio to be determined by our board of
directors within a range of one-for-ten and one-for-forty. This was approved by
the Company's board of directors on June 8, 2006.
INFORMATION STATEMENT
GENERAL
The Company's current Certificate of Incorporation provides for an
authorized capitalization consisting of 150,000,000 shares of common stock,
$.001 par value per share. As of June 1, 2006, there were 85,904,253 shares of
common stock outstanding.
REVERSE SPLIT
After our board of directors selects the exchange ratio for the reverse
stock split and the Amendment to the Certificate of Incorporation is filed with
the Secretary of State of Delaware, then all of the outstanding shares of our
outstanding common stock on the date of the reverse stock split will be
automatically converted into a smaller number of shares, at the reverse stock
split ratio selected by the board of directors, as more fully described below.
The ratio will be no less than one-for-ten, and no greater than one-for-forty.
The board will select, at its discretion, the ratio of the reverse stock split,
which will be within the range of one-for-ten to one-for-forty, inclusive. In
determining the reverse stock split ratio, our board of directors will consider
numerous factors, including the historical and projected performance of our
common stock before and after the reverse stock split, prevailing market
conditions and general economic trends, as well as the projected impact of the
reverse stock split on the trading liquidity of our common stock, and investor
interest in our stock.
This proposal authorizes our board of directors to select the reverse
stock split ratio from within a range. We authorized our board of directors to
have this discretion, rather than approving a specific ratio at this time, in
order to give the board the flexibility to implement a reverse stock split at a
ratio that reflects the board's then-current assessment of the factors described
above, including our then-current stock price. The reverse stock split would
become effective upon as soon as reasonably practicable upon a determination by
the board of directors and the filing of a Certificate of Amendment of our
Certificate of Incorporation with the Secretary of State of the State of
Delaware. The form of the Certificate of Amendment to effect the reverse split
is attached to this information statement as Appendix A. The following
discussion is qualified in its entirety by the full text of the Certificate of
Amendment, which is hereby incorporated by reference.
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REASONS FOR THE REVERSE SPLIT
The purpose of the reverse split is to reduce the number of outstanding
shares in an effort to increase the market value of the remaining outstanding
shares. In approving the reverse split, the board of directors considered that
the Company's common stock may not appeal to brokerage firms that are reluctant
to recommend lower priced securities to their clients. Investors may also be
dissuaded from purchasing lower priced stocks because the brokerage commissions,
as a percentage of the total transaction, tend to be higher for such stocks.
Moreover, the analysts at many brokerage firms do not monitor the trading
activity or otherwise provide coverage of lower priced stocks. The Board of
Directors also believes that most investment funds are reluctant to invest in
lower priced stocks.
The Board of Directors proposed the reverse split as one method to attract
investors and locate business opportunities in the Company. The Company believes
that the reverse split may improve the price level of the Company's common stock
and that this higher share price could help generate additional interest in the
Company.
However, the effect of the reverse split upon the market price for the
Company's Common Stock cannot be predicted, and the history of similar stock
split combinations for companies in like circumstances is varied. There can be
no assurance that the market price per share of the Company's Common Stock after
the reverse split will rise in proportion to the reduction in the number of
shares of Common Stock outstanding resulting from the reverse split. The market
price of the Company's Common Stock may also be based on its performance and
other factors, some of which may be unrelated to the number of shares
outstanding.
POTENTIAL RISKS OF THE REVERSE SPLIT
There can be no assurance that the bid price of the Company's common stock
will continue at a level in proportion to the reduction in the number of
outstanding shares resulting from the reverse split, that the reverse split will
result in a per share price that will increase its ability to attract employees
and other service providers or that the market price of the post-split common
stock can be maintained. The market price of the Company's common stock will
also be based on its financial performance, market condition, the market
perception of its future prospects and the Company's industry as a whole, as
well as other factors, many of which are unrelated to the number of shares
outstanding. If the market price of the Company's Common Stock declines after
the reverse split, the percentage decline as an absolute number and as a
percentage of the Company's overall capitalization may be greater than would
occur in the absence of a reverse split.
POTENTIAL EFFECTS OF THE REVERSE SPLIT
General.
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The following table illustrates the effects of a one-for-ten, one-for
twenty, one-for-thirty, and one-for-forty reverse stock split, without giving
effect to any adjustments for fractional shares of our common stock, on our
authorized and outstanding shares of our capital stock and on certain per share
data (in thousands, except per share data):
Prior to
Reverse After Reverse Split
- ---------------------------------------------------------------------------------------------------------
Stock Split 1 for 10 1 for 20 1 for 30 1 for 40
- ---------------------------------------------------------------------------------------------------------
Common Stock Outstanding 85,795,809 8,579,580 4,289,790 2,144,895 1,072,448
Stockholders' equity at March31,
2006 $ 200,451 200,451 200,451 200,451 200,451
Stockholders' equity
per
share at March 31, 2006 $ .002 .02 .04. .09 .18
Net loss for year ended March 31,
2006 $ 49,608 49,608 49,608 49,608 49,608)
Basic and diluted net loss per share
for year ended March 31, 2006 $ 0 .005 .01 .02 .04)
Accounting Matters. The reverse split will not affect the par value of the
Company's common stock. As a result, on the effective date of the reverse split,
the stated par value capital on the Company's balance sheet attributable to
Common Stock would be reduced from its present amount by a fraction which
represents the ratio as set by the board of directors, and the additional
paid-in capital account shall be credited with the amount by which the stated
capital is reduced. The per share net income or loss and net book value per
share will be increased because there will be fewer shares.
Effect on Authorized and Outstanding Shares. There are 85,904,253 shares
of common stock issued and outstanding. As a result of the reverse split, the
number of shares of capital stock issued and outstanding (as well as the number
of shares of common stock underlying any options, warrants, convertible debt or
other derivative securities) will be reduced to the number of shares of capital
stock issued and outstanding immediately prior to the effectiveness of the
reverse split, divided by the ratio as set by the board of directors.
With the exception of the number of shares issued and outstanding, the
rights and preferences of the shares of capital stock prior and subsequent to
the reverse split will remain the same. It is not anticipated that the Company's
financial condition, the percentage ownership of management, the number of
shareholders, or any aspect of the Company's business would materially change,
solely as a result of the reverse split.
The reverse split will be effectuated simultaneously for all of the
Company's Common Stock and the exchange ratio will be the same for all shares of
the Company's Common Stock. The reverse split will affect all of our
shareholders uniformly and will not affect any shareholder's percentage
ownership interests in the Company or proportionate voting power, except to the
extent that the reverse split results in any shareholder's percentage ownership
interests in the Company or proportionate voting power, except to the extent
that the reverse split results in any shareholders owning a fractional share.
See "Fractional Shares" below. The reverse split will not alter the respective
voting rights and other rights of shareholders.
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The Company will continue to be subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company's Common Stock is currently registered under Section 12(g) of
the Exchange Act and as a result, is subject to periodic reporting and other
requirements. The proposed reverse split will not affect the registration of the
Company's Common Stock under the Exchange Act. The reverse split is not intended
as, and will not have the effect of, a "going private transaction" covered by
Rule 13e-3 under the Exchange Act.
Increase of Shares of All Classes of Capital Stock Available for Future
Issuance. As a result of the reverse split, there will be a reduction in the
number of shares of Common Stock issued and outstanding and an associated
increase in the number of authorized shares which would be unissued and
available for future issuance after the reverse split. The increase in available
shares could be used for any proper corporate purpose approved by the Board of
Directors including, among other purposes, future financing transactions.
Fractional Shares. No fractional shares will be created as a result of the
reverse split. Accordingly, the number of shares owned by any shareholder who
would otherwise receive a fractional share will be rounded up to the nearest
whole number.
EFFECTIVENESS OF THE REVERSE SPLIT
The reverse split will become effective after the filing with the
Secretary of State of the State of Delaware of the Amendment to the Certificate
of Incorporation (attached hereto as Exhibit "A"). It is expected that such
filing will take place within 90 days from on or about July 21, 2006, the date
that is 20 calendar days after the mailing of this Information Statement.
The following discussion summarizing material federal income tax
consequences of the reverse split is based on the Internal Revenue Code of 1986,
as amended (the "Code"), the applicable Treasury Regulations promulgated
thereunder, judicial authority and current administrative rulings and practices
in effect on the date this Information Statement was first mailed to
shareholders. This discussion does not discuss consequences that may apply to
special classes of taxpayers (e.g., non-resident aliens, broker-dealers, or
insurance companies). Stockholders should consult their own tax advisors to
determine the particular consequences to them.
The receipt of the common stock following the effective date of the
reverse split, solely in exchange for the common stock held prior to the reverse
split, will not generally result in a recognition of gain or loss to the
shareholders. 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.
The adjusted tax basis of a shareholder in the common stock received after the
reverse split will be the same as the adjusted tax basis of the common stock
held prior to the reverse split exchanged therefor, and the holding period of
the common stock received after the reverse split will include the holding
period of the common stock held prior to the reverse split exchanged therefor.
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No gain or loss will be recognized by the Company as a result of the
reverse split. The Company's views regarding the tax consequences of the reverse
split are not binding upon the Internal Revenue Service or the courts, and there
can be no assurance that the Internal Revenue Service or the courts would accept
the positions expressed above.
THIS SUMMARY IS NOT INTENDED AS TAX ADVICE TO ANY PARTICULAR PERSON. IN
PARTICULAR, AND WITHOUT LIMITING THE FOREGOING, THIS SUMMARY ASSUMES THAT THE
SHARES OF COMMON STOCK ARE HELD AS "CAPITAL ASSETS" AS DEFINED IN THE CODE, AND
DOES NOT CONSIDER THE FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY'S
SHAREHOLDERS IN LIGHT OF THEIR INDIVIDUAL INVESTMENT CIRCUMSTANCES OR TO HOLDERS
WHO MAY BE SUBJECT TO SPECIAL TREATMENT UNDER THE FEDERAL INCOME TAX LAWS (SUCH
AS DEALERS IN SECURITIES, INSURANCE COMPANIES, FOREIGN INDIVIDUALS AND ENTITIES,
FINANCIAL INSTITUTIONS AND TAX EXEMPT ENTITIES). IN ADDITION, THIS SUMMARY DOES
NOT ADDRESS ANY CONSEQUENCES OF THE REVERSE SPLIT UNDER ANY STATE, LOCAL OR
FOREIGN TAX LAWS. THE STATE AND LOCAL TAX CONSEQUENCES OF THE REVERS SPLIT MAY
VARY AS TO EACH STOCKHOLDER DEPENDING ON THE STATE IN WHICH SUCH STOCKHOLDER
RESIDES. AS A RESULT, IT IS THE RESPONSIBILITY OF EACH SHAREHOLDER TO OBTAIN AND
RELY ON ADVICE FROM HIS, HER OR ITS TAX ADVISOR AS TO, BUT NOT LIMITED TO, THE
FOLLOWING: (A) THE EFFECT ON HIS, HER OR ITS TAX SITUATION OF THE REVERSE SPLIT,
INCLUDING, BUT NOT LIMITED TO, THE APPLICATION AND EFFECT OF STATE, LOCAL AND
FOREIGN INCOME AND OTHER TAX LAWS; (B) THE EFFECT OF POSSIBLE FUTURE LEGISLATION
OR REGULATIONS; AND (C) THE REPORTING OF INFORMATION REQUIRED IN CONNECTION WITH
THE REVERSE SPLIT ON HIS, HER OR ITS OWN TAX RETURNS. IT WILL BE THE
RESPONSIBILITY OF EACH SHAREHOLDER TO PREPARE AND FILE ALL APPROPRIATE FEDERAL,
STATE AND LOCAL TAX RETURNS.
APPROVAL OF PROPOSED AMENDMENT.
Under the Delaware General Corporation Law, the Proposed Amendment must be
approved in writing by the holders of at least a majority of the voting stock of
the Company. The persons listed in SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS below represent 58.3% of the Company's outstanding Shares, and have
consented in writing to the Proposed Amendment. The Proposed Amendment,
therefore, has been approved by the stockholders of the Company, and thereverse
split will become effective after the filing with the Secretary of State of the
State of Delaware of the Amendment to the Certificate of Incorporation (attached
hereto as Exhibit "A"). It is expected that such filing will take place within
90 days from July 21, 2006, the date that is 20 calendar days after the mailing
of this Information Statement.
Because the Proposed Amendment already has been approved, you are not
required to take any action at this time; however, at your option, you may
submit a written consent to the Proposed Amendment. This information statement
is your notice that the proposal concerning the reverse stock split has been
approved; you will receive no further notice when the change becomes effective.
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SHARE CERTIFICATES.
Following the reverse stock split, the Share certificates you now hold
will continue to be valid. In the future, new Share certificates will contain a
legend noting the change in name or will be issued bearing the new name and will
reflect the reverse split, but this in no way will affect the validity of your
current Share certificates.
OUTSTANDING VOTING SECURITIES.
At the close of business on June 1, 2006, there were 85,904,253 Shares
outstanding. The Shares constitute the only voting securities of the Company.
Each holder of the Shares is entitled to cast one vote for each Share held at
any meeting of shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
The following tables set forth the ownership, as of the date of this
information statement, of our common stock by each person known by us to be the
beneficial owner of more than 5% of our outstanding common stock, our directors,
and our executive officers and directors as a group. To the best of our
knowledge, the persons named have sole voting and investment power with respect
to such shares, except as otherwise noted. There are not any pending or
anticipated arrangements that may cause a change in control of our company. All
business addresses are 5214 SW 91st Terrace, Gainesville, FL 32608.
Number Percentage of Shares
Name of Shares Issued
- ---------------- ----------- -------------
Oscar Rodriguez 35,000,000 41.0%
Jesus Diaz 10,000,000 11.6%
Aaron Taravella 5,000,000 5.8%
Rob Rill 6,600,000 7.7%
Doug Zemsky 5,000,000 5.8%
Marc Baker 5,687,000 6.6%
All officers and directors
as a group
[3 persons] 50,000,000 58.3%
This table is based upon information derived from our stock records. Unless
otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, it believes that each of the shareholders named
in this table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Applicable percentages are based upon 85,904,253 shares of common stock
outstanding as of June 1, 2006.
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
o No director or officer of the Company or nominee for election as a
director of the Company or associate of any director or officer of the
Company has a substantial interest in the Proposed Amendment.
o No director of the Company has informed the Company in writing that such
director intends to oppose the adoption of the Proposed Amendment.
o No security holder entitled to vote at a meeting or by written consent has
submitted to the Company any proposal.
/S/ OSCAR RODRIGUEZ
------------------
OSCAR RODRIGUEZ, PRESIDENT
9
EXHIBIT "A"
AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
ABAZIAS, INC.
Abazias, Inc. (the "Corporation"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
1. The date of filing the original certificate of incorporation of the
Corporation with the Secretary of State of Delaware is March 19, 1997 and was
incorporated as Biologistics, Inc.
2. The Board of Directors on June 8, 2006 duly adopted a resolution
setting forth a proposed amendment to certificate of incorporation of the
Corporation, declaring said amendment to be advisable and calling for it to be
submitted to the stockholders of the Corporation for consideration thereof and
that thereafter, pursuant to such resolution of the Board of Directors, the
stockholders adopted such amendment by written action of the majority of the
stockholders.
3. Article IV of the Certificate of Incorporation of Abazias, Inc. shall
be hereby amended to add the following: Upon this Certificate of Amendment to
the Certificate of Incorporation becoming effective pursuant to the General
Corporation Law of the State of Delaware (the "Effective Date"), each share of
Common Stock, par value $0.001 per share (the "Old Common Stock"), issued and
outstanding immediately prior to the Effective Date, shall be, and hereby is,
converted into [one-Xth (1/Xth)](1) of a share of Common Stock, par value $0.001
per share (the "New Common Stock"). Each outstanding stock certificate which
immediately prior to the Effective Date represented one or more shares of Old
Common Stock shall thereafter, automatically and without the necessity of
surrendering the same for exchange, represent the number of whole shares of New
Common Stock determined by multiplying the number of shares of Old Common Stock
represented by such certificate immediately prior to the Effective Date by
[one-Xth (1/Xth)] and rounding such number up to the nearest whole integer.
The Corporation shall not issue fractional shares on account of the Reverse
Stock Split. Any fractional share resulting from such change will be rounded
upward to the next higher whole share of New Common Stock.
Each holder of Old Common Stock shall be entitled to receive a certificate
representing the number of whole shares of New Common Stock into which such Old
Common Stock is reclassified.
(1) "1/X" represents a fraction, within the range of 1-for-10 to 1-for-40,
inclusive, to be determined by the Board of Directors, such that
references to "1/X" or "1/Xth" are to a number no less than 1/40 and no
greater than 1/10, as selected by the Board of Directors.
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IN WITNESS WHEREOF, the undersigned has executed this Amendment to Certificate
of Incorporation on this ____ day of ________, 2006.
ABAZIAS, INC.
By /s/ Oscar Rodriguez
---------------------------
Oscar Rodriguez, CEO
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