UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only(as permitted by
Rule 14c-5(D)(2))
[x] Definitive Information Statement
DENIM APPAREL GROUP INC.
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(Name of Registrant As Specified In Its Charter)
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DENIM APPAREL GROUP INC.
INFORMATION STATEMENT
Pursuant to Section 14(c) of the Securities Exchange Act of 1934
Approximate Date of Mailing: October 24, 2005
THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU BY
THE BOARD OF DIRECTORS OF THE COMPANY
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
General
This information statement is being circulated to the shareholders of Denim
Apparel Group, Inc. a Nevada corporation ("KDMV"), to the holders of record at
the close of business on October 10, 2005 ("Record Date"), of KDMV's outstanding
common stock, par value $0.001 per share ("Common Stock"), pursuant to Rule
14c-2 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act").
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 Common Stock.
Interest of Certain Persons in or Opposition to Matters to be Acted Upon
No director, officer, nominee for election as a director, associate of any
director, officer or nominee or any other person has any substantial interest,
direct or indirect, by security holdings or otherwise, resulting from the
matters described herein which is not shared by all other stockholders pro rata
in accordance with their respective interest.
REVERSE SPLIT
This Information Statement is being furnished to the stockholders in connection
with a the following action taken by the Board of Directors and approved by a
majority of shareholders: (1) to authorize the Board of Directors to effect a
reverse stock split of one-for-one thousand (1:1000) (the "Reverse Stock
Split").
The Reverse Stock Split was approved by the Board of Directors on October 10,
2005 and was subsequently approved by a majority of shareholders on the same
day. The Reverse Stock Split will be effective on October 24, 2005. The Reverse
Stock Split shall provide for each shareholder who would otherwise be entitled
to a fractional share of Common Stock as a result of the Reverse Stock Split.
Therefore any person with one thousand shares or less shall receive one share of
common stock as a result of the reverse stock split.
This Information Statement will be mailed to our shareholders within the time
periods required by Rules 14c-2 and 14c-5, in connection with the approval of
the Reverse Stock Split by a majority of KDMV's shareholders entitled to take
action. Section 78.320 of the Nevada Revised Statutes allows any action that can
be taken at an annual or special meeting of shareholders to be taken without a
meeting, without prior notice and without a vote, if a majority of the holders
of outstanding stock entitled to vote consent in writing. Common Stock is KDMV's
sole class of outstanding shares.
On October 10, 2005 , the majority shareholder who collectively holds 91% of the
outstanding voting power of KDMV authorized common stock approved by written
consent, the Reverse Stock Split. There are currently 303,563,108 votes and the
Debbie Leibovitz controls 278,563,108 votes.
Accordingly, KDMV has obtained all necessary corporate approvals in connection
with the matters referred to in this statement, and furnishes this Information
Statement solely for the purpose of informing stockholders, in the manner
required under the Securities Act of 1934, as amended, of these corporate
actions before they take effect.
The Board of Directors of the Company, at a special meeting, authorized and
approved, subject to shareholder approval, a reverse stock split of one-for-one
thousand (the "Reverse Stock Split") of the Company's issued and outstanding
shares of common stock. The Reverse Stock Split may be effectuated by the Board
as soon as legally possible. The intent of the Reverse Stock Split is to
decrease the number of outstanding authorized shares of the Common Stock of the
Company.
A majority of shareholders have approved the Reverse Stock Split pursuant to the
execution of a Written Consent of Shareholders. The Reverse Stock Split will
become effective on any date (the "Effective Date") selected by the Board of
Directors on or after to October 24, 2005, upon filing appropriate documentation
with all applicable regulatory authorities and providing notice to shareholders.
Purpose and Effect of the Reverse Stock Split
Effectuation of the Reverse Stock Split will reduce the number of shares of
Common Stock outstanding from 31,998,661 to 31,999. The number of authorized
shares will remain the same.
The Common Stock is listed for trading on the Pink Sheets under the symbol
"KDMV." On the Record Date, the reported closing price of the common stock on
the Pink Sheets was $0.002 per share. Management intends to effectuate a Reverse
Stock Split at a level of one-for-one thousand which it believes is sufficient
to attain its goal of decreasing the number of shares outstanding of the
Company's common stock. The reduction will allow for the Company to issue
additional shares to effectuate acquisitions and to issue stock to consultants
and others to assist the Company in moving forward with its business plan.
The Denim Apparel Group Inc. was organized to acquire premium denim and or high
end apparel manufacturers with distribution to the finest stores in America.
The Reverse Stock Split would have the following effects upon the number of
shares of common stock outstanding (31,998,661 shares as of the Record Date) and
no effect upon the number of authorized and unissued shares of common stock
(assuming that no additional shares of common stock are issued by the Company
after the Record Date and that the Reverse Stock Split is effected and without
taking into account any increase in the number of outstanding shares resulting
from the exercise of outstanding options and warrants). The common stock will
continue to be $0.001 par value common stock following any Reverse Stock Split,
and the number of shares of common stock outstanding will be decreased. The
following example is intended for illustrative purposes.
Reverse Stock Common Stock Authorized Common Stock Outstanding
Split Outstanding Common Stock After Reverse Split
----- ----------- ------------ -------------------
1 for 1000 31,998,661 100,000,000 31,998 (approximate)
At the Effective Date, each share of the common stock issued and outstanding
immediately prior thereto (the "Old Common Stock"), will be reclassified as and
changed into the appropriate number of shares of the Company's Common Stock,
$0.001 par value per share (the "New Common Stock"). Shortly after the Effective
Date, the Company will send transmittal forms to the holders of the Old Common
Stock to be used in forwarding their certificates formerly representing shares
of Old Common Stock for surrender and exchange for certificates representing
shares of New Common Stock.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of the material federal income tax consequences of
the proposed Reverse Stock Split. This summary does not purport to be complete
and does not address the tax consequences to holders that are subject to special
tax rules, such as banks, insurance companies, regulated investment companies,
personal holding companies, foreign entities, nonresident alien individuals,
broker-dealers and tax-exempt entities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations and proposed
regulations, court decisions and current administrative rulings and
pronouncements of the Internal Revenue Service ("IRS"), all of which are subject
to change, possibly with retroactive effect, and assumes that the New Common
Stock will be held as a "capital asset" (generally, property held for
investment) as defined in the Code. Holders of Old Common Stock are advised to
consult their own tax advisers regarding the federal income tax consequences of
the proposed Reverse Stock Split in light of their personal circumstances and
the consequences under state, local and foreign tax laws.
The reverse Stock Split will qualify as a recapitalization described in Section
368(a)(1)(E) of the Code. No gain or loss will be recognized by the Company in
connection with the Reverse Stock Split. No gain or loss will be recognized by a
shareholder who exchanges all of his shares of Old Common Stock solely for
shares of New Common Stock.
The aggregate basis of the shares of New Common Stock to be received in the
Reverse Stock Split will be the same as the aggregate basis of the shares of Old
Common Stock surrendered in exchange therefore. The holding period of the shares
of New Common Stock to be received in the Forward Stock Split will include the
holding period of the shares of the Old Common Stock surrendered in exchange
therefor.
AUTHORIZATION TO DECREASE OR INCREASE SHARES
The Board of Directors approved a resolution to request the majority of
shareholders to approve a motion to allow the Articles of Incorporation of the
Company to be amended to allow the Board of Directors to have the requisite
authority by majority vote to effect a forward or reverse split of the
outstanding common shares of the Company at any time in the future without
requiring the approval of the majority of shareholders, nor requiring a
notification to the shareholders other than by press release or through a filing
with the Securities and Exchange Commission.
Purpose of the Authorization to Amend the Articles of Incorporation to allow the
Board of Directors to effect a forward or reverse split of the Company's
outstanding shares
OUTSTANDING SHARES AND VOTING RIGHTS
Shareholders are entitled to receive notice of this corporate action if they
were shareholders of record at the close of business on October 10, 2005. On
October 10, 2005, KDMV had shares of $0.001 par value Common Stock issued and
outstanding. Each share is entitled to one vote per share on any matter which
may properly come before the shareholders and there are no cumulative voting
rights on any shares. Pursuant to applicable Nevada law, there are no
dissenter's or appraisal rights relating to the matters outlined in this
statement.
All matters to be voted on require an affirmative written vote of a majority of
the issued and outstanding shares of KDMV. KDMV has received written consent of
the Reverse Stock Split and the Authorization to Increase Shares from management
and other major shareholders who hold, directly or indirectly, a majority of the
outstanding shares as of the record date.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of
shares of KDMV's common stock as of October 10, 2005 by (i) all shareholders
known to KDMV to be beneficial owners of more than 5% of the outstanding Common
Stock; (ii) each director and executive officer; and (iii) all officers and
directors of KDMV as a group. Except as may be otherwise indicated in the
footnotes to the table, each person has sole voting power and sole dispositive
power as to all of the shares shown as beneficially owned by them. KDMV had
31,785,428 shares issued and outstanding on October 10, 2005.
Number of Shares Percentage
Name and Address Beneficially Owned of Class Class(1)
- ---------------- ------------------ -------- ---------------------------
Debbie Leibovitz 1,233,888 100% Series A preferred stock(1)
1,000,000 Series B preferred
(1) Figures based on as estimated 303,563,108 common shares outstanding as of
October 10, 2005.
(2) Series A preferred stock is entitled to 100 votes per share.
(3) Series B preferred stock is entitled to 25 votes per share.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document filed at the Public Reference Room of the SEC,
450 Fifth Street, N.W. Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. The
Company's SEC filings are also available to the public from the SEC's website at
http://www.sec.gov/. Included in the information available is audited financial
statements of the Company in comparative form as of January 31, 2005 and 2004
which are contained in the Company's Form 10-KSB for the fiscal year ended
January 31, 2005 (the "2005 Form 10-KSB") to the SEC. Neither the 2005 Form
10-KSB nor the financial statements contained in it are to be considered part of
any solicitation. At the end of this Information Statement is information on how
to obtain a copy of the 2005 Form 10-KSB if desired. It is also available on the
SEC's website.
STOCKHOLDER COMMUNICATIONS WITH DIRECTORS
Stockholders who wish to communicate with the Board of Directors or with a
particular director may send a letter to the Company at 820 North Orleans Street
ste. 208., Chicago IL, 60610. Any communication should clearly specify it is
intended to be made to the entire Board of Directors or to one or more
particular director(s). Under this process, the recipient of the communication
will review such correspondence and will forward to the Board of Directors a
summary of all such correspondence and copies of all correspondence that, in the
opinion of the reviewer, deals with the functions of the Board of Directors, or
that the reviewer otherwise determines requires their attention. Directors may
at any time review a log of all correspondence received by the Company that is
addressed to the members of the Board of Directors and request copies of such
correspondence. Concerns relating to accounting, internal controls or auditing
matters are immediately brought to the attention of the Board of Directors or
the appropriate Committee thereof.
NO SOLICITATION OF PROXIES
This Information Statement is furnished to stockholders pursuant to the
requirements of Section 14(c) under the Exchange Act to report action taken by
written consent of the Majority Stockholders. No action is required upon the
part of any other stockholder, and no proxy is being solicited. The cost of this
Information Statement will be borne by the Company.
COPIES OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JANUARY 31, 2005
ON FORM 10-KSB ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST
TO DENIM APPAREL GROUP INC., 820 NORTH ORLEANS STREET STE. 208 , Chicago IL,
60610, ATTN: INVESTOR RELATIONS.
Dated October 14, 2005. By order of the Board of Directors,
By: /s/ Eric Joffe
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Eric Joffe, President