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: January 31, 2006
________________________________________________________________________________
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" or the "Company"), to the
holders of record of KDMV's outstanding common stock, par value $0.001 per share
(its "Common Stock"), at the close of business on October 10, 2005 (the "Record
Date"), pursuant to Rule 14c-2 promulgated under the U.S. Securities Exchange
Act of 1934, as amended (the "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 Company's stockholders in
connection with an action taken by the Board of Directors, and approved by a
majority of the voting interests of shareholders eligible to vote on said
action, authorizing the Board of Directors to effect a one-for-one thousand
reverse split of its issued and outstanding shares of Common Stock, whereby one
share of post-reverse split Common Stock shall be issued to a shareholder in
exchange for every one thousand (1,000) Shares of Common Stock held immediately
prior to the reverse split (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 the voting interests of the
Company's capital voting stock on the same day. The Reverse Stock Split became
effective on October 10, 2005. The Reverse Stock Split provides one full share
of post-reverse split Common Stock to each shareholder who would have otherwise
been entitled to a fractional share of Common Stock as a result of the Reverse
Stock Split. Consequently, any shareholder owning fewer than one thousand shares
of the Company's Common Stock before the effectuation of the Reverse Stock Split
has been issued one full share of Common Stock in lieu of any post-reverse split
fractional share interest.
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 the Company's shareholders entitled to
take action. Section 78.320 of 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 capital voting stock entitled to vote consents to the action in
writing.
At a special meeting on October 10, 2005, the Board of Directors of the Company
authorized and approved the Reverse Stock Split, subject to shareholder
approval. The Reverse Stock Split's objective was to decrease the number of
issued and outstanding shares of the Company's Common Stock. On October 10,
2005, a shareholder who collectively held approximately 90% of the outstanding
voting stock of the Company approved the Reverse Stock Split by written consent.
Of the 303,776,261 votes eligible to be cast on that date, the shareholder in
question owned 271,777,600 and voted them all in favor of the Reverse Stock
Split.
Accordingly, the Company has obtained all necessary corporate approvals in
connection with the matters referred to in this Information Statement, and
furnishes the same solely for the purpose of informing stockholders of these
corporate actions, in the manner required under the Exchange Act.
A majority of the votes necessary to approve the Reverse Stock Split has been
obtained pursuant to the execution of a Written Consent of Shareholders. The
Reverse Stock Split became effective on October 24, 2005 (the "Effective Date"),
which date was selected by the Board of Directors.
Purpose and Effect of the Reverse Stock Split
Effectuation of the Reverse Stock Split reduced the number of shares of issued
and outstanding Common Stock from 31,998,661 to 31,999. The number of authorized
shares of Common Stock remains the same at 100,000,000, and the number of issued
and outstanding shares of Series A Preferred Stock and Series B Preferred Stock
remains the same at 1,233,888 and 1,000,000, respectively.
The Common Stock is listed for trading on the NASD Over the Counter Bulletin
Board ("OTCBB" or 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 believes that the Reverse Stock Split is sufficient
to attain its goal of decreasing the number of issued and outstanding shares of
the Company's Common Stock. This reduction was sought in order to grant the
Company increased flexibility in being able to issue additional shares of
authorized Common Stock to parties from time to time in the future, consistent
with the Company's evolving business plan.
The following table reflects the effect that the Reverse Stock Split has had
upon the number of issued and outstanding shares of Common Stock (31,998,661
shares as of the Record Date). The Reverse Stock Split will have no effect upon
the number of authorized shares of Common Stock, and the Common Stock continues
to maintain its $0.001 par value following the Reverse Stock Split. The
following example is intended for illustrative purposes:
Common Stock Authorized Common Stock
Reverse Outstanding Common Stock Outstanding
Stock Split 10/10/05 After Reverse Split After Reverse Split
- ----------- ------------ ------------------- -------------------
1 for 1,000 31,998,661 100,000,000 31,999 (approximate)
At the Effective Date, each share of issued and outstanding Common Stock
immediately prior thereto (the "Old Common Stock"), was 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"). 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
In addition to the approval of the Reverse Stock Split, the Board of Directors
approved a resolution to request the Company's shareholders to approve a motion
to allow an amendment to the Company's Articles of Incorporation, granting the
Board of Directors the requisite authority (upon a majority vote of the Board)
to effect a forward or reverse split of the outstanding shares of capital stock
of the Company at any time in the future without requiring the approval of a
majority of the voting interests of the Company's shareholders, nor requiring a
notification to the shareholders of such action other than by press release or
through a filing with the Securities and Exchange Commission. On October 10,
2005, the holder of a majority of the Company's voting rights provided written
consent to this proposed authorization. The purpose of the Authorization to
Amend the Articles of Incorporation's is to permit the Company's Board of
Directors to affect a forward or reverse split of the Company's outstanding
capital stock expeditiously, without the added expenses or delays attendant to
effectuating such a forward or reverse split with the requirement of the formal
approval of its shareholders.
OUTSTANDING SHARES AND VOTING RIGHTS
Shareholders are entitled to receive notice of this corporate action if they
were shareholders of record of the Company at the close of business on October
10, 2005. On that date, the Company had 31,998,661 shares of its Common Stock
issued and outstanding. Each such share is entitled to one vote on any matter
which may properly come before the shareholders, and the shares of Common Stock
do not have any cumulative voting rights. Pursuant to applicable Nevada
corporate law, there are no dissenter's or appraisal rights relating to the
matters outlined in this Information Statement.
All matters to be voted on required an affirmative written vote of a majority of
the voting interests of the Company's capital stock. The Company has received
written consent to the Reverse Stock Split and the Authorization to Increase
Shares from management and other shareholders who hold, directly or indirectly,
a majority of the outstanding voting rights 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 the Company's capital voting stock as of October 10, 2005 by (i) all
shareholders known to the Company to be beneficial owners of more than 5% of the
outstanding Common Stock; (ii) each director and executive officer of the
Company; and (iii) all officers and directors of the Company 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. There were 31,998,661 shares of Common Stock issued
and outstanding on October 10, 2005.
Number of Shares Percentage of
Name and Address Beneficially Owned Class(1)
- ------------------- ------------------ -----
Debbie Leibovitz(2) 1,233,888 Series A Preferred Stock(3) 100%
1,000,000 Series B Preferred Stock(4) 100%
All Officers and
Directors as a 0
Group
(1) Figures based on as estimated 303,776,261 eligible votes as of October 10,
2005.
(2) Address is: 820 North Orleans Street, Suite 208, Chicago, Illinois 60610.
(3) Series A preferred stock is entitled to 200 votes per share.
(4) 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, Suite 208, Chicago, Illinois 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 in order to report action
taken by written consent of a majority of the Company's voting 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 solely 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, SUITE 208, CHICAGO,
ILLINOIS 60610 ATTN: INVESTOR RELATIONS.
Dated January 30, 2006. By order of the Board of Directors,
By: /s/ Eric Joffe
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Eric Joffe, President