W3 GROUP, INC.
444 Madison Avenue, Suite 1800
New York, New York 10022
INFORMATION STATEMENT
PURSUANT TO SECTION 14(c) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Approximate Date of Mailing: April 19, 2005
Dear Shareholders:
This information Statement is being furnished by the Board of
Directors (the "Board") of W3 Group, Inc. (the "Company") to inform
shareholders of the Company of the approval of certain shareholders'
actions. This information Statement will be mailed to holders of
record of common stock, par value $0.0001 (the "Common Stock"), of the
Company as of the close of business on April 15, 2005. On that date,
the Company had outstanding and entitled to vote 23,274,145 shares of
its Common Stock. Specifically, this Information Statement relates to
the following:
1. Shareholders' approval of an amendment to the Company's
amended Certificate of Incorporation reflecting (a) a reverse split of
the Company's Common Stock on a one (1) share for fifteen (15) shares
basis, effective May 9, 2005 and (b) an increase in the total
authorized capital stock to 110,000,000 shares, of which 100,000,000
will be classified as common stock, par value $0.0001 per share, and
10,000,000 will be classified as Preferred Stock, par value $0.0001
per share, issuable in series with such powers, designations,
preferences and relative, participating, optional or other specific
rights, and qualifications, limitations or restrictions thereof, as
the Board may fix from time to time by resolution or resolutions.
2. Shareholders' approval of mandatory conversion of the
Company's issued and outstanding shares of Preferred Stock into
authorized, previously unissued shares of Common Stock on the basis of
one (1) share of Common Stock for each two (2) shares of Preferred
Stock, effective April 25, 2005 for Preferred Stock issued and
outstanding on the record date, April 20, 2005.
On April 14, 2005 shareholders owning in the aggregate 19,930,749
shares of Common Stock, or approximately 83% of the then issued and
outstanding Common Stock, and 800,000 shares of Preferred Stock, or
approximately 54% of the then issued and outstanding Preferred Stock,
consented in writing to the matters described herein. As a result,
these matters were approved by the majority required by law and no
further votes will be needed.
NO VOTE OR ACTION OF THE COMPANY'S SHAREHOLDERS
IS REQUIRED IN CONNECTION WITH THIS INFORMATION
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
Page 1 of 8
INFORMATION STATEMENT
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, nominee for election as a
director, associate of any director, executive officer or nominee or
any other person has any substantial interest, direct or indirect, by
security holdings or otherwise, resulting from the matters described
herein, which is not shared by all other stockholders pro-rata, and in
accordance with their respective interests.
EXECUTIVE OFFICERS
The executive officers of the Company are identified in the table
below. Each executive officer of the Company serves at the pleasure of
the Board.
Date Became an
Name: Age Executive Officer Position
----- --- ----------------- --------
Robert Gordon 70 1996 President, CEO
William C. Hayde 44 2004 Secretary
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PRINCIPAL STOCKHOLDERS
The following chart sets forth, as of April 15, 2005, information
with respect to (1) any person known by us to own beneficially more
than five (5%) of our Common Stock based on 24,014,095 shares issued
and outstanding as of April 15, 2005; (2) Common Stock owned
beneficially by each of our officers or directors; and (3) the total
of our Common Stock owned beneficially, directly or indirectly, by our
officers and directors as a group.
Number of Shares of
Name Common Stock Owned Percentage of Class
------------------------------------- ------------------ -------------------
Ameristar Group Incorporated* (1) (4) 10,714,216 (2) 44.62 %
60 E. 42nd Street, Suite 1163
New York, NY 10165
Mabery Group, Inc. (1) (5) 6,461,433 26.90 %
60 E. 42nd Street, Suite 1163
New York, NY 10165
William C. Hayde* (1) 1,500,100 6.24 %
76 Cliff Road
Belle Terre, NY 11777
Wilmont Holdings Corp.* (6) 630,000 2.60 %
33 Wilputte Place
New Rochelle, NY 10804
Lomar Corp. * (7) 625,000 2.60 %
21 Schermerhorn
Brooklyn, NY 11201
Dunhill Limited * (8) 3,334 0.01 %
444 Madison Avenue, Suite 1800
New York, NY 10022
Officers and Directors 13,472,650 (3) 56.10 %
(1) Person beneficially owning more than 5% of the Company's Common Stock
(2) Common Stock beneficially owned, directly or indirectly, by the
Company's Officers and Directors as a group.
(3) Beneficially owned, directly or indirectly, by Officers and Directors
of the Company.
(4) Ameristar Group Incorporated is a privately held corporation
principally owned and controlled by the principals of Lomar Corp. and
Wilmont Holdings, Corp., two corporate shareholders of the Registrant.
(5) The President of Mabery Group, Inc. is also President of the Issuer,
however, he disclaims beneficial ownership of these shares and the
shares of Mabery Group, Inc.
(6) Wilmont Holdings Corp. is a privately held corporation principally
owned and controlled by Joseph J. Messina, a Director of the Company.
(7) Lomar Corp. is a privately held corporation principally owned and
controlled by Martin I. Saposnick, a Director of the Company until
March 24, 2005 when he resigned.
(8) Dunhill Limited is a privately held corporation principally owned and
controlled by Joseph J. Messina, currently a Director of the Company
and Martin I. Saposnick, a Director of the Company until March 24,
2005 when he resigned.
Under Section 16(a) of the Securities and Exchange Act of 1934, as amended,
the directors and officers of the Company and any person who owns ten
percent or more of the Company's Common Stock are required to report their
initial ownership of the Company's Common Stock and any subsequent changes
in that ownership to the SEC on Forms 3,4 and 5. Such reporting persons are
also required by SEC regulations to furnish the Company with Copies of all
such reports that they file in accordance with Section 16(a).
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company and representations made to the Company,
no other reports were required, during and with respect to the period ended
April 15, 2005 and all reporting persons have complied with all filing
requirements to such persons.
Page 3 of 8
APPROVAL OF AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO (A) REVERSE SPLIT
THE COMPANY'S COMMON STOCK AND (B) TO EFFECT AN INCREASE
IN THE TOTAL AUTHORIZED CAPITAL STOCK
Amendment to the Amended Certificate of Incorporation
The Board of Directors and shareholders holding the necessary
number of votes have approved an amendment (the "Charter Amendment")
of the Company's amended Certificate of Incorporation (the
"Certificate") to (a) article Fourth thereof to effect an increase in
the total authorized capital stock of the Company (the "Capital
Increase") to 110,000,000 shares of which 100,000,000 will be
classified as common stock, par value $0.0001 per share, and
10,000,000 will be classified as preferred stock, par value $0.0001
per share, issuable in series with such powers, designations,
preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, as
the Board may fix from time to time by resolution or resolutions.
As amended, article FOURTH. (a) The total number of shares of
stock which this corporation is authorized to issue is one hundred ten
million (110,000,000) shares, 100,000,000 of which shall be common
stock, par value $0.0001 per share and 10,000,000 of which shall be
preferred stock, par value $0.0001 per share.
(b) Each fifteen (15) shares of Common
Stock outstanding at 9:00 a.m. on May 9, 2005, shall be deemed to be
one (1) share of Common Stock of the Corporation, par value $0.0001
per share.
(c) Shares of Preferred Stock may be
issued from time to time in one or more series as may be established
from time to time by resolution of the Board of Directors of the
Corporation (hereinafter the "Board"), each of which series shall
consist of such number of shares and have such distinctive designation
or title as shall be fixed by resolution of the Board prior to the
issuance of any shares of such series. Each such class or series of
Preferred Stock shall have such voting powers, full or limited, or no
voting powers, and such preferences and relative, participating,
optional or other special rights and such qualifications, limitations
or restrictions, thereof, as shall be stated in such resolution of the
Board providing for the issuance of such series of Preferred Stock.
The Capital Increase will be effected by filing a Certificate of
Amendment to the Amended Certificate of Incorporation with the
Secretary of the State of Delaware. The Certificate of Amendment,
attached hereto as Exhibit "A", will be filed with the Secretary of
the State of Delaware approximately twenty (20) days after the mailing
of this Information Statement, and the Capital Increase will become
effective immediately upon such filing (the "Effective Date").
Page 4 of 8
Purpose and Effect of Capital Increase
General
-------
The effect of the Capital Increase will be to increase the number of
shares of Common Stock that the Company is authorized to issue from
40,000,000, pre-reverse split, to 100,000,000, post-reverse split,
(the "Common Stock Increase") and continue the current authorization
of 10,000,000 shares of preferred stock (the "Preferred Stock").
Common Stock Increase
---------------------
The additional shares of Common Stock authorized by the Capital
Increase, if and when issued, will have the same rights and privileges
as the shares of Common Stock presently issued and outstanding. The
creation of additional shares of authorized Common Stock will not
alter the current number of post-reverse split shares. The relative
rights and limitations of the shares of Common Stock will remain
unchanged.
As of April 19, 2005, a total of 24,014,095 shares of the Company's
authorized 40,000,000 shares of Common Stock were issued and
outstanding.
The Board expects that the Company will privately place shares of its
Common Stock to raise funds to finance operations, including stock
based acquisitions of businesses or assets. Except for two (2) planned
private placements aggregating approximately 2,200,000 post-reverse
split shares and current discussions of a possible 30,000,000 post-
reverse split share exchange transaction with a potential acquisition
candidate, and of which there can be no assurance, there are no other
present understandings or arrangements for the issuance or sale of any
shares of Common Stock. However, it is likely that any future
financing or acquisition will require the Company to sell shares of
its Common Stock. The Company believes that the Common Stock Increase
will provide it with the flexibility of having an adequate number of
authorized but unissued shares of Common Stock available for future
financing requirements and other corporate purposes, such as stock
dividends or further splits, mergers, or existing and further
incentive programs, without the expense or delay attendant in seeking
stockholder approval at any special meeting or annual meeting. The
Charter Amendment provides additional authorized shares of Common
Stock that could be used from time to time, without further action or
authorization by the stockholders (except as may be required by law or
by any stock exchange or over-the-counter market on which the
Company's securities may then be listed).
Holders of Common Stock have no preemptive rights to purchase or
subscribe for any unissued stock of the Company. Accordingly, the
issuance of additional shares of Common Stock will reduce the current
stockholders' percentage ownership interest in the total outstanding
shares of Common Stock and, depending upon the circumstances, may have
a dilutive effect on earnings per share, voting power and other
interests of the existing stockholders.
The increase in the authorized number of shares of Common Stock and
the subsequent issuance of such shares could also have the effect of
delaying or preventing a change in control of the Company without
further action by the stockholders. Shares of unauthorized and
Page 5 of 8
unissued Common Stock could (within the limits imposed by applicable
law) be issued in one or more transactions that would make a
subsequent change in control of the Company more difficult, and
therefore less likely.
Principal Effects of Continuing the Current Preferred Stock
Authorization
The Charter Amendment continues the current authorization of
10,000,000 authorized shares of "blank check" preferred stock. The
term "blank check" refers to preferred stock, the creation and
issuance of which has been authorized in advance by the stockholders
and the terms, rights, and features of which are determined by the
Board upon issuance. The authorization of such preferred currently
permits the Board to authorize and issue preferred stock from time to
time in one or more series.
Subject to the provisions of the Company's amended Certificate of
Incorporation and the limitations prescribed by law, the Board is
expressly authorized, at its discretion, to adopt resolutions to issue
shares of preferred stock, to fix the number of such shares and to
change the number of such shares constituting any series and to
provide for or change the voting powers designations, preferences and
relative, participating, optional or other specific rights,
qualifications limitations or restrictions thereof, including dividend
rights (including whether the dividends are cumulative), dividend
rates, terms and redemption (including sinking fund provisions),
redemption prices, conversion rights and liquidation preferences of
the shares constituting any series of the preferred stock, in each
case without any further action or vote by the stockholders. The Board
is required to make any determination to issue shares of preferred
stock based on its judgment regarding the best interests of the
Company and its stockholders.
The Board believes that the continuing Preferred Stock authorization
provides the Company with increased financial flexibility in meeting
its future capital requirements by providing another type of security
in addition to its Common Stock, as it will allow preferred stock to
be available for issuance from time to time and with such features as
determined by the Board for any proper corporate purpose. Such
purposes may include the issuance for cash as a means of obtaining
capital for use by the Company, or issuance as part or all of the
consideration required to be paid by the Company for acquisitions of
other business or assets.
Any issuance of preferred stock with voting rights, could, under
certain circumstances, have the effect of delaying or preventing a
change in control of the Company by increasing the number of
outstanding shares entitled to vote and by increasing the number of
votes required to approve a change in control of the Company. Shares
of voting or convertible preferred stock could be issued, or rights to
purchase such shares could be issued to render more difficult or
discourage an attempt to obtain control of the Company by means of a
tender offer, proxy contest, merger or otherwise. The ability of the
Board to issue such additional shares of preferred stock, with the
rights and preferences it deems advisable, could discourage an attempt
by a party to acquire control of the Company by tender offer or other
means. Such issuances could therefore deprive stockholders of benefits
that could result from such an attempt. Moreover, the issuance of such
additional shares of preferred stock to persons friendly to the Board
could make it more difficult to remove incumbent managers and
directors from office event if such change were to be favorable to
stockholders generally.
Page 6 of 8
Exchange of Stock Certificates
As soon as practicable after the effective dates, shareholders of
record on the effective dates will be furnished with the necessary
materials and instructions for the surrender and exchange of their
current certificates representing shares of Common Stock and Preferred
Stock. Beginning on the respective effective date, that is, April 25,
2005, for the Preferred Stock conversion to Common Stock and May 9,
2005 for the 1 share for 15 shares, reverse split of all issued and
outstanding Common Stock, certificates representing two (2) shares of
Preferred Stock will represent one (1) share of Common Stock of the
Company and each fifteen (15) shares of Common Stock, will be deemed
for all corporate purposes to evidence ownership of one (1) share of
Common Stock of the Company. Accordingly, shareholders may, but need
not, surrender and exchange their certificates representing shares of
pre-conversion Preferred Stock and of pre-reverse split shares of
Common Stock. SHAREHOLDERS SHOULD NOT SUBMIT ANY STOCK CERTIFICATES TO
THE COMPANY OR THE COMPANY'S TRANSFER AGENT UNTIL REQUESTED TO DO SO.
No service charge will be payable by shareholders in connection with
the exchange of Preferred Stock or pre-reverse split Common Stock
certificates as all costs will be borne by the Company.
Dissenters' Rights
Under the provisions of the applicable General Corporate Law of
Delaware, shareholders are not provided with dissenters' right or
rights of appraisal in connection with these matters or the Charter
Amendment.
By Order of the Board of Directors
/s/ Robert Gordon
-----------------------------
Robert Gordon
President
Page 7 of 8
EXHIBIT A
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
W3 GROUP, INC.
First: That the Board of Directors of W3 Group, Inc. (the
"Corporation") by Unanimous Written Consent dated as of April 14,
2005, adopted resolutions setting forth proposed amendments to the
Certificate of Incorporation of the Corporation as heretofore amended,
declaring said amendments to be advisable and calling for the
submission of such amendments to the stockholders of the Corporation
for consideration thereof. The resolutions setting forth the proposed
amendments are as follows:
Resolved, that the Certificate of Incorporation of the Corporation be
amended by changing Article thereof numbered "Fourth" so that, as
amended, said Article shall be and read as follows:
FOURTH. (a) The total number of shares of stock which this
corporation is authorized to issue is one hundred ten million
(110,000,000), consisting of one hundred million (100,000,000) shares
of common stock, par value $0.0001 per share and ten million
(10,000,000) shares of preferred stock, par value $0.0001 per share.
(b) Each fifteen (15) shares of Common Stock
outstanding at 9:00 a.m. on May 9, 2005, shall be deemed to be one (1)
share of Common Stock of the Corporation, par value $0.0001 per share.
(c) Shares of Preferred Stock may be issued from time
to time in one or more series as may be established from time to time
by resolution of the Board of Directors of the Corporation
(hereinafter the "Board"), each of which series shall consist of such
number of shares and have such distinctive designation or title as
shall be fixed by resolution of the Board prior to the issuance of any
shares of such series. Each such class or series of Preferred Stock
shall have such voting powers, full or limited, or no voting powers,
and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions,
thereof, as shall be stated in such resolution of the Board providing
for the issuance of such series of Preferred Stock.
Second: That thereafter, pursuant to Section 228 of the
General Corporation Law of the State of Delaware, a consent setting
forth resolutions approving the amendments set forth above was signed
by holders of outstanding stock having not less than the minimum
number of votes necessary to authorize or take action at a meeting at
which all shares entitled to vote thereon were present and voted.
Third: That said amendments were duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
By: /s/Robert Gordon
----------------------
(Authorized Officer)
Name: Robert Gordon
Page 8 of 8