SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. 1)
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|X| Preliminary information statement |_| Confidential, for use of the
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Rule 14c-5(d)(2))
|_| Definitive information statement
ALTRIMEGA HEALTH CORPORATION
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(Name of Registrant as Specified in Its Charter)
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Amendment No. 1 to
Preliminary Information Statement
Dated: January 9, 2004
ALTRIMEGA HEALTH CORPORATION
4702 Oleander Drive
Suite 200
Myrtle Beach, South Carolina 29577
(843) 497-7028
INFORMATION STATEMENT
This information statement (the "Information Statement") is furnished to
the shareholders of Altrimega Health Corporation, a Nevada corporation (the
"Company"), with respect to certain corporate actions of the Company. This
Information Statement is first being provided to shareholders on or about
January 26, 2003.
The corporate actions involve two (2) proposals (individually, a
"Proposal" and, collectively, the "Proposals") providing for the following
amendments to the Company's Articles of Incorporation to:
1. Change the name of the Company to Creative Holdings & Marketing
Corporation; and
2. Increase the authorized common stock, par value $0.001 per share, of
the Company from 50,000,000 shares to 2,000,000,000 shares.
ONLY THE COMPANY'S SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON
DECEMBER 30, 2003 (THE "RECORD DATE") ARE ENTITLED TO NOTICE OF AND TO VOTE ON
THE PROPOSALS. MEMBERS OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS WHO COLLECTIVELY
HOLD IN EXCESS OF 50% OF THE COMPANY'S SHARES OF COMMON AND PREFERRED STOCK
ENTITLED TO VOTE ON THE PROPOSALS HAVE INDICATED THEIR INTENTION TO 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.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Gandy, President
Myrtle Beach, South Carolina
January 9, 2004
TABLE OF CONTENTS
PAGE NO.
--------
ABOUT THE INFORMATION STATEMENT...............................................1
What Is The Purpose Of The Information Statement?.......................1
Who Is Entitled To Notice?..............................................1
What Corporate Matters Will The Principal Shareholders Vote For
And How Will They Vote?...............................................1
What Are The Board Of Directors' Recommendations?.......................2
What Vote Is Required To Approve Each Proposal?.........................2
STOCK OWNERSHIP...............................................................3
Security Ownership Of Certain Beneficial Owners.........................3
Security Ownership Of Management Of Altrimega...........................5
PROPOSAL 1 - AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE THE
COMPANY'S NAME TO CREATIVE HOLDINGS & MARKETING CORPORATION............7
Recommendation Of The Board Of Directors...............................8
PROPOSAL 2 - AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED COMMON STOCK OF THE COMPANY TO 2,000,000,000 SHARES.........9
Purpose Of Increasing Number Of Authorized Shares Of Common Stock......9
Recommendation Of The Board Of Directors...............................10
Description Of Capital Stock...........................................10
Common Stock....................................................10
Preferred Stock.................................................11
Dividends..............................................................11
Transfer Agent And Registrar...........................................11
Additional Information.................................................11
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON.....11
PROPOSALS BY SECURITY HOLDERS................................................11
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS.................12
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ALTRIMEGA HEALTH CORPORATION
4702 Oleander Drive
Suite 200
Myrtle Beach, South Carolina 29577
---------------------
INFORMATION STATEMENT
January 9, 2004
-------------------------
This information statement contains information related to certain
corporate actions of Altrimega Health Corporation, a Nevada Corporation (the
"Company"), and is expected to be mailed to shareholders on or about January 26,
2004.
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
pursuant to the written consents of principal shareholders. Shareholders holding
a majority of the Company's outstanding common stock independently and also with
the outstanding preferred stock, voting on an as converted basis with the common
stock, are expected to act upon certain corporate matters outlined in this
information statement, which action is expected to take place on February 18,
2004, consisting of the approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to Creative Holdings and
Marketing Corporation and to increase the authorized common stock to
2,000,000,000.
Who Is Entitled To Notice?
Each holder of an outstanding share of common stock or preferred stock as
of record on the close of business on the Record Date, December 30, 2003, will
be entitled to notice of each matter to be voted upon pursuant to written
consents. Shareholders as of the close of business on the record date that hold
in excess of fifty percent (50%) of the Company's 49,139,950 issued and
outstanding shares of common stock combined with the Company's 1,000,000 shares
of preferred stock, on an as converted basis into 300,000,000 shares of common
stock, have indicated that they will vote in favor of the Proposals.
Additionally, shareholders as of the close of business on the record date that
hold in excess of fifty percent (50%) of the Company's 49,139,950 issued and
outstanding shares of common stock, as an independent class, have indicated they
will vote in favor of the Proposal to increase the the number of authorized
shares of common stock to 2,000,000,000 shares. Under Nevada corporate law, all
the activities requiring shareholder approval may be taken by obtaining the
written consent and approval of more than 50% of the holders of voting stock in
lieu of a meeting of the shareholders. No action by the minority shareholders in
connection with the Proposals is required.
What Corporate Matters Will The Principal Shareholders Vote For And How Will
They Vote?
Shareholders holding a majority of the outstanding stock required to vote
on each matter have indicated that they will vote for the following matter:
o For the approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to Creative Holdings
& Marketing Corporation (see page 6).
o For the approval of an amendment to the Company's Articles of
Incorporation to increase the authorized shares of the Company's
common stock from 50,000,000 to 2,000,000,000 shares (see page 8).
1
What Are The Board Of Directors' Recommendations?
The Board of Directors' recommendation is set forth together with the
description of each item in this information statement. In summary, the Board
recommends a vote:
o For the approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company from Altrimega
Health Corporation to Creative Holdings & Marketing Corporation (see
page 6).
o For the approval of an amendment to the Company's Articles of
Incorporation to increase the authorized shares of the Company's
common stock to 2,000,000,000 shares (see page 8).
What Vote Is Required To Approve Each Proposal?
As of the record date, the Company had 49,139,950 shares of issued and
outstanding shares of common stock and 1,000,000 shares of issued and
outstanding shares of preferred stock. Each share of preferred stock is
convertible into 300 shares of common stock and is entitled to vote with shares
of common stock on an as converted basis. As a result, holders of the shares of
preferred stock are entitled to vote a total of 300,000,000 shares of common
stock.
Corporate Name Change. For the Proposal to change the name of the
corporation to Creative Holdings & Marketing Corporation, a vote of a majority
of the common stock combined with the as converted shares of preferred stock is
required for approval of the Proposal. As a result of the 49,139,950 outstanding
shares of common stock and the 300,000,000 shares of common stock entitled to
vote on an as converted basis of the 1,000,000 shares of preferred stock, at
least 174,569,976 votes are required to approve the Proposal.
Increase in Authorized Shares. For the Proposal to increase the authorized
shares of common stock to 2,000,000,000, in addition to the vote of at least
174,569,976 shares including the as converted preferred stock, a second vote of
a majority of common stock, as an independent class, is also required by Nevada
Revised Statutes Section 78.390(2). Accordingly, a second vote of at least
24,569,976 shares of outstanding common stock, without the shares of preferred
stock, is also require to approve the increase in the number of authorized
shares of common stock.
The shareholders that have indicated an intention to vote in favor of the
Proposals and the number of shares of common stock and preferred stock,
including on an as converted basis, within their voting control as of the new
record date (December 30, 2003) are described below. These shareholders have
62.1106% of the shares entitled to vote when the shares of preferred stock are
included on an as converted basis, and have 50.0517% of the shares common stock
when considered as an independent class. Accordingly the same shareholders have
sufficient shares to approve both Proposals.
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NUMBER OF PERCENTAGE
COMMON OWNERSHIP
SHARES UPON TOTAL INCLUDING
PERCENTAGE CONVERSION SHARES PREFERRED
COMMON OWNERSHIP PREFERRED PERCENTAGE OF ON AN AS (ALL PREFERRED
SHARES COMMON SHARES OF PREFERRED CONVERTED PREFERRED AS
SHAREHOLDER OWNED STOCK(6) OWNED PREFERRED(7) STOCK BASIS CONVERTED(8)
----------- ----- -------- ----- ------------ ----- ----- ------------
CAPITAL PROPS. CONS., LLC(1) 1,668,250 3.3949% 83,410 8.34% 25,023,000 26,691,250 7.6449%
EARL INGARFIELD 2,611,430 5.3143% 0 0.00% 0 2,611,430 0.7480%
CHICORA BEACH HOLIDAY(2) 559,300 1.1382% 27,969 2.80% 8,390,700 8,950,000 2.5634%
JOHN F. SMITH, III 348,400 0.7090% 17,422 1.74% 5,226,600 5,575,000 1.5968%
JOHN W. GANDY 1,254,750 2.5534% 62,730 6.27% 18,819,000 20,073,750 5.7495%
GANDY ASSOCIATES, LLC(2) 1,250,000 2.5438% 62,500 6.25% 18,750,000 20,000,000 5.7284%
GANDY FAMILY INVS., LLC(2) 2,500,000 5.0875% 125,000 12.50% 37,500,000 40,000,000 11.4567%
KIM GOODSON 2,000,000 4.0700% 0 0.00% 0 2,000,000 0.5728%
GREAT WEST, LLC(3) 4,879,750 9.9303% 250,647 25.06% 75,194,100 80,073,850 22.9346%
ROBERT LEE MATZIG 1,100,000 2.2385% 0 0.00% 0 1,100,000 0.3151%
WOFFORD CAPITAL(2) 202,500 0.4121% 10,125 1.01% 3,037,500 3,240,000 0.9280%
HENDRIX & GANDY, LLC(4) 21,000 0.0427% 1,055 0.11% 316,500 337,500 0.0967%
RIO INVS. GROUP, LLC(5) 6,200,000 12.6170% 0 0.00% 0 6,200,000 1.7758%
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24,595,380 50.0517% 640,858 64.09% 192,257,400 216,852,780 62.1106%
=====================================================================================
(1) To the Company's knowledge, Capital Properties Consultants, LLC is
controlled by Ron Hendrix, a director of the Company.
(2) Represents shares of the Company's common stock over which John W. Gandy,
the Company's President and Director, has voting control.
(3) To the Company's knowledge, Great West, LLC is controlled by Marcella M.
Mica.
(4) Hendrix & Gandy, LLC is controlled 50% by John Gandy and 50% by Ron
Hendrix.
(5) To the Company's knowledge, Rio Investments Group, LLC is controlled by
Walter Lynch.
(6) Applicable percentage of ownership is based on 49,139,950 shares of common
stock outstanding as of December 30, 2003.
(7) Applicable percentage of ownership is based on 1,000,000 shares of
preferred stock outstanding as of December 30, 2003.
(8) Applicable percentage of ownership is based on 49,139,950 shares of common
stock outstanding as of December 30, 2003, combined with 300,000,000
shares of common stock based on a converted basis of the 1,000,000 shares
of preferred stock.
STOCK OWNERSHIP
Security Ownership Of Certain Beneficial Owners
As of December 30, 2003, other than the persons identified below, no
person owned beneficially more than five percent (5%) of the Company's common
stock. Unless otherwise indicated, beneficial ownership is direct and the person
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indicated has sole voting and investment power. Ownership of preferred stock is
set forth below to show the effect of conversion of the shares of preferred
stock into common stock. As of December 10, 2003, the Company had 49,139,950
shares of common stock outstanding and 1,000,000 shares of preferred stock
outstanding.
Amount and
Nature of
Name and Address Beneficial Percentage of
Beneficial Owner Title of Class Ownership Class(1)
---------------- -------------- --------- --------
Rio Investment Group, LLC(3) Common 6,200,000 12.62%
25 Greystone Manor Preferred 0 0%
Lewes, Delaware 19958-9776 Total Beneficial Ownership 6,200,000 12.62%
Great West, LLC(4) Common 4,879,750 9.93%
1960 Stickney Point Road Preferred 250,647 25.06%
Sarasota, FL 34231 Total Beneficial Ownership 80,073,850 64.40%
Earl Ingarfield Common 2,611,430 5.31%
19 Boulevard of the Presidents North Preferred 0 0%
Unit # 227 Total Beneficial Ownership 2,611,430 5.31%
Sarasota, FL 34236
Capital Properties Consultants, LLC(5) Common 1,668,250 3.39%%
4702 Oleander Drive, Suite 200 Preferred 83,410 8.34%
Myrtel Beach, SC 29577 Total Beneficial Ownership 26,691,250 35.99%
Quickstep, LLC(6) Common 0 0%
2033 Main Street Preferred 250,647 25.06%
Sarasota, FL 34237 Total Beneficial Ownership 75,194,100 60%
Chicora Beach Holiday(7) Common 559,300 1.14%
P.O. Box 276 Preferred 27,969 2.80%
Myrtle Beach, SC 29576 Total Beneficial Ownership 8,950,000 15.56%
John F. Smith, III Common 348,400 1.71%
26 Highwood Circle Preferred 17,422 1.74%
Murrells Inlet, SC 29575 Total Beneficial Ownership 5,575,000 10.25%
John W. Gandy(2) Common 2,813,812 5.73%
561 Old Filed Road Preferred 77,957 7.80%
Murrells Inlet, SC 29576 Total Beneficial Ownership 26,200,784 36.13%
Gandy Associates, LLC(8) Common 1,250,000 2.54%
561 Old Filed Road Preferred 62,500 6.25%
Murrells Inlet, SC 29576 Total Beneficial Ownership 20,000,000 29.46%
Gandy Family Investments, LLC(8) Common 2,500,000 5.09%
561 Old Filed Road Preferred 125,000 12.5%
Murrells Inlet, SC 29576 Total Beneficial Ownership 40,000,000 46.17%
Wofford Capital(9) Common 202,500 .41%
P.O. Box 1103 Preferred 10,125 1.01%
Myrtle Beach, SC 29578 Total Beneficial Ownership 3,240,000 15.56%
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Amount and
Nature of
Name and Address Beneficial Percentage of
Beneficial Owner Title of Class Ownership Class(1)
---------------- -------------- --------- --------
Ron Hendrix, C.F.O., Secretary and
Director (2) Common 1,678,750 3.42%
4702 Oleander Drive, Suite 200 Preferred 83,938 8.39%
Myrtel Beach, SC 29577 Total Common and Preferred (converted) 26,860,000 36.14%
Security Ownership Of Management Of Altrimega
Amount and
Nature of
Name and Position Beneficial Percentage of
of Officer and/or Director Title of Class Ownership Class(1)
-------------------------- -------------- --------- --------
John W. Gandy, President, C.E.O. and
Director (2) Common 2,813,812 5.73%
Preferred 77,957 7.80%
Total Common and Preferred (converted) 26,200,784 36.13%
Ron Hendrix, C.F.O., Secretary and Director
(2) Common 1,678,750 3.42%
Preferred 83,938 8.39%
Total Common and Preferred (converted) 26,860,000 36.14%
John F. Smith, III, Director Common 348,400 .71%
Preferred 17,422 1.74%
Total Common and Preferred (converted) 5,575,000 10.25%
Officers and Directors as a Group (3
persons) Common 4,840,962 9.85%
Preferred 179,317 17.93%
Total Common and Preferred (converted) 58,635,784 54.41%
----------
(1) Applicable percentage of ownership is based on 49,139,950 shares of common
stock and 1,000,000 shares of preferred stock, convertible into
300,000,000 shares of common stock, outstanding as of December 30, 2003
for each stockholder. Beneficial ownership is determined in accordance
within the rules of the Commission and generally includes voting of
investment power with respect to securities (Please see note 2 below).
Shares of common stock subject to securities exercisable or convertible
into shares of common stock that are currently exercisable or exercisable
within 60 days of December 30, 2003 are deemed to be beneficially owned by
the person holding such preferred shares for the purpose of computing the
percentage of ownership of such persons, but are not treated as
outstanding for the purpose of computing the percentage ownership of any
other person.
(2) Ownership for officers and directors includes shares owned by the
following entities based on the officer and director's percentage
ownership of the entity, as set forth below.
o Hendrix & Gandy is owned 50% by John W. Gandy and 50% by Ron
Hendrix.
o Chicora Beach Holiday is owned 25% by John W. Gandy.
o Wofford Capital is owned 16.66% by John W. Gandy.
o Gandy Associates is owned 50% by John W. Gandy.
o Gandy Family Investments is owned 30% by John W. Gandy.
o Capital Properties Consultants is 100% owned by Ron Hendrix.
(3) To the Company's knowledge, Rio Investments Group, LLC is controlled by
Walter Lynch.
(4) To the Company's knowledge, Great West, LLC is controlled by Marcella M.
Mica.
(5) To the Company's knowledge, Capital Properties Consultants, LLC is
controlled by Ron Hendrix, a director of the Company.
(6) To the Company's knowledge, Troy H. Myers, Jr. has voting control of
Quickstep, LLC.
(7) John W. Gandy, the Company's President and Director, has voting control
over Chicora Beach Holiday.
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(8) John W. Gandy, the Company's President and Director, has voting control
over Gandy Associates, LLC and Gandy Family Investments, LLC.
(9) John W. Gandy, the Company's President and Director, has voting control
over Wofford Capital, LLC
Corporate action will only take place 20 days after a definitive
information statement is mailed to all shareholders of record.
6
PROPOSAL 1 -
AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO
CREATIVE HOLDINGS & MARKETING CORPORATION
Our Company's Board of Directors proposed an amendment to our Company's
Articles of Incorporation to change our Company's name from Altrimega Health
Corporation to Creative Holdings & Marketing Corporation.
The amendment to our Company's Articles of Incorporation shall be filed
with the Nevada Secretary of State so that the first paragraph of Article I of
the Articles of Incorporation shall be as follows:
"The name of the corporation is Creative Holdings & Marketing
Corporation."
Our Company's Board of Directors believes that it is desirable to have the
Company change its name in light of our recent merger agreement with Creative
Holdings, Inc. and change in our business focus to the real estate industry.
Moreover, the Company is not involved in the health care industry.
On August 15, 2002, the Company entered into a definitive Merger Agreement
(the "Merger Agreement") among the Company, Altrimega Acquisition Co., a Nevada
corporation ("Acquisition Co."), Creative Holdings, Inc., a South Carolina
corporation ("Creative Holdings") and the shareholders of Creative Holdings (the
"Shareholders"). Pursuant to the Merger Agreement, Creative Holdings would have
been merged with and into Acquisition Co., which would have been the surviving
corporation and continued its corporate existence under the laws of the State of
Nevada as a wholly-owned subsidiary of the Company. In consideration of the
merger, the Company was to issue a total of 320,000,000 shares of common stock
of the Company to the Shareholders in exchange for all of the common stock of
Creative Holdings. At closing, 20,000,000 shares of common stock of the Company
would have been issued and delivered to the Shareholders. Upon consummation of
the merger and the approval by a majority of the outstanding shares of capital
stock authorizing an amendment to the Company's Articles of Incorporation
increasing the authorized common stock of the Company to 800,000,000, the
remaining 300,000,000 shares of common stock of the Company would have been
issued and delivered to the Shareholders.
On September 2, 2002, the Company, Creative Holdings and the Shareholders
amended the Merger Agreement and restructured the merger into a stock exchange
transaction, whereby Creative Holdings became a wholly-owned subsidiary of the
Company. Pursuant to the Share Exchange Agreement (the "Share Exchange
Agreement"), effective as of August 15, 2002 by and among the Company, Creative
Holdings and the Shareholders, the Shareholders exchanged with, and delivered
to, the Company the issued and outstanding capital stock of Creative Holdings in
exchange for 20,000,000 shares of common stock of the Company and 1,000,000
shares of Series A Convertible Preferred Stock of the Company. Each share of
Series A Convertible Preferred Stock will be convertible into 300 shares of
common stock of the Company. All of the shares of preferred stock were issued on
November 6, 2002. After cancellation of certain shares, the Shareholders have
received 13,619,950 shares of the Company's common stock.
The Company is a real estate development business and will strive to
locate, evaluate and proceed to finance and develop multiple projects located
primarily in the Myrtle Beach, S.C. area and the Carolinas area of the United
States. Management believes that these areas provide the population growth
necessary to achieve profits from new construction projects. The Company's
business strategy includes a focus on interval ownership properties that cater
to this major tourism industry. As well, we intend to develop projects in the
medium price ranges for the areas' permanent service industry population.
Management will attempt to seek out low-risk projects throughout the Carolinas
that do not require large financing commitments. Accordingly, the Company
believes "Creative Holdings & Marketing Corporation" is an appropriate name for
the Company.
The Company's first revenue generating real estate project is the Sea
Garden Town Home Community in North Myrtle Beach, South Carolina. The Company is
developing this project through its 80% interest in Sea Garden Funding, LLC, the
owner and developer of the remaining 59 units in a 175 unit, 2 bedroom, 2 bath
town home community approximately 3 blocks from the Atlantic shoreline. Sea
Garden Funding purchased the real property from Sea Garden, LLC on October 21,
2002 for the payment of $210,000 and the assumption of $1,071,344.66 in
mortgages on the real property held by Horry County State Bank. The development
consists of buildings that have either 4 or 5 units per building. The remaining
20% interest in Sea Garden Funding, LLC, is owned by an unaffiliated party. The
community currently consists of
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116 sold units. During the first three quarters of 2003, this project produced
revenue of $634,868 with gross profit of $24,782.
Recommendation Of The Board Of Directors
Our Board of Directors unanimously recommended a vote "FOR" the approval
of an amendment to our Company's Articles of Incorporation to change the company
name from Altrimega Health Corporation to Creative Holdings & Marketing
Corporation.
8
PROPOSAL 2 -
AMENDMENT TO THE ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY TO 2,000,000,000 SHARES
Our Company's Board of Directors proposed an amendment to our Company's
Articles of Incorporation to increase the number of authorized shares of common
stock, par value $0.001 per share, from 50,000,000 to 2,000,000,000 shares.
The amendment to our Company's Articles of Incorporation provides for the
authorization of 1,950,000,000 additional shares of our Company's common stock.
Currently, 49,139,950 shares of our Company's common stock are issued and
outstanding of the 50,000,000 authorized shares of common stock. None of the
current authorized and unissued shares of common stock are reserved for specific
purposes.
Purpose Of Increasing Number Of Authorized Shares Of Common Stock
On August 15, 2002, the Company entered into a definitive Merger Agreement
(the "Merger Agreement") among the Company, Altrimega Acquisition Co., a Nevada
corporation ("Acquisition Co."), Creative Holdings, Inc., a South Carolina
corporation ("Creative Holdings") and the shareholders of Creative Holdings (the
"Shareholders"). Pursuant to the Merger Agreement, Creative Holdings would have
been merged with and into Acquisition Co., which would have been the surviving
corporation and continued its corporate existence under the laws of the State of
Nevada as a wholly-owned subsidiary of the Company. In consideration of the
merger, the Company was to issue a total of 320,000,000 shares of common stock
of the Company to the Shareholders in exchange for all of the common stock of
Creative Holdings. At closing, 20,000,000 shares of common stock of the Company
would have been issued and delivered to the Shareholders. Upon consummation of
the merger and the approval by a majority of the outstanding shares of capital
stock authorizing an amendment to the Company's Articles of Incorporation
increasing the authorized common stock of the Company to 2,000,000,000, the
remaining 300,000,000 shares of common stock of the Company would have been
issued and delivered to the Shareholders.
On September 2, 2002, the Company, Creative Holdings and the Shareholders
amended the Merger Agreement and restructured the merger into a stock exchange
transaction, whereby Creative Holdings became a wholly-owned subsidiary of the
Company. Pursuant to the Share Exchange Agreement (the "Share Exchange
Agreement"), effective as of August 15, 2002 by and among the Company, Creative
Holdings and the Shareholders, the Shareholders exchanged with, and delivered
to, the Company the issued and outstanding capital stock of Creative Holdings in
exchange for 20,000,000 shares of common stock of the Company and 1,000,000
shares of Series A Convertible Preferred Stock of the Company. Each share of
Series A Convertible Preferred Stock will be convertible into 300 shares of
common stock of the Company. All of the shares of preferred stock were issued on
November 6, 2002. After cancellation of certain shares, the Shareholders have
received 13,619,950 shares of the Company's common stock.
The Company is contractually obligated to use some of the additional
authorized shares of common stock for issuance pursuant to the Company's Share
Exchange Agreement between the Company, Creative Holdings and the Shareholders.
Pursuant to the Share Exchange Agreement, the Shareholders were collectively
issued 1,000,000 shares of Series A Convertible Preferred Stock that are
convertible into a total of 300,000,000 shares of common stock. All of the
shares of preferred stock were issued on November 6, 2002. On the date of the
Share Exchange Agreement, the Company had insufficient authorized shares of
common stock for the Shareholders who acquired Series A Convertible Preferred
Stock as part of the Share Exchange Agreement to convert the preferred stock
into shares of common stock. The Company believes that upon the increase of the
authorized shares of common stock to 2,000,000,000 shares, all, or substantially
all, of the shares of Series A Preferred Stock will be converted into
300,000,000 shares of the Company's common stock. Accordingly, 300,000,000
shares of the Company's common stock will likely be issued to the Shareholders
upon the approval of the amendment to the Company's Articles of Incorporation.
After issuance of the 300,000,000 shares as a result of the conversion of
the preferred shares, the Company will have approximately 1,650,000,000 shares
of authorized and unissued shares of common stock. While the Company has no
current plans, and is not currently considering any acquisitions, financings or
corporate purposes involving the issuance of these shares of common stock, the
Company's board of directors believes that it is desirable to have additional
authorized shares of common stock available for possible future financings,
possible future acquisition transactions and other possible general corporate
purposes. The Company's board of directors believes 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 special shareholders' meeting. Although such
issuance of additional shares with respect
9
to future financings and acquisitions would dilute existing shareholders,
management believes that such transactions would increase the value of the
Company to its shareholders. Again, other than as discussed above in connection
with the conversion of the shares of preferred stock, the Company currently is
not contemplating the issuance of any shares of common stock for any future
financing, any future acquisitions transactions or other general corporate
purposes.
The amendment to the Company's Certificate of Incorporation provides for
the authorization of 1,950,000,000 additional shares of the Company's common
stock. As of December 30, 2003, 49,139,950 shares of the Company's common stock
were issued and outstanding.
There are certain advantages and disadvantages of voting for an increase
in the Company's authorized common stock and the authorization of shares of
preferred stock. The advantages include:
o The ability of the Company to satisfy the obligations pursuant to
the Share Exchange Agreement.
o The ability to raise capital by issuing capital stock under
financing transactions, if any.
o To have shares of common stock available to pursue business
expansion opportunities, if any.
The disadvantages include:
o Dilution to the existing shareholders, including a decrease in our
net income per share in future periods. This could cause the market
price of our stock to decline.
The issuance of authorized but unissued stock could be used to deter a
potential takeover of the Company that may otherwise be beneficial to
shareholders by diluting the shares held by a potential suitor or issuing shares
to a shareholder that will vote in accordance with the desires of the Company's
Board of Directors, at that time. A takeover may be beneficial to independent
shareholders because, among other reasons, a potential suitor may offer such
shareholders a premium for their shares of stock compared to the then-existing
market price. The Company does not have any plans or proposals to adopt
provisions or enter into agreements that may have material anti-takeover
consequences.
The amendment to our Company's Articles of Incorporation shall be filed
with the Nevada Secretary of State so that the first paragraph of Article V1 of
the Articles of Incorporation shall be as follows:
"The maximum number of shares of stock which this Corporation shall
have authority to issue is Two Billion Ten Million (2,010,000,000),
consisting of Two Billion (2,000,000,000) shares of common
stock having a par value of $0.001 per share, and Ten Million
(10,000,000) shares of preferred stock having a par value of $0.001
per share. The preferences, qualifications, limitations,
restrictions and the special or relative rights with respect to the
shares of each class are as follows:"
Recommendation Of The Board Of Directors
Our Board of Directors unanimously recommended the approval of an
amendment to our Company's Articles of Incorporation to increase the number of
authorized shares of common stock, par value $0.001 per share, from 50,000,000
to 2,000,000,000 shares.
Description Of Capital Stock
The current authorized capital stock of our Company consists of 60,000,000
shares, consisting of 50,000,000 shares of common stock, par value $0.001 per
share and 10,000,000 shares of preferred stock, par value $0.001 per share. As
of December 30, 2003, we had 49,139,950 shares of our common stock outstanding
and 1,000,000 shares of our preferred stock outstanding. The following
description is a summary of the capital stock of our Company and contains the
material terms of our capital stock. Additional information can be found in our
Articles of Incorporation and our Bylaws.
Common Stock
Each share of our common stock entitles the holder to one vote on each
matter submitted to a vote of our shareholders, including the election of
directors. There is no cumulative voting. The holders of our common stock are
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entitled to receive ratably such dividends, if any, as may be declared from time
to time by our Board of Directors out of funds legally available therefor.
Holders of our common stock have no preemptive, conversion or other subscription
rights. There are no redemption or sinking fund provisions available to our
common stock. In the event of liquidation, dissolution or winding up our
Company, the holders of our common stock are entitled to share ratably in all
assets remaining after payment of liabilities.
Preferred Stock
The Company has authorized and issued 1,000,000 shares of Class A
Convertible Preferred Stock to the prior shareholders of Creative Holdings. Each
share is convertible into 300 shares of common stock. These shares of preferred
stock are senior to shares of common stock regarding dividends and liquidation.
These 1,000,000 shares of preferred stock vote with shares of common stock on an
as converted basis.
The Company has 9,000,000 shares of authorized but unissued shares of
"blank check" preferred stock.
Anti-Takeover Effects Of Provisions Of The Articles Of Incorporation, Bylaws And
Florida Law
Authorized and Unissued Stock. Authorized but unissued shares of common
stock and preferred stock would be available for future issuance without our
shareholders' approval. These additional shares may be utilized for a variety of
corporate purposes including but not limited to future public or direct
offerings to raise additional capital, corporate acquisitions and employee
incentive plans. The issuance of such shares may also be used to deter a
potential takeover of the Company that may otherwise be beneficial to
shareholders by diluting the shares held by a potential suitor or issuing shares
to a shareholder that will vote in accordance with the Company's Board of
Directors' desires. A takeover may be beneficial to shareholders because, among
other reasons, a potential suitor may offer shareholders a premium for their
shares of stock compared to the then-existing market price.
The existence of authorized but unissued and unreserved shares of
preferred stock may enable the Board of Directors to issue shares to persons
friendly to current management, which would render more difficult or discourage
an attempt to obtain control of the Company by means of a proxy contest, tender
offer, merger or otherwise, and thereby protect the continuity of the Company's
management.
Dividends
The Company has not declared or paid cash dividends on its common stock
since its inception and does not anticipate paying such dividends in the
foreseeable future. The payment of dividends may be made at the discretion of
the Board of Directors at that time and will depend upon, among other factors,
on the Company's operations.
Transfer Agent And Registrar
Interwest Transfer Company Inc. is the transfer agent and registrar of our
common stock. Its address is 1981 East Murray Holladay Road, Suite 100, P.O. Box
17136, Salt Lake City, Utah 84117.
Additional Information
Incorporation by Reference. Certain financial and other information
required pursuant to Item 13 of the Proxy Rules is incorporated by reference to
the Company's Annual Report on Form 10-KSB for the year ended December 30, 2002,
and the Company's Quarterly Report on Form 10-QSB for the three month period
ended September 30, 2003, which are being delivered to the shareholders with
this information statement. In order to facilitate compliance with Rule 2-02(a)
of Regulation S-X, one copy of the definitive Information statement will include
a manually signed copy of the accountant's report.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
(a) No officer or director of the Company has any substantial interest in
the matters to be acted upon, other than his role as an officer or director of
the Company and as a former Shareholder of Creative Holdings.
(b) No director of the Company has informed the Company that he intends to
oppose the proposed actions to be taken by the Company set forth in this
information statement.
PROPOSALS BY SECURITY HOLDERS
No security holder has requested the Company to included any proposals in
this information statement.
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DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
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 documents 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 4702 Oleander Drive, Suite 200, Myrtle Beach,
South Carolina 29577; or by calling the Company at (843) 497-7028 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.
By Order of the Board of Directors
/s/ John W. Gandy.
----------------------------------------
John W. Gandy
President and Director
Myrtle Beach, South Carolina
January 9, 2004
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