SCHEDULE 14C
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
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
Terrace Food Group, Inc.
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(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| $125 per Exchange Act Rule O-11(c)(1)(ii), 14c-5(g).
|_| Fee computed on table below per Exchange Act
Rules 14c-5(g) and O-11.
1) Title of each class of securities to which transaction applies:
Common Stock $.001 par value
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2) Aggregate number of securities to which transaction applies:
9,483,423 Shares
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
N/A
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4) Proposed maximum aggregate value of transaction:
N/A
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5) Total fee paid:
N/A
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
Registrant
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4) Date Filed:
February 26, 1999
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INFORMATION STATEMENT DATED FEBRUARY 23, 1999
TO THE STOCKHOLDERS OF TERRACE FOOD GROUP, INC.:
Notice is hereby given that in accordance with the provisions of
Section 228 of the Delaware General Corporation Law ("DGCL"), the holders of the
issued and outstanding common stock of Terrace Food Group, Inc., a Delaware
corporation (the "Company"), having not less than the minimum number of votes
necessary to authorize or take such action as described below have taken, by
written consent without a meeting and without a vote, effective March 18, 1999
(the "Written Consent"), the following action: to effect a one-for- ten
combination or reverse split of the outstanding common stock of the Company, the
result of which will be to decrease the number of shares issued and outstanding
from 9,483,423 to 948,343 shares of common stock.
Only holders of record of the Company's common stock at the close of
business on February 19, 1999 are entitled to receive notice of the action by
written consent in accordance with Section 228 of the DGCL. This Information
Statement is being sent to such holders of record on or about February 26, 1999.
No response is being requested from you and you are requested not to respond to
this Information Statement. In accordance with Section 228 of the DGCL, this
Information Statement shall be deemed prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent to
those stockholders who have not consented in writing.
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
and Consenting Stockholders of
Terrace Food Group, Inc.
1351 N.W. 22nd Street
Pompano Beach, FL 33069
954-917-7272
By: /s/ Jonathan S. Lasko
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Jonathan S. Lasko, Secretary
Dated: February 26, 1999.
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Date, Time and Place Information
As stated in the preceding Notice, effective March 18, 1999, all the
issued and outstanding common stock of the Company will be combined, on a
one-for-ten reverse split basis ("Reverse Split"). Under Section 242 of the
DGCL, the Reverse Split will be accomplished without the necessity of amending
the Company's Certificate of Incorporation. Thus, no filings under applicable
Delaware law are required. Copies of the executed and dated requisite Consents
of Stockholders in Lieu of Meeting are available for inspection at the offices
of the Company at 1351 N.W. 22nd Street, Pompano Beach, FL 33069, by any
stockholder or record on the Record Date (February 19, 1999).
Voting Securities and Principal Holders Thereof
As of the Record Date, February 19, 1999, there were 9,483,423 shares
of common stock issued and outstanding and entitled to vote or give written
consent to the Reverse Split. No other class of securities of the Company has
any such voting right. Those stockholders from whom written consent has been
secured are 24 in number and either are current or former directors, officers,
employees or family or close associates of the foregoing. A total of 4,836,714
shares (51%) have signed written consents to make the Reverse Split effective
March 18, 1999. Stockholder consents were not and will not be solicited
generally.
The following table provides information concerning the beneficial
ownership of Common Stock of the Company by each director, certain executive
officers, and by all directors and officers of the Company as a group as of
February 19, 1998. In addition, the table provides information concerning the
beneficial owners known to the Company to hold more than 5% of the outstanding
Common Stock of the Company as of February 19, 1998.
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Common Stock
Beneficial Percent of
Name of Beneficial Owner Ownership(1) Class(1)(2)
- ------------------------ ------------ -----------
Jonathan S. Lasko 490,000(3) 5.2%
Richard Power 422,501 *
Steven Shulman 719,501 7.6%
Fred A. Siegel 78,750 *
Houssam T. Aboukhater 200,000 *
William P. Rodrigues 25,000 *
A-One-A Wholesale Produce, Inc. 500,000(4) 5.3%
Virgil Scarbrough 111,316 *
Scott Davis 111,316 *
Michael Feinberg 500,000 5.3%
All Directors, Executive Officers and 5%
Holders as a Group 3,158,384(5) 33.3%
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*Less than five percent.
(1) In each case the beneficial owner has sole voting and investment power
except that 380,000 shares held by Jonathan S. Lasko are held in joint
tenancy with his wife Ellen J. Lasko.
(2) The calculation of percent of class is based upon the number of shares
of Common Stock outstanding as of February 19, 1999.
(3) Includes 25,000 shares held for the benefit of Jordana Lasko, a minor.
(4) These shares were issued in connection with the Company's acquisition
of the business and assets of the named company which is owned equally
by Virgil Scarbrough and Scott Davis. Messrs. Scarbrough and Davis are
Co-Chief Operating Officers of A-One-A Produce & Provisions, Inc., one
of the Company's wholly-owned subsidiaries.
(5) Does not include stock options granted in the amounts and prices as
follows: Jonathan S. Lasko - 125,000 @ $1.185 and 30,000 @ $1,375;
Steven Shulman - 130,000 @ $1.185 and 50,000 @ $1.375; Richard Power -
20,000 @ $1,185 and 30,000 @ $1.375; Fred A. Seigel - 30,000 @ $1.375;
and Houssam T. Aboukhater - 30,000 @ $1.375. Also does not include
warrants to purchase Common Stock at a price of $1.1875 in the
following amounts: Jonathan S. Lasko - 375,000; Steven Shulman -
36,666.7; Richard Power - 31,666.7; and Fred A. Seigel - 15,833.3.
Modification of Securities
The Company has determined the advisability of effecting the Reverse
Split of its common stock in an attempt to increase the market price per share
for its common stock and ultimately to enhance stockholder value. After informal
discussions with members of the investment banking community, certain directors
brought to the attention of the entire Board
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of Directors the informal view that combining the total number of shares
outstanding at this time, would probably result in a higher market price per
share. Since some investors may be precluded from investing or trading in
securities at extremely low market prices, the Company believes the market for
its securities has been negatively affected. While no assurance can be given, a
higher per share market price may attract more long term investors.
The Reverse Split will occasion implementation of the "anti-dilution"
provisions in the Company's outstanding 5,272,300 Public Warrants in that each
such Warrant will be exercisable at $4.00 per tenth of a share, or $40.00 for a
full share. The Company will not issue fractional shares and will only accept
the exercise of ten Warrants for each share to be issued upon exercise and
payment of the revised exercise price. If less than ten Warrants are exercised,
such resulting fractional share shall be disregarded and, upon payment of the
full share exercise price, a full share of Common Stock shall be issued to such
exercising Warrant Holder. As required by the Warrant Agreement, separate notice
will be sent to Warrant Holders advising of the revisions to the number of
shares issuable upon exercise and the exercise price per share, as required by
the Warrant Agreement.
Financial and Other Information
Inasmuch as the Reverse Split will not cause any changes to the
Company's financial or other information other than to reduce the total number
of shares issued and outstanding, no financial or related information is
included herein. However, reference is hereby made to the Company's Form 10-QSB
for the period ended September 30, 1998, its latest filed report with the
Securities and Exchange Commission, for such information. Additionally, the
Company notes that its Annual Report on Form 10-KSB for the year ended December
31, 1998 is due to be filed with the Securities and Exchange Commission on or
about March 31, 1999 and copies thereof will be available for its stockholders
and others shortly thereafter in connection with the Company's Annual Meeting of
Stockholders for the election of directors and possibly other matters, intended
to be held in early July of 1999.
No Restatement of Accounts; No Fractional Shares to be Issued
No action is to be taken to restate any accounts of the Company, other
than to revise the total number of shares outstanding as of March 18, 1999, as a
result of the Reverse Split. Furthermore, as noted, neither the Certificate of
Incorporation, as amended, nor the By-laws of the Company, as amended, or other
documents will be amended by reason of this action.
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No fractional shares will be issued as a result of the Reverse Split.
If the Reverse Split would create a fractional share of Common Stock or a right
to acquire a fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock, in the aggregate shall be
the next higher number of shares.
No Voting
As noted, no votes or consents are being solicited in connection with
the Reverse Split. Under the DGCL, a simple majority of the total number of
shares outstanding is required to effectuate the Reverse Split. Inasmuch as the
stockholders mentioned above having a majority of the shares outstanding
entitled to vote have submitted written consents effective March 18, 1999, to
such action, under the DGCL such affirmative consent is all that is required.
The purpose of this Information Statement is to provide "prompt notice" required
by the DGCL and to provide information in accordance with Regulation 14C
promulgated by the Securities and Exchange Commission.
By order of the Board of Directors
and Consenting Stockholders of
Terrace Food Group, Inc.
By: /s/ Steven Shulman
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Steven Shulman, Chairman of the Board
Dated: February 26, 1999
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