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SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No.)
Check the appropriate box:
[ X ] Preliminary Information Statement
[ ] Definitive Information Statement
DECOR GROUP, INC.
(Name of Registrant as Specified in Charter)
Dennis D'Amore, President
Decor Group, Inc.
320 Washington Street
Mt. Vernon, N.Y. 10553
(Name of Person(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction
applies:
Common Stock, par value $.0001 per share
Series B Convertible Preferred Stock, par value $.0001 per share
2) Aggregate number of securities to which transaction applies:
5,157,500 shares of Common Stock Outstanding
20,000,000 shares of Series B Convertible Preferred Stock Outstanding
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: __/
N/A
4) Proposed maximum aggregate value of transaction:
N/A
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed: September 5, 1997
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THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU BY
THE MANAGEMENT OF THE COMPANY
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
DECOR GROUP, INC.
320 WASHINGTON STREET
MT. VERNON, NEW YORK 10553
INFORMATION STATEMENT
TO STOCKHOLDERS
OF
DECOR GROUP, INC.
SEPTEMBER , 1997
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THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU BY
THE MANAGEMENT OF THE COMPANY.
WE ARE NOT ASKING YOU FOR A
PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
DECOR GROUP, INC.
320 WASHINGTON STREET
MT. VERNON, NEW YORK 10553
INFORMATION STATEMENT
This Information Statement is furnished to holders of shares of common
stock, $.0001 par value (the "Common Stock"), and shares of Series B
Non-Convertible Preferred Stock, par value $.0001 per share (the "Series B
Preferred Stock") (collectively the "Stockholders"), of Decor Group, Inc. (the
"Company") to notify such Stockholders that on or about September 1, 1997 the
Company received written consents (the "Written Consents") in lieu of a meeting
of Stockholders from the holders of 140,000 shares of Common Stock and
20,000,000 shares of Series B Preferred Stock representing approximately 80% of
the total issued and outstanding shares of voting stock of the Company adopting
an amendment to the Company's certificate of incorporation (the "Amendment"),
which authorized a one-for-three (3) reverse stock split of the Common Stock and
the Series B Preferred Stock authorized and outstanding (the "Reverse Stock
Split"). Certain of the principal stockholders (described on Page 5 under the
Section entitled "Principal Stockholders") of the Company delivered Written
Consents in favor of the Amendment. Certain of the principal stockholders are
also officers and/or directors of the Company.
On August 29, 1997, the Board of Directors approved the Amendment and
recommended that the Stockholders of the Company grant their approval thereto.
The Board of Directors and Management believe that the Reverse Stock Split is
desirable to effectively insure the marketability of the Company's shares of
Common Stock.
This Information Statement describing the Amendment is first being
mailed or furnished to Stockholders on or about September , 1997 and such
Amendment shall not become effective until at least 20 days thereafter.
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO EFFECT REVERSE STOCK SPLIT
The Board of Directors believes that it would be in the best interests
of both the Company and its stockholders (i) to effect the reverse stock split
of one share of newly issued Common Stock ("New Common Stock") for each three
(3) shares of the Company's presently issued and outstanding shares of Common
Stock, (ii) to effect the reverse stock split of one share of newly issued
Series B Preferred Stock ("New B Preferred Stock") for each three (3) shares of
the Company's presently issued and outstanding share of Series B Preferred
Stock, and (iii) to reduce the number of authorized shares of Series B Preferred
Stock from 20,000,000 shares to 6,667,667 shares and to reduce the number of
authorized shares of Common Stock from 20,000,000 shares to 6,666,667 shares.
Immediately following the Reverse Stock Split, the Board proposes to provide for
payment of cash in lieu of fractional shares of New Common Stock and New B
Preferred Stock otherwise issuable in connection therewith. This amendment has
been adopted by the Board of Directors and consented to by Stockholders
representing approximately 80% of the total shares of voting stock. Approval
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of a reverse stock split requires, under the Company's Certificate of
Incorporation and the Delaware General Corporation Law, the affirmative vote of
the holders of a majority of the outstanding shares of voting stock of the
Company. The Board of Directors reserves the right, notwithstanding Stockholder
approval and without further action by the Stockholders, not to proceed with the
Reverse Stock Split, if, at any time prior to filing the amendment with the
Secretary of State of the State of Delaware, the Board of Directors, in its sole
discretion, determines that the Reverse Stock Split is no longer in the best
interests of the Company and its stockholders.
The Company is currently authorized to issue 20,000,000 shares of
Common Stock, $.0001 par value, of which 5,157,500 shares are issued and
outstanding. The Company is also currently authorized to issue an aggregate of
35,000,000 shares of Preferred Stock, of which 20,000,000 have been designated
as Series B Non-Convertible Preferred Stock, $.0001 par value, all of which are
outstanding. As proposed and if effected, the Reverse Stock Split would reduce
the number of authorized shares of Series B Preferred Stock to 6,666,667 shares
and the number of authorized shares of Common Stock to 666,667 shares. The
number of issued and outstanding shares of Common Stock will be reduced to
approximately 2,063,000 shares and the number of issued and outstanding shares
Series B Preferred Stock will be reduced to 6,666,667 shares. The proposed
Reverse Stock Split would not affect any stockholder's proportionate equity
interest in the Company, except for those stockholders who would receive cash in
lieu of fractional shares. Neither the par value of the Common Stock or the
Series B Preferred Stock nor any rights presently accruing to holders of Common
Stock nor B Preferred Stock would be affected by this transaction.
Reasons for the Proposed Reverse Stock Split. The Board of Directors of the
Company is of the opinion that the Reverse Stock Split is necessary to
effectively insure the marketability of the Company's Common Stock. A relatively
low stock price may affect not only the liquidity of the Company's Common Stock,
but also its ability to raise additional capital through the sale of equity
securities. Thus, the Company believes that the expected increase in trading
price is expected to be attractive to the financial community, the investing
public, and to users of the Company's products.
The Board of Directors is hopeful that a decrease in the number of
shares of Common Stock outstanding, as a consequence of the proposed Reverse
Stock Split, and the anticipated corresponding increase price per share will
stimulate interest in the Company's Common Stock and possibly promote greater
liquidity for the Company's Common stockholders with respect to those shares
presently held by them. However, the possibility does exist that such liquidity
could be adversely affected by the reduced number of shares which would be
outstanding if the proposed Reverse Stock Split is effected.
Management of the Company is not aware of any present efforts of any
persons to accumulate Common Stock or Series B Preferred Stock or to obtain
control of the Company, and the proposed Reverse Stock Split of Common Stock and
Series B Preferred Stock is not intended to be an anti-takeover device. The
amendment is being sought solely to enhance the image of the Company, its
corporate flexibility, and to price the Common Stock in the price range that
would be more acceptable to the brokerage community, and to investors generally.
Exchange of Stock Certificates. If the amendment is approved by the Company's
Stockholders, and if the Board of Directors still believes at that time that the
Reverse Stock Split is in the best interests of the Company and its
Stockholders, the Company will file its Amended Certificate of Incorporation
with the Secretary of State of the State of Delaware. The Reverse Stock Split
will become effective on the date of such filing (the "Effective Date") and the
Stockholders will be notified on or after the Effective Date that the Reverse
Stock Split has been affected. The Company's transfer agent will act as its
exchange agent (the "Exchange Agent") to act for holders of Common Stock in
implementing the exchange of their certificates. The Company will act as the
exchange agent for holders of Series B Preferred Stock in implementing the
exchange of those certificates.
As soon as practicable after the Effective Date, Stockholders will be
notified and requested to
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surrender their certificates representing shares of Common Stock to the Exchange
Agent in exchange for certificates representing New Common Stock. One share of
New Common Stock will be issued in exchange for each three (3) presently issued
and outstanding shares of Common Stock. Beginning on the Effective Date, each
certificate representing shares of the Company's Common Stock will be deemed for
all corporate purposes to evidence ownership of shares of New Common Stock. To
the extent a Stockholder holds a number of shares not evenly divisible by three
(3), the Company will pay cash for fractional interests as described below.
Liquidation of Fractional Shares. No scrip or fractional certificates will be
issued in connection with the Reverse Stock Split. Stockholders who ostensibly
would be entitled to receive fractional shares because they hold a number of
shares of Common Stock not evenly divisible by three (3) will be entitled, upon
surrender to the Exchange Agent, of certificates representing such shares, to a
cash payment in lieu thereof. The cash payment shall be at a price equal to the
average of the closing bid and ask prices of the Company's Common Stock as
reported on NASD OTC Bulletin Board on the Effective Date for each such share of
Common Stock held prior to the Effective Date. Shares of New B Preferred Stock
shall be rounded to the next whole share.
The Company will either deposit sufficient cash with the Exchange Agent
or set aside sufficient cash for the purchase of the fractional interests.
Stockholders are encouraged to surrender their certificates to the Exchange
Agent for certificates evidencing whole shares of the New Common Stock and to
claim the sums, if any, due them for fractional interests, as promptly as
possible following the Effective Date.
The ownership of a fractional interest will not give the holder thereof
any voting, dividend, or other rights except to receive payment therefor as
described herein. No service charge will be payable by stockholders in
connection with the exchange of certificates or the issuance of cash for
fractional interests, all of which costs will be borne and paid by the Company.
Federal Income Tax Consequences. The Reverse Stock Split should not result in
the recognition of gain or loss (except in the case of cash received for
fractional shares as described below). The holding period of the shares of New
Common Stock and New Series B Preferred Stock will include the stockholders'
respective holding periods for the shares of Common Stock and Series B Preferred
Stock exchanged therefore, provided that the shares of Common Stock and Series B
Preferred Stock were held as a capital asset. The adjusted basis of the shares
of New Common Stock and New Series B Preferred Stock will be the same as the
adjusted basis of the Common Stock and Series B Preferred Stock exchanged
therefore, reduced by the basis applicable to the receipt of cash in lieu of
fractional shares described below.
A stockholder who receives cash in lieu of fractional shares will be
treated as if the Company would issue fractional shares to him and immediately
redeem such shares for cash. Such stockholder should generally recognize gain or
loss, as the case may be, measured by the difference between the amount of cash
received and the basis of his or her old Common Stock applicable to such
fractional shares had they actually been issued. Such gain or loss shall be a
capital gain or loss (if such stockholder's Common Stock was held as a capital
asset), any such capital gain or loss shall generally be long-term capital gain
or loss to the extent such stockholder's holding for his Common Stock exceeds
twelve months.
No Dissenter's Rights. Under Delaware law, Stockholders are not entitled to
dissenter's rights of appraisal with respect to the proposed amendment to the
Company's Certificate of Incorporation to effect the Reverse Stock Split.
If the amendment is approved, the amended Certificate of Incorporation
will become effective upon filing with the Secretary of State of the State of
Delaware. The affirmative vote of the holders of a majority of the outstanding
voting stock of the Company will be required to approve the amendment to the
Certificate of Incorporation.
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Expenses
Expenses in connection with the distribution of this Information
Statement will be paid by the Company and are anticipated to be less than
$10,000.
Other Matters
The Board of Directors knows of no other matters other than those
described in this Information Statement which have been approved or considered
by the holders of a majority of the shares of the Company's voting stock.
OUTSTANDING VOTING SECURITIES
As of September 1, 1997 (the "Record Date"), out of the 20,000,000
shares of Common Stock authorized there were 5,157,500 shares of Common Stock
issued and outstanding, and out of the 20,000,000 shares of the Series B
Preferred Stock authorized, all of such shares were issued and outstanding.
Only holders of record of the Common Stock and the Series B Preferred
Stock at the close of business on the Record Date were entitled to participate
in the Written Consents. Each share of Common Stock and each share of Series B
Preferred Stock were entitled to one vote.
The Delaware General Corporation Law ("DGCL") provides in substance
that unless the Company's certificate of incorporation provides otherwise,
stockholders' may take action without a meeting of stockholders and without
prior notice if a consent or consents in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to take such action at a meeting
at which all shares entitled to vote thereon were present. Under the applicable
provisions of the DGCL, such action is effective when written consents from
holders of record of a majority of the outstanding shares of voting stock are
executed and delivered to the Company within 60 days of the earliest dated
consent delivered in accordance with the DGCL to the Company.
In accordance with the DGCL, the Company received the affirmative vote
on the Amendment of more than a majority of the shares of voting stock. As a
result, the Company shall take all actions necessary to implement the Amendment.
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VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information, as of September 1,
1997 with respect to the beneficial ownership of the outstanding Common Stock by
(i) any holder of more than five (5%) percent; (ii) each of the Company's
officers and directors; and (iii) the directors and officers of the Company as a
group:
<TABLE>
<CAPTION>
Shares of Shares of Series Percentage (%)
Common B Preferred of Series B
Stock Percentage (%) Stock Preferred Stock
Name and Address of Beneficially of Common Beneficially Beneficially
Beneficial Owner(1) Owned(2) Stock Owned Owned(2) Owned
<S> <C> <C> <C> <C>
Matthew Harriton(3) 73,000 1.4% 20,000,000(10) 100%
Dennis D'Amore(4) 30,000 *** ---- ----
Interiors, Inc. 164,802(5) --- 20,000,000(10) 100%
320 Washington St.
Mt. Vernon, NY
10553
Max Munn(6) 67,000(7) 1.3% 20,000,000(10) 100%
Interiors, Inc.
320 Washington St.
Mt. Vernon, NY
10553
Michael Lulkin(8) ---- ---- 20,000,000(10) 100%
BH Funding, LLC 750,000(9) 12.7% ---- ----
750 Lexington Ave.
Suite 2750
New York, NY
10022
All officers and 320,000 6.3% 20,000,000(10) 100%
directors as a group
(4 persons)
</TABLE>
- ----------
* indicates ownership of less than 1%.
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
Decor Group, Inc., 320 Washington Street, Mt. Vernon, New York 10553.
(2) Beneficial ownership as reported in the table above has been determined
in accordance with Item 403 of Regulation S-B of the Securities Act of
1933 and Rule 13(d)-3 of the Securities Exchange Act.
(3) Mr. Harriton is a Director of the Company.
(4) Mr. D'Amore is President and Chief Financial Officer of the Company. Mr.
D'Amore holds options to purchase 30,000 shares of Common Stock for a
period of six (6) years at an exercise price of $.0001 per share.
(5) Includes 164,802 shares of Common Stock issuable upon conversion of 54,934
shares of Series C Preferred Stock held by Interiors, Inc.
(6) Mr. Munn is Chairman of the Board and Secretary of the Company.
(7) Includes 67,000 shares of Common Stock held by Laurie Munn, Mr. Munn's
wife. Mr. Munn disclaims beneficial ownership over such shares.
(8) Mr. Lulkin is a Director of the Company.
(9) Includes 750,000 shares of Common Stock issuable upon conversion of 250,000
shares of Series A Preferred Stock held by BH Funding, LLC.
(10) Includes 20,000,000 shares of Series B Preferred Stock covered by that
certain Voting Agreement by Interiors, Inc., Max Munn, Matt Harriton,
Michael Lulkin and the Company pursuant to which Messrs. Munn, Harriton
and Lulkin may vote the shares of Series B Preferred Stock held by
Interiors, Inc. on all matters presented to the vote of stockholders.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the corporation with the Securities
and Exchange Commission pursuant to the Exchange Act are incorporated by
reference herein:
1. Quarterly Report on Form 10-QSB, filed August 13, 1997.
2. Annual Report on Form 10-KSB, filed June 30, 1997.
THIS INFORMATION STATEMENT, INCORPORATES BY REFERENCE DOCUMENTS
RELATING TO THE COMPANY WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
DOCUMENTS RELATING TO THE CORPORATION (OTHER THAN EXHIBITS TO SUCH DOCUMENTS
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE AVAILABLE
TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS INFORMATION
STATEMENT IS DELIVERED, ON WRITTEN OR ORAL REQUEST, WITHOUT CHARGE, BY WRITING
TO THE COMPANY AT DECOR GROUP, INC., 320 WASHINGTON STREET, MT. VERNON, NY 10553
ATTENTION: MAX MUNN, OR BY CALLING THE COMPANY AT (914) 665-5400. COPIES OF
DOCUMENTS SO REQUESTED WILL BE SENT BY FIRST CLASS MALL, POSTAGE PAID, WITHIN
ONE BUSINESS DAY OF THE RECEIPT OF SUCH REQUEST.
IF YOU HAVE ANY QUESTIONS REGARDING THIS INFORMATION STATEMENT
AND/OR THE AMENDMENT, PLEASE CONTACT:
Decor Group, Inc.
320 Washington Street
Mt. Vernon, New York 10553
(914) 665-5400
By order of the Board of Directors
Decor Group, Inc.
Dennis D'Amore, President
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