MULLY CORPORATION
12835 E. Arapahoe Road
Tower I, Penthouse
Englewood, Colorado 80112
COMMISSION FILE NUMBER 0-25609
INFORMATION STATEMENT
PURSUANT TO
SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND
RULE 14f-1 THEREUNDER
INTRODUCTION
This Statement is being mailed on or about February 23, 2000 to holders of
record on February 7, 2000, of the shares of Common Stock, par value $.0001 per
share (the "Common Stock") of Mully Corporation, a Colorado corporation (the
"Company"). It is being furnished in connection with the change of the Company's
directors to be effected at a Board meeting to be held at the closing of the
transaction discussed below, to be held on or about March 6, 2000.
BACKGROUND OF TRANSACTION AND CHANGE IN CONTROL
Pursuant to the terms of an agreement (the "Agreement") between the Company
and Baby's Best Infant Formula, Inc., a Florida corporation ("BBI"), the Company
has agreed to acquire all of BBI's issued and outstanding shares of common stock
(collectively, the "BBI Stock") in exchange for an aggregate of 18,000,000
"restricted" shares of the Company's Common Stock (the "Transaction").
BBI is currently emerging from its research and development stage. It
intends to offer numerous baby products, including baby's Best Premium, a unique
infant formula, which management of BBI believes to be a far more easily
digested product and which provides more nourishment per feeding that the two
leading infant formulas, Similac and Enfamil, with better taste. BBI has
completed its comparison tests while working with the Food and Drug
Administration ("FDA"). Documentation seeking approval to conduct clinical
trials have been submitted to the FDA and are ready to be approved.
BBI does not own a food processing plant, but subcontracts its production
to FDA approved facilities, as management believes that this is more efficient
and cost effective. It will use distributors to build its channels of
distribution, both internationally and in North America. BBI's strategy is to
open channels of distribution in every major international city throughout the
world.
American and Canadian families spend approximately $4.5 billion annually on
infant formula. BBI has projected that, within 18 months it will have acquired a
minimum of 1% of the American and Canadian market annual business. Together with
international sales, management has projected that BBI should generate
approximately $30 million in gross sales in its initial year of marketing, with
substantial estimated net pre-tax profits. However, there can be no assurances
that these projections will be met.
As of the date of this Information Statement, there are 500,000 shares of
the Company's Common Stock issued and outstanding. As part of the terms of the
proposed Transaction, the Company will undertake a forward split of its issued
and outstanding common stock whereby 4 shares of common stock will be issued in
exchange for each share then outstanding, in order to establish the number of
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issued and outstanding common shares at closing to be 2,000,000. Accordingly, if
all of the issued and outstanding shares of BBI Stock are exchanged for the
Company's Common Stock, the holders thereof will own 90% of the Company's
20,000,000 shares of Common Stock which would then be issued and outstanding.
Upon consummation of the Transaction, the Company's current officers and
directors will resign and will be replaced by Directors and Officers selected by
BBI's management (see "Directors and Executive Officers and Related
Transactions").
Consummation of the Transaction will result in a change of control. If the
Transaction is not consummated, the Company's current officers and directors
will not resign and there will not be a change in control. The Company
anticipates, but cannot assure, that the Agreement will be executed on or about
March 6, 2000, with the closing to occur shortly thereafter.
REASON FOR INFORMATION STATEMENT
Because a majority of its directors is being changed otherwise than at a
meeting of stockholders, the Company is required pursuant to Rule 14f-1
promulgated under the Securities Exchange Act of 1934, as amended, to provide
its stockholders and the Securities and Exchange Commission (the "Commission")
with certain information not less than ten days prior to the date on which the
change will take place, or such other time period as may be established by the
Commission. This Information Statement is being filed with the Commission and
sent to stockholders in compliance with that Rule.
INFORMATION RELATING TO THE COMPANY'S SECURITIES
As of the date of this report, there are outstanding 500,000 shares of the
Company's Common Stock. Each outstanding share of Common Stock entitles the
record holder thereof to one vote on all matters which are to be presented to
stockholders for their consideration. The Common Stock is the only issued and
outstanding stock of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of the date of this report certain
information with respect to all those known by the Company to be record or
beneficial owners of more than 5% of its outstanding Common Stock, each Director
and all Directors and Officers as a group. The information provided is presented
on a pre-forward split basis.
No. of Percentage
Name Shares Owned Ownership
---- ------------ ---------
Andrew I. Telsey 260,000 52%
All Officers and 260,000 52%
Directors as a
Group (1 person)
- ------------------------
The following table sets forth as of the date hereof, certain information
with respect to all those known by the Company who, retroactively assuming
consummation of the Transaction, would be the record or beneficial owners of
more than 5% of its outstanding Common Stock, each newly-appointed director and
executive officer of the Company and all newly-appointed Directors as a group.
Except as indicated in the footnotes to the table, the listed stockholders hold
sole voting and investment power over their respective shares. The information
provided is presented on a post-forward split basis.
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Shares of
Common Stock
to be owned upon Approximate
consummation of Percent
Name and Address Offices To Be Held the Transfer of Class
- ---------------- ------------------ ------------ --------
Encore Consolidated
Trust(1) - 14,595,000 73.0%
467 Westnary Road
Ajax, Ontario,
Canada L15 6V8
Jackie Free Chief Financial Officer, 187,500 *
10 Fairway Dr. Treasurer, Director
Suite 205
Deerfield Beach, FL 33441
Daniel Marlowe Chief Operating Officer, 187,500 *
10 Fairway Dr. Secretary, Director
Suite 205
Deerfield Beach, FL 33441
All Proposed Directors - 14,970,000 74.9%
and Officers as a
Group (3 persons)
* Less than 1%
(1) The beneficiaries of this Trust are the family members of Patricia
Bishop, who will assume the positions of President and a director of
the Company upon closing of the proposed Transaction.
No family relationship exists between the prospective officers and
directors of the Company.
DIRECTORS AND EXECUTIVE OFFICERS AND RELATED TRANSACTIONS
The Directors and Officers of the Company as of the date of this report are
as follows:
Name Age Position
---- --- --------
Andrew I. Telsey 46 President, Director
Resumes:
Andrew I. Telsey, President and a director. Mr. Telsey has held his
positions with the Company since its inception. From 1984 through the present,
Mr. Telsey has been employed by Andrew I. Telsey, P.C., Aurora, Colorado, a
professional corporation engaged in the practice of law, emphasizing securities
law, mergers, acquisitions and general business matters. This firm is also legal
counsel to the Company. Mr. Telsey is also a director and principal shareholder
of Cavion Technologies, Inc., a publicly held Colorado corporation engaged in
the building and managing of a secure private communications network exclusively
for the credit union industry which will offer products and services for
business to business communications, secure Internet financial products,
including on-line banking and bill paying services. In addition, Mr. Telsey is
also an officer and director of Parputt Enterprises, Inc., a public reporting
company whose principal business is to merge with or acquire another company or
assets. Mr. Telsey received a Juris Doctor degree from Syracuse University
College of Law in 1979 and a Bachelor of Arts degree from Ithaca College in
1975. He devotes only
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such time as necessary to the business of the Company, which has not exceeded 20
hours per month.
If and when the Transaction is consummated, the Company's current officers
and directors will resign and will be replaced, without stockholder action, by
the following Officers and Directors:
Name Age Position
---- --- --------
Patricia Bishop 53 President, Director
Jackie Free 38 Chief Financial Officer,
Treasurer, Director
Daniel B. Marlowe 44 Chief Operating Officer,
Secretary, Director
Resumes:
Patricia Bishop. Upon closing of the proposed Transaction, Ms. Bishop will
assume the positions of President and a director of the Company. Ms. Bishop has
been president of BBI since its incorporation in November 1999. Since 1991, she
has been an executive officer of BBI's predecessors. She has been instrumental
in the development of BBI's proprietary infant formula and has extensive
experience in the food industry, infant formula industry and freight forwarding.
She is currently becoming an accredited member of the Institute of Food
Technologists Association. Upon closing of the proposed Transaction, she intends
to devote substantially all of her business time to the Company.
Jackie Free. Upon closing of the proposed Transaction, Ms. Free will assume
the positions of Chief Financial Officer, Treasurer and a director of the
Company. Since 1993, she has been a senior officer for Addison Mortgage Company,
Boca Raton, Florida, where she specializes in sub prime paper and hard equity
loans. She has also been a vice president for other major Florida lenders. Upon
closing of the proposed Transaction, she intends to devote substantially all of
her business time to the Company.
Daniel B. Marlowe. Upon closing of the proposed Transaction, Mr. Marlowe
will assume the positions of Chief Operating Officer, Secretary and a director.
Since 1994, he has been an employee of Holman Automotive, a major Florida and
New Jersey automotive dealer, where he is currently Director of Wholesale
Operations for the Southern Division. Upon closing of the proposed Transaction,
he intends to devote substantially all of his business time to the Company.
Compensation
During the last fiscal year, Ms. Patricia Bishop and her husband, Brian, an
employee of BBI, drew a combined annual salary of $240,000, including other
compensation. It is anticipated that Mr. and Ms. Bishop will draw a similar
salary following the closing of the Transaction proposed herein. No other member
of prospective management is expected to receive aggregate compensation in
excess of $100,000 during the next fiscal year of the Company.
BBI may award stock options to key employees, members of management,
directors and consultants under stock option programs as bonuses based on
performance. However, as of the date of this Information Statement, no such
plans have been adopted by the Company or BBI.
RELATED PARTY TRANSACTIONS
BBI and its predecessors have been primarily funded by Ms. Bishop and her
family through a combination of loans and capital contributions. A portion of
such funds have been used to pay the salary described above under
"Compensation".
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It is expected that any loans will be cancelled and contributed to capital and
not repaid.
Brian Bishop, Patricia Bishop's husband, is an employee of BBI in the
product development and marketing areas.
As of the date hereof, no other related party transactions exist between
BBI and its present directors, officers, 5% or greater shareholders or any
affiliate thereof, either individually or through ownership of a controlling
interest in any company or other entity.
STANDING AUDIT, NOMINATING AND COMPENSATION COMMITTEES.
The Board of Directors of the Company has no standing audit, nominating or
compensation committees.
INFORMATION RELATING TO BOARD OF DIRECTORS MEETINGS.
The Company presently has one Director. During the fiscal year ended
December 31, 1999, the Director held one meeting of the Board of Directors.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The Company's officer and director has not been paid a salary during the
fiscal year ended December 31, 1999, or subsequent thereto. The Company
maintains a policy whereby the directors and executive officers of the Company
may be reimbursed for out-of-pocket expenses incurred in the performance of
their duties. The Company did not reimburse any director or officer for such
expenses during the 1999 fiscal year, or subsequent thereto.
The Company has no bonus or incentive plans in effect, nor are there any
understandings in place concerning additional compensation to the Company's
officers or directors.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and person who own more than 10% of the Company's Common
Stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission, provided that there were any changes to such persons
respective stock holdings in the Company during the previous fiscal year.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no forms were
required for those persons, the Company believes that during the 1999 fiscal
year all filing requirements applicable to Officers, Directors and greater than
10% beneficial owners were complied with.
Dated: February 23, 2000.
MULLY CORPORATION
s/Andrew I. Telsey
Andrew I. Telsey, President
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