UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[X] Preliminary Information Statement
[_] Confidential, For Use of the
Commission Only (as permitted
by Rule 14c-5(d)(2))
[_] Definitive Information Statement
[_] Definitive Additional Materials
Eco-Rx, Inc.
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(Name of Registrant as Specified In Its Charter)
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
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2) Aggregate number of securities to which transaction applies:
6,953,339
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
None
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
None
________________________________________________________________________________
5) Total fee paid:
None
________________________________________________________________________________
[_] 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:
None
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
Eco-Rx, Inc.
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4) Date Filed:
September 18, 2000
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<PAGE>
ECO-Rx, INC.
2051 Northeast 191 Drive
North Miami Beach, Florida 33179
PRELIMINARY INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY,
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
GENERAL
This Information Statement is being furnished to the shareholders of Eco-Rx,
Inc., a Florida corporation (the "Company"), in connection with the proposed
adoption of an amendment (the "Amendment") to the Company's Articles of
Incorporation by the written consent of the holders of a majority in interest of
the Company's voting capital stock ("Voting Capital Stock") consisting of the
Company's outstanding common stock ("Common Stock"). The purpose of the
Amendment is to effect a 1 for 20 reverse stock split of the Company's
outstanding Common Stock (the "Reverse Stock Split"). The Company's Board of
Directors on September 15, 2000 approved and recommended that the Articles of
Incorporation be amended in order to effectuate the Reverse Stock Split. The
proposed Amendment will become effective upon (i) execution of a written consent
by holders of not less than a majority of the Company's outstanding Voting
Capital Stock approving the Amendment (the "Written Consent") and (ii) the
filing of the Amendment with the Secretary of State of the State of Florida. The
Company anticipates that the filing of the proposed Amendment will occur on or
about October 17, 2000 (the "Effective Date"), but in no event prior to the
expiration of 20 days from the date this information statement is disseminated
to the Company's shareholders. If the proposed Amendment is not adopted by
written consent, it would have to be considered by the Company's shareholders at
a special shareholders' meeting convened for the specific purpose of approving
the proposed Amendment.
The elimination of the need for a special meeting of shareholders to
approve the Proposed Amendment is made possible by Section 607.0704 of the
Florida Business Corporation Act (the "Florida Act") which provides that the
written consent of the holders of outstanding shares of voting capital stock,
having not less than the minimum number of votes which would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, may be substituted for such a special meeting.
Pursuant to Section 607.0901 of the Florida Law, a majority of the outstanding
shares of voting capital stock entitled to vote thereon is required in order to
amend the Company's Articles of Incorporation. In order to eliminate the costs
and management time involved in holding a special meeting and in order to effect
the Proposed Amendment as early as possible in order to accomplish the purposes
of the Company as hereafter described, the Board of Directors of the Company
voted to utilize the written consent of the holders of a majority in interest of
the Voting Capital Stock of the Company.
<PAGE>
Certain officers, directors and shareholders of the Company, who
beneficially own in the aggregate 3,559,628 shares of Common Stock of the
Company, representing approximately 51.2% of the outstanding Voting Capital
Stock of the Company entitled to vote on the Amendment, have indicated that they
will give their written consent to the adoption of the Amendment described in
this Information Statement on or about October 15, 2000. The written consent
will become effective on October 18, 2000, the date upon which the written
consent will be filed with the Secretary of the Company. The date on which this
Information Statement will be sent to the shareholders is on or about September
28, 2000. The record date established by the Company for purposes of determining
the number of outstanding shares of Voting Capital Stock of the Company is
September 15, 2000 (the "Record Date").
Pursuant to Section 607.0704 of the Florida Law, the Company is
required to provide prompt notice of the taking of the corporate action without
a meeting to shareholders, who have not consented in writing to such action.
Inasmuch as the Company will have provided to its shareholders of record this
Information Statement, the Company will notify its shareholders at the time of
distribution of its next Quarterly Report on Form 10-QSB of the effective date
of the Amendment. No additional action will be undertaken pursuant to such
written consents, and no dissenters' rights under the Florida Law are afforded
to the Company's shareholders as a result of the adoption of the Amendment.
OUTSTANDING VOTING STOCK OF THE COMPANY
As of the Record Date, there were 6,953,339 shares of Common Stock
outstanding. The Common Stock constitutes the sole class of voting securities of
the Company. Each share of Common Stock entitles the holder thereof to one vote
on all matters submitted to shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth Common Stock ownership information as of
the Record Date, with respect to (i) certain persons known to the Company to be
beneficial owners of the Company's Common Stock; (ii) each director and each
executive officer of the Company; (iii) each person intending to execute and
file a written consent to the adoption of the proposed Amendment described
herein; and (iv) all directors, executive officers and designated shareholders
of the Company as a group. This information as to beneficial ownership was
furnished to the Company by or on behalf of the persons named. Unless otherwise
indicated, the business address of each person listed is 2051 Northeast 191
Drive, North Miami Beach, Florida 33179. After giving effect to the Reverse
Stock Split, there will be 347,167 shares of Common Stock outstanding
<PAGE>
<TABLE>
<CAPTION>
Shares Shares
Beneficially Percent of Beneficially Percent of
Owned Class Owned Owned Class Owned
Prior To The Prior To The After The After The
Reverse Reverse Reverse Reverse
Name (1) Stock Split (1) Stock Split Stock Split (1) Stock Split
-------- --------------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
Dorothy Nelson 1,127,233 16.2% 56,362 16.2%
Jerry Nelson (2) 137,500 2.0% 6,875 2.0%
Paul Taccini (3) 601,300 8.7% 30,065 8.7%
Joseph Peiken (4) 1,264,732 18.2% 63,237 18.2%
Roger Nelsen (5) 225,328 3.2% 11,267 3.2%
Alan Peiken (6) 43,197 .6% 2,160 .6%
Ira Edell (7) 50,000 .7% 2,500 .7%
Arthur Eilertson (8) 50,000 .7% 2,500 .7%
Stuart Shapiro (9) 25,000 .4% 1,250 .4%
Phyllis Wilson (10) 35,338 .5% 1,767 .5%
------ --- ----- ---
3,559,628 51.2% 177,983 51.2%
All executive officers, directors and consenting shareholders as a group (10 persons)
(1) Unless otherwise indicated in the footnotes below, each shareholder has
sole power to vote and dispose of all the shares of Common Stock listed
opposite his name.
(2) Mr. Jerry Nelson, Chief Executive Officer and Chairman of board of directors.
(3) Mr. Paul F. Taccini, President of the Company and director.
(4) Mr. Joseph M. Peiken, Vice President, Secretary and Chief Financial Officer.
(5) Mr. Roger K. Nelsen, Vice President - Sales of the Company.
(6) Dr. Alan Peiken is a shareholder and brother of Joseph M. Peiken
(7) Mr. Ira Edell is a shareholder.
(8) Mr. Arthur Eilertson is a shareholder.
(9) Mr. Stuart Shapero is a shareholder.
(10) Ms. Phyllis Wilson is a shareholder.
</TABLE>
<PAGE>
AMENDMENT TO ARTICLES OF INCORPORATION TO EFFECT A
1 FOR 20 REVERSE STOCK SPLIT
On September 15, 2000, our Board of Directors voted unanimously to
authorize and recommend that our shareholders approve a proposal to effect the
Reverse Stock Split. Pursuant to the Reverse Stock Split, each 20 of the
outstanding shares of our Common Stock on the date of the Reverse Stock Split
(the "Old Shares") will be automatically converted into one (1) share of our
post-split Common Stock (the "New Shares"). The Reverse Stock Split will not
alter the number of shares of our Common Stock the Company is authorized to
issue, but will simply reduce the number of shares of Common Stock issued and
outstanding. Notwithstanding the Reverse Stock Split, the authorized Common
Stock will remain at 10,000,000 shares of Common Stock, and the Articles of
Incorporation will reflect this amount of authorized Common Stock. The Reverse
Stock Split will become effective upon filing of the Amendment with the Florida
Secretary of State.
Purpose and Effect of Proposed Reverse Stock Split
The Board of Directors of the Company believes that the Reverse Stock
Split is necessary to provide a manageable number of shares of Common Stock and
to effectively insure the marketability of the Company's new Common Stock. At
this time, there is no trading market for the stock. However, should a trading
market for the Common Stock develop in the future, the Board of Directors is
hopeful that the Reverse Stock Split will have a favorable effect on the market
price of the Common Stock. The Board of Directors is also hopeful that a
decrease in the number of shares of Common Stock outstanding, as a consequence
of the proposed Reverse Stock Split, will stimulate investor interest in the
Company's Common Stock and enable the Company to complete a secondary round of
financing.
The Reverse Stock Split will affect all of our shareholders uniformly
and will not affect any shareholder's percentage ownership interests in us or
proportionate voting power, except to the extent that the Reverse Stock Split
results in any of our shareholders owning a fractional share. In lieu of issuing
fractional shares, we will issue any shareholder who otherwise would have been
entitled to receive a fractional share as a result of the Reverse Stock Split
one share of our Common Stock. The Reverse Stock Split may result in certain of
our shareholders owning "odd lots" (i.e. a number of shares of our common stock
not divisible by 100). Shareholders owning "odd lots" may experience higher
costs associated with selling their shares in the open market.
<PAGE>
The Reverse Stock Split will have the following effects upon the number
of shares of our Common Stock outstanding and the number of authorized and
unissued shares of our Common Stock.
Upon the effectiveness of the Reverse Stock Split, the number of shares
owned by each holder of Common Stock will be reduced by the ratio of 20 to 1
shares of Common Stock he or she owned immediately prior to the Reverse Stock
Split. The number of shares of Common Stock the Company is authorized to issue
will remain at 10,000,000. The per-share loss and net book value of our Common
Stock may increase because there will be fewer shares of our Common Stock
outstanding.
The principal effect of the Reverse Stock Split will be that (i) the
number of shares of Common Stock issued and outstanding will be reduced from
6,953,339 shares to approximately 347,667shares.
Notwithstanding the Reverse Stock Split, the par value of the Common
Stock will remain $.001 per share. As a result, on the effective date of the
Reverse Stock Split, the stated capital on our balance sheet attributable to the
Common Stock will be reduced to 5% of its present amount, and the additional
paid-in capital account shall be credited with the amount by which the stated
capital is reduced.
Manner of Effecting the Reverse Stock Split and Exchange Stock Certificates
The Reverse Stock Split will be effected by the filing of the Articles
of Amendment with the Secretary of the State of Florida. The Reverse Stock Split
will become effective on the date of filing the Articles of Amendment unless we
specify otherwise (the "Effective Date"). As soon as practicable after the
Effective Date, we will send a letter of transmittal to each holder of record of
Old Shares outstanding on the Effective Date. The letter of transmittal will
contain instructions for the surrender of certificates representing the Old
Shares. Upon proper completion and execution of the letter of transmittal and
return thereof, together with certificates representing the Old Shares, a
shareholder will be entitled to receive a certificate representing the number of
the New Shares into which his or her Old Shares have been reclassified as a
result of the Reverse Stock Split. Shareholders should not submit any
certificates until requested to do so. No new certificate will be issued to a
shareholder until such shareholder has surrendered his or her outstanding
certificates together with the properly completed and executed letter of
transmittal. Until so surrendered, each outstanding certificate representing the
Old Shares will be deemed for all corporate purposes after the Effective Date to
evidence ownership of the New Shares in the appropriately reduced number.
<PAGE>
No Rights of Appraisal
Under the Florida Act, our dissenting shareholders are not entitled to
appraisal rights with respect to our proposed Amendment to effect the Reverse
Stock Split, and we will not independently provide our shareholders with any
such right.
Certain Federal Income Tax Consequences
We believe that the federal income tax consequences of the Reverse
Stock Split to holders of Old Shares and holders of New Shares will be as
follows:
1. Except as set forth in (5) below, no gain or loss will be recognized
by a shareholder on the surrender of the Old Shares or receipt of a certificate
representing New Shares.
2. Except as set forth in (5) below, the aggregate tax basis of the New
Shares will equal the aggregate tax basis of the Old Shares exchanged therefor.
3. Except as set forth in (5) below, the holding period of the New
Shares will include the holding period of the Old Shares if such Old Shares were
held as capital assets.
4. The conversion of the Old Shares into the New Shares will produce no
gain or loss to us.
5. The federal income tax consequences of the receipt of an additional
share in lieu of a fractional interest is not clear but may result in tax
liabilities which should not be material in amount in view of the low value of
the fractional interest.
Our beliefs regarding the tax consequence of the Reverse Split are not
binding upon the Internal Revenue Service or the courts and there can be no
assurance that the Internal Revenue Service or the courts will accept the
positions expressed above.
This summary does not purport to be complete and does not address the
tax consequences to holders that are subject to special tax rules, such as bank,
insurance companies, regulated investment companies, personal holding companies,
foreign entities, nonresident foreign individuals, broker-dealers and tax exempt
entities.
The state and local tax consequences of the Reverse Stock Split may vary
significantly as to each shareholder, depending upon the state in which he or
she resides.
The foregoing summary is included for general information only. Accordingly,
shareholders are urged to consult their own tax advisors with respect to the
Federal, State and local tax consequences of the Reverse Stock Split.
<PAGE>
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jerry Nelson
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Date: September 15, 2000 Jerry Nelson, Chairman,
Chief Executive Officer
Eco-Rx, Inc.
