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PRES14C
SCHEDULE 14C
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amend. 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
WHITNEY AMERICAN CORPORATION
(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule O-11(c)(1)(ii), or 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:__________________________________________
2) Aggregate number of securities to which transaction
applies:__________________________________________
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):
__________________________
4) Proposed maximum aggregate value of transaction:
$________________
5) Total fee paid: $_______________
[ ] Fee previously paid 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: $_____________________________
2) Form, Schedule or Registration Statement No.:_____________________
3) Filing Party:_______________________________________
4) Date Filed:_________________
WHITNEY AMERICAN CORPORATION
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8150 Leesburg Pike
Suite 1200
Vienna, Virginia 22182
-------------------
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
-------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
You are cordially invited to attend a Special Meeting of Shareholders of
WHITNEY AMERICAN CORPORATION (the "Company") to be held on January 20, 2000 at
2:00 o'clock p.m. at the above address (the "Special Meeting"), for the
following purposes:
1. To consider and vote upon a proposal to unwind and rescind the
Company's acquisition of Kemron Environmental Services, Inc., a New
York corporation ("Kemron"), which is the Company's only subsidiary
and only asset of consequence, to transfer ownership of Kemron back to
its former shareholders and to cancel the 3,500,000 shares of common
stock originally issued by the Company to acquire Kemron.
2. To consider and vote upon the election of Stephen M. Siedow, former
officer and director of the Company, as the sole director and officer
of the Company following the unwinding of the Kemron acquisition and
resignation of the Company's current directors.
3. To transact such other business as may properly come before the
Special Meeting and any and all adjournments thereof.
Only shareholders of record at the close of business on November 30, 1999,
are entitled to receive notice of and to vote at the Special Meeting. Proxies
are not being solicited, and you must attend the Special Meeting in order to
vote upon the above matters.
We hope that you will be able to attend the Special Meeting.
By Order of the Board of Directors
/s/ John S. Heishman
--------------------
John S. Heishman
Secretary
December 28, 1999
WHITNEY AMERICAN CORPORATION
8150 Leesburg Pike
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Suite 1200
Vienna, Virginia 22182
I N F O R M A T I O N S T A T E M E N T
This Information Statement is being furnished for use in connection with
the Special Meeting of Shareholders ("Special Meeting") of WHITNEY AMERICAN
CORPORATION, a Delaware corporation (the "Company"), to be held on January 20,
2000, at 2:00 o'clock p.m. at the above address, and any and all postponements
and adjournments thereof.
The Board of Directors has fixed the close of business on November 30, 1999
(the "Record Date") for determining shareholders entitled to receive notice of
and to vote at the Special Meeting. As of the Record Date, the Company had
4,217,020 shares of common stock, $.00001 par value ("Common Stock" or "Common
Shares") outstanding. A majority in interest of the common shareholders on the
Record Date must be present at the Special Meeting in order to constitute a
quorum. Each share of Common Stock will carry one vote on the proposals
described below, as well as on any other matters which may properly come before
the Special Meeting. The affirmative vote of a majority of the shares entitled
to vote is necessary to approve each of the proposals included in this
Information Statement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. Shareholders must attend the Special Meeting in person in order to vote
on the proposals herein contained. It is anticipated that this Information
Statement will be mailed to shareholders on or about December 28, 1999.
AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements of
Section 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and in accordance with those requirements files reports and other
information with the Securities and Exchange Commission ("SEC"). Such reports
and other information filed with the SEC are available for inspection and
copying at the Public Reference Branch of the SEC, located at Room 1024, 450
Fifth Street N.W., Washington, DC 20549, at prescribed rates. They may also be
viewed electronically on the Internet at http://www.sec.gov/cgi-bin/srch-edgar
and downloaded or printed from that website.
PRINCIPAL SHAREHOLDERS
This information is incorporated by reference to Item 11 of the annual
report on Form 10-KSB of the Company for the fiscal year ended May 31, 1999.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 50,000,000 shares
of Class A Common Stock, $.00001 par value per share, and 5,000,000 shares of
Preferred Stock, $.00001 par value.
Common Stock
On November 30, 1999, there were 4,217,020 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held. The Company's Articles of Incorporation provide that the affirmative vote
of a majority of the Common Shares is sufficient to effect any corporate action
upon which
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shareholders may or must vote. Common Shares do not carry cumulative voting
rights, thus holders of more than 50% of the Common Stock have the power to
elect all directors and, as a practical matter, to control the Company. Holders
of Common Stock are not entitled to preemptive rights, and the Class A Common
Stock is not subject to redemption.
The Company's bylaws currently provide for a board of four directors, all
of whom are elected at each annual meeting of shareholders. Each Director holds
office until the next annual meeting of shareholders and thereafter until his
successor has been elected and qualified. Holders of Common Stock are entitled
to receive, pro rata, dividends if, when and as declared by the Board of
Directors out of funds legally available therefor. Upon liquidation, dissolution
or winding up of the Company, holders of Common Stock are entitled to share
ratably in the Company's assets legally available for distribution to its
shareholders after payment of liquidation preference and outstanding redemption
rights (if any) on any Preferred Stock outstanding and are not subject to
further calls or assessments.
Preferred Stock
There are no shares of Preferred Stock outstanding, and there are no plans
to issue any shares of Preferred Stock. The Board of Directors has the authority
to issue Preferred Stock in one or more series and to fix the voting powers,
conversion rights, other special rights and qualifications, limitations and
restrictions of each series, without any further vote or action by the
shareholders. It is not possible to state the actual effect of the authorization
of any Preferred Stock upon the rights of holders of the Common Stock, until the
Board of Directors determines the specific rights of the holders of the
Preferred Stock. However, the Preferred Stock may have adverse effects upon the
holders of the Common Stock, including (i) restrictions on dividends on the
Common Stock if dividends on the Preferred Stock have not been paid, (ii)
dilution of the voting power of the Common Stock to the extent that the
Preferred Stock has voting rights, (iii) dilution of the equity interest of the
Common Stock to the extent that the Preferred Stock is converted into Common
Stock, or (iv) the Common Stock not being entitled to share in the Company's
assets upon liquidation until satisfaction of any liquidation preference granted
the holders of the Preferred Stock. The Company does not currently anticipate
that it will issue Preferred Stock in connection with any business combination,
but issuance for this purpose is a possibility. The Company has not authorized
such number of Preferred Shares for anti-takeover or similar purposes.
INFORMATION CONCERNING THE COMPANY
This information is incorporated by reference to Item 1 of the annual
report on Form 10-KSB of the Company for the fiscal year ended May 31, 1999.
MANAGEMENT
Identification of Directors and Executive Officers
Directors are elected for one-year terms or until the next annual meeting
of shareholders and until their successors are duly elected and qualified.
Officers hold office at the pleasure of the Board of Directors. The table below
sets forth the name, age, position and tenure of each director and executive
officer. Mr. Heishman, as secretary, is not considered an "executive" officer.
All Directors have served since March 1998.
Year
First
Name Elected Position Held and Tenure
- - ----------------- ------- -------------------------
Juan J. Gutierrez 1998 DIRECTOR, Chairman, Chief Executive
Officer, President
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John M. Dwyer 1998 DIRECTOR, Vice President
Dave Vandenberg 1998 DIRECTOR, Vice President
John S. Heishman 1998 DIRECTOR, Secretary, Treasurer
Biographical Information
The following is a brief account of the business experience during at least
the past five years of each director and executive officer, including the
principal occupation and employment during that period.
JUAN J. GUTIERREZ, 57, is Chairman and CEO of the Company. He has been
Chairman and CEO of Kemron Environmental Services, Inc. since 1983, when he
purchased Kemron. He is also Chairman and CEO of InterAmerica Technologies,
Inc., a software development and systems integration company which he founded in
1971. Both companies have enjoyed rankings on the list of the 500 largest
Hispanic-owned businesses compiled by Hispanic Business magazine. Mr. Gutierrez
has received numerous achievements and community awards, including being
selected by the U.S. Hispanic Chamber of Commerce as the 1984 Hispanic
Businessman of the Year, and receiving the 1994 Small Business Administration's
Lifetime Minority Business Achievement Award. He is a graduate of Pan American
University at Edinberg, Texas.
JOHN M. DWYER, 39, is a Director of the Company and a Vice President of
Kemron. Mr. Dwyer is responsible for the management and administration of
Kemron's Consulting and Engineering Division, including profit and loss
performance, as well as Kemron's marketing and business development. He has been
with Kemron for over 19 years and brings a wealth of experience and expertise in
the development, design, and execution of small and large scale environmental
programs involving hazardous waste, site investigations, remedial construction,
environmental assessments and permitting assistance services, as well as leaking
underground storage tanks. Mr. Dwyer holds an A.S. degree in computer and
electrical technology from the Southern Institute of Technology.
DAVID VANDENBERG, 43, is a Director of the Company, and a Vice President of
Kemron. He is a 1979 graduate of the University of Wisconsin with degrees in
Chemistry and Business. With 20 years of experience in the environmental field,
through the changes in legislation, market conditions and growth of the
environmental service industry. He has managed the growth of a 3 person
environmental laboratory to a staff of over 80 professionals, and today Kemron's
Ohio Valley Laboratory is one of the nation's largest, most respected
environmental laboratories. Mr. Vandenberg is responsible for the laboratory's
sales and marketing strategies, operation oversight and profit and loss
performance.
JOHN S. HEISHMAN, 34, is the Secretary/Treasurer and a Director of the
Company, and is responsible for Finance and Contract Administration for the
Company. He has over 12 years of finance and accounting experience in both
commercial and federal contracting. Mr. Heishman joined Kemron's management team
in 1996 and has brought vast experience in forecasting/budgeting, cash
management, financial analysis, corporate and operational accounting. Prior to
joining Kemron, Mr. Heishman worked for Computer Sciences Corporation and in
public accounting with Ernst & Young. He holds a BBA in accounting from James
Madison University, and is a Certified Public Accountant in Virginia.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
This information is incorporated by reference to Item 10 of the annual
report on Form 10-KSB of the Company for the fiscal year ended May 31, 1999.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This information is incorporated by reference to Item 7 of the annual
report on Form 10-KSB of the Company for the fiscal year ended May 31, 1999.
TRADING MARKET AND RELATED MATTERS
Market Information
The Company's outstanding common shares were for the most part traded in
small volumes during the fiscal year ended May 31, 1999, with trades in the last
two quarters ranging in price from $.06 to $.10 per share. Price and trading
volume have not increased since that date. The Company's common stock is quoted
in the over-the-counter market under the symbol "WHAM" on the OTC Bulletin
Board. Although some trading activity has occurred over the past reporting year,
there is no assurance that an active market ever will arise in the Company's
shares.
FISCAL 1999
HIGH LOW
First Quarter 5.75 0.62
Second Quarter 1.03 0.07
Third Quarter 0.10 0.06
Fourth Quarter 0.07 0.07
Holders
The Company's common stock is held of record by approximately 180 persons,
which does not include shares held in nominee or "street" name.
Dividends
The Company does not expect to pay cash dividends on its capital stock in
the foreseeable future. Payment of dividends in the future will depend on the
Company's earnings and its cash requirements at that time.
CERTAIN RELATIONSHIPS AND RELATED INFORMATION
This information is incorporated by reference to Item 12 of the annual
report on Form 10-KSB of the Company for the fiscal year ended May 31, 1999.
Former officer and director Stephen M. Siedow and former counsel to the Company
John D. Brasher Jr. collectively are owed approximately $105,000 by the Company
for services rendered and funds advanced to or expended on behalf of the
Company.
Proposal No. 1
PROPOSAL TO UNWIND ACQUISITION OF KEMRON
The first question to be presented for shareholder approval is a proposal
to unwind the Company's March 1998 acquisition of Kemron Environmental Services,
Inc., a New York corporation ("Kemron"), which is the Company's sole subsidiary
and sole asset, and transfer ownership of Kemron back to its original owners.
The Company entered into and consummated the following Stock Exchange Agreements
(collectively, the "Exchange Agreements") dated March 6, 1998, among the Company
and:
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Kemron Environmental Services, Inc., a New York corporation ("Kemron"), and
its shareholders ("Kemron Exchange Agreement"), pursuant to which 3,500,000
shares of the Company (the "Kemron Exchange Shares") were issued to the
Kemron shareholders (the "Kemron Holders") in order to acquire Kemron,
which acquisition is referred to below as the "Kemron Exchange";
Coastline International, Inc., a Delaware corporation ("Coastline"), and
its shareholders ("Coastline Exchange Agreement"), pursuant to which
1,750,000 shares of the Company were issued to the Coastline shareholders
in order to acquire Coastline;
New Horizons, Inc., a Delaware corporation ("New Horizons"), and its
shareholders ("New Horizons Exchange Agreement"), pursuant to which
1,750,000 shares of the Company were issued to the New Horizons
shareholders in order to acquire New Horizons; and
Exeter Group, Inc., a Florida corporation ("Exeter"), and its shareholders
("Exeter Exchange Agreement"), pursuant to which 1,000,000 shares of the
Company were issued to the Exeter shareholders in order to acquire Exeter.
These transactions are sometimes collectively referred to below in this
report as the "Exchange." Of the four companies acquired, only Kemron had
significant assets and revenues. In connection with the Exchange, the Company
underwent a change of control. Subsequent to the Exchange, the Exeter, Coastline
and New Horizons Exchange Agreements all have been cancelled, and 4,309,027 (all
but 190,973) of the 4,500,000 common shares of the Company issued to acquire
those three companies have been cancelled and returned to treasury.
Unwinding and Stock Exchange Agreement
The Company, Kemron and the Kemron Holders have entered into an Unwinding
and Stock Exchange Agreement dated November 29, 1999 (the "Unwinding
Agreement"), which provides for the unwinding and rescission of the Kemron
Exchange, and the transfer of ownership of Kemron back to the Kemron Holders.
The Unwinding Agreement will be consummated as soon as possible after it is
approved by the Company's shareholders at a special meeting called for that
purpose. Effective upon the consummation of the Unwinding Agreement, the Kemron
Exchange Agreement will be cancelled and the following things will be done and
occur:
(1) The 3,500,000 Kemron Exchange Shares will be surrendered by the Kemron
Holders to the Company for cancellation and returned to the status of
authorized but unissued shares;
(2) Ownership of the 315 shares of Kemron common stock will be returned to
the Kemron Holders;
(3) The Company will issue to Kemron 100,000 shares of its common stock in
settlement of certain sums expended by Kemron to date on the Company's
behalf;
(4) Kemron will deliver a general release of the Company;
(5) The Company will deliver a general release of Kemron;
(6) Kemron will deliver to the Company a written release of all liability
to Peoples Bank under a guarantee of the loan to the Gutierrez
Properties Limited Partnership;
(7) The originals of the stock options granted by the Company to Juan J.
Gutierrez, John Dwyer and David Vandenberg will be cancelled;
(8) Juan J. Gutierrez, John S. Heishman, John M. Dwyer and David
Vandenberg will resign as officers and
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directors of the Company; and
(9) The number of members of the Company's board of directors will be
reduced from four to one, and Stephen M. Siedow will become the sole
director of the Company;
The Unwinding Agreement will constitute an unwinding and rescission of the
Exchange Agreement, not a repurchase of the Kemron Exchange Shares by the
Company. The unwinding of the Kemron Exchange and the issuance of the 100,000
settlement shares to Kemron will reduce the number of outstanding common shares
of the Company from the current 4,217,020 shares to 817,020 shares.
Following the unwinding of the Kemron Exchange, the Company will have no
revenues or significant assets, nor will the Company have any debts other than
the $105,000 owed to Stephen M. Siedow, a former officer and director of the
Company, and John D. Brasher Jr., former Company counsel, in both cases for
services rendered or for funds advanced to or for expenses incurred on behalf of
the Company. The Company will then not have any business other than attempting
to acquire another operating company with assets and revenues.
Status of Settlement Shares
The 100,000 settlement shares to be issued at closing to Kemron have not
been and will not be registered under the Securities Act of 1933 (the "Act") in
reliance upon exemptions from registration provided by Section 4(2) of the Act
and under the securities laws of the State of Virginia or any rules or
regulations promulgated thereunder, on the grounds that the offer, sale and
issuance of the settlement shares is a transaction not involving any public
offering. The settlement shares will be restricted securities as that term is
defined in Rule 144 (a) of the General Rules and Regulations under the Act and
must be held indefinitely, unless they are subsequently registered under the Act
or an exemption from such registration requirements is available for their
resale. Every certificate evidencing the settlement shares will, unless and
until removed in accordance with law, bear a customary form of investment legend
which restricts transfer of the shares except pursuant to registration under the
Act or pursuant to an available exemption from the Act's registration
requirements.
Shareholder Approval Required
Because Kemron amounts to all or substantially all of the assets of the
Company, the unwinding of the Kemron Exchange may constitute a "bulk sale" under
Section 271 of the Delaware General Corporation Law, which requires the prior
approval of the holders of a majority of the Company's shares entitled to vote.
This shareholder approval is being sought at the Special Meeting. The Kemron
Holders, who in the aggregate hold 3,500,000 of the 4,217,020 common shares of
the Company issued and outstanding and who have signed the Unwinding Agreement,
are expected to vote in favor of the Unwinding Agreement, which would of course
assure its approval.
Indemnity Obligations
In the Unwinding Agreement, Kemron and the Kemron Holders each agree to
defend, indemnify and hold the Company harmless from and against any and all
losses, liabilities, damages, costs or expenses (including reasonable attorneys'
fees, penalties and interest) arising from or incurred as a result of (i) any
false statement, representation or warranty made by Kemron or the Kemron Holders
in the Unwinding Agreement, or (ii) the breach of any agreement or covenant made
by Kemron or a Kemron Holder in the Unwinding Agreement, or (iii) the Peoples
Bank loan to Gutierrez Properties Limited Partnership, which was guaranteed by
the Company.
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Under the terms of the Unwinding Agreement, the Company agrees to defend,
indemnify and hold Kemron and the Kemron Holders harmless from and against any
and all losses, liabilities, damages, costs or expenses (including reasonable
attornies' fees, penalties and interest) arising from or incurred as a result of
(i) any false statement, representation or warranty made by the Company in the
Unwinding Agreement, or (ii) the breach of any agreement or covenant made by the
Company in the Unwinding Agreement; provided, that the Company shall have no
liability to indemnify Kemron Holders InterAmerica Technologies, Inc., Juan J.
Gutierrez, John Dwyer and David Vandenberg for any alleged false statement,
representation or warranty that such person knew or reasonably should have known
was false at the time of consummation of the Unwinding Agreement, or for the
breach of any covenant or agreement by the Company in the Unwinding Agreement
that such person knew or reasonably should have known could not be performed by
the Company at the time of consummation of the Unwinding Agreement.
Reasons for the Unwinding
Kemron and the Kemron Holders entered into the Exhange for the purpose of
becoming publicly held, in the expectation that being public would make it
easier to raise funds and perhaps make it possible to acquire other companies
and grow assets and revenues through such further acquisitions. However, these
supposed advantages of being public have turned out to be illusory, and the
Kemron Holders no longer desire for Kemron to be part of a public company.
In light of the low price of the Company's shares and lack of trading
volume, which make the raising of capital perhaps even more difficult than it
would be for a private company, there is no real advantage --certainly, there is
no obvious advantage -- for the Company to continue owning Kemron. The low price
of the Company's shares have made it very difficult to raise capital and have
made it impossible to grow the Company by using its shares to make acquisitions.
More to the point, when the Company acquired Kemron, it also acquired the other
companies in the Exchange. Kemron provided assets and a revenue base that added
ballast to the Company, while the business plans of Coastline and New Horizons
were believed to add excitement and a substantial potential for growth and
profitability that exceeded the potential of Kemron. Now that Exeter, Coastline
and New Horizons have been disposed of, the Company believes that Kemron by
itself does not really merit being the centerpiece of a public company. The
considerable expenses of filing quarterly and annual reports and of auditing
Kemron's financial statements make the Company's ownership of Kemron even less
desirable.
By disposing of Kemron as called for in the Unwinding Agreement, the
Company will again become a clean public shell and have the possibility of
acquiring another company.
Business of the Company after the Unwinding
Following the unwinding, the Company intends to acquire or enter into a
business combination with one or more as-yet-unidentified privately held
businesses. Management believes that the Company will be attractive to a
privately held company interested in becoming publicly traded by means of a
business combination with the Company, without offering its own securities to
the public. The Company intends to pursue negotiations with qualified candidates
after consummation of the unwinding.
The term "business combination" (or "combination") means the result of (i)
a statutory merger or consolidation involving the Company and a privately held
business, (ii) the exchange of securities of the Company for the assets or
outstanding equity securities of a privately held business, (iii) the merger or
consolidation of a privately held business into or with a wholly owned
subsidiary of the Company formed for that purpose, (iv) the sale of securities
of the Company for cash or other value to a business entity or individual, and
similar transactions.
The Company will not be restricted in its search for business combination
candidates to any particular geographical area, industry or industry segment,
and may enter into a combination with a private business engaged in any line of
business, including service, finance, mining, manufacturing, real estate, oil
and gas, distribution, transportation, medical, communications, high technology,
biotechnology or any other. Management's discretion is, as a practical matter,
unlimited in the selection of a
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combination candidate. The Company's search generally will be directed toward
small to medium-sized companies.
Management of the Company will seek combination candidates in the United
States and other countries, as available time permits, through existing
associations and by word of mouth. The Company also may employ the services of
business brokers or other intermediaries. The Company has not entered into any
agreement or understanding of any kind with any person regarding a business
combination. There can be no assurance that the Company will be successful in
locating a suitable combination candidate or in concluding a business
combination on acceptable terms.
THE BOARD OF DIRECTORS MAKES NO RECOMMENDATIONS AS TO THIS PROPOSAL. The
affirmative vote of a majority of the shares entitled to vote will be required
to approve this proposal.
Proposal Number 2
PROPOSAL TO ELECT STEPHEN M. SIEDOW AS SOLE DIRECTOR
The Unwinding Agreement requires at consummation the resignations of
current Company officers and directors Juan J. Gutierrez, John S. Heishman, John
M. Dwyer and David Vandenberg, the reduction of the Board of Directors from four
members to one member, and the election of Mr. Stephen M. Siedow as the sole
director of the Company.
Messrs. Gutierrez, Heishman, Dwyer and Vandenberg are long-standing
directors and officers of Kemron who became officers and directors of the
Company at the time of the Exchange. They do not wish to continue as officers
and directors of the Company following the unwinding and disposition of Kemron.
Mr. Siedow was the president and sole director of the Company at the time of the
Exchange and resigned upon completion of the Exchange.
The Company's bylaws currently provide for a board of four directors, but
if this proposal is approved by the shareholders, the board will consist of only
one director, Mr. Siedow. All directors are elected for one-year terms at the
annual meeting of shareholders. Directors are elected by plurality vote,
meaning that (should more than one nominee vie for the same seat on the Board)
the nominee who receives the most votes will be elected for the term nominated,
even if he receives less than a majority of the votes cast.
Mr. Siedow has agreed to serve as sole director if this proposal is
approved. There is no arrangement between Mr. Siedow and any other person or
persons, pursuant to which another person is to be selected as a director of the
Company. Mr. Siedow has not been involved in any legal proceedings during the
past five years which are material to an evaluation of his ability or integrity.
There are no material proceedings adverse to the Company to which Mr. Siedow or
any affiliate of his is a party, nor do Mr. Siedow or any affiliate of his have
any material interest adverse to the Company.
Biography of Stephen M. Siedow
Mr. Siedow, age 49, is president and sole shareholder of Stephen M. Siedow,
P.C., a professional accounting firm providing auditing, management consulting,
tax services and write-up services to corporations, partnerships and individuals
since 1982. Mr. Siedow specializes in public and SEC accounting and has
experience in industries including mining (gold and coal), oil and gas,
construction, and mergers/acquisitions/liquidations. Prior to that, he was with
the audit department of Ernst & Young, Certified Public Accountants in Denver,
Colorado, for eight years. Mr. Siedow is a member of the American Institute of
Certified Public Accountants and the Colorado Society of Certified Public
Accountants. Mr. Siedow also is a director, executive officer and significant
shareholder of the following companies, which are blank check companies:
. EQUICAP, INC., a California corporation.
. GALLAGHER RESEARCH CORPORATION, a Nevada corporation.
. MNS EAGLE EQUITY GROUP, INC., a Nevada corporation.
. MNS EAGLE EQUITY GROUP I, INC., a Nevada corporation.
. MNS EAGLE EQUITY GROUP II, INC., a Nevada corporation.
. MNS EAGLE EQUITY GROUP III, INC., a Nevada corporation.
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. MNS EAGLE EQUITY GROUP IV, INC., a Nevada corporation.
THE BOARD OF DIRECTORS MAKES NO RECOMMENDATIONS AS TO THIS PROPOSAL. The
affirmative vote of a majority of the shares entitled to vote will be required
to approve this proposal.
FURTHER INFORMATION
A copy of the Unwinding Agreement is being mailed with this Information
Statement. No annual report is being mailed with this Information Statement,
because the meeting being held is a Special Meeting and is not in lieu of an
annual meeting.
Upon request and payment of a fee of $10.00 to cover the Company's mailing
and handling expenses, the Company will furnish any person who was a shareholder
of the Company as of the Record Date a copy of the Company's annual report on
Form 10-KSB for the fiscal year ended May 31, 1999, with attached exhibits. Any
such written request may be addressed to the Secretary at the above address. The
written request must contain a good faith representation that, as of the Record
Date, the person making the request was the beneficial owner of Common Stock of
the Company.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Special Meeting. Management expects the Kemron Holders, all of whom have signed
the Unwinding Agreement, to vote to approve the Unwinding Agreement and
disposition of Kemron. They hold as a group 3,500,000 shares out of 4,217,020
common shares issued and outstanding, and an affirmative vote by them would
assure passage of the proposals.
By Order of the Board of Directors
/s/ Juan J. Gutierrez
---------------------
Juan J. Gutierrez
Chairman of the Board
December 28, 1999
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