SCHEDULE 14C INFORMATION PRELIMINARY COPY
AMENDMENT NO. 1
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
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
CELEBRITY ENTERTAINMENT, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii) or 14c-5(g)
[ ] 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:
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 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ x ] 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:
No Exhibit Index
Total Number of Pages:
CELEBRITY ENTERTAINMENT, INC.
NOTICE OF ACTION TAKEN BY
WRITTEN CONSENT OF MAJORITY SHAREHOLDERS
NOVEMBER 12, 1996
To the Shareholders of CELEBRITY ENTERTAINMENT, INC.:
The majority shareholders of Celebrity Entertainment, Inc., a Delaware
corporation (the "Company"), holding 8,680,313 votes out of a total of
15,451,012 votes, or 56.2%, with respect to common and preferred stock, which
vote together as a class, have submitted to the Company written consents of
shareholders requesting and consenting to the Company's effectuating a reverse
stock split of the Company's Common Stock as soon as practicable on the basis of
one share for every fifty shares outstanding, issuing one whole share in lieu of
any fraction of a share otherwise issuable, and maintaining the number of
authorized shares at the current levels.
This Information Statement is being sent to all shareholders of the
Company to inform you that the above actions will be taken by the Company as
soon as possible, but no earlier than December 2, 1996.
By Order of the Board of Directors,
Palm Beach, Florida J. William Metzger, Secretary
November 12, 1996
CELEBRITY ENTERTAINMENT, INC.
214 Brazilian Avenue
Suite 400
Palm Beach, Florida 33480
Telephone (561) 659-3832
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is first being sent to stockholders on or about
November 12, 1996.
The Company's Annual Report on Form 10-KSB for fiscal year 1995 is being
furnished to all stockholders herewith.
ACTION
TO BE EFFECTUATED PURSUANT TO
WRITTEN CONSENT OF MAJORITY SHAREHOLDERS
On November 5, 1996, the majority stockholders of Celebrity Entertainment,
Inc. (the "Company") delivered to the Company signed, written consents directing
that the Company effectuate a reverse stock split of its shares of Common Stock
on a one-for-fifty basis.
On the date of delivery to the Company of the consents, the directors held
a special meeting resolving to take the directed action as soon as practicable.
The record date for determination of whether the consents delivered represented
a majority of all stockholders entitled to vote on the matter was fixed at such
date of delivery of the consent and the directors' meeting, in accordance with
Delaware law. The consents so delivered to the Company represent stockholders
who together on the record date held a majority of votes with respect to the
Company's outstanding common and preferred stock. Thus the reverse split has
been duly authorized by shareholder action and by Director action, and no
further shareholder or board consents are necessary. Pursuant to regulations of
the Securities and Exchange Commission, the action may not be taken any earlier
than 20 days after the date of mailing of this Information Statement to the
Company's shareholders. The reverse split will be effectuated as soon as
possible after such date.
Delaware law does not provide for any appraisal rights or rights of
dissenters with respect to the matter directed by the majority shareholders'
written consents.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
As of November 5, 1996, the number of shares of Common Stock outstanding
at the close of business was 15,215,412 shares, each share being entitled to one
vote. The number of shares of Preferred Stock outstanding at the close of
business on the same date was 589,000 shares, each share being entitled to
two-fifths of one vote, which totals 235,600 votes.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of November 5, 1996, certain
information as to the Common Stock of the Company beneficially owned by (i) each
person known by the Company to own more than 5% of the Company's Common Stock,
(ii) each director of the Company, (iii) each of the named executive officers;
and (iv) all officers and directors as a group.
Name and Address of Common Percent of
Beneficial Owner Stock Common Stock Owned
James J. McNamara
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 174,786(1) 1.1 %
J. William Metzger
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 174,786(1) 1.1 %
David J. Critchfield
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 0 0 %
Douglas Pedrie
Energex, Inc.
P.O. Box 1424 7,000,000(2) 46%
Abilene, TX 79604
Udo Schieke 1,680,313(3) 11.1%
Select International Securities GmbH.
Graf-Adolf-Str. 108
40210 Dusseldorf
Germany
All Officers and Directors
As A Group (3 persons) 349,572 2.3 %
(1) Includes 74,786 shares directly owned and 100,000 shares beneficially owned
pursuant to options currently exercisable.
(2) Record holder of these shares is Energex, Inc., a Texas corporation wholly
owned and controlled by Douglas Pedrie. Schedule 13D is in process of being
prepared; information has been certified to the Company by the beneficial owner.
(3) Record holder of these shares is Select International Securities GmbH., a
German corporation wholly owned and controlled by Udo Schieke. Schedule 13D not
yet filed; information has been certified to the Company by the beneficial
owner.
RECENT TRANSACTIONS
On November 5, 1996, the Company sold to Energex, Inc., a newly-formed
Texas corporation, 7,000,000 shares of the Company's common stock in exchange
for a secured promissory note in the principal amount of $1,312,500. The note
is due and payable on June 30, 1997 and bears interest at the rate of 12% per
annum. Payment pursuant to the note is secured by all the assets of Energex,
Inc., which consist of certain mineral leasehold interests and personal
property located in Stephens and Shackelford Counties, Texas. Simultaneous
with the purchase of said shares, and pursuant to a prior understanding between
the parties, Energex presented the Company with a written consent described in
this Information Statement. Energex and the Company are currently negotiating
a letter of intent contemplating a possible acquisition of Energex by the
Company or other business combination between the parties, subject to numerous
conditions including thorough and satisfactory due diligence reviews, which have
just begun by both parties. Energex, both as a shareholder in the Company and as
a possible acquisition candidate, has a substantial interest in the Company's
effectuating a reverse stock split in order to enable the Company to maintain
its Nasdaq status and to have common stock available for capital raising
purposes.
Select International Securities GmbH. became the owner of a total of
1,680,313 shares of common stock of the Company over the past several months by
purchase of convertible debentures sold pursuant to Regulation S and subsequent
conversions of those debentures into common stock. The debentures were
convertible at a discount of 35% off the current market price of the shares. On
November 5, 1996, Select provided the Company with a written consent to the
actions described in this Information Statement. Select has a substantial
interest in the reverse split's occurring, due to its status as a shareholder
and its desire for the Company to maintain its Nasdaq status.
REVERSE SPLIT TO BE EFFECTUATED PURSUANT TO SHAREHOLDER CONSENT
The majority shareholders' written consents have directed that the Company
effectuate a reverse split of the Company's common stock on a one-for-fifty
basis. The form of the consents is attached to this Statement as Exhibit A.
When the reverse split is effectuated, every fifty outstanding common shares
will automatically be converted into one outstanding share. One whole share
will be issued in lieu of any fractional share otherwise issuable. The trading
price of the Company's shares is anticipated to adjust to reflect the reverse
split on the date of the transaction. The reverse stock split will be
effectuated by filing with the Secretary of State of Delaware the
Certificate of Amendment in the form attached to this Statement as Exhibit B.
Replacement certificates evidencing the split will be issued on an as-traded
basis; i.e., no transmittal letters or other instructions will be sent to
shareholders.
The common shares issuable in the reverse split will be identical to the
shares currently outstanding. Shareholder rights will not be affected other
than with respect to the actual number of shares held and the trading price per
share.
The Company is currently authorized to issue 25,000,000 shares of Common
Stock and 2,000,000 shares of Preferred Stock. As of the Record Date there were
8,215,412 shares of the Company's Common Stock outstanding and 589,000 shares of
Class A 8% Convertible Preferred Stock outstanding. The Company's Certificate
of Incorporation will not be amended with respect to the number of authorized
shares of Common Stock or Preferred Stock. After the reverse split, the number
and percentage of the shares of the Company's Common Stock that are authorized
but unissued will increase from 9,784,588 or 39.1% of the authorized shares to
approximately 24,695,692 or 98.8% of the authorized shares. This effectively
constitutes an increase in the number and proportion of shares of the Company's
Common Stock that are available for future issuance without further stockholder
approval.
The reverse split is anticipated to cause the Company's Common Stock to
meet the minimum bid price required for continued listing on the Nasdaq. If the
Company's Common Stock is not listed on the Nasdaq, the Company's Common Stock
would be subject to certain rules imposing additional sales practice
requirements on broker-dealers. Because of such regulations, brokerage firms
often adopt internal policies or practices which discourage brokers from
recommending lower-priced stocks because of the burden of compliance with such
regulations and the general presumption that such stocks are speculative.
Management believes that the reverse split will result in a price level for the
Company's Common Stock which will allow continued quotation of the Common Stock
on the Nasdaq and reduced chances of the Common Stock's being subject to the
above-described regulations, policies or practices. However, there can be no
assurance that the reverse stock split will enable the Common Stock to continue
to be listed on the Nasdaq or that any increase in the per share market value
will occur or be sustained for any period of time.
The Directors of the Company have a substantial interest in the reverse
split's being effectuated, by way of their ownership of shares of common stock
in the Company.
EXHIBIT A TO INFORMATION STATEMENT
FORM OF WRITTEN CONSENTS SUBMITTED
Date: November 5, 1996
Celebrity Entertainment, Inc.
214 Brazilian Ave., Suite 400
Palm Beach, FL 33480
Dear Sirs:
As a shareholder of 7,000,000 (1) shares of common stock Celebrity
Entertainment, Inc. (the "Company"), representing 45.3% (1) of the voting shares
of the Company, I am writing to request and to consent to the Company's
effectuating a reverse split of its common stock on a one-for-fifty basis, with
one whole share being issued in lieu of any fractional share, as soon as
possible. The number of authorized shares should not change but should remain
at the current level.
Thank you.
Sincerely,
Energex, Inc.
/s/ Douglas Pedrie
Douglas Pedrie, President
(1) The form of consent shown was submitted by Energex, Inc. The consent from
the other shareholder, Select International Securities GmbH., was identical
except that the number of shares owned is 1,680,313, and the percentage is 10.9.
EXHIBIT B TO INFORMATION STATEMENT
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF
CELEBRITY ENTERTAINMENT, INC.
Celebrity Entertainment, Inc., a Delaware corporation, hereby certifies
that the following amendment to its Certificate of Incorporation has been duly
adopted in accordance with the provisions of section 242 of the General
Corporation Law of the State of Delaware by the directors and shareholders of
the corporation.
ARTICLE FOURTH of the Certificate of Incorporation is hereby amended in
its entirety to read as follows:
FOURTH. The total number of shares of stock which the corporation
shall have authority to issue is 27,000,000 shares, which shall be
divided into classes as follows: (i) 25,000,000 shares of common
stock, par value $.0001 per share (the "Common Stock"), and
(ii) 2,000,000 shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock").
The Preferred Stock shall have such other designations,
preferences, and such relative, participating, optional or other
special rights as may be fixed by the corporation's Board of
Directors, with such qualifications, limitations or restrictions of
such preferences or rights as shall be stated and expressed in this
paragraph Fourth or in the resolution or resolutions as may be
adopted from time to time by the Board of Directors in accordance
with the laws of the State of Delaware.
Every fifty shares of Common Stock, $.0001 par value per
share, of the corporation outstanding or held in treasury
immediately prior to the effective date of this Amendment to Article
Fourth of the corporation's Certificate of Incorporation (the "Pre-
Reverse Common Stock") shall, without any action on the part of the
respective holders thereof, be reclassified as and changed into one
share of the corporation's common stock as it is constituted
immediately after the effective date of this Amendment (the "Post-
Reverse Common Stock"). No fractional shares of Post-Reverse Common
Stock shall be issued upon such reclassification and conversion, and
the number of shares of Post-Reverse Common Stock to be issued to
each holder of record shall be rounded up to the nearest whole
share. The capital of the corporation attributable to the shares of
Post-Reverse Common Stock into which the Pre-Reverse Common Stock
shall be reclassified and changed in the aggregate shall be the same
as the capital of the corporation attributable to the shares of Pre-
Reverse Common Stock so reclassified and changed. Each stock
certificate that, immediately prior to the time that this Amendment
becomes effective, represents shares of Pre-Reverse Common Stock
shall, from and after the time that this Amendment becomes
effective, automatically and without the necessity of presenting the
same for exchange, represent the same number of shares of Post-
Reverse Common Stock as shall be determined hereby.
This Amendment shall become effective on [effective date].
IN WITNESS WHEREOF, the undersigned, the duly elected and incumbent
Executive Vice President of Celebrity Entertainment, Inc., has set his hand this
_____ day of ______, 1996.
J. William Metzger, Exec. Vice
President
