INTERNATIONAL STANDARDS GROUP, LIMITED
3200 North Military Trail, Suite 300
Boca Raton, Florida 33431
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 stockholders of
International Standards Group, Limited (the "Company"), a Delaware corporation,
in connection with the proposed adoption of a Certificate of Amendment to the
Company's Certificate of Incorporation (the "Amendment") 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") and Series M and Series O Preferred Stock (the "Voting
Preferred Stock"). The Company's Board of Directors on September 9, 1996,
approved and recommended that the Certificate of Incorporation be amended in
order to (i) change the name of the Company from International Standards Group,
Limited to Total World Telecommunications, Inc. and (ii) effectuate up to a one
for fifteen (1:15) reverse stock split of the Company's outstanding shares of
Common Stock. The exact reverse split will be determined by the Board of
Directors of the Company but will not exceed a one for fifteen reverse split.
The proposed Amendment to the Certificate of Incorporation will become effective
upon (i) a written consent of the holders of not less than a majority of the
Company's outstanding Voting Capital Stock approving the Amendment and (ii) the
filing of the Certificate of Amendment to the Certificate of Incorporation with
the Secretary of State of the State of Delaware. The Company anticipates that
the filing of the written consents will occur on or about October 16, 1996
(the "Effective Date"). If the proposed Amendment were not adopted by written
consent, it would have been required to be considered by the Company's
stockholders at a special stockholders' meeting convened for the specific
purpose of approving the Amendment.
The elimination of the need for a special meeting of stockholders to
approve the Amendment is made possible by Section 228 of the Delaware General
Corporation Law (the "Delaware Law") 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
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and voted, may be substituted for such a special meeting. Pursuant to Section
242 of the Delaware Law, a majority of the outstanding shares of voting capital
stock entitled to vote thereon is required in order to amend the Company's
Certificate of Incorporation. In order to eliminate the costs and management
time involved in holding a special meeting and in order to effect the 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. As discussed hereafter, the Board of Directors has
recommended the Amendment in order to reflect the transformation of the scope of
operations of the Company following the acquisition of Total World
Telecommunications, Inc. ("TWT") in June 1996 and to restructure the Company's
capitalization in order to adjust the Company's outstanding Common Stock to
stimulate interest in the Company's Common Stock and possibly promote greater
liquidity by attracting both an institutional and broader based market
following. The stock split would also enable the Company to complete targeted
acquisitions within the telecommunications industry.
The written consent of such persons to the Amendment will become effective
upon the filing of their written consents with the Secretary of the Company. The
Company anticipates that the filing of such written consents will occur on or
before October 16, 1996, following which the Company will prepare and file
a Certificate of Amendment to its Certificate of Incorporation with the State of
Delaware effecting (i) a name change of the Company from International Standards
Group, Limited to Total World Telecommunications, Inc.; and (ii) up to a one for
fifteen (1:15) reverse stock split of the Company's outstanding shares of Common
Stock. A copy of the proposed Amendment to the Company's Certificate of
Incorporation is set forth as Exhibit A to this Information Statement. The date
on which this Information Statement was first sent to the stockholders is on or
about September 26, 1996. 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 20, 1996 (the "Record Date").
Pursuant to Section 228 of the Delaware Law, the Company is required to
provide prompt notice of the taking of the corporate action without a meeting to
stockholders who have not consented in writing to such action. Inasmuch as the
Company will have provided to its stockholders of record this Information
Statement, the Company will notify its stockholders at the time of distribution
of its next Quarterly Report on Form 10-QSB or Annual Report on Form 10-KSB of
the effective date of the Amendment. No additional action will be undertaken
pursuant to such written consents, and no dissenters' rights under the Delaware
Law are afforded to the Company's stockholders as a result of the adoption of
the Amendment.
EXECUTIVE OFFICES
The Company's principal executive offices are located at 3200 North
Military Trail, Suite 300, Boca Raton, Florida 33431. Its telephone number is
(561) 997-5880.
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OUTSTANDING VOTING STOCK OF THE COMPANY
As of the Record Date, there were 86,514,596 shares of Common Stock
outstanding and 266,000 shares of Voting Preferred Stock outstanding and
entitled to vote on matters submitted to the stockholders of the Company. The
Common Stock and Series M and Series O Preferred Stock constitute the sole
classes of voting securities of the Company. Each share of Common Stock entitles
the holder thereof to one vote on all matters submitted to stockholders. Each
share of Series M and Series O Preferred Stock entitles the holder thereof to
one vote of all matters submitted to stockholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth Common Stock ownership information as of
September 10, 1996, with respect to (i) each person known to the Company to be
the beneficial owner of more than 5% of the Company's Common Stock; (ii) each
director of the Company; (iii) each person intending to file a written consent
to the adoption of the Amendment described herein; and (iv) all directors and
executive officers 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 3200
North Military Trail, Suite 300, Boca Raton, Florida 33431. Information with
respect to the percent of class is based on 86,514,596 issued and outstanding
shares of Common Stock as of September 10, 1996.
Shares
Beneficially Percent
Name Owned(1) of Class
---- -------- --------
Joseph L. Lents (2) 6,093,500 6.7%
C. Denning Loveridge(3) 2,634,500 3.0%
John Loveridge(4) 2,634,500 3.0%
Donald Booth(5) 23,183,351 26.8%
Arnold Salinas(6) 1,333,333 1.5%
Platina Technologies, Inc.(7) 10,433,333 12.1%
Reinerman Holdings, Ltd.(8) 5,223,974 6.0%
SMS Capital Services Corp.(9) 2,000,000 2.3%
Booth Family Trusts(10) 2,849,000 3.3%
Caspian, Ltd.(11) 2,500,000 2.9%
Walter Cecchini(12) 800,000 0.9%
Fred Griffin(13) 600,000 0.7%
All executive officers and
directors as a group
(6 persons) 37,456,184 38.4%
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(1) Except as otherwise indicated in the footnotes below, each stockholder has
sole power to vote and dispose of all the shares of Common Stock listed
opposite his name.
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(2) Mr. Lents is Chairman of the Board, President and Chief Executive Officer
of the Company. Includes 4,500,000 shares of Common Stock issuable upon
exercise of certain options by Mr. Lents, 69,500 shares of Common Stock
acquired by a retirement program established by Cheryl Lents, the wife of
Mr. Lents, as to which shares Mr. Lents disclaims beneficial ownership,
and 325,000 shares of Common Stock acquired by Mr. Lents' children. Mr.
Lents assigned 1,200,000 shares of his Common Stock to an investment
banking firm pending resolution of certain issues associated with the
Bearer Bonds issued by the Banco Central de Venezuela.
(3) Mr. C. Denning Loveridge is Senior Vice President and a Director of the
Company. Includes 2,500,000 shares of Common Stock issuable upon exercise
of certain options.
(4) Mr. John Loveridge is a Director of the Company and the brother of Mr. C.
Denning Loveridge. Includes 2,500,000 shares of Common Stock issuable upon
exercise of certain options.
(5) Mr. Booth is President and Chief Executive Officer of TWT and a Director
of the Company. Also includes 6,669,667 shares of Common Stock which have
been allocated and placed in trust for certain TWT key employees of which
Mr. Booth is the Trustee.
(6) Mr. Salinas is Vice President of Marketing of TWT and a Director of the
Company.
(7) Platina Technologies, Inc. is a Delaware corporation with offices at 5630
Fairdale, Suite 4, Houston, Texas 77057.
(8) Reinerman Holdings, Ltd. is a Bahamian company with a mailing address of
P.O. Box N624, Nassau, Bahamas.
(9) SMS Capital Services Corp. is a Texas corporation with offices at 5757
Westheimer, Suite 3-173, Houston, Texas 77057.
(10) Booth Family Trusts is located at 1001 Fannin, Suite 300, Houston, Texas
77002. These shares are voted by Ron Berry, Trustee of Booth Family
Trusts.
(11) Caspian, Ltd. is a Bahamian corporation with an address of P.O. Box N4178,
Nassau, Bahamas.
(12) Walter Cecchini's business address is 104 Woodlake Circle, Greenacres,
Florida 33463.
(13) Fred Griffin's business address is 999 Peachtree Street, N.E., Atlanta,
Georgia 30309.
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Messrs Lents, Booth, Salinas, Cecchini, Griffin and Platina Technologies,
Inc., Reinerman Holdings, Ltd., SMS Capital Services Corp., Caspian Ltd. and the
Booth Family Trusts, representing a total of 50,516,491 shares of Common Stock
or 58.4% of the outstanding Common Stock of the Company, have indicated their
intention to vote their shares of Common Stock for the proposed Amendment.
PROPOSAL TO CHANGE THE NAME OF THE COMPANY
The Board of Directors proposes to amend the Company's Certificate of
Incorporation to change its name from "International Standards Group, Limited"
to "Total World Telecommunications, Inc." The Company believes that the new name
will promote public recognition of the Company and reflect the transformation of
the Company's business focus from credit union auditing and related services and
real estate and mortgage brokerage services to telecommunications operations.
PROPOSAL TO EFFECT UP TO
A 1 FOR 15 REVERSE STOCK SPLIT
Generally
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The Board of Directors of the Company proposes to amend the Company's
Certificate of Incorporation to effect up to a one-for-fifteen reverse stock
split of the issued and outstanding Common Stock of the Company on the basis of
one (1) newly issued Common Stock ("New Common Stock") share for each fifteen
(15) shares (assuming maximum conversion of the Company's presently issued and
outstanding Common Stock (the "Reverse Stock Split"). The number of authorized
Common Stock would remain at 100,000,000 shares and, the par value of the Common
Stock would remain at $.00001 per share. No fractional share or scrip
representing a fractional share will be issued upon the Reverse Stock Split.
Fractional shares of .5 of New Common Stock will be rounded up to the next
highest share, and fractional interest of less than .5 of New Common Stock will
be reduced down to the next nearest share. Any stockholder whose aggregate
stockholding is reduced to a fraction of one (1) share will receive one (1)
share of New Common Stock. The Board of Directors reserves the right, without
further action by the stockholders, to lower the proportional amount of the
Reverse Stock Split from the level of one-for-fifteen or to not 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 their
sole discretion, determines that the Reverse Stock Split proportion should be
reduced or it is no longer in the best interests of the Company and its
stockholders.
The Company is currently authorized to issue 100,000,000 shares of Common
Stock, $.00001 par value, of which 86,514,596 (pre-split) shares were issued
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and outstanding at the close of business on the Record Date. In addition,
231,000 shares of Series M Preferred Stock and 35,000 shares of Series O
Preferred Stock are outstanding and are entitled to one vote per share.
Stockholders of the Company will not be entitled to dissenters' rights under the
Delaware Law in connection with this proposed amendment to the Certificate of
Incorporation.
As proposed, the Reverse Stock Split would reduce the number of the
Company's outstanding shares to approximately 5,767,640 shares of Common Stock
(assuming authorization of 1:15 reverse stock split). The proposed Reverse Stock
Split would not affect any stockholder's proportionate equity interest in the
Company, except to the extent that any fractional shares are rounded up to the
next whole number.
Reasons for the Proposed 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. There
can be no assurances, however, that the trading market for the Common Stock will
increase or improve, nor can the Board of Directors of the Company predict what
effect, if any, the Reverse Stock Split will have on the market price of the
Common Stock. 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 in the price per share
will stimulate interest in the Company's Common Stock by attracting both an
institutional and broader based market following, and thereby possibly promote
greater liquidity for the Company's 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.
The Company does not propose to modify the number of authorized shares of
Common Stock or Preferred Stock. It is estimated that after the Reverse Stock
Split approximately 94,232,360 authorized but unissued shares of New Common
Stock will remain, which shares will be available for future corporate purposes.
The Reverse Stock Split is not intended to change the proportionate equity
interests of the Company's stockholders; however, some incidental change can be
expected to occur in connection with the rounding up or down of fractional
shares (see "The Reverse Stock Split - Fractional Shares"). Voting rights and
other rights of the stockholders will not be altered by the Reverse Stock Split.
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Management of the Company is not aware of any present efforts of any
persons to accumulate Common Stock or to obtain control of the Company, and the
proposed Reverse Stock Split of Common 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 by enabling the Company to complete
targeted acquisitions within the telecommunications industry, and to be more
acceptable to the brokerage community and to investors generally.
Exchange of Stock Certificates
- ------------------------------
The Reverse Stock Split will be effected by the filing of an amendment to
the Company's Certificate of Incorporation with the Secretary of State of the
State of Delaware. The Company plans to file the Amendment as soon as
practicable. The Amendment will become effective at the close of business on the
date of filing, unless the Company specifies otherwise. The record date for the
Reverse Stock Split will be the effective date of the Amendment to the
Certificate of Incorporation (the "Reverse Stock Split Date") and the
stockholders will be notified on or about the Reverse Stock Split Date that the
Reverse Stock Split has been effected. 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.
As soon as practicable after the Reverse Stock Split, stockholders will be
notified and requested to surrender their certificates representing shares of
Common Stock to the Exchange Agent in exchange for certificates representing New
Common Stock. Beginning on the Reverse Stock Split 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 the number
representing the proportionate amount of the Reverse Stock Split, the Company
will issue one whole share for fractional interests as described below.
Fractional Shares
- -----------------
No scrip or fractional certificates will be issued in connection with the
Reverse Stock Split. Fractional shares of .5 of New Common Stock will be rounded
up to the next highest share, and fractional interest of less than .5 of New
Common Stock will be reduced down to the next nearest share. Any stockholder
whose aggregate stockholding is reduced to a fraction of one (1) share will
receive one (1) share of New Common Stock. No service charge will be payable by
stockholders in connection with the exchange of certificates, and the 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. The holding period of the shares of New Common Stock will include the
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<PAGE>
stockholders holding period for the shares of Common Stock exchanged therefor,
provided that the shares of Common Stock were held as a capital asset. The
adjusted basis of the shares of New Common Stock will be the same as the
adjusted basis of the Common Stock exchanged therefor, reduced by the basis
applicable to the receipt of one whole share in lieu of fractional shares
described below.
No Dissenters' Rights.
- ----------------------
Under Delaware law, stockholders are not entitled to dissenters' rights of
appraisal with respect to the Company's proposed amendment to the Company's
Certificate of Incorporation to effect the Reverse Stock Split.
The complete text of the proposed amendment to the Certificate of
Incorporation is set forth as Exhibit A to this Information Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Joseph L. Lents
--------------------------------------
Joseph L. Lents, President
Dated: September 26, 1996
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<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
------------------------
OF
--
CERTIFICATE OF INCORPORATION
----------------------------
INTERNATIONAL STANDARDS GROUP, LIMITED
--------------------------------------
International Standards Group, Limited (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation have adopted a
resolution proposing and declaring advisable the following amendments to the
Certificate of Incorporation of the Corporation:
RESOLVED, that the Certificate of Incorporation of
International Standards Group, Limited be amended by changing
Articles I and IV thereof, so that, as amended, said Articles I and
IV shall be and read as follows:
"ARTICLE I
NAME
The name of the corporation is Total World Telecommunications,
Inc.
ARTICLE IV
SHARES OF STOCK
The total number of shares of capital stock which the
Corporation shall have authority to issue is as follows:
100,000,000 shares of Common Stock, $.00001
par value per share.
10,000,000 shares of Preferred Stock, $.00001
par value per share.
The Board of Directors is authorized, subject to limitations
prescribed by law and the provision of this Article IV, to provide
for the issuance of the shares of Preferred Stock in series, and to
establish from time to time the number of shares to be included in
each series, and to fix the designation, powers, preferences and
relative, participating, optional or other special rights of the
<PAGE>
shares of each series and the qualifications, limitations or
restrictions thereof.
Effective as of the effective date of this Amendment, each 15
shares of Common Stock, $.00001 par value per share, outstanding
before the effective date of the Amendment will be changed into one
(1) fully paid and nonassessable share of Common Stock $.00001 par
value per share; and that after the effective date of the Amendment
each holder of record of one or more certificates representing
shares of the old Common Stock shall be entitled to receive one or
more certificates representing the proportionate number of shares of
new Common Stock on surrender of a stockholder's old certificates
for cancellation. If a stockholder shall be entitled to a number of
shares of new Common Stock which is not a whole number, then the
number of shares of new Common Stock issued to the Stockholder shall
be rounded upward to the nearest whole number. The authorized number
of shares of Common Stock and of Preferred Stock shall not be
affected by this Amendment.
The authority of the Board with respect to each series of
Preferred Stock shall include, but not be limited to, determination
of the following:
The number of shares constituting the series and the
distinctive designation of the series;
The dividend rate on the shares of the series, whether
dividends shall be cumulative, and, if so, from which
date or dates, and the relative rights or priority, if
any, or payments of dividends on shares of the series;
Whether the series will have voting rights, and, if so,
the terms of the voting rights;
Whether the series will have conversion privileges, and,
if so, the terms and conditions of the conversion,
including provision for adjustment of the conversion
rate in such events as the Board of Directors
determines;
Whether or not the shares of the series will be
redeemable, and, if so, the terms and conditions of
redemption, including the date or dates upon or after
which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary
under different conditions and at different redemption
dates;
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Whether the series shall have a sinking fund for the
redemption or purchase of shares of the series, and, if
so, the terms and amount of the sinking fund;
The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, and the relative rights
or priority, if any, of payment of shares of the series;
and
Any other relative terms, rights, preferences and
limitations, if any, of the series as the Board of
Directors may lawfully fix under the laws of the State
of Delaware as in effect at the time of the creation of
such series."
SECOND: That in lieu of a meeting and vote of stockholders, the holders of
outstanding shares of Common 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 have given
their written consent to said amendment in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendments were duly adopted in accordance with
the applicable provisions of Section 242 and Section 228 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Joseph L. Lents, its President, and attested by Loretta Murphy, its
Secretary this _______ day of September, 1996.
INTERNATIONAL STANDARDS
GROUP, LIMITED
(SEAL) By:
---------------------------
Joseph L. Lents, President
ATTEST:
By:
-----------------------------
Loretta A. Murphy, Secretary
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