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SCHEDULE 14C INFORMATION
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
MARK FOUR RESOURCES, INC.
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(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ $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 (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 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:
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PRELIMINARY COPY
MARK FOUR RESOURCES, INC.
45 Rockefeller Plaza
SUITE 2000
New York, NY 10111
(212) 957-3956
INFORMATION STATEMENT
This Information Statement is furnished to the holders of shares of common
stock, par value $.001 per share (the "Common Stock"), of Mark Four Resources,
Inc., a Delaware corporation (the "Company") in connection with the adoption by
the Board of Directors of the Company of resolutions on May 1, 1996, which were
subsequently approved by the written consent of certain stockholders of the
Company representing the holders of a majority of the issued and outstanding
shares of Common Stock of the Company, which resolutions authorized certain
amendments to the Company's Certificate of Incorporation to provide for (i) an
increase in the number of authorized Common Stock from 35,000,000 to
100,000,000; (ii) a one for three reverse stock split; and (iii) a change of the
Company's name to "Ecology Pure Air International, Inc."
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Notice of the above actions is hereby given in accordance with the
provisions of Section 228 of the General Corporation Law of the State of
Delaware. For additional information concerning the Company, refer to the
Company's Form 10-KSB for the year ended July 31, 1995, Form 10-QSB for the
interim period ended October 31, 1995, Form 10-QSB for the interim period ended
January 31, 1996 and Current Reports on Forms 8-K and 8-K/A dated November 17,
1995 and filed on November 27, 1995 and April 24, 1996, respectively
(collectively, the "SEC Reports"). Copies of the SEC Reports will be provided to
any stockholder upon written request to the Company at 45 Rockefeller Plaza,
Suite 2000, New York, New York 10111. The Company's SEC Reports are not,
however, to be considered part of this Information Statement or any soliciting
material of the Company.
BACKGROUND OF COMPANY AND PURPOSE FOR THIS INFORMATION STATEMENT
From its inception in 1988 through November 1995, the Company engaged in no
active business operations other than to seek to enter into strategic business
combinations that would capitalize on its status as a public company. The
Company commenced operations when in November 1995 it secured and entered into
agreements regarding the acquisition of the worldwide rights to manufacture,
sell and distribute the Combustion Efficiency Management Catalyst (the "C.E.M.
Catalyst") - a pre-combustion device intended for the purpose of reducing the
emission of pollutants in automobiles, motorcycles, lawn mowers and other
vehicles and machinery, all as more fully described in the SEC Reports.
Acquisition of the Worldwide Marketing Rights (Excluding Canada) to the
C.E.M. Catalyst
On November 17, 1995, the Company acquired the worldwide rights (excluding
Canada) to market, sell and distribute the C.E.M. Catalyst from a group of
eleven individuals (such group, which includes members of the Company's current
management as more fully described below, to be collectively referred to herein
as the "EPA Founders"), who had in turn acquired such rights from Rotello
Technology and Marketing, Inc. ("Rotello"), the original developer of these
technologies.
The Company purchased these rights through the issuance to the EPA Founders
of an aggregate of 3,000,000 shares of Series A Convertible Voting Preferred
Stock (the "Preferred Shares") and Common Stock Purchase Warrants (the
"Warrants") to acquire 18,000,000 Shares of Common Stock. The Company also
issued to a group of five investment banking consultants who were instrumental
in arranging the transaction (collectively referred to herein as the
"Consultants") an aggregate of 12,000,000 Shares of Common Stock, 600,000
Preferred Shares and Warrants to acquire an additional 6,000,000 Shares of
Common Stock.
Each Preferred Share is convertible into thirty (30) Shares of Common Stock
in accordance with a Certificate of Designation of Terms of Preferred Stock
approved by the Board of Directors of the Company and filed with the Secretary
of State of the State of Delaware on November 15, 1995. The Warrants are
exercisable at U.S. $3.334 per Share on or before September 30, 1997.
In addition, the Company also agreed to pay a three and one half percent
(3-1/2%) royalty on all sales of the C.E.M. Catalyst to Rotello in perpetuity.
Acquisition of the C.E.M. Catalyst Manufacturing Rights
Additionally, on November 17, 1995, the Company acquired the exclusive
right to manufacture the C.E.M. Catalyst by acquiring all of the outstanding
shares of capital stock of E.P.A. Manufacturing, Inc. (f/k/a Ecology Pure Air
International, Inc.), an Indiana corporation ("EPA Manufacturing"). Prior to
November 17, 1995, EPA Manufacturing had been granted exclusive manufacturing
rights to the C.E.M. Catalyst by Rotello.
The acquisition of these rights was accomplished through a Stock Purchase
Agreement by and among the Company, Teodosio Pangia and Gianni D'Alessandro
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(collectively, the stockholders of EPA Manufacturing) (the "Stock Purchase
Agreement"). In accordance with the Stock Purchase Agreement, the Company
acquired all of the outstanding shares of stock of EPA Manufacturing in exchange
for 600,000 Common Shares of the Company. Messrs. Pangia and D'Alessandro, being
the sole stockholders of EPA Manufacturing, each received 300,000 Common Shares
as a result of this transaction. Messrs. Pangia and D'Alessandro are both
currently principal stockholders, officers and directors of the Company.
Agreement to Acquire Canadian Marketing Rights to the C.E.M. Catalyst
The Company completed its business transactions with regard to the C.E.M.
Catalyst when, pursuant to an Arrangement Agreement dated November 17, 1995, it
agreed to acquire the rights to market, sell and distribute the C.E.M. Catalyst
in Canada by agreeing to acquire all of the outstanding shares of capital stock
of E.P.A. Enterprises Inc., a British Columbia corporation ("Enterprises").
Prior to November 17, 1995 a subsidiary of Enterprises owned the exclusive right
to market, sell and distribute the C.E.M. Catalyst in Canada.
The Arrangement Agreement contemplates the acquisition of Enterprises in
exchange for 12,411,672 Shares of Common Stock and Warrants to acquire an
additional 12,411,672 Shares of Common Stock of the Company.
The consummation of the transactions contemplated by the Arrangement
Agreement are subject to obtaining (i) the approval of the shareholders of
Enterprises, which approval was obtained on February 23, 1996 and (ii) the
approval of the British Columbia Supreme Court as to the fairness of the entire
transaction. This transaction was presented to the British Columbia Supreme
Court on May 6, 1996 which reserved ruling to a later date. Although management
of the Company is optimistic that such approval will be forthcoming, there can
be no assurance to this effect. The approval of this transaction was conditioned
upon the Company increasing its authorized common stock to a number sufficient
to encompass the issuance of the shares and warrants under the Arrangement
Agreement. Upon consummation of the transactions as contemplated by the
Arrangement Agreement, Enterprises and EPA Systems will become wholly-owned
subsidiaries of the Company.
Purpose of Information Statement
A. Increase of Authorized Common Stock
In conjunction with the acquisition of the worldwide rights (excluding
Canada) to the C.E.M. Catalyst, the Company has issued Preferred Shares which
convert into 108,000,000 shares of Common Stock and Warrants which may upon
exercise require the issuance of 24,000,000 additional shares of Common Stock.
The Company presently has 25,100,000 shares of Common Stock outstanding.
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The Company has insufficient authorized Common Stock to allow for the
exercise and conversion of the various Warrants and Preferred Shares issued and
to be issued in connection with these transactions. Accordingly, the Board of
Directors has resolved to increase its authorized Common Stock from 35,000,000
to 100,000,000 and has resolved to effectuate a reverse-split of its outstanding
Common Stock at the rate of 1 for 3.
B. Reverse Stock Split
There is currently no active trading market for the shares of Common Stock
of the Company. The Shares are presently only eligible for trading on the
Over-The-Counter Market through the use of "pink sheet" quotations. This form of
trading is not likely to provide any material degree of liquidity for the
Shares.
Through the reverse stock split the Company hopes to reduce its number of
outstanding shares to a level that initially will encourage the development of a
trading market; and thereafter, facilitate trading at prices that may be
sufficient to secure a listing on The NASDAQ Stock Market (Small-Cap Index). The
development of a trading market and the prices at which shares trade are
generally outside of the control of the Company. Therefore, there can be no
assurances that the Company's objectives will be achieved by the reverse stock
split.
An initial listing of securities of a public company on The NASDAQ Stock
Market is subject to compliance with a number of objective and other standards.
These include, among other things, establishing in periodic reports filed with
the Securities and Exchange Commission under the Securities Exchange Act of 1934
total assets of over $4 million and stockholders' equity of over $2 million. The
public trading price of an eligible security must exceed $3.
Management hopes that the reverse stock split will initially encourage a
trading market, and thereafter, justify a trading market in excess of $3. By
virtue of recent financing transactions as more fully described in the SEC
Reports, Management believes that it has otherwise achieved the necessary level
of total assets and stockholders' equity to satisfy the NASDAQ initial listing
standards.
Management has established its objective of anticipated trading price based
merely upon its expectation of future results of operations and its analysis of
the trading prices of other publicly traded companies in similar industries and
stages of development. These objectives were not established with the benefit of
any formal valuations, appraisals or investment banking analysis. Thus, there
can be no assurances that a trading market will develop, or if it develops, the
price at which its shares may trade.
Pursuant to the terms of the reverse stock split, as of the date of filing
of the Certificate of Amendment to the Company's Certificate of Incorporation
with the Delaware Secretary of State (the "Effective Date") each three shares of
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the Company's currently outstanding shares of common stock, (the "Old Common
Stock") will be exchanged for one post-split share of the Company's Common Stock
(the "New Common Stock") (the "Reverse Stock Split"). If such exchange results
in a fractional share, then the Company shall issue such additional fraction of
a share as is necessary to increase the fractional share to a full share.
The New Common Stock will not be different from the Old Common Stock in
that the holders of the New Common Stock will have the same relative rights
following the Effective Date as they had prior thereto.
General Effect of Reverse Stock Split and Recapitalization
The effect of the Reverse Stock Split and Recapitalization on the aggregate
number of shares of the Company's common Stock at May 8, 1996, is as follows:
Prior to After
Proposed Reverse Proposed Reverse
Number of Shares Stock Split Stock Split
- ---------------- ----------- -----------
Common Stock
Authorized 35,000,000 100,000,000
Outstanding(1) 25,100,000 8,366,667
Available for Issuance 9,990,000 91,633,333
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(1) Does not include the shares of Common Stock that may be issuable upon
exercise of the Preferred Shares, Warrants and Options.
Exchange of Stock Certificates
As soon as practicable after the Effective Date, the stockholders will be
notified and requested to surrender their certificates representing shares of
Common Stock to the Company's transfer agent so that certificates representing
the appropriate number of shares of New Common Stock may be issued in exchange
therefor.
No scrip or fractional certificates will be issued in connection with the
proposed Reverse Stock Split. Rather, the Company will issue an additional
fraction of a share as is necessary to increase the fractional share to a full
share.
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Federal Income Tax Consequences
A summary of the federal income tax consequences of the proposed Reverse
Stock Split is set forth below. The following discussion is based upon present
federal tax law and does not purport to be a complete discussion of such
consequences. ACCORDINGLY, STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS FOR MORE DETAILED INFORMATION REGARDING THE EFFECTS OF THE PROPOSED
REVERSE STOCK SPLIT ON THEIR INDIVIDUAL TAX STATUS.
1. The proposed Reverse Stock Split will not be a taxable transaction to
the Company.
2. A stockholder will not recognize any gain or loss as result of the
Reverse Stock Split.
3. The aggregate tax basis of the share of New Common Stock received by
the stockholder pursuant to the Reverse Stock Split will equal the
aggregate tax basis of the stockholder's Old Common Stock prior to the Effective
Date of the Reverse Stock Split (which basis, depending upon the tax treatment
described in paragraph 2 above, may be (i) reduced by any basis allocated to a
fractional share redeemed by the Company or (ii) reduced by the amount of
proceeds representing a return of capital). The holding period of the New Common
Stock received by the stockholder will include the holding period of the
stockholder's Old Common Stock before the Reverse Stock Split, provided the
shares of Old Common Stock were capital assets in the hands of such stockholder.
C. Change of Corporate Name
Following the series of transactions described above, the Company now has
the worldwide rights to manufacture, sell and distribute the C.E.M. Catalyst. As
a result of these acquisitions, and in light of the Company not conducting any
previous business activities prior to such acquisitions, the Board of Directors
has resolved to change the name of the Company to "Ecology Pure Air
International, Inc." to reflect the principal business operations of the
Company.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the securities
holdings of all persons which the Company, by virtue of filings with the
Securities and Exchange Commission, has reason to believe may be deemed the
beneficial owners of more than 5% of the Company's outstanding Common Stock as
of April 8, 1996. Also set forth in the table is the beneficial ownership of all
of the Company's outstanding Common Stock as of such date by all officers and
directors, individually and as a group.
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Amount of Percentage of
Name and Address Beneficial Ownership(1) Beneficial Ownership
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Teodosio V. Pangia 46,725,000(2) 26.6%
45 Rockefeller Plaza
Suite 2000
New York, NY 10111
Gianni D'Alessandro 45,600,000(3) 25.9%
45 Rockefeller Plaza
Suite 2000
New York, NY 10111
Paul Mazza 13,800,000(4) 7.8%
45 Rockefeller Plaza
Suite 2000
New York, NY 10111
John Howard 5,400,000(5) 3.1%
45 Rockefeller Plaza
Suite 2000
New York, NY 10111
Stephen O'Farrell 600,000(6) *
45 Rockefeller Plaza
Suite 2000
New York, NY 10111
Tunku Mudzaffar bin 300,000(7) *
Tunku Mustapha
45 Rockefeller Plaza
Suite 2000
New York, NY 10111
All officers and
directors as a 112,575,000 63.7%
group (seven persons)
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1 Includes all shares issuable upon conversion of Preferred Shares and
exercise of outstanding Options and Warrants.
2 Includes 1,050,000 Preferred Shares, Warrants to acquire 6,300,000 Common
Shares and Options to acquire 7,550,000 Shares under Mr. Pangia's
Employment Agreement.
3 Includes 1,050,000 Preferred Shares, Warrants to acquire 6,300,000 Common
Shares and Options to acquire 7,500,000 Shares under Mr. D'Alessandro's
Employment Agreement.
4 Includes 300,000 Preferred Shares, Warrants to acquire 1,800,000 Common
Shares and Options to acquire 3,000,000 Shares under Mr. Mazza's Employment
Agreement.
5 Includes 150,000 Preferred Shares and Warrants to acquire 900,000 Common
Shares.
6 Includes Options to acquire 600,000 Common Shares under Mr. O'Farrell's
Consulting Agreement, of which, Options to acquire 450,000 Common Shares
are performance related.
7 Includes Options to acquire 300,000 Common Shares.
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AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
In order to amend the Company's Certificate of Incorporation, the Board of
Directors and the holders of a majority of the outstanding shares of the Company
must approve the amendments hereinafter described.
The Board of Directors adopted resolutions by written consent dated May 1,
1996, approving (i) an increase in the authorized Common Stock from 35,000,000
to 100,000,000; (ii) a one for three reverse stock split; and (iii) a change of
the Company's name to "Ecology Pure Air International, Inc." (the "Amendments").
On May 8, 1996, stockholders representing approximately 75% of the
outstanding voting stock of the Company approved the Amendments.
RESOLUTIONS OF THE SPECIFIC AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
The following paragraphs represent the specific Resolutions as adopted by
the Board of Directors and approved by a majority of the holders of the
outstanding voting stock of the Company:
"RESOLVED, that the Board of Directors of this Corporation deem it
advisable and in the best interest of the Corporation, subject to approval by a
majority of the stockholders to amend the Certificate of Incorporation of the
Corporation to (i) increase the authorized Common Stock from 35,000,000 to
100,000,000; and to (ii) change the name of the Corporation to "Ecology Pure Air
International, Inc."; and
RESOLVED, that Corporation is authorized to effectuate a three for one
reverse stock split of its outstanding Common Stock."
Effective Date
The share increase, reverse split and name changes will be effected by
means of filing Amendment to the Certificate of Incorporation with the Delaware
Secretary of State. Pursuant to Rule 14c-2 under the Exchange Act, such filing
or the effective date designated in such filing will not occur until a date at
least twenty (20) days after the date on which this Information Statement has
been mailed to the shareholders. The Company anticipates that the actions
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contemplated by this Information Statement will be effected on or about the
close of business on June __, 1996.
BY ORDER OF THE BOARD OF DIRECTORS
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Gianni D'Alessandro, President
Dated: May __, 1996
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