SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
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
LIUSKI INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
<PAGE>
P R E L I M I N A R Y C O P Y
LIUSKI INTERNATIONAL, INC.
6585 Crescent Drive
Norcross, Georgia 30071
INFORMATION STATEMENT
(Dated June , 1998)
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THE AMENDMENT, DEFINED BELOW, HAS ALREADY BEEN APPROVED BY WRITTEN
CONSENT OF MR. DUKE LIAO WHO OWNS A MAJORITY OF THE COMPANY'S OUTSTANDING SHARES
OF COMMON STOCK. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT NECESSARY.
GENERAL
This Information Statement is first being furnished on or about June ,
1998 to holders of record as of the close of business on June 3, 1998 of the
common stock, $.01 par value per share ("Common Stock"), of Liuski
International, Inc., a Delaware corporation (the "Company"), in connection with
the amendment (the "Amendment") of the Company's Certificate of Incorporation,
as amended (the "Certificate of Incorporation"), (a) to effect a two-for-five
reverse split of the issued and outstanding shares of Common Stock, and (b) to
decrease the total number of shares of Common Stock which the Company has
authority to issue from 20,000,000 to 8,000,000.
The Board of Directors of the Company (the "Board") has approved, and Mr.
Duke (Chih-Hung) Liao ("Liao"), the Chairman, President and Chief Executive
Officer of the Company, who owned 8,929,053 shares (approximately 77.5%) of the
11,525,958 shares of Common Stock outstanding as of May 28, 1998, has consented
in writing to, the Amendment. Such approval and consent are sufficient under
Section 228 of the Delaware General Corporation Law and the Company's By-Laws to
approve the Amendment. Accordingly, the Amendment will not be submitted to the
other Company stockholders for a vote and this Information Statement is being
furnished to stockholders solely to provide them with certain information
concerning the Amendment in accordance with the requirements of Delaware law and
the Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder, including particularly Regulation 14C.
The Amendment will be effective on the date that a Certificate of Amendment
of the Certificate of Incorporation with respect to the Amendment is filed with
the Secretary of State of the State of Delaware. This filing is expected to
occur on July 1, 1998.
The principal executive offices of the Company are located at 6585 Crescent
Drive, Norcross, Georgia 30071, and the Company's telephone number is (770)
447-9454.
<PAGE>
AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
TO EFFECT A 2-FOR-5 REVERSE SPLIT OF THE OUTSTANDING COMMON STOCK AND
TO DECREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK FROM 20,000,000 TO 8,000,000
The Board has approved the Amendment to effect a two-for-five reverse split
("Reverse Split") of the issued and outstanding shares of Common Stock, par
value $.01 per share ("Existing Common"), and to decrease the total number of
shares of Common Stock which the Company has authority to issue from 20,000,000
to 8,000,000. A copy of the Certificate of Amendment effecting the Reverse
Split, in substantially the form to be filed with the Department of State of
Delaware, is provided below. Liao, the majority stockholder of the Company as of
the date of this Information Statement, has consented to the Reverse Split and
to the Amendment, which is expected to become effective on July 1, 1998 (the
"Effective Date"). Pursuant to the Reverse Split, each share of Existing Common
issued and outstanding immediately prior to the Effective Date will be
reclassified as, and exchanged for, two-fifths of one share of newly issued
Common Stock, par value $.01 ("New Common").
The Reverse Split will not materially affect the proportionate equity
interest in the Company of any holder of Existing Common or the relative rights,
preferences, privileges or priorities of any such stockholder. In addition, the
approximately 309,200 shares issuable upon exercise of the Company's outstanding
options, and the exercise price per share, will be proportionately adjusted, and
the par value per share of the Common Stock will not be changed.
Purpose and Effect of the Reverse Split
The Reverse Split is proposed by the Board in response to notification by
The Nasdaq Stock Market, Inc. ("Nasdaq") that the Existing Common is subject to
being de-listed from the Nasdaq National Market ("National Market") because
Nasdaq's per share minimum closing bid price of $1.00 has not been sustained for
the Existing Common for at least ten consecutive trading days and the Company
fails to meet the minimum market value of public float of $5,000,000. Nasdaq
defines public float as the nubmer of shares of Common Stock outstanding which
is not owned by officers, directors or 10% stockholders of the Company. On May
21, 1998, the closing bid price of the Existing Common was $0.9375 per share,
the Company's public float was approximately 2,567,000 shares and the market
value of such public float was approximately $2,406,000 based upon such closing
bid price.
In the event the company is not able to meet the maintenance requirements
of the National Market, the Company intends to make application for the transfer
of the Common Stock listing from the National Market to The Nasdaq SmallCap
Market (the "SmallCap Market") whose minimum requirements for entry applicable
to the Company are, among others, $1.00 per share bid price and market value of
public float of $1,000,000. While the Company currently does not meet the $1.00
minimum bid price requirement of the SmallCap Market, the Reverse Split should
positively affect the trading price per share of the New Common. The Company
believes that it satisfies all oth er SmallCap Market listing criteria. The
Board believes that maintaining a Nasdaq listing is important to the Company and
its stockholders and that it is in the best interest of the Company and its
stockholders that the Reverse Split be effected in order to permit the Company
to do so. However, there can be no assurance that the Company will meet in the
future all of the entry standards for the SmallCap Market or that Nasdaq will
accept an application for listing the New Common on the SmallCap Market.
2
<PAGE>
An additional effect of the Reverse Split will be to decrease the number of
issued and outstanding shares of Common Stock from 11,525,958 shares of Existing
Common as of the date of this Information Statement to approximately 4,610,300
shares of New Common. No assurance can be given, however, that the market price
of the New Common will rise in proportion to the reduction in the number of
outstanding shares resulting from the Reverse Split.
The Company does not anticipate any change in the Company's status as a
reporting company for federal securities law purposes as a result of the Reverse
Split.
The New Common issued pursuant to the Reverse Split will be fully paid and
non-assessable. All shares of New Common will have the same par value, voting
rights and other rights as shares of the Existing Common have. Stockholders of
the Company do not have preemptive rights to acquire additional shares of Common
Stock which may be issued. In addition, the filing of the Amendment will lower
the number of currently authorized shares of the Common Stock from 20,000,000 to
8,000,000. The Certificate of Incorporation will continue to authorize
1,000,000 shares of preferred stock, par value $.01, of which none are currently
issued or outstanding. The Company has no definitive plans or commitments to
issue additional shares of Common Stock.
Stock Certificates and Fractional Shares
The Reverse Split will occur on the Effective Date without any further
action on the part of stockholders of the Company and without regard to the date
or dates on which certificates representing shares of Existing Common are
actually surrendered by each holder thereof for certificates representing the
number of shares of the New Common which each such stockholder is entitled to
receive as a consequence of the Reverse Split. After the Effective Date of the
Reverse Split, the certificates representing shares of Existing Common will be
deemed to represent two-fifths the number of shares of New Common. Certificates
representing shares of New Common will be issued in due course as old
certificates are tendered for exchange or transfer to Continental Stock Transfer
& Trust Company, 2 Broadway, New York, NY 10004, Attention: Reorganizations (the
"Exchange Agent" or "Transfer Agent"), telephone number: 212-509-4000, extension
535.
No fractional shares of New Common will be issued and, in lieu thereof,
stockholders holding a number of shares of Existing Common not evenly divisible
by five, upon surrender of their old certificates, will receive cash in lieu of
fractional shares of New Common. Such cash payment will not be made until a
stockholder's certificates of Existing Common are presented to the Exchange
Agent. The price payable by the Company for those shares of Existing Common
which are not divisible by five will be equal to the product of (a) the number
of such shares which cannot be exchanged for a whole number of shares of New
Common and (b) the average of the closing price of one share of Existing Common
as reported on the National Market for the 10 business days immediately
preceding the Effective Date of the Reverse Split for which transactions in the
Existing Common are reported.
Source of Funds; Number of Holders
The funds required to purchase the fractional shares are available and will
be paid from the current cash reserves of the Company. The Company cannot
predict with certainty the number of fractional shares or the total amount that
the Company will be required to pay for fractional share interests. However, it
is not anticipated that the funds necessary to effect the cancellation of
fractional shares will be material.
3
<PAGE>
As of April 6, 1998, there were approximately 1,400 beneficial holders of
Existing Common. The Company does not anticipate that, as a result of the
Reverse Split, the number of holders of record or beneficial owners of Existing
Common or New Common will change significantly.
Exchange of Stock Certificates
On or around the Effective Date, the Company will send to each stockholder
of record as of the Effective Date a transmittal form (the "Transmittal Form")
that each such stockholder of record should use to transmit certificates
representing shares of Existing Common ("Old Certificates") to the Exchange
Agent for exchange or transfer. The Transmittal Form contains instructions for
the surrender of Old Certificates to the Exchange Agent in exchange for
certificates representing the appropriate number of whole shares in New Common.
No new certificates will be issued to a stockholder until such stockholder has
surrendered all Old Certificates together with a properly completed and executed
Transmittal Form to the Exchange Agent.
Upon proper completion and execution of the Transmittal Form and its return
to the Exchange Agent together with all of a stockholder's Old Certificates
and/or an Affidavit of Loss for any lost or destroyed certificates, as
applicable, that stockholder will receive a new certificate or certificates
representing the number of whole shares of New Common into which the shares of
Common Stock represented by the Old Certificates are being converted as a result
of the Reverse Split. Until surrendered to the Exchange Agent, Old Certificates
retained by stockholders will be deemed for all purposes, including voting and
payment of dividends, if any, to represent the number of whole shares of New
Common to which such stockholders are entitled as a result of the Reverse Split.
Stockholders should not send their Old Certificates to the Exchange Agent until
after the Effective Date. Shares of Existing Common surrendered after the
Effective Date will be replaced by certificates representing shares of New
Common as soon as practicable after such surrender.
Certificates representing shares of Existing Common which contain a
restrictive legend will be exchanged for New Common with the same restrictive
legend. As applicable, the time period during which a stockholder has held the
Existing Common will be included in the time period during which such
stockholder actually holds the New Common received in exchange for such Existing
Common for the purposes of determining the term of the restrictive period
applicable to the New Common.
Federal Income Tax Consequences
Except as described below with respect to cash received in lieu of
fractional share interests, the receipt of New Common in the Reverse Split
should not result in any taxable gain or loss to stockholders for federal income
tax purposes. The tax basis of New Common received as a result of the Reverse
Split (when added to the basis for any fractional share interests to which a
stockholder is entitled) will be equal, in the aggregate, to the basis of the
Existing Common exchanged for New Common. The per share tax basis of the New
Common is based on the tax basis of the Existing Common for which the New Common
is exchanged. For purposes of determining whether short-term or long-term
capital gains treatment will be applied to a stockholder's disposition of New
Common subsequent to the Reverse Split, a stockholder's holding period for the
shares of Existing Common will be included in the holding period for the New
Common received as a result of the Reverse Split. A stockholder who receives
cash in lieu of fractional shares of New Common will be treated as first
receiving such fractional shares and then receiving cash as payment in exchange
for such fractional shares of New Common and, except for dealers, will recognize
capital gain or loss in an amount equal to the difference between the amount of
cash received and the adjusted basis of such fractional shares.
THE DISCUSSION SET FORTH ABOVE CONCERNING CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE REVERSE SPLIT IS INCLUDED HEREIN FOR GENERAL INFORMATION
ONLY. ALL STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS AS TO ANY
FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES APPLICABLE TO THEM WHICH COULD
RESULT FROM THE REVERSE SPLIT.
Effectiveness
The Company reserves the right, upon notice to stockholders, to abandon or
modify the proposed Amendment and the Reverse Split at any time prior to the
filing of the Amendment upon consent of the Board and the holders of a majority
of the Existing Common then issued and outstanding.
4
<PAGE>
Amendment of Certificate of Incorporation
The first sentence of Article FOURTH of the Certificate of Incorporation
will be amended by deleting such sentence and adding the following paragraphs in
lieu thereof:
"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Nine Million (9,000,000) which
are divided into One Million (1,000,000) shares of Preferred Stock, par
value $.01 per share, and Eight Million (8,000,000) shares of Common Stock,
par value $.01 per share.
"On the effective date (the "Effective Date") of this Certificate of
Amendment, all outstanding shares of Common Stock of the Corporation shall
be automatically combined at the rate of two-for-five (the "Reverse Split")
without the necessity of any further action on the part of the holders
thereof or the Corporation, provided, however, that the Corporation shall,
through its transfer agent, exchange certificates representing Common Stock
outstanding immediately prior to the Reverse Split (the "Existing Common")
into new certificates representing the appropriate number of shares of
Common Stock resulting from the combination ("New Common"). No fractional
shares, but only whole shares of New Common, shall be issued to any holder
of any number of shares which, when divided by five (5), does not result in
a whole number. In lieu of fractional shares, the Corporation has arranged
for its transfer agent (the "Exchange Agent") to remit payment therefor on
the following terms and conditions:
"The price payable by the Corporation for fractional shares of Existing
Common, certificates for which are surrendered to the Exchange Agent in
connection with the Reverse Split, shall be equal to the product of (a) the
number of such shares which cannot be exchanged for a whole number of
shares of New Common and (b) the average of the closing price of one share
of Existing Common as reported on The Nasdaq National Market for the 10
business days immediately preceding the Effective Date for which
transactions in the Existing Common are reported. The par value of the
Common Stock shall remain as otherwise provided in Article FOURTH of this
Certificate of Incorporation and shall not be modified as a result of the
Reverse Split. From and after the Effective Date, certificates representing
shares of Existing Common shall represent only the right of the holders
thereof to receive New Common and payment as provided herein for any
fractional shares of Existing Common.
"From and after the Effective Date, the term "New Common" as used in this
Article FOURTH shall mean Common Stock as provided in this Certificate of
Incorporation."
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of May 28, 1998
pertaining to the beneficial ownership of the Common Stock by (i) persons known
to the Company to own 5% or more of the outstanding Common Stock, (ii) each
director of the Company, (iii) each executive officer of the Company and (iv)
directors and executive officers of the Company as a group. Each such person has
sole voting and investment powers with respect to his shares. This information
has been obtained from the Company's records, or from information furnished
directly by the individual to the Company.
Number of Shares Percentage of
Name of Beneficial Owner Beneficially Owned Outstanding Shares
Duke Liao 8,929,053 77.5%
Edwin Feinberg 13,000(1) *
Martin Tsai 57,512(1)(2) *
Kenny Liu 12,500(1)(2) *
All directors and executive officers
as a group
(4 individuals) 9,012,065(1)(2) 77.8%
--------- -----
- ------------------------------------------
* Less than 1%
(1) Represents or includes shares subject to stock options granted by the
Company as follows: Mr. Feinberg, 13,000 shares; Mr. Tsai, 27,666 shares;
and Mr. K. Liu, 12,500.
(2) Excludes shares of Common Stock that are subject to options which are not
currently exercisable as follows: Mr. Tsai, 8,334 shares; and Mr. K. Liu,
2,500 shares.
By Order of the Board of Directors,
Martin Tsai
Vice President-Finance and
Dated: June , 1998 Chief Financial Officer
6
