PROXY STATEMENT
PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 40.14a-11(c) or
Section 240.14a-12
AURORA ACQUISITIONS, INC.
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(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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>
AURORA ACQUISITIONS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1999
Notice is hereby given that a Meeting of the Shareholders (the "Meeting")
of Aurora Acquisitions, Inc., a Colorado corporation (the "Company"), will be
held at 2:00 p.m. on May 20, 1999, at the offices of Schlueter & Associates,
P.C., 1050 Seventeenth Street, Suite 1700, Denver, Colorado 80265, and any
adjournments or postponements thereof (the "Annual Meeting") for the following
purposes:
1. To elect the following three (3) persons to serve as directors of the
Corporation until the next Annual Meeting of Shareholders and
thereafter until their successors shall have been elected and shall
qualify: Michael J. DeLaney, David J. Gregarek, and Derrin R. Smith.
2. To authorize the Board of Directors to effect a 1-for-3 reverse stock
split (the "Reverse Stock Split") of the Company's outstanding Common
Stock, with such post-split shares of Common Stock being referred to
herein as the "New Common Stock" and to amend (the "Amendment") the
Company's Articles of Incorporation, as amended, with respect thereto.
3. To consider and act upon such other matters as may properly come
before the Meeting or any adjournments thereof.
Only shareholders of record at the close of business on April 26, 1999,
shall be entitled to notice of and to vote at the Meeting or any adjournments
thereof. All shareholders are cordially invited to attend the Meeting in person.
By Order of the Board of Directors
---------------------------------------
Michael J. DeLaney, President
April 29, 1999
Denver, Colorado
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES OF COMMON
STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED
FOR THAT PURPOSE.
<PAGE>
AURORA ACQUISITIONS, INC.
1050 Seventeenth Street, Suite 1700
Denver, Colorado 80265
PROXY STATEMENT
Dated April 29, 1999
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1999
GENERAL
-------
This Proxy Statement is being furnished to the shareholders of Aurora
Acquistions, Inc., a Colorado corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company (the "Board
of Directors") from holders (the "Shareholders") of outstanding shares of common
stock, $.01 par value, of the Company (the "Common Stock"), for use at the
Annual Meeting of the Shareholders to be held at 2:00 p.m. on May 20, 1999, at
the offices of Schlueter & Associates, P.C., 1050 Seventeenth Street, Suite
1700, Denver, Colorado 80265, and any adjournments or postponements thereof (the
"Annual Meeting"). This Proxy Statement, Notice of Annual Meeting of
Shareholders and the accompanying Proxy Card are first being mailed to
shareholders on or about April 29, 1999.
VOTING SECURITIES AND VOTE REQUIRED
-----------------------------------
Only Shareholders of record at the close of business on April 26, 1999,
(the "Record Date") are entitled to notice of and to vote the shares of Common
Stock, $.01 par value, of the Company held by them on such date at the Meeting
or any and all adjournments thereof. As of the Record Date, 3,060,000 shares of
Common Stock were outstanding. There was no other class of voting securities
outstanding at that date.
Each share of Common Stock held by a Shareholder entitles such Shareholder
to one vote on each matter that is voted upon at the Meeting or any adjournments
thereof.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Meeting. Assuming that a quorum is present, the affirmative vote of the holders
of a majority of the shares of Common Stock outstanding will be required to
authorize the Board of Directors to effect the Reverse Stock Split and to amend
(the "Amendment") the Company's Articles of Incorporation, as amended, with
respect thereto.
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business; however, abstentions will
have the effect of a negative vote on the proposals being submitted. Abstentions
may be specified on all proposals. A broker "non-vote" will have no effect on
the outcome of any of the proposals.
If the accompanying proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying Proxy will vote "FOR" the election of the three
nominees for directors of the Company, the Reverse Stock Split, and the
amendment to the Company's Articles of Incorporation to effect the Reverse Stock
Split and as recommended by the Board of Directors with regard to any other
matters or, if no such recommendation is given, in their own discretion. The
Company's officers and directors have advised the Company that they intend to
vote their shares (including those shares over which they hold voting power),
representing approximately 53.6% of the outstanding shares of Common Stock, in
<PAGE>
favor of the above proposal. Each Proxy granted by a Shareholder may be revoked
by such Shareholder at any time thereafter by writing to the Secretary of the
Company prior to the Meeting, or by execution and delivery of a subsequent Proxy
or by attendance and voting in person at the Meeting, except as to any matter or
matters upon which, prior to such revocation, a vote shall have been cast
pursuant to the authority conferred by such Proxy.
The cost of soliciting these Proxies, consisting of the printing, handling
and mailing of the Proxy and related material, and the actual expense incurred
by brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
materials to the beneficial owners of the shares of Common Stock, will be paid
by the Company.
In order to assure that there is a quorum, it may be necessary for certain
officers, directors and other representatives of the Company to solicit Proxies
by telephone or telegraph or in person. These persons will receive no extra
compensation for their services.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
----------------------------------------
The following table sets forth information as of the Record Date
concerning: (i) each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock; (ii) each of the Company's
executive officers and directors; and (iii) all executive officers and directors
as a group. Common Stock not outstanding but deemed beneficially owned by virtue
of the right of an individual to acquire shares within 60 days is treated as
outstanding only when determining the amount and percentage of Common Stock
owned by such individual. Except as noted, each person or entity has sole voting
and sole investment power with respect to the shares shown.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
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Amount and Nature of Percent of
Name Position Beneficial Ownership Ownership
- ---- -------- -------------------- ---------
<S> <C> <C> <C>
Michael J. DeLaney Director and 10,000 0.3%
P. O. Box 890261 Executive Officer
Temecula, California 92589
David J. Gregarek Director and 1,570,208 51.3%
71 Spyglass Drive Executive Officer
Littleton, Colorado 80123
Derrin R. Smith Director 60,000 2.0%
3746 East Easter Circle South
Littleton, Colorado 80122
Henry F. Schlueter(1) Shareholder 1,280,208 41.8%
1050 17th Street, Suite 1700
Denver, Colorado 80265
Officers and Directors as a 1,640,208 53.6%
Group (3 persons)
</TABLE>
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(1) Includes 280,208 shares held of record by Mr. Schlueter's wife, Sandra
Schlueter. Mr. Schlueter may be deemed to be the beneficial owner of these
shares.
BOARD COMMITTEES
The Board of Directors has not appointed, nor does it maintain, any
committees.
COMPENSATION OF OFFICERS AND DIRECTORS
None of the Company's officers and/or directors receives any compensation
for his respective services rendered to the Company and, except as described
below under the section entitled "Certain Transactions," the Company paid no
cash or non-cash compensation to any officer or director during the fiscal years
ended December 31, 1996, 1997, or 1998. All of the Company's officers and
directors have agreed to act without compensation until authorized by the Board
of Directors, which is not expected to occur until the Company has generated
revenues from operations after consummation of a merger or acquisition. As of
the date of this report, the Company has no funds available to pay directors.
Further, none of the directors are accruing any compensation pursuant to any
agreement with the Company.
<PAGE>
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted Common Stock issued by the Company as part of
the terms of the proposed transaction or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this report, but is expected to be comparable to
consideration normally paid in like transactions. No member of management of the
Company will receive any finder's fee, either directly or indirectly, as a
result of their respective efforts to implement the Company's business plan
outlined herein.
The Company has no retirement, pension, profit sharing, stock option or
insurance or medical reimbursement plans or programs covering its officers and
directors, and does not contemplate implementing any such plans at this time.
No advances have been made or are contemplated by the Company to any of its
officers or directors.
CERTAIN TRANSACTIONS
On March 27, 1998, the Company issued 1,000,000 shares of its $.01 par
value Common Stock to Mr. Henry F. Schlueter, the Company's legal counsel, as
payment in full of an outstanding indebtedness in the amount of $10,000 for
prior legal services rendered to the Company. On that same date, the Company
issued 1,000,000 shares of its $.01 par value Common Stock to Mr. David J.
Gregarek, the Secretary, Treasurer and a director of the Company, for consulting
services rendered to the Company. On January 6, 1996, the Company issued and
sold 510,000 shares of its $.01 par value Common Stock to two officers and
directors of the Company in exchange for $5,100. In addition, the Company issued
250,000 shares of its $.01 par value Common Stock to the wife of the Company's
legal counsel in exchange for $2,500 in cash. During the six months ended June
30, 1996, the Company paid A. Jay Boisdrenghien, the Company's former president,
$3,000 for consulting services rendered to the Company. In addition, the Company
paid the law firm of Schlueter & Associates, P.C. a retainer of $2,000. During
the period ended December 31, 1995, the Company's former president, A. Jay
Boisdrenghien, paid an expense for the Company totaling $1,500 in consideration
for the issuance of 150,000 shares of its $.01 par value Common Stock. During
1996, a principal shareholder of the Company paid an expense of the Company in
the amount of $1,500, which has been reflected as a contribution to capital in
the Company's financial statements.
From March 1992 until January 1993, the Company had a lease arrangement
with its former president, A. Jay Boisdrenghien, providing for the rental of a
portion of his business office as a temporary office for the Company, for
$300.00 per month. During the year ended December 31, 1993, the president
forgave $2,417 due to him by the Company for rental payments and other related
expenses. The Company has no outstanding obligations under this lease. This
lease cannot be considered the result of arms' length negotiations. However,
management of the Company believes that the rent for its office and facilities
was no higher than that which the Company would have been required to pay to
unaffiliated parties for comparable facilities in the same locale. The Company
is currently receiving office space and clerical services on a rent-free basis
from its counsel, Schlueter & Associates, P.C. The Company does not anticipate
changing this arrangement until the Company is able to conclude a merger or
acquisition.
<PAGE>
During 1992, the Company paid $5,000 to a shareholder as compensation for
services provided in organizational and fund-raising activities.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
generally requires the Company's directors and executive officers and persons
who own more than 10% of a registered class of the Company's equity securities
("10% owners") to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Directors, executive officers, and 10%
owners are required by Securities and Exchange Commission regulation to furnish
the Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on review of copies of such reports furnished to the
Company and verbal representations that no other reports were required to be
filed during the fiscal year ended December 31, 1998, all Section 16(a) filing
requirements applicable to its directors, executive officers and 10% owners were
met, except that: David J. Gregarek, the Secretary, Treasurer, and a director of
the Company, and Henry F. Schlueter, the holder of more than 10% of the
Company's outstanding shares of Common Stock, failed to timely file Forms 4 and
Forms 5 with the Securities and Exchange Commission with respect to the fiscal
year ended December 31, 1998 to report their respective acquisitions of
1,000,000 shares of the Company's Common Stock. The Company has received
representations from each other person who served during fiscal 1998 as an
officer or director of the Company confirming that there were no transactions
that occurred during the Company's most recent fiscal year which required the
filing of a Form 5.
PROPOSAL 1
ELECTION OF THREE (3) PERSONS
TO SERVE AS DIRECTORS OF THE COMPANY
The Company's directors are elected annually to serve until the next
succeeding annual meeting of shareholders and until his or her successor shall
have been elected and shall qualify. The number of directors presently
authorized by the Bylaws of the Company is three (3).
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them for the election of the following
nominees, all of whom are now members and constitute the Company's Board of
Directors. The Company is advised that all nominees have indicated their
availability and willingness to serve if elected. In the event that any nominee
becomes unavailable or unable to serve as a director of the Company prior to the
voting, the proxy holder will vote for a substitute nominee in the exercise of
his best judgment.
INFORMATION CONCERNING NOMINEES
Michael J. DeLaney has served as President and a director of the Company
since January 6, 1996. Since 1980, Mr. DeLaney has been the owner and president
of MD Sales, a sales representative and consulting firm for various companies in
product development, sales and marketing. Mr. DeLaney will devote only such time
as is available to the business of the Company. Since December 1997, Mr. DeLaney
has been a controlling shareholder and sole officer and director of Boulder
Capital Opportunities II, Inc., a blank check company which is an Exchange Act
reporting company. Mr. DeLaney also has served on the Boards of Directors of the
following blank check companies:
Maui Capital Corporation ("Maui") conducted its initial public offering in
May 1989 and raised gross proceeds of $250,000 through the sale of 50,000,000
units at $0.005 per unit, with each unit consisting of one share of common stock
and one warrant to purchase common stock. Mr. DeLaney served as Vice President
<PAGE>
and a director of Maui from May 1990 until his resignation in September 1995
when Maui, through a wholly owned subsidiary, merged with Charter Communications
International, Inc. In January 1996, Maui acquired 90% of the stock of Phoenix
DataNet, Inc. ("PDN"). In March 1996, Maui merged with Phoenix Data Systems,
Inc. ("Phoenix"), the former parent of PDN, and in conjunction with that merger,
Maui acquired the remaining 10% of the stock of PDN. In May 1996, Maui changed
its name to Charter Communications International, Inc. ("Charter") which
currently trades on the Nasdaq Bulletin Board under the symbol CHTD.
Parkway Capital Corporation ("Parkway") conducted its initial public
offering in February 1988 and raised gross proceeds of $200,000 through the sale
of 20,000,000 units at $0.01 per unit, each unit consisting of one share of
common stock and two warrants to purchase common stock. Mr. DeLaney served as
secretary/treasurer and a director of Parkway for a very brief period in 1994.
In October 1994, Parkway was merged into QCS Corporation, which currently trades
on the Nasdaq Bulletin Board under the symbol QCSC.
David J. Gregarek has served as Secretary, Treasurer and a director of the
Company since January 6, 1996. Mr. Gregarek is President and a director of
Centennial Bankshares, an Exchange Act reporting company. Mr. Gregarek only
devotes such time as is available to the business of the Company. Mr. Gregarek
also has served on the Boards of Directors of the following blank check
companies:
Bellview Capital Corporation ("Bellview") conducted its initial public
offering in August 1986 and raised gross proceeds of $150,000 through the sale
of 15,000,000 units at $0.01 per unit, each unit consisting of one share of
common stock and one warrant to purchase common stock. On February 27, 1987,
Bellview acquired the assets of Associated Ancillary Service, Inc., and changed
its name to Medical Ancillary Services, Inc. Mr. Gregarek served as a director
of Medical Ancillary Services, Inc. until his resignation in August 1987.
Medical Ancillary Services, Inc. is not an Exchange Act reporting company.
Clearview Capital Corporation ("Clearview") conducted its initial public
offering in June 1987 and raised gross proceeds of $200,000 through the sale of
20,000,000 units at $0.01 per unit, with each unit consisting of one share of
common stock and two warrants to purchase common stock. Effective January 19,
1988, Clearview merged with Arriba Fajita, Inc., the operator of four
restaurants in Austin, Texas, and changed its name to Arriba Fajita Holdings,
Inc. Mr. Gregarek resigned from the Board of Directors of Arriba Fajita
Holdings, Inc. in June 1988. Arriba Fajita Holdings, Inc. is not an Exchange Act
reporting company.
Ferrari Capital, Ltd. ("Ferrari") conducted its initial public offering in
1987 or early 1988 and raised gross proceeds of $125,000 through the sale of
12,500,000 units at $0.01 per unit, each unit consisting of one share of common
stock and one warrant to purchase common stock. Mr. Gregarek resigned from the
Board of Directors of Ferrari in 1989. Ferrari has been administratively
dissolved by the Colorado Secretary of State.
Parkway Capital Corporation ("Parkway") is described above in the resume of
Michael J. DeLaney. Mr. Gregarek served as President and a director of Parkway
from inception until March 1994 when Mr. Gregarek sold 19,160,000 shares of
Parkway for a price of $0.001 per share, or $19,491, thereby effecting a change
in control of Parkway, and resigned from its Board of Directors.
Maui Capital Corporation ("Maui") is described above in the resume of
Michael J. DeLaney. Mr. Gregarek served as President and a director of Maui from
inception until September 1995 when Maui, through a wholly owned subsidiary,
merged with Charter Communications International, Inc. and Mr. Gregarek resigned
from its Board of Directors.
<PAGE>
JNS Marketing, Inc. ("JNS") conducted its initial public offering in July
1984 and raised gross proceeds of $283,320 through the sale of 283,320 units at
$1.00 per unit, with each unit consisting of one share of common stock and two
warrants to purchase common stock. From inception through the fiscal year ended
September 30, 1988, JNS was engaged in the business of searching for and
obtaining, on a buyout basis or a right to market basis, products to be sold to
the general public primarily through the television media. Since 1989, JNS has
not engaged in any business or had any revenues, and its sole activity has been
to seek to acquire assets of or an interest in a company or venture actively
engaged in a business generating revenues or having immediate prospects of
generating revenues. JNS is an Exchange Act reporting company.
Derrin R. Smith Ph.D. has served as a director of the Company since January
6, 1996. Dr. Smith has over 17 years of experience developing and directing
strategic high technology programs and enterprises. This background includes
domestic and international (Asia, South America and Middle East) activities for
both government and the private sector. For the last five years, Dr. Smith has
operated his own private company, DRS Sciences, Inc., which is engaged primarily
in providing consulting services in the design and development of computer
software, the integration of such software with the hardware platforms utilized
by his clients, and in investment banking services for high technology ventures.
In June of 1998, Dr. Smith's company entered into an agreement with CeBourn
Ltd., an investment banking firm specializing in telecommunications, software,
and high technology under which Dr. Smith serves as CeBourn's chief economist.
Dr. Smith devotes his time substantially full-time to CeBourn Ltd. under this
agreement. Prior to commencing active operations of his own company, Dr. Smith
was employed by M.I.T.R.E. Corporation in various capacities. Dr. Smith is
currently providing consulting services to several companies. Dr. Smith will
devote only such time as is necessary to the business of the Company.
Board Recommendation
The Board recommends a vote FOR the election of each of the three
nominees for directors of the Company.
PROPOSAL 2
PROPOSED REVERSE STOCK SPLIT
The Company's plan of operation includes its intention to seek to acquire
assets or shares of an entity actively engaged in business which generates
revenues, in exchange for its securities. The Company has recently entered into
a letter of intent with a private company which provides for the merger of a
wholly-owned subsidiary of the Company, which has yet to be organized, with and
into the private company. The private company would be the surviving entity and,
therefore, would become a wholly-owned subsidiary of the Company. The letter of
intent contains several major conditions to the merger including but not limited
to (i) the conversion of $1,500,000 of debt and liabilities to 200,000 shares of
the Company's Common Stock plus $500,000; (ii) the conversion of $1,000,000
principal amount of Promissory Notes to stock; and (iii) completion of a one-for
three reverse split of the Company's Common Stock (the "Reverse Stock Split"),
which requires approval of the Company's shareholders. Although management of
the Company is diligently pursuing consummation of the merger, management cannot
predict whether the conditions to the merger, some of which are beyond the
control of the Company, will be met or whether the merger will be consummated.
If the merger is not consummated, management intends to continue seeking an
alternate business opportunity. The Board of Directors has authorized, subject
to Shareholder approval, the 1-for-3 Reverse Stock Split of the Company's
outstanding Common Stock.
<PAGE>
If the Reverse Stock Split is approved by the Shareholders at the Meeting,
it will become effective upon filing the appropriate amendment to the Company's
Articles of Incorporation with the Colorado Secretary of State. The filing will
be made as soon as practicable following approval by the Shareholders. The form
of amendment to the Articles of Incorporation is attached as Exhibit A, and
reference is made to the Amendment for the complete terms thereof.
Purposes And Effects Of The Reverse Stock Split
The Company's Articles of Incorporation authorize the issuance of ten
million (10,000,000) shares of Common Stock, $.01 value. As of the Record Date,
3,060,000 shares of Common Stock were issued and outstanding. Consummation of
the Reverse Stock Split will not alter the number of authorized shares of Common
Stock, which will remain ten million (10,000,000) shares. The Reverse Stock
Split will reduce the number of shares of Common Stock outstanding from
3,060,000 shares (as of the Record Date) to approximately 1,020,000 shares
(assuming that no additional shares of Common Stock are issued by the Company
after the Record Date) and will increase the number of authorized and unissued
shares of Common Stock from 6,940,000 (as of the Record Date) to approximately
8,980,000 (assuming that no additional shares of Common Stock are issued by the
Company after the Record Date). Therefore, the Reverse Stock Split will better
position the Company for a merger or acquisition by enabling the Company to
issue a larger number of shares in such a transaction. The Common Stock will
continue to be $.01 par value Common Stock following the Reverse Stock Split.
At the Effective Date, each share of Common Stock of the Company issued and
outstanding immediately prior thereto (the "Old Common Stock"), will be
reclassified as and changed into one-third (1/3) of a share of the Company's
Common Stock, $.01 value per share (the "New Common Stock"), subject to the
treatment of fractional share interests as described below. Shortly after the
Effective Date, the Company will send transmittal forms to the holders of the
Old Common Stock to be used in forwarding their certificates formerly
representing shares of Old Common Stock for surrender and exchange for
certificates representing whole shares of New Common Stock. No certificates or
scrip representing fractional share interests in the New Common Stock will be
issued, and no such fractional share interest will entitle the holder thereof to
vote or to any rights of a shareholder of the Company. In lieu of any such
fractional share interest, each holder of Old Common Stock who would otherwise
be entitled to receive a fractional share of New Common Stock will, in lieu
thereof, receive one full share upon surrender of certificates formerly
representing Old Common Stock held by such holder.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of the material federal income tax consequences
of the proposed Reverse Stock Split. This summary does not purport to be
complete and does not address the tax consequences to holders that are subject
to special tax rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities, nonresident alien
individuals, broker-dealers and tax-exempt entities. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
and proposed regulations, court decisions and current administrative rulings and
pronouncements of the Internal Revenue Service ("IRS"), all of which are subject
to change, possibly with retroactive effect, and assumes that the New Common
Stock will be held as a "capital asset" (generally, property held for
investment) as defined in the Code. Holders of Old Common Stock are advised to
consult their own tax advisers regarding the federal income tax consequences of
the proposed Reverse Stock Split in light of their personal circumstances and
the consequences under state, local and foreign tax laws.
1. The reverse split will qualify as a recapitalization described in
Section 368(a)(1)(E) of the Code.
<PAGE>
2. No gain or loss will be recognized by the Company in connection with
the reverse split.
3. No gain or loss will be recognized by a Shareholder who exchanges all
of his shares of Old Common Stock solely for shares of New Common
Stock.
4. The aggregate basis of the shares of New Common Stock to be received
in the Reverse Stock Split (including any whole shares received in
lieu of fractional shares) will be the same as the aggregate basis of
the shares of Old Common Stock surrendered in exchange therefor.
5. The holding period of the shares of New Common Stock to be received in
the Reverse Stock Split (including any whole shares received in lieu
of fractional shares) will include the holding period of the shares of
Old Common Stock surrendered in exchange therefor.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. ACCORDINGLY,
EACH HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OWN TAX
ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK
SPLIT, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, MUNICIPAL,
FOREIGN OR OTHER TAXING JURISDICTION.
Board Recommendation
The Board recommends a vote FOR the adoption of the Reverse Stock Split and
the amendment to the Articles of Incorporation to effect the Reverse Stock Split
and each of the resolutions with respect thereto set forth in Exhibit B hereto.
GENERAL
Other Matters
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting other than those stated in the Notice of Annual
Meeting and referred to in this Proxy Statement. If any other matters should
properly come before the Meeting, it is intended that the proxies in the
accompanying form will be voted as the persons named therein may determine in
their discretion.
Shareholder Proposals
If any Shareholder of the Company intends to present a proposal for
consideration at the 2000 Annual Meeting of Shareholders and desires to have
such proposal included in the proxy statement and form of proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the Company's offices, c/o Schlueter & Associates, P.C., 1050
Seventeenth Street, Suite 1700, Denver, Colorado 80265, Attention: Henry F.
Schlueter, not later than March 31, 2000.
By Order of the Board of Directors
Michael J. DeLaney, President
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
OF
THE ARTICLES OF INCORPORATION
OF
AURORA ACQUISITIONS, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation has adopted the following Articles of Amendment to its
Articles of Incorporation.
FIRST: The name of the Corporation is Aurora Acquisitions, Inc.
SECOND: The Articles of Incorporation of the Corporation are hereby
amended, and a reverse stock split in the ratio of 1-for-3 is hereby effected,
by the addition of the following provision as the second paragraph of Section 1
of Article IV thereof:
"Reverse Stock Split. Simultaneously with the effective date of this
amendment (the "Effective Date"), each share of the Corporation's Common Stock,
$.01 value, issued and outstanding immediately prior to the Effective Date (the
"Old Common Stock") shall automatically and without any action on the part of
the holder thereof be reclassified as and changed, pursuant to a reverse stock
split (the "Reverse Stock Split"), into a fraction thereof of 1/3 of a share of
the Corporation's outstanding Common Stock, $.01 value (the "New Common Stock"),
subject to the treatment of fractional share interests as described below. Each
holder of a certificate or certificates which immediately prior to the Effective
Date represented outstanding shares of Old Common Stock (the "Old Certificates,"
whether one or more) shall be entitled to receive, upon surrender of such Old
Certificates to the Corporation's Transfer Agent for cancellation, a certificate
or certificates (the "New Certificates," whether one or more) representing the
number of whole shares of the New Common Stock into which and for which the
shares of the Old Common Stock formerly represented by such Old Certificates so
surrendered are reclassified under the terms hereof. From and after the
Effective Date, Old Certificates shall represent only the right to receive New
Certificates pursuant to the provisions hereof. No certificates or scrip
representing fractional share interests in New Common Stock will be issued, and
no such fractional share interest will entitle the holder thereof to vote, or to
any rights of a shareholder of the Corporation. Any fraction of a share of New
Common Stock to which the holder would otherwise be entitled will be adjusted
upward to the nearest whole share. If more than one Old Certificate shall be
surrendered at one time for the account of the same Shareholder, the number of
full shares of New Common Stock for which New Certificates shall be issued shall
be computed on the basis of the aggregate number of shares represented by the
Old Certificates so surrendered. In the event that the Corporation's Transfer
Agent determines that a holder of Old Certificates has not tendered all his
certificates for exchange, the Transfer Agent shall carry forward any fractional
share until all certificates of that holder have been presented for exchange
such that payment for fractional shares to any one person shall not exceed the
value of one share. If any New Certificate is to be issued in a name other than
that in which the Old Certificates surrendered for exchange are issued, the Old
Certificates so surrendered shall be properly endorsed and otherwise in proper
form for transfer. From and after the Effective Date, the amount of capital
represented by the shares of the New Common Stock into which and for which the
shares of the Old Common Stock are reclassified under the terms hereof shall be
the same as the amount of capital represented by the shares of Old Common Stock
so reclassified, until thereafter reduced or increased in accordance with
applicable law."
THIRD: By written informal action, unanimously taken by the Board of
Directors of the Corporation effective April 12, 1999, pursuant to and in
accordance with Sections 7-108-202 and 7-110-103 of the Colorado Business
Corporation Act, the Board of Directors of the Corporation duly adopted and
recommended the amendment described above to the Corporation's shareholders for
their approval.
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FOURTH: Notice having been properly given to the shareholders in accordance
with Sections 7-107-105 and 7-110-103, at a meeting of shareholders held on May
17, 1999, the number of votes cast for the amendment by the shareholders
entitled to vote on the amendment was sufficient for approval by the
shareholders.
IN WITNESS WHEREOF, Aurora Acquistions, Inc. has caused these presents to
be signed in its name and on its behalf by Michael J. DeLaney, its President,
and attested by David J. Gregarek, its Secretary, on this _______ day of
_________________, 1999, and its President acknowledges that these Articles of
Amendment are the act and deed of Aurora Acquistions, Inc. and, under the
penalties of perjury, that the matters and facts set forth herein with respect
to authorization and approval are true in all material respects to the best of
his knowledge, information and belief.
ATTEST: AURORA ACQUISTIONS, INC.
By: By:
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David J. Gregarek, Secretary Michael J. DeLaney, President
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EXHIBIT B
THE REVERSE STOCK SPLIT
RESOLVED, that the Board of Directors be, and it hereby is, authorized to
effect a Reverse Stock Split in accordance with the following Resolutions.
FURTHER RESOLVED, that Article IV of the Company's Articles of
Incorporation be amended by the addition of the following provision as the
second paragraph of Section 1 of Article IV:
Simultaneously with the effective date of this amendment (the "Effective
Date"), each share of the Corporation's Common Stock, $.01 value, issued and
outstanding immediately prior to the Effective Date (the "Old Common Stock")
shall automatically and without any action on the part of the holder thereof be
reclassified as and changed, pursuant to a reverse stock split (the "Reverse
Stock Split"), into a fraction thereof of 1/3 of a share of the Corporation's
outstanding Common Stock, $.01 value (the "New Common Stock"), subject to the
treatment of fractional share interests as described below. Each holder of a
certificate or certificates which immediately prior to the Effective Date
represented outstanding shares of Old Common Stock (the "Old Certificates,"
whether one or more) shall be entitled to receive, upon surrender of such Old
Certificates to the Corrporation's Transfer Agent for cancellation, a
certificate or certificates (the "New Certificates," whether one or more)
representing the number of whole shares of the New Common Stock into which and
for which the shares of the Old Common Stock formerly represented by such Old
Certificates so surrendered are reclassified under the terms hereof. From and
after the Effective Date, Old Certificates shall represent only the right to
receive New Certificates pursuant to the provisions hereof. No certificates or
scrip representing fractional share interests in New Common Stock will be
issued, and no such fractional share interest will entitle the holder thereof to
vote, or to any rights of a shareholder of the Corporation. Any fraction of a
share of New Common Stock to which the holder would otherwise be entitled will
be adjusted upward to the nearest whole share. If more than one Old Certificate
shall be surrendered at one time for the account of the same Shareholder, the
number of full shares of New Common Stock for which New Certificates shall be
issued shall be computed on the basis of the aggregate number of shares
represented by the Old Certificates so surrendered. In the event that the
Corporation's Transfer Agent determines that a holder of Old Certificates has
not tendered all his certificates for exchange, the Transfer Agent shall carry
forward any fractional share until all certificates of that holder have been
presented for exchange such that payment for fractional shares to any one person
shall not exceed the value of one share. If any New Certificate is to be issued
in a name other than that in which the Old Certificates surrendered for exchange
are issued, the Old Certificates so surrendered shall be properly endorsed and
otherwise in proper form for transfer. From and after the Effective Date, the
amount of capital represented by the shares of the New Common Stock into which
and for which the shares of the Old Common Stock are reclassified under the
terms hereof shall be the same as the amount of capital represented by the
shares of Old Common Stock so reclassified, until thereafter reduced or
increased in accordance with applicable law.
FURTHER RESOLVED, that at any time prior to the filing of the foregoing
amendment to the Company's Articles of Incorporation effecting a Reverse Stock
Split, notwithstanding authorization of the proposed amendment by the
shareholders of the Company, the Board of Directors may abandon such proposed
amendment without further action by the shareholders.
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APPENDIX
AURORA ACQUISITIONS, INC.
ANNUAL MEETING OF SHAREHOLDERS
May 20, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Aurora Acquisitions, Inc., a Colorado
corporation (the "Company"), acknowledges receipt of the Notice of Meeting of
Shareholders and Proxy Statement, dated April 29, 1999, and hereby appoints
David J. Gregarek and Henry F. Schlueter, or either of them, each with the power
of substitution, as Attorneys and Proxies to represent and vote all shares of
Common Stock of the Company which the undersigned would be entitled to vote at
the Annual Meeting of Shareholders, and at any adjournment or adjournments
thereof, hereby revoking any proxy or proxies heretofore given and ratifying and
confirming all that said Attorneys and Proxies may do or cause to be done by
virtue thereof with respect to the following matters:
1. Election of each of the following three (3) persons to serve as
directors of the Corporation until the next Annual Meeting of
Shareholders and thereafter until their successors shall have been
elected and shall qualify:
Michael J. DeLaney
FOR /___/ AGAINST /___/ ABSTAIN /___/
David J. Gregarek
FOR /___/ AGAINST /___/ ABSTAIN /___/
Derrin R. Smith
FOR /___/ AGAINST /___/ ABSTAIN /___/
2. Approval of the Proposal to authorize the Board of Directors to effect
a 1-for-3 Reverse Stock Split of the Company's outstanding Common
Stock and to amend (the "Amendment") the Company's Articles of
Incorporation, as amended, with respect thereto.
FOR /___/ AGAINST /___/ ABSTAIN /___/
3. To act upon such other matters as may properly come before the Meeting
or any adjournments thereof.
This Proxy, when properly executed, will be voted as directed. If no direction
is indicated, the Proxy will be voted FOR the above proposal.
Dated: , 1999
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Please sign your name exactly as it appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as it
appears hereon. When signing as joint tenants, all parties in the joint tenancy
must sign. When a proxy is given by a corporation, it should be signed by an
authorized officer and the corporate seal affixed. No postage is required if
returned in the enclosed envelope and mailed in the United States.
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
