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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:
<TABLE>
<S> <C>
[ ] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
</TABLE>
Peachtree FiberOptics, Inc.
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(Name of Registrant As Specified in 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:
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PEACHTREE FIBEROPTICS, INC.
701 Brickell Avenue, Suite 2000
Miami, Florida 33131
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
Peachtree FiberOptics, Inc., a Delaware corporation (the "Company"), in
connection with the proposed adoption of an 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"). The purpose of filing the Amendment is to effect a 1 for 197.44092
reverse stock split of the Company's outstanding Common Stock (the "Reverse
Stock Split"). The Company's Board of Directors and majority stockholder on
March 18, 1999, approved and recommended that the Certificate of Incorporation
be amended in order to effectuate the Reverse Stock Split. The proposed
Amendment will become effective upon the filing of the Amendment with the
Secretary of State of the State of Delaware. The Company anticipates that the
filing of the Amendment will occur on or about April 26, 1999 (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 authorized 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
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 holder of a majority in interest of the Voting Capital
Stock of the Company.
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Mr. Leonard J. Sokolow, who beneficially owns in the aggregate
7,011,162 shares of Common Stock of the Company, representing approximately
68.5% of the outstanding Voting Capital Stock of the Company entitled to vote on
the Amendment, gave his written consent to the adoption of the Amendment
described in this Information Statement on March 18, 1999. The written consent
became effective on March 18, 1999, the date on which his written consent was
filed with the Secretary of the Company. The date on which this Information
Statement was first sent to the stockholders is on or about April 6, 1999. The
record date established by the Company for purposes of determining the number of
outstanding shares of Voting Capital Stock of the Company is March 24, 1999 (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 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.
OUTSTANDING VOTING STOCK OF THE COMPANY
As of the Record Date, there were 10,236,162 shares of Common Stock
outstanding. The Common Stock constitutes the sole outstanding class of voting
securities of the Company. Each share of Common Stock entitles the holder
thereof to one vote on all matters submitted to stockholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth Common Stock ownership information as of
March 18, 1999, 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,
executive officers and designated stockholders 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 701 Brickell Avenue, Suite 2000, Miami, Florida 33131.
After giving effect to the reverse stock split there will be 51,845 shares of
Common Stock outstanding.
<TABLE>
<CAPTION>
SHARES PERCENT SHARES PERCENT
BENEFICIALLY OF CLASS BENEFICIALLY OF CLASS
OWNED PRIOR OWNED PRIOR OWNED AFTER OWNED AFTER
TO REVERSE TO REVERSE REVERSE REVERSE
NAME STOCK SPLIT(1) STOCK SPLIT STOCK SPLIT(2) STOCK SPLIT
- ---- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Leonard J. Sokolow(3) 7,011,162 68.5% 35,511 68.5%
Sidney Levine(4) 0 0% 0 0.0%
All executive officers and
directors as a group
(2 persons) 7,011,162 68.5% 35,511 68.5%
</TABLE>
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(1) Prior to the Reverse Stock Split, there are 10,236,162 shares of Common
Stock outstanding.
(2) After the Reverse Stock Split there will be 51,845 shares of Common
Stock outstanding.
(3) Leonard J. Sokolow is sole shareholder, President and CEO of Genesis
Partners, Inc. ("Genesis"), a company that has provided executive
management services to the Company since 1993. Includes 6,652,830
shares of Common Stock owned by Genesis before giving effect to the
Reverse Stock Split.
(4) Mr. Levine is the sole director of the Company. Mr. Levine is the
father-in-law of Mr. Sokolow.
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AMENDMENT TO CERTIFICATE TO EFFECT A
1 FOR 197.4402 REVERSE STOCK SPLIT
On March 18, 1999, our Board of Directors, acting through our sole
director Mr. Sidney Levine, voted unanimously to authorize and recommend that
our stockholders approve a proposal to effect the Reverse Stock Split. Pursuant
to the Reverse Stock Split, each 197.44092 of the outstanding shares of our
Common Stock on the date of the Reverse Stock Split (the "Old Shares") will be
automatically converted into one share of our Common Stock (the "New Shares").
The Reverse Stock Split will not alter the number of shares of our Common Stock
we are authorized to issue, but will simply reduce the number of shares of our
Common Stock issued and outstanding. Notwithstanding the Reverse Stock Split,
our authorized Common Stock will remain at 20,0000,000 shares of Common Stock,
and our Certificate of Amendment will reflect this amount of authorized Common
Stock. Although we have no current plans to issue any of the authorized but
unissued shares of our common stock created by the Reverse Stock Split, we have
engaged in preliminary discussions regarding issuing shares of our Common Stock
in a merger or acquisition. The Reverse Stock Split will become effective upon
filing of the Amendment to our Certificate of Incorporation with the Delaware
Secretary of State, but our Board of Directors reserves the right not to make
such filing if it deems it appropriate not to do so.
PURPOSE AND EFFECT OF PROPOSED REVERSE STOCK SPLIT
The Board believes the Reverse Stock Split is desirable because it will
assist us by helping to raise the trading price of our Common Stock. Our Board
believes that the higher share price which should result from the Reverse Stock
Split will help generate interest in us among investors and thereby assist us in
raising capital to fund our operations. Our Board also believes that the effects
of the Reverse Stock Split will improve our ability to consummate acquisitions
of other companies.
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The effect of the Reverse Stock Split upon the market price for our
Common Stock cannot be predicted. There can be no assurance that the market
price per New Share of our Common Stock after the Reverse Stock Split will rise
in proportion to the reduction in the number of Old Shares of our Common Stock
outstanding resulting from the Reverse Stock Split. The market price of our
Common Stock may also be based on our performance and other factors, some of
which may be unrelated to the number of shares outstanding.
The Reverse Stock Split will effect all of our stockholders uniformly
and will not affect any stockholder's percentage ownership interests in us or
proportionate voting power, except to the extent that the Reverse Stock Split
results in any of our stockholders owning a fractional share. In lieu of issuing
fractional shares, we will issue any stockholder who otherwise would have been
entitled to receive a fractional share as a result of the Reverse Stock Split
one share of our Common Stock. The Reverse Stock Split may result in certain of
our stockholders owning "odd lots" (i.e. a number of shares of our common stock
not divisible by 100). Stockholders owning "odd lots" may experience difficulty
selling their shares in the open market.
The Reverse Stock Split will have the following effects upon the number
of shares of our Common Stock outstanding and the number of authorized and
unissued shares of our Common Stock.
Upon the effectiveness of the Reverse Stock Split, the number of shares
owned by each holder of Common Stock will be reduced by the ratio of 197.44092
to 1 share of Common Stock he or she owned immediately prior to the Reverse
Stock Split. The number of shares of Common Stock we are authorized to issue
will remain at 20,000,000. The per share loss and net book value of our Common
Stock will be increased because there will be fewer shares of our Common Stock
outstanding.
The principal effect of the Reverse Stock Split will be that (i) the
number of shares of Common Stock issued and outstanding will be reduced from
10,236,162 shares to approximately 51,845 shares, (ii) all outstanding options
entitling the holders thereof to purchase shares of Common Stock will enable
such holders to purchase, upon exercise of their options, 1/197.44092 of the
number of shares of Common Stock which such holders would have been able to
purchase upon exercise of their options immediately preceding the Reverse Stock
Split at the same aggregate price required to be paid therefor upon exercise
thereof immediately preceding the Reverse Stock Split, and (iii) the number of
shares included in the our 1992 Incentive Stock Option Plan will be reduced by
the Reverse Stock Split ratio of the number of shares currently included in such
Stock Option Plan.
Pursuant to the Reverse Stock Split, the par value of the Common Stock
will remain $.01 per share. As a result, on the effective date of the Reverse
Stock Split, the stated capital on our balance sheet attributable to the Common
Stock will be reduced to 1/197.44092 of its present amount, and the additional
paid-in capital account shall be credited with the amount by which the stated
capital is reduced.
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MANNER OF EFFECTING THE REVERSE STOCK SPLIT AND EXCHANGE STOCK CERTIFICATES
The Reverse Stock Split will be effected by the filing of the
Certificate of Amendment with the Secretary of the State of Delaware. The
Reverse Stock Split will become effective on the date of filing the Certificate
of Amendment unless we specify otherwise (the "Effective Date"). As soon as
practicable after the Effective Date, we will send a letter of transmittal to
each holder of record of Old Shares outstanding on the Effective Date. The
letter of transmittal will contain instructions for the surrender of
certificates representing the Old Shares. Upon proper completion and execution
of the letter of transmittal and return thereof, together with certificates
representing the Old Shares, a stockholder will be entitled to receive a
certificate representing the number of the New Shares into which his Old Shares
have been reclassified as a result of the Reverse Stock Split. Stockholders
should not submit any certificates until requested to do so. No new certificate
will be issued to a stockholder until such stockholder has surrendered his
outstanding certificates together with the properly completed and executed
letter of transmittal. Until so surrendered, each outstanding certificate
representing the Old Shares will be deemed for all corporate purposes after the
Effective Date to evidence ownership of the New Shares in the appropriately
reduced number.
NO RIGHTS OF APPRAISAL
Under the Delaware General Corporation Law, our dissenting stockholders
are not entitled to appraisal rights with respect to our proposed Amendment to
effect the Reverse Stock Split, and we will not independently provide our
stockholders with any such right.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
We believe that the federal income tax consequences of the Reverse
Stock Split to holders of Old Shares and holders of New Shares will be as
follows:
1. Except as set forth in (5) below, no gain or loss will be recognized
by a stockholder on the surrender of the Old Shares or receipt of a certificate
representing New Shares.
2. Except as set forth in (5) below, the aggregate tax basis of the New
Shares will equal the aggregate tax basis of the Old Shares exchanged therefor.
3. Except as set forth in (5) below, the holding period of the New
Share will include the holding period of the Old Shares if such Old Shares were
held as capital assets.
4. The conversion of the Old Shares into the New Shares will produce no
gain or loss to us.
5. The federal income tax consequences of the receipt of an additional
share in lieu of a fractional interest is not clear but may result in tax
liabilities which should not be material in amount in view of the low value of
the fractional interest.
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Our beliefs regarding, the tax consequence of the Reverse Split are not
binding upon the Internal Revenue Service or the courts, and there can be no
assurance that the Internal Revenue Service or the courts will accept the
positions expressed above.
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 bank,
insurance companies, regulated investment companies, personal holding companies,
foreign entities, nonresident foreign individuals, broker-dealers and tax exempt
entities.
The state and local tax consequences of the Reverse Stock Split may
vary significantly as to each stockholder, depending upon the state in which he
resides.
The foregoing summary is included for general information only.
Accordingly, stockholders are urged to consult their own tax advisors with
respect to the Federal, State and local tax consequences of the Reverse Stock
Split.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Leonard J. Sokolow
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Leonard J. Sokolow, Managing Agent
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