<PAGE>
SCHEDULE 14A INFORMATION
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
[ ] Definitive Proxy Statement Rule 14a-6(e)(2)
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COVENTRY INDUSTRIES CORP.
------------------------------------------------
(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)(4) 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>
COVENTRY INDUSTRIES CORP.
7777 Glades Road, Suite 211
Boca Raton, Florida 33434
Telephone 561-488-4802 Facsimile 561-488-3419
February , 1998
Dear Stockholder:
You are cordially invited to attend a Special Meeting of the
Stockholders of Coventry Industries Corp. to be held on Thursday, March 26, 1998
at 9:00 a.m. at Embassy Suites, 661 NW 53 Street, Boca Raton, Florida 33487.
We hope you will attend the meeting in person. Whether you expect to be
present and regardless of the number of shares you own, please mark, sign and
mail the enclosed proxy in the envelope provided. Matters on which action will
be taken at the meeting are explained in detail in the notice and proxy
statement following this letter.
Sincerely,
/s/ Robert Hausman
---------------------------------------
Robert Hausman
President and Chief Executive Officer
<PAGE>
PRELIMINARY PROXY STATEMENT
COVENTRY INDUSTRIES CORP.
7777 GLADES ROAD, SUITE 211
BOCA RATON, FLORIDA 33434
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 26, 1998
Notice is hereby given that a Special Meeting of the Stockholders of
Coventry Industries Corp. (the "Company") will be held at Embassy Suites, 661 NW
53 Street, Boca Raton, Florida 33487, at 9:00 a.m. on Thursday, March 26, 1998
for the following purposes:
1. To approve the possible issuance of in excess of 19.95% of the
presently issued and outstanding Common Stock of the Company
upon the conversion of the Company's 5% Convertible Preferred
Stock ("5% Preferred Stock") and the possible payment of
dividends on the 5% Preferred Stock in shares of Common Stock.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Common stockholders of record at the close of business on February 19,
1998 will be entitled to notice of and to vote at the meeting.
Stockholders unable to attend the Special Meeting in person are
required to read the enclosed Proxy Statement and then complete and deposit the
Proxy together with the power of attorney or other authority, if any, under
which it was signed, or a notarized certified copy thereof, with the Company's
proxy solicitation agent Corporate Investor Communications, Inc., 111 Commerce
Road, Carlstadt, NJ 07072-2586 prior to the commencement thereof. Stockholders
who received the Proxy through an intermediary must delivery the Proxy in
accordance with the instructions given by such intermediary.
By Order of the Board of Directors
/s/ Robert Hausman
----------------------------------------
Robert Hausman, President and Chief
Executive Officer
February , 1998
THE PROXY WHICH ACCOMPANIES THIS NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE CONSIDERED AT THE
MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS NOTICE.
<PAGE>
PRELIMINARY PROXY STATEMENT
COVENTRY INDUSTRIES CORP.
7777 GLADES ROAD, SUITE 211
BOCA RATON, FLORIDA 33434
(PRINCIPAL EXECUTIVE OFFICES)
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PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
----------
INTRODUCTION
This Proxy Statement is being furnished to stockholders in connection
with the solicitation of proxies by the Board of Directors of Coventry
Industries Corp. (the "Company") for use at a Special Meeting of Stockholders of
the Company (the "Meeting") to be held at Embassy Suites, 661 NW 53 Street, Boca
Raton, Florida 33487, at 9:00 a.m. on Thursday, March 26, 1998, and at any
adjournments thereof, for the purpose of considering and voting upon the matters
set forth in the accompanying Notice of Special Meeting of Stockholders. This
Proxy Statement and the accompanying form of proxy are first being mailed to
stockholders on or about February , 1998.
The close of business on February 19, 1998, has been fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting and any adjournment thereof. As of the record date, there
were 2,704,297 shares of the Company's common stock, par value $.001 per share
("Common Stock") issued and outstanding, the only class of the Company's
securities entitled to vote at the Meeting.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote on the record date is
necessary to constitute a quorum at the Meeting. Abstentions and broker
non-votes will be counted towards a quorum. If a quorum is not present or
represented at the Meeting, the stockholders present at the Meeting or
represented by proxy have the power to adjourn the Meeting from time to time,
without notice other than an announcement at the Meeting, until a quorum is
present or represented. At any such adjournment Meeting at which a quorum is
present or represented, any business may be transacted that might have been
transacted at the original Meeting.
The affirmative vote of a majority of the shares of Common Stock
present in person or by proxy at the Meeting is required for approval of
Proposal 1. Abstentions will have the same effect as a vote against a proposal
and broker non-votes will be disregarded.
All shares represented by properly executed proxies, unless such
proxies previously have been revoked, will be voted at the Meeting in accordance
with the directions on the proxies. IF NO DIRECTION IS INDICATED, THE SHARES
WILL BE VOTED TO APPROVE (i) THE
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POSSIBLE ISSUANCE OF IN EXCESS OF 19.95% OF THE PRESENTLY ISSUED AND OUTSTANDING
COMMON STOCK UPON THE CONVERSION OF THE 5% PREFERRED STOCK AND THE POSSIBLE
PAYMENT OF DIVIDENDS ON THE 5% PREFERRED STOCK IN SHARES OF COMMON STOCK AND
(ii) SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. The enclosed
proxy, even though executed and returned, may be revoked at any time prior to
the voting of the proxy by one of the following methods: (a) execution and
submission of a revised proxy, (b) written notice to the Secretary of the
Company, or (c) voting in person at the Meeting.
Proposal 1
TO APPROVE THE POSSIBLE ISSUANCE OF IN EXCESS OF 19.95% OF THE
PRESENTLY ISSUED AND OUTSTANDING COMMON STOCK UPON THE
CONVERSION OF THE 5% CONVERTIBLE PREFERRED STOCK AND THE
POSSIBLE PAYMENT OF DIVIDENDS ON THE 5%
CONVERTIBLE PREFERRED STOCK IN SHARES OF COMMON STOCK
Terms of the Private Placement
On January 16, 1998 the Company sold 1,750 shares of its 5% Convertible
Preferred Stock ("5% Preferred Stock"), at a purchase price of $1,000 per share
("Purchase Price"), to an unaffiliated third party in a private transaction
exempt from registration under the Securities Act of 1933, as amended (the
"Act"). The designations, rights and preferences of the Preferred Stock are
described below.
The shares of 5% Preferred Stock are convertible at the holder's option
into shares of the Company's Common Stock at a conversion price determined by
dividing the liquidation value of $1,000 per share by the conversion price,
i.e., 80% of the average closing bid price of the Common Stock as report on The
Nasdaq SmallCap Market for the five (5) trading days immediately preceding the
date of conversion. Accordingly, the ultimate number of shares of Common Stock
issuable upon the conversion of all shares of 5% Preferred Stock, assuming this
Proposal 1 is approved by the Company's stockholders, is unknown at this time.
The Company has agreed to register the shares of Common Stock underlying the 5%
Preferred Stock (the "Registerable Securities") under the Act in a registration
statement on Form S-3 to be filed with the Securities and Exchange Commission
(the "Commission") no later than 30 days from the closing date of the
transaction. The Company has agreed to use its best efforts to cause such
registration statement to become effective within 120 days from its filing, and
thereafter to maintain an effective registration statement under the Act for a
period of two years. In the event such registration statement is not declared
effective by the Commission by May 17, 1998, being 121 days from closing date,
the Company is subject to a cash penalty of 2% of the Purchase Price per month
until the effectiveness thereof.
$500,000 of the Purchase Price paid for the 1,750 shares of 5%
Preferred Stock, as well a certificate for 500 shares of 5% Preferred Stock, has
been deposited in escrow by the purchaser with Atlas, Pearlman, Trop & Borkson,
P.A., counsel for the Company, pending approval of this Proposal 1. by the
Company's stockholders. Pursuant to the terms of the private placement, should
the Company obtain stockholder approval, the purchaser will also purchase an
additional 750 shares of
<PAGE>
5% Preferred Stock at $1,000 per share, resulting in a sale of an aggregate of
2,500 shares of 5% Preferred Stock.
The Company currently intends to use the proceeds from this private
placement for general working capital purposes. After payment of the estimated
fees and expenses of the placement (including this proxy and the registration
statement), the Company estimates its net proceeds from the first $1,250,000 of
gross proceeds to be approximately $1,090,000. Should the Company obtain
stockholder approval for this Proposal 1, the net proceeds to the Company of
approximately $1,125,000, after payment of fees and expenses related thereto,
will be used by the Company as general working capital.
Rule 4460(i)(1)(D) of The Nasdaq Stock Market, Inc. Nasdaq Marketplace
Rules requires certain companies whose securities are traded on the Nasdaq
SmallCap Market (such as the Company) to obtain stockholder approval prior to
issuing common stock (or shares convertible into common stock) in a transaction
other than a public offering at a price less than the market value of the common
stock when the amount of common stock to be issued (or issuable upon conversion)
is or will be greater than 20% of the common stock or voting power of the
company outstanding prior to issuance. The initial purchase of 1,250 shares of
5% Preferred Stock did not require stockholder approval pursuant to Rule
4460(i)(1)(D) as the ability of the purchaser to convert the shares of 5%
Preferred Stock is presently limited to a conversion of up to 526,034 shares of
the Company's Common Stock (the "Maximum Control Shares"), being a maximum of
19.95% of the currently issued and outstanding Common Stock. The Company,
however, must obtain stockholder approval of this Proposal 1 prior to the
release of the escrowed cash and stock and the sale of the remaining 750 shares
of 5% Preferred Stock. In the event the Company does not obtain stockholder
approval of this Proposal 1 prior to March 31, 1998, (i) the $500,000 in escrow
will be returned to the purchaser and the certificate for the 500 shares of 5%
Preferred Stock will be canceled, (ii) concurrently the Company will pay to the
purchaser the sum of $50,000 as liquidated damages, (iii) the purchaser will not
be obligated to purchase the remaining 750 shares of 5% Preferred Stock, and
(iv) on the day immediately following the date of issuance of the Maximum
Control Shares, the Company shall redeem all remaining shares of issued and
outstanding 5% Preferred Stock not so converted (due to the numerical
limitation) at a price of $1,300 per share.
Assuming approval of this Proposal 1, the ultimate number of shares of
Common Stock into which the remaining 1,250 shares of 5% Preferred Stock are
convertible is unknown at this time. However, for purposes of example, based
upon the closing bid price of $5.125 per share of the Company's Common Stock as
reported on The Nasdaq Stock Market, Inc. on February 13, 1998, the 2,500 shares
of 5% Preferred Stock would convert, should the holder so elect, into 609,756
shares of Common Stock. Further, should the Company elect to pay dividends on
the 5% Preferred Stock in the form of shares of Common Stock, the number of
shares which may be so issued is unknown at this time.
5% Convertible Preferred Stock
The Company is authorized to issue up to 2,000,000 shares of preferred
stock, par value $.0001 per share, issuable in such series and bearing such
voting, dividend, conversion, liquidation and other rights and preferences as
the Board of Directors may determine. As of February 13, 1998
<PAGE>
there were 30 shares of Series A Preferred Stock, 30,000 shares of Series C
Preferred Stock, 115,000 shares of Series E Cumulative Non-Participating
Preferred Stock and 75,000 shares of Series F 7% Cumulative Non-Participating
Preferred Stock issued and outstanding, none of which have conversion rights. In
addition, in connection with the aforedescribed private placement, the Company
designated a series of 2,500 shares of 5% Convertible Preferred Stock, of which
1,250 shares are presently issued and outstanding. The balance of 1,777,470
shares of preferred stock remaining without designation.
The following is a summary description of the preferences, rights and
limitations of the 5% Convertible Preferred Stock as set forth in the Articles
of Amendment to the Articles of Incorporation of the Company as filed with the
Secretary of State of Florida on January 20, 1998.
Voting Rights
The shares of 5% Preferred Stock carry no voting rights.
Dividends
The holders of the 5% Preferred Stock are entitled to cumulative
dividends at the rate of $50 per share per annum, accrued daily and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year in preference and priority to any payment of any dividend on the Common
Stock or any other class or series of stock of the Company. The dividends are
payable in cash or in shares of the Company's Common Stock providing the shares
of Common Stock issuable upon the conversion of the 5% Preferred Stock have been
registered under the Act.
Liquidation Preference
The 5% Preferred Stock has a face value of $1,000 per share (the "Face
Value"). The liquidation preference is Face Value, plus any accrued but unpaid
dividends.
Redemption
At any time commencing on May 17, 1998 (121 days from the closing
date), upon 20 days notice the Company has the right to redeem any outstanding
shares of 5% Preferred Stock at a redemption price of $1,300 per share, plus any
accrued but unpaid dividends (the "Redemption Value").
<PAGE>
Optional Conversion
The shares of 5% Preferred Stock are convertible at the holder's option
into shares of the Company's Common Stock at a conversion price determined by
dividing the liquidation value of $1,000 per share by the conversion price,
i.e., 80% of the average closing bid price of the Common Stock as report on The
Nasdaq SmallCap Market for the five (5) trading days immediately preceding the
date of conversion.
Liquidated Damages
The Company is obligated to pay the holder of the 5% Preferred Stock
liquidated damages of $500 per day plus an amount equal to 2% of the Purchase
Price of the shares for the first 30 day period after the date on which the
Common Stock should have been issued by the Company or the 5% Preferred Stock
redeemed, plus an amount equal to 3% of the total Purchase Price of the shares
of 5% Preferred Stock for each subsequent 30 day period.
THE BOARD OF DIRECTORS HAS APPROVED THE OFFERING AND RECOMMENDS A VOTE
FOR THE APPROVAL OF THE OFFERING. SUCH APPROVAL REQUIRES THE AFFIRMATIVE VOTE OF
THE HOLDERS OF A MAJORITY OF THE COMMON STOCK REPRESENTED IN PERSON OR BY PROXY
AT THE MEETING.
<PAGE>
STOCK OWNERSHIP
The following table sets forth, as of February 13, 1998, certain
information with respect to the beneficial ownership of the Company's Common
Stock by (i) each person known to the Company who beneficially owns more than 5%
of the Company's outstanding Common Stock, (ii) each director; (iii) all named
executive officers, (iv) all directors and officers as a group:
<TABLE>
<CAPTION>
SHARES OF PERCENTAGE OF
NAME AND ADDRESS COMMON STOCK VOTING POWER
<S> <C> <C>
Robert Hausman(1)(2) 307,500 10.6%
7777 Glades Road
Suite 211
Boca Raton, Florida 33434
C. Lawrence Rutstein(1) 7,500 (3)
7777 Glades Road
Suite 211
Boca Raton, Florida 33434
Lester Gann 128,981 4.8%
2415 Sycamore Drive
Knoxville, Tennessee 37921
Marc Weisz(1) 7,600 (3)
498 Cambridge Lane
Weston, Florida 33326
Yucatan Holding Company 200,000 7.4%
200 East Las Olas Boulevard
Suite 1900
Fort Lauderdale, Florida 33301
All officers and directors 351,581 12.0%
as a group (four persons)(1)(2)
</TABLE>
(1) Includes options to acquire 7,500 shares of the Company's Common Stock
at an exercise price of $2.00 per share granted pursuant to the
Company's 1997 Stock Option Plan.
(2) Includes options to acquire 100,000 shares of the Company's Common
Stock at an exercise price of $5.00 per share and an options to acquire
an additional 100,000 shares of the Company's Common Stock at an
exercise price of $4.00 granted pursuant to Mr. Hausman's management
agreement with the Company.
(3) Represents less than 1%.
<PAGE>
OTHER MATTERS
Management is not aware of any other matters to be presented for action
at the Meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed form of proxy to vote in
accordance with their best judgment on such matter.
COST OF SOLICITATION
The Company will bear the costs of the solicitation of proxies from its
stockholders. In addition to the use of the mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and employees
of the Company will not be compensated additionally for the solicitation but may
be reimbursed for out-of-pocket expenses in connection with the solicitation.
Arrangements are also being made with brokerage houses and any other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of the Company, and the Company will reimburse the brokers,
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the 1998 Annual Meeting must be received by
the Company no later than July 1, 1998 in order to have them included in the
proxy statement and form of proxy relating to that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert Hausman
----------------------------------
Robert Hausman,
President and Chief
Executive Officer
February , 1998
<PAGE>
COVENTRY INDUSTRIES CORP.
SPECIAL MEETING OF STOCKHOLDERS
MARCH 26, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COVENTRY
INDUSTRIES CORP. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of Coventry Industries Corp. (the "Company") hereby
appoints Robert Hausman the true and lawful attorney, agent and proxy of the
undersigned with full power of substitution for and in the name of the
undersigned, to vote all of the shares of Common Stock of the Company which the
undersigned may be entitled to vote at the Special Meeting of Stockholders of
the Company to be held at Embassy Suites, 661 NW 53 Street, Boca Raton, Florida
33487, on Thursday, March 26, 1998 at 9:00 a.m., and any and all adjournments
thereof, with all of the powers which the undersigned would possess if
personally present, for the following purposes:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
1. To approve the possible [ ] [ ] [ ]
issuance of in excess
of 19.95% of the presently
issued and outstanding
Common Stock upon the
conversion of the 5%
Convertible Preferred Stock and
the possible payment of dividends
on the 5% Convertible Preferred
Stock in shares of Common Stock
2. The proxy is authorized to vote [ ] [ ] [ ]
as he determines in his
discretion upon such other
matters as may properly come
before the meeting.
</TABLE>
THIS PROXY WILL BE VOTED FOR THE CHOICE SPECIFIED. IF NO CHOICE IS
SPECIFIED FOR PROPOSAL 1, THIS PROXY WILL BE VOTED FOR THAT ITEM.
<PAGE>
The undersigned hereby acknowledges receipt of the Notice of Special Meeting and
Proxy Statement dated February , 1998.
DATED: ____________________ _______________________________________
(Signature)
_______________________________________
(Signature if jointly held)
_______________________________________
(Printed name(s))
Please sign exactly as name appears on
the stock certificate(s). Joint owners
should each sign. Trustees and others
acting in a representative capacity
should indicate the capacity in which
they sign.
