Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN CONSENT STATEMENT
SCHEDULE
14A INFORMATION
Consent
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No. )
Filed
by
the Registrant o
Filed
by
a Party other than the Registrant x
Check
the
appropriate box:
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x |
Preliminary
Consent Statement
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|
o |
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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|
o |
Definitive
Consent Statement
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|
o |
Definitive
Additional Materials
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o |
Soliciting
Material Under Rule 14a-12
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STONEPATH
GROUP, INC.
(Name
of
Registrant as Specified in Its Charter)
STRATEGIC
TURNAROUND EQUITY PARTNERS, L.P. (Cayman)
GALLOWAY
CAPITAL MANAGEMENT LLC
GARY
L.
HERMAN
BRUCE
GALLOWAY
(Name
of
Persons(s) Filing Consent Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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o |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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|
(1)
|
Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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|
(3)
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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)
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Proposed
maximum aggregate value of
transaction:
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o
Fee
paid previously with preliminary
materials:
o
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.
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(6)
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Amount
previously paid:
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(7)
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Form,
Schedule or Registration Statement
No.:
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STRATEGIC
TURNAROUND EQUITY PARTNERS, LP (Cayman)
C/o
Galloway Capital Management, LLC
720
Fifth Avenue, 10th
Floor
New
York, New York 10019
May
__,
2007
To
the
Stockholders of Stonepath Group, Inc.:
We
are
sending you the attached Consent Statement and the accompanying WHITE
consent
card because we are soliciting consents from Stonepath stockholders to remove
without cause each current member of Stonepath’s Board of Directors (the
“Stonepath Board”) and replace them with our three nominees, and to take certain
other actions described in the attached Consent Statement. The Stonepath Board
is currently comprised of a single class of three members. Each of our nominees,
if elected, would serve in a single class and would hold office until the next
annual meeting of stockholders and until such person’s successor has been
elected or until such person’s death, resignation, retirement or
removal.
We
are
seeking your support for the removal of each current director of Stonepath
and
the election of our three nominees, Seth Lukash, Robert Arovas, and Gary Herman.
The current directors of Stonepath were nominated by a major creditor of
Stonepath that is now both.
We
believe that our nominees are committed to obtaining the best possible result
for Stonepath’s shareholders.
We
urge you to carefully consider the information contained in the attached Consent
Statement and then support our efforts by signing, dating and returning the
enclosed WHITE consent card today. The attached Consent Statement and the
enclosed WHITE consent card are first being furnished to the stockholders on
or
about May __, 2007.
We
urge you not to sign any revocation of consent card that may be sent to you
by
Stonepath. If you have done so, you may revoke that revocation of consent by
delivering a later dated WHITE consent card to Strategic Turnaround Equity
Partners, L.P., in care of Galloway Capital Management, LLC, which is assisting
us, at their address listed on the following page, or to the principal executive
offices of Stonepath.
If
you have any questions or require any assistance with your vote, please contact
Galloway Capital Management, LLC at its address and toll-free number listed
on
the following page.
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Thank
you for your support,
Gary
Herman
Strategic
Turnaround Equity Partners, L.P.
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If
you have any questions, require assistance in voting your
WHITE
consent card,
or
need additional copies of Strategic Turnaround Equity Partners, L.P.’s
consent solicitation materials, please call
Galloway
Capital Management, LLC at the phone numbers listed
below.
Galloway
Capital Management, LLC
720
Fifth Avenue, 10th
Floor
New
York, NY 10019
(212)
247-2072 (Call Collect)
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STONEPATH
GROUP, INC.
CONSENT
SOLICITATION STATEMENT
OF
STRATEGIC
TURNAROUND EQUITY PARTNERS, L.P. (Cayman)
GALLOWAY
CAPITAL MANAGEMENT LLC
GARY
L. HERMAN
BRUCE
GALLOWAY
This
Consent Statement and WHITE
consent
card are furnished by Strategic Turnaround Equity Partners, L.P. (Cayman)
(“Strategic Turnaround”), a limited partnership incorporated under the laws of
the Cayman Islands, and its affiliates (the “Committee For The Preservation of
Stonepath”), in connection with its solicitation of written consents from you,
the holders of shares of common stock, par value $.001 per share (the “Shares”),
of Stonepath Group, Inc., a Delaware corporation (“Stonepath” or the “Company”),
to take the following actions (the “Proposals”) without a stockholders’ meeting,
as authorized by the Delaware General Corporation Law (the “DGCL”):
Proposal
1
- Remove
each member of Stonepath’s Board of Directors (the “Stonepath Board”) and any
person (other than those elected by this consent solicitation) elected or
appointed to the Stonepath Board by such directors to fill any vacancy on the
Stonepath Board or any newly-created directorships;
Proposal
2
- Elect
the nominees of Strategic Turnaround - Seth Lukash, Robert Arovas and Gary
Herman- described in this Consent Statement to serve as directors of Stonepath
(or, if any such nominee is unable or unwilling to serve as a director of
Stonepath, any other person designated as a nominee by the remaining nominee
or
nominees) (the “Strategic Turnaround Nominees”).
The
participants in this proxy solicitation are each of the Strategic Turnaround
nominees, Bruce Galloway, Strategic Turnaround, and Galloway Capital Management
LLC. Information regarding these participants appears under “Participant
Information” below.
This
Consent Statement and the enclosed WHITE
consent
card are first being sent or given to Stonepath’s stockholders on or about May
__, 2007.
On
May
__, 2007, Strategic Turnaround provided its written consent to the Secretary
of
Stonepath thereby fixing a record date for determining stockholders entitled
to
give their written consent to the Proposals described herein (the “Record
Date”). As a result, under the applicable provisions of the Delaware laws,
stockholders of record as of the close of business on the Record Date will
be
entitled to one vote for each Share. Based on publicly available information
filed by Stonepath with the Securities and Exchange Commission (the
“Commission”), there were 43,777,151 Shares issued and outstanding, as of
November, 2006 and based on SEC filings, Strategic Turnaround believes that
an
additional 3,804,768 shares have been issued since then, bring the total
outstanding shares to 47,581,919. Based on the foregoing figure, as of May
18,
2007, Strategic Turnaround and its principals, Gary Herman and Bruce Galloway,
were the beneficial owners of an aggregate of 4,879,789 Shares, which represents
approximately 10.26% of the Shares outstanding. Strategic Turnaround intends
to
vote such Shares in favor of the Proposals described herein. The mailing address
of the principal executive offices of Stonepath is Word Trade Center West,
2200
Alaskan Way, Suite 200, Seattle, WA 98121.
THE
COMMITTEE URGES YOU TO SIGN, DATE AND RETURN THE WHITE
CONSENT
CARD IN FAVOR OF THE PROPOSALS DESCRIBED HEREIN.
BACKGROUND
TO THE SOLICITATION
Effective
February 12, 2007, the members of the Board of Stonepath resigned and appointed
as their replacement three directors designated by Mass Financial Corp. (“Mass
Financial”), Messrs. Slobodan Andjic, Martin Müller-Romheld, and James Carter.
According to Stonepath’s SEC filings, the appointments resulted from Mass
Financial’s purchase by assignment of approximately $3.688 million in
outstanding notes previously issued by Stonepath to Laurus Master Fund Ltd.
(“Laurus”). On March 28, 2007, one of the three Mass Financial nominees, Mr.
Carter, resigned and the Stonepath Board appointed Mr. Nowroz Jal Cama as his
successor. As a result of these transactions, the existing Board of Stonepath
is
now comprised of three individuals, each proposed by Mass Financial or directors
that it selected.
Under
the
agreements signed in February 2007, Stonepath apparently anticipated an
additional $20 million in funding from Mass Financial. These additional funds
have not been advanced.
In
late
March 2007, Stonepath announced that it was unable to prepare and file its
annual report on Form 10-K for its fiscal year ended December 31, 2006 within
the prescribed time period. To date, Stonepath has still not filed its Form
10-K. On April 18, 2007, Stonepath also received a notice from the American
Stock Exchange LLC (the “Exchange”) that by failing to timely file its annual
report on Form 10-K for the fiscal year ended December 31, 2006, Stonepath
had
failed to satisfy standards for continued listing of Stonepath’s securities on
the Exchange.
On
May 4,
2007, Stonepath announced that it had received a notice of default from Mass
Financial on or about April 17, 2007 and that later in April, it had received
a
notice of disposition of certain collateral, specifically that “Mass Financial
is the process of negotiating specific sales of collateral foreclosed upon
in
connection with the April 17, 2007 notice of default….” According to Stonepath’s
SEC filing, the collateral “consist inter
alia of
the
shares of Stonepath Logistics Domestic Services, Inc.
(“SLDS”). . . and the assets of two subsidiaries of SLDS, United
American Freight Services, Inc. and Stonepath Logistics Government Services,
Inc.” According to Stonepath’s SEC filing, it had also received a notice of
appointment of receivers and managers from SBI Brightline, LLC (“SBI”) relating
to the shares of Stonepath in its subsidiary Stonepath Holdings (Hong Kong)
Limited.
On
May 8,
2007, three alleged creditors of the Stonepath filed a petition in the United
States Bankruptcy Court for the District of Delaware seeking an involuntary
Chapter 7 proceeding for Stonepath and the appointment of an interim
trustee.
It
is
apparent that Stonepath’s Board now faces serious challenges and is adverse to
Mass Financial. However, each member of the Board was selected directly or
indirectly by Mass Financial, a creditor who is now seeking to dispose of
Stonepath’s assets. For this reason, Strategic Turnaround believes that new
directors should be appointed who are independent of Mass Financial.
Accordingly, Strategic Turnaround has delivered its written consent to elect
its
three nominees to the Board and has commenced this proxy solicitation to remove
the existing directors without cause and replace them with three new directors.
Strategic Turnaround believes that it is Stonepath’s largest
shareholder.
The
nominees of Strategic Turnaround are not committed to any particular plan or
course of action. Upon election to the Board, they intend to explore all
alternatives to protect and maximize shareholder value, including without
limitation the possible appointment of a restructuring officer, the possible
appointment of Mr. Arovas as interim CEO, the negotiation of new arrangements
with existing creditors, a possible refinancing of the Company’s debt and new
equity capital, and legal challenges to the proceedings filed by Mass
Financial.
IMPORTANT
Your
vote is important, no matter how few Shares you own. Strategic Turnaround urges
you to sign, date, and return the enclosed WHITE consent card today to vote
FOR
the Proposals described herein.
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●
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If
your Shares are registered in your own name, please sign and date
the
enclosed WHITE
consent card and return it to Strategic Turnaround, c/o Galloway
Capital
Management, LLC, in the enclosed envelope
today.
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●
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If
any of your Shares are held in the name of a brokerage firm, bank,
bank
nominee or other institution on the Record Date, only it can vote
such
Shares and only upon receipt of your specific instructions. Accordingly,
please contact the person responsible for your account and instruct
that
person to execute on your behalf the WHITE
consent card. Strategic Turnaround urges you to confirm your instructions
in writing to the person responsible for your account and to provide
a
copy of such instructions to Strategic Turnaround, c/o Galloway Capital
Management, LLC., who is assisting in this solicitation, at the address
and telephone numbers set forth below, and on the back cover of this
Consent Statement, so that we may be aware of all instructions and
can
attempt to ensure that such instructions are
followed.
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If
you
have any questions regarding your WHITE
consent
card,
or
need
assistance in voting your Shares, please call:
Galloway
Capital Management, LLC
720
Fifth Avenue, 10th
Floor
New
York, NY 10019
(212)
247-2072
|
PROPOSAL
NO. 1
REMOVAL
OF EXISTING DIRECTORS SERVING ON
STONEPATH
BOARD
According
to the Bylaws, any director may be removed from office, with or without cause,
by the affirmative vote of a majority of the voting power of all shares of
the
Company entitled to vote generally in the election of directors, voting as
a
single class. We are seeking to remove without cause each member of the
Stonepath Board and any person (other than those elected by this consent
solicitation) elected or appointed to the Stonepath Board by such directors
to
fill any vacancy on the Stonepath Board or any newly-created
directorships.
The
Stonepath Board is currently composed of three (3) directors as set forth below,
each of whom will be removed if Proposal No. 1 is approved:
Name
|
|
Current
Position
|
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Martin
Müller-Romheld
|
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Director
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Nowroz
Jal Cama
|
|
Director
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Slobodan
Andjic
|
|
Director
|
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|
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REASONS
FOR REMOVING EXISTING DIRECTORS
We
recommend that the Stonepath stockholders consent to the removal of all the
directors serving on the Stonepath Board. The most important reason for you
to
consent to the removal of directors is to allow the Stonepath stockholders
to
have representatives who are independent of Mass Financial, a creditor who
is
foreclosing upon Stonepath’s assets.
The
WHITE
consent
card delivered with this Consent Statement provides each stockholder with the
opportunity to adopt Proposal No. 1 in part by designating the names of any
member of the Stonepath Board whom such stockholder does not want removed from
the Stonepath Board.
Strategic
Turnaround urges you to vote FOR its proposal to remove each member of the
Stonepath Board and any person (other than those elected by this consent
solicitation) elected or appointed to the Stonepath Board by such directors
to
fill any vacancy on the Stonepath Board or any newly-created directorships
on
the enclosed WHITE consent card.
PROPOSAL
NO. 2
ELECTION
OF THE STRATEGIC TURNAROUND NOMINEES
The
Stonepath Board is currently composed of three (3) directors. Each of the
Strategic Turnaround Nominees, if elected, would serve as a single class and
would hold office until the next annual meeting of stockholders and until such
person’s successor has been elected or until such person’s death, resignation,
retirement or removal.
The
Nominees
The
following information sets forth the name, age, business address, present
principal occupation, and employment and material occupations, positions,
offices, or employments for the past five years of each of the Strategic
Turnaround Nominees. Each of the Strategic Turnaround Nominees is a citizen
of
the United States of America.
Seth
Lukash
Mr.
Lukash has been Chief Executive Officer and a consultant to Food Automation
Service Techniques, Inc. and Smart Commercial Kitchen, a manufacturer of
appliance controls exclusively for the foodservice industry, since 2002. From
1985 through 2001, Mr. Lukash served as President and Chief Executive Officer
of
Tridex Corporation. From 2001 through July 2002, Mr. Lukash served as President
and Chief Executive Officer of Progressive Software Inc., a designer and
developer of software for the specialty retail and restaurant industries. Mr.
Lukash is currently on the Board of Directors of DataMetrics Corporation and
is
employed by USi Power of Armonk, New York. He received a B.A. in Finance from
the University of Miami in 1968. Mr. Lukash does not beneficially own any shares
of Stonepath common stock. He is 61 years old.
Robert
Arovas
Mr.
Arovas was the past Chief Executive Officer of Stonepath Group, Inc., a publicly
held corporation on the AMEX from October 2006 to April 2007. From October
1994
to October 1996 he served as the Company’s President and Chief Financial
Officer. He also serves on the Board of Directors of a privately held company
in
the meat processing business.
Mr.
Arovas was the President, Chief Executive Officer, and member of the Board
of
Directors of GeoLogistics Corporation, a privately held, $1.2 billion global
organization providing integrated logistics services around the world. He has
over 40 years of experience in both product and service businesses, of which
the
last 25 years have been in senior executive positions. He is a financially
trained executive who has held the position of CFO for publicly held
Corporations on the New York Stock Exchange and NASDAQ. Mr. Arovas’
international experience spans 30 years, conducting business in every continent
of the world. His experience includes financial restructurings, debt placements,
working capital management, acquisitions and divestitures of businesses, and
expansions and contractions of operations. He also has extensive experience
with
information systems as a director of the function, a consumer of and a seller
of
information services. He is a graduate of Syracuse University and a Certified
Public Accountant. Mr. Arovas is 61 years old and beneficially owns 502,614
shares of Stonepath common stock, which includes options to acquire 500,000
shares issued to him while he was employed by Stonepath.
Gary
Herman
Mr.
Herman has been a Managing Member of Galloway Capital Management, LLC since
2003.
From
1997
to 2002, Mr. Herman was an Associate Managing Director of the Galloway Division
at Burnham Securities Inc. Mr. Herman has extensive experience investing in,
structuring, and managing corporate turnarounds. Prior to joining Burnham,
Mr.
Herman was the managing partner of Kingshill Group, Inc., a merchant banking
and
financial firm with offices in New York and Tokyo. He was instrumental in
originating and executing numerous domestic and cross-border
transactions.
He
has a
B.S. from the State University of New York at Albany. Mr. Herman is Chairman
of
Digital Creative Development Corp and DataMetrics Corporation, as well as a
Director of Shells Seafood Restaurants, Inc., and a former director of the
NYC
Industrial Development Agency. He has sat on the boards of many private and
public companies, and has been involved in turnarounds of companies at all
levels including management, advisory, corporate finance and acquisitions.
Mr.
Herman is 42 years old and is the beneficial owner of 4,015,990 shares of
Stonepath common stock, which includes, 3,955,590 owned by Strategic Turnaround
over which he has shared voting power.
There
can
be no assurance that the election of the Strategic Turnaround Nominees will
lead
to any specific results.
The
Strategic Turnaround Nominees will not receive any compensation from Strategic
Turnaround for their services as directors of Stonepath. Other than as stated
herein, there are no arrangements or understandings between Strategic Turnaround
and any of the Strategic Turnaround Nominees or any other person or persons
pursuant to which the nomination described herein is to be made, other than
the
consent by each of the Strategic Turnaround Nominees to be named in this Consent
Statement and to serve as a director of Stonepath if elected. Except as
otherwise set forth herein, none of the Strategic Turnaround Nominees is a
party
adverse to Stonepath or any of its subsidiaries or has a material interest
adverse to Stonepath or any of its subsidiaries in any material pending legal
proceedings. We may modify the number and/or identity of the Strategic
Turnaround Nominees if we deem such modification advisable in light of
Stonepath’s actions, subject to applicable law.
The
WHITE
consent
card delivered with this Consent Statement provides each stockholder with the
opportunity to adopt Proposal No. 2 in part by designating the names of any
of
the Strategic Turnaround Nominees whom such stockholder does not want elected
to
the Stonepath Board.
Strategic
Turnaround urges you to vote FOR the election of the Strategic Turnaround
Nominees on the enclosed WHITE consent card.
CONSENT
PROCEDURES
Section
228 of the DGCL provides that, unless the certificate of incorporation of a
Delaware corporation otherwise provides, any action required to be taken at
any
annual or special meeting of stockholders of that corporation, or any action
that may be taken at any annual or special meeting of those stockholders, may
be
taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action so taken, is signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take that action at a meeting at which
all shares entitled to vote thereon were present and voted, and those consents
are delivered to the corporation by delivery to its registered office in
Delaware, its principal place of business or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. The certificate of incorporation of Stonepath does
not prohibit stockholder action by written consent.
To
be
effective, the requisite written consents must be delivered to Stonepath within
60 days of the earliest dated written consent delivered to Stonepath. Strategic
Turnaround delivered its written consent to Stonepath on May __, 2007. Thus,
written consents must be delivered to Stonepath by July __, 2007 to be
effective.
If
the
Proposals become effective as a result of this consent solicitation, prompt
notice will be given under Section 228(e) of the DGCL to stockholders who have
not executed written consents. All stockholders will be notified as promptly
as
possible by press release of the results of the solicitation.
According
to publicly available information, the Shares constitute Stonepath’s only class
of voting securities and each Share entitles its record holder to one vote.
Stockholders of Stonepath do not have cumulative voting rights in the election
of directors and cumulative voting is not applicable in this consent
solicitation. Only holders of Shares as of the close of business on the Record
Date are entitled to execute written consents in favor of the Proposals. If
you
are a stockholder of record at the close of business on the Record Date, you
will retain your right to consent even if you sell your Shares after the Record
Date. Accordingly, it is important that you provide consent for the Shares
held
by you as of the close of business on the Record Date on the WHITE
consent
card.
Revocation
of Consents
An
executed consent card may be revoked at any time by marking, dating, signing
and
delivering a written revocation before the time that the action authorized
by
the executed consent becomes effective. A revocation may be in any written
form
validly signed by the record holder as long as it clearly states that the
consent previously given is no longer effective. The delivery of a subsequently
dated consent card that is properly completed will constitute a revocation
of
any earlier consent. The revocation may be delivered either to Strategic
Turnaround, c/o Galloway Capital Management, LLC, 720 Fifth Avenue,
10th
Floor,
New York, New York 10019, or to the principal executive offices of Stonepath.
Although a revocation is effective if delivered to Stonepath, we request that
either the original or photostatic copies of all revocations of consents be
mailed or delivered to Strategic Turnaround, c/o Galloway Capital Management,
LLC, at its address set forth above, so that we will be aware of all revocations
and can more accurately determine if and when sufficient unrevoked consents
in
favor of the Proposals have been received.
Special
Instructions
If
you
are a record holder of Shares as of the close of business on the Record Date
for
this consent solicitation, you may elect to consent to, withhold consent to
or
abstain with respect to each Proposal by marking the “CONSENTS,” “WITHHOLD
CONSENT” or “ABSTAIN” box, as applicable, underneath each Proposal on the
accompanying WHITE
consent
card and signing, dating and returning it promptly in the enclosed postage-paid
envelope. The effectiveness of each Proposal will require the properly completed
and duly delivered, unrevoked written consent to that Proposal by the holders
of
record, as of the close of business on the Record Date, of a majority of the
Shares then outstanding.
The
accompanying WHITE
consent
card will be acted upon in accordance with the stockholder’s instructions on
such WHITE
consent
card. You may consent to the removal of all directors of Stonepath by marking
the “CONSENTS” box or you may consent to the removal of only certain of such
directors by marking the “CONSENTS” box and writing the name of any director you
do not want removed in the space provided on the WHITE
consent
card. You also may consent to the appointment of the entire slate of the
Strategic Turnaround Nominees by marking the “CONSENTS” box or you may withhold
consent to the appointment of any one or more of the Strategic Turnaround
Nominees by marking the “CONSENTS” box and writing the name of any Strategic
Turnaround Nominee you do not want to be appointed in the space provided on
the
WHITE
consent
card.
IF
A STOCKHOLDER EXECUTES AND DELIVERS A WHITE CONSENT CARD, BUT FAILS TO CHECK
A
BOX MARKED “CONSENTS,” “WITHHOLD CONSENT” OR “ABSTAIN” FOR A PROPOSAL, THAT
STOCKHOLDER WILL BE DEEMED TO HAVE CONSENTED TO THAT
PROPOSAL.
YOUR
CONSENT IS IMPORTANT. PLEASE SIGN, DATE AND RETURN THE ENCLOSED WHITE CONSENT
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED TODAY. FAILURE TO RETURN YOUR CONSENT
WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE PROPOSALS.
If
your
Shares are held in the name of a broker, dealer, commercial bank, trust company
or other nominee, only it can execute a consent with respect to your Shares
and
only upon receipt of your specific instructions. Accordingly, it is critical
that you promptly contact the person responsible for your account and give
instructions for a WHITE
consent
card in favor of each of the Proposals. We urge you to confirm in writing your
instructions to the person responsible for your account and provide a copy
of
those instructions to Strategic Turnaround, c/o Galloway Capital Management,
LLC, so that we will be aware of all instructions given and can attempt to
ensure that those instructions are followed.
SOLICITATION
OF CONSENTS
The
solicitation of consents pursuant to this consent solicitation is being made
by
Strategic Turnaround. Consents may be solicited by mail, facsimile, telephone,
telegraph, Internet, in person and by advertisements.
Strategic
Turnaround has retained _______________ (the “Proxy Firm”) for advisory services
in connection with this solicitation, for which the Proxy Firm will receive
a
fee not to exceed $__________, together with reimbursement of its reasonable
out-of-pocket expenses, and will be indemnified against certain liabilities
and
expenses, including certain liabilities under the federal securities laws.
In
addition, under certain circumstances, the Proxy Firm may receive additional
amounts. Strategic Turnaround will solicit consents from individuals, brokers,
banks, bank nominees and other institutional holders. Strategic Turnaround
has
requested banks, brokerage houses and other custodians, nominees and fiduciaries
to forward all solicitation materials to the beneficial owners of the Shares
they hold of record. Strategic Turnaround will reimburse these record holders
for their reasonable out-of-pocket expenses in so doing. It is anticipated
that
the Proxy Firm will employ approximately ____ persons in connection with its
services to Strategic Turnaround.
The
entire expense of soliciting consents is being borne by Strategic Turnaround.
If
the Proposals are approved, Strategic Turnaround intends to seek reimbursement
of the costs of this solicitation from Stonepath. Unless otherwise required
by
law, Strategic Turnaround does not currently intend to submit the question
of
reimbursement of the costs of this solicitation to a vote of stockholders.
The
costs of this consent solicitation are currently estimated to be approximately
$________. Strategic Turnaround estimates that through the date hereof, its
expenses in connection with this solicitation are approximately
$10,000.
PARTICIPANT
INFORMATION
Strategic
Turnaround Equity Partners, L.P. (Cayman) is a limited partnership organized
under the laws of the Cayman Islands and a fund focused primarily on investing
in undervalued public equities. Galloway Capital Management LLC is a Delaware
limited liability company and principally engaged in serving as the general
partner of Strategic Turnaround Equity Partners, L.P. (Cayman). The address
of
the principal business office of Strategic Turnaround Equity Partners, L.P.
(Cayman) and Galloway Capital Management LLC is c/o Galloway Capital Management
LLC, 720 Fifth Avenue, 10th
Floor,
New York, New York 10019. As of the date hereof, Strategic Turnaround Equity
Partners, L.P. (Cayman) beneficially owned 3,955,590 shares of Stonepath Common
Stock. As of the date hereof, Galloway Capital Management LLC (as the general
partner of Strategic Turnaround Equity Partners, L.P. (Cayman)) beneficially
owned 3,955,590 shares of Stonepath Common Stock. For information regarding
the
purchases and sales of securities of Stonepath Common Stock by Strategic
Turnaround Equity Partners, L.P. (Cayman) and Galloway Capital Management LLC
during the past two years, see Schedule I.
Gary
L.
Herman is a citizen of the United States and a managing member of Strategic
Turnaround Equity Partners, L.P. (Cayman) and Galloway Capital Management LLC.
He has been a managing member of Galloway Capital Management LLC since 2003.
From 1997 to 2002, Mr. Herman was an Associate Managing Director of the Galloway
Division at Burnham Securities Inc. (“Burnham”). Mr. Herman has extensive
experience investing in, structuring, and managing corporate turnarounds. Prior
to joining Burnham, Mr. Herman was the managing partner of Kingshill Group,
Inc., a merchant banking and financial firm with offices in New York and Tokyo.
He was instrumental in originating and executing numerous domestic and
cross-border transactions. Mr. Herman has a B.S. from the State University
of
New York at Albany. He is Chairman of Digital Creative Development Corp and
DataMetrics Corporation, as well as a Director of Shells Seafood Restaurants,
Inc., and a former director of the NYC Industrial Development Agency. He has
sat
on the boards of many private and public companies, and has been involved in
turnarounds of companies at all levels including management, advisory, corporate
finance and acquisitions. The address of the principal business office of Gary
L. Herman is c/o Galloway Capital Management LLC, 720 Fifth Avenue,
10th
Floor,
New York, New York 10019. As of the date hereof, Mr. Herman beneficially owned
4,015,590 shares of Stonepath Common Stock, including 30,000 shares held through
the Gary Herman, IRA. For information regarding the purchases and sales of
securities of Stonepath Common Stock by Gary Herman during the past two years,
see Schedule I.
Bruce
Galloway is a citizen of the United States and a managing member of Strategic
Turnaround Equity Partners, L.P. (Cayman) and Galloway Capital Management LLC.
Mr. Galloway also holds a majority membership interest in those two entities.
Mr. Galloway has over 20 years of experience investing in turnaround companies.
In 1991, Mr. Galloway pioneered the fundamental concepts behind his proprietary
STEP program as a Senior Vice President at Oppenheimer & Co. Mr. Galloway
brought STEP to Burnham Securities Inc., where he established and managed the
Galloway Division from 1993 to 2005. Prior to Oppenheimer, Mr. Galloway held
various positions in Institutional Equity Research and Sales with Rausher Pierce
& Refsnes, Inc., Morgan Keegan & Co., L.F. Rothschild & Co., and
Prudential Insurance. He holds a B.A. in Economics from Hobart College and
an
MBA in Finance from New York University’s Stern Graduate School of Business. Mr.
Galloway is Chairman of Command Security Corporation, as well as a director
of
Forward Industries, Inc. The address of the principal business office of Bruce
Galloway is c/o Galloway Capital Management LLC, 720 Fifth Avenue,
10th
Floor,
New York, New York 10019. As of the date hereof, Mr. Galloway beneficially
owned
4,819,789 shares of Stonepath Common Stock, including 748,749 shares held
through the Bruce Galloway, IRA, 55,000 shares owned by Mr. Galloway’s children,
Justin and Alana (for which Mr. Galloway has the power to dispose), and 60,450
held by RexonGalloway Capital Growth, LLC (for which Mr. Galloway retains full
investment and voting discretion). For information regarding the purchases
and
sales of securities of Stonepath Common Stock by Mr. Galloway during the past
two years, see Schedule I.
Seth
Lukash has been Chief Executive Officer and a consultant to Food Automation
Service Techniques, Inc. and Smart Commercial Kitchen, a manufacturer of
appliance controls exclusively for the foodservice industry, since 2002. From
1985 through 2001, Mr. Lukash served as President and Chief Executive Officer
of
Tridex Corporation. From 2001 through July 2002, Mr. Lukash served as President
and Chief Executive Officer of Progressive Software Inc., a designer and
developer of software for the specialty retail and restaurant industries. Mr.
Lukash is currently on the Board of Directors of DataMetrics Corporation and
is
employed by USi Power of Armonk, New York. Mr. Lukash received a B.A. in Finance
from the University of Miami in 1968. Mr. Lukash does not beneficially own
any
shares of Stonepath common stock. He maintains a business address at 102 Regents
Park, Westport, CT 06880.
Robert
Arovas served as Chief Executive Officer of Stonepath from October 2006 to
April
2007. From October 1994 to October 1996, he served as the Company’s President
and Chief Financial Officer. He also serves on the Board of Directors of a
privately held company in the meat processing business. Mr. Arovas was the
President, Chief Executive Officer, and member of the Board of Directors of
GeoLogistics Corporation, a privately held, $1.2 billion global organization
providing integrated logistics services around the world. He has over 40 years
of experience in both product and service businesses, of which the last 25
years
have been in senior executive positions. He is a financially trained executive
who has held the position of Chief Financial Officer for publicly held
corporations on the New York Stock Exchange and NASDAQ. Mr. Arovas’
international experience spans 30 years, conducting business in every continent
of the world. His experience includes financial restructurings, debt placements,
working capital management, acquisitions and divestitures of businesses, and
expansions and contractions of operations. He also has extensive experience
with
information systems as a director of the function, a consumer of and a seller
of
information services. He is a graduate of Syracuse University and a Certified
Public Accountant. As of the date hereof, Mr. Arovas is the beneficial owner
of
502,614 shares of Stonepath Common Stock which includes options to acquire
500,000 shares. Pursuant to his Employment Agreement with the Company dated
February 2, 2005, Mr. Avoras was compensated at the rate of $250,000 per annum
prior to his dismissal on or about April 16, 2007. Mr. Arovas has advised the
Company that he believes additional sums are owed to him under his employment
agreement, including a “change of control” payment. Mr. Arovas maintains a
business address at 950 Wilson Street, Laguna Beach, California 92651. For
information regarding the purchases and sales of securities of Stonepath Common
Stock by Mr. Arovas during the past two years, see Schedule I.
Except
as
set forth in this Consent Statement (including the Schedules hereto), (i) during
the past 10 years, no participant in this solicitation has been convicted in
a
criminal proceeding (excluding traffic violations or similar misdemeanors);
(ii)
no participant in this solicitation directly or indirectly beneficially owns
any
securities of Stonepath; (iii) no participant in this solicitation owns any
securities of Stonepath which are owned of record but not beneficially; (iv)
no
participant in this solicitation has purchased or sold any securities of
Stonepath during the past two years; (v) no part of the purchase price or market
value of the securities of Stonepath owned by any participant in this
solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities
of
Stonepath, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii)
no
associate of any participant in this solicitation owns beneficially, directly
or
indirectly, any securities of Stonepath; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any securities of any
parent or subsidiary of Stonepath; (ix) no participant in this solicitation
or
any of his/its associates was a party to any transaction, or series of similar
transactions, since the beginning of Stonepath’s last fiscal year, or is a party
to any currently proposed transaction, or series of similar transactions, to
which Stonepath or any of its subsidiaries was or is to be a party, in which
the
amount involved exceeds $60,000; (x) no participant in this solicitation or
any
of his/its associates has any arrangement or understanding with any person
with
respect to any future employment by Stonepath or its affiliates, or with respect
to any future transactions to which Stonepath or any of its affiliates will
or
may be a party; and (xi) no person, including the participants in this
solicitation, who is a party to an arrangement or understanding pursuant to
which the Strategic Turnaround Nominees are proposed to be elected has a
substantial interest, direct or indirect, by security holdings or otherwise
in
any matter known to Strategic Turnaround.
OTHER
MATTERS AND ADDITIONAL INFORMATION
Ownership
of More Than 5% Security Holders and Management
See
Schedule II for information regarding persons who beneficially own more than
5%
of the Shares and the ownership of the Shares by the management of
Stonepath.
Information
Concerning Stonepath
The
information concerning Stonepath contained in this Consent Statement and the
Schedules attached hereto has been taken from, or is based upon, publicly
available information. Although Strategic Turnaround does not have any
information that would indicate that any information contained in this Consent
Statement that has been taken from such documents is inaccurate or incomplete,
Strategic Turnaround does not take any responsibility for the accuracy or
completeness of such information.
SCHEDULE
I
TRANSACTIONS
IN SECURITIES OF STONEPATH
DURING
THE PAST TWO YEARS
Class
of
Security
|
|
Quantity
Purchased
|
|
Price
Per
Share
($)
|
|
Date
of
Purchase
|
|
STRATEGIC
TURNAROUND
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
20200
|
|
STG
|
|
5/2/2006
|
|
5/5/2006
|
|
0.7398
|
Buy
|
|
26800
|
|
STG
|
|
5/9/2006
|
|
5/12/2006
|
|
0.7409
|
Buy
|
|
50000
|
|
STG
|
|
5/31/2006
|
|
6/5/2006
|
|
0.51
|
Buy
|
|
35000
|
|
STG
|
|
6/15/2006
|
|
6/20/2006
|
|
0.3505
|
Buy
|
|
25900
|
|
STG
|
|
6/16/2006
|
|
6/21/2006
|
|
0.3624
|
Buy
|
|
40000
|
|
STG
|
|
6/21/2006
|
|
6/26/2006
|
|
0.3825
|
Buy
|
|
40000
|
|
STG
|
|
6/22/2006
|
|
6/27/2006
|
|
0.3847
|
Buy
|
|
20000
|
|
STG
|
|
6/28/2006
|
|
7/3/2006
|
|
0.33
|
Buy
|
|
3900
|
|
STG
|
|
6/29/2006
|
|
7/5/2006
|
|
0.33
|
STRATEGIC
TURNAROUND
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
30100
|
|
STG
|
|
6/30/2006
|
|
7/6/2006
|
|
0.33
|
Buy
|
|
60000
|
|
STG
|
|
7/25/2006
|
|
7/28/2006
|
|
0.2804
|
Buy
|
|
100000
|
|
STG
|
|
8/1/2006
|
|
8/4/2006
|
|
0.3051
|
Buy
|
|
21260
|
|
STG
|
|
8/2/2006
|
|
8/7/2006
|
|
0.31
|
Buy
|
|
83500
|
|
STG
|
|
8/3/2006
|
|
8/8/2006
|
|
0.3085
|
Buy
|
|
23600
|
|
STG
|
|
8/4/2006
|
|
8/9/2006
|
|
0.3066
|
Buy
|
|
10000
|
|
STG
|
|
8/22/2006
|
|
8/25/2006
|
|
0.21
|
Buy
|
|
31000
|
|
STG
|
|
8/29/2006
|
|
9/1/2006
|
|
0.2103
|
Buy
|
|
13300
|
|
STG
|
|
10/25/2006
|
|
10/30/2006
|
|
0.33
|
Buy
|
|
19663
|
|
STG
|
|
10/27/2006
|
|
11/1/2006
|
|
0.32
|
Buy
|
|
1800
|
|
STG
|
|
11/9/2006
|
|
11/14/2006
|
|
0.3083
|
Buy
|
|
99000
|
|
STG
|
|
11/10/2006
|
|
11/15/2006
|
|
0.32
|
Buy
|
|
48200
|
|
STG
|
|
11/13/2006
|
|
11/16/2006
|
|
0.33
|
Buy
|
|
327400
|
|
STG
|
|
11/15/2006
|
|
11/20/2006
|
|
0.2004
|
Buy
|
|
30600
|
|
STG
|
|
11/22/2006
|
|
11/28/2006
|
|
0.18
|
Buy
|
|
162457
|
|
STG
|
|
11/30/2006
|
|
12/5/2006
|
|
0.1989
|
Buy
|
|
42036
|
|
STG
|
|
12/6/2006
|
|
12/11/2006
|
|
0.2024
|
Buy
|
|
99000
|
|
STG
|
|
12/7/2006
|
|
12/12/2006
|
|
0.2006
|
Buy
|
|
44300
|
|
STG
|
|
12/11/2006
|
|
12/14/2006
|
|
0.21
|
Buy
|
|
61630
|
|
STG
|
|
12/12/2006
|
|
12/15/2006
|
|
0.21
|
Buy
|
|
36405
|
|
STG
|
|
12/22/2006
|
|
12/28/2006
|
|
0.1865
|
Buy
|
|
185300
|
|
STG
|
|
12/26/2006
|
|
12/29/2006
|
|
0.18
|
Buy
|
|
3500
|
|
STG
|
|
12/27/2006
|
|
1/2/2007
|
|
0.1729
|
Buy
|
|
80000
|
|
STG
|
|
12/29/2006
|
|
1/4/2007
|
|
0.1695
|
Buy
|
|
100000
|
|
STG
|
|
1/3/2007
|
|
1/8/2007
|
|
0.1798
|
Buy
|
|
98995
|
|
STG
|
|
1/4/2007
|
|
1/9/2007
|
|
0.1984
|
Buy
|
|
121887
|
|
STG
|
|
1/5/2007
|
|
1/10/2007
|
|
0.2061
|
Buy
|
|
100000
|
|
STG
|
|
1/8/2007
|
|
1/11/2007
|
|
0.2137
|
Buy
|
|
127500
|
|
STG
|
|
1/9/2007
|
|
1/12/2007
|
|
0.222
|
Buy
|
|
95000
|
|
STG
|
|
1/10/2007
|
|
1/16/2007
|
|
0.2164
|
Buy
|
|
50000
|
|
STG
|
|
1/17/2007
|
|
1/22/2007
|
|
0.23
|
Buy
|
|
17300
|
|
STG
|
|
1/18/2007
|
|
1/23/2007
|
|
0.23
|
Buy
|
|
100000
|
|
STG
|
|
1/19/2007
|
|
1/24/2007
|
|
0.22
|
Buy
|
|
25000
|
|
STG
|
|
1/24/2007
|
|
1/29/2007
|
|
0.21
|
Buy
|
|
40890
|
|
STG
|
|
1/30/2007
|
|
2/2/2007
|
|
0.2073
|
Buy
|
|
62760
|
|
STG
|
|
1/31/2007
|
|
2/5/2007
|
|
0.2064
|
Buy
|
|
32986
|
|
STG
|
|
2/1/2007
|
|
2/6/2007
|
|
0.2
|
Buy
|
|
45700
|
|
STG
|
|
2/2/2007
|
|
2/7/2007
|
|
0.21
|
Buy
|
|
47000
|
|
STG
|
|
2/5/2007
|
|
2/8/2007
|
|
0.2
|
Buy
|
|
55721
|
|
STG
|
|
2/6/2007
|
|
2/9/2007
|
|
0.21
|
Buy
|
|
27400
|
|
STG
|
|
2/7/2007
|
|
2/12/2007
|
|
0.2136
|
Buy
|
|
60000
|
|
STG
|
|
2/16/2007
|
|
2/22/2007
|
|
0.2607
|
Buy
|
|
40900
|
|
STG
|
|
2/22/2007
|
|
2/27/2007
|
|
0.2981
|
Buy
|
|
30000
|
|
STG
|
|
3/29/2007
|
|
4/3/2007
|
|
0.1998
|
Buy
|
|
30000
|
|
STG
|
|
3/30/2007
|
|
4/4/2007
|
|
0.2
|
Buy
|
|
99100
|
|
STG
|
|
4/5/2007
|
|
4/11/2007
|
|
0.13
|
Sell
|
|
-145400
|
|
STG
|
|
4/18/2007
|
|
4/23/2007
|
|
0.1142
|
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
50000
|
|
STG
|
|
3/15/2006
|
|
3/20/2006
|
|
0.8579
|
Buy
|
|
80000
|
|
STG
|
|
3/31/2006
|
|
4/5/2006
|
|
0.8009
|
Buy
|
|
106000
|
|
STG
|
|
4/3/2006
|
|
4/6/2006
|
|
0.672
|
Buy
|
|
40000
|
|
STG
|
|
4/17/2006
|
|
4/20/2006
|
|
0.69
|
BRUCE
GALLOWAY IRA
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
7025
|
|
STG
|
|
3/16/2006
|
|
3/21/2006
|
|
0.811
|
Buy
|
|
54100
|
|
STG
|
|
3/17/2006
|
|
3/22/2006
|
|
0.8466
|
Buy
|
|
50000
|
|
STG
|
|
3/20/2006
|
|
3/23/2006
|
|
0.8498
|
Buy
|
|
30000
|
|
STG
|
|
4/3/2006
|
|
4/6/2006
|
|
0.672
|
Buy
|
|
20000
|
|
STG
|
|
4/12/2006
|
|
4/18/2006
|
|
0.68
|
Buy
|
|
10000
|
|
STG
|
|
4/24/2006
|
|
4/27/2006
|
|
0.7194
|
Buy
|
|
20000
|
|
STG
|
|
4/26/2006
|
|
5/1/2006
|
|
0.7689
|
Buy
|
|
20000
|
|
STG
|
|
5/2/2006
|
|
5/5/2006
|
|
0.7398
|
Buy
|
|
25000
|
|
STG
|
|
5/3/2006
|
|
5/8/2006
|
|
0.7461
|
Buy
|
|
20000
|
|
STG
|
|
5/9/2006
|
|
5/12/2006
|
|
0.7409
|
Buy
|
|
50000
|
|
STG
|
|
6/20/2006
|
|
6/23/2006
|
|
0.37
|
Buy
|
|
80000
|
|
STG
|
|
7/24/2006
|
|
7/27/2006
|
|
0.2671
|
Buy
|
|
60000
|
|
STG
|
|
7/25/2006
|
|
7/28/2006
|
|
0.2804
|
Buy
|
|
120000
|
|
STG
|
|
7/26/2006
|
|
7/31/2006
|
|
0.2896
|
Buy
|
|
99000
|
|
STG
|
|
8/17/2006
|
|
8/22/2006
|
|
0.21
|
Buy
|
|
15000
|
|
STG
|
|
8/28/2006
|
|
8/31/2006
|
|
0.21
|
Sell
|
|
-42500
|
|
STG
|
|
9/6/2006
|
|
9/11/2006
|
|
0.25
|
Buy
|
|
91555
|
|
STG
|
|
11/27/2006
|
|
11/30/2006
|
|
0.18
|
Buy
|
|
12444
|
|
STG
|
|
11/29/2006
|
|
12/4/2006
|
|
0.19
|
Buy
|
|
7125
|
|
STG
|
|
1/23/2007
|
|
1/26/2007
|
|
0.22
|
ALANA
GALLOWAY
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
8000
|
|
STG
|
|
4/13/2006
|
|
4/19/2006
|
|
0.6751
|
Buy
|
|
6000
|
|
STG
|
|
4/25/2006
|
|
4/28/2006
|
|
0.77
|
Buy
|
|
7000
|
|
STG
|
|
7/11/2006
|
|
7/14/2006
|
|
0.3683
|
JUSTIN
GALLOWAY
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
12000
|
|
STG
|
|
4/13/2006
|
|
4/19/2006
|
|
0.6751
|
Buy
|
|
15000
|
|
STG
|
|
5/3/2006
|
|
5/8/2006
|
|
0.7461
|
Buy
|
|
7000
|
|
STG
|
|
7/11/2006
|
|
7/14/2006
|
|
0.3683
|
GARY
HERMAN
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
30000
|
|
STG
|
|
8/4/2006
|
|
8/9/2006
|
|
0.3066
|
GARY
HERMAN IRA
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
30000
|
|
STG
|
|
8/4/2006
|
|
8/9/2006
|
|
0.3066
|
REXON
GALLOWAY
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
Buy
|
|
20000
|
|
STG
|
|
8/16/2006
|
|
8/21/2006
|
|
0.24
|
Sell
|
|
-14900
|
|
STG
|
|
12/14/2006
|
|
12/19/2006
|
|
0.21
|
Buy
|
|
10000
|
|
STG
|
|
5/3/2006
|
|
5/8/2006
|
|
0.7461
|
Buy
|
|
24100
|
|
STG
|
|
7/21/2006
|
|
7/26/2006
|
|
0.3022
|
Sell
|
|
-34100
|
|
STG
|
|
12/14/2006
|
|
12/19/2006
|
|
0.21
|
Buy
|
|
55350
|
|
STG
|
|
1/22/2007
|
|
1/25/2007
|
|
0.22
|
ROBERT
AROVAS
|
Activity
|
|
Quantity
|
|
Symbol
|
|
Trade
Date
|
|
Settle
Date
|
|
USD
Price
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Arovas acquired 2,614 shares at various time in 2005, 2006 and early 2007,
through the Company’s Employee Stock Purchase Plan. None of these purchase was
in the open market.
SCHEDULE
II
COMMON
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
The
following tables sets forth information as of May 18, 2007, regarding the
beneficial ownership of the Company Common Stock by the only persons known
to
the Company to be the beneficial owners of more than 5% of the Company’s issued
and outstanding Common Stock. It is compiled from the Schedule 13D filings
by
each entity and the percentage ownership is based on 47,581,919 shares
outstanding.
Name
and Address of
Beneficial
Owner
|
|
Amount
and Nature
of
Beneficial
Ownership
of
Common
Stock
|
|
Percentage
of Issued
and
Outstanding
Common
Stock on
May
18, 2007
|
Strategic
Turnaround Equity
Partners,
LP and affiliates*
720
Fifth Avenue, 10th
Fl.
New
York, New York 10019
|
|
4,879,789
|
|
10.25%
|
|
|
|
|
|
Laurus
Master Fund Ltd.
825
Third Avenue
New
York, New York 10022
|
|
3,500,000
|
|
7.36%
|
|
|
|
|
|
Gruber
and McBaine Capital Management
1600
Market Street
Philadelphia,
PA 19103
|
|
3,373,450
|
|
7.01%
|
*
Includes
shares beneficially owned by Bruce Galloway and Gary
Herman.
The
following table presents information regarding beneficial ownership of the
Company Common Stock by each member of the Board of Directors, each nominee
for
election as a director, each of the executive officers of the Company named
in
the summary compensation table below and by all directors and executive officers
of the Company as a group, as of May 18, 2007.
Name
of Individual or Group
|
|
Amount
and Nature
of
Beneficial
Ownership
of
Common
Stock
|
|
Percentage
of Issued
and
Outstanding
Common
Stock on
May,
2007
|
|
|
|
|
|
Martin
Müller-Romheld (Director/CEO)
|
|
None
|
|
None
|
|
|
|
|
|
Nowroz
Jal Cama (Director)
|
|
None
|
|
None
|
|
|
|
|
|
Slobodan
Andjic (Director)
|
|
None
|
|
None
|
|
|
|
|
|
Seth
Lukash (Nominee)
|
|
None
|
|
None
|
|
|
|
|
|
Robert
Arovas (Nominee)
|
|
502,614*
|
|
1.01%
|
|
|
|
|
|
Gary
Herman (Nominee)
|
|
4,015,990
|
|
8.44%
|
* Includes
options to acquire 500,000 shares.
IMPORTANT
Tell
your
Board what you think! Your vote is important. No matter how many Shares you
own,
please give Strategic Turnaround your consent FOR the Proposals described herein
by taking three steps:
|
●
|
SIGNING
the enclosed WHITE
consent card,
|
|
●
|
DATING
the enclosed WHITE
consent card, and
|
|
●
|
MAILING
the enclosed WHITE
consent
card TODAY in the envelope provided (no postage is required if mailed
in
the United States).
|
If
any of
your Shares are held in the name of a brokerage firm, bank, bank nominee or
other institution, only it can vote such Shares and only upon receipt of your
specific instructions. Accordingly, please contact the person responsible for
your account and instruct that person to execute the WHITE
consent
card representing your Shares. Strategic Turnaround urges you to confirm in
writing your instructions to Strategic Turnaround in care of Galloway Capital
at
the address provided below so that Strategic Turnaround will be aware of all
instructions given and can attempt to ensure that such instructions are
followed.
If
you
have any questions or require any additional information concerning this Consent
Statement, please contact Galloway Capital at the address set forth
below.
Galloway
Capital Management, LLC
720
Fifth Avenue, 10th
Floor
New
York, NY 10019
(212)
247-2072
|
WHITE
CONSENT CARD
CONSENT
OF STOCKHOLDERS OF STONEPATH CORPORATION
THIS
CONSENT IS SOLICITED BY STRATEGIC TURNAROUND
THE
BOARD OF DIRECTORS OF STONEPATH CORPORATION
IS
NOT SOLICITING THIS CONSENT
C
O N S E N
T
Unless
otherwise indicated below, the undersigned, a stockholder of record of Stonepath
Group, Inc. (the “Company”) as of the record date established for determining
stockholders entitled to consent to the following actions (the “Record Date”),
hereby consents pursuant to Section 228(a) of the Delaware General Corporation
Law with respect to all shares of common stock of the Company (the “Shares”)
held by the undersigned to the taking of the following actions without a meeting
of the stockholders of the Company.
CHECK
THE APPROPRIATE BOX BELOW TO CONSENT OR WITHHOLD CONSENT TO, OR ABSTAIN FROM,
THE PROPOSALS BELOW.
IF
NO BOX IS MARKED FOR ANY PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO CONSENT
TO
SUCH PROPOSAL, EXCEPT THAT THE UNDERSIGNED WILL NOT BE DEEMED TO CONSENT TO
THE
REMOVAL OF ANY CURRENT DIRECTOR OR TO THE ELECTION OF ANY NOMINEE WHOSE NAME
IS
WRITTEN-IN IN THE SPACE PROVIDED. IN THE ABSENCE OF DISSENT OR ABSTENTION BEING
INDICATED BELOW, THE UNDERSIGNED HEREBY CONSENTS TO EACH ACTION LISTED
BELOW.
IMPORTANT:
PLEASE SIGN, DATE AND MAIL THIS CONSENT CARD PROMPTLY!
-
CONTINUED AND TO BE SIGNED ON REVERSE SIDE -
x
Please mark vote as in
this example
STRATEGIC
TURNAROUND EQUITY PARTNERS, L.P. (“STRATEGIC TURNAROUND”) RECOMMENDS THAT YOU
CONSENT TO PROPOSALS 1, AND 2.
CONSENT
CARD
Consent
by Stockholders of Stonepath Group Inc.
To
Action Without a Meeting
THIS
CONSENT IS SOLICITED BY THE STONEPATH VALUE COMMITTEE
The
undersigned, a stockholder of record of Stonepath Group Inc. (“Stonepath”)
hereby consents, pursuant to Section 228 of the Delaware General Corporation
Law, with respect to all shares of Common Stock, par value $.001 per share,
of
Stonepath which the undersigned is entitled to vote in all capacities, to the
following action without a meeting, without prior notice and without a
vote:
RESOLVED,
that, in the best interests of Stonepath, the removal without cause of directors
of Stonepath, Slobodan Andjic, Martin Muller-Romheld, and Nowroz Jal Cama,
and
any person or persons elected to the Stonepath Board of Directors to fill any
vacancy arising since the last annual meeting of stockholders, or any newly
created directorships, is hereby approved.
o
CONSENTS o
CONSENT WITHHELD o
ABSTAINS
To
withhold consent to the removal of any director, write his/her name in the
following space:
____________________________________________________________
RESOLVED,
that the slate of Committee to Protect Stonepath, Seth Lukash, Robert Arovas
and
Gary Herman (the “Slate”), is hereby elected to the Stonepath Board of Directors
to fill the newly created vacancies on the Board of Directors, and the members
of the Slate shall serve until their respective successors are duly elected
and
qualify.
o
CONSENTS o
CONSENT WITHHELD o
ABSTAINS
To
withhold consent to the election of any member of the Slate, write his/her
name
in
the following space:
____________________________________________________________
INSTRUCTIONS
Check
the appropriate box above to consent or withhold consent to, or abstain
from,
the
foregoing resolutions.
If
no box is marked with respect to either or each of the above resolutions, the
undersigned will be
deemed
to consent to such resolution or resolutions.
IN
WITNESS WHEREOF, the undersigned has executed this stockholder consent on the
date set forth below.
|
Date:
|
|
|
|
|
|
|
|
|
Signature
of Stockholder
|
|
|
|
|
|
|
|
Signature
(if held jointly)
|
|
|
|
|
|
|
|
Name
and Title of Representative (if applicable)
|
|
|
|
|
|
|
|
IMPORTANT
NOTE TO STOCKHOLDERS:
|
|
Please
sign exactly as your shares are registered. Joint owners should both
sign.
When signing as executor, trustee, administrator, guardian, officer
of a
corporation, attorney-in-fact or in any other fiduciary or representative
capacity, please give your full name. This consent, when executed,
will
vote all shares held in all capacities. Be sure to date this Consent
Card.
|
**THIS
IS
YOUR CONSENT CARD**