Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
Information
Statement Pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
Check
the appropriate box:
oPreliminary
Information Statement
o
Confidential, for Use
of the Commission Only (as permitted by Rule 14c-5(d)(2)
x
Definitive Information Statement
Interact
Holdings Group, Inc.
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(Name
of Registrant as Specified In Its
Chapter)
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Payment
of Filing Fee (Check the appropriate box)
x
No fee
required
o
Fee computed on table
below per Exchange Act Rules 14c-5(g) and 0-11
(1)
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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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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials. |
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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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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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TABLE
OF CONTENTS
INFORMATION
STATEMENT
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1
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OUTSTANDING
SHARES AND VOTING RIGHTS
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2
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AMENDMENTS
TO THE ARTICLES OF INCORPORATION
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2
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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6
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ADDITIONAL
INFORMATION
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7
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Interact
Holdings Group, Inc.
550
Greens Parkway, Suite 230,
Houston,
Texas 77067
INFORMATION
STATEMENT
This
information statement pursuant to Section 14 of the Securities Exchange Act
of 1934, as amended, and Regulation 14C and Schedule 14C thereunder
(the “
Information Statement”)
will be mailed on or about December 11, 2007 to the shareholders of record
as of
December 5, 2007 (the “
Record Date”)
of Interact Holdings Group, Inc. in connection with certain actions to be taken
pursuant to the written consent of the shareholders of the Company holding
a
majority of the outstanding shares of common stock, dated as of December 5,
2007.
The
actions to be taken pursuant to the written consent shall be taken on or about
December
31, 2007, 20 days after the mailing of this information
statement.
THIS
IS NOT A NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS AND
NO
SHAREHOLDER
MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN.
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By
Order of the Board of Directors,
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/s/
Jeffrey Flannery
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Jeffrey
Flannery
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President
and Chief Executive Officer
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WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
NOTICE
OF ACTIONS TO BE TAKEN PURSUANT TO THE WRITTEN CONSENT OF SHAREHOLDERS HOLDING
A
MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY IN LIEU OF
A
SPECIAL MEETING OF THE SHAREHOLDERS, DATED DECEMBER 5, 2007
To
Our Shareholders:
NOTICE
IS HEREBY GIVEN that, on December 5, 2007, Interact Holdings Group, Inc., a
Florida corporation (“IHGR”
or the “Company”)
obtained the written consent of shareholders holding a majority of the voting
power of the issued and outstanding shares of common stock (the “Common
Stock”),
to approve the amendment of the Company’s articles of incorporation, as amended
(the “Articles
of Incorporation”),
to effect an up to Five Thousand (5,000) to One (1) reverse stock
split, whereby, as of the Record Date, for every five thousand shares of Common
Stock then owned, or such smaller amount as the Board of Directors, in their
sole discretion, shall determine, each shareholder shall receive one share
of
Common Stock.
Such
actions will be taken on or about December 31, 2007, or approximately twenty
(20) days after the mailing of this Information Statement.
OUTSTANDING
SHARES AND VOTING RIGHTS
As
of the Record Date, the Company's authorized capitalization consisted of
5,000,000,000 shares of common stock (the “Common
Stock”),
of which 461,691,258 shares were issued and outstanding. Holders of Common
Stock
have no preemptive rights to acquire or subscribe to any of the additional
shares of Common Stock.
Each
share of Common Stock entitles its holder to one vote on each matter submitted
to the shareholders. However, because shareholders holding at least a majority
of the voting rights of all outstanding shares of capital stock as at the Record
Date have voted in favor of the foregoing proposals by resolution dated December
5, 2007, and having sufficient voting power to approve such proposals through
their ownership of capital stock, no other shareholder consents will be
solicited in connection with this Information Statement.
Pursuant
to Rule 14c-2 under the Securities Exchange Act of 1934, as amended, the
proposals will not be adopted until a date at least 20 days after the date
on which this Information Statement has been mailed to the shareholders. The
Company anticipates that the actions contemplated herein will be effected on
or
about the close of business on December 31, 2007.
The
Company has asked brokers and other custodians, nominees and fiduciaries to
forward this Information Statement to the beneficial owners of the Common Stock
held of record by such persons and will reimburse such persons for out-of-pocket
expenses incurred in forwarding such material.
AMENDMENTS
TO THE ARTICLES OF INCORPORATION
On
December 5, 2007, the board of directors of the Company (the “Board
of Directors”)
and the shareholders of the Company holding a majority of the outstanding shares
of Common Stock of the Company approved an amendment to the Articles of
Incorporation to effect an up to five thousand (5000) to One (1) reverse stock
split, whereby, as of the Record Date, for every five thousand shares of Common
Stock then owned, or such smaller amount as the Board of Directors, in their
sole discretion, shall determine, each shareholder shall receive one share
of
Common Stock (the “Reverse Split”).
THE
REVERSE STOCK SPLIT OF COMMON STOCK
General
The
Board of Directors and the shareholders of the Company holding a majority of
the
outstanding shares of Common Stock of the Company have approved an amendment
to
the Articles of Incorporation to effect the Reverse Split of the Company's
Common Stock.
Background
As
of the Record Date, the Company has 5,000,000,000 shares of Common Stock
authorized, and approximately 461,691,258 shares of Common Stock are
outstanding. The Board of Directors believes that the price of the Common Stock
is too low to attract investors to buy the stock. In order to proportionally
raise the per share price of the Common Stock by reducing the number of shares
of the Common Stock outstanding, the Board of Directors believes that it is
in
the best interests of the Company's shareholders to implement a reverse stock
split. In addition, the Board of Directors believes that the share price of
the
Common Stock is a factor in whether the Common Stock meets investing guidelines
for certain institutional investors and investment funds. Finally, the Board
of
Directors believes that the Company's shareholders will benefit from relatively
lower trading costs for a higher priced stock. The combination of lower
transaction costs and increased interest from institutional investors and
investment funds may ultimately improve the trading liquidity of the Common
Stock. The Board of Directors is not implementing the Reverse Split in
anticipation of any future transaction or series of transactions, including
any
“going private” transaction.
Material
Effects of the Reverse Stock Split
The
Reverse Split will be effected simultaneously for all issued and outstanding
shares of the Common Stock, and the ratio will be the same for all of the Common
Stock. The Reverse Split will affect all of the Company's shareholders uniformly
and will not affect any shareholder's percentage ownership interests in the
Company, except to the extent that the Reverse Split results in fractional
share
ownership.
The
principal effect of the Reverse Split will be to reduce the number of issued
and
outstanding shares of Common Stock from approximately 461,691,258 shares as
of
December 5, 2007 to approximately 92,338 shares after the effectiveness of
Reverse Split, assuming management chooses the maximum reverse
ratio.
In
addition, the Reverse Split will increase the number of shareholders who own
odd
lots (less than 100 shares). Shareholders who hold odd lots may experience
an
increase in the cost of selling their shares and may have greater difficulty
in
effecting sales.
Shareholders
will not receive fractional post-reverse stock split shares in connection with
the Reverse Split and we will not be paying any cash to shareholders for any
fractional shares from the Reverse Split. Instead, any resulting fractional
shares shall be rounded up to the nearest whole number.
Effect
on Registered and Beneficial Shareholders
Upon
the Reverse Split, the Company intends to treat shareholders holding the Common
Stock in “street name,” through a bank, broker or other nominee, in the same
manner as registered shareholders whose shares are registered in their names.
Banks, brokers or other nominees will be instructed to effect the Reverse Split
for their beneficial holders holding the Common Stock in “street name.” However,
such banks, brokers or other nominees may have different procedures than
registered shareholders for processing the Reverse Split. Shareholders who
hold
their shares with such a bank, broker or other nominee and who have any
questions in this regard are encouraged to contact their nominees.
Effect
on Registered Certificated Shares
Shareholders
whose shares are held in certificate form will receive a transmittal letter
from
our transfer agent, Transfer Online, Inc., as soon as practicable after the
effective date of the Reverse Split. The letter of transmittal will contain
instructions on how to surrender certificate(s) representing pre-reverse stock
split shares to the transfer agent. No new shares will be issued until
outstanding certificate(s) are surrendered, together with a properly completed
and executed letter of transmittal, to the transfer agent. Shareholders should
not submit any certificate(s) until requested to do so.
Procedure
for Effecting Reverse Stock Split
The
Company will promptly file an Amended Articles of Incorporation with the
Secretary of State of the State of Florida to amend its existing Articles of
Incorporation. The Reverse Split will become effective on the date of filing
the
Amended Articles of Incorporation, which is referred to as the “Effective
Date.”
Beginning on the Effective Date, each certificate representing pre-reverse
stock
split shares will be deemed for all corporate purposes to evidence ownership
of
post-reverse stock split shares. The text of the Amended Articles of
Incorporation is set forth in Appendix A
to this Information Statement. The text of the Amended Articles of Incorporation
is subject to modification to include such changes as may be required by the
office of the Secretary of State of the State of Florida and as the Board of
Directors deems necessary and advisable to effect the Reverse
Split.
Certain
Risk Factors Associated with the Reverse Stock Split
Implementation
of the Reverse Split entails various risks and uncertainties, including but
not
limited to the following:
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There
can be no assurance that the market price per share of the Common
Stock
after the Reverse Split will remain unchanged or increase in proportion
to
the reduction in the number of shares of the Common Stock outstanding
before the Reverse Split. Accordingly, the total market capitalization
of
the Company after the Reverse Split may be lower than the total
market
capitalization before the Reverse
Split;
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After
the Reverse Split is effected, if the market price of the Common
Stock
declines, the percentage decline may be greater than would occur
in the
absence of a Reverse Split;
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There
can be no assurance that the Reverse Split will result in a per
share
price that will attract institutional investors or investment funds
or
that such share price will satisfy the investing guidelines of
institutional investors or investment funds. As a result, the trading
liquidity of the Common Stock may not necessarily improve;
and
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The
reduced number of shares that would be outstanding after the Reverse
Split
could adversely affect the liquidity of the Common
Stock.
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Authorized
Shares
The
Reverse Split will affect all issued and outstanding shares of the Common Stock
and outstanding rights to acquire the Common Stock. Upon the effectiveness
of
the Reverse Split, the number of authorized shares of the Common Stock that
are
not issued or outstanding would increase due to the reduction in the number
of
shares of the Common Stock issued and outstanding.
As
of the Record Date, the Company has 5,000,000,000 shares of authorized Common
Stock and 461,691,258 shares of Common Stock issued and outstanding. Authorized
but un-issued shares of Common Stock will be available for issuance, and the
Company may issue such shares in the future. However, the Company has no current
plans to issue any additional shares of Common Stock. If the Company issues
additional shares of Common Stock, the ownership interest of holders of the
Common Stock will be diluted.
The
following table sets forth information regarding the Company's current and
anticipated number of authorized shares and issued and outstanding shares of
the
Common Stock following implementation of the Reverse Split.
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Number
of
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Number
of Shares
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Shares
of
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Number
of Shares
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Number of Shares
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of
Common Stock
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Common
Stock
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of
Common Stock
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of Common Stock
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Issued
and
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Reserved
for
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Available
for
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Authorized
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Outstanding
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Issuance
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Issuance
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As
of November 7, 2007
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5,000,000,000
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461,691,258
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4,538,308,742
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4,538,308,742
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After
5000 for 1 reverse stock split
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5,000,000,000
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92,338
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4,999,907,662
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4,999,907,662
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Accounting
Matters
The
Reverse Split will not affect the par value of the Common Stock. As a result,
as
of the effective time of the Reverse Split, the stated capital attributable
to
the Common Stock on the Company's balance sheet will be reduced proportionately
based on the Reverse Split ratio of Five thousand-for-One (or such smaller
ratio
as the Board of Directors may determine), and the additional paid-in capital
account will be credited with the amount by which the stated capital is reduced.
The per share net income or loss and net book value of the Common Stock will
be
restated because there will be fewer shares of the Common Stock
outstanding.
Potential
Anti-Takeover Effect
Although
the increased proportion of un-issued authorized shares to issued shares could,
under certain circumstances, have an anti-takeover effect (for example, by
permitting issuances that would dilute the stock ownership of a person seeking
to effect a change in the composition of the Board of Directors or contemplating
a tender offer or other transaction for the combination of the Company with
another company), the Reverse Split proposal is not being undertaken in response
to any effort of which the Board of Directors is aware to accumulate shares
of
the Common Stock or obtain control of Company. Other than the Reverse Split,
the
Board of Directors does not currently contemplate the adoption of any other
amendments to the Articles of Incorporation that could be construed to affect
the ability of third parties to take over or change the control of the
Company.
No
Appraisal Rights
Under
Florida law, the Company's shareholders are not entitled to appraisal rights
with respect to the Reverse Split, and the Company will not independently
provide shareholders with any such right.
Federal
Income Tax Consequences of the Reverse Stock Split
The
following is a summary of the material federal income tax consequences of the
proposed Reverse Split. This discussion is based on the Internal Revenue Code,
the Treasury Regulations promulgated thereunder, judicial opinions, published
positions of the Internal Revenue Service, and all other applicable authorities
as of the date of this document, all of which are subject to change (possibly
with retroactive effect). This discussion does not describe all of the tax
consequences that may be relevant to a holder in light of his particular
circumstances or to holders subject to special rules (such as dealers in
securities, financial institutions, insurance companies, tax-exempt
organizations, foreign individuals and entities, and persons who acquired their
Common Stock as compensation). In addition, this summary is limited to
shareholders that hold their Common Stock as capital assets. This discussion
also does not address any tax consequences arising under the laws of any state,
local or foreign jurisdiction.
ACCORDINGLY,
EACH SHAREHOLDER IS STRONGLY URGED TO CONSULT WITH A TAX ADVISER TO DETERMINE
THE PARTICULAR FEDERAL, STATE, LOCAL OR FOREIGN INCOME OR OTHER TAX CONSEQUENCES
TO SUCH SHAREHOLDER OF THE REVERSE SPLIT.
No
gain or loss should be recognized by a shareholder upon such shareholder's
exchange of pre-reverse stock split shares for post-reverse stock split shares
pursuant to the Reverse Split. The aggregate tax basis of the post-reverse
stock
split shares received in the Reverse Split will be the same as the shareholder's
aggregate tax basis in the pre-reverse stock split shares exchanged therefore.
The shareholder's holding period for the post-reverse stock split shares will
include the period during which the shareholder held the pre-reverse stock
split
shares surrendered in the Reverse Split.
The
tax treatment of each shareholder may vary depending upon the particular facts
and circumstances of such shareholder. Each shareholder is urged to consult
with
such shareholder's own tax advisor with respect to all of the potential the
tax
consequences of the Reverse Split.
AND
MANAGEMENT
The
following table sets forth certain information, as of December 5, 2007, and
after the 5000 for 1 Reverse Split, concerning shares of Common Stock of the
Company held by (1) each shareholder known by the Company to beneficially
own more than five percent of the common stock, (2) each director of the
Company, (3) each executive officer of the Company, and (4) all
directors and executive officers of the Company as a group:
Name
and Address
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Number
of Shares
Beneficially
Owned Before Reverse Split
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Percent
of Class Before Reverse Split
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Number
of Shares
Beneficially
Owned Post Reverse Split
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Percent
of Class Beneficially Owned Post Reverse Split
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Jeffrey
Flannery (1)
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480,000(2)
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*
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480,000(2)
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83.87%
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James
E. Nelson(1)
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480,000(2)
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*
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480,000(2)
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83.87%
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All
officers and directors as a group
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960,000(2)
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*
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960,000(2)
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91.23%
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*
Less than 1%
(1) |
The
address of the above named individuals is: 550 Greens Parkway, Suite
230,
Houston, Texas 77067.
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(2) |
Represents
shares of the Company’s Series A Preferred Stock, each of which are
convertible into one share of the Company’s Common Stock and each of which
are entitled to the number of votes on such matters equal to the
number of
shares of Series A Preferred Stock held by such holder multiplied
by
2,000.
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ADDITIONAL
INFORMATION
The
Company will provide upon request and without charge to each shareholder
receiving this Information Statement a copy of the Company's Annual Report
on
Form 10-KSB for the fiscal year ended December 31, 2006, including the financial
statements and financial statement schedule information included therein, as
filed with the Securities and Exchange Commission. The Annual Report is
incorporated in this Information Statement. You are encouraged to review the
Annual Report together with subsequent information filed by the Company with
the
Securities and Exchange Commission and other publicly available information.
A
copy of any public filing is also available, at no charge, by contacting our
legal counsel, Gersten, Savage LLP, attn: Arthur S. Marcus, Esq. at
212-752-9700.
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By
Order of the Board of Directors,
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/s/
Jeffrey W. Flannery
Jeffrey
W. Flannery
Chief
Executive Officer
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APPENDIX
A
ARTICLES
OF AMENDMENT
TO
THE
ARTICLES
OF INCORPORATION
OF
INTERACT HOLDINGS GROUP, INC.
Pursuant
to the provisions of Section 607.0602 of the Florida Statutes, Interact Holdings
Group, Inc., a Florida profit corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
FIRST:
Article V, as previously amended, is hereby further amended as follows:
“On
December 31, 2007 (the “Effective Date”), the authorized, issued and outstanding
shares of the Company’s Common Stock, par value $0.00001 per share (the “Old
Common Stock”), authorized, outstanding or held as treasury shares as of the
open of business on the Effective Date, shall automatically and without any
action on the part of the holders of the Old Common Stock be reverse split
on a
5,000-to-1 basis so that every 5,000 shares of the Old Common Stock shall be
converted and reconstituted as one share of Common Stock, par value $0.00001
per
share (the “New Common Stock”).”
SECOND:
The amendment was approved by the shareholders. The number of votes cast
for the amendment by the shareholders were sufficient for approval.
Dated:
December 6, 2007
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Jeffrey
W. Flannery
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President
and Chief Executive Officer
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