AMENDMENT NO. 1
TO
SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Check the appropriate box:
[ X ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
ENDAVO MEDIA AND COMMUNICATIONS, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11. 1) Title of each class of securities to which
transaction applies: 2) Aggregate number of securities to
which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth amount
on which 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 offering fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of the filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.: 3) Filing
Party: 4) Date Filed:
ENDAVO MEDIA AND COMMUNICATIONS, INC.
50 West Broadway, Suite 400
Salt Lake City, Utah 84101
Tel: (801) 297-8500
NOTICE OF ACTION TO BE TAKEN PURSUANT TO THE WRITTEN
CONSENT OF MAJORITY STOCKHOLDERS IN LIEU OF
A SPECIAL MEETING OF THE STOCKHOLDERS, DATED MARCH 13, 2006
To Our Stockholders:
NOTICE IS HEREBY GIVEN to inform the holders of record of shares of
common stock and preferred stock of Endavo Media and Communications, Inc. (the
"Company," "us," "we," or "our"), that as of the close of business on February
1, 2006 (the "Record Date") our board of directors recommended and a majority of
our stockholders voted in favor of resolutions which accomplished the following:
A. Implemented a reverse stock split of our common stock
outstanding as of March 13, 2006 on the basis of one post-consolidation
share for every forty (40) pre-consolidation shares (the "Reverse Stock
Split"); and
B. Approved the Certificate of Amendment of our Amended and
Restated Certificate of Incorporation to be filed with the Delaware
Secretary of State to effect the Reverse Stock Split.
One consenting stockholder, SovCap Equity Partners, Ltd. (the
"Consenting Stockholder"), holds a total of 612,346 shares of our common stock
and 3,581,585 shares of our Series A Preferred Stock, which votes together with
the common stock on an as-if converted basis. For purposes of voting, each share
of Series A Preferred Stock is convertible into 9.6 shares of our common stock.
Accordingly, the Consenting Stockholder has the right to vote an aggregate of
34,995,562 shares of our common stock. This equals 60% of the total voting power
entitled to vote on the foregoing resolutions as of the Record Date. The
Consenting Stockholder voted in favor of the corporate actions and possessed the
power to pass the corporate actions without the concurrence of any of our other
stockholders.
The accompanying Information Statement is furnished pursuant to Section
14(c) of the Securities Exchange Act of 1934 and Regulation 14C and Schedule 14C
thereunder.
We are mailing the Information Statement on or about February 20, 2006
to stockholders of record of the Company at the close of business on the Record
Date.
THIS IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO
STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER WHICH WILL BE DESCRIBED
HEREIN.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US
A PROXY.
By Order of the Board of Directors,
Paul D. Hamm, President and Chief Executive Officer
February 14, 2006
ENDAVO MEDIA AND COMMUNICATIONS, INC.
50 West Broadway, Suite 400
Salt Lake City, Utah 84101
Tel: (801) 297-8500
INFORMATION STATEMENT
PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND REGULATION 14C AND SCHEDULE 14C THEREUNDER
February 20, 2006
This Information Statement is being mailed on or about February 20,
2006 to the stockholders of record on February 20, 2006 (the "Mailing Date") of
Endavo Media and Communications, Inc., a Delaware corporation (the "Company"),
in connection with the adoption of a forty-for-one reverse stock split (the
"Reverse Stock Split') of the Company's common stock, $.001 par value per share,
outstanding as of March 13, 2006 (the "Record Date"). The Reverse Stock Split
was adopted pursuant to the written consent by the holder of a majority of the
capital stock entitled to vote, dated as of February 1, 2006, and as reflected
in the Company's books and records as of such date. This Information Statement
is further directed to the approval of the Certificate of Amendment of our
Amended and Restated Certificate of Incorporation (the "Amendment") to effect
the Reverse Stock Split. The actions to be taken pursuant to the written consent
shall be made effective 20 days after the mailing of this Information Statement.
The board of directors of the Company approved the adoption of the
Reverse Stock Split and Amendment by unanimous written consent dated as of
February 1, 2006 as it believes that such actions are in the best interests of
the Company and its stockholders. The majority stockholder of the Company, which
comprises 60% of the total issued and outstanding shares of the Company's
capital stock entitled to vote on these matters approved the adoption of the
Reverse Stock Split and the Amendment by written consent dated as of February 1,
2006. This Information Statement is furnished only to inform stockholders of the
Company of the above actions taken by the majority stockholder of the Company
before such action takes effect in accordance with the Securities Exchange Act
of 1934, as amended from time to time (the "Exchange Act").
The elimination of the need for a special or annual meeting of
stockholders to ratify or approve the Reverse Stock Split and Amendment is
authorized by Section 228(a) of the DGCL, which provides that the written
consent of stockholders holding at least a majority of the voting power may be
substituted for such a special or annual meeting. In order to eliminate the
costs and management time involved in holding a special or annual meeting and in
order to effect or ratify the Reverse Stock Split and Amendment as early as
possible in order to accomplish the purposes of the Company as hereafter
described, the board of directors of the Company voted to utilize the written
consent of stockholders holding a majority of the voting power of the Company.
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WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
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OUTSTANDING SHARES AND VOTING RIGHTS
As of the Record Date, the Company's authorized capitalization consists
of 100,000,000 shares of common stock, $.001 par value, of which 10,639,454 were
issued and outstanding, 5,000,000 shares of preferred stock, $.001 par value, of
which 4,500,000 have been designated as Series A Preferred Stock, 3,817,308 of
which were issued and outstanding. Holders of common stock of the Company 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 stockholders. Each share of Series A Preferred Stock
entitles its holder to 9.6 votes (due to 9.6-to-1 conversion ratio) on each
matter submitted to the stockholders. Notwithstanding the foregoing, however,
because a consenting stockholder holding at least a majority of the voting
rights of all outstanding shares of capital stock has voted in favor of the
foregoing proposals by resolution dated February 1, 2006 and has sufficient
voting power to approve such proposals through its ownership of capital stock,
no other stockholder consents will be solicited in connection with this
Information Statement.
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.
This Information Statement will serve as written notice to stockholders
pursuant to Section 228(e) of the DGCL.
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL
SHAREHOLDERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of February 1, 2006 with respect to
(i) each director of the Company; (ii) each executive officer; (iii) all
executive officers and directors of the Company as a group; and (iv) each party
known by us to be the beneficial owner of more than 5% of our common stock.
Unless otherwise indicated, the mailing address for each party listed below is
c/o Endavo Media & Communications, Inc., 50 West Broadway, Suite 1100, Salt Lake
City, Utah 84119. This table is based upon information supplied by current and
former officers, directors and principal stockholders. Unless otherwise
indicated in the footnotes to this table and subject to community property laws
where applicable, we believe that each of the stockholders named in this table
has sole voting and investment power with respect to the shares indicated as
beneficially owned. Applicable percentages are based on 21,862,129 of our common
stock outstanding on February 1, 2006 adjusted as required by rules promulgated
by the Securities and Exchange Commission.
The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
that rule, beneficial ownership includes any shares as to which the individual
or entity has voting power or investment power and any shares that the
individual has the right to acquire within 60 days through the exercise of any
stock option or other right. Unless otherwise indicated in the footnotes or
table, each person or entity has sole voting and investment power, or shares
such powers with his or her spouse, with respect to the shares shown as
beneficially owned.
Name and Address of Beneficial Owner Amount and Nature of Percent of
Beneficial Ownership Shares
Outstanding
Executive Officers and Directors
Paul D. Hamm (1) 568,847 2.6 %
Mark S. Hewitt (2) 525,000 2.5 %
Jerry Dunlap (3) 0 *
Five Percent Shareholders
All Directors and Executive 1,093,847 5.1 %
Officers as a Group (3 persons) (1)(2)(3)
-----------------------------
* Less than one percent.
(1) Consists of 36,724 shares of common stock owned directly by Mr. Hamm and
525,000 shares that Mr. Hamm has the right to acquire upon the exercise of
currently exercisable stock options. Mr. Hamm may also be deemed to own the
7,123 shares of common stock and 44,883 shares of Series A Preferred Stock owned
by AlphaWest Capital Partners, of which Mr. Hamm is the sole member. However,
the Series A Preferred Stock has not been converted to common stock, but may
occur at a conversion ratio of 9.6 shares of common stock for each share of
Series A Preferred Stock. Mr. Hamm, as a managing member of SovCap Investment
Management Group, also may be deemed to beneficially own any shares of common
stock beneficially owned by SovCap Investment Management Group. Mr. Hamm
disclaims beneficial ownership of the securities held by SovCap Investment
Management Group and SovCap Equity Partners except to the extent of his
proportionate interest therein.
(2) Consists of 525,000 shares that Mr. Hewitt has the right to acquire upon the
exercise of currently exercisable stock options. Mr. Hewitt also owns 2,076
shares of Series A Preferred Stock. However, the Series A Preferred Stock has
not been converted into common, but may occur at a conversion ratio of 9.6
shares of common stock for each share of Series A Preferred Stock. (3) ISDN.Net,
of which Mr. Dunlap is President and an owner, owns 80,000 shares of Series A
Preferred Stock. However, the Series A Preferred Stock has not been converted
into common stock, but may occur at a conversion ratio of 9.6 shares of common
stock for each share of Series A Preferred Stock. Mr. Dunlap disclaims
beneficial ownership of the securities owned by ISDN.Net except to the extent of
his proportionate interest therein.
REVERSE STOCK SPLIT AND AMENDMENT
General
The board of directors has adopted, and the majority stockholder of the
Company has approved, pursuant to the written consent dated as of February 1,
2006, a Reverse Stock Split and Amendment.
The board of directors of the Company approved the adoption of the
Reverse Stock Split and Amendment by unanimous written consent as it believes
the corporate actions are in the best interests of the Company and its
stockholders.
Vote Required
Adoption of the Reverse Stock Split and Amendment requires approval by
holders of at least a majority of the outstanding shares of the Company's common
stock who are present, or represented, and entitled to vote thereon, at a
special or annual meeting of stockholders. Section 228(a) of the DGCL provides
that the written consent of stockholders holding at least a majority of the
voting power may be substituted for such a special or annual meeting.
Our board of directors fixed the close of business on March 13, 2006 as
the record date for determining the stockholders entitled to notice of the above
noted action.
One consenting stockholder, SovCap Equity Partners, Ltd. (the
"Consenting Stockholder"), holds a total of 612,346 shares of our common stock
and 3,581,585 shares of our Series A Preferred Stock, which votes together with
the common stock on an as-if converted basis. For purposes of voting, each share
of Series A Preferred Stock is convertible into 9.6 shares of our common stock.
Accordingly, the Consenting Stockholder has the right to vote an aggregate of
34,995,562 shares of our common stock. This equals 60% of the total voting power
entitled to vote on the foregoing resolutions as of the Record Date. The
Consenting Stockholder voted in favor of the corporate actions and possessed the
power to pass the corporate actions without the concurrence of any of our other
stockholders.
Distribution and Costs
We will pay all costs associated with the distribution of this
information statement, including the costs of printing and mailing. In addition,
we will only deliver one information statement to multiple stockholders sharing
an address, unless we have received contrary instructions from one or more of
the stockholders. Also, we will promptly deliver a separate copy of this
information statement and future stockholder communication documents to any
stockholder at a shared address to which a single copy of this information
statement was delivered, or deliver a single copy of this information statement
and future stockholder communication documents to any stockholder or
stockholders sharing an address to which multiple copies are now delivered, upon
written request to us at our address noted above.
Stockholders may also address future requests regarding delivery of
information statements and/or annual reports by contacting us at the address
noted above.
Dissenters' Right of Appraisal
No action will be taken in connection with the proposed corporate
actions by our board of directors or the voting stockholders for which the DGCL,
our Amended and Restated Certificate of Incorporation or the Company's bylaws
provide a right of a stockholder to dissent and obtain appraisal of or payment
for such stockholder's shares.
Effect of the Reverse Stock Split
The Reverse Stock Split would not affect the registration of our common
stock under the Securities Exchange Act of 1934, as amended, nor will it change
our periodic reporting and other obligations thereunder.
The number of stockholders of record would not be affected by the
Reverse Stock Split. The authorized number of shares of our common stock and the
par value of our common stock under our Amended and Restated Certificate of
Incorporation would remain the same following the effective time of the Reverse
Stock Split.
The number of shares of our common stock issued and outstanding as of
March 13, 2006 would be reduced following the effective date of the Reverse
Stock Split in accordance with the following formula: every forty shares of our
common stock owned by a stockholder will automatically be changed into and
become one new share of our common stock. Any shares issued and outstanding
after March 13, 2006 would be uneffected. Our Series A Preferred Stock contains
a provision that prevents the adjustment of the conversion ratio in the event of
a reverse stock split or combination. Accordingly, the conversion ratio of the
Series A Preferred Stock will remain uneffected by the Reverse Stock Split and,
as of March 13, 2006, each outstanding share of Series A Preferred Stock will
continue to be convertible into 9.6 shares of our common stock.
As described below, all fractional share amounts resulting from the
Reverse Stock Split will be rounded up to the nearest whole share in lieu of
issuing any fractional share.
We currently have no intention of going private, and this proposed
Reverse Stock Split is not intended to be a first step in a going private
transaction and will not have the effect of a going private transaction covered
by Rule 13e-3 of the Exchange Act. Moreover, the Reverse Stock Split does not
increase the risk of us becoming a private company in the future. We will
continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934 following the Reverse Stock Split of our common stock.
The number of authorized but unissued shares of our common stock
effectively will be increased significantly by the Reverse Stock Split of our
common stock. The Reverse Stock Split will have the effect of decreasing the
number of our outstanding shares of our common stock.
The issuance in the future of such additional authorized shares may
have the effect of diluting the earnings per share and book value per share, as
well as the stock ownership and voting rights, of the currently outstanding
shares of our common stock.
The effective increase in the number of authorized but unissued shares
of our common stock may be construed as having an anti-takeover effect by
permitting the issuance of shares to purchasers who might oppose a hostile
takeover bid or oppose any efforts to amend or repeal certain provisions of our
articles of incorporation or bylaws. Such a use of these additional authorized
shares could render more difficult, or discourage, an attempt to acquire control
of the Company through a transaction opposed by our board of directors. At this
time, our board of directors does not have plans to issue any common shares
resulting from the effective increase in our authorized but unissued shares
generated by the Reverse Stock Split.
Federal Income Tax Consequences
We will not recognize any gain or loss as a result of the Reverse Stock
Split.
The following description of the material federal income tax
consequences of the Reverse Stock Split to our stockholders is based on the
Internal Revenue Code of 1986, as amended, applicable Treasury Regulations
promulgated thereunder, judicial authority and current administrative rulings
and practices as in effect on the date of this information statement. Changes to
the laws could alter the tax consequences described below, possibly with
retroactive effect. We have not sought and will not seek an opinion of counsel
or a ruling from the Internal Revenue Service regarding the federal income tax
consequences of the Reverse Stock Split. This discussion is for general
information only and does not discuss the tax consequences that may apply to
special classes of taxpayers (e.g., non-residents of the United States,
broker/dealers or insurance companies). The state and local tax consequences of
the Reverse Stock Split may vary significantly as to each stockholder, depending
upon the jurisdiction in which such stockholder resides. You are urged to
consult your own tax advisors to determine the particular consequences to you.
We believe that the likely federal income tax effects of the Reverse
Stock Split will be that a stockholder who receives a reduced number of shares
of our common stock will not recognize gain or loss. With respect to a Reverse
Stock Split, such a stockholder's basis in the reduced number of shares of our
common stock will equal the stockholder's basis in its old shares of our common
stock. The holding period of the post-effective Reverse Stock Split shares
received will include the holding period of the pre-effective Reverse Stock
Split shares exchanged.
Effective Date
The Reverse Stock Split will become effective as of 5:00 p.m. Eastern
Standard Time on the date we file the Amendment with the Delaware Secretary of
State, however, the Reverse Stock Split will only effect those shares of our
common stock outstanding as of March 13, 2006. Effectively, this makes the
effective date March 31, 2006. Accordingly, except for stockholders who
currently hold fewer than forty shares, on such date, all shares of our common
stock that were issued and outstanding immediately on March 31, 2006 will be,
automatically and without any action on the part of the stockholders, converted
into new shares of our common stock in accordance with the forty-for-one
exchange ratio.
ADDITIONAL INFORMATION
The Company has received no indication from any of its directors or
non-employee directors of any intent to oppose any action to be taken by the
Company. There have been no proposals for action submitted to the Company by any
stockholders other than the proposal, which is the subject of this Information
Statement.
By Order of the Board of Directors,
Paul D. Hamm, President and Chief Executive Officer
February 14, 2006