SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Tiger Telematics, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is
calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid: 0
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
Tiger Telematics, Inc.
10201 Centurion Parkway North Ste. 600
Jacksonville, FL 32256
Phone: 904-279-9240
May 25, 2004
Dear Shareholders:
The Special Meeting of Shareholders of Tiger Telematics, Inc., a Deleware
corporation (the "Company") will be held at the offices of the company at 10201
Centurion Parkway North Ste. 600, on July 9, 2004, at 11:00 a.m. Eastern Time,
to consider and to vote upon the following matter:
Approval of an amendment to the Company's Certification of Incorporation to
effect a reverse stock split of not less than 1 for 10 and not more than 1 for
50 and to authorize the Board of directors to determine which, if any, of these
reverse stock spots to effect.
The accompanying proxy statemetn contains a more complete description of this
proposal.
Only shareholders or record at the close of business on May 25, 2004 are
entitled to notice of, and to vote at, the Special shareholder's meeting.
All shareholders are extended a cordial invitation to attend the Special Meeting
of Shareholders.
By order of the Board of Directors
/s/ Michael W. Carrender
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Michael Carrender, CEO
Jacksonville, FL 32256
May 25, 2004
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON July 9, 2004
NOTICE IS HEREBY GIVEN, that Special Meeting of Shareholders of Tiger
Telematics, Inc, a Deleware corporation, will be held at the Company's offices
located at 10201 Centurion Parkway North Ste. 600 Jacksonville, FL 32256 on July
9, 2004 at 11:00 a.m. Eastern Standard time for the following purposes:
(1) Approval of an amendment to the Company's Certification of Incorporation to
effect a reverse stock split of not less than 1 for 10 and not more than 1 for
50 and to authorize the Board of directors to determine which, if any, of these
reverse stock spots to effect.
The Company has fixed the close of business on May 25, 2004 as the Record Date
for the determination of Company shareholders entitled to receive notice of, and
to vote at, the Non Standard Meeting and any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Michael W. Carrender
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Michael W. Carrender, CEO
Jacksonville, FL
Date: May 25, 2004
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING
IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING IN PERSON HAVE THE RIGHT TO
REVOKE THEIR PROXIES AND VOTE THEIR SHARES IN PERSON, IF THEY SO DESIRE.
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Tiger Telematics, Inc.
PROXY STATEMENT
FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON July 9, 2004
I. INTRODUCTION
The Board of Directors of Tiger Telematics, Inc., a Deleware corporation (the
"Company"), is soliciting the accompanying Proxy in connection with its Special
Meeting of Shareholders of the Company to be held at 11:00 a.m. Eastern Standard
Time on July 9, 2004, at 10201 Centurion Parkway North Ste. 600 Jacksonville,
FL, 32256 and any adjournments thereof. The Notice of Special Meeting and Proxy
Card were mailed to shareholders on or about May 25, 2004.
II. OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed the close of business on May 25,
2004, as the record date for the determination of those holders of Common Stock
of the Company entitled to receive notice of, and vote at, the Annual Meeting.
Persons who were not shareholders on such date will not be allowed to vote at
the Annual Meeting. At the close of business on the record date, there were
416,133,617+ shares of the Company's Common Stock issued and outstanding. The
Common Stock is the only outstanding class of capital stock of the Company
entitled to vote at the Meeting. Each share of Common Stock is entitled to one
vote on each matter to be voted on at the meeting. Holders of Common Stock are
not entitled to cumulative voting rights. A majority of the shares entitled to
vote present in person or represented by proxy at the Special Meeting, is
required for approval of each of the Company's proposals.
Shares of Common Stock that are represented by properly executed proxies, unless
such proxies have previously been revoked, will be voted in accordance with the
instructions indicated in such proxies. If no instructions are indicated, such
common shares will be voted "FOR" approval of the proposal and in the discretion
of the proxy holders for any other matter that may properly come before the Non
Standard Meeting. If a shareholder abstains from voting as to any matter, then
the shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum, and for purposes of calculating the vote with
respect to such matter, but shall not be deemed to have been voted in favor of
such matter. Abstentions, therefore, as to any proposal will have the same
effect as votes against such proposal. If a broker returns a "non-vote" proxy,
indicating a lack of voting instructions by the beneficial holder of the shares
and a lack of discretionary authority on the part of the broker to vote a
particular matter, then in such instance, the shares covered by such "non-vote"
proxy shall be deemed to be present at the meeting for purposes of determining a
quorum, but shall not be deemed to be represented at the meeting for purposes of
calculating the vote required for approval of such matter.
A shareholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by filing with the Chief Executive Officer of the
Company, Mr. Michael Carrender, at 10201 Centurion Parkway North. Ste. 600
Jacksonville, FL a written revocation of such proxy, or by executing and
delivering a duly- executed proxy bearing a later date, or by simply voting the
common shares covered thereby by separate written ballot to be disseminated at
the Special Meeting.
In addition to soliciting proxies by mail, officers, directors and employees of
the Company, without receiving additional compensation therefor, may solicit
proxies personally, or by telephone, telegram or other forms of communication,
including wire facsimile. The Company has not retained a proxy solicitation
firm, and instead, will use its own best efforts to solicit as many proxies as
practicable in the time available before the Special Meeting.
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1. PROPOSAL NUMBER ONE - Approval of an amendment to the Company's Certification
of Incorporation to effect a reverse stock split of not less than 1 for 10 and
not more than 1 for 50 and to authorize the Board of directors to determine
which, if any, of these reverse stock spots to effect.
The Board of Directors has determined that it is in the best interests of the
Copmany and its stockholders to approve an amendment to Articles of our
Certificate of Incorporation to effect a reverse stock split of the outstanding
common stock of not less than 1 for 10 and not more than 1 for 50 , with the
Board of Directors having the authority to determine which, if any, of these
reverse stock splits to effect. The Board of Directors approved the reverse
stock split primarily as a means of facilitating an increase in the share price
of our common stock in order to meet applicable Nasdaq listing requirements. Our
common stock is not currently listed on Nasdaq, and a minimum bid price of $4.00
per share is required for an initial listing on The Nasdaq SmallCap Market. The
minimum bid price is measured by the closing bid for the common stock. The Board
of Directors believes it is in the Company's best interest to be listed on the
Nasdaq National Market or in alternate, Nasdaq SmallCap Market.
In addition, the reverse stock split will provide the Company with increased
flexibility to use common stock, as the need arises, for possible future
financing transactions or for other general corporate purposes. We currently
have no specific arrangements, understandings or agreements to issue any
additional shares of common stock beyond this amount. However, in the normal
course of business, we continually evaluate alternative proposals concerning
common stock issuances, and the proposed reverse stock split will effectively
increase the number of shares of common stock available for issuance by the
Company.
The proposed reverse stock split will reduce the number of issued and
outstanding shares of our common stock as described below in "Implementation and
Effects of Reverse Stock Split". However, the proposed reverse stock split will
not change the number of authorized shares of common stock by the company, or
the par value of our common stock.
NASDAQ LISTING
Our common stock traded on the OTC Bulletin Board until May 29, 2003, at which
time the common stock was removed from Bulletin Board trading due to our failure
to remain current with the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended, sometimes referred to as the Exchange Act. As
a result, our common stock is currently traded on a limited basis on the OTC
U.S. Market, often referred to as the "Pink Sheets".
The Board of Directors of the Company has determined that it is in the best
interests of the Company and its stockholders that we seek to a Nasdaq listing
as soon as we are eligible to do so. The Company prefers to apply for such a
listing as soon as it is eligble. The Company prefers to apply for a Nasdaq
National Market Listing. Because the initial and continued listing standards for
The Nasdaq SmallCap Market are less rigorous than the listing standards for The
Nasdaq National Market, the Board of Directors believes that it will first
become eligible for listing on The Nasdaq SmallCap Market. Therefore, for
purposes of this proxy statement references below are done only as respect to
the NAsdaq SmallCap Market. In order to obtain a listing on The Nasdaq SmallCap
Market, we must demonstrate, among other requirements, a common stock bid price
of at least $4.00 per share. We do not currently satisfy this requirement. The
closing price per share of our common stock is and has been under $4.00. The
closing price per share was $0.46 on the record date for the special meeting.
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After consideration, the Board of Directors has determined that the likelihood
of the Company meeting the Nasdaq SmallCap Market's initial listing requirement
of $4.00 per share will be substantially enhanced by amending our Certificate of
Incorporation to effect a reverse stock split of our common stock. Such an
amendment would require the approval of a majority of the shares of our
outstanding voting stock, which is why the Board of Directors has called the
special meeting.
RANGE OF REVERSE STOCK SPLITS
Because it is difficult to predict market conditions at the time the reverse
stock split may be effected, we do not know the appropriate reverse stock split
ratio that may be necessary to accomplish our goals related to the reverse stock
split. Therefore, we believe it would be in the best interests of the
stockholders if the Board of Directors had the flexibility to determine the
appropriate reverse stock split ratio immediately prior to effecting the reverse
stock split. In making this determination, the Board of Directors may consider
various factors, including prevailing market conditions , the trading prices of
our common stock on the Pink Sheets, and the steps we would need to take to
achieve compliance with the minimum bid price requirement and other listing
regulations of Nasdaq (see "Nasdaq Listing" and "Risks Associated with the
Reverse Stock Split"). A significant factor for consideration will be the
trading price of our common stock on the days leading up to the date of the
reverse stock split. Based on the price of our common stock at that time, the
Board of Directors would select the authorized stock split that it believes is
sufficient to increase our trading price to satisfy the initial listing
requirements of The Nasdaq SmallCap Market of $4.00 per share. However, the
Board of Directors may also, in its discretion, select an authorized stock split
which will result initially in a closing bid stock price below $4.00, if the
Board believes there to be a reasonable possibility of a subsequent increase in
the trading price sufficient to reach the $4.00 listing minimum.
Accordingly, the Board is asking that the stockholders approve a range of
reverse stock splits of not less than 1 for 10 and not more than 1 for 50 and
authorize the Board of Directors to determine which of the reverse stock splits,
if any, in the specified range to implement. A vote in favor of this proposal
will be a vote for approval of each of the reverse stock split ratios in the
specified range, and for the granting of authority to the Board of Directors to
effectuate one of the reverse stock splits as the Board of Directors deems
advisable at the time the reverse stock split is to be effected. Stockholder
approval of this proposal also gives the Board of Directors the discretion to
abandon the reverse stock split if it deems it to be in the best interests of
the Company.
RISKS ASSOCIATED WITH THE REVERSE STOCK SPLIT
We cannot predict whether the reverse stock split will increase the market price
for our common stock. The history of similar stock split combinations for
companies in like circumstances is varied. There is no assurance that:
* the market price per new share of our common stock after the reverse stock
split, or "New Shares", will rise in proportion to the reduction in the
number of old shares of our common stock outstanding before the reverse
stock split, or "Old Shares"; or
* the market price per New Share will either exceed or remain in excess of
the minimum bid price as required by Nasdaq or that we will otherwise meet
the requirements of Nasdaq for an initial listing for trading on Nasdaq.
The market price of our common stock will also be based on our performance and
other factors, some of which are unrelated to the number of shares outstanding.
If the reverse stock split is effected and the market price of our common stock
declines, the percentage decline as an absolute number and as a percentage of
our overall market capitalization may be greater than would occur in the absence
of a reverse stock split. Furthermore, the reduced number of shares that would
be outstanding after the reverse stock split will likely significantly reduce
the trading volume of our common stock and could otherwise adversely affect the
liquidity of our common stock.
Page 4
It is also important to note that even if we are able to meet the minimum bid
price requirement after the reverse stock split, we will still need to meet the
other standards applicable to the Company required for an initial listing on
Nasdaq including:
* either (a) stockholders' equity of $5 million, (b) a market capitalization
of $50 million or (c) net income of $750,000 each for the most recently
completed fiscal year or two of the last three most recently completed
fiscal years;
* at least 1,000,000 shares publicly held;
* a $5 million market value of shares not held directly or indirectly by any
officer or director of the Company, or by any person who is the beneficial
owner of more than 10% of the total shares outstanding;
* at least 300 stockholders each holding 100 or more shares;
* at least three registered and active market makers; and
* compliance with mandated corporate governance requirements.
If we fail to meet any of these requirements for initial listing on The Nasdaq
SmallCap Market, even if we meet the minimum bid price requirement subsequent to
the approval of this reverse stock split proposal, the Company may still not
qualify for initial listing. In addition, even if we qualify for initial listing
under all of these requirements, we will still not be eligible for Nasdaq
listing until we become current with our SEC filings and regain compliance with
the periodic reporting requirements of the Exchange Act. Further, even if we
obtain an initial listing on The Nasdaq SmallCap Market, we will be required to
continue to meet standards in order to maintain our listing, including:
* either (a) stockholders' equity of $2.5 million or (b) a market
capitalization of $35 million or (c) net income of $500,000 each for the
most recently completed fiscal year or two of the last three most recently
completed fiscal years;
* at least 500,000 shares publicly held;
* a $1 million market value of shares not held directly or indirectly by any
officer or director of Cadiz, or by any person who is the beneficial owner
of more than 10% of the total shares outstanding;
* at least 300 stockholders each holding 100 or more shares;
* at least two registered and active market makers; and
* compliance with mandated corporate governance requirements.
IMPLEMENTATION AND EFFECTS OF THE REVERSE STOCK SPLIT
GENERAL. The Board of Directors will be authorized to effect a reverse stock
split and to select the reverse stock split ratio, from within the approved
range, as deemed appropriate by the Board of Directors considering market and
other relevant conditions and the trading price of our common stock at that
time. Depending on the reverse stock split ratio selected by the Board of
Directors, at the time the reverse stock split is effected, every 10 to 50
shares of the common stock outstanding will automatically be combined and
converted into one share of common stock. For example, if the Board of Directors
selected a 1 for 10 reverse stock split, every 10 shares of the common stock
outstanding will be combined and converted into one share of common stock.
The reverse stock split will become effective upon the filing of an amendment to
our Certificate of Incorporation with the Secretary of State of Delaware,
referred to as the "effective time". Beginning at the effective time, each
certificate representing Old Shares will be deemed for all corporate purposes to
evidence ownership of New Shares.
Page 5
The reverse stock split will not affect the number of shares of common stock
that the Board of Directors is authorized to issue pursuant to our Certificate
of Incorporation. However, it will have the effect of increasing the number of
shares of common stock available for future issuance because of the reduction in
the number of shares that will be outstanding after giving effect to the reverse
stock split.
The reverse stock split would also have the following effects:
* all outstanding options and warrants entitling the holders thereof to
purchase shares of our common stock will enable such holders to purchase,
upon exercise of their options or warrants, a fraction (for instance, in
the case of a 1 for 10 reverse stock split, 1/10th ) of the number of
shares of our common stock that such holders would have been able to
purchase upon exercise of their options or warrants immediately preceding
the reverse stock split at an exercise price equal to some multiple (for
instance, in the case of a 1 for 10 reverse stock split, 10 ) times the
exercise price specified before the reverse stock split, resulting in
approximately the same aggregate price being required to be paid upon
exercise thereof immediately preceding the reverse stock split;
* the number of shares reserved for issuance under our existing stock option
plans and employee stock purchase plans will be reduced by a fraction (for
instance, in the case of a 1 for 10 reverse stock split, 1/10th ) of the
number of shares currently included in such plans;
The reverse stock split will be effected simultaneously, and the exchange number
will be the same, for all of our outstanding common stock. The reverse stock
split will affect all of our stockholders uniformly and will not affect any
stockholder's percentage ownership interests in the Company, except to the
extent that the reverse stock split results in any of our stockholders owning a
fractional share. As described below, stockholders holding fractional shares
will be entitled to cash payments in lieu of such fractional shares. Such cash
payments will reduce the number of post-split stockholders to the extent there
are stockholders presently holding fewer than the number of shares to be
converted into one share as a result of the reverse stock split. This, however,
is not the purpose for which we are effecting the reverse stock split. Common
stock issued pursuant to the reverse stock split will remain fully paid and non-
assessable. We will continue to be subject to the periodic reporting
requirements of the Exchange Act of 1934, as amended, sometimes referred to as
the Exchange Act.
Upon stockholder approval, the Board of Directors will be authorized, but not
required, to proceed with the reverse stock split. The Board of Directors may
delay its decision to execute the reverse stock split indefinitely.
FRACTIONAL SHARES. No certificates for fractional shares will be issued in
connection with the reverse stock split. Stockholders who otherwise would be
entitled to receive fractional shares because they hold a number of Old Shares
not evenly divisible by the number of shares to be converted into one share as a
result of the reverse stock split will be entitled, upon surrender of
certificate(s) representing such shares, to a cash payment in lieu thereof. The
cash payment will equal the fraction to which the stockholder would otherwise be
entitled multiplied by the average of the high and low sales prices (as adjusted
to reflect the reverse stock split) of our common stock, as last reported on the
Pink Sheets
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immediately prior to the effective time. The ownership of a fractional interest
will not give the holder thereof any voting, dividend or other rights except to
receive payments as described herein.
The funds required to purchase the fractional share interests are available and
will be paid from our current cash reserves. Our stockholder list shows that
some of the outstanding common stock is registered in the names of clearing
agencies and broker nominees. Since we do not know the numbers of shares held by
each beneficial owner for whom the clearing agencies and broker nominees are
record holders, we cannot predict with certainty the number of fractional shares
that will result from the reverse split or the total amount we will be required
to pay for fractional share interests. However, we expect the amount will not be
material.
You will not have to pay any service charges in connection with the exchange of
your certificates or the payment of cash in lieu of fractional shares.
You should be aware that, under the escheat laws of the various jurisdictions
where stockholders reside, where the Company is domiciled, and where the funds
will be deposited, sums due for fractional interests that are not timely claimed
after the effective time may be required to be paid to the designated agent for
each such jurisdiction. Thereafter, stockholders otherwise entitled to receive
such funds may have to obtain them directly from the state to which they were
paid.
ACCOUNTING MATTERS. The reverse stock split will not affect the par value of our
common stock. As a result, as of the effective time, the stated capital on our
balance sheet attributable to our common stock will be reduced by a fraction
(for instance, in the case of a 1 for 10 reverse stock split, 1/10 ) of its
present amount, and the additional paid-in capital account shall be credited
with the amount by which the stated capital is reduced. The per share net income
or loss and net book value of our common stock will be increased because there
will be fewer shares of our common stock outstanding.
POTENTIAL ANTI-TAKEOVER EFFECT. Although the increased proportion of unissued
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 our
Board of Directors or contemplating a tender offer or other transaction for the
combination of the Company with another company), the reverse stock split
proposal is not being proposed in response to any effort of which we are aware
to accumulate our shares of common stock or obtain control of us, nor is it part
of a plan by management to recommend a series of similar amendments to our Board
of Directors and stockholders. Other than the proposals in this proxy statement,
our Board of Directors does not currently contemplate recommending the adoption
of any other amendments to our Certificate of Incorporation that could be
construed to affect the ability of third parties to take over or change control
of the Company.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the effective time, stockholders will be notified
that the reverse stock split has been effected. We expect that our transfer
agent, Madison Stock Company will act as exchange agent for purposes of
implementing the exchange of stock certificates. Any Old Shares submitted for
transfer, whether pursuant to a sale, other dispositions or otherwise, will
automatically be exchanged for New Shares. STOCKHOLDERS SHOULD NOT DESTROY ANY
STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO
SO.
BOARD OF DIRECTORS' DISCRETION
Even if the stockholders approve the reverse stock split, the Company reserves
the right not to effect the reverse stock split if in the Board of Directors'
opinion it would not be in the best interests of the Company and its
stockholders to effect such a reverse stock split.
NO DISSENTERS' RIGHTS
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Under Delaware law, our stockholders are not entitled to dissenters' rights with
respect to the reverse stock split, and we will not independently provide
stockholders with any such rights.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The following summary of material federal income tax consequences of the reverse
stock split does not purport to be a complete discussion of all of the possible
federal income tax consequences of the reverse stock split and is included for
general information only. Further, this summary does not address any state,
local or foreign income or other tax consequences. For example, the state and
local tax consequences of the reverse stock split may vary significantly as to
each stockholder, depending upon the state in which such stockholder resides.
Also, this summary does not address the tax consequences to holders that are
subject to special tax rules, such as banks, insurance companies, regulated
investment companies, personal holding companies, foreign entities, nonresident
alien individuals, broker-dealers and tax-exempt entities. The summary is based
on the provisions of the United States federal income tax law as of the date
hereof, which is subject to change retroactively as well as prospectively. This
summary also assumes that the Old Shares were, and the New Shares will be, held
as "capital assets" , as defined in the Internal Revenue Code of 1986, as
amended (generally, property held for investment). The tax treatment of a
stockholder may vary depending upon the particular facts and circumstances of
such stockholder. Each stockholder is urged to consult with his or her own tax
adviser with respect to the tax consequences of the reverse stock split.
Other than with respect to any cash received instead of a fractional share of
Tiger Telematics common stock, no gain or loss should be recognized by a
stockholder upon such stockholder's exchange of Old Shares for New Shares
pursuant to the reverse stock split. The aggregate tax basis of the New Shares
received in the reverse stock split will be the same as the stockholder's
aggregate tax basis in the Old Shares exchanged therefore, reduced by the basis
attributable to any fractional share for which cash is received. In general, a
stockholder who receives cash instead of a fractional share of Tiger common
stock as a result of the reverse stock split will be treated as if such
fractional share was received and then redeemed by Tiger. The stockholder will
recognize capital gain or loss based on the difference between the adjusted
basis in the fractional share redeemed and the amount of cash received. The
federal income tax liability, if any, generated by the receipt of cash in lieu
of a fractional share should not be material in amount in view of the low value
of the fractional share. The stockholder's holding period for the New Shares
will include the period during which the stockholder held the Old Shares
surrendered in the reverse stock split.
Our view regarding the tax consequences of the reverse stock split is not
binding on the Internal Revenue Service or the courts. Accordingly, each
stockholder should consult with his or her own tax adviser with respect to all
of the potential tax consequences of the reverse stock split.
PROPOSAL NUMBER ONE CALLS Approval of an amendment to the Company's
Certification of Incorporation to effect a reverse stock split of not less than
1 for 10 and not more than 1 for 50 and to authorize the Board of directors to
determine which, if any, of these reverse stock spots to effect. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NUMBER ONE.
OTHER MATTERS
We do not intend to bring any matters before the special meeting other than
approval of the reverse split amendment to our certificate of incorporation, and
we know of no other matters to be brought before the meeting by others. If any
other matters properly come before the special meeting, the persons named in the
accompanying proxy will have authority to vote on them in their discretion.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Michael Carrender
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Michael Carrender, CEO
Jacksonville, FL
May 25, 2004