UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934(Amendment No. __)
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
ICEWEB, INC.
(Name of Registrant As Specified in 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 the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ICEWEB, INC.
205 Van Buren Street
Suite 420
Herndon, Virginia 20170
Telephone 703-964-8000
Dear Stockholders:
We are writing to advise you that we intend to amend our Certificate of
Incorporation to effect a 1 for 80 reverse stock split of our outstanding common
stock. This action was approved on February 15, 2005 by our Board of Directors.
In addition, eight individuals who hold a majority of our issued and outstanding
voting securities have approved this action, with an effective date of March
[__], 2005, by written consent in lieu of a special meeting in accordance with
the relevant sections of the Delaware General Corporation Law. We will file the
Certificate of Amendment to our Certificate of Incorporation with the Secretary
of State of Delaware, a copy of which is attached hereto as Exhibit A, which
will specify an effective date of March [__], 2005.
As described hereafter, it is hoped that these actions will result in
an increase in the market price of our common stock which our Board believes it
will assist us in attracting qualified independent directors to join our Board
of Directors and may make an investment in our company more attractive to
institutional investors, possible acquisition candidates and the investing
public as well as increasing our ability to raise working capital.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
No action is required by you. The accompanying information statement is
furnished only to inform our stockholders of the actions described above before
they take place in accordance with Rule 14c-2 of the Securities Exchange Act of
1934. This information statement is first mailed to you on or about March [__],
2005.
Please feel free to call us at 703-964-8000 should you have any
questions on the enclosed Information Statement. We thank you for your continued
interest in IceWEB.
For the Board of Directors of
ICEWEB, INC.
By: /s/ John R. Signorello
----------------------
John R. Signorello, Chairman and CEO
ICEWEB, INC.
205 VAN BUREN STREET
SUITE 420
HERNDON, VA 20170
INFORMATION STATEMENT REGARDING
ACTION TO BE TAKEN BY WRITTEN CONSENT OF
MAJORITY STOCKHOLDERS
IN LIEU OF A SPECIAL MEETING
WE ARE NOT ASKING YOU FOR A PROXY,
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
GENERAL
This Information Statement is being furnished to the stockholders of
IceWEB, Inc. in connection with the adoption of a Certificate of Amendment to
our Certificate of Incorporation by written consent of our Board of Directors
and the holders of a majority of our issued and outstanding voting securities in
lieu of a special meeting. On February 15, 2005 our Board of Directors approved
an amendment to our Certificate of Incorporation effecting a reverse stock split
of our issued and outstanding shares of common stock on the basis of 1:80 (the
"Amendment"). This action will become effective on March [__], 2005 (the
"Effective Date of the Amendment") in accordance with the written consent of the
holders of a majority of our issued and outstanding common stock and the filing
of the Amendment with the Secretary of State of Delaware in accordance with the
relevant sections of the Delaware General Corporation Law.
As of February 15, 1005 there are 448,724,780 shares of our common
stock issued and outstanding. The following individuals who collectively own
approximately 51.3% of our outstanding common stock, which is in excess of the
required majority of our outstanding voting securities necessary for the
adoption of this action, have executed a written consent approving the
Amendment:
Stockholder No. of Shares Owned
----------- -------------------
John R. Signorello 178,043,000
Michael Cachine 1,274,420
John Younts 16,000,000
Tom Cerami 10,000,000
James Bond 3,000,000
G. Anthony Munno 5,000,000
Mari-Beth Kinney 6,687,500
Robert Druzak 10,000,000
-----------
230,004,920
===========
For the purposes of determining the applicable percentage of votes for
approval of the Amendment, we have not included 50,800,010 shares of common
stock currently listed as outstanding. These shares were contributed to our
capital by agreement at the time of our reverse merger in March 2002 and may not
be voted. Messrs. Signorello and Cachine are executive officers of our company,
Mr. Signorello is a member of our Board of Directors. Messrs. Younts, Cerami,
Bond, Munno and Druzak and Ms. Kinney are employees of our company. The full
text of the Amendment is attached to this information statement as Exhibit A.
The reverse stock split, when implemented, will not change the number
of authorized shares of common stock or the par value of the common stock.
Except for any changes as a result of the treatment of fractional shares, each
stockholder who owns 80 or more shares will hold the same percentage of common
stock outstanding immediately following the reverse stock split as the
stockholder did immediately prior to the reverse stock split.
As described hereafter, it is hoped that these actions will result in
an increase in the market price of our common stock which our Board believes may
make an investment in our company more attractive to institutional investors,
possible acquisition candidates and the investing public as well as increasing
our ability to raise working capital. We cannot assure you, however, that the
reverse stock split will result in either a lasting increase in the market price
of our common stock or otherwise make our company more attractive to potential
investors.
The elimination of the need for a meeting of stockholders to approve
this action is made possible by Section 228 of the Delaware General Corporation
Law which provides that the written consent of the holders of outstanding shares
of voting capital stock, having not less than the minimum number of votes which
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted, may be substituted for
such a meeting. In order to eliminate the costs involved in holding a special
meeting, our Board of Directors voted to utilize the written consent of the
holders of a majority in interest of our voting securities.
Pursuant to Section 228 of the Delaware General Corporation Law, we are
required to provide prompt notice of the taking of the corporate action without
a meeting of stockholders to all stockholders who did not consent in writing to
such action. This Information Statement serves as this notice. This Information
Statement is first being mailed on or about March [__], 2005 to stockholders of
record, and is being delivered to inform you of the corporate actions described
herein before they take effect in accordance with Rule 14c-2 of the Securities
Exchange Act of 1934. No dissenter's rights are afforded to our stockholders
under Delaware law as a result of the adoption of the Amendment.
The entire cost of furnishing this Information Statement will be borne
by us. We will request brokerage houses, nominees, custodians, fiduciaries and
other like parties to forward this Information Statement to the beneficial
owners of our voting securities held of record by them and we will reimburse
such persons for out-of-pocket expenses incurred in forwarding such material.
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OUR PRINCIPAL STOCKHOLDERS
Our voting securities are comprised of our common stock. The holders of
our shares of common stock are entitled to one vote for each outstanding share
on all matters submitted to our stockholders. The following table contains
information regarding record ownership of our common stock as of February 15,
2005 held by:
* persons who own beneficially more than 5% of our outstanding
voting securities,
* our directors,
* named executive officers, and
* all of our directors and officers as a group.
A person is deemed to be the beneficial owner of securities that can be
acquired by such a person within 60 days from February 15, 2005, upon exercise
of options, warrants or convertible securities. Each beneficial owner's
percentage ownership is determined by assuming that options, warrants and
convertible securities that are held by such a person (but not those held by any
other person) and are exercisable within 60 days from that date have been
exercised. Unless otherwise indicated, the address of each of the listed
beneficial owners identified is 205 Van Buren Street, Suite 420, Herndon,
Virginia 20170.
Name of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- ----------
John R. Signorello 178,043,000 shares 39.7%
Michael N. Cachine, Sr.(1) 7,075,550 shares 1.6%
All officers and directors
as a group (two persons)(1) 185,118,550 shares 41.3%
(1) Shares beneficially owned by Mr. Cachine include options to purchase
5,801,130 shares of our common stock at an exercise price of $0.37 per
share.
THE AMENDMENT
At February 15, 2005 we had 448,724,780 shares of our common stock
issued and outstanding. The Amendment provides that each eighty (80) shares of
our common stock outstanding immediately prior to the Effective Date of the
Amendment (the "Old Shares") will be automatically converted into one (1) share
of our common stock (the "New Shares"), thereby reducing the number of
outstanding shares of our common stock to approximately 5,609,060 shares,
subject to rounding or the issuance of additional shares of our common stock.
The Amendment does not change the par value of our common stock or the number of
shares of our common stock authorized for issuance. We have no present
intention, however, to issue any additional shares of our common stock before
the Effective Date of the Amendment.
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Purpose and Effect of Amendment.
Our common stock is currently quoted on the OTC Bulletin Board under
the symbol "ICEW." On February 14, 2005 the last sale price of our common stock
was $ .033 per share. Our Board of Directors believes that our relatively low
stock price has somewhat inhibited our ability to attract qualified independent
candidates to join our Board of Directors. Our Board of Directors also believes
that the relatively low per-share market price of our common stock impairs the
acceptability of our common stock to potential acquisition candidates, certain
members of the investing public, including institutional investors, as well
adversely effecting our ability to raise additional working capital. Because of
the current low price of our common stock, our credibility as a viable business
enterprise is negatively impacted. In addition, many analysts will not or are
not permitted to initiate coverage on any securities that trade below $5.00 and
certain investors view low-priced stock as unattractive or, as a matter of
policy, are precluded from purchasing low-priced securities. However, certain
other investors may be attracted to low-priced stock because of the greater
trading volatility sometimes associated with such securities.
Because brokerage commissions on low-priced stocks generally represent
a higher percentage of the stock price than commissions on higher priced stocks,
the current share price of our common stock can result in individual
stockholders paying transaction costs (commissions, markups or markdowns) that
represent a higher percentage of their total share value than would be the case
if the share price were substantially higher. This factor also may limit the
willingness of institutions to purchase our common stock at its current price
levels.
For these reasons our Board of Directors has chosen to adopt and
recommend the Amendment. We are not, however, a party to any binding agreement,
acquisition agreement or agreement to raise additional working capital as of the
date of this Information Statement, nor can we be certain that the reverse stock
split will have a long-term positive effect on the market price of our common
stock, increase our abilities to enter into financing arrangements in the future
or serve to attract qualified independent candidates for our Board of Directors.
The market price of our common stock is also based on factors which may
be unrelated to the number of shares outstanding. These factors include our
performance, general economic and market conditions and other factors, many of
which are beyond our control. The market price per new share of the New Shares
may not rise or remain constant in proportion to the reduction in the number of
Old Shares outstanding before the reverse stock split. Accordingly, the total
market capitalization of common stock after the reverse stock split may be lower
than the total market capitalization before the reverse stock split. In the
future, the market price of common stock following the reverse stock split may
not equal or exceed the market price prior to the reverse stock split. In many
cases, the total market capitalization of a company following a reverse stock
split is lower than the total market capitalization before the reverse stock
split.
The reverse stock split will affect all of the holders of our common
stock uniformly. Any fractional shares existing as a result of the reverse stock
split shall be rounded to the next higher whole number to those stockholders who
are entitled to receive them as a consequence of the
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reverse stock split. On the Effective Date of the Amendment, each stockholder
will own a reduced number of shares of our common stock, but will hold the same
percentage of the outstanding shares as the stockholder held prior to the
Effective Date of the Amendment.
The liquidity of our common stock may be adversely affected by the
reduced number of shares outstanding after the reverse stock split. In addition,
the split will increase the number of stockholders who own odd-lots. An odd-lot
is fewer than 100 shares. Such stockholders may experience an increase in the
cost of selling their shares and may have greater difficulty in making sales.
The reverse stock split will not affect the par value of our common
stock. As a result, on the Effective Date of the Amendment, the stated capital
on our balance sheet attributable to our common stock will be reduced in
proportion with the reverse stock split and our additional paid-in capital
account will be credited with the amount by which the stated capital is reduced.
These accounting entries will have no impact on total stockholders' equity. All
share and per share information will be retroactively adjusted following the
Effective Date of the Amendment to reflect the reverse stock split for all
periods presented in future filings.
On October 18, 2004, we entered into a letter of intent to purchase
PlanGraphics, Inc. Subsequently, on November 11, 2004, we received preliminary
consent of our banking partner, Comerica, to move forward with the letter of
intent to merge the two companies. The merger is subject to approval by the
PlanGraphics, Inc. shareholders, and certain terms and conditions as are
customary to this type of transaction. The number of shares of common stock
which may issued in this transaction, if closed, will be proportionately reduced
as a result of the reverse stock split.
The Board considered reducing the number of shares of authorized common
stock in connection with the reverse stock split, but determined that the
availability of additional shares may be beneficial to our company in the future
for possible issuances. The availability of additional authorized shares will
allow the Board to issue shares for corporate purposes, if appropriate
opportunities should arise, without further action by the stockholders or the
time delay involved in obtaining stockholder approval (except to the extent that
approval is otherwise required by applicable law). Such purposes could include
meeting requirements for capital expenditures or working capital or, depending
on the market conditions, effecting future acquisitions of other businesses
through the issuance of shares of our common stock or securities convertible
into shares of our common stock.
Because the reverse stock split results in an increased number of
authorized but unissued shares of our common stock, it may be construed as
having an anti-takeover effect. Although the reverse stock split is not being
undertaken by the Board for this purpose, in the future the Board could, subject
to its fiduciary duties and applicable law, use the increased number of
authorized but unissued shares to frustrate persons seeking to take over or
otherwise gain control of our company by, for example, privately placing shares
with purchasers who might side with the Board in opposing a hostile takeover
bid. Shares of common stock could also be issued to a holder that would
thereafter have sufficient voting power to assure that any proposal to amend or
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repeal our Bylaws or certain provisions of our Certificate of Incorporation
would not receive the requisite vote. Such uses of our common stock could render
more difficult, or discourage, an attempt to acquire control of our company if
such transactions were opposed by the Board. However, it is also possible that
an indirect result of the anti-takeover effect of the reverse stock split could
be that stockholders will be denied the opportunity to obtain any advantages of
a hostile takeover, including, but not limited to, receiving a premium to the
then current market price of our common stock, if the same was so offered by a
party attempting a hostile takeover of IceWEB. We are not aware of any party's
interest in or efforts to engage in a hostile takeover attempt as of the date of
this Information Statement.
The reverse stock split will have the following effects upon our common
stock:
* The number of shares owned by each holder of common stock will be
reduced eighty fold;
* The number of shares of our common stock which will be issued and
outstanding after the reverse stock split will be reduced from
448,724,780 shares to approximately 5,609,060 shares;
* The per share loss and net book value of our common stock will be
increased because there will be a lesser number of shares of our
common stock outstanding;
* The par value of the common stock will remain $0.001 per share;
* The stated capital on our balance sheet attributable to the common
stock will be decreased 80 times its present amount and the
additional paid-in capital account will be credited with the amount
by which the stated capital is decreased; and
* All outstanding options, warrants, and convertible securities
entitling the holders thereof to purchase shares of common stock
will enable such holders to purchase, upon exercise thereof, 80
times fewer of the number of shares of common stock which such
holders would have been able to purchase upon exercise thereof
immediately preceding the reverse stock split, at the same aggregate
price required to be paid therefore upon exercise thereof
immediately preceding the reverse stock split.
The New Shares will be fully paid and non-assessable. The Amendment
will not change any of the other the terms of our common stock. The New Shares
will have the same voting rights and rights to dividends and distributions and
will be identical in all other respects to the Old Shares.
Because the number of authorized shares of our common stock will not be
reduced, the overall effect will be an increase in authorized but unissued
shares of our common stock as a result of the reverse stock split. These shares
may be issued by our Board of Directors in its sole discretion. Any future
issuance will have the effect of diluting the percentage of stock ownership and
voting rights of the present holders of our common stock.
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Manner of Effecting the Amendment.
The reverse stock split will be effected by the filing of the Amendment
with the Secretary of State of the State of Delaware. The Amendment will specify
the effective date of the Amendment will be March [__], 2005 which is 60 days
after this Information Statement was first mailed to our stockholders. The
record date for the reverse split is March [__], 2005 and the effective date of
the reverse stock split will be the Effective Date of the Amendment. No scrip or
fractional shares will be issued. Fractional shares will be rounded up to the
nearest whole share. We will bear the costs of the issuance of the additional
stock certificates.
Our common stock will be quoted on the OTC Bulletin Board at the
post-split price on the Effective Date of the Amendment.
Following the reverse split, the share certificates representing the
Old Shares will continue to be valid. In the future, new share certificates will
be issued reflecting the reverse stock split, but this in no way will effect the
validity of your current share certificates. The reverse split will occur on the
Effective Date of the Amendment without any further action on the part of our
stockholders. After the Effective Date of the Amendment, each share certificate
representing Old Shares will be deemed to represent 1/80th share of our common
stock. Certificates representing New Shares will be issued in due course as Old
Share certificates are tendered for exchange or transfer to our transfer agent,
Olde Monmouth Stock Transfer Co. We request that stockholders do not send in any
of their stock certificates at this time.
As applicable, new share certificates evidencing New Shares that are
issued in exchange for Olds Shares representing restricted shares will contain
the same restrictive legend as on the old certificates. Also, for purposes of
determining the term of the restrictive period applicable to the New Shares, the
time period during which a stockholder has held their existing pre-split shares
will be included in the total holding period.
Certain Federal Income Tax Consequences
The reverse stock split should not result in any recognition of gain or
loss. The holding period of the New Shares will include the stockholder's
holding period for the corresponding Old Shares owned prior to the reverse stock
split. The adjusted basis of the New Shares (including the original shares) will
be equal to the adjusted basis of a stockholder's original shares.
Notwithstanding the foregoing, the federal income tax consequences of the
receipt of an additional share in lieu of a fractional interest is not clear but
may result in tax liabilities which should not be material in amount in view of
the low value of the fractional interest. Our beliefs regarding the tax
consequence of the reverse stock split are not binding upon the Internal Revenue
Service or the courts, and there can be no assurance that the Internal Revenue
Service or the courts will accept the positions expressed above. This summary
does not purport to be complete and 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 foreign individuals, broker-dealers and tax exempt
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entities. The state and local tax consequences of the reverse stock split may
vary significantly as to each stockholder, depending upon the state in which he
or she resides.
The foregoing summary is included for general information only.
Accordingly, stockholders are urged to consult their own tax advisors with
respect to the Federal, State and local tax consequences of the reverse stock
split.
No Dissenter's Rights
Under Delaware law stockholders are not entitled to dissenter's rights
of appraisal with respect to the Amendment.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
We are required to file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
document we file at the SEC's public reference rooms at 450 Fifth Street, N.W.,
Washington, D.C., and at its offices in New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for more information on the
operation of the public reference rooms. Copies of our SEC filings are also
available to the public from the SEC's web site at www.sec.gov.
ICEWEB, INC.
By: /s/ John R. Signorello
----------------------
John R. Signorello, Chairman and CEO
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EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF
ICEWEB, INC.
(A DELAWARE CORPORATION)
Pursuant to Section 242 of the Delaware General Corporations Law, the
undersigned, being the Chairman and Chief Executive Officer of IceWEB, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
"Corporation"), does hereby certify that the following resolutions were adopted
by the Corporation's Board of Directors and its stockholders as hereinafter
described:
RESOLVED at the effective time of this amendment, each share of common
stock of the Corporation issued and outstanding as of the record date set by the
Corporation's Board of Directors shall be subject to a one (1) for eighty (80)
reverse split with all fractional shares rounded to the nearest whole share. The
effective time of this amendment shall be March [__], 2005.
The foregoing resolution and this Certificate of Amendment were adopted
by the Board of Directors of the Corporation pursuant to a written consent of
the directors of the Corporation dated February 15, 2005 in accordance with
Section 141 of the Delaware General Corporation Law, and by the written consent
dated March __, 2005 of the holders of shares of the Corporation's voting stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted in accordance with Section 228 of the Delaware
General Corporation Law.
IN WITNESS WHEREOF, the undersigned, being the Chief Executive Officer
of this Corporation, has executed this Certificate of Amendment to the
Corporation's Certificate of Incorporation as of _____________, 2005.
ICEWEB, INC.
By:
------------------------------------
John R. Signorello,
Chief Executive Officer
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