def14c
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. ___)
Check the appropriate box:
o Preliminary Information Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(D)(2))
þ Definitive Information Statement
CABELTEL INTERNATIONAL CORPORATION
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. |
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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
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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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Form, Schedule or Registration Statement No.: |
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Date Filed: |
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CABELTEL INTERNATIONAL CORPORATION
1755 Wittington Place, Suite 340
Dallas, Texas 75234
INFORMATION STATEMENT
Pursuant to Section 14(c) of the Securities Exchange Act of 1934
Approximate Date of Mailing: February 8, 2008
THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU BY
THE BOARD OF DIRECTORS OF THE COMPANY.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
This Information Statement is first being furnished on or about February 8, 2008, to the
holders of record as of the close of business on November 5, 2007 of shares of Common Stock, par
value $0.01 per share (the Common Stock) of CabelTel International Corporation, a
Nevada corporation (the Company or CIC) to notify such stockholders
that on November 5, 2007, the Company received written consents in lieu of a meeting of
stockholders from holders of a majority of the shares of Common Stock (576,487 shares or
approximately 58%) which together represent in excess of 58% of the total votes of the Company (the
Majority Stockholders) ratifying and approving the proposed issuance by the Company
of 950,000 shares of Common Stock, par value $0.01 per share at a purchase price of $3 per share
($2,850,000) to URC Energy LLC in accordance with its subscription to purchase such shares and
pursuant to the consummation of a Securities Purchase Agreement dated effective as of October 19,
2007 (executed November 16, 2007) between the Company and URC Energy LLC. The 950,000 shares to be
issued to URC Energy LLC, will then comprise, when issued, approximately 49% of the issued and
outstanding common stock of the Company.
This Information Statement describing the approvals is first being mailed or furnished to the
Companys Stockholders on or about February 8, 2008, and such matters shall not become
effective until at least twenty (20) calendar days after this Information Statement is first sent
or given to stockholders pursuant to the requirements of Rule 14c-2(b) under the Securities
Exchange Act of 1934, as amended (the Exchange Act).
General
The Company will pay all costs associated with the distribution of this Information Statement,
including the costs of printing and mailing. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending this
Information Statement to the beneficial owners of the Common Stock.
-1-
The Company will only deliver one Information Statement to multiple stockholders sharing
an address unless the Company has received contrary instruction from one or more of the
stockholders. Upon written or oral request, the Company will promptly deliver a second copy of
this Information Statement and any future annual reports and information statements to any
stockholder to which a single copy of this Information Statement was delivered, or deliver a single
copy of this Information Statement and any future annual reports and information statements to any
stockholder or stockholders sharing an address to which multiple copies are now delivered. You
should direct any requests to the following address:
CabelTel International Corporation
1755 Wittington Place, Suite 340
Dallas, Texas 75234
Attn: Investor Relations
Telephone: 972-407-8400
Interests of Certain Persons In or Opposition to Matters Acted Upon
No director, officer, nominee for election as a director, associate of any director, officer
or nominee or any other person has any substantial interest, direct or indirect, by
securityholdings or otherwise, resulting from the matters described herein which is not shared by
all other stockholders pro rata in accordance with their respective interest. That is, each of the
other directors and officers will mathematically be reduced in percentage ownership pro rata with
all other holders of Common Stock.
OUTSTANDING SHARES AND VOTING RIGHTS
As of November 5, 2007, the date of action by the Majority Stockholders (and as of the date of
this Information Statement), the Companys authorized capitalization consists of 100,000,000
shares of Common Stock, par value $0.01 per share, of which 986,939 shares are issued and
outstanding, and 10,000,000 shares of Preferred Stock, par value $0.10 per share, of which 100,000
shares have been designated as the Series B Preferred Stock, at least 589* shares of which are
issued and outstanding. The CUSIP number of the Common Stock, par value $0.01 per share, is
1261Y-10-06.
Each share of Common Stock entitles its holder to one vote on each matter submitted to the
stockholders. Each share of Series B Preferred Stock is entitled to one vote per share voting
together with the holders of any other class of stock entitled to vote without regard to class on
all matters to be voted on by stockholders of the Company, and such shares of stock are to be
counted in determining the total outstanding shares to constitute a quorum at any meeting of
stockholders. The
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The Company has reported 615 shares of Series B Preferred Stock outstanding in its Proxy
Statement dated October 19, 2006 and in its Information Statement dated February 16, 2007, but such
number may be an error; 589 shares have been issued and are outstanding and it may be that up to an
additional 26 shares should have been issued as dividends to six individuals. |
-2-
holders of the Series B Preferred Stock are not entitled to vote separately as a class to
effectuate or validate any matters.
On November 5, 2007, the Majority Stockholders by written consent in lieu of a meeting, voted
576,387 shares of Common Stock (approximately 58% of the class) in favor of the approval and
ratification of the proposed issuance of 950,000 new shares of Common Stock to URC Energy LLC.
Under Nevada law, any dissenting stockholder is not entitled to appraisal rights with respect
to the approval and ratification of the issuance of 950,000 new shares of Common Stock to URC
Energy LLC, and the Company will not independently provide stockholders with any such right.
ISSUANCE OF 950,000 SHARES OF COMMON STOCK
The Companys Common Stock is listed and traded on the American Stock Exchange LLC
under the symbol GBR. Prior to the actual issuance of certificates representing
950,000 shares of Common Stock, the potential issuance must be approved by the stockholders in
accordance with Sections 705 and 712 of the American Stock Exchange (AMEX) Company
Guide in order for the AMEX to approve an application to list additional shares to be issued.
Section 712 of the AMEX Company Guide requires stockholder approval as a prerequisite to approval
of applications to list additional shares to be issued when the present or potential issuance of
Common Stock (or securities convertible into Common Stock) could result in an increase in
outstanding common shares of 20% or more. The Company currently has outstanding 986,939 shares of
Common Stock and the issuance of 950,000 shares is greater than 20% of the currently outstanding
number of shares of Common Stock.
Under Nevada law, the Board of Directors has the authority to issue shares of Common Stock of
the Company in such amounts and for such consideration as the Board of Directors may deem
appropriate under Section 78.211 of the Nevada General Corporation Law. The Board of Directors has
already approved the proposed issuance as well as the execution by the Company of the Securities
Purchase Agreement effective as of October 19, 2007* (the Purchase Agreement) and
recommended to the stockholders such actions. The stockholders listed under the caption
Security Ownership of Principal Stockholders and Management have so approved such
actions by written consent. By virtue of the consent of the Majority Stockholders and the
requirements of the AMEX Company Guide, this Information Statement has been prepared for
distribution to all stockholders of the Company. The actual issuance of share certificates
representing the 950,000 shares of Common Stock to be issued to URC Energy LLC in exchange for the
consideration of $3 per share (i.e. $2,850,000 cash) will not be effectuated until at least
twenty (20) calendar days after the date
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The Purchase Agreement is effective for accounting purposes (i.e. although not executed at that
date, it may be treated for accounting purposes as though it was signed on that date) as of October
19, 2007, the date the Company received the subscription for the Shares; the Purchase Agreement was
actually executed by the parties on November 16, 2007, following the approval by consent of the
holders of 58% of the Common Stock. |
-3-
of distribution of this Information Statement have elapsed, after which time, the actual
share certificates covering 950,000 shares of Common Stock may only be issued to URC Energy LLC
upon payment to the Company of the sum of $2,850,000.
Recent Price Range of Common Stock
During the current calendar year of 2007, shares of Common Stock of the Company, which are
listed on the AMEX and traded under the symbol GBR have traded at various prices.
The following table sets forth the high and low sales prices as reported for the periods indicated
in the reporting system of the AMEX and other published financial sources.
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Price Range of Common Stock |
Period |
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High |
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Low |
Calendar Year 2007 |
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1st Quarter Ended March 31, 2007 |
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$ |
6.49 |
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$ |
3.45 |
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2nd Quarter Ended June 30, 2007 |
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$ |
6.50 |
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$ |
3.30 |
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3rd Quarter Ended September 30, 2007 |
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$ |
4.35 |
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$ |
2.90 |
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4th Quarter Ended December 31, 2007 |
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$ |
3.59 |
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$ |
1.25 |
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Calendar Year 2008 |
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1st Quarter Through February 6, 2008 |
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$ |
2.87 |
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$ |
1.15 |
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The following table sets forth the range of market prices of the Common Stock during the five
trading days prior to October 19, 2007, the effective date of the Purchase Agreement.
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Volume |
October 12, 2007 |
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$ |
2.85 |
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$ |
2.85 |
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0 |
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October 15, 2007 |
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$ |
2.85 |
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$ |
2.85 |
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0 |
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October 16, 2007 |
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$ |
2.85 |
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$ |
2.85 |
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0 |
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October 17, 2007 |
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$ |
2.85 |
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$ |
2.85 |
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October 18, 2007 |
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$ |
3.59 |
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$ |
2.95 |
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12,100 |
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On October 17, 2007, the Company received a letter from the staff of the AMEX described under
AMEX status below. The Company issued a press release concerning such matter on
October 22, 2007. Since October 22, 2007, the Companys Common Stock has traded at a high of
$3.35 on October 23, 2007 to a low of $1.15 on January 8, 2008. The closing price of the
Companys Common Stock on the AMEX on February 6, 2008 was $2.84 based on a volume of 35,100
shares.
-4-
Effective as of October 19, 2007, the Company entered into the Purchase Agreement with
URC Energy LLC, a Nevada limited liability company covering the purchase by URC Energy LLC of
950,000 shares of Common Stock of the Company at a price of $3 per share (a total of $2,850,000).
Rights of Existing Holders; Dilution
The Shares of the Common Stock of the Company to be issued to URC Energy LLC are current
shares of Common Stock without modification, and no difference will exist between the currently
outstanding shares of Common Stock of the Company and the 950,000 shares to be issued. Each such
share of Common Stock will continue to be subject only to one vote per share. The current shares
of Common Stock are presently listed on the AMEX. The Company intends to apply for additional
listing and registration on such Exchange of the 950,000 shares of Common Stock to be issued.
Although the rights of current holders of shares of Common Stock of the Company will not
change after the issuance of 950,000 shares of Common Stock to URC Energy LLC, such shares will
ultimately comprise 49% of the issued and outstanding Common Stock which will obviously dilute all
existing stockholders** and reduce the voting power of those current stockholders. The issuance of
such 950,000 shares of Common Stock to URC Energy LLC may also have the following effects upon
current stockholders and/or the value of the shares of Common Stock currently outstanding:
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Members of the Board of Directors are elected by a plurality of the votes cast in
person or by proxy in the election of directors. With one stockholder and its
affiliates holding approximately 69.4% of the issued and outstanding shares and
votes, such stockholder and its affiliates will be able to elect all of the
directors of the Company. As affiliates of that stockholder will continue to hold
an additional 20.4% post 950,000 shares issuance, the total of that 20.4% and 49%
will be 69.4% which will be able to elect all of the directors of the Company. |
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Although URC Energy LLC, as the holder of 950,000 shares of Common Stock will be
restricted in its ability to resell shares for a period of time, any sales privately of
substantial amounts of our Common Stock or in the public market or a perception that
such sales may occur in the future may create a perception in the market place which
causes the market price of the Common Stock to decline. |
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The sale and issuance of 950,000 of Common Stock to a single holder may impair the
Companys ability to raise capital through the sale of additional Common or
Preferred Stock in the future. |
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** |
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Including dilution of shares held by these entities which total 395,580 shares or 40.11% pre
issuance of the 950,000 shares or 20.4% post issuance. See Information about URC Energy LLC
and its affiliates. |
-5-
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Although the Companys Bylaws and Articles of Incorporation, as
amended, currently contain provisions which could have the effect of discouraging
certain stockholder actions or opposition to candidates selected by the Board of
Directors or provide incumbent management a greater opportunity to oppose stockholder
nominees or hostile actions by stockholders or others, the existence of a block of
Common Stock representing an aggregate of approximately 49% of the
outstanding shares of Common Stock may well have a chilling effect
upon persons wishing to propose a takeover of the Company without the consent and support of
that holder of 49% of the issued and outstanding Common Stock. |
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The existence of what may be perceived as a control block of Common
Stock of the Company may have some effect upon any third parties desires to purchase or
sell the Companys Common Stock. |
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With one stockholder holding approximately 49% and its affiliates holding an
additional 20.4% of the issued and outstanding shares and votes, those holders of a
combined 69.4% of the votes will be able to cause the approval of any matter submitted
to the stockholders which requires approval of more than a majority but less than 70%
of the votes without the votes of any other stockholders. |
Information about URC Energy LLC and its affiliates
URC Energy LLC is a Nevada limited liability company organized by Articles of Organization
filed with the Secretary of State of Nevada on October 26, 2006; its sole member is Syntek West,
Inc., a Nevada corporation. The principal executive officers of URC Energy LLC are:
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Name |
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Office |
Ronald Akin
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President and Treasurer |
R. Neil Crouch
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Vice President |
Syntek West, Inc. is a Nevada corporation incorporated June 21, 1982. One hundred percent
(100%) of the issued and outstanding stock of Syntek West, Inc. is owned by Gene E. Phillips. The
directors and principal executive officers of Syntek West, Inc. are:
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Name |
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Office |
Gene E. Phillips
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Director, Chairman, President and Chief Executive Officer |
R. Neil Crouch
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Director, Vice President, Treasurer and Secretary |
Gene
E. Phillips, Basic Capital Management, Inc., a Nevada corporation
(BCM), International Health Products, Inc., a Nevada
corporation (IHPI), TacCo Financial, Inc., a Nevada
corporation (TFI) and its wholly-owned subsidiary, JRG
Investment Co., Inc., a Nevada corporation (JRGIC) are
all reporting persons who may be deemed to constitute a
person within
-6-
the meaning of Section 13d of the Securities Exchange Act of 1934, as amended (the
Exchange Act), as three of the corporations are the owners of shares of Common Stock
of the Company which are the subject of a Schedule 13D and amendments thereto filed on behalf of
Mr. Phillips and such corporations with the Securities and Exchange Commission (the
Commission). Reference is made to Amendment No. 9 to Schedule 13D for event date of
June 1, 2006 and Amendment No. 10 to Schedule 13D for event date of November 5, 2007 on file with
the Commission for a summary of the information contained therein. As of such date (and currently), IHPI owned 9,970 shares of
Common Stock of the Company (approximately 1% of the current outstanding), TFI owned 228,726 shares
of Common Stock of the Company (approximately 23.18% of the outstanding) and JRGIC owned 156,886
shares of Common Stock of the Company (approximately 15.90% of the outstanding) which in the
aggregate total 395,582 shares of Common Stock of the Company or approximately 40% of the currently
issued and outstanding shares of Common Stock.
IHPI is owned by a trust established for the benefit of the wife and children of Gene E.
Phillips (the Martin Trust). IHPI is managed by R. Neil Crouch who also manages
other private entities owned by Mr. Phillips or his family trust. R. Neil Crouch is also a
director, vice president, treasurer and secretary of Syntek West, Inc. Mr. Crouch consults on a
regular basis with Mr. Phillips regarding investments and marketable securities of IHPI. In the
past, IHPI generally made such investments with funds borrowed from BCM. BCM is beneficially owned
by a trust established for the benefit of the children of Gene E. Phillips (the May
Trust) who, although he is not an officer of director of BCM, continues to have substantial
contact with the management of BCM and has a significant influence on matters as a representative
of the May Trust.
TFIs day-to-day operations are managed by the same personnel who manage IHPIs
day-to-day operations. TFI has generally made investments with funds borrowed from BCM. JRG is a
wholly owned subsidiary of TFI. TFI is owned by Electrical Networks, Inc. (75%) and Starr
Investments (25%). Electrical Networks, Inc. is beneficially owned by J. T. Tackett and Starr
Investments is 100% beneficially owned by E. Wayne Starr.
Information about URC Energy LLC and its Affiliates
The following table sets forth the amount of current ownership of Common Stock and the pro
forma ownership of Common Stock after giving effect to the issuance of 950,000 shares of Common
Stock to URC Energy LLC (without giving effect to options or conversion rights which in the
aggregate are not material) by name of the current direct owner or group. The table set forth
below is intended to reflect the dilutive effect of the issuance of 950,000 shares of Common Stock.
-7-
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amount of |
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pro forma |
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ownership |
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ownership |
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name |
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common stock |
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of common |
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current direct owner/ |
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currently |
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approx. |
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stock |
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pro forma |
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proposed owner |
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(shares) |
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% |
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(shares) |
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% |
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TacCo Financial, Inc. |
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228,726 |
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23.18 |
% |
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228,726 |
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11.81 |
% |
JRG Investment Co., Inc. |
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156,884 |
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15.90 |
% |
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156,884 |
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8.11 |
% |
International Health
Products, Inc. |
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9,970 |
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1.01 |
% |
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9,970 |
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0.51 |
% |
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Subtotal |
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395,580 |
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40.01 |
% |
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395,580 |
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20.40 |
% |
URC Energy LLC |
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950,000 |
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49.05 |
% |
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395,580 |
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40.11 |
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1,345,580 |
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69.41 |
% |
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HKS Investment Corporation |
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108,994 |
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11.01 |
% |
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108,994 |
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5.63 |
% |
Gene S. Bertcher |
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71,811 |
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7.28 |
% |
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71,811 |
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3.71 |
% |
Others Public |
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410,554 |
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41.60 |
% |
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410,554 |
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21.21 |
% |
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Totals |
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986,939 |
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100 |
% |
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1,936,939 |
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100 |
% |
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HKS Investment Corporation acquired its current stock ownership of 108,994 shares from Victor
Lund, a director of the Company. HKS Investment Corporation filed an original statement on
Schedule 13D dated January 9, 2006 listing a group of individuals as stockholders and officers.
Reference is made to such original statement on Schedule 13D dated January 9, 2006 for summary of
the information contained therein. Mr. Lund originally became a director of the Company when the
Company acquired certain nursing homes/retirement community operations from Mr. Lund. HKS
Investment Corporation and its stockholders are not affiliated with Gene E. Phillips or TFI or
JRGIC or IHPI.
While Mr. Phillips and each of the officers and directors of the Company have had contact with
each other in the past, there are no arrangements or understandings existing among the directors
and officers of the Company on the one hand and Mr. Phillips, BCM, IHPI, TFI or JRGIC. No
arrangements or understandings existed in the past among the directors and officers of the Company
on the one hand and Mr. Phillips, BCM, IHPI, TFI or JRGIC except that TFI holds a Stock Option
Agreement presently exercisable covering 40,000 shares of Common Stock dated December 16, 2003 at
an exercise price of $2.60 per share, exercisable until December 15, 2008. Also, pursuant to a
Recission Agreement dated June 1, 2006 among the Company and four individuals including Mr.
Phillips, the Company received $1,500,000 as a break up fee from and through Syntek
West, Inc. (a Nevada corporation owned by Mr. Phillips and the parent of URC Energy LLC). The
Recission Agreement rescinded ab initio a transaction entered into on October 12, 2004 involving
-8-
the acquisition for preferred stock by the Company of two US entities which indirectly owned a
Bulgarian telecommunications and cable tv entity.
Consideration for the Purchase of Shares
The Purchase Price of $3 per share under the Purchase Agreement was established by the
Board of Directors of the Company through negotiation with representatives of the Purchaser. The
$3 per share price is the same price offered by the Company for
sizable purchases of its Common Stock (a minimum of 333,333 shares) in a private placement which has not yet reached the minimum
subscription level. During the period from January 2007 through November 5, 2007, the
Companys Common Stock traded in a range of $3.52 per share on January 2, 2007 to a high of
$6.50 per share on April 16, 2007 to a low of $1.95 per share on November 5, 2007 to a further low
of $1.15 on January 8, 2008. The Companys Common Stock is presently held by approximately
460 holders of records. The Company does not have an explanation for the volatility of the price
range of the Companys Common Stock.
Use of Proceeds
During 2006, the Company disposed of its subsidiaries then engaged in the oil and natural gas
lease and operation business. The Company advised in its Form 10-K for the fiscal year ended
December 31, 2006 that it seeks to re-enter the oil and natural gas industry through
an acquisition of interest in a significant block of oil and natural gas leases in Cleburne County,
Arkansas covering several net acres, which the Company seeks to develop using various financing
sources. The oil and natural gas leases cover properties located in the Fayetteville Shale area of
the state of Arkansas.
Since the fall of 2006, the Company and its management have continued to explore
alternatives to establish and/or acquire new business operations for the Company. Although
management continues to explore other possible transactions and lines of business, management
presently intends to re-enter the oil and natural gas industry through the acquisition and
development of interests in the Fayetteville Shale in Arkansas. The Company originally sought to
acquire a significant block of leasehold interest in Cleburne County, Arkansas covering an excess of 10,000
net acres in exchange for the issuance of certain shares of Common Stock, but such transaction did
not come to fruition in that form. In late November 2007, the Company through a subsidiary,
entered into an arrangement to acquire certain leasehold interests covering 1,712 net acres of land
in four separate sections of land in Cleburne County, Arkansas through the issuance of a
promissory note. Through such arrangement the Company also obtained two separate options to
acquire additional leasehold acreage through August 15, 2008 under a similar arrangement.
Assignments of the interests to a subsidiary of the Company were made and filed in the County
records through January 15, 2008.
The Company expects to engage in exploration development activities on such leasehold
interests during 2008 in a cost efficient manner seeking to develop commercially productive wells
-9-
and establish proven reserves. A portion of the net proceeds from the sale and issuance of the
950,000 shares of Common Stock to URC Energy LLC may be available to pay for seismic studies and
other developmental costs in preparation for drilling and/or actual drilling of development wells
on such acreage. The Company may also use a portion of such proceeds to solidify or consolidate
its position in various sections of land in the focus area in order to be the controlling holder of
more than one half of the acreage in such sections (the controlling holder of more than one half of
the acreage in a section is entitled under various Arkansas regulations to be the operator of a
well or wells drilled on such acreage and certain other benefits). However, no definitive
determination has been made concerning the expenditures or use of the proceeds of $2,850,000 from
the sale of Common Stock. At such time as same is received in exchange for issuance of
certificates representing such 950,000 shares (which will not occur until after this Information
Statement has been distributed to stockholders and a period of some 21 days shall have elapsed), the expectation
of the Company is to invest such proceeds and hold same as working capital for the Company.
Change of Control
At the time of issuance of such 950,000 shares of Common Stock to URC Energy LLC, a
deemed change of control will occur. See the table on page 8 for information about
the resulting percentage ownership of Common Stock of the Company by various individuals and
groups. At the time of its issuance of the 950,000 shares of Common Stock to URC Energy LLC, Gene
E. Phillips and a group consisting of Mr. Phillips, TFI, JRG and IHPI will control, in the
aggregate, approximately 69% of the Common Stock of the Company.
AMEX Status
In August 2006 the AMEX advised the Company that it was not then in compliance with Section
1003(a)(i) of the Company Guide with stockholders equity of less than $2,000,000 and losses from
continuing operations and/or net losses in two out of its three most recent fiscal years; Section
1003(a)(ii) of the Company Guide with shareholders equity of less than $4,000,000 and losses from
continuing operations and/or net losses in three out of its four more fiscal years. In
response to that August 2006 notice, the Company submitted a Plan of Compliance on September 22,
2006 which was accepted by the AMEX which granted the Company an extension until December 31, 2007
to regain compliance with the continued listing standards.
On October 17, 2007, the Company received a staff determination notice confirming the intent
of the AMEX staff to seek to strike the Companys Common Stock from the exchange through a
delisting procedure. Such notice advised that in the opinion of the staff of the AMEX the
Company had failed to deliver on a number of milestones that were in the Companys Plan of
Compliance and had not demonstrated an ability to regain compliance by December 31, 2007.
The AMEX staff notice specified failures by the Company to deliver the following
milestones in the Plan of Compliance [Companys position follows each item in
brackets]:
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Completion of an equity raise by December 31, 2006 to increase the Companys
equity to $2,000,000 [stockholder equity at December 31, 2006 was $2,079,000]. |
-10-
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|
Transition to an energy company through the acquisition of certain mineral rights in
the Fayetteville Shale area of Arkansas [arrangement reached in late November 2007 to
acquire such mineral rights]. |
|
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|
Providing no assurances that the Company will be able to secure the necessary
investments to complete the acquisition of mineral rights by the end of the Plan Period
[proposed acquisition of mineral rights was financed]. |
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Company has failed to provide financial projections for the duration of the Plan
Period to the AMEX and made no representations that it expects to regain compliance by
reporting net income for the fiscal year 2007 and/or shareholders equity of $4,000,000
at December 31, 2007 [the $2,850,000 to be received by the Company from URC Energy will
put the stockholders equity of the Company above $4,000,000]. |
The Company appealed that decision and was to have an opportunity to present its position at a
hearing before a Listing Qualifications Panel in late November 2007. The Company submitted to the
AMEX staff certain information as part of the appeal process in the form of a letter brief of the
Companys response to the staff notice involving the Companys accomplishments under
the Plan of Compliance. Following that submission, on November 20, 2007, the Hearings
Administrator of the AMEX advised the Company that the scheduled hearing was postponed for at least
30 days. On December 20, 2007, the Company was orally notified that such hearing is further
postponed to a date in January or February to be mutually agreed upon by the AMEX and the Company.
No further action is expected by the AMEX pending that hearing.
There can be no assurances given that the AMEX will continue the current listing of the
Companys Common Stock or that the AMEX will accept an additional listing application
covering the 950,000 shares to be sold to URC Energy LLC.
Voting Power of Management; Vote Required
Members of the Companys Board of Directors and other stockholders listed under the
table captioned Security Ownership of Principal Stockholders and Management have all voted
all shares of Common Stock held by them (an aggregate of 576,387 shares, or approximately 58% of
the current outstanding shares of Common Stock) in favor of the approval of the issuance of 950,000
shares of Common Stock to URC Energy LLC. Approval of this matter required only the affirmative
vote by the holders of a majority of the shares of Common Stock presently outstanding and entitled
to vote at a meeting which would be an aggregate of 493,470 votes.
On November 5, 2007, the Majority Stockholders, by written consent in lieu of a meeting,
approved the issuance of the 950,000 shares of Common Stock to URC Energy LLC. No further
consents, votes or proxies are or were necessary to effectuate the approval of the issuance of
950,000 shares of Common Stock to URC Energy LLC.
-11-
Certain Pro Forma Information
A pro forma balance sheet and pro forma statement of earnings is not presented herein because
such pro forma statements would not be materially different than the
combined historical balance sheet and statement of earnings contained in the 2006 Form 10-K, or the Companys
Form 10-Q for the quarter ended September 30, 2007 except that
the components of the stockholders equity section would be changed and pro forma primary earnings per share would be given. Pro forma
stockholders equity and pro forma primary earnings per share are presented below.
The following table sets forth the approximate pro forma consolidated book value per share
of Common Stock after giving effect to the issuance of 950,000 additional shares of Common Stock
based on the audited balance sheet of the Company as at December 31, 2006 and the unaudited balance
sheet of the Company at September 30, 2007 and that the total outstanding after giving effect to
such issuance would be 1,936,939 shares of Common Stock:
Pro Forma Consolidated Book Value Per Share of Common Stock Outstanding
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|
|
|
|
|
|
12/31/06 |
|
09/30/07 |
Before Issuance(1) |
|
$ |
2.11 |
|
|
$ |
1.77 |
|
After Issuance(2) |
|
$ |
2.54 |
|
|
$ |
2.38 |
|
|
|
|
(1) |
|
Based on 986,939 shares of Common Stock issued and outstanding. |
|
(2) |
|
Based on 1,936,939 shares of Common Stock issued and outstanding. |
In the foregoing table, the reduction in pro forma book value per share of Common Stock after
the issuance results solely from the issuance of the additional shares.
The following table sets forth the approximate pro forma primary net earnings per share of
Common Stock before and after such exchange:
Pro Forma Primary Earnings Per Share of Common Stock
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|
|
|
|
|
|
|
|
12/31/06 |
|
09/30/07 |
Before Issuance(1) |
|
$ |
1.32 |
|
|
$ |
(0.33 |
) |
After Issuance(2) |
|
$ |
0.77 |
|
|
$ |
(0.09 |
) |
|
|
|
(1) |
|
Based on 986,939 shares of Common Stock issued and outstanding. |
|
(2) |
|
Based on 1,936,939 shares of Common Stock issued and outstanding and
assuming the 950,000 shares were sold at the beginning of each period presented and the
funds received by the Company were invested at 7% per annum. |
-12-
The following table sets forth the capitalization of the Company at September 30, 2007 and the
pro forma capitalization of the Company as adjusted as of such date to reflect the exchange:
(Amounts in Thousands)
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|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted |
|
|
|
09/30/07 |
|
|
to Reflect Change |
|
Accounts Payable and Accrued Expenses |
|
|
350 |
|
|
|
350 |
|
Liabilities Held for Sale |
|
|
6,564 |
|
|
|
6,564 |
|
|
|
|
|
|
|
|
Current Liabilities |
|
$ |
6,914 |
|
|
$ |
6,914 |
|
Other Liabilities |
|
|
392 |
|
|
|
392 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
$ |
7,306 |
|
|
$ |
7,306 |
|
|
|
|
|
|
|
|
|
|
Stockholders Equity |
|
|
|
|
|
|
|
|
Preferred Stock, Series B |
|
|
1 |
|
|
|
1 |
|
Common Stock |
|
|
10 |
|
|
|
20 |
|
Additional Paid-In Capital |
|
|
55,992 |
|
|
|
58,832 |
|
Accumulated Other Comprehensive |
|
|
(54,252 |
) |
|
|
(54,252 |
) |
|
|
|
|
|
|
|
Income (Loss) |
|
|
|
|
|
|
|
|
Total Stockholders Equity |
|
$ |
1,751 |
|
|
$ |
4,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
9,057 |
|
|
$ |
11,907 |
|
|
|
|
|
|
|
|
Effectiveness of Issuance of Stock
This Information Statement is first being mailed to stockholders on or about January 31, 2008.
Assuming the AMEX accepts the additional listing of 950,000 shares of Common Stock, the issuance of
certificates representing such stock may be effective twenty-one (21) calendar days thereafter on
or about February 21, 2008.
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
As of November 5, 2007 and the date of this Information Statement, according to the stock
transfer records of the Company and other information available to the Company, the following
persons where known to be (i) the beneficial owners of more than five percent (5%) of the
outstanding shares of Common Stock of the Company and their associates and (ii) officers and
directors of the Company individually and as a group:
-13-
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Amount and Nature |
|
|
|
|
|
|
|
|
|
|
of Beneficial |
|
Approximate Percent |
|
|
Title of Class |
|
Name of Beneficial Owner |
|
Capacity with Company |
|
Ownership(a) |
|
of Class (6) |
|
No. of Votes |
Common Stock |
|
Gene S. Bertcher |
|
Director, President and Chief
Financial Officer and Stockholder |
|
71,811 Shares |
|
7.28% |
|
71,811 |
Common Stock |
|
Victor S. Lund |
|
Director |
|
-0- |
|
|
|
|
Common Stock |
|
Roz Campisi Beadle |
|
Director and Stockholder |
|
100 Shares |
|
0.01% |
|
100 |
Common Stock |
|
James E. Huffstickler |
|
Director |
|
-0- |
|
|
|
|
Common Stock |
|
Dan Locklear |
|
Director |
|
-0- |
|
|
|
|
Common Stock |
|
TacCo Financial, Inc. |
|
Stockholder |
|
228,726(c)(g) |
|
23.18% |
|
228,726 |
|
|
|
|
|
|
Shares |
|
|
|
|
Common Stock |
|
JRG Investment Co., Inc. |
|
Stockholder |
|
156,886(d)(g) |
|
15.90% |
|
156,886 |
|
|
|
|
|
|
Shares |
|
|
|
|
Common Stock |
|
HKS Investment Corp. |
|
Stockholder |
|
108,994(e) Shares |
|
11.04% |
|
108,994 |
Common Stock |
|
International Health |
|
Stockholder |
|
9,970(f)(g) |
|
1.01% |
|
9,970 |
|
|
Products, Inc. |
|
|
|
Shares |
|
|
|
|
Common Stock |
|
Group of TacCo Financial, Inc., JRG
Investment Co., Inc., International Health Products, Inc. and Gene E. Phillips |
|
|
|
395,580(g) Shares |
|
40.11% |
|
395,580 |
All Officers and Directors as a Group (5 persons) |
|
71,911 Shares |
|
7.29% |
|
71,900 |
All Officers, Directors and Stockholders listed in the table (9 persons) |
|
576,487 Shares |
|
58.41% |
|
576,487 |
(a) Beneficial ownership is determined in accordance with the rules of the Commission and
generally includes voting or investment power with respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable or convertible within 60 days of November 5, 2007, are generally deemed to be
outstanding for computing the percentage of the person holding such option or warrant but are not
deemed outstanding for computing the percentage of any other person.
(b) Based on 986,954 shares of Common Stock outstanding at November 5, 2007 and at February 7,
2008.
(c) TacCo Financial, Inc. presently holds an exercisable option to purchase up to 40,000
Shares at an exercise price of $2.60 per Share which is not included in the table and which may not
be voted as such Shares were not outstanding on November 5, 2007. TacCo Financial, Inc., a Nevada
corporation is owned by Electrical Networks, Inc. (75%) and Starr Investments, Inc. (25%). Its
officers and directors are J. T. Tackett, Director, Chairman and Chief Executive Officer and Wayne
Starr, Director, President and Treasurer. TacCo Financial, Inc. is also one of the Reporting
Persons listed on Amendment No. 9 to Schedule 13D filed by a group on June 1, 2006. The direct
ownership by TacCo Financial, Inc. listed in the table above does not include 156,844 shares held
by its wholly-owned subsidiary JRGIC.
-14-
(d) JRG Investment Co., Inc. is a wholly-owned subsidiary of TacCo Financial, Inc., but the
156,886 shares of Common Stock held by JRG Investment Co., Inc. are listed separately and not
included in TacCo Financial, Inc.s number of shares; its directors and officers are the same
as TacCo Financial, Inc.
(e) According to an original statement on Schedule 13D dated January 9, 2006, the group
consists of HKS Investment Corporation, David Hensel, John Kellar and Marshall Stagg, each of whom
are deemed ot be the beneficial owner of all 108,994 shares. Hensel is stated to be a Shareholder,
Director and President of HKS Investment Corporation; Kellar is a Shareholder, Director, Vice
President and Treasurer of HKS Investment Corporation and Stagg is a Shareholder, Director and
Secretary of HKS Investment Corporation.
(f) International Health Products, Inc., a Nevada corporation (IHPI) is owned by
a separate trust established for the benefit of the wife and children of Gene E. Phillips. Its
officers and directors are R. Neil Crouch II, Director, President and Treasurer; Bradford A.
Phillips, Vice President and Jamie Cobb, Treasurer. IHPI is one of the Reporting Persons listed in
Amendment No. 9 to Schedule 13D filed on behalf of a group on June 1, 2006.
(g) Pursuant to Rule 13d-5(b)(1) under the Exchange Act when two or more persons act together
for certain purposes, the group is deemed to have acquired beneficial ownership of all equity
securities of the issuer beneficially owned by any of such persons. Under that Rule, each of TFI,
JRG and IHPI are deemed to beneficially own all 395,580 Shares (40.11% of the outstanding) as is
Mr. Gene E. Phillips who has no direct ownership of any shares.
The total combined votes of all stockholders listed in the foregoing table is 576,487 votes
out of a total of 986,939 votes, or 58.41% of the voting power voting together as a single class.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and special reports, proxy statements and other
information with the Commission. You may read and copy any document filed at the Public Reference
Room of the SEC, 450 Fifth Street, N.W. Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. The Companys SEC
filings are also available to the public from the SECs website at
http://www.sec.gov/. Included in the information available is audited financial statements
of the Company in comparative form as of December 31, 2006 and 2005 which are contained in the
Companys Form 10-K for the fiscal year ended December 31, 2006 (the 2006 Form
10-K) to the SEC. Neither the 2004 Form 10-K nor the financial statements contained in it
are to be considered part of any solicitation. At the end of this Information Statement is
information on how to obtain a copy of the 2004 Form 10-K if desired. It is also available on the
SECs website. The 2004 Form 10-K is also being delivered to each stockholder along with
this Information Statement.
The Company also maintains an internet website at http://www.cabeltel.us. The Company
has available through the website, free of charge, Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K, reports filed pursuant to Section 16 of the Securities
Exchange Act of 1934 (the Exchange Act), and amendments to those reports as soon as
reasonably practicable after we electronically file or furnish such materials to the SEC. In
addition, the Company has posted the charters for our Audit Committee, Compensation Committee and
Governance and Nominating Committee, as well as our Code of Business Conduct and Ethics,
Corporate Governance Guidelines on Director Independence and other information on the website.
These charters and principles are not incorporated in this Information Statement by reference. The
-15-
Company will also provide a copy of these documents free of charge to stockholders upon written
request. The Company issues Annual Reports containing audited financial statements to its common
stockholders.
STOCKHOLDER COMMUNICATIONS WITH DIRECTORS
Stockholders who wish to communicate with the Board of Directors or with a particular director
may send a letter to the Company at 1755 Wittington Place, Suite 340, Dallas, Texas 75234. Any
communication should clearly specify it is intended to be made to the entire Board of Directors or
to one or more particular director(s). Under this process, the recipient of the communication will
review such correspondence and will forward to the Board of Directors a summary of all such
correspondence and copies of all correspondence that, in the opinion of the reviewer, deals with
the functions of the Board of Directors, or that the reviewer otherwise determines requires their
attention. Directors may at any time review a log of all correspondence received by the Company
that is addressed to the members of the Board of Directors and request copies of such
correspondence. Concerns relating to accounting, internal controls or auditing matters are
immediately brought to the attention of the Board of Directors or the appropriate Committee
thereof.
NO SOLICITATION OF PROXIES
This Information Statement is furnished to stockholders pursuant to the requirements of
Section 14(c) under the Exchange Act to report action taken by written consent of the Majority
Stockholders. No action is required upon the part of any other stockholder, and no proxy is being
solicited. The cost of this Information Statement will be borne by the Company.
COPIES OF THE COMPANYS ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006 ON
FORM 10-K ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO CABELTEL
INTERNATIONAL CORPORATION, 1755 WITTINGTON PLACE, SUITE 340, DALLAS, TEXAS 75234, ATTN: INVESTOR
RELATIONS.
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Dated: February 7, 2008. |
By order of the Board of Directors, |
|
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|
By: |
/s/ Oscar Smith
|
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|
Oscar Smith, Secretary |
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-16-