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:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
MEDITECH PHARMACEUTICALS, INC.
(Name of Small Business Issuer As Specified in Charter)
___________________________________________________________
(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 transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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:
_______________________________________________________
MEDITECH PHARMACEUTICALS, INC.
___________ __, 2004
Dear Stockholder:
A special meeting of stockholders of Meditech Pharmaceuticals,
Inc. ("Meditech") will be held on __________, __________ __, 2004
at [10:00 a.m.] local time, at ____________, Scottsdale, Arizona.
You are cordially invited to attend.
The Notice of Special Meeting of Stockholders and a Proxy
Statement, which describe the formal business to be conducted at
the meeting, follow this letter.
It is important that you use this opportunity to take part
in the affairs of Meditech by voting on the business to come
before this meeting. After reading the Proxy Statement, please
promptly mark, sign, date and return the enclosed proxy card in
the prepaid envelope to assure that your shares will be
represented. Regardless of the number of shares you own, your
careful consideration of, and vote on, the matter before our
stockholders is important.
The board of directors and management look forward to seeing
you at the special meeting.
Very truly yours,
Gerald N. Kern
Chairman of the Board,
Chief Executive Officer
MEDITECH PHARMACEUTICALS, INC.
10105 E. Via Linda, #103, PMB-382
Scottsdale, AZ 85258
(480) 614-2874
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held ______ __, 2004
Dear Stockholders of Meditech Pharmaceuticals, Inc.:
You are cordially invited to attend the special meeting of
stockholders of Meditech Pharmaceuticals, Inc. ("Meditech") to be
held at [10:00 a.m.], local time on _________ __, 2004, at
________________, Scottsdale, Arizona, to consider and vote upon
a proposal to effect a 1 for 1,000 reverse split of Meditech's
outstanding common stock. Meditech's board of directors
unanimously approved the proposal on ________ __, 2004 and
recommended that it be submitted for stockholder approval.
Only stockholders of record at the close of business on
_______________ can vote at the meeting.
You are cordially invited to attend the special meeting in
person. Even if you plan to attend the meeting, you are still
requested to sign, date and return the accompanying proxy in the
enclosed addressed envelope. If you attend, you may vote in
person if you wish, even though you have sent your proxy.
By Order of the Board of
Directors
Gerald N. Kern
Chairman of the Board, Chief
Executive Officer
___________ __, 2004
MEDITECH PHARMACEUTICALS, INC.
10105 E. Via Linda, #103, PMB-382
Scottsdale, AZ 85258
(480) 614-2874
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
To Be Held __________ __, 2004
Meditech Pharmaceuticals, Inc. is sending this Proxy
Statement and the accompanying proxy card to the holders of
common stock of Meditech in connection with a solicitation of
proxies by the board of directors of Meditech from such
stockholders for use at the special meeting of stockholders of
Meditech referenced above. We are mailing this proxy statement
and the enclosed form of proxy beginning on or about _________
__, 2004.
VOTING AND PROXY INFORMATION
Who May Vote
- ------------
Holders of record of common stock at the close of business
on __________ __, 2004 are entitled to receive notice of and to
vote at the special meeting. At the close of business on the
record date, there were outstanding 352,175,487 shares of common
stock, the only outstanding securities of Meditech entitled to
vote at the special meeting. The common stock is held by
approximately 3,028 stockholders of record.
Required Votes
- --------------
Each stockholder is entitled to one vote per share on all
matters properly brought before the stockholders at the special
meeting. Such votes may be cast in person or by proxy.
Abstentions may be specified as to the approval of the proposal
and will have the effect of a vote against the proposal. Under
the rules that govern brokers who have authority to vote on
certain matters on behalf of the beneficial owners of stock but
who have not received instructions from such beneficial owners,
such brokers have the discretion to vote such shares on routine
matters, but not on non-routine matters. Non-routine matters
include the adoption of reverse stock splits.
The proposal to effect a 1 for 1,000 reverse stock split
requires the affirmative vote of a majority of the voting power
entitled to vote thereon.
How to Vote
- -----------
Votes may be cast in person at the special meeting or by
proxy using the enclosed proxy card. A facsimile of the proxy
will be accepted. All shares of common stock that are
represented at the special meeting by properly executed proxies
received by Meditech prior to or at the special meeting and not
revoked will be voted at the special meeting in accordance with
the instructions indicated in such proxies. Unless instructions
to the contrary are specified in the proxy, each such proxy will
be voted FOR the proposal.
Proxies Can Be Revoked
- ----------------------
Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is voted. Proxies
may be revoked by filing with the Secretary of Meditech, before
the vote is taken at the special meeting, a written notice of
revocation bearing a date later than the date of the proxy, duly
executing and delivering a subsequent proxy relating to the same
shares, or attending the special meeting and voting in person
(although attendance at the special meeting will not in and of
itself constitute a revocation of a proxy). Any written notice
of revocation should be sent to: Corporate Secretary, Meditech
Pharmaceuticals, Inc., 10105 E. Via Linda, #103, PMB-382,
Scottsdale, AZ 85258.
Expenses of Solicitation
- ------------------------
We will bear the expense of this solicitation, including the
reasonable costs incurred by custodians, nominees, fiduciaries
and other agents in forwarding the proxy material to you. We
will also reimburse brokerage
firms and other custodians and nominees for their expenses in
distributing proxy material to you. In addition to the
solicitation made by this proxy statement, certain directors,
officers and employees of Meditech may solicit proxies by
telephone and personal contact.
Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------
The following table sets forth, as of November 1, 2004, the
stock ownership of each officer and director of Meditech, of all
our officers and directors as a group, and of each person known
by us to be a beneficial owner of five percent or more of our
common stock. Except as otherwise noted, each person listed
below is the sole beneficial owner of the shares and has sole
investment and voting power over such shares. Unless otherwise
indicated, the address of each named beneficial owner is the same
as that of our principal executive offices located at 10105 E.
Via Linda, No. 103, Scottsdale, Arizona 85258.
Name and Address Amount and Nature Percentage
of Beneficial Owner (1) of Beneficial Ownership of Class
- ----------------------- -------------------------- ----------
Gerald N. Kern 238,816,794 (2) 63.2%
Petro-Med, Inc. 206,756,794 58.7%
Steven I. Kern 24,905,000 (3) 6.6%
Cynthia S. Kern 3,455,000 (4) 1.0%
Lester Goldstein 1,490,000 (5) *
Harry Hall 1,100,000 (6) *
All directors & officers 269,766,794 66.8%
as a group (5 persons)
* Less than 1%.
(1) Beneficial ownership has been determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934.
Pursuant to the rules of the Securities and Exchange Commission,
shares of common stock that each named person and group has the
right to acquire within 60 days pursuant to options, warrants,
conversion privileges or other rights, are deemed outstanding for
purposes of computing shares beneficially owned by and the
percentage ownership of each such person and group. However, such
shares are not deemed outstanding for purposes of computing the
shares beneficially owned by or percentage ownership of any other
person or group.
(2) Mr. Kern is the Chairman of the board and chief
executive officer of Petro-Med, Inc. and may be deemed the
beneficial owner of the 206,756,794 shares owned by Petro-Med,
Inc. Includes 25,550,000 shares issuable upon exercise of
outstanding stock options. Does not include an aggregate of
25,210,000 shares of our common stock beneficially owned by Mr.
Kern's spouse and adult children. Mr. Kern disclaims beneficial
ownership of the shares held by such persons. In October 2004,
Petro-Med exchanged $3,610,000 principal amount of outstanding
advances to Meditech for 180,500,000 shares of Meditech common
stock (an exchange rate of $0.02 per share).
(3) Includes 24,550,000 shares issuable upon exercise of
outstanding stock options.
(4) Includes 1,100,000 shares issuable upon exercise of
outstanding stock options. Does not include an aggregate of
7,260,000 shares of common stock held by Ms. Kern's spouse and
adult children. Ms. Kern disclaims beneficial ownership of the
shares held by such persons.
(5) Includes 950,000 shares issuable upon exercise of
outstanding stock purchase warrants and options.
(6) Includes 750,000 shares issuable upon exercise of
outstanding stock purchase warrants and options.
The directors of Petro-Med are Gerald N. Kern, Harry Hall
and Jerry Tennant. Gerald N. Kern is the Chairman, President and
Chief Executive Officer of Petro-Med.
Petro-Med may be deemed a parent or promoter of Meditech
under the Securities Act. Gerald N. Kern may be deemed a parent
of Petro-Med and therefore a parent of Meditech under the
Securities Act.
-2-
The following table sets forth, as of May 31, 2004, the
shares of common stock of Petro-Med owned of record and
beneficially by certain officers and directors of Meditech and by
all such officers and directors of Meditech as a group.
Name Shares Owned Percentage of Class
-------------------- ----------------- -------------------
Gerald N. Kern 3,613,840 (1) 15.85%
Lester F. Goldstein 8,000 0.4%
All directors and 3,621,840 15.89%
officers as a
group (4 persons)
(1) 2,087,270 shares are owned by FSL Cosmetics, Ltd., of
which Gerald N. Kern is the sole shareholder. Cynthia S. Kern, as
the wife of Gerald N. Kern, may be deemed, as a result of
community property laws, to be a beneficial owner of 50% of the
shares owned by Mr. Kern.
Except for Gerald N. Kern, the above table does not include
those persons who beneficially own more than 5% of Petro-Med's
outstanding common stock, which persons are Sergei Givotovsky who
owns 1,683,640 shares, and Lakestone Acceptance Corp., who owns
1,370,000 shares or approximately 7.4% and 6% respectively.
PROPOSAL
APPROVAL OF A REVERSE SPLIT OF MEDITECH COMMON STOCK
Meditech's board has adopted resolutions proposing to effect
a reverse stock split pursuant to which the outstanding shares of
Meditech common stock will be combined and reconstituted as a
smaller number of shares of common stock by a ratio of 1 for
1,000.
PURPOSE OF THE REVERSE STOCK SPLIT
The purpose of the reverse stock split is to increase the
market price per share of our common stock. The board of
directors believes that by decreasing the number of shares
outstanding we will have an increased stock price. Our
management believes that the low per share market price of our
common stock impairs the acceptability of the stock by the
financial community and the investing public. Theoretically, the
number of shares outstanding should not, by itself, affect the
marketability of the stock, the type of investor who acquires it,
or our reputation in the financial community, but in practice
this is not necessarily the case, as many investors look upon low-
priced stocks as unduly speculative in nature and, as a matter of
policy, avoid investment in such stocks. Our management also
believes that a low share price reduces the effective
marketability of our shares because of the reluctance of many
leading brokerage firms to recommend low-priced stocks to their
clients. Certain institutional investors have internal policies
preventing the purchase of low-priced stocks and many brokerage
houses do not permit low-priced stocks to be used as collateral
for margin accounts. A variety of brokerage house policies and
practices tends to discourage individual brokers within those
firms from dealing in low-priced stocks. Some of those policies
and practices pertain to the payment of brokers' commissions and
to time-consuming procedures that function to make the handling
of low-priced stocks unattractive to brokers from an economic
standpoint. In addition, the structure of trading commissions
also tends to have an adverse impact upon holders of low-priced
stocks because the brokerage commission on a sale of a low-price
stock generally represents a higher percentage of the sales price
than the commission on a relatively higher-priced stock.
Our board of directors is hopeful that the decrease in the
number of shares of our outstanding common stock as a consequence
of the reverse stock split will result in an anticipated
increased price level, which will encourage interest in our
common stock and possibly promote greater liquidity for our
stockholders. In addition, although it may be anticipated that
the increase in the price level of our common stock as a result
of the reverse stock split will be proportionately less than the
decrease in the number of shares outstanding, the reverse stock
split could result in a price level for the shares that will
overcome the reluctance, policies and practices referred to above
and diminish the adverse impact of trading commissions on the
market for the shares. However, there can be no
-3-
assurance that the foregoing effects will occur, or that the
share price level of the common stock immediately after the
reverse stock split will be maintained for any period of time.
EFFECTIVENESS OF THE REVERSE STOCK SPLIT
If this proposal is approved by the stockholders, the
reverse stock split will become effective immediately. At that
time, all of the shares of the old common stock will be converted
into shares of the new common stock as set forth below. As
permitted by Nevada law, there will be no change in the par value
of the shares or the number of authorized shares.
METHOD OF CONVERTING SHARES
As soon as practicable after the effective time, we will
notify the stockholders through a transmittal letter of the
opportunity to surrender to Meditech their certificates
representing old common stock in exchange for certificates
representing new common stock in accordance with the procedures
to be set forth in the letter of transmittal. No new
certificates will be issued to a stockholder until such
stockholder has surrendered such stockholder's outstanding
certificate(s), together with the properly completed and executed
letter of transmittal, to Meditech. Stockholders must retain
possession of their shares until receiving such transmittal
letter and should not send them in with their proxies.
CERTIFICATES AND FRACTIONAL SHARES
Beginning with the effective date, each old certificate,
until exchanged in the normal course of business as described
above, will be deemed for all purposes to evidence ownership of
the number of whole shares of new common stock into which the
shares evidenced by the old certificates have been converted.
No fractional shares will be issued. Any fractional shares
created as a result of the reverse stock split will be rounded up
to the nearest whole share; however, stockholders who would
receive less than one share as a result of the reverse stock
split will be entitled, upon surrender of certificate(s)
representing their shares, to a cash payment of $0.02 per share
in lieu thereof. The ownership of a fractional interest will not
give the holder thereof any voting, dividend or other rights
except to receive payment therefor as described herein.
Notwithstanding the fact that the reverse stock split is expected
to reduce the total number of record holders of common stock by
529 stockholders, the purpose of the proposed stock split is not
to reduce the number of record holders. The reverse stock split
is not part of a contemplated "going private" transaction under
Rule 13e-3 of the Securities Exchange Act of 1934, as amended,
although such transactions are typically effected by reverse
stock splits. This is because in order for Meditech to go
private it would require the cessation of its reporting
requirements under such act by reason of having less than 300
stockholders. Meditech will still have approximately 2499
stockholders after the reverse stock split takes effect and thus
will continue to be subject to the periodic reporting
requirements of such act.
NO DISSENTERS' RIGHTS
Under Nevada Law, Meditech's stockholders are not entitled
to dissenters' rights with respect to the reverse stock split,
and Meditech will not independently provide stockholders with any
such right.
EFFECTS OF THE REVERSE STOCK SPLIT
The principal effect of the reserve stock split will be to
decrease the number of shares of common stock outstanding from
352,175,487 to approximately 352,175 before giving effect to the
rounding of fractional shares referred to above. In addition,
the board of directors will take appropriate action to
proportionately adjust the number of shares of common stock
issuable upon exercise of outstanding warrants, options, other
convertible securities and other contingent share issuances, and
to adjust the related exercise price, to reflect the reverse
stock split. As a result, following the effective date of the
reverse stock split, the number of common shares issuable upon
the exercise of outstanding warrants, options, other convertible
securities and contingent share issuances will be reduced from
57,890,000 to approximately 57,890 shares.
The shares of new common stock will be fully paid and
nonassessable. The relative voting and other rights of holders
of the new common stock will not be altered by the reverse stock
split. Meditech does not anticipate that
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the reverse stock split will result in the reduction of more than
529 stockholders, which reduction does not materially affect
Meditech's reporting status under the Securities Exchange Act of
1934, as amended.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following description of the material United States
federal income tax consequences of the reverse stock split is
based on the United States Internal Revenue Code of 1986, as
amended, applicable Treasury Regulations promulgated thereunder,
judicial authority and current administrative rulings and
practices as in effect on the date of this proxy. Changes to the
laws could alter the tax consequences described below, possibly
with retroactive effect. Meditech will not request an opinion of
counsel or a ruling from the Internal Revenue Service regarding
the United States federal income tax consequences of the reverse
stock split. This discussion is for general information only and
does not discuss the tax consequences which may apply to special
classes of taxpayers (e.g., tax-exempt organizations, non-
resident aliens, mutual funds, regulated investment companies,
broker/dealers or insurance companies). This summary does not
discuss the state, local and foreign (non-United States) tax
consequences of the reverse stock split, which may vary
significantly as to each stockholder, depending upon the
jurisdiction in which such stockholder resides. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
PARTICULAR CONSEQUENCES TO THEM.
In general, the United States federal income tax
consequences of the reverse stock split will vary among
stockholders depending upon whether they receive cash for
fractional shares or solely a reduced number of shares of common
stock in exchange for their old common stock. We believe that
because the reverse stock split is not part of a plan to increase
periodically a stockholder's proportionate interest in our assets
or earnings and profits, the reverse stock split will likely have
the following United States federal income tax effects: A
stockholder who receives solely a reduced number of shares of
common stock will not recognize gain or loss. In the aggregate,
such a stockholder's basis in the reduced number of shares of
common stock will equal the stockholder's basis in its old common
stock. A stockholder who receives cash in lieu of a fractional
share as a result of the reverse stock split will generally be
required to recognize a taxable gain or dividend income,
depending on that stockholder's particular facts and
circumstances. Generally, a stockholder receiving such a payment
will recognize a taxable gain or dividend income in an amount
equal to the lesser of (i) the amount of the cash payment
received by the stockholder, or (ii) the excess of (A) the
aggregate fair market value of the reduced number of shares of
common stock received, plus the amount of the cash payment
received, over (B) the stockholder's basis in all of the
stockholder's old common stock. In the aggregate, such a
stockholder's basis in the reduced number of shares of common
stock will equal the stockholder's basis in its old common stock,
and the holding period of the post-reverse stock split shares
received will include the holding period of the pre-reverse stock
split shares exchanged.
Meditech will not recognize any gain or loss as a result of
the reverse stock split.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
Approval of the proposal requires the affirmative vote of a
majority of the votes represented by the outstanding shares of
Meditech common stock. The total number of votes eligible to be
cast with respect to this proposal as of the record date is
352,175,487. Abstentions and broker non-votes will be counted as
present for purposes of determining if a quorum is present but
will have the same effect as a negative vote on this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF A 1 FOR 1,000 REVERSE SPLIT OF THE OUTSTANDING SHARES
OF MEDITECH COMMON STOCK.
OTHER MATTERS
The board of directors does not intend to bring any other
matters before the special meeting and has not been informed that
any other matters are to be presented to the special meeting by
others. In the event that other matters properly come before the
special meeting or any adjournments thereof it is intended that
the persons named in the accompanying proxy and acting thereunder
will vote in accordance with their best judgment.
-5-
DEADLINE FOR SUBMISSION
OF PROPOSALS TO BE PRESENTED
AT THE 2005 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who intends to present a proposal at the
2005 annual meeting of stockholders must file such proposal with
Meditech by _______________ for possible inclusion in Meditech's
proxy statement and form of proxy relating to the meeting.
By Order of the Board of Directors
Gerald N. Kern, Chairman of the
Board, Chief Executive Officer
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Meditech Pharmaceuticals, Inc.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby acknowledges receipt of the notice of
special meeting of stockholders of Meditech Pharmaceuticals,
Inc., to be held at _________________________________________,
beginning at [10:00 a.m.], and the proxy statement in connection
therewith and appoints Gerald N. Kern, the undersigned's proxy
with full power of substitution for and in the name, place and
stead of the undersigned, to vote upon and act with respect to
all of the shares of common stock of Meditech standing in the
name of the undersigned, or with respect to which the undersigned
is entitled to vote and act, at the meeting and at any
adjournment thereof.
The undersigned directs that the undersigned's proxy be
voted as follows:
1. APPROVAL OF THE PROPOSAL TO EFFECT A REVERSE SPLIT OF
MEDITECH COMMON STOCK
Proposal to effect a one-for-one thousand reverse split of
Meditech common stock.
[_] FOR[_] AGAINST[_] ABSTAIN
2. IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER WHICH
MAY PROPERLY COME BEFORE THE MEETING.
This proxy will be voted as specified above. If no
specification is made, this proxy will be voted for the proposal
set forth in Item 1.
The undersigned hereby revokes any proxy heretofore given to
vote or act with respect to the common stock of Meditech and
hereby ratifies and confirms all that the proxies, their
substitutes, or any of them may lawfully do by virtue hereof.
If more than one of the proxies named shall be present in
person or by substitute at the meeting or at any adjournment
thereof, the majority of the proxies so present and voting,
either in person or by substitute, shall exercise all of the
powers hereby given.
[Signature Page Follows]
Please date, sign and mail this proxy in the enclosed
envelope. No postage is required.
Date ________________ ____, 2004
_________________________________
Signature of Stockholder
_________________________________
Signature of Stockholder
Please date this proxy and sign
your name exactly as it appears
hereon. Where there is more than
one owner, each should sign. When
signing as an attorney,
administrator, executor, guardian
or trustee, please add your title
as such. If executed by a
corporation, the proxy should be
signed by a duly authorized
officer.