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
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
ENERTECK CORPORATION
--------------------------------------------
(Name of Registrant As Specified in Charter)
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ENERTECK CORPORATION
10701 CORPORATE DRIVE
SUITE 150
STAFFORD, TX 77477
October 11, 2004
Dear Stockholders:
We are writing to advise our stockholders that EnerTeck Corporation
intends to amend its Certificate of Incorporation (the "Amendment") to reduce
the per share par value of its common stock from $.001 to $.0001 and effect a
forward common stock split of all of the outstanding shares of our common stock
at a ratio of four-for-one. Our Board of Directors has approved this action. In
addition, the holders of a majority of our issued and outstanding voting
securities have approved this action by written consent in lieu of a special
meeting in accordance with the relevant sections of the Delaware General
Corporation Law. These actions will not be effective until after we file the
Amendment with the Delaware Secretary of State. We intend to file the Amendment
on or about November 2, 2004 with an effective date of November 5, 2004, which
is no less than 20 days after the date the enclosed information statement is
first mailed to our stockholders.
The forward stock split and reduction of the par value of our Common
Stock is not intended to change the proportionate equity interest of our
stockholders in relation to the authorized common stock of EnerTeck. As
described hereafter, it is hoped that these actions will result in a broader
based market and promote greater liquidity for EnerTeck's stockholders.
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. The information statement is first mailed to you on or about
October 11, 2004.
Please feel free to call us at (281) 240-1787 should you have any
questions on the enclosed Information Statement. We thank you for your continued
interest in EnerTeck.
For the Board of Directors
of ENERTECK CORPORATION
Parrish B. Ketchmark, President
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ENERTECK CORPORATION
10701 CORPORATE DRIVE
SUITE 150
STAFFORD, TX 77477
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
EnerTeck Corporation ("EnerTeck" or the "Company") 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. In August
2004, our Board of Directors approved, subject to stockholder approval, an
amendment to our Certificate of Incorporation reducing the per share par value
of our common stock from $.001 to $.0001 and effecting a forward stock split of
all of the outstanding shares of our common stock at a ratio of four-for-one
(the "Amendment").
The Board has fixed the close of business on September 15, 2004 as the
record date for the determination of stockholders entitled to receive notice of
the matters set forth herein (the "Record Date"). On the Record Date, the
Company had outstanding 8,551,509 shares of Common Stock which are the only
outstanding voting securities of the Company. Stockholders holding shares
representing 57.0% of the votes entitled to be cast at a meeting of the
Company's stockholders have already consented in writing to the proposed
actions. As a result, these actions will become effective upon the filing of the
Amendment with the Secretary of State of Delaware in accordance with the
relevant sections of the Delaware General Corporation Law. In accordance with
the regulations of the Securities and Exchange Commission, the proposed actions
cannot become effective until at least 20 calendar days following the
distribution of this Information Statement to the Company's stockholders.
Accordingly, it is expected that the Amendment will be filed with the Secretary
of State of Delaware on or about November 2, 2004 with an effective date of
November 5, 2004.
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.
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 October 11, 2004 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
The following table sets forth the stock ownership of each of the
Company's directors and officers, individually and as a group, and each
beneficial owner of greater than 5% of the outstanding shares of the Company, as
of the Record Date.
Name and Address of Amount and Nature
Beneficial Owner Title of Class of Beneficial Ownership Percent of Class
- ------------------- -------------- ----------------------- ---------------
Dwaine Reese (1) Common 1,225,000 14.3%
206 Country Creek Way
Richmond, TX 77469
Parrish B. Ketchmark (1) Common 1,145,000 (2) 13.3%
75 Oak Street
Norwood, NJ 07648
Leon van Kraayenburg (1) Common 400,000 (3) 4.6%
14826 Cedar Point Drive
Houston, TX 77070
Stan Crow Common 665,500 (4) 7.7%
1410 Andover
Livingston, TX 77351
Leo Long Common 1,010,000 (5) 11.8%
14600 W. 107th Street
Lenexa, KS 66215
John Russell Common 1,010,000 (5)(6) 11.8%
116 A Main Street
Tiburon, CA 94920
All directors and
executive officers
as a group (3 persons) Common 2,770,000 32.3%
(1) Holds these positions (officer and/or director) with the Company.
(2) This includes the shares underlying the warrant that has issued to an
affiliate of this shareholder, Parrish Brian Partners, Inc., to purchase
1,145,000 shares of the Company's common stock for $1.00 per share. The percent
of class assumes the exercise of this shareholder's warrants only.
(3) This includes the shares underlying the warrant that has been issued to this
shareholder in connection with his employment agreement. This is a warrant to
purchase 400,000 shares at $1.20 per share. The percent of class assumes the
exercise of this shareholder's warrants only.
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(4) This includes the shares underlying the warrant that has been issued to this
shareholder in connection with services previously rendered. This is a warrant
to purchase 60,000 shares at $1.20 per share. The percent of class assumes the
exercise of this shareholder's warrants only.
(5) This includes shares underlying a warrant that has been issued to this
shareholder to purchase 10,000 shares at $1.00 per share. The percent of class
assumes the exercise of this shareholder's warrants only.
(6) This individual's common stock holdings are comprised of shares owned by his
affiliates as follows: Park City Investors, LP (400,000 shares), Carlsbad
Industrial Association, LP (200,000 shares) and The Sherman Family Partners, LP
(400,000). Mr. Russell controls all of these entities.
All such shares are owned beneficially and of record, there are no
additional shares known to the Company for which the listed beneficial owner has
the right to acquire beneficial ownership as specified in Rule 13D-3(d)(1) of
the Exchange Act.
THE PROPOSAL
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT
A FORWARD STOCK SPLIT OF OUR OUTSTANDING COMMON STOCK
AND REDUCE THE PAR VALUE OF OUR COMMON STOCK
We currently have authorized 100,000,000 shares of common stock and on
the Record Date we had 8,551,509 shares issued and outstanding. Pursuant to the
Amendment, (i) we will reduce the per share par value of our common stock from
$.001 to $.0001, and (ii) the number of outstanding shares of our common stock
on the date of the Amendment (the "Old Shares") will be automatically increased
on the ratio of four-for-one (the "New Shares").
This means that all stockholders of record on the record date of the
forward split will receive and own four New Shares for every one Old Share
owned. As a result, following the forward stock split, the stockholders as of
the record date will own a total of 34,206,036 shares of stock, an increase of
25,654,527 shares.
The text of the proposed Amendment is as follows:
The Certificate of Incorporation of this Corporation is hereby amended
by deleting Paragraph FOURTH in its entirety and replacing it with the
following:
"FOURTH: The authorized capital stock of the corporation shall consist
of two (2) classes of stock, designated as Common Stock and Preferred Stock.
The total number of shares of Common Stock that the corporation will
have authority to issue is one hundred million (100,000,000) shares. The shares
shall have par value of $.0001 per share. All of the Common Stock authorized
herein shall have equal voting rights and powers without restrictions in
preference.
The total number of shares of Preferred Stock that the corporation will
have authority to issue is ten million (10,000,000) shares. The Preferred Stock
shall have no stated value and par value of $.001 per share. The Preferred Stock
shall be entitled to preference over the Common Stock with respect to the
distribution of assets of the corporation in the event of liquidation,
dissolution, or winding-up of the corporation, whether voluntarily or
involuntarily, or in the event of any other distribution of assets of the
corporation among its stockholders for the purpose of winding-up its affairs.
The authorized but unissued shares of Preferred Stock may be divided into and
issued in designated series from time to time by one or more resolutions adopted
by the Board of Directors. The Directors in their sole discretion shall have the
power to determine the relative powers, preferences, and rights of each series
of Preferred Stock.
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At the effective time of this amendment, each share of common stock of
the Corporation issued and outstanding shall be subject to a four (4) for one
(1) forward split."
PURPOSE AND EFFECT OF AMENDMENT
Our common stock is currently quoted on the OTC Bulletin Board. We
believe that the four-for-one (4:1) forward stock split will substantially
increase the number of our common shares that trade in the over-the-counter
market and will provide substantially greater liquidity for our shares which,
hopefully, will provide greater incentive for investors to acquire our common
shares. The Board believes that the resulting increase of the shares of
outstanding caused by the forward stock split is likely to improve the value of
our common stock.
The number of shares of Common Stock authorized will not change as a
result of the forward stock split. However, the par value per share will change
from $.001 to $.0001.
The forward stock split will have the following effects upon the number
of shares of our common stock outstanding and the number of authorized and
unissued shares of our common stock:
- The number of shares owned by each holder of common stock will be
increased fourfold;
- The number of shares of our common stock that will be issued and
outstanding after the forward stock split will be approximately 34,206,036;
- The per share loss and net book value of our common stock will be
decreased because there will be a greater number of shares of our common stock
outstanding;
- The par value of the common stock will be reduced to $0.0001 per
share;
- 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, four times of the number of
shares of common stock which such holders would have been able to purchase upon
exercise thereof immediately preceding the forward stock split, at the same
aggregate price required to be paid therefore upon exercise thereof immediately
preceding the forward stock split.
MANNER OF EFFECTING THE AMENDMENT
The reduction in per share par value of our common stock and the
forward stock split will be effected by the filing of the Amendment with the
Secretary of State of the State of Delaware. We anticipate that the Amendment
will be filed on or about November 2, 2004 with an effective date of November 5,
2004, which is at least 20 days after this Information Statement was first
mailed to our stockholders. As soon as practicable after the effective date of
the forward stock split, stockholders of record on the record date will receive
certificates representing the additional shares of common stock issued to the
stockholder as a result of the forward stock split. We will bear the costs of
the issuance of the additional stock certificates.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The forward 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 forward 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. Our beliefs
regarding the tax consequence of the forward 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
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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
entities. The state and local tax consequences of the forward 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 forward stock
split.
POTENTIAL RISKS OF THE FORWARD STOCK SPLIT
If the forward stock split is effected, there can be no assurance that
the bid price of our common stock will continue at a level in proportion to the
increase in the number of outstanding shares resulting from the forward stock
split and that the market price of the post-split common stock can be
maintained. The market price of our common stock will also be based on our
performance and other factors, many of which are unrelated to the number of
shares outstanding. If the forward stock split is effected and the market price
of our common stock declines, the percentage decline as an absolute number and
as a percentage of our overall capitalization may be greater than would occur in
the absence of a forward stock split. Furthermore, the increased number of
shares that would be outstanding after the forward stock split could adversely
affect liquidity of our common stock.
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.
For the Board of Directors
of ENERTECK CORPORATION
Parrish B. Ketchmark, President
Dated: October 11, 2004
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