Filed On 9/27/06 11:12am ET · SEC File 0-30237 · Accession Number 1328759-6-99
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
9/27/06 Victor Industries Inc PRER14A 1:125 Law Of..D/Huettel/ESQ/FA
Revised Preliminary Proxy Solicitation Material · Schedule 14A
Filing Table of Contents
Document/Exhibit Description Pages Size
1: PRER14A Vici Revised 14a No. 2 HTML 582K
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UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE
14A
(Rule 14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. 2)
Check
the
appropriate box:
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þ
Preliminary
Proxy Statement
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o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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o
Definitive
Proxy Statement
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o
Definitive
Additional Materials
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o
Soliciting
Material under Rule 14a-12
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VICTOR
INDUSTRIES, INC.
(Name
of
Registrant as Specified in its Charter)
NOT
APPLICABLE
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
o Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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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 state how it was
determined):
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(4)
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Proposed
maximum aggregate value of
transaction:
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o
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Fee
paid previously with preliminary
materials:
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o
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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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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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VICTOR
INDUSTRIES, INC.
180
S.W. Higgins Avenue
To
Our
Stockholders:
You
are
cordially invited to attend the Annual Meeting of Stockholders (the “Meeting”)
of Victor Industries, Inc. to be held on _________________ at 10:00 a.m., local
time, at the Company’s Headquarters located at 180 S.W. Higgins Avenue,
Missoula, MT 59803.
The
Notice of Annual Meeting and the Proxy Statement that follow describe the
business to be considered and acted upon by stockholders of the Company at
the
Meeting. Please carefully review the information contained in the Proxy
Statement.
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, IT IS VERY IMPORTANT THAT YOU MARK,
SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AT THAT TIME
BY REQUESTING THE RIGHT TO VOTE IN PERSON.
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Sincerely,
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Lana
Pope
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Chief
Executive Officer
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NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON [], 2006
PLEASE
TAKE NOTICE that the Annual Meeting of Stockholders (the “Meeting” or “Annual
Meeting”) of Victor Industries, Inc. (the “Company”) will be held on
_____________________ at 10:00 a.m., local time, at the Company’s Headquarters
located at 180 S.W. Higgins Avenue, Missoula, MT 59803, for the following
purposes:
At
the
Annual Meeting the following items shall be considered and voted upon:
| 1. |
the
appointment of Lana Pope and David Boulter as Directors of the Company
for
the term of one year or until their successors are duly appointed;
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| 3. |
the
filing of a Certificate of Amendment with the Secretary of State
of Idaho
in order to effect a reverse stock split of the Company’s issued and
outstanding common stock, a range from one new share for one hundred
(1:500) to one new share for one thousand currently issued and outstanding
shares (1:1200) of the Company’s common
stock;
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to
consider and vote upon the merger of the Company with and into its
wholly-owned Nevada subsidiary, Victor Nevada, Inc.,
for the sole purpose of changing the Company’s State of
domicile;
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the
approval and ratification an Acquisition Agreement & Plan of
Reorganization whereby the Company shall acquire all of the issues
and
outstanding shares of common stock of Ethos Environmental, Inc.,
a Nevada
corporation solely for shares of the Company’s post-reverse split Common
Stock;
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the
approval and ratification of the proposed sale of the Company’s
wholly-owned subsidiary New Wave Media, a Nevada corporation;
and,
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to
transact such other business as may properly come before the annual
meeting.
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Only
stockholders of record at the close of business on March 31, 2006 (the
“Shareholders”) will be entitled to notice of, and to vote at, the Annual
Meeting, and any adjournments or postponements thereof. The stock transfer
books
of the Company will remain open between the record date and the date of the
Annual Meeting, and any adjournments or postponements thereof. A list of
stockholders entitled to vote at the Annual Meeting will be available for
inspection at the Annual Meeting, and any adjournments or postponements thereof.
All
stockholders are cordially invited to attend the Annual Meeting in person.
Whether or not you plan to attend the Annual Meeting in person, your vote is
important. To assure your representation at the Annual Meeting, please sign
and
date the enclosed Proxy Card and return it promptly in the enclosed envelope,
which requires no additional postage if mailed in the United States or Canada.
Should you receive more than one Proxy Card because your shares are registered
in different names and addresses, each Proxy Card should be signed and returned
to assure that all your shares will be voted. You may revoke your proxy in
the
manner described in the Proxy Statement at any time prior to it being voted
at
the Annual Meeting. If you attend the Annual Meeting and vote by ballot, your
proxy will be revoked automatically and only your vote at the Annual Meeting
will be counted. These Proxy materials will be mailed on or about [], 2006
to
all stockholders of record at March 31, 2006.
By
Order
of the Board of Directors
Lana
Pope
CEO
YOUR
VOTE
IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE READ
THE
ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
PROXY
STATEMENT
SUMMARY
TERM SHEET
This
summary highlights the material information from Proposal 5 contained in this
document (the”Merger Proposal”). This summary may not contain all of the
information that is important to you and should be read together with the more
detailed information contained elsewhere in this proxy statement and in the
Exhibits to this proxy statement, including the Agreement and Plan of Merger
(the “APR Merger”) attached to this Proxy statement as Exhibit F. You should
read this entire proxy statement, its Exhibits and all documents that have
been
incorporated by reference before executing your proxy. Section
references are included below to direct you to a more complete description
of
the topics
The
following summarizes the principal terms of Proposal 5 and the APR Merger of
Victor Industries, Inc., an Idaho corporation (“VICI”) with Ethos Environmental,
Inc., a Nevada corporation ("ETHOS").
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You
are being asked to approve all necessary proposals (the “Necessary
Proposals”) needed to implement the merger set forth in Merger Proposal.
The Necessary Proposals are:
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first,
the filing of a Certificate of Amendment with the Secretary of State
of
Idaho in order to effect a reverse stock split of the Company’s issued and
outstanding common stock, a range from one new share for one hundred
(1:500) to one new share for one thousand currently issued and outstanding
shares (1:1200) of the Company’s common stock; See “Proposal 3, page PRE
14A - 9”)
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second,
that VICI merge into its wholly owned subsidiary Victor Industries,
Inc. a
Nevada corporation ("VICI Nevada") for the sole purpose of redomiciling
under the laws of the State of Nevada. See (Proposal 4, page PRE
14A -
10); and
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third,
that following the redomicile to the state of Nevada, VICI Nevada
will
merge with ETHOS. VICI Nevada will be the surviving corporation.
See
(Proposal 5, page PRE 14A - 11)
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An
annual meeting of the shareholders of the Company will be held on
[ ], at
the [ ], at [ ] local time, to consider and vote upon several proposals.
The proposals contained in this Proxy statement that are unrelated
to the
Merger Proposal are:
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first,
the appointment of Lana Pope and David Boulter as Directors of the
Company
for the term of one year or until their successors are duly appointed;
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third,
the approval and ratification of the proposed sale of the Company’s
wholly-owned subsidiary New Wave Media, a Nevada
corporation.
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You
are entitled to vote at the annual meeting if you owned shares of
VICI
common stock at the close of business on March 31, 2006, which is
the
record date for the annual meeting. You will have one vote at the
annual
meeting for each share of VICI common stock you owned at the close
of
business on the record date. On the record date, there were 500,177,953
shares of our common stock outstanding and entitled to be voted at
the
annual meeting. The approval and adoption of the APR Merger agreement
requires the affirmative vote of a majority of the votes cast, either
in
person or by proxy, at the annual meeting. See "Notice of Annual
Meeting
of Stockholders" page PRE 14A - 3.
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Under
the terms of the APR Merger, VICI Nevada will acquire all issued
and
outstanding shares of Ethos in exchange for 17,718,187 shares of
the post
reverse split common stock of VICI Nevada. The 17,718,187 Shares
of VICI
Nevada common stock represents an estimated 97% of the total issued
and
outstanding post reverse split shares. Unless otherwise indicated,
this
proxy statement assumes that 17,718,187 VICI Nevada common shares
will be
issued in conjunction with the APR Merger. See (“Merger Consideration",
page PRE 14A - 11.)
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As
of March 31, 2006, directors and executive officers of VICI and their
affiliates (the “VICI Inside Stockholders”) beneficially owned and were
entitled to vote 12,918,070 shares or approximately .026% of VICI’s
outstanding common stock. The VICI Inside Stockholders have also
indicated
that they intend to vote their shares in favor of all other proposals
being presented at the meeting and that they will vote the shares
they
purchased in open market transactions in favor of all of the proposals
being presented at the meeting, including the merger proposal. See
“VICI
Inside Stock Holders”, page PRE 14A -
11.
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Following
the merger the name of VICI shall be Ethos Environmental,
Inc.
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The
corporate headquarters and principal executive offices of VICI will
be
located at 7015 Alamitos Avenue in San Diego, CA 92154, which is
Ethos’s
corporate headquarters
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VICI
and Ethos will cause the common stock of VICI outstanding prior to
the APR
Merger, which is traded on the Over The Counter Trading Bulletin
Board
("OTCBB"), to continue trading on the OTCBB, albeit a new symbol
shall be
requested by the filing of the appropriate documentation.
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When
you consider the recommendation of VICI's board of directors in favor
of
adoption of the APR Merger proposal, you should keep in mind that
VICI's
executive officers and members of VICI's board have interests in
the APR
Merger transaction that are different from, or in addition to, your
interests as a stockholder. These interests include, among other
things if
the APR Merger is not approved, that VICI will be required to seek
additional funds or possible business combinations in order to remain
operational. See “Interests of VICI Directors and Officers in APR Merger”,
page PRE 14A - 12.
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Consummation
of the APR Merger and the related transactions is conditioned on
the VICI
stockholders adopting this merger proposal. In addition, the consummation
of the merger is conditioned upon the following:
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no
order, stay, judgment or decree being issued by any governmental
authority
preventing, restraining or prohibiting in whole or in part, the
consummation of such transactions;
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the
delivery by each party to the other party of a certificate to the
effect
that the representations and warranties of the delivering party are
true
and correct in all material respects as of the closing and all covenants
contained in the APR Merger have been materially complied with by
the
delivering party;
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the
receipt of necessary consents and approvals by third parties and
the
completion of necessary proceedings;
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VICI's
common stock being quoted on the OTCBB;
and
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those
additional terms and conditions as fully set forth in the APR Merger
Agreement attached hereto. See “Conditions to the Closing of the APR
Merger”, page PRE 14A - 12.
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The
merger agreement may be terminated at any time before the completion
of
the merger by mutual written consent of both ETHOS and VICI or by
either
party in certain instances. See "Termination Amendment and Waiver,"
page,
PRE 14A - 13.
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The
APR Merger is intended to qualify as a reorganization within the
meaning
of Section 368(a) of the Internal Revenue Code and no gain or loss
will be recognized by VICI as a result of the APR Merger. See “Tax
Consequences of the Merger”, page, PRE 14A -
13.
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There
are no dissenters’ rights applicable to the APR Merger
proposal
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(This
Space Intentionally Left Blank)
CAUTIONARY
STATEMENTS CONCERNING FORWARD-LOOKING INFORMATION
This
Information Statement contains forward-looking statements. Certain matters
discussed herein are forward-looking statements within the meaning of the
Private Litigation Reform Act of 1995. Certain, but not necessarily all, of
such
statements can be identified by the use of forward-looking terminology, such
as
“believes,” “expects,” “may,” “will,” “should,” “estimates” or “anticipates” or
the negative thereof or comparable terminology. All forward-looking statements
involve known and unknown risks, uncertainties and other factors, which may
cause the actual transactions, results, performance or achievements of the
company to be materially different from any future transactions, results,
performance or achievements expressed or implied by such forward-looking
statements. These may include, but are not limited to matters described in
this
Information Statement and matters described in “Note on Forward-Looking
Statements” in our Annual Reports on Forms 10-KSB for the fiscal years ending
December 31, 2004 and December 31, 2005. Although we believe the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions and business opportunities, we can give no assurance that our
expectations will be attained or that any deviations will not be material.
We
undertake no obligation to publicly release the result of any revisions to
these
forward-looking statements that may be made to reflect any future events or
circumstances.
Record
Date
The
record date for determination of stockholders entitled to notice of and to
vote
at the Annual Meeting, and any adjournments or postponements thereof, is March
31, 2006 with respect to the 500,177,953 shares of the Company's $0.0001 par
value common stock outstanding as of that date. No shares of the Company's
Preferred Stock, par value $0.0001 per share, were outstanding. Each stockholder
is entitled to one vote for each share of Common Stock held by such stockholder
on March 31, 2006. Stockholders may not cumulate votes in the election of
directors.
The
stock
transfer books of the Company will remain open between the record date and
the
date of the Annual Meeting, and any adjournments or postponements thereof.
A
list of stockholders entitled to vote at the Annual Meeting will be available
for inspection at the Annual Meeting, and any adjournments or postponements
thereof, and for a period of ten days prior to the meeting during regular
business hours at the offices of the Company listed above.
Voting;
Quorum
The
presence in person or by proxy of the holders of a majority of the votes
entitled to be cast at the Annual Meeting is necessary to constitute a quorum
in
connection with the transaction of business at the Annual Meeting. All votes
will be tabulated by the inspector of election appointed for the Meeting, who
will separately tabulate affirmative and negative votes, abstentions and broker
non-votes (i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owner or other persons
entitled to vote shares as to a matter with respect to which the brokers or
nominees do not have discretionary power to vote).
Appraisal
Rights.
Pursuant
to section 30-1-1302 of the Idaho Business Corporations Act stockholders may
have the right to assert appraisal rights with respect to Proposal 3, the
reverse stock split, and Proposal 4, the reincorporation from the State of
Idaho
to the State of Nevada. A shareholder may be entitled to appraisal rights,
and
to obtain payment of the fair value of that shareholder's shares, in the event
of the above referenced corporate action. The
procedure for perfecting appraisal rights is complicated and any shareholder
contemplating exercising such right is hereby advised to seek independent legal
counsel to assist in the process. A complete copy of the Idaho Business
Corporation Act relevant section(s) have been attached here to as Exhibit A
pursuant to Section 30-1-1320 of the Idaho Business Corporation Act.
Proxies
If
the
enclosed Proxy Card is properly signed and returned, the shares represented
thereby will be voted at the Annual Meeting in accordance with the instructions
specified thereon. If a signed and returned Proxy Card does not specify how
the
shares represented thereby are to be voted, the proxy will be voted FOR the
election of the directors proposed by the Board, unless the authority to vote
for the election of such directors is withheld. In addition, if no contrary
instructions are given, the proxy will be voted FOR the approval of Proposals
1,
2, 3, 4, 5, and 6 described in this Proxy Statement, and as the proxy holders
deem advisable for all other matters as may properly come before the Annual
Meeting.
Revocability
You
may
revoke or change your proxy at any time before the Annual Meeting by filing
with
the Secretary of the Company, at the Company's principal executive offices
at,
180 Southwest Higgins Avenue, Missoula, MT 59804 by sending a notice of
revocation or another signed Proxy Card with a later date. You may also revoke
your proxy by attending the Annual Meeting and voting in person.
Solicitation
The
Company will bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of this Proxy Statement, the enclosed Proxy
Card
and any additional solicitation materials furnished to the stockholders. Copies
of solicitation materials will be furnished to brokerage houses, fiduciaries
and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by a solicitation by
telephone, telegram or other means by directors, officers or employees of the
Company. No additional compensation will be paid to these individuals for any
such services. Except as described above, the Company does not presently intend
to solicit proxies other than by mail.
Financial
Information
Our
quarterly and annual reports on Form 10-QSB and Form 10-KSB, respectively,
and
Form 8-K relating to material contained in this Proxy have been filed with
the
SEC and may be viewed on the SEC's Web site at
HTTP://WWW.SEC.GOV/CGI-BIN/SRCH-EDGAR, AND SIMPLY TYPING IN “Victor Industries”
in the Edgar Archives. We are presently “current” in the filing of all reports
required to be filed by us.
Beneficial
Owners and Management and Related Stockholder Matters
The
following table sets forth certain information regarding the beneficial
ownership of the Company’s Common Stock as of the date of this report based on
information available to the Company by;
(i)
each
person who is known by the Company to own more than 5% of the outstanding Common
Stock
based upon reports filed by such persons within the Securities and Exchange
Commission;
(iii)
each
of
the Named Executive Officers; and
(iv)
all
officers and directors of the Company as a group.
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Name
and Address
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Shares
Beneficially Owned (1)
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Percent
of Class
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Lana
Pope
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6,996,935
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0.014
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David
Boulter
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5,921,935
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0.012
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TOTAL
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12,918,870
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0.026
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Section
16(a) Beneficial Ownership Reporting Compliances
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
requires the Company’s directors, executive officers and holders of more than
10% of the Company’s common stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership
of
common stock and other equity securities of the Company. The Company believes
that during the year ended December 31, 2005, its officers, directors and
holders of more than 10% of the Company’s common stock, if any, complied with
all Section 16(a) filing requirements. This disclosure is based on a review
of
the forms submitted to the Company during, and with respect to, its fiscal
year
ending December 31, 2005.
(This
Space Intentionally Left Blank)
PROPOSAL
ONE- ELECTION OF DIRECTORS
General
As
of
April 24, 2006, the Board consisted of two directors. At the 2006 annual
meeting, two directors will be elected to serve a one-year term expiring at
the
next annual meeting of stockholders and until such director’s successor shall
have been elected and qualified. Our
Board
has nominated Lana Pope and David Boulter for election as directors to serve
until the 2007 annual meeting of stockholders. All nominees are currently
members of the Board. Each
nominee has expressed his or her willingness to serve as a director if elected,
and we know of no reason why any nominee would be unable to serve. If a nominee
becomes unavailable before the election, the proxies may be voted for one or
more substitute nominees designated by the Board, or the Board may decide to
reduce the number of directors.
Nominees
Lana
Pope
(52) Our
interim Chief Executive Officer, Treasurer and director is Lana Pope. Ms. Pope
is 52 years old and has served as our corporate accountant since April
2000. Lana J. Pope is a Missoula, MT native and has lived there all but 10
months of her life. She has owned & operated L.J.M. Enterprises, a
bookkeeping and tax service, since November 1989. Prior to that, she
worked as a bookkeeper for numerous companies and has more than 30 years
experience in the accounting.
Dave
Boulter
(65) In
addition to serving as our Secretary since 2000, Mr. Boulter has also served
as
a Director during the same period of time. Moreover, since 1998, Mr. Boulter
has
also been involved full time as owner/operator of Booth Distributing,
a local Missoula company which distributes auto care products.
Executive
Compensation
The
following table sets forth certain summary information regarding compensation
paid by the Company for services rendered during the fiscal year ending December
31, 2004 and the fiscal year ending December 31, 2005, to the Company’s Chief
Executive Officer and President during such periods.
Executive
Compensation Table
|
Name
and Position
|
Year
|
Annual
Comp Salary
|
Long
Term Compensation Awards—Securities Underlying Stock Options
(1)
|
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Lana
Pope, President, CEO, Chairwoman of the Board
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2004
2005
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$60,000
$51,000
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-
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David
Boulter, Director
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2004
2005
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$36,000
$39,000
|
-
|
(1)
There
were no stock options granted or exercised by the named executive directors
in
fiscal year 2004 or fiscal year 2005.
Identification
of Audit Committee; Audit Committee Financial Expert
The
Company currently does not have an audit committee and has not made a
determination of whether there is a financial expert. The Company does not
presently plan to establish an audit committee. However, if an audit committee
is established, the Registrant will make the proper disclosures on Form
8-K.
Employment
Agreements
The
Registrant has no written employment agreements.
Director
Compensation
The
Company has adopted no retirement, pension, profit sharing or other similar
programs.
Pending
Legal Proceedings
To
the
knowledge of our management, no director or executive officer is party to any
action in which any has an interest adverse to us.
Involvement
in Certain Legal Proceedings
Except
as
indicated at the end of this heading, and to the knowledge of our management
and
during the past 10 years, no present or former director, person nominated to
become one of our directors, executive officers, promoters or control
persons:
(1) Was
a
general partner or executive officer of any business by or against which any
bankruptcy petition
was filed, whether at the time of such filing or two years prior
thereto;
(2) Was
convicted in a criminal proceeding or named the subject of a pending criminal
proceeding (excluding
traffic violations and other minor offenses);
(3) Was
the
subject of any order, judgment or decree, not subsequently reversed, suspended
or vacated,
of
any
court of competent jurisdiction, permanently or temporarily enjoining him from
or otherwise
limiting, the following activities:
(i)
Acting
as
a futures commission merchant, introducing broker, commodity trading
advisor,
commodity pool operator, floor broker, leverage transaction merchant,
associated
person of any of the foregoing, or as an investment adviser, underwriter,
broker
or
dealer in securities, or as an affiliated person, director or employee of any
investment
company, bank, savings and loan association or insurance company, or
engaging
in or continuing any conduct or practice in connection with such
activity;
(ii) Engaging
in any activity in connection with the purchase or sale of any security
or commodity
or in connection with any violation of federal or state securities laws or
federal
commodities laws;
(4) Was
the
subject of any order, judgment or decree, not subsequently reversed, suspended
or vacated,
of
any
federal or state authority barring, suspending or otherwise limiting for more
than 60
days
the
right
of such person to engage in any activity described above under this Item, or
to
be
associated with persons engaged in any such activity;
(5) Was
found
by a court of competent jurisdiction in a civil action or by the Securities
and
Exchange Commission
to have violated any federal or state securities law, and the judgment in such
civil action
or
finding by the Securities and Exchange Commission has not been subsequently
reversed, suspended,
or vacated; or
(6) Was
found
by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading
Commission to have violated any federal commodities law, and the judgment in
such civil action
or
finding by the Commodity Futures Trading Commission has not been subsequently
reversed,
suspended or vacated.
Required
Vote
The
directors standing for election at the annual meeting shall be elected by the
affirmative vote of a plurality of the shares of the Common Stock present at
the
Annual Meeting, in person or by proxy, and entitled to vote in the election
of
directors.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” THE NOMINEES ABOVE
PROPOSAL
TWO—RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS
On
April
23, 2006, upon the authorization and approval of the board of directors, the
Company retained Peterson Sullivan, PLLC, the (“Accountants”) as the principal
accountants to audit the Company’s financial statements.
As
of the
end of the periods covered by the Company's 10-KSB for fiscal years 2004 and
2005, we have evaluated, under the supervision and with the participation of
management, including our chief executive officer, the effectiveness of the
design and operation of our “disclosure controls and procedures” (as defined in
Security Exchange Act of 1934, Rules 13a - 15(e) and 15d - 15(e)). Based on
this
evaluation, our management, including our chief executive officer, has concluded
that as of the date of the evaluation our disclosure controls and procedures
were effective to ensure that all material information required to be filed
in
this report has been made known to them.
During
the interim period from January 1, 2004 through April
23,
2006, there were no disagreements with the Accountants on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction
of
the Accountants, would have caused the Accountants to make reference to the
subject matter of the disagreements in connection with the Accountants reports.
Changes
in Internal Controls over Financial Reporting
There
have been no changes in internal controls over financial reporting that occurred
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting.
Audit
Fees
During
fiscal years 2005 and 2004, the aggregate fees billed or estimated to be billed
to us for professional services rendered by Peterson Sullivan, PLLC, for the
audit of our annual financial statements, review of financial statements
included in our annual reports or services normally provided by our accountants
in connection with statutory and regulatory filings or engagements were $16,700
and $21,392, respectively.
All
Other Fees
During
fiscal years 2004 and 2005, there were no fees billed to us for any other
products or services provided by Peterson Sullivan, PLLC, other than the
services reported above.
Pre-Approval
Policies and Procedures
The
Board
of Directors is responsible for appointing, setting compensation, and overseeing
the work of the independent auditor. The Board has no established policy
regarding pre-approval of any audit or permissible non-audit services provided
by the independent auditor.
Nominating
Committee and Other Committees
As
of
March 31, 2006 our board of directors had not established an audit, nominating
or compensation committee. We recognize that these committees, when established,
will play a critical role in our financial reporting system by overseeing and
monitoring management's and the independent auditors' participation in the
financial reporting process.
Until
such time as any of these committees has been established, the board of
directors will continue to undertake those tasks normally associated with them
to include, but not by way of limitation, the (i) review and discussion of
the
audited financial statements with management, (ii) discussions with the
independent auditors the matters required to be discussed by the Statement
On
Auditing Standards No. 61, as may be modified or supplemented, (iii) nomination
of new directors, and (iv) compensation for directors.
At
this
time the Board of Directors has determined that the addition of a Nominating
Committee, is not necessary based on the Company’s current size and its
operational and management requirements. Instead, the Board acts in lieu of
committees and will consider candidates recommended by security holders, and
by
security holders in submitting such recommendations; should provide a completed
Directors Questionnaire to the Company. There are no specific, minimum
qualifications that the nominating committee believes must be met by a nominee
recommended by security holders. The Board believes that there are no
differences in the manner in which the nominating committee evaluates nominees
for director based on whether the nominee is recommended by a security holder,
or found by the board.
Each
of
the members of the Board which acting in lieu of a nominating committee is
not
independent, pursuant to the definition of independence of a national securities
exchange registered pursuant to section 6(a) of the Act (15 U.S.C. 78f(a).
Auditor
Representative
A
representative of the Accountant will not be present at the Annual Meeting
and
will therefore not make any statements or receive any questions.
Required
Vote
Ratification
of the appointment of the new Accountant shall be approved by the affirmative
vote of the holders of a majority of the shares of the Common Stock present
at
the Annual Meeting, in person or by proxy, and entitled to vote thereon.
Abstentions and broker non-votes will not be counted for purposes of determining
whether such a proposal has been approved.
Although
stockholder ratification of the Board of Directors' appointment is not required,
the Board of Directors considers it desirable for the stockholders to pass
upon
the selection of the independent public accountants. In the event the
stockholders fail to ratify the appointment, the Board of Directors will
reconsider its selection. Even if the selection is ratified, the Board of
Directors in its discretion may direct the appointment of a different
independent public accounting firm at any time during the year if the Board
of
Directors believes that such a change would be in the best interests of the
Company and its stockholders.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” THE APPOINTMENT
(This
Space Intentionally Left Blank)
PROPOSAL
THREE—AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION IN ORDER TO EFFECT A REVERSE SPLIT OF THE COMPANY'S OUTSTANDING
COMMON STOCK
The
Certificate of Amendment
After
this Proxy Statement has been filed with the SEC, and mailed to all holders
of
record of the Company’s shares, and upon the expiration of all applicable
waiting and review periods under the Exchange Act, the Company will file a
Certificate of Amendment to its Articles of Incorporation with the State of
Idaho effecting the following corporate action:
General
The
Company's Board of Directors has approved and adopted resolutions proposing,
declaring advisable and in the Company's best interests, and recommending to
the
stockholders of the Company for approval an amendment to the Company's Amended
and Restated Certificate of Incorporation (the “Charter”). The purpose of the
amendment is to effect, a reverse split of the Company's 500,177,953 shares
of
issued and outstanding Common Stock, at an exchange ratio within the range
of
1-for-500, to 1-for-1200 (a “Reverse Split”). If the Reverse Split Proposal is
approved, the Board would have the authority (without further stockholder
approval) to elect, as it determines to be in the best interests of the Company
and its stockholders, whether or not to implement any stockholder-approved
Reverse Split, and if so at which of the stockholder-approved exchange
ratios.
The
Board
believes that approval of the Reverse Split Proposal, within the above stated
range, would allow the Board the discretion to choose which Reverse Split to
implement, rather than approval of a reverse split at a single specified
exchange ratio. This method provides the Board with the maximum flexibility
to
react to future market conditions and therefore, act in the best interests
of
the Company and its stockholders.
Stockholders
may vote in favor of, against or abstain from the Reverse Split Proposal. The
text to the proposed amendment is attached hereto as Exhibit B, the Proposed
Amendment to the Company's Articles of Incorporation.
If
the
stockholders approve the Reverse Split Proposal, the timing of any
implementation of the Reverse Split will be determined in the judgment of the
Board of Directors, with the intention of maximizing the Company's ability
to
make itself more attractive to a merger agreement as well as other intended
benefits of a Reverse Split to stockholders and the Company. See the information
below under the caption “Purposes of the Reverse Split.”
The
Board
of Directors also reserves the right, notwithstanding stockholder approval
to
not proceed with the stockholder-approved Reverse Split, if, at any time prior
to filing an Amendment with the Secretary of State of the State of Idaho (the
“Effective Time”), the Board of Directors, in its sole discretion, determines
that the stockholder-approved Reverse Split is not in the best interests of
the
Company and its stockholders. The Board of Directors may consider a variety
of
factors in determining whether or not to implement any stockholder-approved
Reverse Split, including, but not limited to, overall trends in the stock
market, recent changes and anticipated trends in the per share market price
of
the Common Stock, business and transactional developments and the Company's
actual and projected business and financial performance.
If
the
Reverse Split Proposal is approved, and the Board elects to implement an
approved Reverse Split, each of the Company's presently outstanding shares
(the
“Old Shares”) of Common Stock would be exchanged for new shares (the “New
Shares”) of Common Stock in an exchange ratio within 1-for-500 and 1-for-1200.
If the Board elects to implement a stockholder-approved Reverse Split, such
split will be effectuated simultaneously for all holders of the Common Stock
and
the exchange ratio will be the same for all of the Common Stock. An implemented
Reverse Split will affect all of the Company's stockholders uniformly and will
not change the proportionate equity interests of the Company's stockholders,
nor
will the respective voting or other rights of stockholders be altered. The
Common Stock issued pursuant to an implemented Reverse Split will remain fully
paid and non-assessable. The Company will continue to be subject to the periodic
reporting requirements of the Securities Exchange Act of 1934, as amended.
Purposes
of the Reverse Split
In
Missoula, Montana, on March 26, 2006, the Company’s Board of Directors met and
authorized the execution of a merger agreement with Ethos. At that time, the
Company’s Board also authorized a reverse stock split between 1:100 and 1:1000,
in order to effectuate the contemplated merger with Ethos (as further described
herein in Proposal 5 below). At a later meeting, the Board revised the range
of
the Reverse Split to 1:500 to 1:1200. Any such agreement with Ethos will
necessarily involve a post-reverse share exchange on a one-for-one basis. After
such an issuance, we believe that the resulting amount of our outstanding shares
will adversely affect any possibility of creating and maintaining an orderly
market for our common stock following a merger transaction.
If
for
any reason the Company deems it advisable to do so, the reverse stock split
may
be abandoned at any time prior to its effectiveness without further action
by
the Company's stockholders.
Procedure
of the Reverse Stock Split
The
Reverse Split will become effective upon the filing with the Secretary of State
of the State of Idaho of a Certificate of Amendment to our Restated Certificate
of Incorporation, as amended. The exact timing of the filing of the Certificate
of Amendment, however, will be determined by the Board of Directors based upon
the evaluation as to when this action would be most advantageous to our
stockholders. In addition, the Company reserves the right to elect not to
proceed with the Reverse Split if, at any time prior to the effective time
of
the Reverse Split, the Company, in its sole discretion, determines that the
Reverse Split of its common stock is no longer in the best interests of the
Company and its stockholders.
Commencing
at the effective time of the Reverse Split, each common stock certificate would
be deemed for all corporate purposes to evidence ownership of the reduced number
of shares of the Company’s common stock resulting from the Reverse Split. As
soon as practicable after the effective date, stockholders would be notified
as
to the effectiveness of the Reverse Split and instructed as to how and when
to
surrender their certificates of common stock.
YOU
SHOULD NOT SEND YOUR STOCK CERTIFICATES NOW. YOU SHOULD SEND THEM ONLY AFTER
YOU
RECEIVE A LETTER OF TRANSMITTAL FROM OUR EXCHANGE AGENT, IF
ANY.
Fractional
Shares
We
do not
intend to issue fractional shares in connection with the Reverse Split.
Stockholders that otherwise would be entitled to receive fractional shares
because the number of shares of the Company’s common stock they hold is not
evenly divisible by the Reverse Split ratio will be rounded up to the nearest
whole share, not to be reduced below one share.
Effects
of Reverse Stock Split
The
Reverse Split will not, by itself, impact the Company's assets or prospects.
However, the Reverse Split could result in a decrease in the aggregate market
value of the Company's equity capital. The Reverse Split may affect the
liquidity of the common stock because of the reduced number of shares
outstanding after the Reverse Split. Also, the Reverse Split could result in
some stockholders owning “odd-lots” of less than 100 shares of common stock.
Odd-lot shares may be more difficult to sell, and brokerage commissions and
other costs of transactions in odd-lots are generally somewhat higher than
the
costs of transactions in “round-lots” of even multiples of 100 shares. The Board
believes, however, that these risks are outweighed by the benefits of the
Reverse Split.
The
following tables approximate the change to the capital structure of the Company
should the reverse stock split be effectuated:
| |
Issued
and
Outstanding
|
Authorized
and Reserved for Issuance
|
Authorized
and
Unreserved
(1)
|
| |
|
|
|
|
Post
1-for-500 Reverse Split
|
1,000,356
|
17,718,187
|
981,281,457
|
|
Post
1-for-1200 Reverse Split
|
416,765
|
17,718,187
|
981,865,048
|
| |
|
|
|
(1) As
a
result of any reverse split, we will have an increased number of authorized
but
unissued shares
of
common stock. Authorized but unissued shares will be available for issuance,
and
we may
issue
such shares in financings or otherwise. If we issue additional shares, the
ownership interests
of our current stockholders may be diluted.
Potential
Disadvantages to the Reverse Stock Split
Reduced
Market Capitalization. While we expect that the reduction in our outstanding
shares of common stock will increase the market price of our common stock,
we
cannot assure you that the reverse stock split will increase the market price
of
our common stock by a multiple equal to the number of pre-split shares in the
reverse split ratio determined by the board of directors or result in any
permanent increase in the market price, which can be dependent upon many
factors, including our business and financial performance and prospects. Should
the market price decline after the reverse stock split, the percentage decline
may be greater, due to the smaller number of shares outstanding, than it would
have been prior to the reverse stock split. In some cases the stock price of
companies that have effected reverse stock splits has subsequently declined
back
to pre-reverse split levels. Accordingly, we cannot assure you that the market
price of our common stock immediately after the effective date of the proposed
reverse stock split will be maintained for any period of time or that the ratio
of post- and pre-split shares will remain the same after the reverse stock
split
is effected, or that the reverse stock split will not have an adverse effect
on
our stock price due to the reduced number of shares outstanding after the
reverse stock split. A reverse stock split is often viewed negatively by the
market and, consequently, can lead to a decrease in our overall market
capitalization. If the per share price does not increase proportionately as
a
result of the reverse stock split, then our overall market capitalization will
be reduced.
Liquidity.
Although the board believes that the decrease in the number of shares of our
common stock outstanding as a consequence of the reverse stock split and the
anticipated increase in the price of our common stock could encourage interest
in our common stock, such liquidity could also be adversely affected by the
reduced number of shares outstanding after the reverse stock split.
Voting
Rights
There
will be no change in the terms of the common stock as a result of the Reverse
Split. After the Reverse Split, the shares of common stock will have the same
voting rights and rights to dividends and distributions and will be identical
in
all other respects to the currently issued common stock now authorized. With
the
exception of the number of shares issued and outstanding, or held as treasury
shares, the rights and preferences of the shares of common stock prior and
subsequent to the Reverse Split will remain the same. Holders of the Company's
common stock will have no preemptive rights.
Federal
Income Tax Consequences
The
following is a summary of the material federal income tax consequences of the
proposed reverse stock split. This discussion is based on the Internal Revenue
Code, as amended (the “Code”), the Treasury Regulations promulgated thereunder,
judicial opinions, published positions of the Internal Revenue Service, and
all
other applicable authorities as of the date of this document, all of which
are
subject to change (possibly with retroactive effect).
This
discussion is for general information only and does not describe all of the
tax
consequences that may be relevant to a holder in light of such holder's
particular circumstances or to holders subject to special rules (such as dealers
in securities, financial institutions, insurance companies, tax-exempt
organizations, foreign individuals and entities, and persons who acquired their
common stock as compensation). In addition, this summary is limited to
stockholders that hold their common stock as capital assets. This discussion
also does not address any tax consequences arising under the laws of any state,
local or foreign jurisdiction. Accordingly,
each stockholder of the Company is strongly urged to consult with a tax adviser
to determine the particular federal, state, local or foreign income or other
tax
consequences to such holder of the reverse stock split.
We
believe that the U.S. federal income tax consequences of the Reverse Split
generally are as follows:
| · |
No
gain or loss would be recognized by the Company upon the Reverse
Split;
|
| · |
The
aggregate adjusted basis of the shares of the Company's common stock
held
by a stockholder following the Reverse Split would be equal to such
stockholder's aggregate adjusted basis in the Company's common stock
held
immediately prior to the Reverse Split;
|
The
holding period of the Company's common stock held by a stockholder following
the
Reverse Split would include the holding period of the shares of the Company's
common stock held immediately prior to the Reverse Split.
Dissenters
Rights
There
are
no dissenters' rights applicable to this proposal.
Financial
Information
Our
quarterly and annual reports on Form 10-QSB and Form 10-KSB, respectively and
Form 8-K relating to material contained in this Proxy have been filed with
the
SEC, are herein incorporated by this reference, and may be viewed on the SEC's
Web site at HTTP://WWW.SEC.GOV/CGI-BIN/SRCH-EDGAR, AND SIMPLY TYPING IN “Victor
Industries” in the Edgar Archives. We are presently “current” in the filing of
all reports required to be filed by us.
Required
Vote
To
be
approved, the Reverse Split Proposal requires the affirmative vote (in person
or
by proxy) of the holders of a majority of the outstanding shares of Common
Stock
entitled to vote thereon.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
“FOR”
THE
REVERSE SPLIT
PROPOSAL
FOUR—REDOMICILE TO NEVADA
Introduction
The
following discussion assumes that the Company has effectuated Proposal 3 as
discussed above. For purposes of this Proposal, the Company and any reference
thereto, shall refer to the redomiciled Nevada Company, VICI Nevada. For the
business combination with Ethos to close, Proposal 3, supra, and this Proposal
4
must be approved, otherwise the contemplated transaction with Ethos will fail.
Therefore, this Proposal assumes that Proposal 3 has been ratified and all
action taken to effectuate the proposed action has been completed.
The
merger of the Company with and into its wholly-owned subsidiary, Victor Nevada,
Inc., a Nevada corporation (“VICI Nevada”) will have the sole effect of changing
the domicile of the Company from the State of Idaho to the State of Nevada.
The
Company will thereafter be governed by the laws of the State of Nevada rather
than the laws of the State of Idaho. A copy of the Plan of Merger is attached
to
this Proxy Statement as Exhibit C.
Once
this
Plan of Merger becomes effective, the Company will be governed by the articles
of incorporation and bylaws of VICI Nevada, which have been attached to this
Proxy Statement as Exhibits D and E, respectively. Shareholders of the
Company do not have preemptive rights nor will they as a result of this Plan
of
Merger.
