VISIJET, INC.
192 TECHNOLOGY DRIVE, SUITE Q
IRVINE, CALIFORNIA 92618
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INFORMATION STATEMENT
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
INTRODUCTION
This Information Statement is being mailed or otherwise furnished to
stockholders of VisiJet, Inc., a Delaware corporation ("VisiJet" or the
"Company"), in connection with the approval, by written consent of the holders
of a majority of the Company's Common Stock, of (i) an amendment to the
Certificate of Incorporation of the Company to increase the authorized Common
Stock of the Company to 100,000,000 shares, and (ii) VisiJet's 2003 Stock Option
Plan.
This Information Statement is being first sent to stockholders on or
about December 28, 2004.
VOTE REQUIRED
The vote required to approve each matter was the affirmative vote of
the holders of a majority of the Company's Common Stock.
The record date for purposes of determining the number of outstanding
shares of Common Stock of the Company, and for determining stockholders entitled
to vote, was the close of business on August 31, 2004. As of the record date,
the Company had 27,879,663 shares of Common Stock outstanding. Holders of the
shares have no preemptive rights. Shareholders beneficially owning 13,971,264
shares as of the record date executed written consents approving the two
matters.
THE ACTIONS
INCREASE IN AUTHORIZED SHARES. On July 15, 2004, the Board of Directors
approved, subject to stockholder approval, an Amendment to the Company's
Certificate of Incorporation to increase the number of Common Stock which the
Company is authorized to issue from fifty million (50,000,000) shares to one
hundred million (100,000,000) shares. At present, the Certificate of
Incorporation provides that the total number of shares the Company has authority
to issue is fifty million (50,000,000) shares of Common Stock and ten million
(10,000,000) shares of Preferred Stock. The authorized Preferred Stock is
unaffected by the proposed amendment.
Following approval by the Board of Directors, the proposal was approved
by the written consent of holders of a majority of the Company's outstanding
common stock.
The change will be accomplished by amending the second sentence of
ARTICLE IV of the Company's Certificate of Incorporation to read as follows:
The total number of shares of Common Stock this Corporation is
authorized to issue is 100,000,000, and each such share shall
have a par value of $.001, and the total number of shares of
Preferred Stock this corporation is authorized to issue is
10,000,000, and each such share shall have a par value of
$.001.
The Amendment will become effective upon filing the Amendment to the
Company's Certificate of Incorporation with the Delaware Secretary of State,
anticipated to be approximately twenty-one days after this Information Statement
has been distributed to the Company's stockholders.
The Board of Directors of the Company believes that the Amendment is
advisable and in the best interests of the Company and its stockholders in order
allow it to honor existing equity financing commitments, to provide for
conversion of outstanding convertible securities into Common Stock or issuance
of shares of Common Stock upon exercise of outstanding options and warrants, and
to attract and obtain additional sources of capital in the future pursuant to
additional equity financing transactions.
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APPROVAL OF STOCK OPTION PLAN. On November 10, 2003 the Board of
Directors of VisiJet approved the VisiJet 2003 Stock Option Plan. The Option
Plan provides for the grant of incentive and non-qualified stock options to
selected employees, as well as the grant of non-qualified options to selected
directors, advisory board members and consultants. The Option Plan is
administered by the Compensation Committee of the Board of Directors and
authorizes the grant of options for 3,000,000 shares. The Compensation Committee
determines the individual employees and consultants who participate under the
Plan, the terms and conditions of options, the option price, the vesting
schedule of options and other terms and conditions of the options granted
pursuant thereto.
As of November 30, 2004, options to purchase a total of 2,460,000
shares of the Company's common stock were outstanding. The following table
summarizes information about stock options outstanding at November 30, 2004:
Weighted
Average
Exercise Number Life in Number
Price Outstanding Years Exercisable
-------- ----------- ------- -----------
$1.10 1,090,000 9.06 610,006
$0.40 1,370,000 9.98 220,000
----------- -----------
2,460,000 830,006
ACTION BY WRITTEN CONSENT
Under Section 228 of the Delaware General Corporation Law, any action
which may be taken at any meeting of the stockholders may also be taken without
a meeting and without prior notice and without a vote, so long as a consent is
signed by the holders of the number of outstanding shares that would be
necessary to authorize such action at a shareholders' meeting at which all
shares entitled to vote were present and voted (here, a majority of the
outstanding shares of Common Stock of the Company).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below lists the beneficial ownership of our common stock, as
of November 30, 2004, by each person known by us to be the beneficial owner of
more than 5% of our common stock, by each of our directors and officers, and by
all of our directors and officers as a group.
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned(1)(2) of Class(2)
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Lance Doherty 4,585,758(3) 15.55%
9342 Jeronimo Road
Irvine, CA 92618
Liberty View Special 5,118,571(3) 15.19%
Opportunities Fund (4)
111 River Street, Suite 1000
Hoboken, NJ 07030
Financial Entrepreneurs, Inc. (5) 3,383,001(3) 11.86%
300 South 4th Street
Las Vegas, Nevada 89101
David E. Eisenberg Trust (6) 2,950,000(3) 9.70%
520 Madison, 38th Floor
New York, NY 10022
Bushido Capital Master Fund, LP (7) 2,708,572(3) 8.74%
275 Seventh Avenue, Suite 2000
New York, NY 10001
Bridges & PIPES, LLC (8) 2,384,286(3) 7.74%
830 3rd Avenue, 14th Floor
New York, NY 10022
Taika Investments, Inc. (9) 2,200,000 7.67%
Calle Los Mangos C/Alameda
Edificio Los Mangos PB
OFC 1 y 2
La Campina
Caracas 1030
Venezuela
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Lewis Family Interest, LP (10) 1,950,000(3) 6.63%
520 Madison, 38th Floor
New York, NY 10022
Randal A. Bailey ** 510,357(3) 1.77%
192 Technology Dr., Suite Q
Irvine, CA 92618
Richard H. Keates, M.D.** 425,000(3) 1.47%
20 Sutton Place South
New York, NY 10022
Laurence Schreiber** 243,478(3) *
192 Technology Dr., Suite Q
Irvine, CA 92618
Norman Schwartz** 125,664(3) *
192 Technology Dr., Suite Q
Irvine, CA 92618
Adam Krupp** 50,000(3) *
535 Eighth Avenue, 14th Floor
New York, NY 10018
All directors and executive
officers as a group (5 persons) 1,354,499(3) 4.60%
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* Denotes less than one percent.
** Denotes Member of the Board of Directors.
(1) Except as set forth, the persons named in the table have sole voting and
investment power with respect to all shares shown as beneficially owned by them.
(2) Applicable percentage of ownership is based on 28,677,520 shares outstanding
as of November 30, 2004, together with applicable warrants, options and
convertible debt for such stockholder. Beneficial ownership is determined in
accordance with the rules of the SEC and includes voting and investment power
with respect to shares. Shares subject to options, warrants and convertible debt
currently exercisable/convertible, or exercisable/convertible within 60 days
after November 30, 2004, are included in the number of shares beneficially owned
and are deemed outstanding for purposes of computing the percentage ownership of
the person holding such options or warrants, but are not deemed outstanding for
computing the percentage of any other stockholder.
(3) Includes shares issuable upon exercise of currently exercisable options or
warrants, or conversion of debt.
(4) Controlled by Ryan Hay.
(5) Controlled by Norton Cooper
(6) Controlled by David E. Eisenberg
(7) Controlled by Louis Rabman
(8) Controlled by David Fuchs
(9) Controlled by Carlos Fernandez
(10) Controlled by Peter C. Lewis
REASONS FOR THE PROPOSED INCREASE IN CAPITAL; INTEREST OF PRINCIPAL SHAREHOLDERS
AND DIRECTORS IN THE PROPOSED INCREASE
The Board of Directors approved the increase in the authorized shares
because of a series of transactions, which may, in the aggregate, require the
issuance of shares of Common Stock in excess of the amount currently available
to be issued. In connection with certain of the transactions, the Company agreed
to increase the authorized number of shares of Common Stock. In addition to
authorizing sufficient shares to satisfy existing obligations, the Board of
Directors believes that it is in the best interests of the Company to have a
sufficient number of shares of Common Stock available for future acquisition or
financing transactions.
The following is a description of transactions completed during 2004,
which could entail the issuance of additional shares of Common Stock.
In financing transactions in early 2004, the Company issued warrants to
purchase 585,000 shares of Common Stock.
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In February 2004, the Company issued $500,000 in debentures and, in
connection with these debentures, issued warrants to purchase 375,000 shares of
the Company's common stock to the debenture holders.
In May 2004, the Company issued $750,000 in debentures and, in
connection with these debentures, issued warrants to purchase 500,000 shares of
the Company's common stock to the debenture holders.
Also in May 2004, the Company issued $800,000 in convertible
debentures, convertible into Common Stock of the Company. In addition, the
debenture holders received warrants to purchase an aggregate of 1,066,666 shares
of the Company's common stock.
In June 2004, the Company issued $1,000,000 in convertible debentures.
In addition, the debenture holders received warrants to purchase shares
1,000,000 of the Company's common stock.
In July 2004, the Company entered into convertible note agreements with
an aggregate principal balance of $1,000,000. In addition, the debenture holders
received warrants to purchase 1,000,000 shares of the Company's common stock.
In October 2004, VisiJet entered into convertible note agreements with
an aggregate principal balance of $850,000. In addition, the debenture holders
received warrants to purchase 850,000 shares of the Company's common stock.
Also in October 2004, the Company consummated the sale of 450,000
shares of Series A Convertible Preferred Stock ("Series A Shares"). The Series A
Shares, which have a "stated value" for purposes of conversion and redemption of
$10.00 per share, are convertible at any time for a period of three years from
the date of issuance into shares of the Company's common stock ("Common Stock").
The number of shares of Common Stock to be issued upon conversion is determined
by dividing the aggregate stated value of the Series A Shares being converted,
by the conversion price then in effect, which is to be the lesser of $0.609 (the
"Fixed Conversion Price"), or eighty percent (80%) of the lowest closing bid
price of the Common Stock in the ten (10) trading days preceding the date of
conversion, but in no event less than 30 percent (30%) of the Fixed Conversion
Price.
The following is a description of transactions currently pending which,
if completed, could entail the issuance of additional shares of Common Stock.
In October 2004, VisiJet entered into a stock purchase agreement with
a private equity investment fund pursuant to which the fund agreed to purchase
an aggregate of 4,750,000 shares of the Company's common stock, based on a
minimum price of $1.00 per share. In addition, under the agreement the investor
would receive five-year warrants to purchase up to 1,900,000 shares of our
common stock, at an exercise price of $1.00 per share. Completion of this
financing and related funding is contingent on the effectiveness of a
Registration Statement covering the shares of common stock and the shares of
common stock underlying the warrants, which the Company anticipates filing with
the Securities and Exchange Commission.
The Board of Directors believes that it is in the Company's best
interests to increase the number of authorized shares of Common Stock in order
to provide the Company with the flexibility to issue Common Stock without
further action by the Company's shareholders (unless required by law or
regulation), to have sufficient authorized shares to satisfy the obligations
described above, and for such other corporate purposes as the Board may deem
advisable. These purposes may include, among other things, the sale of shares to
obtain additional capital funds, the purchase of property, the use of additional
shares for various equity compensation and other employee benefit plans of the
Company or of acquired companies, the acquisition of other companies, and other
bona fide purposes. Other than as described above, the Company has no present
arrangements, agreements or understandings for the use of the additional shares
proposed to be authorized. However, the Company is currently seeking equity
financing to provide additional funding for operations and regularly explores
potential acquisitions and business combinations that might involve the issuance
of additional equity.
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The additional shares of Common Stock, for which authorization is
sought, would be a part of the existing class of Common Stock and, if, and when
issued, would have the same rights and privileges as the currently outstanding
shares of Common Stock. Current shareholders do not have preemptive rights under
the Company's Certificate of Incorporation, and will not have such rights with
respect to these additional authorized shares of Common Stock. If the Board of
Directors elects to issue additional shares of Common Stock, such issuance could
have a dilutive effect on the earnings per share, voting power and shareholdings
of current shareholders.
The proposed amendment to increase the number of authorized shares of
Common Stock could under certain circumstances, have an anti-takeover effect,
although this is not the intention of this proposal. For example, in the event
of a hostile attempt to take over control of the Company, it may be possible for
the Company to hinder the attempt by issuing shares of Common Stock, thereby
diluting the voting power of the other outstanding shares and increasing the
potential costs to acquire control of the Company. The amendment therefore may
have the effect of discouraging unsolicited takeover attempts, potentially
limiting the opportunity for our shareholders to dispose of their shares at a
higher price than may otherwise be available. The proposed amendment could have
the effect of permitting our current management, including the current Board of
Directors, to retain its position, and place it in a better position to resist
changes that shareholders may wish to make if they are dissatisfied with the
conduct of our business. This proposal to increase the authorized Common Stock
has been prompted by business and financial considerations, and the Board of
Directors is not aware of any attempt to take control of the Company. The Board
of Directors has not approved this amendment with the intent that it be utilized
as a type of anti-takeover device.
The Board of Directors believes that the amendment of the Certificate of
Incorporation to increase the number of authorized shares of Common Stock is in
the best interests of the Company and its shareholders.
THE STOCK OPTION PLAN
DESCRIPTION OF THE PLAN. The purpose of the VisiJet 2003 Stock Option Plan
is to provide incentives to attract, retain and motivate eligible persons whose
present and potential contributions are important to the success of the Company,
by offering them an opportunity to participate in our future performance through
awards of options. The Plan is administered by the Compensation Committee of the
Board of Directors, and covers a total of 3,000,000 shares. The following is a
brief description of the Plan.
OPTIONS. The Plan allows the grant of both Incentive Stock Options
("ISO") and Nonqualified Stock Options ("NQSOs"). The Compensation Committee
selects the persons to whom options will be granted, the number of shares
subject to the option, the exercise price of the option, the period during which
the option may be exercised, and all other terms and conditions of the option,
subject to certain specified conditions. Incentive Stock Options may be granted
only to employees (including officers and directors who are also employees) of
VisiJet or any parent or subsidiary of VisiJet. Each option granted under the
Plan is evidenced by a Stock Option Agreement that will expressly identify the
option as an ISO or an NQSO (the "OPTION AGREEMENT"), and will be in such form
and contain such provisions (which need not be the same for each participant) as
the Compensation Committee may from time to time approve, and which will comply
with and be subject to the terms and conditions of the Stock Plan. The date of
grant of an option is the date on which the committee makes the determination to
grant such option, unless otherwise specified by the committee. The Option
Agreement and a copy of the Plan are to be delivered to the participant within a
reasonable time after the granting of the option.
EXERCISE PERIOD. Options may be exercisable within the times or upon
the events determined by the committee as set forth in the Stock Option
Agreement governing such option; provided, however, that no option will be
exercisable after the expiration of 10 years from the date the option is
granted. The Option Agreements may provide for vesting of options based on
continued employment.
EXERCISE PRICE. The exercise price of an option is determined by the
committee when the option is granted and may be not less than 85 percent of the
fair market value of the shares of our common stock on the date of exercise;
provided that the exercise price of any ISO granted to a person who beneficially
owns more than ten percent of our outstanding Common Stock must be at least 110
percent of the fair market value of our common stock on the date of grant.
Payment for the shares may be made in cash or as otherwise provided in the Plan.
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METHOD OF EXERCISE. Options may be exercised only by delivery of a
written stock option exercise agreement in a form approved by the Compensation
Committee, together with payment of the exercise price for the number of shares
being purchased.
TERMINATION. Upon an employee's termination of employment due to
disability (as defined in the Plan) or death, (a) all options to the extent then
presently exercisable remain in full force and effect and may be exercised for a
period of 180 days thereafter (in the case of disability) or twelve months
thereafter (in the case of death) , and (b) all Stock Options to the extent not
then presently exercisable terminate as of the date of such termination of
employment. Upon termination of employment for reasons other than death or
disability, the options remain exercisable for 30 days after termination.
LIMITATIONS ON ISOS. The aggregate fair market value (determined as of
the date of grant) of shares of our common stock with respect to which ISOs are
exercisable for the first time by a participant during any calendar year may not
exceed $100,000.
OPTION TRANSFERABILITY. Options granted under the Plan are not
transferable or assignable by the participant, and may not be made subject to
execution, attachment or similar process, other than by will or by the laws of
descent and distribution.
ADOPTION AND STOCKHOLDER APPROVAL. The Plan became effective on the
date it was adopted by the Board of Directors. The Plan provides for approval by
the stockholders thereafter. The committee may grant options pursuant to the
Plan upon approval by the Board of Directors.
TERM OF PLAN. Unless earlier terminated as provided, the Plan will
terminate 10 years from the date of adoption,
AMENDMENT OR TERMINATION OF THE STOCK PLANS. Our board of directors may
at any time terminate or amend the Plan, provided that, to the extent required
under Delaware law or to qualify transactions under the Plan for exemption under
Rule 16b-3 promulgated under the Exchange Act, no amendment to the Stock Plans
is effective without further approval of our stockholders.
REASONS FOR SHAREHOLDER APPROVAL OF THE STOCK OPTION PLAN; INTEREST OF PRINCIPAL
SHAREHOLDERS AND DIRECTORS IN THE STOCK OPTION PLAN.
The Board of Directors believes that it is in the best interests of the
Company to approve the Plan so that the Company can grant options to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to the success of the Company.
Certain officers and directors of VisiJet have received options under
the Plan, as follows:
Name Position No. of Shares Exercise Price Termination
---- -------- ------------- -------------- -----------
Randal A. Bailey President and a director 200,000 $1.10 November 10, 2013
200,000 $0.40 October 20, 2014
Laurence M. Schreiber Chief Operating Officer and
a director 200,000 $1.10 November 10, 2013
200,000 $0.40 October 20, 2014
Richard H. Keates, M.D. Chairman and a director 200,000 $1.10 November 10, 2013
200,000 $0.40 October 20, 2014
Norman Schwartz Director and Contracts 75,000 $1.10 November 10, 2013
Administrator 100,000 $0.40 October 20, 2014
Adam Krupp Director 25,000 $1.10 November 10, 2013
25,000 $0.40 October 20, 2014
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ADDITIONAL INFORMATION
Additional information concerning VisiJet, including its annual and
quarterly reports filed with the Securities and Exchange Commission, may be
accessed through the Securities and Exchange Commission's EDGAR archives at
www.sec.gov.
Dated: December 21, 2004
By Order of the Board of Directors
By: Laurence M. Schreiber, Secretary
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