Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NUWAY ENERGY, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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Notes:
NUWAY ENERGY, INC.
6826 NW 77th Street
Miami, Florida 33166
____________, 2001
Dear Stockholders:
The annual meeting of the stockholders of NuWay Energy, Inc. (the
"Company") will be held at __________ on ____________, ________, 2001 at
_________ and will address the matters referred to in the enclosed Notice of
Annual Meeting.
The Notice of Annual Meeting and Proxy Statement which follow describe
the business to be conducted at the meeting.
Your Board of Directors unanimously believes that (i) the election of
the nominees as directors, (ii) the issuance of the Convertible Debentures and
the shares of common stock issuable upon conversion thereof, and (iii) the
ratification of its independent auditors for 2001, are in the best interests of
the Company and its stockholders, and accordingly, recommends a vote "FOR" the
foregoing proposals on the enclosed proxy card.
If you do not plan to attend the meeting, please review the enclosed
materials, make your decision and sign and return your proxy in the return
envelope provided. If you do not plan to attend the meeting, send your proxy now
to assure that your shares are voted. Be assured, that if you send in an
executed proxy you may revoke it at any time before it is voted at the meeting
by filing with the Secretary of the Company a document revoking it, by
submitting a proxy bearing a later date, or by attending the meeting and voting
in person.
The Board of Directors, as well as the executive officers of the
Company looks forward to seeing you. We hope you will participate in our Annual
Meeting, if not in person, then by proxy.
Sincerely,
-----------------------
Todd Sanders
Chief Executive Officer
NUWAY ENERGY, INC.
6826 NW 77th Court
Miami, Florida 33166
NOTICE OF 2001 ANNUAL MEETING
OF SHAREHOLDERS AND PROXY STATEMENT
-------------------------------------------
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE.
-------------------------------------------
To the Stockholders of NuWay Energy, Inc. (the "Company"):
NOTICE IS HEREBY GIVEN, that the annual meeting of the stockholders of
the Company will be held at _________ on _________, ______, 2001, at _______
local time, for the following purposes:
1. To elect the Directors of the Company to serve until the next
annual meeting of stockholders or until their respective
successors have been duly elected and qualified.
2. To ratify and approve the Convertible Debenture Purchase
Agreement dated as of December 14, 2000, and all transactions
contemplated thereby, including the issuance of $3,500,000 of
our 6% Convertible Debentures, the amendment thereto, and the
shares of common stock issuable upon conversion thereof.
3. To approve the engagement of Shubitz, Rosenbloom & Co., P.A.
as the Company's independent accountants for the year 2001.
4. To transact such other and further business as may properly
come before the meeting or any adjournment or adjournments
thereof.
The Board of Directors has fixed the close of business on _______, 2001
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting. A list of such stockholders will be available at the
Company's office, 6826 NW 77th Court, Miami, Florida 33166 during regular hours
after ______, 2001 for inspection by any stockholder for any purpose germane to
this meeting.
Please return the proxy enclosed with this Notice as soon as possible
so that your shares can be voted at the 2001 Annual Meeting.
Please be sure that your proxy is signed and dated; it cannot be voted
without your signature.
By Order of The Board of Directors
-----------------------
Todd Sanders
Chief Executive Officer
_________, 2001
---------------------------------
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY. IF YOU DO NOT EXPECT TO BE PRESENT
AT THE MEETING:
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED FOR THAT PURPOSE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE
PRESENT AT THE MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.
NUWAY ENERGY, INC.
6826 NW 77th Court
Miami, Florida 33166
------------
PROXY STATEMENT
------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON ___________, 2001
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of NuWay Energy, Inc. (the "Company") for
use at the annual meeting of stockholders of the Company to be held on
__________, including any adjournment or adjournments thereof, and for the
purposes set forth in the foregoing Notice of Annual Meeting of Stockholders.
The address of the Company's principal executive office is 6826 NW 77th Court,
Miami, Florida 33166. The telephone number of the Company's principal executive
office is (786) 331-4100. This Proxy Statement and form of proxy are being
mailed to shareholders of record on or about ________, 2001.
REVOCABILITY OF PROXY AND VOTING OF PROXY
Any proxy returned to the Company will be voted in accordance with the
instructions indicated thereon. If no instructions are indicated on the proxy,
the proxy will be voted for the election of the nominees for Directors named
herein and in favor of Items 2 and 3 in the Notice of Annual Meeting. A
Stockholder who has given a proxy may revoke it at any time before it is voted
at the meeting by filing with the Secretary of the Company a document revoking
it, by submitting a proxy bearing a later date, or by attending the meeting and
voting in person. Under Delaware law, abstentions are treated as present and
entitled to vote. Broker non-votes will not be included in vote totals and will
have no effect on the outcome of the votes.
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally by mail, but directors, officers and regular
employees of the Company, who will receive no additional compensation, may
solicit proxies by any appropriate means. The Company will reimburse custodians,
nominees or other persons for their out-of-pocket expenses in sending proxy
materials to beneficial owners and obtaining proxies from such owners.
VOTING PROCEDURES AND PROXY INFORMATION
The directors will be elected by the affirmative vote of a plurality of
the shares of Common Stock present in person or represented by proxy at the
Annual Meeting voting as a single class, provided a quorum exists. A quorum is
established if, as of the Record Date, at least a majority of the outstanding
shares of Common Stock are present in person or represented by proxy at the
Annual Meeting. All other matters at the meeting will be decided by the
affirmative vote of a majority of the shares of Common Stock present in person
or represented by proxy at the meeting and entitled to vote on the subject
matter, provided a quorum exists. Votes will be counted and certified by one or
more Inspectors of Election.
In accordance with Delaware law, 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) will be treated as present for purposes of
determining the presence of a quorum. For purposes of determining approval of a
matter presented at the meeting, abstentions will be deemed present and entitled
to vote and will, therefore, have the same legal effect as a vote "against" a
matter presented at the meeting. Broker non-votes will be deemed not entitled to
vote on the subject matter as to which the non-vote is indicated. Abstentions
and broker non-votes will have no effect on the election of directors, the
approval of the Convertible Debenture Purchase Agreement dated as of December
14, 2000, and all transactions contemplated thereby, including the issuance of
$3,500,000 of our 6% Convertible Debentures, the amendment thereto, and the
shares of common stock issuable upon conversion thereof, or the vote to ratify
the appointment of Shubitz, Rosenbloom & Co., P.A. as independent auditors of
the Company for 2001.
The enclosed proxies will be voted in accordance with the instructions
thereon. Unless otherwise stated, all shares represented by such proxy will be
voted as instructed. Proxies may be revoked as noted above.
The entire cost of soliciting proxies, including the costs of
preparing, assembling, printing and mailing this Proxy Statement, the proxy and
any additional soliciting material furnished to stockholders, will be borne by
the Company. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy materials to the
beneficial owners of stock, and such persons may be reimbursed for their
expenses by the Company. Proxies may also be solicited by directors, officers or
employees of the Company in person or by telephone, telegram or other means. No
additional compensation will be paid to such individuals for these services.
YOU ARE REQUESTED, REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, TO SIGN AND
DATE THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on _______, 2001
are entitled to vote at the meeting. On such record date the Company had
entitled to vote 4,221,600 shares of Common Stock. Each stockholder entitled to
vote shall have one vote for each share of Common Stock registered in such
stockholder's name on the books of the Company as of the record date. Officers
and directors of the Company who together maintain voting rights to
approximately 29.8% of the Company's voting securities have indicated an
intention to vote for the election of the directors, for the approval of the
Convertible Debenture Purchase Agreement dated as of December 14, 2000, and all
transactions contemplated thereby, including the issuance of $3,500,000 of our
6% Convertible Debentures, the amendment thereto, and the shares of common stock
issuable upon conversion thereof, and for the appointment of Shubitz, Rosenbloom
& Co., P.A. as independent auditors of the Company for 2001. See "Voting
Security Ownership of Certain Beneficial Owners and Management."
ACTION TO BE TAKEN AT THE MEETING
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Five directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting for a term expiring at the Annual Meeting of
Stockholders to be held in 2002. Unless otherwise specified, the enclosed proxy
will be voted in favor of the persons named below to serve until the next annual
meeting of stockholders of the Company and until their successors have been
elected and qualified. In the event that any of the nominees shall be unable to
serve as a director, the shares represented by the proxy will be voted for the
person, if any, who is designated by the Board of Directors to replace the
nominee. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve, or that any vacancy on the Board of Directors
will occur.
It is the intention of the Board of Directors to nominate Todd Sanders,
William Bossung, Jose A. Caballero, Michael Iscove, and Dennis R. Barry as
directors. Each director will be elected to serve until a successor is elected
and qualified or until the director's earlier resignation or removal. At this
year's Annual Meeting of Stockholders, the proxies granted by stockholders will
be voted individually for the election, as directors of the Company, of the
persons listed below, unless a proxy specifies that it is not to be voted in
favor of a nominee for director.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" THE ELECTION OF THE NOMINEES.
The names of the nominees and certain other information about them are
set forth below.
Name Age Position
---- --- --------
Todd Sanders 30 Director, Chief Executive Officer
William Bossung 42 Director, Chief Operating Officer
Jose A. Caballero 43 Director
Michael Iscove 49 Director
Dennis R. Barry 61 Director
Mr. Sanders joined the Company as a Director and Chief Executive
Officer in October 2000. For the last five years Mr. Sanders has been acting as
a private financier of both public and private ventures. Since 1998 Mr. Sanders
has been the President of Strategic Capital Consultants, Inc., an Orange County,
California based corporate finance and business development consulting company.
Mr. Bossung joined the Company as a Director and Chief Operating
Officer in October 2000. For approximately the last ten years Mr. Bossung has
been President of Alliance Financial Network, Inc. which provides financial
consulting for public and private companies. From early 1995 until mid 1997 Mr.
Bossung was the Director of Corporate Finance for Chadmoore Wireless Group, Inc.
which was subsequently acquired by Nextel.
Mr. Caballero has served on the Board of Directors since April 1994.
Mr. Caballero is the Vice President of Exfi International Corporation, an
advertising and marketing agency that specializes in doing work for companies
that plan to expand their business into Latin America. Mr. Caballero has been
with Exfi International Corporation since 1987.
Mr. Iscove joined the Company in October 2000 as a Director. From June
1995 to date, Mr. Iscove served as the Chairman, President and Chief Executive
Officer of Sirius Corporate Finance Inc.
Mr. Barry has been a member of the Board of Directors since June of
1999. Mr. Barry has been employed as a commercial mortgage broker and real
estate salesman for the past 37 years. He is a Vice President with the Mortgage
Corporation of America since 1997.
Compensation
The following table sets forth all compensation paid or accrued during
the three fiscal years ended December 31, 2000 by the Company for services
rendered by our former Chief Executive Officer and former Chief Financial
Officer, as well as our current Chief Executive Officer and Chief Operating
Officer.
=======================================================================================================================
Annual Compensation Long Term Compensation
------------------- -------------------------------------------------- ------------------------------------------------
Awards Payouts
------------------- ----------- ------------ ------------ ------------ ------------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
------------------- ----------- ------------ ------------ ------------ ------------- ----------- ---------- -----------
Other
Annual Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Awards SARs Payouts sation
Position Year $ $ $ $ (#) $ $
------------------- ----------- ------------ ------------ ------------ ------------- ----------- ---------- -----------
Lloyd Lyons, 2000 151,000(1) -- -- -- -- -- --
Chief Executive 1999 348,000 100,000 [42,000] -- 650,000 (2) -- --
Officer 1998 300,000 -- -- -- 350,000 -- --
Todd Sanders, 2000(3) -- -- -- 175,000(3) 750,000(3) -- --
Chief Executive
Officer
William Bossung, 2000(4) -- -- -- 175,000(4) 750,000(4) -- --
Chief Operating
Officer
Donald Schiffour, 1999 38,060(5) -- -- -- 85,000(2) -- --
Chief Financial 1998 45,845 -- -- -- 85,000 -- --
Officer
=================== =========== ============ ============ ============ ============= =========== ========== ===========
-----------------
(1) Including wage continuation payments and offset of loans from Company.
(2) Options which were re-priced from $2.50 Per share to $1.00 Per share
(3) Became Chief Executive Officer in October 2000. Pursuant to an employment
arrangement the Company issued Mr. Sanders 100,000 shares of Common Stock
and warrants to purchase 750,000 shares of Common Stock for $1.75 per
share.
(4) Became Chief Operating Officer in October 2000. Pursuant to an employment
arrangement the Company issued Mr. Bossung 100,000 shares of Common Stock
and warrants to purchase 750,000 shares of Common Stock for $1.75 per
share.
(5) An additional $2,595 was paid to the widow of Donald Schiffour as per his
employment contract
Effective December 31, 1998, the Board of Directors, in lieu of giving
a bonus to Lloyd Lyons, then the Chief Executive Officer, re-priced options
previously granted to him. The board similarly re-priced other options
previously granted to key employees, as well as officers and directors. The
Board of Directors considered re-pricing a better alternative to issuing new
options at then current market prices, particularly in view of the fact that the
1994 Plan did not reserve a sufficient number of shares to accommodate such
action.
During 2000 there were no options issued to the named executive
officers.
Aggregated Options Exercises In Last Financial Year and Financial
Year-end Option Values
The following table (presented in accordance with the Exchange Act and
the Regulations) sets forth details of all exercises of stock options granted
during the year ended December 31,2000 by each of the Named Executive Officers
and the financial year-end value of unexercised options on an aggregated basis:
Fiscal Year-End Options/Option Values Table
-------------------------------------------
Number of
securities underlying Value of unexercised
Shares unexercised options in-the-money options
acquired on Value at Fiscal Year End at Fiscal Year-end($)
Name exercise (#) realized ($) Exercisable / Unexercisable Exercisable / Unexercisable
---- ------------ ------------ --------------------------- ---------------------------
Lloyd Lyons 650,000 162,500 0 0
During fiscal 2000 the Estate of Lloyd Lyons exercised an aggregate of
650,000 options and sold the shares of common stock acquired therefrom in a
private transaction. During fiscal 2000 Geraldine Lyons exercised an aggregate
of 75,000 options.
Option Repricings
During the year ended December 31, 2000 there were no repricings of
stock options.
Employment Agreements
In January 1997, we entered into a five-year employment agreement with
Lloyd Lyons which provided for an annual salary commencing January, 1997 of
$275,000 and increasing at $25,000 per annum commencing January 1, 1998. The
1999 increase had been waived. The agreement provided for an adjustment in
salary to reflect increases, but not decreases, in the consumer price index. The
agreement further provided that in the event of either a merger, consolidation,
sale or conveyance of substantially all the assets of the Company which results
in the discharge of Mr. Lyons, he would be entitled to 200% of the balance of
payments remaining under the contract. Further, the agreement provided that an
annual bonus shall be at the discretion of the Board of Directors. The contract
provided the salary continuation for a period of two years after the death of
Mr. Lyons. In January 2000, Mr. Lyons passed away and effective August 2, 2000
the Company amended its employment contract with the surviving widow and primary
beneficiary of the Estate of Lloyd Lyons (Geraldine Lyons, our Chief Financial
Officer and Secretary), where-in the salary continuation clause included in his
contract was replaced with a severance arrangement which requires the Company to
pay Geraldine Lyons $100,000 over a one year period commencing on the first
month following her termination from her employment with the company and upon
her termination she is to receive 100,000 shares of common stock pursuant to an
amendment to her employment agreement. The amended employment agreement
obligates the company to register these shares and reimburse her for the
difference in the gross proceeds upon the sale of such shares and $300,000,
regardless of the time she holds such shares. Upon termination of the employee
contract the company will record additional compensation at the greater of the
market price of the company stock or the guaranteed price stipulated in the
contract. The agreement further provides that she remain in the employment of
the company for at least four months following the amendment of the contract.
The contract revisions further provided that the officer loan of $115,000 be
recorded as additional compensation as required by the officer compensation
agreement, the employment agreement with Geraldine Lyons remains intact in all
other regards and obligates us to provide an annual compensation at the rate of
$46,800 per annum in the year 2000 and $51,480 in the subsequent year.
In January 2000 we entered into two additional employment contracts,
both for the duration of two years and provides that company be obligated for an
aggregate compensation of $115,000 in year 2000 and $126,500 in year 2001.
Effective August 2, 2000 both of these employment contracts were amended to
reflect upon termination from employment these individuals will be entitled to
nine months of compensation and will receive in the aggregate 35,000 shares of
common stock which the company has agreed to reimburse the respective employees
the difference between the gross proceeds they receive upon sale and $105,000,
regardless of the term the employees hold such shares.
We entered into two-year employment contracts with Jeffrey A. Felder,
President, Geraldine Lyons, Chief Financial Officer, and Angel Garcia, President
of Latin American Operations on January 27, 2000, calling for salaries of
$70,000, $50,000 and $43,000 respectively for the first year. The contracts call
for a ten percent increase in salary during the second year of each contract.
We entered into one-year employment agreements with the Todd Sanders,
Chief Executive Officer, and William Bossung, Chief Operating Officer, whereby
the Company issued each of them 100,000 shares of stock and private five year
warrants to purchase 750,000 shares of Common Stock at $1.75 per share.
Other than the stock option plan described below and pursuant to the
aforementioned employment agreements, as of December 31, 2000, we do not have
any contingent forms of remuneration, including any pension, retirement, stock
appreciation, cash or stock bonus, or other compensation plan.
1994 Stock Option Plan
In June 1994, the Board of Directors adopted the 1994 Stock Option Plan
(the "Plan"). The maximum number of shares available for issuance under the Plan
is 1,500,000 shares. The Plan terminates on June 13, 2004. The Plan is designed
to provide additional incentives for our Directors and officers and other key
employees, to promote the success of the business and to enhance our ability to
attract and retain the services of qualified persons. The Board of Directors
administers the Plan. The Plan authorizes the Board of Directors to grant key
employees selected by it, incentive stock options and non-qualified stock
options. The exercise price of shares of Common Stock subject to options
qualifying as incentive stock options must not be less than the fair market
value of the Common Stock on the date of the grant. The exercise price of
incentive options granted under the Plan to any participant who owns stock
possessing more than 10% of the total combined voting power of all classes of
our outstanding stock must be at least equal to 100% of the fair market value on
the date of grant. Fair market value has been determined to be the closing sales
price for our Common Stock reported by NASDAQ.
The Board of Directors may amend the Plan at any time but may not,
without shareholder approval, adopt any amendment, which would materially
increase the benefits accruing to participants, or materially modify the
eligibility requirements. The Company also may not, without shareholder
approval, adopt any amendment, which would increase the maximum number of
shares, which may be issued under the Plans, unless the increase results from a
stock dividend, stock split or other change in the capital stock of the Company.
In March 1999, the Board of Directors authorized an amendment to the
Plan increasing the number of shares to be issued there under from 1,000,000 to
1,500,000. This amendment was submitted for shareholder approval at the 1999
Annual Meeting and was approved.
Effective December 31, 1998 the Company ratified the re-pricing of
872,000 of employee stock options to $1.00 per share and simultaneously
authorized the issuance of 85,000 options at an exercise price $1.00 per share
and canceled 10,000 options issued in 1995 at $2.50 per share. Effective
February 2000 we issued 35,000 options at an exercise price of $1.06 and in
December 2000 we issued 80,000 options at a $1.75 exercise price. In fiscal 2000
725,000 options were exercised, and as of June 15, 2001 237,500 options remain
outstanding.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than 10% of a registered class of the
Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by the regulation to furnish the
Company with copies of the Section 16(a) forms which they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company, and written representations that no other
reports were required during the year ended December 31, 2000, all Section 16(a)
filing requirements applicable to the Company's officers, directors and greater
than ten percent (10%) stockholders were complied with, except for the late
filing of a Form 5 by Michael Iscove, a member of our Board of Directors and the
late filing of a Form 4 by Geraldine Lyons, our Chief Financial Officer and
Secretary.
ADDITIONAL INFORMATION CONCERNING THE
BOARD OF DIRECTORS OF THE COMPANY
During 2000, the Board of Directors and held five meetings, which were
attended by all of the members of the Board of Directors in person or by
telephone.
Each director who is not an employee of the Company is paid a fee of
$300 for each Board meeting attended. In addition, each such director is paid a
fee of $300 for attendance at a meeting of a committee of the Board.
Audit Committee
The functions of the Audit Committee are to serve as an independent and
objective monitor of the Company's financial reporting process and internal
control system. The audit committee is responsible for reviewing and appraising
the efforts of our independent public accountants, reviewing the plans and
results of the audit engagement with the independent public accounts, approving
professional services provided by the independent public accounts, and to
providing an open avenue of communication among the independent auditors and
management and the Board of Directors. Messrs. Iscove, Barry and Caballero
served as members of the Audit Committee during 2000. The audit committee did
held two meetings during 2000 and from time to time had informal discussions.
The Audit Committee has a written charter, a copy of which is
reproduced as Appendix A to this proxy statement.
Report of the Audit Committee
Neither the following report of the Audit Committee nor any other
information included in this proxy statement pursuant to item 7(d)(3) of
Schedule 14A promulgated under the Securities Exchange Act of 1934 or pursuant
to Rule 306 of Regulation S-K constitutes "soliciting material" and none of such
information should be deemed to be "filed" with the Securities and Exchange
Commission or incorporated by reference into any other filing of the Company
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates such information by
reference in any of those filings.
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the fiscal year ended December 31, 2000 with the
Company's management. Based on the review and discussions described above, the
Audit Committee recommended to the Board of Directors of the Company that the
audited financial statements of the Company be included in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2000.
Compensation Committee
The Compensation Committee develops and implements formal policies with
respect to executive officer compensation in order to best link future
compensation to the performance of the officer, as well as the overall
performance of the Company. The Compensation Committee did not hold any meetings
during 2000, but from time to time held informal discussions. Messrs. Iscove,
Sanders, and Bossung served as members of the Compensation Committee during
2000.
VOTING SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding shares of
the Common Stock beneficially owned as of _______, 2001, by (i) each person or
group, known to the Company, who beneficially owns more than 5% of the Common
Stock; (ii) each of the Company's directors; and (iii) all executive officers
and directors as a group:
------------------------------------------------------------------------------------------
Number of Shares
Name Beneficially Owned (1) Percent of Class
------------------------------------------------------------------------------------------
William Bossung 1,601,403 (2) 12.2%
c/o NuWay Energy, Inc.
19100 Von Karman Ave, Ste 450
Irvine, CA 92612
------------------------------------------------------------------------------------------
Todd Sanders 1,480,260 (3) 12.2%
c/o NuWay Energy, Inc.
19100 Von Karman Ave, Ste 450
Irvine, CA 92612
------------------------------------------------------------------------------------------
Augustine Fund, L.P. 3,121,234 (4) 27.8%
141 W. Jackson, Suite 2182
Chicago, IL 60604
------------------------------------------------------------------------------------------
M.H. Meyerson & Co. Inc. 945,890 (5) 6.5%
525 Washington Boulevard
Jersey City, NJ 07503
------------------------------------------------------------------------------------------
Geraldine Lyons 226,224 (6) 2%
c/o NuWay Energy, Inc.
6826 NW 77th Court
Miami, FL 33166
------------------------------------------------------------------------------------------
Angel Garcia 75,000 (7) *
Mariscal Sucre 321 Miraflores
Lima, 18 Peru
------------------------------------------------------------------------------------------
Kenneth Koock 263,750 (8) 2.4%
525 Washington Boulevard
Jersey City, NJ 07503
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Jose A. Caballero 30,000 (9) *
c/o NuWay Energy, Inc.
6826 NW 77th Court
Miami, FL 33166
------------------------------------------------------------------------------------------
Jeffrey A. Felder 50,092(10) *
c/o NuWay Energy, Inc.
6826 NW 77th Court
Miami, FL 33166
------------------------------------------------------------------------------------------
Dennis R. Barry 30,000(11) *
c/o NuWay Energy, Inc.
6826 NW 77th Court
Miami, FL 33166
------------------------------------------------------------------------------------------
Michael Iscove 50,000(12) *
c/o NuWay Energy, Inc.
6826 NW 77th Court
Miami, FL 33166
------------------------------------------------------------------------------------------
All Executive Officers and Directors as a
group 1,260,122 29.8% (13)
------------------------------------------------------------------------------------------
* Less than 1%
(1) To the Company's knowledge, all shares of Common Stock are owned
beneficially, with sole voting and investment power, except as otherwise
noted.
(2) Mr. Bossung is the Chief Operating Officer and a Director of the Company.
Includes 125,000 shares which may be acquired upon exercise of Company's
publicly traded warrants, 212,000 shares which may be acquired upon
conversion of the Company's Convertible Debentures, and 750,000 shares
which may be acquired upon exercise of the Company's private warrants at a
price of $1.75 per share.
(3) Mr. Sanders is the Chief Executive Officer and a Director of the Company.
Includes 125,000 shares which may be acquired upon exercise of Company's
publicly traded warrants, 90,857 shares which may be acquired upon
conversion of the Company's Convertible Debentures, and 750,000 shares
which may be acquired upon exercise of the Company's private warrants at a
price of $1.75 per share.
(4) Based upon filings by Augustine Fund, L.P. with the Securities and Exchange
Commission. Includes 457,143 shares which may be acquired upon conversion
of the Company's Convertible Debentures owned by Augustine Fund, L.P.
Includes 285,714 shares which may be acquired upon conversion of the
Company's Convertible Debentures owned by Brian D. Porter. Includes 28,571
shares which may be acquired upon conversion of the Company's Convertible
Debentures and 45,000 shares which may be acquired upon exercise of the
Company's private warrants owned by David M. Matteson at a price of $1.75
per share. Mr. Porter and Mr. Matteson are either controlling members,
directors and officers of Augustine Capital, the general partner of
Augustine Fund L.P. Also, includes 750,000 shares which may be acquired
upon exercise of the Company's private warrants at a price of $1.75 per
share owned by Delano Group Securities LLC, which is owned, controlled
and/or managed by certain affiliates of Augustine Fund L.P.
(5) Includes 274,455 shares of common stock, 621,060 shares of common stock
which may be acquired upon exercise of the Company's publicly traded
warrants, and 50,375 shares of stock which may be acquired upon exercise of
investment banker warrants exercisable at $1.06 per share.
(6) Includes 10,000 shares which may be acquired upon exercise of Company
options which are exercisable at $1.75 per share, and 41,224 shares of
Common Stock held in trust for grandchildren.
(7) Includes 65,000 shares which may be acquired upon exercise of Company
options which are exercisable at $1.00 per share and 10,000 shares which
may be acquired upon exercise of Company options which are exercisable at
$1.75 per share.
(8) Includes 100,750 shares which may be acquired upon exercise of investment
banker warrants exercisable at $1.06 per share.
(9) Includes 5,000 shares which may be acquired upon exercise of Company
options exercisable at $1.06 per share and 25,000 shares which may be
acquired upon exercise of Company options exercisable at $1.75 per share.
(10) Includes 25,000 shares which may be acquired upon exercise of Company
options exercisable at $1.06 per share and 10,000 shares which may be
acquired upon exercise of Company options exercisable at $1.75 per share.
(11) Includes 5,000 shares which may be acquired upon exercise of Company
options exercisable at $1.06 per share and 25,000 shares which may be
acquired upon exercise of Company options exercisable at $1.75 per share.
(12) Includes 50,000 shares which may be acquired upon exercise of the Company's
private warrants.
(13) Percentage is based upon a total number of shares of common stock owned by
the directors and officers of the company. Does not include those shares of
common stock issuable upon conversion of the Company's Convertible
Debentures, or exercise of the Company's options, publicly traded warrants,
or private warrants.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 14, 2000, we issued and sold $3,500,000 principal amount of
convertible debentures (the "Debentures") to certain accredited investors
(including William Bossung, a director and our Chief Operating Officer, and Todd
Sanders, a director our Chief Executive Officer) pursuant to a Convertible
Debenture Stock Purchase Agreement dated as of December 14, 2000. In June 2001
the Debentures were amended to reflect a Maturity Date (as defined in the
Debentures) of December 13, 2001, and we also agreed to register the underlying
shares of Common Stock.
In July 2001, a majority of the shareholders, via written consent,
consented to amend the Company's Certificate of Incorporation to change the name
of the Company to NuWay Energy, Inc.
Any future transactions with affiliates will be on terms no less
favorable to the Company than could be obtained from unaffiliated parties and
will be approved by a majority of the independent and disinterested members of
the Board of Directors, outside the presence of any interested directors and, to
the extent deemed appropriate by the Board of Directors, the Company will obtain
stockholder approval or fairness opinions in connection with any such
transaction.
APPROVAL OF THE SALE OF CONVERTIBLE DEBENTURES AND ISSUANCE
OF SHARES OF COMMON STOCK UPON CONVERSION THEREOF
(ITEM 2 ON THE PROXY CARD)
On December 14, 2000, we entered into a Convertible Debenture Purchase
Agreement with accredited investors (including William Bossung, a director and
our Chief Operating Officer, and Todd Sanders, a director our Chief Executive
Officer) pursuant to which we issued and the investors purchased an aggregate of
$3,500,000 principal amount of our 6% Convertible Debentures. We received net
proceeds of $3,500,000 from this transaction, which is being used for general
corporate purposes including but not limited to the exploration of new business
ventures. Our shareholders are being asked to ratify and approve the Convertible
Debenture Purchase Agreement, and the exhibits thereto, including the issuance
of $3,500,000 of our 6% Convertible Debentures, the amendment to the 6%
Convertible Debentures, and all shares issuable upon conversion, in order to
satisfy certain listing requirements under The Nasdaq Marketplace Rules for
continued listing of our common stock on The Nasdaq Stock Market Small Cap
Market.
The following summarizes the terms of the transaction and is qualified
in its entirety by the Convertible Debenture Purchase Agreement and the exhibits
thereto, and the amendment to the 6% Convertible Debentures, a copy of which is
attached hereto as Appendix B and incorporated by reference herein. Shareholders
are encouraged to review the attached Agreements.
The terms and conditions of the 6% Convertible Debentures are
summarized as follows:
o Interest rate on the Debentures is 6% per annum, payable, at
our option in cash or in that number of shares of our common
stock at the rate of $1.75 per share.
o Maturity date for the 6% Convertible Debentures is December
13, 2001 (as per the amendment to the 6% Convertible
Debentures).
o The Debentures are convertible into shares of our common
stock at a price of $1.75 per share.
o In the event the principal amount of the 6% Convertible
Debentures has not been repaid as of the close of business
on the maturity date, then at such time the holder thereof
shall have the option of receiving repayment of the
principal amount plus accrued and unpaid interest then
outstanding in cash or cash equivalent, or in shares of our
common stock at a price of $1.75 per share.
o In the event we enter into a definitive agreement, the
result of which is a consolidation or merger with or into
another corporation or other entity, or the sale of all or
substantially all of the our assets to another corporation
or other entity, then the Debentures automatically convert
into shares of our common stock at a price of $1.75 per
share.
o By amendment to the 6% Convertible Debentures we agreed to
file a registration statement with the Securities and
Exchange Commission including our shares of common stock
underlying the 6% Convertible Debentures (which was filed
July 27, 2001), and the maturity date of the 6% Convertible
Debentures was amended to be December 13, 2001.
In order to qualify for inclusion in The Nasdaq Stock Market Small Cap,
we need to satisfy certain financial and other criteria set forth in The Nasdaq
Marketplace Rules (the "Rules"). In addition, in order to maintain such
inclusion under the Rules, we must, among other things, follow certain corporate
governance procedures, including obtaining shareholder approval in connection
with certain corporate transactions. Rule 4350(i) of the Rules requires
shareholder approval of the issuance of securities by an issuer under various
circumstances. In particular, Subsection (1)(D) of paragraph (i) requires
shareholder approval prior to the issuance of securities in the following
situations: (D) In connection with a transaction other than a public offering
involving: (i) the sale or issuance by the issuer of common stock (or securities
convertible into or exercisable for common stock) at a price less than the
greater of book or market value which together with sales by officers, directors
or substantial shareholders of the company equals 20% or more of common stock or
20% or more of the voting power outstanding before the issuance; or (ii) the
sale or issuance by the company of common stock (or securities convertible into
or exercisable for common stock) equal to 20% or more of the common stock or 20%
or more of the voting power outstanding before the issuance for less than the
greater of book or market value of the stock. Pursuant to the terms of the 6%
Convertible Debentures, the Debentures are convertible into shares of common
stock at a price of $1.75 per share. As a result, if the 6% Convertible
Debentures were converted into shares of common stock, it would represent more
than 20% of our issued and outstanding common stock and, accordingly, would
require shareholder approval under the applicable Rules.
THE BOARD OF DIRECTORS RECOMMENDS TO OUR SHAREHOLDERS THAT THEY VOTE "FOR" THE
APPROVAL AND RATIFICATION OF THE SALE OF CONVERTIBLE DEBENTURES PROPOSAL.
APPROVAL OF INDEPENDENT ACCOUNTANTS
(ITEM 3 ON THE PROXY CARD)
Action will be taken with respect to the approval of independent
accountants for the Company for the calendar year 2001. The Board of directors
has, subject to such approval, selected Shubitz, Rosenbloom & Co., P.A.
("Shubitz, Rosenbloom") of Miami, Florida to serve in this capacity. Shubitz,
Rosenbloom will serve as the Company's principal accountants to audit the
Company's financial statements. Shubitz, Rosenbloom audited the Company's
financial statements for the years ended December 31, 1996, 1997, 1998, 1999 and
2000.
Representatives of Shubitz, Rosenbloom are expected to be present at
the Annual Meeting, will have the opportunity to make a statement if they desire
to do so, and are expected to be available to respond to appropriate questions.
Audit Fees
In 2000, Shubitz, Rosenbloom billed us Thirty Three Thousand Dollars
($33,000) for services rendered for the audit of our annual financial statements
included in our Form 10-KSB and the reviews of our quarterly financial
statements.
Financial Information Systems Design and Implementation Fees
In 2000, Shubitz, Rosenbloom did not perform any professional services
described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X.
All Other Fees
In 2000, Shubitz, Rosenbloom billed us Two Thousand Nine Hundred
Seventy Five Dollars ($2,975) for services rendered for other services not
covered above. These services primarily related to domestic and foreign tax
consultation and compliance for the Company and our subsidiaries and to
non-audit services provided.
The Board of Directors recommends a vote "FOR" the proposal to approve
the engagement of Shubitz, Rosenbloom & Co., P.A. as the Company's independent
accountants.
OTHER BUSINESS
The Board of Directors does not know of any other business to be
presented at the meeting and does not intend to bring before the meeting any
matter other than the proposals described herein. However, if any other business
should come before the meeting, or any adjournment thereof, the person(s) named
in the accompanying proxy will have discretionary authorization to vote all
proxies in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Proposals of security holders intended to be presented at the Company's
2002 Annual Meeting of Stockholders must be received by the Company by no later
than January 29, 2002.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist of primarily of printing, postage and handling, including the expenses
of brokerage houses, custodians, nominees, and fiduciaries in forwarding
documents to beneficial owners. Solicitation also may be made by the Company's
officers, directors, or employees, personally or by telephone.
GENERAL
In order that all holders of Common Stock may be represented at the
Annual Meeting, it is extremely important that proxies be returned promptly.
PLEASE SIGN, DATE AND MAIL OR OTHERWISE DELIVER THE ENCLOSED PROXY. THE
ACCOMPANYING ADDRESSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
Stockholders mailing or otherwise delivering their proxies who attend
the meeting may, if desired, revoke their proxies and personally vote their
shares by ballot at the meeting. Your cooperation in promptly returning your
proxy will be appreciated and will help secure, at an early date, a quorum for
our meeting.
A copy of our Annual Report for the year ended December 31, 2000 has
been mailed concurrently with this Proxy Statement to all stockholders entitled
to notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors
-----------------------
Todd Sanders
Chief Executive Officer
___________, 2001
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
LATIN AMERICAN CASINOS, INC.
The Board of Directors (the "Board") of Latin American Casinos, Inc., a
Delaware corporation (the "Company") has oversight responsibilities to, among
other things, promote an environment in which the Company maintains adequate
systems of internal control, presents reliable financial information and
complies with applicable laws, regulations and Company policies. To assist the
Board in fulfilling certain of those oversight responsibilities, the Board has
established an Audit Committee. The following sets forth certain guidelines and
requirements with respect to the Audit Committee and its responsibilities.
I. Purpose
The primary function of the Audit Committee is to assist the Board in
fulfilling its oversight responsibilities by reviewing the financial reports and
other financial information provided by the Company to any governmental body or
the public; the Company's systems of internal controls regarding finance,
accounting, legal compliance and ethics that management and the Board have
established or may in the future establish; and the Company's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should foster adherence to, the Company's
policies, procedures and practices at all levels. The Audit Committee's primary
duties and responsibilities are to: serve as an independent and objective party
to monitor the Company's financial reporting process and internal control
system; review and appraise the audit efforts of the Company's independent
auditors; and provide an open avenue of communication among the independent
auditors, financial and senior management and the Board.
The Audit Committee will fulfill these responsibilities by carrying out
the activities enumerated in this Charter as may from time to time be necessary
or appropriate.
II. AUTHORITY
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee may
request any officer or employee of the Company or the Company's outside counsel
or independent accountants to attend meetings of the Audit Committee or to meet
with any members of, or consultants to, the Audit Committee. The Audit Committee
shall be given unrestricted access to Company personnel and documents and to the
Company's independent accountants.
IV. COMPOSITION
The Audit Committee shall consist of at least two Directors or such
additional number as the Board or the Audit Committee may determine, a majority
of the members of which shall be independent directors based on the rules of the
National Association of Securities Dealers for audit committees, as amended,
modified or supplemented from time to time. The Audit Committee shall not have
less than two directors without prior approval of the Board. In the event that
the Audit Committee has less than two Directors thereon due to the resignation,
death or removal of a Director or other similar event, the Board shall appoint
promptly another member thereto. Unless a chairman of the Audit Committee (the
"Chairman") is elected by the Board, the members of the Committee may designate
a Chairman by majority vote of the full Audit Committee membership.
V. RESPONSIBILITIES
A. Financial Reports. The Audit Committee shall: review this Charter
periodically, but at least annually, and update this Charter as conditions
dictate; review, prior to its filing, the Company's annual and quarterly reports
prior to its filing; and review such other reports or other financial
information submitted to the Securities and Exchange Commission or the public as
the Audit Committee shall deem appropriate. For purposes of this review the
Chairman may represent the entire Audit Committee.
B. Independent Auditors. The Audit Committee shall recommend to the
Board the selection of the independent auditors for each fiscal year, confirm
and assure their independence and approve the fees and other compensation to be
paid to the independent auditors. On an annual basis, the Audit Committee should
review and discuss with the auditors all significant relationships which effect
the auditors' independence and should receive the written statement from the
independent auditors required by Independence Standards Board Standard No. 1, as
amended, modified or supplemented from time to time. The Audit Committee shall
recommend to the Board the advisability of having the independent auditors make
specified studies and reports as to auditing matters, accounting procedures, tax
or other matters; review the performance of the independent auditors and approve
any proposed discharge of the independent auditors when circumstances warrant;
and periodically consult with the independent auditors out of the presence of
management about internal controls and the completeness and accuracy of the
Company's financial statements.
C. Financial Reporting Processes. The Audit Committee shall consider
the independent auditors' judgments about the quality and appropriateness of the
Company's accounting principles as applied in its financial reporting, and
consider and approve, if appropriate, major changes to the Company's auditing
and accounting principles and practices as suggested by the independent auditors
or management.
D. Process Improvement. The Audit Committee shall: establish regular
and separate systems of reporting to the Audit Committee by each of management
and the independent auditors regarding any significant judgments made in
management's preparation of the financial statements and the view of each as to
appropriateness of such judgments; following completion of the annual audit,
review separately with each of management and the independent auditors any
significant difficulties encountered during the course of the audit, including
any restrictions on the scope of work or access to required information; review
any significant disagreement among management and the independent auditors in
connection with the preparation of any of the Company's financial statements;
and review with the independent auditors and management the extent to which
changes or improvements in financial or accounting practices, as approved by the
Audit Committee, have been implemented.
E. Legal Compliance. The Audit Committee shall review with the
Company's corporate counsel legal compliance matters including corporate
securities trading policies, and review with the Company's corporate counsel any
legal matter that could have a significant impact on the Company's financial
statements.
F. Other Responsibilities. The Audit Committee shall perform any other
activities consistent with this Charter, and the Company's Certificate of
Incorporation, By-laws and governing law, as the Audit Committee or the Board
deems necessary or appropriate.
VI. MEETINGS
The Audit Committee shall meet such number of times in each fiscal year
of the Company as the Audit Committee believes are reasonable or necessary. The
Audit Committee shall maintain minutes or other records of those meetings and
its activities.
VII. MISCELLANEOUS
This Charter is intended to be flexible so that the Audit Committee is
able to meet changing conditions. The Audit Committee is authorized to take such
further actions as are consistent with the above-described responsibilities and
to perform such other actions as applicable law, the Company's charter documents
and/or the Board may require. To that end, the Audit Committee shall review and
reassess the adequacy of this Charter annually. Any proposed changes shall be
put before the Board for its approval.
NUWAY ENERGY, INC.
6826 NW 77th Street
Miami, Florida 33166
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ___________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Meeting
and Proxy Statement relating to the meeting and hereby revokes any proxy or
proxies heretofore given. The undersigned hereby appoints Todd Sanders and
William Bossung, each of them, Proxies, with full power of substitution in each
of them, in the name, place and stead of the undersigned, to vote at the Annual
Meeting of Stockholders of NuWay Energy, Inc. (the "Company") on _____________,
at _______________ or at any adjournment or adjournments thereof, according to
the number of votes that the undersigned would be entitled to vote if personally
present, upon the following matters:
1) To elect directors for the ensuing year.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) listed below.
Todd Sanders, William Bossung, Jose A. Caballero, Michael Iscove,
and Dennis R. Barry
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below)
------------------------------------------------------------
(Continued and to be signed on reverse side)
2) To ratify and approve the Convertible Debenture Purchase Agreement
dated as of December 14, 2000, and all transactions contemplated
thereby, including the issuance of $3,500,000 of our 6% Convertible
Debentures, the amendment thereto, and the shares of common stock
issuable upon conversion thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3) To ratify the appointment of Shubitz Rosenbloom & Co., P.A. as
independent auditors of the Company for fiscal 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN
ABOVE. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THOSE NOMINEES
AND THE PROPOSALS LISTED ABOVE. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL
OF THE FOREGOING. IN ADDITION, DISCRETIONARY AUTHORITY IS CONFERRED AS TO ALL
OTHER MATTERS THAT MAY COME BEFORE THE MEETING UNLESS SUCH AUTHORITY IS
SPECIFICALLY WITHHELD. STOCKHOLDERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW
THEIR PROXY AND VOTE IN PERSON IF THEY SO DESIRE.
DATED: ____________________, 2001
---------------------------------
Signature
---------------------------------
Signature if held jointly
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY.