UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14f-1
Information Statement Pursuant to Section 14(f)
of The Securities Exchange Act of 1934
Notice of Change in the Majority of Directors
November 7, 2005
HS3 TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
001-32289
(Commission File Number)
20-3598613
(IRS Employer Identification No.)
220 Decourcy Drive, Gabriola Island, British Columbia, Canada VOR 1X1
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code 604-837-2739
--------------------------------------------------------------------------------
SCHEDULE 14f1 - INFORMATION STATEMENT
INTRODUCTION
This information statement is being mailed on or about November 8, 2005 to you
and other holders of record of the common stock of HS3 Technologies Inc. as of
the close of business on November 7, 2005. This information statement is
provided to you for information purposes only. We are not soliciting proxies
in connection with the items described in this information statement. You are
urged to read this information statement carefully. You are not, however,
required to take any action.
On November 21, 2005, upon compliance with Section 14(f) of the Securities
Exchange Act of 1934 and Rule 14f-I thereunder, Mark Lana and Lougene Baird
will be appointed as directors of our company. The appointments of Mr. Lana
and Mrs. Baird are made in connection with an asset purchase agreement with
Ip-Colo, Inc. ("IPC") to acquire the assets of IPC in exchange for 1,612,520
of our common voting shares. The share consideration to be paid by us to the
IPC shareholders will represent 2.08% of our issued voting equity on a fully
diluted basis following closing of the agreement and, as a result of related
transactions, will represent 40,313,000 shares or 57.6% of our voting
securities. Our acquisition of the IPC assets is an arm's length transaction.
IPC is in the business of advanced wireless technologies, integrate with
high-speed internet via satellite to provide real-time security and monitoring
for many industries.
-2-
VOTING SECURITIES
The authorized capital stock of our company consists of 200,000,000 shares of
common stock with a par value of $0.001 per share of which 77,623,000 shares
of common stock are issued and outstanding. We do not have any other capital
stock authorized or issued.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the record date, November 7, 2005, we had a total of 77,623,000 shares
of common stock ($.001 par value per common share) issued and outstanding.
The following table sets forth, as of November 7, 2005, certain information
with respect to the beneficial ownership of our common stock by each
shareholder known by us to be the beneficial owner of more than 5% of our
common stock, as well as by each of our current directors and executive
officers. Each person has sole voting and investment power with respect to
the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except
as otherwise indicated.
--------------------------------------------------------------------------------
Amount and Nature of Percentage
Name and Address of Beneficial Owner Beneficial Ownership' of Class(1)
--------------------------------------------------------------------------------
Dimitrios Gountis, 54, 000, 000 shares 69.57%
7400 E. Orchard Rd. #290 Direct Ownership
Greenwood Village, CO 80111
--------------------------------------------------------------------------------
Frank McGill Nil
1161 Prairie Ave. Nil
Port Coquitlam, BC V3B 1S7
--------------------------------------------------------------------------------
Linda Smith Nil
220 Decourcy Dr., RR 1 Nil
Gabriola Island, BC VOR 1X1
--------------------------------------------------------------------------------
Management as a Group including executive Nil Nil
officers and directors
--------------------------------------------------------------------------------
(1) Based on 77,623,000 shares of common stock issued and outstanding as of
November 7, 2005. Except as otherwise indicated, we believe that the
beneficial owners of our common stock listed above, based on information
furnished by such owners, have sole investment and voting power with
respect to such shares, subject to community property laws where
applicable. Beneficial ownership is determined in accordance with the
rules of the SEC and generally includes voting or investment power with
respect to securities. Shares of common stock subject to options or
warrants currently exercisable, or exercisable within 60 days, are deemed
outstanding for purposes of computing the percentage ownership of the
person holding such option or warrants, but are not deemed outstanding
for purposes of computing the percentage ownership of any other person.
CHANGE IN CONTROL
The change in control is occurring primarily as a result of an asset purchase
agreement with IPC to acquire the assets of IPC in exchange for 4,612,520 of
our common voting shares. The share consideration to be paid by us to the
IPC shareholders will represent 2.08% of our issued voting equity on a fully
diluted basis following closing and, as a result of related transactions, will
result in the IPC shareholders holding 40,313,000 or 57.6% of our issued
voting securities. Our acquisition of IPC is an arm's length transaction. IPC
is in the business of advanced wireless technologies, integrated with
high-speed internet via satellite to provide real-time security and monitoring
for many industries.
-3-
LEGAL PROCEEDINGS
We are not aware of any legal proceedings in which any director or officer, or
any owner of record or beneficial owner of more than 5% of our common stock is
a party adverse to us. We are not aware of any legal proceeding to which we
are a party.
DIRECTORS AND EXECUTIVE OFFICERS
The following information relates to those individuals who will be our
directors and executive officers on November 21, 2005 upon compliance with
Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1
thereunder. All directors of our company hold office until the next annual
meeting of the stockholders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors, executive officers and significant employees, their ages, positions
held, and duration as such, are as follows:
-----------------------------------------------------------------------------------------------------
Name Position Held Age Date First Elected or Appointed
with the Company
-----------------------------------------------------------------------------------------------------
Mark Lana Director, C.E.O. and President 52 President - upon the closing of the asset
purchase agreement with IPC
Director -on the later of the closing of
the asset purchase agreement with IPC, or
November 21, 2005.
-----------------------------------------------------------------------------------------------------
Lougene Baird Director, Secretary and Chief 64 Secretary and C.O.O. - upon the closing
Operating Officer of the asset purchase agreement with IPC
Director - on the later of the closing of
the asset purchase agreement with IPC, or
November 21, 2005.
-----------------------------------------------------------------------------------------------------
Business Experience
The following is a brief account of the education and business experience
during at least the past five years of each director, executive officer and
key employee, indicating the principal occupation during that period, and the
name and principal business of the organization in which such occupation and
employment were carried out.
Mark Lana
Mr. Lana will become our President and C.E.O. upon the closing of the asset
purchase agreement with IPC and will become a Director on the later of the
closing of the asset purchase agreement with IPC, or November 21, 2005.
Mr. Mark Lana has been an entrepreneur for over 30 years. He owned and
operated several multi-unit and corporate extended stay hotels each with a
staff of over 10 people in the Denver metro area for the past 20 years. He was
involved in the housing industry and built, remodeled and refurbished single
family and multi-unit dwellings. Mr. Lana has been involved in developing
markets and putting together the financing for commercial real estate
transactions and acquisitions. He has been involved with software development
for medical transcription services and for payroll efficiencies in the
hotel/motel labor market. During the 1990's Mr. Lana was able to develop a
system of medical records transcriptions that enabled records to be
transcribed at several remote locations and then be centrally transmitted back
to the hospital/clinic. His software applications were used by the Denver
medical profession for use in delivering radiology reports to medical
facilities and physician's offices from remote locations.
-4-
Lougene Baird
Mrs. Baird will become our Secretary and C.O.O. upon the closing of the asset
purchase agreement with IPC and will become a Director on the later of the
closing of the asset purchase agreement with IPC, or November 21, 2005.
Ms. Lougene Baird has over thirty-five years experience in project management
and implementation. She has spent many years as a staff supervisor working in
both the health care industry, the securities brokerage business and in real
estate. She was a subcontractor for Lockheed-Martin (a large defense
contractor located in the Denver Metropolitan area) and she successfully
assisted the Company with relocation of over 6,000 engineering staff during
her contract with them. During the 1980's, Ms. Baird was involved in real
estate acquisitions and sales and continues to hold a Colorado real estate
broker's license. Her most recent experience was working with Zynex Medical
where she was billing manager. She directed the claims department for durable
medical equipment rentals and sales and was credited with helping the company
to increase the company revenues substantially. Ms. Baird is also an
international certified livestock judge and has been very active in several
non-profit organizations in which she has been a director and treasurer.
Family Relationships
There are no family relationships among our current or proposed directors or
officers.
Board and Committee Meetings
The Board of Directors of our company held no formal meetings during the year
ended March 31, 2005. All proceedings of the Board of Directors were conducted
by resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of
the directors are, according to the Nevada General Corporate Law and the
By-laws of the Company, as valid and effective as if they had been passed at
a meeting of the directors duly called and held.
For the year ended March 31, 2005 our only standing committee of the Board of
Directors was our audit committee. We currently do not have nominating,
compensation committees or committees performing similar functions. Our Board
does not believe that it is necessary to have a nominating committee because
it believes that the functions of a nominating committee can be adequately
performed by the Board of Directors, consisting of Frank McGill and Linda
Smith at present. In its capacity as a nominating committee, our Board has
determined that it does not have any members that qualify as "independent" as
the term is used in Item 7(d)(2)(ii)(D) of Schedule 14A under the Securities
Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the
NASD Rules. There has not been any defined policy or procedure requirements
for shareholders to submit recommendations or nomination for directors. We
believe that, given the early stages of our development, a specific nominating
policy would be premature and of little assistance until our business
operations are at more advanced level. We do not have a nominating committee
charter. We do not currently have any specific or minimum criteria for
nominees to our Board of Directors and we do not have any specific process or
procedure for evaluating such nominees. The entire Board assesses all
candidates, whether submitted by management or stockholders, and makes
recommendations for election or appointment.
Audit Committee
At the present time, the Company's Audit Committee is comprised of Mr. McGill
and Ms. Smith.
During fiscal 2005, there were no meetings held by this Committee. The
business of the Audit Committee was conducted by resolutions consented to in
writing by all the members and filed with the minutes of the proceedings
of the Audit Committee.
-5-
Involvement in Certain Legal Proceedings
Our directors, executive officers and control persons have not been
involved in any of the following events during the past five years:
1. any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
4. being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended, or vacated.
CERTAIN RELATED TRANSACTIONS AND RELATIONSHIPS
None of our directors, executive officers, future directors, 5%
shareholders, or any members of the immediate families of the foregoing
persons have been indebted to us during the last fiscal year or the current
fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our executive officers and directors and persons who own more than 10% of a
registered class of our equity securities to file with the Securities and
Exchange Commission initial statements of beneficial ownership, reports of
changes in ownership and annual reports concerning their ownership of our
common stock and other equity securities, on Forms 3, 4 and 5 respectively.
Executive officers, directors and greater than 10% shareholders are
required by the Securities and Exchange Commission regulations to furnish
us with copies of all Section 16(a) reports they file.
To the best of our knowledge, all executive officers, directors and greater
than 10% shareholders filed the required reports in a timely manner.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Remuneration of Directors and Executive Officers
The following table sets forth the compensation paid to our President and
Chief Executive Officer and key persons earning over $100,000 in total
annual salary and bonus, for all services rendered in all capacities for
the fiscal year ended March 31, 2005:
---------------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long TermCompensation(1)
---------------------------------------------------------------------------------------------------------------------------------
Awards Payouts
---------------------------------------------------------------------------------------------------------------------------------
Name and Principal Year Salary Bonus Other Securities Restricted LTIP All Other
Position Annual Underlying Shares or Payouts Compen-
Compen- Options/ Restricted sation
sation SARs Share
Granted Units
---------------------------------------------------------------------------------------------------------------------------------
Frank McGill 2005 Nil Nil Nil Nil Nil Nil Nil
President, CEO,
Secretary and Director
-6-
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values
There were no stock options granted during fiscal 2005 and there were no
stock options outstanding as at March 3 1, 2005.
Stock Options and Stock Appreciation Rights
There were no grants of stock options or stock appreciation rights made
during the fiscal year ended March 31, 2005 to our executive officers and
directors and there were no stock options or stock appreciation rights
outstanding on March 31, 2005.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers, except that our
directors and executive officers may receive stock options at the discretion
of our board of directors. We do not have any material bonus or profit
sharing plans pursuant to which cash or non-cash compensation is or may be
paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors.
We have no plans or arrangements in respect of remuneration received or that
may be received by our executive officers to compensate such officers in the
event of termination of employment (as a result of resignation, retirement,
change of control) or a change of responsibilities following a change of
control, where the value of such compensation exceeds $60,000 per executive
officer.
Compensation Of Directors
We reimburse our directors for expenses incurred in connection with attending
board meetings. We did not pay director's fees or other cash compensation for
services rendered as a director in the year ended March 31, 2005.
We have no formal plan for compensating our directors for their service in
their capacity as directors, although such directors are expected in the
future to receive stock options to purchase common shares as awarded by our
board of directors or (as to future stock options) a compensation committee
which may be established. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection
with attendance at meetings of our board of directors. Our board of directors
may award special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a director.
No director received and/or accrued any compensation for his services as a
director, including committee participation and/or special assignments.
Employment Contracts
We currently do not have any employment agreements with any of our directors,
officers or any other persons.
There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers. Our directors and
executive officers may receive stock options at the discretion of our board
of directors in the future. We do not have any material bonus or profit
sharing plans pursuant to which cash or noncash compensation is or may be
paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors.
We have no plans or arrangements in respect of remuneration received or that
may be received by our executive officers to compensate such officers in the
event of termination of employment (as a result of resignation,
-7-
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HS3 TECHNOLOGIES, INC.
/s/ Frank McGill
Frank McGill, President
Date: November 7, 2005.