As filed with the Securities and Exchange Commission on April 29, 2002
CONFIDENTIAL PURSUANT TO RULE 14a-6(e)(2), FOR THE USE OF THE COMMISSION ONLY
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
---------------
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Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for the use of the Commission only (as permitted by Rule
14a-6(e)(2))
---------------
CORDIA CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person Filing Proxy Statement)
---------------
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|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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or the Form or Schedule and the date of its filing.
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(4) Date Filed:
CORDIA CORPORATION
54 Danbury Road #370
Ridgefield, Connecticut 06877
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 9, 2002
To the Stockholders of Cordia Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of
Cordia Corporation, a Nevada corporation (the "Company"), will be held at 1055
Portion Road, Farmingville, New York 11738 on May 28, 2002 at 10 A.M., New York
City time, for the following purposes:
1. To elect three (3) directors to the Board of Directors for the
ensuing year;
2. To approve an amendment to the Company's Articles of Incorporation
to effect a stock combination, or reverse stock split, pursuant to
which every five shares of the Company's outstanding common stock
would be exchanged for one new share of common stock; and
3. To consider and act upon such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on May 6, 2002
will be entitled to vote at the Annual Meeting.
Whether or not you expect to attend the Annual Meeting, please mark,
sign and promptly return the enclosed proxy in the postpaid envelope provided.
If you receive more than one proxy because your shares are registered in
different names or addresses, each such proxy should be signed and returned so
that all your shares will be represented at the meeting.
Sincerely,
Wesly Minella,
Secretary
CORDIA CORPORATION
54 Danbury Road #370
Ridgefield, Connecticut 06877
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of Cordia
Corporation, a Nevada corporation (the "Company"), in connection with the
solicitation, by order of the Board of Directors of the Company, of proxies to
be voted at the Annual Meeting of Stockholders to be held on Tuesday, May 28,
2002, at 1055 Portion Road, Farmingville, New York 11738 at 10 A.M., New York
City time, and at any adjournment or adjournments thereof (the "Annual
Meeting"). The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. This Proxy Statement and the enclosed proxy card were
first mailed to stockholders of the Company on or about May 9, 2002, accompanied
by the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2001, and the Company incorporates the contents of such report herein by
reference thereto.
At the Annual Meeting, the following matters will be considered and
voted upon:
1. Election of three (3) directors to the Board of Directors for the
ensuing year;
2. To approve an amendment to the Company's Articles of Incorporation
to effect a stock combination, or reverse stock split, pursuant to
which every five shares of the Company's outstanding common stock
would be exchanged for one new share of common stock; and
3. Such other business as may properly come before the meeting.
Voting and Revocation of Proxies; Adjournment
All of the voting securities of the Company represented by valid
proxies, unless the stockholder otherwise specifies therein or unless revoked,
will be voted FOR the election of the persons nominated as directors, FOR the
proposed amendment to the Company's Articles of Incorporation, and at the
discretion of the proxy holders on any other matters that may properly come
before the Annual Meeting. The Board of Directors does not know of any matters
to be considered at the Annual Meeting other than the other proposals set forth
above.
If a stockholder has appropriately specified how a proxy is to be
voted, it will be voted accordingly. Any stockholder has the power to revoke
such stockholder's proxy at any time before it is voted. A proxy may be revoked
by delivery of a written statement to the Secretary of the Company stating that
the proxy is revoked, by a subsequent proxy executed by the person executing the
prior proxy and presented to the Annual Meeting, or by voting in person at the
Annual Meeting.
A plurality of the votes cast at the Annual Meeting by the stockholders
entitled to vote is required to elect the director nominees; a majority of all
outstanding shares of the Company's common stock is required to approve the
proposed amendment to the Company's Articles of Incorporation; and a majority of
the votes cast at the Annual Meeting by the stockholders entitled to vote is
required to take any other action. In the event that sufficient votes in favor
of any of the matters to come before the meeting are not received by the date of
the Annual Meeting, the persons named as proxies may propose one or more
adjournments of the Annual Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of the holders of a
majority of the votes cast in person or by proxy at the Annual Meeting. The
persons named as proxies will vote in favor of any such proposed adjournment or
adjournments.
Solicitation
The solicitation of proxies pursuant to this Proxy Statement will be
primarily by mail. In addition, certain directors, officers or other employees
of the Company may solicit proxies by telephone, telegraph, mail or personal
interviews, and arrangements may be made with banks, brokerage firms and others
to forward solicitation material to the beneficial owners of shares held by them
of record. No additional compensation will be paid to directors, officers or
other employees of the Company for such services. The total cost of any such
solicitation will be borne by the Company and will include reimbursement of
brokerage firms and other nominees.
Quorum and Voting Rights
The Board of Directors of the Company has fixed May 6, 2002 as the
record date (the "Record Date") for the determination of stockholders entitled
to notice of and to vote at the Annual Meeting. Holders of record of shares of
common stock, par value $.001 (the "Common Stock"), at the close of business on
the Record Date will be entitled to one vote for each share held. The presence,
in person or by proxy, of the holders of a majority of the outstanding voting
securities entitled to vote at the Annual Meeting is necessary to constitute a
quorum at the Annual Meeting.
Common Stock Owned by Directors, Officers and Other Beneficial Owners
The following table sets forth, as of March 15, 2002, the names,
addresses and number of shares of Common Stock beneficially owned by all persons
known to the management of the Company to be beneficial owners of more than 5%
of the outstanding shares of Common Stock, and the names and number of shares
beneficially owned by all directors of the Company and all executive officers
and directors of the Company as a group (except as indicated, each beneficial
owner listed exercises sole voting power and sole dispositive power over the
shares beneficially owned):
Shares Beneficially Percent of Outstanding
Name and Address Owned(1) Common Stock(2)
---------------- ------------------- ----------------------
Geils Ventures LLC................................................ 10,990,500(3) 40.0%
54 Danbury Road, #318
Ridgefield, Connecticut
Eel Point Partners Inc............................................ 10,475,000(4) 38.1
1055 Portion Road
Farmingville, New York 11738
Craig Gironda..................................................... 530,000(5) 1.9
John Scagnelli.................................................... 120,000(6) *
Wesly Minella..................................................... 100,000(7) *
All directors and executive officers of the
Company as a group (three individuals).......................... 750,000 2.7%
------------------
* Less than 1%.
(1) For purposes of this table, information as to the beneficial ownership of
shares of common stock is determined in accordance with the rules of the
Securities and Exchange Commission and includes general voting power and/or
investment power with respect to securities. Except as otherwise indicated,
all shares of our common stock are beneficially owned, and sole investment
and voting power is held, by the person named. For purposes of this table,
2
a person or group of persons is deemed to have "beneficial ownership" of
any shares of common stock which such person has the right to acquire
within 60 days after the date hereof. The inclusion herein of such shares
listed beneficially owned does not constitute an admission of beneficial
ownership.
(2) All percentages are calculated based upon a total number of 27,454,009
shares of Common Stock outstanding as of April 1, 2002, plus, in the case
of the individual or entity for which the calculation is made, that number
of options or warrants owned by such individual or entity that are
currently exercisable or exercisable within 60 days.
(3) Includes (i) 725,000 shares of Common Stock owned by Zoom2Net Corp., (ii)
91,250 shares of Common Stock, and a currently exercisable warrant to
purchase 30,000 shares of Common Stock, owned by Lynn Minella, (iii) 1,250
shares of Common Stock owned by Alexander G. Minella, (iv) 15,500 shares of
Common Stock owned by Alexander C. Minella, (v) 15,000 shares of Common
Stock owned by Lauren Minella, (vi) 12,500 shares of Common Stock owned by
Pursuit Holdings Corp. and (vii) 100,000 shares of Common Stock owned by
Carl Carman. As a result of the beneficial ownership of the outstanding
capital stock by the individuals and entity listed above, Geils Ventures
LLC may be deemed to be the beneficial owner of such shares of Common
Stock.
(4) Includes (i) a currently exercisable warrant to purchase 50,000 shares of
Common Stock, (ii) 1,250,000 shares of Common Stock owned by Melanie
Minella, (iii) 250,000 shares of Common Stock owned by Claire Minella, (iv)
250,000 shares of Common Stock owned by Heather Minella and (v) 50,000
shares of Common Stock owned by Robin Marshlow. As a result of the
beneficial ownership of the outstanding capital stock by the individuals
listed in clauses (ii) - (v), Eel Point Partners may be deemed to be the
beneficial owner of such shares of Common Stock.
(5) Includes currently exercisable options to purchase 130,000 shares of Common
Stock and 400,000 shares of Common Stock. Does not include options to
purchase 200,000 shares of Common Stock which have yet to vest.
(6) Includes currently exercisable options to purchase 100,000 shares of Common
Stock, a currently exercisable warrant to purchase 10,000 shares of Common
Stock and 10,000 shares of Common Stock.
(7) Consists of currently exercisable options to purchase 100,000 shares of
Common Stock.
ELECTION OF DIRECTORS
(Proxy Item 1)
The Revised Bylaws of the Company provide that the Company shall not
have less than three directors. Subject to the foregoing limitation, such number
may be fixed from time to time by action of the Board of Directors or of the
stockholders. Each director shall hold office until the next annual meeting of
stockholders or until removed. However, if the term expires, such director shall
continue to serve until his successor shall have been elected and qualified, or
until there is a decrease in the number of directors.
Except where the authority to do so has been withheld, it is intended
that the persons named in the enclosed proxy will vote for the election of the
nominees to the Board of Directors listed below to serve until the date of the
next annual meeting and until their successors are duly elected and qualified.
Although the directors of the Company have no reason to believe that the
nominees will be unable or decline to serve, in the event that such a
contingency should arise, the accompanying proxy will be voted for a substitute
(or substitutes) designated by the Board of Directors.
3
The following table sets forth certain information regarding the
director nominees:
Principal Occupation for Past Five Years and
Name Age Current Public Directorships or Trusteeships
---- ----- --------------------------------------------
Craig Gironda 45 Director since March 2001 and Chief Executive Officer and President since
December 2000. From June 1999 to January 1, 2001, Mr. Gironda served as the Chief
Executive Officer and President of RiderPoint, Inc., which is now a subsidiary of
the Company. In that capacity, he developed a comparative rating insurance
program, negotiated contracts with various insurance carriers, and marketed and
sold insurance policies. From March 1995 to May 1999, Mr. Gironda served as Vice
President of Marketing at WPI Corp., a warranty company that provided service
contracts to the powersport industry. As such, he created warranty programs and
marketing materials with respect to the coverage and pricing of insurance
policies.
Wesly Minella 36 Director since March 2001. Since September 1999, Mr. Minella has served as Vice
President of Operations of Essex Communications (a subsidiary of eLEC
Communications Corp.), a competitive local exchange company that provides local
and long distance telecommunications and data services throughout the United
States. In that capacity, Mr. Minella supervises the provisioning and customer
care operations. From November 1998 to September 1999, Mr. Minella served as the
Production Manager of Jack Frost Sugars, Inc., one of the largest refiners and
distributors of sugar in the United States. From April 1994 to November 1998, Mr.
Minella served as a Logistics Coordinator for Krasdale Foods Inc, a wholesale and
retail food distributor. From July 1997 to August 2000, Mr. Minella was a member
of the Board of Directors and Secretary of Access One Communications, Inc.
John Scagnelli 48 Director and Chairman of the Board since December 2000. Mr. Scagnelli has 22
years experience in the data processing industry. Since September 1999, Mr.
Scagnelli has served as the Sales Director for Hyperion Solutions, Inc. where he
sells business analysis applications. From July 1997 to June 1999, Mr. Scagnelli
served as Regional Vice President for sales at HIE, Inc., an enterprise software
solution provider. From January 1994 to June 1997, Mr. Scagnelli was District
Manager of Sales in New York, New Jersey and Pennsylvania for Sterling Software,
Inc., an enterprise software company.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities ("10% Stockholders"), to
file with the Securities and Exchange Commission (the "Commission") initial
reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Company. Officers, directors and 10% Stockholders
are required by Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on the Company's review of the copies of such reports
received by the Company, the Company believes that for the fiscal year 2001, all
Section 16(a) filing requirements applicable to its officers, directors and 10%
Stockholders were complied with.
4
Board Meetings and Committees; Management Matters
The Board of Directors held four meetings during the fiscal year ended
December 31, 2001. Each director attended at least 75% of the Board and
Committee meetings of which he was a member during such time as he served as a
director. From time to time, the members of the Board of Directors act by
unanimous written consent pursuant to the laws of the State of Nevada. No fees
are paid to directors for attendance at meetings of the Board.
On April 17, 2001, the Board of Directors established an Audit
Committee composed of John Scagnelli and Wesly Minella. The Audit Committee
members are independent directors as defined by Nasdaq. The Audit Committee
reviews with the Company's auditors the audited financial statements of the
Company and any other audit-related issues and reviews with the Company's
management the unaudited quarterly numbers during the year. The Audit Committee
is governed by a written charter approved by the Board of Directors. During the
fiscal year ended December 31, 2001, the Audit Committee held five meetings.
The Audit Committee has reviewed and discussed the audited financial
statements with management. The Audit Committee has also discussed with the
independent auditors the matters required to be discussed by SAS61 (Codification
of Statements on Auditing Standards, AV ss.380) and has received the written
disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1 and has discussed with the
independent accountant the independent accountant's independence.
The Audit Committee has recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2001, for filing with the Commission.
Vote Required
A plurality of the votes cast at the Annual Meeting by the stockholders
entitled to vote is required to elect the director nominees. The Directors
recommend a vote FOR the election of each of the director nominees.
5
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the Company's chief executive
officer and each of the other four most highly compensated executive officers
who were serving as executive officers at December 31, 2001 (collectively
referred to as the "Named Executives").
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
------------------- -------------------
Name and Fiscal Other Annual All Other
Principal Position Year Salary($) Bonus($) Compensation ($) Options(#) Compensation
------------------ ------ --------- -------- ---------------- ---------- ------------
Craig Gironda(1) 2001 $ 85,000 None None 330,000(2) None
2000 None None None None None
1999 -- -- -- -- --
Keith Minella(3) 2001 $191,000 None None None None
2000 -- -- -- -- --
1999 -- -- -- -- --
R. Scott Conant(4) 2001 $170,000 None None None None
2000 -- -- -- -- --
1999 -- -- -- -- --
-----------------
(1) Mr. Gironda has been Chief Executive Officer and President of the Company
since December 2000.
(2) Mr. Gironda was issued options to purchase 330,000 shares of Common Stock
on January 5, 2001. Of these options, options to purchase 30,000 were
exercisable immediately and options to purchase another 100,000 shares
vested on January 5, 2002.
(3) Mr. Minella is the General Manager of ISG Group, Inc., a subsidiary of the
Company.
(4) Mr. Conant is the President of ISG Group, Inc., a subsidiary of the
Company.
6
Stock Option Grants
The following table sets forth individual grants of stock options made
by the Company during fiscal 2001 to each of the Named Executives:
Number of Percent of Total Exercise or
Securities Underlying Options/SARs Granted to Base Price Expiration
Name Options/SARs Granted(1) Employees in Fiscal Year(2) ($/Share) Date
---- ----------------------- --------------------------- ------------ -----------
Craig Gironda 330,000(3) 17.4% $1.50 01/05/2011
R. Scott Conant 150,000(4) 7.9% $1.50 01/09/2011
------------------
(1) The Company granted no SARs in fiscal 2001.
(2) In fiscal 2001, the Company granted options to purchase 1,895,000 shares of
Common Stock to certain officers, directors, employees and consultants.
(3) Mr. Gironda's stock options to purchase 330,000 shares of Common Stock vest
over a three-year period starting in 2002.
(4) Mr. Conant's stock options to purchase 150,000 shares of Common Stock vest
over a three -year period starting in 2002.
Stock Option Exercises
In fiscal 2001, the Named Executives did not exercise any options to
purchase shares of Common Stock.
Board of Directors Compensation
The Company does not currently compensate directors for service on the
Board of Directors.
Report on Executive Compensation
The Board of Directors determines the compensation of the Chief
Executive Officer and President and sets policies for and reviews with the Chief
Executive Officer and President the compensation awarded to the other principal
executives, if any. The compensation policies utilized by the Board of Directors
are intended to enable the Company to attract, retain and motivate executive
officers to meet Company goals using appropriate combinations of base salary and
incentive compensation in the form of stock options. Generally, compensation
decisions are based on contractual commitments, if any, as well as corporate
performance, the level of individual responsibility of the particular executive
and individual performance. During the fiscal year ended December 31, 2001, the
Company's only executive officer was Craig Gironda.
Salaries. Base salaries for the Company's executive officers are
determined initially by evaluating the responsibilities of the position held and
the experience of the individual, and by reference to the competitive
marketplace for management talent, including a comparison of base salaries for
comparable positions at comparable companies within the Company's industry.
7
The Company believes that its salaries are below average as compared to its
competitors. Annual salary adjustments are determined by evaluating the
competitive marketplace, the performance of the Company, the performance of the
executive, particularly with respect to the ability to manage the growth of the
Company, the length of the executive's service to the Company and any increased
responsibilities assumed by the executive.
Stock Incentives. Stock incentives may be granted, subject to the
adoption of the Plan by the stockholders, by the Board of Directors, in their
sole discretion, to officers and employees of the Company to reward outstanding
performance during the prior fiscal year and as an incentive to continued
outstanding performance in future years. In evaluating the performance of
officers and employees other than the Chief Executive Officer and President, the
Board of Directors consults with the Chief Executive Officer and President and
others in management, as applicable. In an effort to attract and retain highly
qualified officers and employees, stock incentives may also be granted by the
Board of Directors, at its sole discretion, to newly-hired officers and
employees as an inducement to accept employment with the Company.
Compensation of Chief Executive Officer and President. Craig Gironda
assumed the duties of Chief Executive Officer and President of the Company in
December 2000. In an effort to provide Mr. Gironda with incentives to grow the
business of the Company and to further align the compensation of Mr. Gironda
with the interests of stockholders, on January 5, 2001, the Board of Directors
granted Mr. Gironda incentive stock options to purchase 330,000 shares of Common
Stock at an exercise price of $1.50 per share. Such options will vest over a
three-year period.
Board of Directors Interlocks and Insider Participation in Compensation
Decisions
No such interlocks existed or such decisions were made during fiscal
year 2001.
Certain Relationships and Related Transactions
The Company believes that all purchases from or transactions with
affiliated parties were on terms and at prices substantially similar to those
available from unaffiliated third parties.
During the last three years, the Company has borrowed an aggregate of
approximately $366,000 from Geils Ventures LLC, a stockholder of the Company.
Such loans bear interest at a rate of 12% per annum and are payable on demand.
During 2001, the Company repaid approximately $311,000 of loans payable to Geils
Ventures LLC and related accrued interest of $26,000 in exchange for eLEC
Communications Corp. common stock having a fair market value of approximately
$101,000. As of April 15, 2002, the Company had loans payable to Geils Ventures
LLC of approximately $55,000.
8
AMENDMENT OF ARTICLES OF INCORPORATION
(Proxy Item 2)
The Company's Board of Directors has unanimously adopted a resolution
approving, and recommending to the Company's stockholders for their approval, a
proposal to amend the Company's Articles of Incorporation to effect a
five-for-one reverse stock split of the Company's outstanding shares of Common
Stock. If the reverse split is approved, the Board of Directors will have
authority, without further stockholder approval, to effect the reverse split
pursuant to which each five shares of Common Stock owned by a stockholder (the
"old shares") would be exchanged for one new share (the "new shares"). The
number of old shares for which each new share is to be exchanged is referred to
as the "exchange number". The reverse split will be effected simultaneously for
all shares of Common Stock and the exchange number will be the same for all
shares of Common Stock. Upon effectiveness of the reverse split, each option or
warrant right for Common Stock would entitle the holder to acquire a number of
shares equal to the number of shares which the holder was entitled to acquire
prior to the reverse split divided by the exchange number at the exercise price
in effect immediately prior to the reverse split, multiplied by the exchange
number.
The Board of Directors of the Company will have the authority to
determine the exact timing of the effective date of the reverse split, without
further stockholder approval. Such timing will be determined in the judgment of
the Board of Directors.
The Board of Directors also reserves the right, notwithstanding
stockholder approval and without further action by the stockholders, not to
proceed with the reverse split, if, at any time prior to filing the amendment to
the Articles of Incorporation with the Secretary of State of the State of
Nevada, the Board of Directors, in its sole discretion, determines that the
reverse split is no longer in the best interests of the Company and its
stockholders. The Board of Directors may consider a variety of factors in
determining whether or not to implement the reverse split including, but not
limited to,
o overall trends in the stock market;
o recent changes and anticipated trends in the per share market price
of the Common Stock, business and transactional developments;
o the Company's actual and projected financial performance; and
o the Company's anticipated merger with another entity.
The reverse split will not change the proportionate equity interests of
the Company's stockholders, nor will the respective voting rights and other
rights of stockholders be altered, except for possible immaterial changes due to
the Company's issuance of additional shares in lieu of fractional shares as
described below. The Common Stock issued pursuant to the reverse split will
remain fully paid and non-assessable. The Company will continue to be subject to
the periodic reporting requirements of the Securities Exchange Act of 1934, as
amended.
Reasons for the Reverse Stock Split
At meetings held during April 2002, the Board reviewed the Company's
current business and financial performance and the recent trading range of the
Company's common stock. The Board determined that a reverse stock spit was
desirable in order to achieve the following benefits, each of which is described
below in more detail:
o encourage greater investor interest in the Common Stock by making
the stock price more attractive to the many investors, particularly
institutional investors, who refrain from investing in stocks that
trade below $5.00 per share; and
o reduce trading fees and commissions incurred by stockholders, since
these costs are based to a significant extent on the number of
shares traded.
9
Encourage greater investor interest in the Company's common stock
The Board of Directors believes that the reverse stock split will
encourage greater interest in the Company's Common Stock by the investment
community. The Board of Directors believes that the current market price of the
Common Stock may impair its acceptability to institutional investors,
professional investors and other members of the investing public. Many
institutional and other investors look upon stock trading at low prices as
unduly speculative in nature and, as a matter of policy, avoid investing in such
stocks. Further, various brokerage house policies and practices tend to
discourage individual brokers from dealing in low-priced stocks. If effected,
the reverse stock split would reduce the number of outstanding shares of Common
Stock and increase the trading price of the Common Stock. The Board of Directors
believes that raising the trading price of the Common Stock will increase the
attractiveness of the Common Stock to the investment community and possibly
promote greater liquidity for the Company's existing stockholders.
Reduce trading fees and commissions incurred by Stockholders
Because broker commissions on low-priced stocks generally represent a
higher percentage of the stock price than commissions on higher priced stocks,
the current share price of the Common Stock, in the absence of the reverse stock
split, may continue to result in individual stockholders paying transaction
costs (commissions, markups or markdowns) which are a higher percentage of their
total share value than would be the case if the share price was substantially
higher. This factor may further limit the willingness of institutions to
purchase the Common Stock at its current market price.
Certain Effects of the Reverse Stock Split
The following tables illustrate the principal effects of the reverse
split on the Common Stock:
Prior to Reverse After Reverse
Stock Split Stock Split
----------------- -------------
Number of shares of Common Stock:
Authorized................................................... 100,000,000 100,000,000
Outstanding(1)............................................... 27,229,009 5,445,802
Available for future issuance(2)............................. 72,770,991 94,554,198
Financial Data(3):
Stockholders' Equity:
Common stock................................................. $ 27,229 $ 5,446
Capital in excess of par value............................... 2,858,655 2,880,438
Accumulated deficit.......................................... (3,716,395) (3,716,395)
Total stockholders' equity................................... (830,511) (830,511)
Net (loss) per share:
Year ended December 31, 2001.................................... $ (.06) $ (.31)
Book value per common share..................................... (.03) (.15)
------------------
(1) Gives effect to the reverse split as if it occurred on December 31, 2001,
subject to further adjustment.
(2) Upon effectiveness of the reverse split, the number of authorized shares of
Common Stock that are not issued or outstanding would increase, as
reflected in this table. Although this increase could, under certain
circumstances, have an anti-takeover effect (for example, by permitting
10
issuances which would dilute the stock ownership of a person seeking to
effect a change in the composition of the Board of Directors of the Company
or contemplating a tender offer or other transaction for the combination of
the Company with another entity), the reverse split proposal is not being
proposed in response to any effort of which the Company is aware to
accumulate shares of Common Stock or obtain control of the Company, nor is
it part of a plan by management to recommend a series of similar amendments
to the Board of Directors and stockholders. Other than the reverse split
proposal, the Board does not currently contemplate recommending the
adoption of any other amendments to the Company's Articles of Incorporation
that could be construed to affect the ability of third parties to take over
or change control of the Company.
(3) Balance sheet data gives effect to the reverse split as if it occurred on
December 31, 2001, subject to further adjustment.
Stockholders should recognize that if the reverse split is effectuated
they will own a fewer number of shares than they presently own, equal to the
number of shares owned immediately prior to the filing of the amendment divided
by the exchange number. While the Company expects that the reverse split will
result in an increase in the market price of the Common Stock, there can be no
assurance that the reverse split will increase the market price of the Common
Stock by a multiple equal to the exchange number or result in the permanent
increase in the market price, which is dependent upon many factors, including
the Company's performance and prospects. Also, should the market price of the
Common Stock decline, the percentage decline as an absolute number and as a
percentage of the Company's overall market capitalization may be greater than
would pertain in the absence of a reverse split. Furthermore, the possibility
exists that liquidity in the market price of the Common Stock could be adversely
affected by the reduced number of shares that would be outstanding after the
reverse split. In addition, the reverse split will increase the number of the
Company's stockholders who own odd lots, that is, less than 100 shares.
Stockholders who hold odd lots typically will experience an increase in the cost
of selling their shares, as well as possible greater difficulty in effecting
such sales. Consequently, there can be no assurance that the reverse split will
achieve the desired results that have been outlined above.
Procedure for Effecting the Reverse Split and Exchange of Stock Certificates
If the amendment is approved by the stockholders, and if the Board of
Directors still believes that the reverse split is in the best interests of the
Company and its stockholders, the Company will file the amendment to the
Articles of Incorporation with the Secretary of State of the State of Nevada at
such time as the Board has determined the appropriate effective time for such
split. The reverse split will become effective on the date of filing the
amendment (the "effective date"). Beginning on the effective date, each
certificate representing old shares will be deemed for all corporate purposes to
evidence ownership of new shares.
As soon as practicable after the effective date, stockholders will be
notified that the reverse split has been effected. The Company's transfer agent
will act as exchange agent for the reverse split for purposes of implementing
the exchange of stock certificates. Holders of old shares will be asked to
surrender to the exchange agent certificates representing old shares in exchange
for certificates representing new shares in accordance with the procedures to be
set forth in a letter of transmittal to be sent by the Company. No new
certificates will be issued to a stockholder until such stockholder has
surrendered such stockholder's outstanding certificate(s), together with the
properly completed and executed letter of transmittal to the exchange agent.
Stockholders should not destroy any stock certificate and should not submit any
certificates until requested to do so.
Fractional Shares
No scrip or fractional certificates will be issued in connection with
the reverse split. Stockholders who otherwise would be entitled to receive
fractional shares because they hold a number of old shares not evenly divisible
by the exchange number, will be entitled, upon surrender to the exchange agent
of certificates representing such shares, to receive one whole share of common
stock in lieu of a fractional share.
11
Dissenters' Rights
Under Nevada law, stockholders are not entitled to dissenter's rights
with respect to the proposed amendment.
Federal Income Tax Consequences of the Reverse Split
The following is a summary of certain material federal income tax
consequences of the reverse split, and does not purport to be complete. It does
not discuss any state, local, foreign or minimum income or other U.S. federal
tax consequences. Also, it does not address the tax consequences to holders that
are subject to special tax rules, such as banks, insurance companies, regulated
investment companies, personal holding companies, foreign entities, nonresident
alien individuals, broker-dealers and tax-exempt entities. The discussion is
based on the provisions of the United States federal income tax law as of the
date hereof, which is subject to change retroactively as well as prospectively.
This summary also assumes that the old shares were, and the new shares will be,
held as a "capital asset," as defined in the Internal Revenue Code of 1986, as
amended, generally, property held for investment. The tax treatment of a
stockholder may vary depending upon the particular facts and circumstances of
such stockholder. EACH STOCKHOLDER SHOULD CONSULT WITH SUCH STOCKHOLDER'S OWN
TAX ADVISOR WITH RESPECT TO THE CONSEQUENCES OF THE REVERSE SPLIT.
No gain or loss should be recognized by a stockholder of the Company
upon such stockholder's exchange of old shares for new shares pursuant to the
reverse split. The aggregate tax basis of the new shares received in the reverse
split, including any fraction of a new share deemed to have been received, will
be the same as the stockholder's aggregate tax basis in the old shares exchanged
therefor. The stockholder's holding period for the new shares will include the
period during which the stockholder held the old shares surrendered in the
reverse split.
Vote Required and Recommendation
The Board of Directors of the Company unanimously recommends a vote FOR
the proposed amendment to the Company's Articles of Incorporation and the
reverse split proposal. The affirmative vote of the holders of a majority of all
outstanding shares of Common Stock entitled to vote on this proposal will be
required for approval of the amendment.
12
INDEPENDENT PUBLIC ACCOUNTANTS
Cipolla Sziklay Zak & Co., LLC ("Cipolla") served as the Company's
independent public accountants for the fiscal year ended December 31, 2001. A
representative of Cipolla is expected to attend the Annual Meeting, and such
representative will have the opportunity to make a statement if he so desires
and will be available to respond to appropriate questions from stockholders.
Audit Fees. Through April 15, 2002, Cipolla billed the Company $50,975
for the independent audit of the Company's consolidated financial statements for
fiscal 2001.
Other Fees. Cipolla has billed the Company $16,500 for other
professional services rendered for the most recent fiscal year.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for presentation at the 2003 Annual
Meeting of Stockholders and intended to be included in the Company's Proxy
Statement and form of proxy relating to that meeting must be received at the
offices of the Company by January 9, 2003.
OTHER BUSINESS
Other than as described above, the Board of Directors knows of no
matters to be presented at the Annual Meeting, but it is intended that the
persons named in the proxy will vote your shares according to their best
judgment if any matters not included in this Proxy Statement do properly come
before the meeting or any adjournment thereof.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the year ended December
31, 2001, including financial statements, is being mailed herewith. If for any
reason you do not receive your copy of the Report, please contact Wesly Minella,
Secretary of the Company, at 54 Danbury Road #370, Ridgefield, Connecticut 06877
and another copy will be sent to you.
By Order of the Board of Directors,
Wesly Minella,
Secretary
Dated: May 9, 2002
Ridgefield, Connecticut
13
REVOCABLE PROXY
CORDIA CORPORATION
+ ------+
| | PLEASE MARK VOTES
| X | AS IN THIS EXAMPLE
| |
+ ------+
The undersigned hereby appoint(s) John Scagnelli and Craig Gironda, or any
of them, lawful attorneys and proxies of the undersigned with full power of
substitution, for and in the name, place and stead of the undersigned to attend
the Annual Meeting of Stockholders of Cordia Corporation to be held at 1055
Portion Road, Farmingville, New York 11738 on Tuesday, May 28, 2002 at 10:00
a.m., local time, and any adjournment(s) or postponement(s) thereof, with all
powers the undersigned would possess if personally present and to vote the
number of votes the undersigned would be entitled to vote if personally present.
The Board of Directors recommends a vote "FOR" the proposals set forth
below.
-----------------------------
Please be sure to sign and date Date
this Proxy in the box below.
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Stockholder sign above Co-holder (if any) sign above
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With- For All
For hold Except
PROPOSAL 1:
[ ] [ ] [ ]
The Election of Directors:
Craig Gironda, Wesly Minella and John Scagnelli
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
----------------------------------------------------
For Against Abstain
[ ] [ ] [ ]
PROPOSAL 2: Proposal to amend the
Company's Articles of Incorporation
to effect a five-for-one reverse
stock split of the Company's
outstanding common stock.
In accordance with their discretion, said Attorneys and Proxies are
authorized to vote upon such other matters or proposals not known at the time of
solicitation of this proxy which may properly come before the meeting.
This proxy when properly executed will be voted in the manner described
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for each of the Proposals set forth herein. Any prior proxy is hereby
revoked.
CORDIA CORPORATION
Please sign exactly as your name appears on this proxy card. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or corporation, please sign in full corporate name by
president or other authorized person. If a partnership, please sign in
partnership name by authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY