The purpose of this information statement is to inform the holders of record of shares of our common stock and preferred stock as of the close of business on the record date, September 24, 2004 that our board of directors has recommended, and that a majority of our stockholders intend to vote in favor of resolutions which will accomplish the following:
- Grant discretionary authority to our directors to amend our articles of incorporation to change our name from "American Fire Retardant Corp." to "Global Materials & Services, Inc." within 180 days of this information statement with the exact time of the amendment to be determined by our directors;
- Implement a reverse stock split of our common stock on the basis of one post-consolidation share for each 2,000 pre-consolidation shares;
- Amend our articles of incorporation to reduce the par value of our common stock from $0.001 per share to $0.0001 per share;
- Amend our articles of incorporation to increase the number of our authorized shares of common stock to 19,800,000,000 shares; and
- Approve the following Stock Plans of American Fire Retardant Corp.:
(a) Employee Stock Plan for the Year 2003, adopted by the directors on April 28, 2003 with 200,000,000 shares available for issuance under the Plan;
(b) Employee Stock Plan for the Year 2003 No. 2, adopted by the directors on May 21, 2003 with 15,000,000 shares available for issuance under the Plan;
(c) Employee Stock Plan for the Year 2003 No. 3, adopted by the directors on June 23, 2003 with 10,000,000 shares available for issuance under the Plan;
(d) Employee Stock Plan for the Year 2003 No. 4, adopted by the directors on August 26, 2003 with 395,000,000 shares available for issuance under the Plan;
(e) Non-Employee Directors and Consultants Retainer Stock Plan for the Year 2003 No. 11, adopted by the directors on August 26, 2003 with 200,000,000 shares available for issuance under the Plan;
(f) Employee Stock Plan for the Year 2003 No. 5, adopted by the directors on October 15, 2003 with 595,000,000 shares available for issuance under the Plan;
(g) Non-Employee Directors and Consultants Retainer Stock Plan for the Year 2003 No. 12, adopted by the directors on October 15, 2003 with 995,000,000 shares available for issuance under the Plan;
(h) Employee Stock Plan for the Year 2003 No. 6, adopted by the directors on December 4, 2003 with 700,000,000 shares available for issuance under the Plan;
(i) Non-Employee Directors and Consultants Retainer Stock Plan for the Year 2003 No. 13, adopted by the directors on December 4, 2003 with 295,000,000 shares available for issuance under the Plan; and
(j) Stock Plan for the Year 2004, adopted by the directors on January 9, 2004 with 1,200,000,000 shares in the aggregate available for issuance under the Plan.
<PAGE> We have a consenting stockholder, Stephen F. Owens, our president and director, who holds 100,000,000 shares of our preferred stock. Mr. Owens will vote in favor of the proposed amendment to our articles of incorporation. Mr. Owens will have the power to pass the proposed amendment without the concurrence of any of our other stockholders.
Pursuant to our amended certificate of designation establishing Series A preferred stock, each share of our currently issued and outstanding Series A preferred stock may be converted into 10 fully paid and nonassessable shares of our common stock. On all matters submitted to a vote of the holders of the common stock, including, without limitation, the election of directors, a holder of shares of the Series A preferred stock shall be entitled to the number of votes on such matters equal to the number of shares of the Series A preferred stock held by such holder multiplied by the number of shares of the common stock each such share of the Series A preferred stock shall then be convertible. Therefore, Mr. Owens will have the power to vote 1,000,000,000 shares of the common stock, which number exceeds the majority of the issued and outstanding shares of the common stock on the record date.
Mr. Owens will vote in favor of the proposed grant of authority to the directors with respect to the amendment to our articles of incorporation, for the change in par value of our common stock, for the reverse split of our common stock and for the approval of our Stock Plans.
Previous Amendments. This information statement is also being sent in connection with the previous approval by our board of directors of the corporate actions referred to below and their subsequent adoption by our majority stockholders. Accordingly, all necessary corporate approvals in connection with the matters referred to herein have been obtained, and the discussion of the November 13, 2002 and February 28, 2003 Amendments in this information statement is furnished solely for the purpose of informing stockholders, in the manner required under the Securities Exchange Act of 1934, as amended, of these corporate actions.
The November 13, 2002 Amendment. On November 13, 2002, as authorized by the necessary approvals of our board of directors and our majority stockholder, we approved the adoption of an amendment (the "November 13, 2002 Amendment") to our articles of incorporation in the form of Attachment C hereto, which (i) ------------- increased our authorized preferred stock to 25,000,000 shares; and (ii) increased our authorized common stock to 375,000,000 shares.
The November 13, 2002 Amendment was adopted because our board of directors believed that our then existing capital structure was inadequate for our corporate needs. Following the November 13, 2002 Amendment, on February 3, 2003, 8,500,000 shares of our preferred stock were designated as Series A preferred stock, pursuant to the certificate of designation of the Series A preferred stock. Thereafter, on March 6, 2003, we adopted a second amended certificate of designation, increasing the number of shares designated as Series A preferred stock from 8,500,000 to 25,000,000.
The November 13, 2002 Amendment was approved by a majority of the total number of shares of common stock and preferred stock issued and outstanding and entitled to vote on the matter. Consequently, an amendment to our articles of incorporation, as well as the certificate of designation of the Series A preferred stock and the second amended certificate of designation of the Series A preferred stock were filed with the Secretary of State of Nevada by our proper officers.
The number of shares of our common stock outstanding at the time of the adoption of the November 13, 2002 Amendment was 54,031,578; and the number of shares of the common stock entitled to vote on the November 13, 2002 Amendment was 54,031,578. The number of shares of our preferred stock outstanding at the time of the adoption was 2,500,000; and the number of shares of the preferred stock entitled to vote on the November 13, 2002 Amendment was 2,500,000.
The number of shares of our common stock that voted for the November 13, 2002 Amendment was 27,421,000. The number of shares of our preferred stock that voted for the November 13, 2002 Amendment was 2,500,000. The vote for the
- 2 - <PAGE> November 13, 2002 Amendment was taken in the form of a consent executed by our stockholders owning a majority of our shares entitled to vote thereon, pursuant to the provisions of Section 78.320 of the Nevada Revised Statutes. However, each share of the preferred stock was entitled to be counted as 10 shares of common stock for voting purposes. As a result, 2,500,000 shares of the preferred stock were equal to the vote of 25,000,000 shares of common stock, which number exceeded the total number of the issued and outstanding shares of the common stock on the record date for the vote on the November 13, 2002 Amendment. The number of shares voted against the November 13, 2002 Amendment was zero, with the result that the November 13, 2002 Amendment received a majority of the votes of the outstanding stock of each class of our stock entitled to vote thereon.
The February 28, 2003 Amendment. Our board of directors determined that our capital structure was still inadequate to serve our ongoing needs, despite the recent November 13, 2002 Amendment to our articles of incorporation. Therefore, on February 28, 2003, as authorized by the necessary approvals of our board of directors and our majority stockholder, we approved the adoption of an amendment (the "February 28, 2003 Amendment"), in the form of Attachment D hereto, to our ------------ articles of incorporation which (i) increased the number of shares of our authorized preferred stock to 200,000,000 shares; and (ii) increased the number of shares of our authorized common stock to 1,800,000,000 shares.
The February 28, 2003 Amendment was approved by a majority of the total number of shares of common stock and preferred stock issued and outstanding and entitled to vote on the matter. Accordingly, an amendment to our articles of incorporation was filed by our proper officers with the Secretary of State of Nevada.
The number of shares of our common stock outstanding at the time of the adoption of the February 28, 2003 Amendment was 167,231,579; and the number of shares of our common stock entitled to vote on the February 28, 2003 Amendment was 167,231,579. The number of shares of our preferred stock outstanding at the time of the adoption was 18,000,000; and the number of shares of the preferred stock entitled to vote on the February 28, 2003 Amendment was 18,000,000.
The number of shares of the common stock that voted for the February 28, 2003 Amendment was 7,000,000. The number of shares of the preferred stock that voted for the February 28, 2003 Amendment was 18,000,000. The vote for the February 28, 2003 Amendment was taken in the form of a consent executed by stockholders owning a majority of our shares entitled to vote thereon, pursuant to the provisions of Section 78.320 of the Nevada Revised Statutes. However, each share of preferred stock was entitled to be counted as 10 shares of common stock for voting purposes. As a result, the 18,000,000 shares of the preferred stock were equal to the vote of 180,000,000 shares of common stock, which number exceeded the majority of the issued and outstanding shares of the common stock on the record date for the vote on the February 28, 2003 Amendment.
This information statement is being mailed on or about October 22, 2004 to all stockholders of record as of September 24, 2004.
We appreciate your continued interest in American Fire Retardant Corp.