SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
_ Preliminary Information Statement
_ Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
X Definitive Information Statement
ENVIRONMENTAL SERVICE PROFESSIONALS, INC.
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
__ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
__ 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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ENVIRONMENTAL SERVICE PROFESSIONALS, INC.
1111 E. TAHQUITZ CANYON WAY, SUITE 110
PALM SPRINGS, CALIFORNIA 92262
NOTICE OF ACTION TO BE TAKEN BY
THE SHAREHOLDERS
JANUARY 27, 2009
To The Shareholders of Environmental Service Professionals, Inc.
Edward L. Torres and Lyle Watkins (collectively, the "Majority
Shareholders") are entitled to vote of a total of 31,541,483 shares or
approximately 60.0% of the total issued and outstanding stock of Environmental
Service Professionals, Inc., a Nevada corporation (the "Company"). The Majority
Shareholders intend to adopt the following resolutions by written consent in
lieu of a meeting pursuant to the General Corporation Law of the State of
Nevada.
1. Authorize the officers and directors of the Company to cause
the Company to amend its Certificate of Incorporation in order
to increase the number of authorized shares of common stock
from 100,000,000, par value $0.001 per share, to 295,000,000,
par value $0.001 per share.
2. Authorize the officers and directors of the Company to cause
the Company to amend its Certificate of Incorporation in order
to adjust the par value and to increase the number of
authorized shares of preferred stock from 1,000,000, par value
$0.01 per share, to 5,000,000, par value $0.001 per share.
Edward L. Torres, Chief Executive Officer and President
WE ARE NOT ASKING YOU FOR A CONSENT OR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
ENVIRONMENTAL SERVICE PROFESSIONALS, INC.
1111 E. TAHQUITZ CANYON WAY, SUITE 110
PALM SPRINGS, CALIFORNIA 92262
JANUARY 27, 2009
SHAREHOLDERS ACTION
The Majority Shareholders submitted their consents to the shareholder
resolutions described in this Information Statement on or about November 21,
2008, to be effective upon satisfaction by the Company of all applicable filing
and notification requirements of the Securities and Exchange Commission. As of
November 21, 2008, the Majority Shareholders were entitled to vote of record
31,541,483 shares of the Company's common stock, par value $0.001 per share, or
approximately 60.0% of the total issued and outstanding common stock of the
Company. The remaining outstanding shares of common stock are held by
approximately 200 other shareholders.
The Majority Shareholders consist of Edward L. Torres, the Chairman,
Chief Executive Officer, President, and Acting Chief Financial Officer of the
Company, and Lyle Watkins, the Chief Operating Officer, Corporate Secretary, and
a Director of the Company.
Holders of the common stock of record as of November 21, 2008 are
entitled to submit their consent to the shareholder resolutions described in
this Information Statement, although no shareholder consents other than that of
the Majority Shareholders are required to be submitted in order for the
resolution to be adopted. The Company is not soliciting consents or proxies and
shareholders have no obligation to submit either of them. Whether or not
shareholders submit consents should not affect their rights as shareholders or
the prospects of the proposed shareholder resolutions being adopted. The
Majority Shareholders have consented to all of the shareholder resolutions
described in this Information Statement. Other shareholders who desire to submit
their consents must do so by February 19, 2009 and once submitted will not be
revocable. The affirmative vote of the holders of a majority of the outstanding
common stock of the Company is required to adopt the resolutions described in
this Information Statement. A total of 52,530,168 shares of common stock will be
entitled to vote on the Company's proposed transactions described in this
Information Statement.
THE COMPANY AND THE TRANSACTIONS
PROPOSED SHAREHOLDER ACTION
The Company has its executive offices at 1111 East Tahquitz Canyon Way,
Suite 110, Palm Springs, California 92262, and its telephone number is (760)
327-5284. As described in the accompanying NOTICE OF ACTION TO BE TAKEN BY THE
SHAREHOLDERS, the Company proposes to amend its Certificate of Incorporation
(the "Amendment") in order to (i) increase the number of authorized shares of
the Company's common stock from 100,000,000, par value $0.001 per share, to
295,000,000, par value $0.001 per share, and (ii) adjust the par value and
increase the number of authorized shares of the Company's preferred stock from
1,000,000, par value $0.01 per share, to 5,000,000, par value $0.001 per share.
The Board of Directors of the Company voted unanimously to implement
the Certificate Amendment because the Board of Directors believes that an
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increase to the number of authorized shares of the Company's common stock and to
the number of authorized shares of preferred stock will allow the Company to
raise the capital necessary for the Company to grow its business in the future.
The Company is not expected to experience a material tax consequence as
a result of the Certificate Amendment. Increasing the number of authorized
shares of the Company's common stock and preferred stock may, however, subject
the Company's existing shareholders to future dilution of their ownership and
voting power in the Company.
POTENTIAL ANTI-TAKEOVER EFFECT
The additional shares of common stock and preferred stock that will
become available for issuance upon the adoption of the resolutions could also be
used by the Company to oppose a hostile takeover attempt or delay or prevent
changes in control or management of the Company. For example, without further
stockholder approval, the Board could strategically sell shares of common stock
or preferred stock in a private transaction to purchasers who would oppose a
takeover or favor the current Board. Although this proposal to increase the
authorized common stock and preferred stock has been prompted by business and
financial considerations and not by the threat of any hostile takeover attempt
(nor is the Board currently aware of any such attempts directed at the Company),
nevertheless, stockholders should be aware that approval of the Certificate
Amendment could facilitate future efforts by the Company to deter or prevent
changes in control of the Company, including transactions in which the
stockholders might otherwise receive a premium for their shares over then
current market prices.
ADDITIONAL INFORMATION
Additional information regarding the Company, its business, its capital
stock, and its financial condition are included in the Company's Form 10-KSB
annual report and its Form 10-Q quarterly reports. Copies of the Company's Form
10-KSB for its fiscal year ending December 31, 2007, as well as the Company's
Form 10-Q for the quarters ending March 31, 2008, June 30, 2008 and September
30, 2008, are available upon request to: Edward L. Torres, Chief Executive
Officer and President, Environmental Service Professionals, Inc., 1111 East
Tahquitz Canyon Way, Suite 110, Palm Springs, California 92262.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership
of the Company's stock as of October 31, 2008, except as indicated by the
footnotes below:
o Each of the Company's directors and nominees;
o Each of the named executive officers;
o All of the Company's directors and executive officers as a
group; and
o Each person or group of affiliated persons known by the
Company to be the beneficial owner of more than 5% of the
Company's outstanding shares of common stock.
Beneficial ownership and percentage ownership are determined in
accordance with the rules of the Securities and Exchange Commission and includes
voting or investment power with respect to shares of stock. This information
does not necessarily indicate beneficial ownership for any other purpose.
Unless otherwise indicated and subject to applicable community property
laws, to our knowledge, each stockholder named in the following table possesses
sole voting and investment power over their shares of common stock, except for
those jointly owned with that person's spouse. Percentage of beneficial
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ownership is based on 52,530,168 shares of Common Stock outstanding as of
October 31, 2008. The total number of outstanding shares does not reflect
outstanding stock options or warrants. Unless otherwise noted below, the address
of each person listed on the table is c/o Environmental Service Professionals,
Inc., 1111 East Tahquitz Canyon Way, Suite 110, Palm Springs, California 92262.
Except as indicated, each person listed below has sole voting and investment
power with respect to the shares set forth opposite such person's name.
--------------------------------------------------- ----------------------------------------
NAME AND POSITION OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED (1)
--------------------------------------------------- ------------------- --------------------
NUMBER(2) PERCENT
--------------------------------------------------- ------------------- --------------------
Edward Torres, Chief Executive Officer,
President, Acting Chief Financial Officer (3)(10) 23,324,000 43.7%
--------------------------------------------------- ------------------- --------------------
Lyle Watkins, Chief Operating Officer, Corporate
Secretary, and Director (4)(10) 9,554,483 18.0%
--------------------------------------------------- ------------------- --------------------
S. Robert August, Director (5) 800,000 1.5%
--------------------------------------------------- ------------------- --------------------
Leroy Moyer, Director (6)* 570,000 0.9%
--------------------------------------------------- ------------------- --------------------
Gerry Berg, Assistant Chief Financial Officer (7) 100,000 *
--------------------------------------------------- ------------------- --------------------
Robert Iger, Director (8) 260,000 *
--------------------------------------------------- ------------------- --------------------
All directors and executive officers as a group
(six persons) (9)
34,608,483 62.7%
--------------------------------------------------- ------------------- --------------------
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*Indicates beneficial ownership of less than 0.5%.
(1) Unless otherwise indicated and subject to applicable community property
laws, to our knowledge each stockholder named in the table possesses sole
voting and investment power with respect to all shares of Common Stock,
except for those owned jointly with that person's spouse.
(2) Calculation of beneficial ownership assumes the exercise of all warrants
and options exercisable within 60 days of October 31, 2008, only by the
respective named stockholder.
(3) Includes 500,000 shares which may be purchased pursuant to warrants that
are exercisable within 60 days of October 31, 2008. Also includes 3,207,000
shares which are owned by Pro-Active Retirement Trust of which Mr. Torres
is the Trustee, and 317,000 shares which may be purchased pursuant to
warrants that are exercisable within 60 days of October 31, 2008 which are
owned by Pro-Active Business Services, Inc. of which Mr. Torres is the
President.
(4) Includes 500,000 shares which may be purchased pursuant to warrants and
stock options that are exercisable within 60 days of October 31, 2008. Also
includes 54,483 shares and 20,000 shares which may be purchased pursuant to
warrants that are exercisable within 60 days of October 31, 2008 which are
owned by Northcom Consulting, Inc. of which Mr. Watkins is the President.
(5) Includes 350,000 shares which may be purchased pursuant to stock options
that are exercisable within 60 days of October 31, 2008. Also includes
450,000 shares and 250,000 shares which may be purchased pursuant to
warrants that are exercisable within 60 days of October 31, 2008 which are
owned by S. Robert August & Associates of which Mr. August is the
President.
(6) Includes 450,000 shares which may be purchased pursuant to stock options
that are exercisable within 60 days of October 31, 2008. Includes 10,000
shares which may be purchased pursuant to warrants that are exercisable
within 60 days of October 31, 2008.
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(7) Does not include 900,000 shares subject to vesting provisions, including
500,000 shares scheduled to vest on the 12 month anniversary of employment
and 400,000 shares scheduled to vest on the 24 month anniversary of
employment. ESP has conferred piggyback registration rights to the shares
for Mr. Berg as the shares vest. If, however, Mr. Berg is terminated for
cause, all unvested shares on the date of such termination will immediately
be cancelled.
(8) Includes 250,000 shares which may be purchased pursuant to stock options
that are exercisable within 60 days of October 31, 2008.
(9) See footnotes (4) through (8). Includes an aggregate of 2,647,000 shares of
Common Stock issuable upon the exercise of warrants and stock options that
are exercisable within 60 days of October 31, 2008.
(10) Includes shares subject to lock-up and vesting provisions. On November 1,
2006, ESP entered into a Redemption, Lock-up and Vesting Agreement (the
"Agreement") with certain shareholders of ESP, including Edward Torres and
Lyle Watkins (collectively, the "Executive"). The purpose of the agreement
was to provide for redemption of a portion of their shares, and to lock-up
the balance of their shares in order to facilitate ESP's ability to raise
capital. According to the Agreement, in consideration for permitting ESP to
redeem and lock-up the shares, ESP conferred piggyback registration rights
to the shares for the Executive as the shares are released from lock-up.
ESP has a right of first refusal to purchase the shares covered by the
Agreement. This right specifies that before there can be any valid sale or
transfer of any of the shares by the Executive, the Executive must first
offer his shares to ESP. The Executive has agreed that he will not directly
or indirectly sell or otherwise transfer or dispose of any of the shares
during the lock-up period. Furthermore, during the Executive's employment
with ESP, he has agreed that he will not sell, transfer, or assign more
than 8% of the released shares per month. Similarly, the Executive has also
agreed that after the termination of his employment with ESP for any
reason, he will not sell, transfer or assign more than 4% of the released
shares per month. If, however, the Executive is terminated for cause, all
unvested shares on the date of such termination will immediately be
cancelled. The following table lists the number of shares subject to
lock-up and the scheduled release dates:
---------------------- ------------------------------ -------------------------
NAME OF EXECUTIVE NUMBER OF SHARES LOCK-UP PERIOD AND
SUBJECT TO LOCK-UP RELEASE SCHEDULE
---------------------- ------------------------------ -------------------------
Edward L. Torres 4,007,000 11/1/06 : 801,400
11/1/07 : 801,400
11/1/08 : 801,400
11/1/09 : 801,400
11/1/10 : 801,400
---------------------- ------------------------------ -------------------------
Lyle A. Watkins 1,000,000 11/1/06 : 200,000
11/1/07 : 200,000
11/1/08 : 200,000
11/1/09 : 200,000
11/1/10 : 200,000
---------------------- ------------------------------ -------------------------
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OTHER MATTERS
The Board of Directors of the Company is not aware that any matter
other than those described in this Information Statement is to be presented for
the consent of the shareholders.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO EDWARD L. TORRES, CHIEF
EXECUTIVE OFFICER OF THE COMPANY, AT ENVIRONMENTAL SERVICE PROFESSIONALS, INC.,
1111 EAST TAHQUITZ CANYON WAY, SUITE 110, PALM SPRINGS, CALIFORNIA 92262,
TELEPHONE NUMBER (760) 327-5284. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB WILL BE PROVIDED WITHOUT CHARGE.
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EXHIBIT A
AMENDMENT TO CERTIFICATE OF INCORPORATION
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