UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14F-1
INFORMATION STATEMENT
PURSUANT TO SECTION 14F OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
MarketShare Recovery, Inc.
(Exact name of registrant as specified in its corporate charter)
Delaware 0-15807 31-1190725
------------------------------- ------- -----------
(State or other jurisdiction of Commission (I.R.S. Employer
incorporation organization) File Number or Identification No.)
33 South Service Road, Suite 111
Jericho, NY 11753
(Address of principal executive offices)
(516) 750-9733
(Issuer's Telephone Number)
Approximate Date of Mailing: May 31, 2005
MARKETSHARE RECOVERY, INC.
33 South Service Road, Suite 111
Jericho, NY 11753
--------
Information Statement pursuant to
Rule 14f-1
--------
NOTICE OF CHANGE IN THE MAJORITY OF THE BOARD OF DIRECTORS
This Information Statement is being furnished to all holders of record at the
close of business on May 25, 2005, of shares of $.001 par common stock ("Common
Stock") of MarketShare Recovery, Inc., a Delaware corporation, in accordance
with the requirements of Section 14(f) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and Securities and Exchange Commission (the
"Commission") Rule 14f-1. As of such date, and without giving effect to the
closing of the Merger (as that term is defined below), we had 3,806,221 shares
of Common Stock issued and outstanding, all of which shares are entitled to one
vote per share on all matters for which stockholders are entitled to vote.
NO VOTE OR OTHER ACTION BY OUR STOCKHOLDERS IS REQUIRED IN RESPONSE TO THIS
INFORMATION STATEMENT. PROXIES ARE NOT BEING SOLICITED.
INTRODUCTION
This information statement pursuant to Section 14(f) of the Securities Exchange
Act of 1934, as amended is being circulated to the shareholders of MarketShare
Recovery, Inc., in connection with the proposed merger ("Merger") of MarketShare
Merger Sub, a wholly owned subsidiary of the Company ("Merger Sub") with
bioMetrx, Technologies, Inc., a Delaware corporation ("bioMetrx") pursuant to
that Agreement and Plan of Merger by and among the Company, Merger Sub and
bioMetrx (the "Merger Agreement"). We are a reporting company pursuant to the
Exchange Act of 1934 dated April 27, 2005, as amended.
THE TRANSACTIONS
We authorized the issuance of 14,000,000 shares of our Common Stock to the
holders of bioMetrx common stock on May 26, 2005. Subject to the fulfillment or
waiver of the conditions set forth in the Merger Agreement, we will issue at
this closing (the "Effective Date") 14,000,000 shares of Common Stock to the
bioMetrx holders, each holder of warrants or options to acquire shares of
bioMetrx, of which there are approximately 402,500 outstanding, will receive
corresponding instruments in MarketShare being substantially the same rights,
preferences and privileges as the original instrument represents. As a result of
the Merger, bioMetrx will be merged into Merger Sub and became our wholly owned
subsidiary as survivor of the Merger.
Simultaneously with the Merger certain stockholders of MarketShare will
surrender 2,208,521 shares of MarketShare's Common Stock, such shares to be
cancelled and returned to the status of authorized and unissued shares
("Cancelled Shares"). Additionally, 300,000 shares of MarketShare's Common Sock
will be deposited into escrow to satisfy a portion of MarketShare's outstanding
indebtedness.
As a result of the foregoing, the 14,000,000 shares and 402,500 warrants and
options to be issued will represent (assuming the exercise of the warrant and
options) as part of the Merger approximately 90% of our total outstanding Common
Stock.
CHANGES IN MAJORITY OF DIRECTORS
Under the Merger Agreement, subject to the conditions set forth therein, on the
Effective Date, Timothy Schmidt will resign as an officer and director and the
following will be appointed by Raymond Barton to serve as directors effective
not less than 10 days after the mailing of this Statement (the "Appointees"):
o Mark Basile
o Steven Kang
o Frank Giannuzzi
Mr. Barton will resign as an officer and director when the above appointments
are effective.
INFORMATION REGARDING THE COMPANY
Please read this Information Statement carefully. It describes the general terms
of the Merger and contains certain biographical and other information concerning
the executive officers and directors after the closing of the Merger. Our
filings and exhibits may be inspected without charge at the public reference
section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or
obtained on the Commission's website at www.sec.gov.
2
EXECUTIVE COMPENSATION
The following table sets forth certain information as to our highest paid
officers for our fiscal years ended December 31, 2004 and 2003. No other
compensation was paid to any such officer or directors other than the cash
compensation set forth below.
Annual Compensation Long Term Compensation
---------------------------- ----------------------------------------------
Awards Payouts
------------------------ -----------------
Other Securities All
Annual Restricted Underlying Other
Name and Compen- Stock Options/ LTIP Compen
Principal Position Year Salary Bonus sation Awards SARs Payouts -sation
------------------ ----- ------ ----- ------ ------ ---- ------- ------
Raymond Barton, CEO FY04 0 -- 0 -- 0 -- --
FY03 0 -- $65,900 -- 0 -- --
Timothy Schmidt, CFO FY04 0 -- 0 -- 0 -- --
FY03 0 -- $39,600 -- 0 -- --
OPTION/SAR GRANT IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
-------------------
Number of Percent of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or
Name Year Granted Fiscal Year Base Price Expiration Date
---- ---- ------- ----------- ---------- ---------------
Raymond Barton FY04 0 0% $0
FY03 0 0% $0
Timothy Schmidt FY02 0 0% $0
FY03 0 0% $0
3
AGGREGATED OPTION/SAR EXERCISED IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options/SARs at Options/SARs
Shares FY-End (#) at FY-End ($)
Acquired on Exercisable/ Exercisable/
Name Year Exercise Value Realized Unexercisable Unexercisable
---- ---- -------- -------------- ------------- -------------
Raymond Barton FY04 0 0 0/0 $0
FY03 0 0 0/0 $0
Timothy Schmidt FY04 0 0 0/0 $0
FY03 0 0 0/0 $0
Compensation of Directors
Our Director's are not paid any compensation.
PRINCIPAL STOCKHOLDERS AND HOLDINGS OF MANAGEMENT
The following table sets forth certain information known to us about the
beneficial ownership of our Common Stock, as of May 25, 2005 (prior to the
Transaction), by each beneficial owner of more than five percent of the Common
Stock. Except as otherwise indicated, each person has sole voting and investment
power with respect to all shares shown as beneficially owned, subject to
community property laws where applicable. As of May 25, 2005, there were
3,806,221 shares of Common Stock outstanding.
Amount and Nature of Percent of Class
Name and Address of Beneficial Owner Beneficial Ownership (1)
------------------------------------ -------------------- ---
Raymond Barton 1,010,417 26.6%
95 Broadhollow Road, Suite 101
Melville, NY 11747
Timothy Schmidt 1,428,435 37.5%
95 Broadhollow Road, Suite 101
Melville, NY 11747
All Directors and Executive Officers as a Group 2,435,852 64.1%
(2 persons)
4
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 25, 2005, information with respect to
the securities holdings of all persons which we, based on bioMetrx' records,
have reason to believe may be deemed the beneficial owners of more than 5% of
bioMetrx stock prior to the Effective Date and our Common Stock as of the
Effective Date. Also set forth in the table is the beneficial ownership of
shares of our outstanding Common Stock of each Company, as of such dates, of all
officers and directors, individually and as a group.
bioMetrx MarketShare
---------------------------------------- -----------------------------------
Name and Address Before Merger % Before Merger After Merger % After Merger
-----------------------------------------------------------------------------------------------------------------------------
Mark Basile 5,728,000(1) 45.55% 6,476,077 40.48%
CEO and Chairman
736 Carlisle Road
Jericho, NY 11753
-----------------------------------------------------------------------------------------------------------------------------
The Naples Trust (2) 4,000,000 31.81% 4,522,400 28.27%
736 Carlisle Road
Jericho, NY 11753
-----------------------------------------------------------------------------------------------------------------------------
Stephen Kang 740,000 5.88% 836,644 5.23%
Director Appointee
9 Herkimer Street
Jericho, NY 11750
-----------------------------------------------------------------------------------------------------------------------------
Clifford Zsevc 20,000 .16% 22,612 .14%
Chief Operating Officer
10 Pinecone Lane
Westbury, NY 11590
-----------------------------------------------------------------------------------------------------------------------------
Frank Giannuzzi 7,500 .05% 8,480 .046%
Chief Financial Officer
40 Stewart Street
Plainview, NY 11704
-----------------------------------------------------------------------------------------------------------------------------
Russell Kuhn 840,000(3) 6.68% 949,704 5.94%
8680 Greenback Lane
Orangevale, CA 95662
-----------------------------------------------------------------------------------------------------------------------------
All Officers and Directors as a Group (4 6,495,500(1)(2) 51.65% 7,343,812 45.90%
persons)
-----------------------------------------------------------------------------------------------------------------------------
5
(1) Includes 4,000,000 shares held by the Naples Trust. Mr. Basile's
mother-in-law is the trustee for the Naples Trust and Mr. Basile's wife is
the beneficiary.
(2) Mr. Basile's mother-in-law is the Trustee for the Naples Trust and Mr.
Basile's wife is the beneficiary.
(3) Includes 140,000 and 158,284 shares of common stock issuable upon the
exercise of a warrant to purchase a like number of shares pre and post
merger, respectively.
DIRECTORS AND EXECUTIVE OFFICERS
Assuming the Merger is completed, the following will serve the Company in the
positions indicated, from and after the Effective Date.
Name Age Position
---- --- --------
Mark Basile 46 Chief Executive Officer, Chairman of
the Board
Steven Kang 41 Director - Appointee
Cliff Zsevc 48 Chief Operating Officer
Frank Giannuzzi 30 Chief Financial Officer, Director -
Appointee
Raymond Barton 36 CEO & Director - Resigning
Mark Basile founded bioMetrx in 2001 and has been its Chief Executive Officer
and Chairman of the Board since its formation. In 1999, Mr. Basile founded and
served as the initial Chief Executive Officer of Sickbay Health Media, Inc., a
company that owned and operated a health information website. During Mr.
Basile's tenure as CEO of Sickbay, its website was consistently ranked at the
top ten most visited health information websites in the world. Mr. Basile
graduated Touro Law School in 1988, and practiced law in the State of New York
from 1989-1998.
Steven Kang is a recognized accomplished computer expert. He has been involved
in the computer field for over 16 years and has earned a reputation of
successfully tackling large and difficult projects. With over ten years of
database design experience, Mr. Kang is a valued Oracle partner and a Certified
Data base Expert who regularly teaches, trains, and hires skilled professionals
for his clients. Mr. Kang also owns and operates an internet-based system called
MARS (Medical Archival and Retrieval System) currently being used by the
Neurosurgical Department at St. Vincent's Hospital.
6
Mr. Kang is currently the President of Eryx systems Design Corp., a
privately-owned computer-consulting firm that specializes in architecting and
developing mission-critical systems for companies including AOL Time Warner, St.
Vincent's Hospital, Simon & Schuster, Toys R. Us, and Columbia Artists
Management Inc. Mr. Kang has been previously called upon by venture capital
firms to advise them on new and emerging technologies and conducts technical
audits of startup companies for due diligence.
Previously, Mr. Kang was the Director of Software Development at Brave New
Consultants, a small computer-consulting firm in downtown Manhattan, where he
increased software development revenues 500% in 24 months. Mr. Kang helped to
develop the first modern system for the New York Stock Exchange to monitor the
financial activities of all its member firms. He also helped develop a claims
processing system for Peat Marwick used to settle claims for highly publicized
class action litigations.
Mr. Kang holds a Bachelor of Science and Masters degree in Computer Science from
New York University where he studied database design, artificial intelligence,
and robotics.
Cliff Zsevc has over twenty-five years of experience in the telecommunications
and data networking industry. Mr. Zsevc's experience includes technical design,
operations and marketing management. He has held positions in companies such as
Siemens Communications, responsible for the design and implementation of voice
and data networks where his thoroughness and integrity has earned him the
"Circle of Excellence" award. Mr. Zsevc has experience dealing with major
airlines as well as educational and financial institutions. Mr. Zsevc holds an
Associates degree in Business Administration and over twenty technical
certifications.
Frank Giannuzzi has over seven years of directing the financial structure and
all financial pertaining aspects of running business. His financial career began
with tenure as the chief financial officer of an international import/ export
company that he helped formulate. His responsibilities included monitoring
currency trades, cash-flows, inventories, accounts receivables and payables, and
quarterly and yearly budgets and projections. Since then, he is the co-founder
and owner of GTC Capital Corp. and National Land Services Inc., which he remains
chief financial officer. He was actively involved in the daily operations
regarding all financial matters, from managing the accounting aspect of the
business, to compliance with the New York State Banking Department. He works
very closely with the marketing and sales department in forecasting and
maximizing the company's revenues and profit in line with the company's budget.
He continues to aid other companies as an outside financial consultant. He also
has been involved in structuring and raising of capital in significant real
estate transactions and developments. Mr. Giannuzzi holds a bachelors of Science
degree from Villanova University, and has also studied international finance at
The John Cabot International School of Business of Rome.
Raymond Barton has served as president and a director for MarketShare Recovery,
Inc. an Internet Direct Marketing firm, which specializes in acquisition and
resale of user demographic data and targeted e-mail marketing where, Mr.
Barton's duties included managing the day to day operations of the business,
marketing and managing the Company's growth. Upon the registrant's acquisition
of MarketShare Recovery, Mr. Barton assumed the role of president, CEO and
chairman of the registrant. Mr. Barton also serves as Chairman of the Board of
Directors and Chief Executive Officer of 110 Media Group, Inc., a specialty
website directory and distributor of adult oriented content. 110 Media is a
public company. Prior thereto Mr. Barton was a stock broker at Meyers Pollock
Robbins, and at Continental Broker Dealers where he served as a retail broker.
Mr. Barton also served as Business Development Manager with PcQuote, Inc. and
was in charge of developing business contacts and negotiating joint ventures.
Prior to that Mr. Barton served as Executive Vice President of Financialweb.com,
where his responsibilities included managing the production of online content.
Mr. Barton served as the CEO and President of Thinkersgroup, Inc. a mobile
wireless software developer, where he developed the Company's business plan,
assembled a management team and oversaw day to day operations. Mr. Barton
attended the State University of New York at Farmingdale, and received a
Bachelor of Arts Degree in criminal justice from New York City Police Academy in
1991.
7
We have no committees of the board, however, we expect to constitute and audit
and compensation committee consisting solely of independent directors after the
Appointees assume their directorships.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers, directors,
and persons who beneficially own more than 10% of our Common Stock to file
reports of ownership and changes in ownership with the Commission. These
reporting persons also are required to furnish us with copies of all Section
16(a) forms they file. Based solely on our review of these reports or written
representations from certain reporting persons, the Company believes that during
the fiscal year ended June 30, 2003, and during the current fiscal year, all
filing requirements applicable to the Company's officers, directors,
greater-than-ten-percent beneficial owners and other persons subject to Section
16(a) of the Exchange Act were met.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 13, 2003 the Company, formerly known as Health & Leisure entered into an
Acquisition Agreement and Plan of Merger (the "Merger Agreement"), with
MarketShare Recovery, Inc., a New York corporation. In connection with said
merger, a Promissory Note was delivered to H & L Concepts, Inc. ("H & L") by
MarketShare Recovery, the New York corporation. H & L was previously a
subsidiary of the registrant but at the time of the making of the Note, to the
best of our knowledge, was solely owned by Mr. Robert Feldman, the Company's
former president, CEO, chairman. The Promissory Note constituted partial payment
for a controlling interest in the Company, previously owned by Mr. Feldman, Mr.
Ray Barton and Mr. Tim Schmidt, the Company's current executive officers and
directors have since purchased the Promissory Note from H & L for the full value
of the Note, in accordance with the terms of the Note. The Company and Messrs.
Barton and Schmidt have since ratified the non-material parts of the Note to
reflect their ownership and addresses. A release agreement was signed between
the Company and the holders in March 2005, which was retroactively effective to
December 31, 2004. According to the agreement, the holders released the Company
from further obligation under this loan, including principle balance of $5,985,
accrued interest of $17,439, and legal fees of $12,300. As a result, at December
31, 2004, the amount due to holders was $0.
8
On November 25, 2003 Dominix, Inc. a Delaware corporation traded on NASDAQ
electronic bulletin board (DMNX), Jade Entertainment Group, a company controlled
by Messrs. Barton and Schmidt the executive officers, directors and controlling
shareholders of our Company and our Company entered into a series of agreements.
Upon execution of the agreements Jade and DMNX are to merge and Our Company was
to enter into a Stock Purchase Agreement (the "Stock Purchase Agreement") under
which Dominix, subject to certain conditions, would acquire all of the
outstanding capital stock of our wholly owned New York subsidiary also named
MarketShare Recovery, Inc. ("MarketShare Sub"). The parties have determined that
it is in their mutual best interest to terminate the Stock Purchase Agreement
and the MarketShare Sub is not to be sold. In consideration of the dissolution
and release of any claims against the Company, we have entered into an agreement
with DMNX to license certain portions of our opt-in database for a fixed term.
Sub-lease Agreement. Beginning January 1, 2004, the Company entered into a sub
lease agreement with 110 Media Group, Inc. and Subsidiaries (formerly known as
Dominix) ("110 Media Group") to share the expense of office facilities occupied
by them jointly under a lease held by the Company. In August 2004, 110 Media
Group assumed the lease for corporate headquarters.
On July 15, 2003 we acquired MarketShare Recovery, Inc. in a merger in
accordance with the acquisition agreement and plan of merger dated June 13,
2003. In connection with this transaction, we issued an aggregate of 237,847
shares of our common stock to Raymond Barton, our Chief Executive Officer
118,924, and Timothy Schmidt, our Chief Financial Officer 118,923. The issuance
of these shares is claimed to be exempt from registration under Section 4(2) of
the Securities Act of 1933, as amended (the "Act") for transactions not
involving a public offering.
In 2004, we entered into a database license agreement with 110 Media Group to
use and to sublicense the use of its database for a term of ten years for a
total license fee of $45,567. For financial reporting, revenue is recognized
using the straight-line method, based upon the economic useful life of three
years. At December 31, 2004, our remaining deferred revenue of $30,378 was
recognized as revenue due to the Company completing its obligations under the
agreement and we are no longer required to perform any further services nor
incur any costs related to this agreement.
BY ORDER OF THE BOARD OF DIRECTORS
May 31, 2005 Mark Basile, President
Jericho, New York
9