SC 14F1: Statement regarding change in majority of directors pursuant to Rule 14f-1
Published on June 13, 2006
SRKP 7,
INC.
1900
Avenue of the Stars
Los
Angeles, California 90067
INFORMATION
STATEMENT PURSUANT TO SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
NOTICE
OF
CHANGE IN THE COMPOSITION
OF
THE
BOARD OF DIRECTORS
June 9,
2006
This
Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14f-1
promulgated thereunder. Section 14(f) of the Exchange Act requires the
mailing of this Information Statement to the stockholders of SRKP 7, Inc.,
a Delaware corporation (the “Company”), not less than ten (10) days before
a contemplated change in a majority of its directors otherwise than at a meeting
of the Company’s stockholders. As such, this Information Statement is being
furnished on or about June 9, 2006 to all of the holders of record as of
the close of business on June 7, 2006 (the “Record Date”) of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”).
NO
VOTE OR OTHER ACTION BY THE COMPANY’S STOCKHOLDERS IS REQUIRED IN RESPONSE TO
THIS INFORMATION STATEMENT. PROXIES ARE NOT BEING
SOLICITED.
VOTING
SECURITIES AND PRINCIPAL HOLDERS THEREOF
As
of the
Record Date, there were 4,005,556 shares of Common Stock issued, outstanding
and
entitled to vote. This is the number of shares of Common Stock after giving
effect to a .111 to 1 stock dividend. There is no other class of capital stock
currently issued and outstanding and, accordingly, entitled to vote. Each share
of Common Stock is entitled to cast one vote. As indicated above, NO
VOTE OR OTHER ACTION OF STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS
INFORMATION STATEMENT.
INFORMATION
REGARDING THE CHANGE IN COMPOSITION
OF
THE BOARD OF DIRECTORS
Pursuant
to Share Exchange Agreement (the “Exchange Agreement”) by and among the Company,
Dr. John Kovach (“Seller”), and Lixte Biotechnology, Inc. (“Lixte”), the
Company
shall acquire from Seller all of the issued and outstanding shares of Lixte
(the
“Lixte Shares”) in exchange (the “Exchange”) for the issuance by the Company of
an aggregate of 19,021,786 shares (the “Company Shares”) of Company Common Stock
to the Seller.
Richard
Rappaport and Anthony Pintsopoulos are currently the directors of the Company.
In accordance with the terms of the Exchange Agreement, the Company has agreed
to appoint Dr. John S. Kovach and Dr. Philip F. Palmedo to
the Company’s Board of Directors, and Messrs. Rappaport and Pintsopoulos have
agreed to resign as directors. Accordingly, after the Exchange, the Board of
Directors of the Company shall be comprised of Dr. John S. Kovach and
Dr. Philip F. Palmedo.
Richard
Rappaport is currently the Company’s President and Anthony Pintsopoulos is
currently the Company’s Secretary and Chief Financial Officer. In accordance
with the terms of the Exchange Agreement, Mr. Rappaport has agreed to resign
as
the President and Mr. Pintsopoulos has agreed to resign as Secretary and Chief
Financial Officer effective immediately after the Exchange. The Board of
Directors will then appoint Dr. John S. Kovach as President of the
Company.
The
following tables set forth information regarding the Company’s current executive
officers and directors and the Company’s proposed executive officers and
directors after the Exchange is completed. If any proposed director listed
in
the table below should become unavailable for any reason, which the Company
does
not anticipate, the directors will vote for any substitute nominee or nominees.
Each member of the board of directors serves a term of one year or from the
date
of election until the end of the designated term and until the successor is
elected and qualified.
Current
Executive Officers and Directors
|
Name
|
Age
|
Position
|
|
Richard
Rappaport
|
46
|
Director
and President
|
|
Anthony
Pintsopoulos
|
49
|
Director,
Secretary and Chief Financial
Officer
|
Richard
A. Rappaport,
President and Director, is the founder of WestPark Capital, Inc. and has been
its Chief Executive Officer since September 1999. WestPark Capital, Inc. is
a
full service investment banking and securities brokerage firm, which serves
the
needs of both private and public companies worldwide, as well as individual
and
institutional investors. From April 1995 through September 1999, Mr. Rappaport
was Director of Corporate Finance for Global Securities, where he was
responsible for all of the firms North American Corporate finance activities.
Global Securities was a registered broker-dealer that has since terminated
operations. Mr. Rappaport received a B.S. in 1981 from the University of
California at Berkeley and a M.B.A. in 1986 from the University of California
at
Los Angeles.
Anthony
C. Pintsopoulos,
Chief
Financial Officer, Secretary and a Director, is the President and Chief
Financial Officer at WestPark Capital, Inc. Prior to joining WestPark Capital,
Mr. Pintsopoulos was CFO and acting COO at Joseph, Charles & Associates
(JCA) a full service investment banking and securities brokerage firm. Prior
to
JCA, from 1983 to 1995, Mr. Pintsopoulos served as CFO, Treasurer and Board
Member of Safety 1st,
Inc., a
manufacturer of juvenile products. He administered the company’s IPO and
Secondary Offerings. Preceding Safety 1st,
Mr.
Pintsopoulos worked at Coopers & Lybrand, Boston, Massachusetts. Also he
owned his own CPA firm in Massachusetts before merging it into Vitale, Caturano
& Co., PC (the largest CPA firm in New England, other than the Big 4). In
his CPA business, he has worked with both public and private entities in all
phases of business development. He holds a Bachelor of Business Administration
in Accounting from the University of Massachusetts, Amherst and holds NASD
licenses 7, 24, and 63. He is a Certified Public Accountant, a member of the
Massachusetts Society of Certified Public Accountants (MSCPA) and the American
Institute of Certified Public Accountants (AICPA).
-2-
Post-Exchange
Executive Officers and Directors
|
Name
|
Age
|
Position
|
|
Dr. John S.
Kovach
|
69
|
President,
Director
|
|
Dr. Philip F.
Palmedo
|
72
|
Director
|
The
Company intends to appoint at least one additional independent director as
soon
as possible after the Exchange.
Dr. John S.
Kovach.
Dr. Kovach
founded Lixte in August 2005 and is its President and a member of Lixte’s Board
of Directors. He received a BA (cum laude) from Princeton University and an
MD
(AOA) from the College of Physicians & Surgeons, Columbia University.
Dr. Kovach trained in Internal Medicine and Hematology at Presbyterian
Hospital, Columbia University and spent six years in the laboratory of Chemical
Biology, National Institute of Arthritis and Metabolic diseases studying control
of gene expression in bacterial systems.
Dr. Kovach
was recruited to Stony Brook University in 2000 to found the Long Island Cancer
Center (now named the Stony Brook University Cancer Center). He is presently
Chair, Department of Preventive Medicine, Stony Brook University, Stony Brook,
New York. From 1994 to 2000, Dr. Kovach was Executive Vice President for
Medical and Scientific Affairs, City of Hope National Medical Center in Los
Angeles, California. His responsibilities included oversight of all basic and
clinical research initiatives at the City of Hope. During that time he was
also
Director of the Beckman Research Center at City of Hope and a member of the
Arnold and Mabel Beckman Scientific Advisory Board in Newport Beach,
California.
From
1976
to 1994, Dr. Kovach was a consultant in oncology and director of the Cancer
Pharmacology Division at the Mayo Clinic in Rochester, Minnesota. During this
time, he directed the early clinical trials program for evaluation of new
anti-cancer drugs as principal investigator of contracts from the National
Cancer Institute. From 1986 to 1994, he was also Chair of the Department of
Oncology and Director of the NCI-designated Mayo Comprehensive Cancer Center.
During that time, Dr. Kovach, working with a molecular geneticist, Steve
Sommer MD, PhD, published extensively on patterns of acquired mutations in
human
cancer cells as markers of environmental mutagens and as potential indicators
of
breast cancer patient prognosis. Dr. Kovach has published over 100 articles
on the pharmacology, toxicity, and effectiveness of anti-cancer treatments
and
on the molecular epidemiology of breast cancer. Dr. Kovach will direct the
Company and Lixte, Inc. with the approval of the State University of New York
at
Stony Brook and the New York State Ethics Commission.
Dr. Philip F.
Palmedo
Dr. Palmedo
has had a diversified career as a physicist, entrepreneur, corporate manager
and
writer. Dr. Palmedo received his undergraduate degree from Williams College
and M.S. and Ph.D. degrees from MIT. He carried out experimental nuclear reactor
physics research at MIT, Oak Ridge National Laboratory, the French Atomic Energy
Commission Laboratory at Saclay and Brookhaven National Laboratory (BNL). At
BNL
in 1972 he initiated and was the first head of the Energy Policy Analysis Group.
In 1974 he served with the Energy Policy Office of the White House and in the
following year initiated the BNL Developing Country Energy Program.
-3-
In
1979
Dr. Palmedo founded the International Resources Group, an international
professional services firm in energy, environment and natural resources. He
served as its Chairman and CEO until 1988 and since that time remains as
Chairman of the company. In 1985 the company was recognized by Inc. Magazine
as
one of the 500 fastest growing private companies in the U.S.
In
1988
Dr. Palmedo joined in the formation of Kepler Financial Management, Ltd., a
quantitative financial research and trading company. Dr. Palmedo held the
position of President and Managing Director until the end of 1991 when
Renaissance Technologies Corporation acquired the company. In 2005 he started
a
new hedge fund, Kepler Asset Management, and is a Managing Director of the
firm.
Dr. Palmedo
was the designer and, in 1992, became the first president of the Long Island
Research Institute. LIRI was formed by Brookhaven National Laboratory, Cold
Spring Harbor Laboratory, and Stony Brook University to facilitate the
commercialization of technologies developed in their research and development
programs. LIRI guided fledgling companies and started several new high tech
entities. In order to provide “zero-stage” financing, LIRI created the Long
Island Venture Fund, which evolved into the $250 million Topspin Fund.
Dr. Palmedo
served on the boards of Asset Management Advisors and the Teton Trust Company
and is currently a member of the Board of Directors of EHR Investments and
the
Gyrodyne Corporation of America. Dr. Palmedo also served on the Board of
Trustees of Williams College and of the Stony Brook (University) Foundation
and
chaired the Foundation’s Investment Committee. He is the founding Chairman of
the non-profit Cultural Preservation Fund.
Dr. Palmedo
has served as a consultant and advisor to numerous corporations and national
and
international agencies in science, technology and environmental policy including
the MacArthur Foundation, the U.S. National Academy of Sciences,
International Atomic Energy Agency, UNIDO, Organization of American States,
the
Governments of Sweden, Denmark, Dominican Republic, Indonesia, Somalia, Sudan,
Egypt and Peru. He is the author of many publications in nuclear reactor
physics, energy and environment, and technology and economic development.
Dr. Palmedo has two sons and lives in St. James, Long Island, N.Y. with his
wife, Elisabeth.
Compliance
With Section 16(a) of The Exchange Act
Section 16(a)
of the Exchange Act requires the Company’s officers, directors and persons who
beneficially own more than 10% of the Company’s common stock to file reports of
ownership and changes in ownership with the SEC. These reporting persons are
also required to furnish the Company with copies of all Section 16(a) forms
they file. To the Company’s knowledge, as of the fiscal quarter ended
March 31, 2006, no person who is an officer, director or beneficial owner
of more than 10% of the Company’s common stock or any other person subject to
Section 16 of the Exchange Act failed to file on a timely basis, reports
required by Section 16(a) of the Exchange Act.
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SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth the number of shares of common stock beneficially
owned by (i) those persons or groups known to beneficially own more than 5%
of the Company’s common stock prior to the closing of the Exchange,
(ii) those persons or groups who will beneficially own more than 5% of the
Company’s common stock on and after the closing of the Exchange, (iii) each
current director and each person who will become a director upon the closing
of
the Exchange, (iv) all current directors and executive officers as a group
and (v) all directors and executive officers after the closing of the
Exchange as a group. The information is determined in accordance with
Rule 13d-3 promulgated under the Exchange Act. Except as indicated below,
the stockholders listed possess sole voting and investment power with respect
to
their shares.
|
Before
Closing
of
Exchange
(1)
|
After
Closing
of
Exchange(2)
|
|||||||
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class
|
||||
|
Current
Officers, Directors and 5% Holders
|
||||||||
|
Debbie
Schwartzberg
800
5th
Avenue
New
York, New York
|
1,155,000
|
28.8%
|
1,154,845
|
4.2%
|
||||
|
Richard
Rappaport
1900
Avenue of the Stars, Suite 310
Los
Angeles, California 90067
|
1,155,000
|
28.8%
|
1,154,845
|
|
4.2%
|
|||
|
TMC
Ulster Holdings, Inc.
1900
Avenue of the Stars, Suite 310
Los
Angeles, California 90067
|
1,005,556
|
25.1%
|
1,005,556
|
3.6%
|
||||
|
Tom
Poletti
1900
Avenue of the Stars, Suite 310
Los
Angeles, California 90067
|
270,000
|
6.7%
|
269,973
|
*
|
||||
|
Anthony
C. Pintsopoulos
1900
Avenue of the Stars, Suite 310
Los
Angeles, California 90067
|
270,000
|
6.7%
|
269,973
|
*
|
||||
|
Glenn
Krinsky
1900
Avenue of the Stars, Suite 310
Los
Angeles, California 90067
|
150,000
|
3.7%
|
149,985
|
*
|
||||
-5-
|
Post
Exchange Officers, Directors
and 5% Holders
|
||||||||
|
Dr. John S.
Kovach
248
Route 25A, #2
East
Setauket, NY 11733
|
__________
|
____
|
19,021,786
|
69.1%
|
||||
|
Dr. Philip F.
Palmedo
248
Route 25A, #2
East
Setauket, NY 11733
|
_________
|
____
|
256,666(3)
|
*
|
||||
|
|
||||||||
|
All
Officers and directors as a group (two persons prior to following
the
consummation of the Exchange)
|
1,425,000
|
35.5%
|
19,278,452
|
70.0%
|
_____________________
(1) Based
on
4,005,556 shares outstanding on June 8, 2006.
(2) Based
on
27,531,846 shares
of
the Company’s common stock projected to be outstanding following the closing of
the Exchange and the completion of a Private Placement of the Company’s shares
of Common Stock of $1,500,000, the maximum amount of such placement.
(3) Consists
of shares issuable pursuant to the exercise of immediately exercisable options
to be granted to Dr. Palmedo as of the closing of the Exchange.
EXECUTIVE
COMPENSATION
For
the
current fiscal year, Dr. Kovach does not anticipate receiving any
compensation from the Company in view of the Company’s early stage status. He
will be reimbursed for any out-of-pocket expenses. Any future compensation
arrangements will be subject to the approval of the board of
directors.
Option
Grants in 2005
None.
Aggregated
Option Exercises in 2005 and Option Values at December 31,
2005
None.
Option
Plans
Members
of the Board of Directors
Each
outside member of the Board will receive options to purchase 200,000 shares
of
common stock at the initial private placement price of $0.333/ share with one
third of the options (66,666 shares) vesting immediately upon joining the board
and one third vesting annually for two years on the anniversary of that date.
-6-
Board
member Dr. Phillip Palmedo also will receive additional options to purchase
190,000 shares of common stock at $0.333 per share for services rendered in
developing the business plan for Lixte, all of which will vest effective the
date of the Exchange.
Indemnification
Under
Section 145 of the General Corporation Law of the State of Delaware, we can
indemnify our directors and officers against liabilities they may incur in
such
capacities, including liabilities under the Securities Act of 1933, as amended
(the “Securities Act”). The Company’s Certificate of Incorporation and Bylaws
provide for indemnification. The provisions in our certificate of incorporation,
bylaws and the Delaware statute do not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director’s duty of loyalty to us or our stockholders, for acts or omissions not
in good faith or involving intentional misconduct or knowing violations of
the
law, for actions leading to improper personal benefit to the director, and
for
payment of dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provisions also do not affect a director’s
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
We
have
been advised that in the opinion of the Securities and Exchange Commission,
insofar as indemnification for liabilities arising under the Securities Act
may
be permitted to our directors, officers and controlling persons pursuant to
the
foregoing provisions, or otherwise, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In
the
event a claim for indemnification against such liabilities (other than our
payment of expenses incurred or paid by our director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel
the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by us
is
against public policy as expressed in the Securities Act and will be governed
by
the final adjudication of such issue.
We
may
enter into indemnification agreements with each of our present or future
directors and officers that are, in some cases, broader than the specific
indemnification provisions permitted by Delaware law, and that may provide
additional procedural protection. The indemnification agreements may require
us,
among other things, to:
|
·
|
indemnify
officers and directors against certain liabilities that may arise
because
of their status as officers or
directors;
|
|
·
|
advance
expenses, as incurred, to officers and directors in connection with
a
legal proceeding, subject to limited exceptions;
or
|
|
·
|
obtain
directors’ and officers’ insurance.
|
-7-
At
present, there is no pending litigation or proceeding involving our
director/officer or involving any of our employees in which indemnification
is
sought, nor are we aware of any threatened litigation that may result in claims
for indemnification.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Except
as
described below, neither the Company’s directors and executive officers, nor any
proposed nominee for election as one of the Company’s directors or executive
officers, nor any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights of the Company’s capital stock, has
during the past three years had any material interest in any transaction to
which the Company is a party. Messrs. Rappaport and Pintsopoulos are affiliated
with WestPark Capital, Inc. (“WestPark”). The Company has engaged WestPark as
the placement agent in connection with a private placement of up to $1.5 million
to occur concurrently with the Exchange (the “Placement”). As consideration for
WestPark’s services, the Company will pay to WestPark the
following:
|
·
|
A
10% commission and a 4% non-accountable fee on the total gross proceeds
raised in the Placement; and
|
|
·
|
Five-year
warrants to purchase Common Stock of the Company equal to (a) 10%
of the
number of Shares sold in the Placement exercisable at $0.333 per
share
(the Placement Agent Warrants), and (b) 2% of the number of Shares
sold in the Placement exercisable at $0.333 per share (the Incentive
Warrants).
|
The
shares underlying the Warrants will have standard demand registration and
piggyback rights and a cashless exercise provision.
Additionally,
the Company will pay to WestPark a cash fee of $45,000 in connection with the
Exchange.
LEGAL
PROCEEDINGS
The
Company is not aware of any legal proceedings in which any director, officer,
or
any owner of record or beneficial owner of more than five percent of any class
of voting securities of the Company, or any affiliate of any such director,
officer, affiliate of the Company, or security holder, is a party adverse to
the
Company or has a material interest adverse to the Company.
-8-
In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto
duly
authorized.
|
SKRP
7, INC.
/s/
Richard
Rappaport
Name:
Richard Rappaport
Title:
President
Dated:
June 8,
2006
|
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