SCHEDULE
13E-3
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Rule
13e-3 Transaction Statement
under
Section 13(e) of the Securities Exchange Act of 1934
COMTEX
NEWS NETWORK, INC.
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(Name
of Issuer)
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COMTEX
NEWS NETWORK, INC.
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(Names
of Persons Filing Statement)
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(Title
of Class of Securities)
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(CUSIP
Number of Class of Securities)
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Chip
Brian
President
and Chief Executive Officer
Comtex
News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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(Name,
Address and Telephone Numbers of Person Authorized to Receive Notices and
Communications on Behalf of the Persons Filing
Statement)
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Copy
to:
Marc E.
Levy, Esq.
Luse
Gorman Pomerenk & Schick, P.C.
5335
Wisconsin Avenue, NW, Suite 780
Washington,
DC 20015
(202)
274-2000
(202)
362-2902 (facsimile)
This
statement is filed in connection with (check the appropriate box):
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a.
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x
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The
filing of solicitation materials or an information statement subject to
Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities
Exchange Act of 1934 (the
“Act”).
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b.
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o
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The
filing of a registration statement under the Securities Act of
1933.
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Check the
following box if the soliciting materials or information statement referred to
in checking box (a) are preliminary copies:
x
Check the
following box if the filing fee is a final amendment reporting the results of
the transaction:
¨
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Calculation
of Filing Fee
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Transaction
valuation*
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Amount
of filing fee
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$126,150
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$25.23
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*
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Calculated
solely for the purpose of determining the filing fee, which was based upon
the price of $0.29 per share for the fractional shares that would
otherwise have been issued pursuant to the reverse stock split, multiplied
by our estimate of the maximum number of fractional shares to be purchased
(435,000).
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¨
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Check
the box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of filing.
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Amount
Previously Paid: Not applicable
Form or
Registration No.: Not applicable
Filing
Party: Not applicable
Date
Filed: Not applicable
ITEM
1. SUMMARY
TERM SHEET
The
information set forth under “Proposal No. 2—Approval of Amendments to the
Company’s Certificate of Incorporation to (A) Effect the Reverse Stock Split,
(B) Reduce the Number of Authorized Shares, and (C) Permit Stockholder Actions
by Written Consent—Effects of the Reverse Stock Split” in the Proxy Statement,
dated February [●], 2010 (the “Proxy Statement”), with respect to the Special
Meeting of Stockholders of Comtex News Network, Inc. (the “Company”), which is
attached hereto as Exhibit 16(a)(2)(i), is incorporated herein by
reference.
ITEM
2.
SUBJECT COMPANY INFORMATION
(a) The
name of the issuer is Comtex News Network, Inc. The Company’s principal
executive office is located at 625 North Washington Street, Suite 301,
Alexandria, Virginia, and its business telephone number is (703)
820-2000.
(b) As
of February 4, 2010, the Company had 15,794,200 shares of common stock, $0.01
par value per share (“Common Stock”), issued and outstanding.
(c) The
information required by this Item is set forth under “Proposal No. 2—Approval of
Amendments to the Company’s Certificate of Incorporation to (A) Effect the
Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and (C) Permit
Stockholder Actions by Written Consent—Price Range of Common Stock; Dividends;
Trading Volume” in the Proxy Statement and is incorporated herein by
reference.
(d) The
information required by this Item is set forth under “Proposal No. 2—Approval of
Amendments to the Company’s Certificate of Incorporation to (A) Effect the
Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and (C) Permit
Stockholder Actions by Written Consent—Price Range of Common Stock; Dividends;
Trading Volume” in the Proxy Statement and is incorporated herein by
reference.
(e) The
Company has not made an underwritten public offering of the Common Stock for
cash during the past three years that was registered under the Securities Act of
1933 or was exempt from registration under Regulation A (Securities Act Rules
251 through 263).
(f) The
Company has not purchased any of its shares of Common Stock during the past two
years.
ITEM
3. IDENTITY
AND BACKGROUND OF FILING PERSON.
(a) The
filing person to which this Schedule 13E-3 relates is the issuer, Comtex News
Network, Inc. The name, business address and business telephone number of the
Company is set forth in Item 2(a) above. The names, titles, and business
addresses of each executive officer, director and controlling shareholder of the
Company are follows:
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Chip
Brian
President
and Chief Executive Officer
Comtex
News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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Kathy
Ballard
Vice
President, Operations
Comtex
News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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Paul
Sledz
Controller
and Treasurer
Comtex
News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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C.W.
Gilluly, Ed.D.
Chairman
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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William
J. Howard
Director
c/o
Comtex News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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Robert
J. Lynch, Jr.
Director
c/o
Comtex News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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Erik
Hendricks
Director
c/o
Comtex News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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Pieter
Vanbennekom
Director
c/o
Comtex News Network, Inc.
625
North Washington Street, Suite 301
Alexandria,
Virginia 22314
(703)
820-2000
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(b)
Not applicable.
(c)(1)-(2)
The information required by this Item is set forth under “Proposal No.
1—Election of Directors” and “—Executive Officers” in the Proxy Statement and is
incorporated herein by reference.
(c)(3)
None of the individuals listed in response to Item (c)(1) and (2) above has been
convicted in a criminal proceeding during the past five years (excluding traffic
violations or similar misdemeanors).
(c)(4)
No individual listed in response to Item (c)(1) and (2) above has been a party
to any judicial or administrative proceeding during the past five years (except
for matters that were dismissed without sanction or settlement) that resulted in
a judgment, decree or final order enjoining the individual from future
violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities
laws.
(c)(5)
Each of the individuals listed in response to Item (c)(1) and (2) is a citizen
of the United States.
(d)
Not required.
ITEM
4. TERMS
OF THE TRANSACTION.
(a)
The information required by this item is set forth under “Proposal No.
2—Approval of Amendments to the Company’s Certificate of Incorporation to (A)
Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and
(C) Permit Stockholder Actions by Written Consent—Effects of the Reverse Stock
Split” in the Proxy Statement and is incorporated herein by
reference.
(b)
Not required.
(c)
The information required by this item is set forth under “Proposal No.
2—Approval of Amendments to the Company’s Certificate of Incorporation to (A)
Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and
(C) Permit Stockholder Actions by Written Consent—Effects of the Reverse Stock
Split—Effects on Stockholders Holding Fewer Than 1,000 Shares of Common Stock”
and “—Effects on Stockholders Holding 1,000 or More Shares of Common Stock” in
the Proxy Statement and is incorporated herein by reference.
(d)
The information required by this item is set forth under “Proposal No.
2—Approval of Amendments to the Company’s Certificate of Incorporation to (A)
Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and
(C) Permit Stockholder Actions by Written Consent—No Dissenters’ Rights” in the
Proxy Statement and is incorporated herein by reference.
(e)
Security holders will be entitled access to the Company’s corporate records in
the manner permitted by Delaware law. The Company is making no
special provision to grant unaffiliated security holders access to its corporate
files or to allow unaffiliated security holders to obtain counsel or appraisal
services at the expense of the Company.
(f
) Not
applicable.
ITEM
5. PAST
CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a)(1)
The information required by this item is set forth under “Proposal No.
1—Election of Directors—Executive Compensation” and “—Certain Relationships and
Related Transactions, and Director Independence” in the Proxy Statement and is
incorporated herein by reference.
(a)(2)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Not required.
(e)
Not applicable.
ITEM
6. PURPOSES
OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a)
Not required.
(b)
The fractional shares of Common Stock purchased by the Company will
be cancelled and will become authorized but unissued stock of the
Company. The information required by this item is set forth under
“Proposal No. 2—Approval of Amendments to the Company’s Certificate of
Incorporation to (A) Effect the Reverse Stock Split, (B) Reduce the Number of
Authorized Shares, and (C) Permit Stockholder Actions by Written
Consent—Exchange of Stock Certificates” in the Proxy Statement and is
incorporated herein by reference.
(c)(1)-(5)
Not applicable.
(c)(6)-(8)
As a result of the reverse stock split, the Common Stock will no longer be
quoted on Over-the-Counter Electronic Bulletin Board of the National Association
of Securities Dealer, Inc., the Common Stock will become eligible for
termination of registration under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the “Exchange Act”), and the
Company’s obligation to file periodic reports under the Exchange Act will be
suspended. The information required by this item is set forth under
“Proposal No. 2—Approval of Amendments to the Company’s Certificate of
Incorporation to (A) Effect the Reverse Stock Split, (B) Reduce the Number of
Authorized Shares, and (C) Permit Stockholder Actions by Written Consent—Effects
of the Reverse Stock Split” in the Proxy Statement and is incorporated herein by
reference.
(d)
Not required.
ITEM
7. PURPOSES,
ALTERNATIVES, REASONS AND EFFECTS.
(a)
The information required by this item is set forth under “Proposal No.
2—Approval of Amendments to the Company’s Certificate of Incorporation to (A)
Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and
(C) Permit Stockholder Actions by Written Consent—Purpose of and Reasons for the
Reverse Stock Split” and “—Background Events” in the Proxy Statement and is
incorporated herein by reference.
(b)
The information required by this item is set forth under “Proposal
No. 2—Approval of Amendments to the Company’s Certificate of Incorporation to
(A) Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares,
and (C) Permit Stockholder Actions by Written Consent—Alternatives to the
Reverse Stock Split” in the Proxy Statement and is incorporated herein by
reference.
(c)
The information required by this item is set forth under “Proposal
No. 2—Approval of Amendments to the Company’s Certificate of Incorporation to
(A) Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares,
and (C) Permit Stockholder Actions by Written Consent—Purpose of and Reasons for
the Reverse Stock Split” and “—Background Events” in the Proxy Statement and is
incorporated herein by reference.
(d)
The information required by this item is set forth under “Proposal
No. 2—Approval of Amendments to the Company’s Certificate of Incorporation to
(A) Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares,
and (C) Permit Stockholder Actions by Written Consent—Effects of the Reverse
Stock Split,” “—Detriments of the Reverse Stock Split” and “Federal Income Tax
Consequences” in the Proxy Statement and is incorporated herein by
reference.
ITEM
8. FAIRNESS
OF THE TRANSACTION.
(a)
The Company believes that the reverse stock split is fair to
unaffiliated stockholders. No director dissented as to, or abstained
from voting on, the reverse stock split.
(b)
The information required by this item is set forth under “Proposal
No. 2—Approval of Amendments to the Company’s Certificate of Incorporation to
(A) Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares,
and (C) Permit Stockholder Actions by Written Consent—Purpose of and Reasons for
the Reverse Stock Split—Determination of Price to be Paid in Cash in Lieu of
Fractional Shares,” “—Alternatives to the Reverse Stock Split” and
“—Recommendation of the Board; Fairness of the Transaction” in the Proxy
Statement and is incorporated herein by reference.
(c)
The reverse stock split requires the approval of the holders of a majority
of the outstanding shares of the Common Stock. The separate approval
of unaffiliated stockholders is not required.
(d)
No representative has been retained to act on behalf of unaffiliated
stockholders for purposes of negotiating the terms of the reverse stock split or
preparing a report concerning the fairness of the reverse stock
split.
(e)
The reverse stock split was approved by all of the directors, including
all directors who are not employees of the Company.
(f)
The Company has not received any firm offer by any unaffiliated person during
the past two years for (i) the merger or consolidation of the Company with or
into another company, or vice versa, (ii) the sale or a transfer of all, or any
substantial part of, the assets of the Company, or (iii) the purchase of the
Company’s securities that would enable the holder to exercise control of the
Company.
ITEM
9. REPORTS,
OPINIONS, APPRAISALS AND NEGOTIATIONS.
(a)
The Company has not received any report, opinion or appraisal from
an outside party that is materially related to reverse stock
split. The information set forth under “Proposal No. 2—Approval of
Amendments to the Company’s Certificate of Incorporation to (A) Effect the
Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and (C) Permit
Stockholder Actions by Written Consent—Purpose of and Reasons for the Reverse
Stock Split—Determination of Price to be Paid in Cash in Lieu of Fractional
Shares,” “—Alternatives to the Reverse Stock Split” and “Recommendation of the
Board; Fairness of the Transaction” in the Proxy Statement is incorporated
herein by reference.
(b)
Not applicable.
(c)
Not applicable.
ITEM
10. SOURCE
AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a)
The Company expects to purchase fractional shares totaling approximately
435,000 shares of its Common Stock at a price of $0.29 per share, for a total
expenditure of approximately $130,500. The Company intends to use
cash on hand to fund such purchases.
(b)
Not applicable.
(c)
The Company expects to incur, and will be solely responsible for the
payment of, the following fees and expenses in connection with the reverse stock
split:
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Expenses
of Purchase of Fractional Shares
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$130,500
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Legal
Fees
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25,000
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Printing,
Filing and Mailing Expenses
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4,300
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Transfer
Agent Fees and Expenses
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19,000
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Information
Agent Fees and Expenses
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6,000
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Miscellaneous
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5,000
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Total
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$189,800
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(d)
Not applicable.
ITEM
11. INTEREST
IN SECURITIES OF THE SUBJECT COMPANY.
(a)
The information required by this item is set forth under “Proposal
No. 1—Election of Directors—Beneficial Ownership of Common Stock” and “Proposal
No. 2—Approval of Amendments to the Company’s Certificate of Incorporation to
(A) Effect the Reverse Stock Split, (B) Reduce the Number of Authorized Shares,
and (C) Permit Stockholder Actions by Written Consent—Interests of Executive
Officers and Directors in the Reverse Stock Split” in the Proxy Statement and is
incorporated herein by reference.
(b)
Neither the Company nor any executive officer, director, affiliate
or subsidiary of the Company, or any of the Company’s pension, profit sharing,
or similar plans, has engaged in any transaction in the Common Stock during the
past 60 days.
ITEM
12. THE
SOLICITATION OR RECOMMENDATION.
(a)-(c)
Not required.
(d)
The Company has not granted any stockholder (including any executive
officer, director or affiliate) any voting or similar right in connection with
the reverse stock split. To the extent known by the Company after
reasonable inquiry, each executive officer and director of the Company intends
to vote his or her shares of Common Stock in favor of the reverse stock
split. The executive officers and directors of the Company will
receive cash in lieu of any fractional shares created by the reverse stock
split. The information set forth under “Proposal No. 2—Approval of
Amendments to the Company’s Certificate of Incorporation to (A) Effect the
Reverse Stock Split, (B) Reduce the Number of Authorized Shares, and (C) Permit
Stockholder Actions by Written Consent—Effects of the Reverse Stock
Split—Effects on Stockholders Holding 1,000 or More Share of Common Stock” and
“—Interests of Executive Officers and Directors in the Reverse Stock Split” in
the Proxy Statement is incorporated herein by reference.
(e)
The Company’s Board of Directors has unanimously recommended that
the stockholders of the Company approve the reverse stock split. The
information set forth under “Proposal No. 2—Approval of Amendments to the
Company’s Certificate of Incorporation to (A) Effect the Reverse Stock Split,
(B) Reduce the Number of Authorized Shares, and (C) Permit Stockholder Actions
by Written Consent—Purpose of and Reasons for the Reverse Stock Split,”
“—Effects of the Stock Split,” “—Background Events,” “—Detriments of the Reverse
Stock Split” “—Alternatives to the Reverse Stock Split” and “—Recommendation of
the Board; Fairness of the Transaction” in the Proxy Statement is incorporated
herein by reference. To the extent known by the Company after
reasonable inquiry, no executive officer (other than executive officers who also
serve on the Board of Directors) or affiliate of the Company has made a
recommendation either in support of or opposed to the reverse stock
split.
ITEM
13. FINANCIAL
STATEMENTS.
(a)
The financial statements included in (i) the Company’s Annual Report
on Form 10-K for the fiscal year ended June 30, 2009, and (ii) the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009,
as filed with the SEC, are incorporated herein by reference.
(b)
No pro forma financial statements are included in this filing or any of
the disclosure documents to be mailed to shareholders as the reverse stock split
is not anticipated to have a material impact on the Company’s financial
condition or results of operations.
(c)
Not required.
ITEM
14. PERSONS/ASSETS,
RETAINED, EMPLOYED, COMPENSATED OR USED.
(a)
No outside person will be directly or indirectly retained,
employed, retained or compensated to make solicitations or recommendations in
connection with the reverse stock split. S. Amber Gordon, the Corporate
Secretary of the Company, will act as Information Agent for the reverse stock
split. She will receive no separate compensation for serving in such
capacity. The Company’s transfer agent, American Stock Transfer & Trust
Company LLC, will perform certain services in connection with the reverse stock
split, and will be paid customary fees and expenses for its
services. See Item 10(c) above. Neither the Information
Agent nor the Transfer Agent has been authorized to make any solicitation or
recommendation in or with respect to the reverse stock split.
(b)
Employees of the Company may perform administrative tasks in
connection with the reverse stock split, and they will be not be separately
compensated for such services. The Company’s directors, officers and
employees may also solicit tenders in person, by telephone or through other
forms of communication, but these persons will not receive any additional
compensation for the solicitations.
ITEM
15. ADDITIONAL
INFORMATION.
(a)
Not required.
(b)
All information set forth in the Proxy Statement is incorporated herein
by reference.
ITEM
16. EXHIBITS.
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16(a)(1)(i)
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Proxy
Statement
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16(a)(1)(ii)
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Press
Release, dated February 5, 2010
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SIGNATURE
After due
inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and
correct.
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COMTEX
NEWS NETWORK, INC.
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Dated:
February 5, 2010
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By:
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/s/ Chip
Brian
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Chip
Brian
President
and Chief Executive Officer
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10
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