UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Consent Solicitation Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. _____)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
| þ | Preliminary Proxy Statement |
□ Confidential, for Use of the Commission Only (as permitted by Rule Rule 14a-6(e)(2)) |
□ Definitive Additional Materials |
□ Definitive Proxy Statement |
□ Soliciting Materials Pursuant to §240.14a-12 |
SecureAlert, Inc.
(formerly, RemoteMDx, Inc.)
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
þ No fee required |
| | | |
□ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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):
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□ 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. |
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(4) Date Filed:
SecureAlert, Inc.
150 West Civic Center Drive, Suite 400
Sandy, UT 84070
(801) 451-6141
NOTICE OF CONSENT SOLICITATION
May ___, 2010
To the Shareholders of SecureAlert, Inc.:
We are soliciting your consent to approve the terms of a proposed amendment to the Articles of Incorporation of SecureAlert, Inc. (formerly, RemoteMDx, Inc.), a Utah corporation (the “Company,” “we,” “us,” and “our”), in order to increase the number of authorized shares of common stock from two hundred fifty million (250,000,000) shares to six hundred million (600,000,000) shares, par value $0.0001 per share (the “Amendment”). There will be no change to the authorized shares of Preferred Stock of the Company.
The Board of Directors of the Company has approved the Amendment, subject to obtaining the approval of the holders of a majority of the shares entitled to vote on the Amendment and is recommending that all shareholders of the Company, including common shareholders as a class and preferred shareholders as a class, approve the Amendment. Shareholders of record at the close of business on May 10, 2010 (the “Record Date”) are entitled to receive notice of and to vote on this Consent Solicitation.
The Board of Directors considers the increase in authorized shares desirable to provide maximum flexibility with respect to the Company’s ability to augment its capital in the near future, and to provide greater flexibility for declaration of stock dividends and for other proper corporate purposes in the long term. In addition, the Company currently has outstanding warrants and convertible debt and equity instruments, including our Series D Convertible Preferred Stock. The increase in authorized shares is necessary to permit the Company to adequately reserve a sufficient number of shares of Common Stock to permit the eventual exercise of these warrants and conversion rights. We urge you to read the accompanying Consent Solicitation Statement carefully, as it contains a detailed explanation of the proposed Amendment and the reasons for the proposed Amendment. The Board of Directors believes the proposed amendment is in the best interest of the Company and its shareholders.
We are providing you with these Consent Solicitation materials by sending you this full set of materials, including a paper consent card, and by making copies of these materials available on the Internet. This Consent Solicitation Statement is available at http://www.securealert.com.
The Amendment will only be adopted following the approval of all classes of shareholders holding a majority of the shares entitled to vote on the Amendment as of the close of business on the Record Date. Failure to vote will have the same effect as a vote against the Amendment. We encourage you, therefore, to review the enclosed Consent Solicitation Statement and to vote as soon as possible by completing, signing, dating and returning the enclosed consent card by mail, facsimile or electronically, as further described on the consent card. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares.
| | Sincerely, |
| | |
| | |
| | /s/ David G. Derrick |
| | David G. Derrick, CEO and Chairman |
SecureAlert, Inc.
150 West Civic Center Drive, Suite 400
Sandy, UT 84070
(801) 451-6141
May ___, 2010
CONSENT SOLICITATION STATEMENT
This Consent Solicitation Statement is being furnished in connection with the solicitation of written consents of the shareholders of SecureAlert, Inc. (formerly, RemoteMDx, Inc.), a Utah corporation (the “Company,” “we,” “us,” and “our”) to amend our Articles of Incorporation. The proposed amendment to our Articles of Incorporation (the “Amendment”) would increase the number of shares of our authorized common stock from two hundred fifty million (250,000,000) shares to six hundred million (600,000,000) shares of Common Stock, par value $0.0001 per share.
This Consent Solicitation Statement and the enclosed form of consent are being mailed on or about May ___, 2010 to all holders of record of our Common Stock and Series D Convertible Preferred Stock (“Series D Preferred Stock”) as of the close of business on May 10, 2010. May 10, 2010 is referred to as the “Record Date.” Written consents of shareholders representing a majority of the voting power of our Common Stock and our Series D Preferred Stock, on the Record Date, acting as separate voting groups, and together as a single voting group on an as-converted basis, are required to approve the Amendment. Under Utah law, the Amendment will become effective anytime after 10 days from the date of delivery of this notice and Consent Solicitation, and immediately upon receipt by the Company of valid, unrevoked consents signed by holders of the requisite number of shares within 60 days of the earliest-dated consent delivered to the Company. The Company believes that it will be able to secure the requisite number of consents, and therefore will be authorized to file evidence of the Amendment with the Utah Department of Commerce, Division of Corporations and Commercial Code, within 10 days of the date of this notice and Consent Solicitation.
The Amendment has been approved by the Board of Directors of the Company and the Board recommends that you vote FOR the Amendment.
The Board of Directors is seeking shareholder approval of the Amendment by written consent, rather than by calling a special meeting of shareholders. Written consents are being solicited from all of our shareholders entitled to vote on the Amendment pursuant to Section 16-10a-704 of the Utah Revised Business Corporation Act and Section 2.11 of Article 2 of our Bylaws.
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF CONSENT SOLICITATION MATERIALS
In accordance with the rules of the Securities and Exchange Commission (the “SEC”), the Company is advising its shareholders of the availability on the Internet of the Company’s consent solicitation materials. These rules allow companies to provide access to proxy and consent materials in one of two ways.
Because the Company has elected to utilize the “full set delivery” option, the Company is delivering to all shareholders paper copies of the consent solicitation materials, as well as providing access to those materials on a publicly accessible website. This Consent Solicitation Statement and Consent Solicitation Card are available at http://www.securealert.com.
If you have any questions about giving your consent or otherwise require assistance, please call Chad Olsen, Chief Financial Officer of the Company, at (801) 451-6141.
VOTING AND SUBMISSION OF CONSENTS
Written consents are being solicited from all of our shareholders entitled to vote on the Amendment pursuant to Section 16-10a-704 of the Utah Revised Business Corporation Act and Section 2.11 of Article 2 of our Bylaws. No meeting of the shareholders is contemplated to be held for the purpose of considering the Amendment. Only record holders of the Company’s Common Stock and Series D Preferred Stock at the close of business on May 10, 2010 will be taken into account for the purpose of determining whether the requisite approval of the Amendment has been obtained.
This Consent Solicitation will expire on the earlier to occur of: (1) the Company’s receipt of valid, unrevoked consents signed by holders of the requisite number of shares to authorize the Amendment or (2) 5:00 p.m. Mountain Time, on the date that is 60 days from the earliest-dated consent delivered to the Company (unless extended by us) (the “Expiration Date”). However the Amendment will become effective anytime after 10 days from the date of delivery of this notice and Consent Solicitation, and upon receipt by the Company of valid, unrevoked, consents signed by holders of the requisite number of shares. A shareholder’s written consent received by the Company will be counted as a shareholder vote cast in favor of the Amendment, as indicated on the consent, with respect to all shares of any class shown on the books of the Company as of the Record Date as being owned by such shareholder. ANY SHAREHOLDER WHO REGISTERS HIS OR HER VOTE AS INDICATED WILL BE DEEMED TO HAVE CONSENTED TO THE APPROVAL OF THE AMENDMENT. Shareholder approval will be effective upon receipt by us of affirmative consents representing a majority of the Company’s outstanding shares of Common Stock, voting as a separate class, Series D Preferred Stock, voting as a separate class, and Common Stock and Series D Preferred Stock, voting together on an as-converted basis.
WHO MAY VOTE
Only shareholders of record as of the Record Date of May 10, 2010 holding shares of Common Stock and/or Series D Preferred Stock may vote. In voting as a class, you are entitled to one vote for each share of the Company's Common Stock or Series D Preferred Stock you held on the Record Date. On an as-converted basis, each share of Series D Preferred Stock will count as 6,000 shares of Common Stock.
There were approximately 218,852,666 shares of the Company's Common Stock and 35,825 shares of Series D Preferred Stock issued and outstanding on the Record Date. Consent may be given by any person in whose name shares of Common Stock or Series D Preferred Stock stand on the books of the Company as of the Record Date, or by his or her duly authorized agent.
IF YOU HOLD YOUR STOCK IN "STREET NAME" AND YOU FAIL TO INSTRUCT YOUR BROKER OR NOMINEE AS TO HOW TO VOTE YOUR SHARES, YOUR BROKER OR NOMINEE MAY NOT, PURSUANT TO APPLICABLE STOCK EXCHANGE RULES, VOTE YOUR STOCK WITH RESPECT TO THE AMENDMENT.
VOTE REQUIRED
WE MUST RECEIVE WRITTEN CONSENTS REPRESENTING A MAJORITY OF THE OUTSTANDING SHARES OF OUR: (1) COMMON STOCK, VOTING AS A SEPARATE CLASS; (2) SERIES D PREFERRED STOCK, VOTING AS A SEPARATE CLASS; AND (3) COMMON STOCK AND SERIES D PREFERRED STOCK VOTING TOGETHER ON AN AS-CONVERTED BASIS, FOR APPROVAL OF THE AMENDMENT.
Because the approval of holders of a majority of the outstanding shareholders entitled to vote is required to approve the Amendment, not returning the form of consent will have the same effect as a vote against the Amendment.
REVOCATION OF CONSENT
You may withdraw or change your consent before the earlier to occur of: (1) the Expiration Date or (2) the date on which the Company receives the requisite number of votes in favor of the Amendment to make the Amendment effective. You may withdraw or change your consent only by sending a letter to the Company's corporate secretary stating that you are revoking your consent.
ABSENCE OF APPRAISAL RIGHTS
Shareholders who abstain from consenting with respect to the Amendment, or who withhold consent to the Amendment, do not have the right to an appraisal of their shares of Common Stock or Series D Preferred Stock, or any similar dissenters' rights under applicable law.
EXPENSES OF THIS SOLICITATION
This solicitation is being made by the Board of Directors of the Company, and the Company will bear the costs of the solicitation, including preparation, printing and mailing costs. Consents will be solicited principally through the mail, but our directors, officers and employees may solicit consents personally or by telephone. Arrangements will be made with brokerage firms and other custodians, nominees and fiduciaries to forward these consent solicitation materials to shareholders whose stock in the Company is held of record by such entities, and we will reimburse such brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith. In addition, we may pay for and utilize the services of individuals or companies we do not regularly employ in connection with this consent solicitation, if management determines it advisable.
PROPOSAL TO BE VOTED ON:
AMENDMENT OF THE COMPANY’S ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY
TO 600,000,000 SHARES OF COMMON STOCK, PAR VALUE $.0001 PER SHARE
The first paragraph of Article III of the Company’s Articles of Incorporation, as amended to date, reads as follows:
“Article III, Capital Stock
The Corporation is authorized to issue two classes of shares to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock authorized to be issued is two hundred fifty million (250,000,000) and the total number of shares of Preferred Stock authorized to be issued is twenty million (20,000,000). The Common Stock and the Preferred Stock shall each have a par value of $0.0001 per share.”
The Company’s Board of Directors has approved and recommends to the shareholders the adoption of an amendment to this paragraph of Article III of the Articles of Incorporation that would increase the number of shares of Common Stock that the Company is authorized to issue from 250,000,000 shares to 600,000,000 shares. The authorized number of shares of Preferred Stock would not be changed. If this proposal is adopted, this paragraph of Article III, as amended, would read as follows:
“Article III, Capital Stock
The Corporation is authorized to issue two classes of shares to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock authorized to be issued is six hundred million (600,000,000) and the total number of shares of Preferred Stock authorized to be issued is twenty million (20,000,000). The Common Stock and the Preferred Stock shall each have a par value of $0.0001 per share.”
Only the number of shares of Common Stock issuable by the Company would be affected by this amendment. Except for this change, the proposed amendment would not affect any other provision of the Articles of Incorporation as previously amended. The text of the Articles of Amendment to the Articles of Incorporation, including the proposed amendment to Article III, is attached to this Consent Solicitation Statement as Appendix A and is incorporated herein by reference. Other than convertible senior debt, outstanding options or warrants (that are currently out of the money) and the Series D Preferred Stock which is convertible into shares of Common Stock, we have no current understanding, arrangement or agreement, oral or written, to issue stock for any purpose that would require an increase in the Company’s authorized Common Stock.
BACKGROUND OF THE PROPOSED AMENDMENT
As of the Record Date, there were approximately 218,852,666 shares of Common Stock issued and outstanding. In addition, as of the Record Date, there were approximately 35,825 shares of Series D Preferred Stock issued and outstanding, convertible into approximately 214,950,000 shares of Common Stock.
In addition to the outstanding Common Stock, the Company has securities and other instruments that may be converted into or exercised to purchase shares of Common Stock, as follows:
| | · | The 35,825 shares of Series D Preferred Stock are convertible into 214,950,000 of Common Stock, as indicated above; |
| | · | Presently issued and outstanding options, warrants and similar rights, are exercisable for the purchase of 19,678,165 shares of Common Stock (the holders of these instruments are not entitled to vote these shares of Common Stock on an as-issued basis); |
| | · | A total of 7,487,286 shares of Common Stock have been set aside for issuance under existing incentive stock option plans at such time as awards may be made under such plans; |
| | · | Warrants are outstanding that are exercisable for the purchase of 4,000 shares of Series D Preferred Stock, convertible in turn into 24,000,000 shares of Common Stock (the holder of these warrants is not entitled to vote these shares of Common Stock); and |
| | · | Approximately 750,000 shares of Common Stock reserved for issuance upon conversion of outstanding senior convertible debt. |
Thus, as of the Record Date, assuming full exercise of all outstanding options and warrants, and conversion of all senior convertible debt and outstanding Preferred Stock, the Company would have approximately 478,230,831 shares of Common Stock outstanding.
The Board of Directors desires to implement the increase in the total number of common shares authorized because it believes that it will enable the Company to generate investor interest in the Company, and to satisfy existing contingent obligations of the Company to issue Common Stock. The current authorization of 250,000,000 shares does not afford the Company a sufficient number of shares for issuance of stock upon the exercise of outstanding warrants, conversion of outstanding convertible debt or shares of Preferred Stock, or the use of Common Stock or instruments for the purchase of or conversion into Common Stock in future financing transactions as may be deemed desirable or necessary by the Board of Directors. Accordingly, management has recommended that the Company increase the number of shares of Common Stock available to provide needed flexibility for full conversion or exercise of existing Company instruments, and for future acquisitions, employee compensation and capital raising.
For these reasons, the Company’s Board of Directors is seeking shareholder approval of the proposed Amendment.
If the Amendment is approved by this Consent Solicitation, generally, no shareholder approval would be necessary for the issuance of all or any portion of the additional shares of Common Stock, unless required by law or any rules or regulations to which the Company is subject.
Depending upon the consideration per share received by the Company for any subsequent issuance of Common Stock, or securities convertible into Common Stock, such issuance could have a dilutive effect on those shareholders who previously paid a higher consideration per share for their stock. Also, future issuances of Common Stock will increase the number of outstanding shares, thereby decreasing the percentage ownership in the Company (for voting, distributions and all other purposes) represented by existing shares of Common Stock. The availability for issuance of the additional shares of Common Stock may be viewed as having the effect of discouraging an unsolicited attempt by another person or entity to acquire control of the Company. Although the Board of Directors has no present intention of doing so, the Company's authorized but unissued Common Stock could be issued in one or more transactions that would make a takeover of the Company more difficult or costly, and therefore less likely. The Company is not aware of any person or entity who is seeking to acquire control of the Company.
Holders of Common Stock do not have any preemptive rights to acquire any additional securities which may be issued by the Company, which means that current shareholders do not have a prior right to purchase any new issue of our capital stock in order to maintain their proportionate ownership of Common Stock. In addition, if the board of directors elects to issue additional shares of Common Stock, or additional series of Preferred Stock or other instruments convertible into or exercisable for the purchase of Common Stock, such issuance could have a dilutive effect on the earnings per share, voting power and holdings of current shareholders.
In addition to the corporate purposes discussed above, the Amendment could, under certain circumstances, have an anti-takeover effect. For example, the existence of authorized but unissued shares of common stock or a shareholder rights plan could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
If the shareholders do not approve the Amendment, the Company will be limited or perhaps precluded from raising additional equity capital, pursuing strategic partnership arrangements and acquisitions, or other similar transactions in which the Company is required to issue shares of Common Stock. In addition, holders of Series D Preferred Stock will be precluded from fully converting their shares into shares of Common Stock and may assert claims against the Company for failure of the Company to provide for the issuance of Common Stock and the registration of sale of such Common Stock in the public market. In such events, the Company’s operations and financial condition will be materially and adversely affected. Moreover, even if the Company were to negotiate additional merger, acquisition, or other transactions on terms acceptable to the Company, the Company likely would not be able to complete such transactions without an increase in authorized capital.
As determined by the Board of Directors, adoption of the proposal to approve the Amendment requires consent of a majority of the holders of the outstanding shares of the Company’s Common Stock, voting as a separate class, Series D Preferred Stock, voting as a separate class, and Common Stock and Series D Preferred Stock, voting together on an as-converted basis. If approved by the shareholders, the proposed Amendment would become effective upon the filing with the Division of Corporations and Commercial Code, Department of Commerce, of the State of Utah (the “Utah Division of Corporations”) of the Articles of Amendment to the Articles of Incorporation (attached hereto as Appendix A) setting forth such increase.
If the proposed Amendment is not approved by a majority of the votes as described herein, Article III of the Company’s Articles of Incorporation will not be amended as a result of this Consent Solicitation.
INTERESTS OF DIRECTORS AND OFFICERS IN THE PROPOSAL
When you consider the recommendation of our board of directors that you give your consent and vote in favor of the Amendment, you should keep in mind that certain of our directors and officers have interests in the proposal that are or may be different from, or in addition to, your interests as a shareholder. It is anticipated that after the approval of the proposal, the current directors and officers will continue in their positions.
Certain of our officers and directors own shares of Series D Preferred Stock (see “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters,” below). If the proposal is not approved, the holders of our Series D Preferred Stock, including those officers and directors indicated in the table on page 8, may be unable to convert all shares of Preferred Stock they hold into Common Stock. In addition, the warrants and options held by certain of these officers and directors, as indicated in the footnotes following the beneficial ownership table, may be worthless because these officers and directors would not be able to receive shares of Common Stock upon exercise of part or all of the warrants and options held by them. Accordingly, those officers, directors and the non-affiliated accredited investors who acquired shares of our Series D Preferred Stock prior to the date of this Consent Solicitation Statement will benefit if the proposal is approved because pursuant to the rights and preferences of the Series D Preferred Stock, each share thereof may be converted at the option of the holder into 6,000 shares of Common Stock. If the proposal is approved and all of the outstanding shares of Series D Preferred Stock are thereafter converted into Common Stock, the current holders of the Series D Preferred Stock will own approximately 45% of the Company’s outstanding Common Stock.
VOTE REQUIRED AND BOARD RECOMMENDATION
Approval of the Amendment requires the affirmative written consent of shareholders holding at least a majority of the Company's outstanding Common Stock and Series D Preferred Stock, voting as separate classes, and together as a single class on an as-converted basis. The Board of Directors has recommended that the shareholders vote FOR approval of the Amendment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED SHAREHOLDER MATTERS
The following tables set forth information as of the Record Date regarding the beneficial ownership of all classes of voting securities of the Company (i) by any persons known to the Company to be beneficial owners of more than 5% of either class of voting securities (Common or Series D Preferred Stock); (ii) by each director, the Chief Executive Officer, and the four highest paid executives of the Company, and (iii) by all such officers and directors as a group. For purposes of these tables, information as to the beneficial ownership of shares of either the Common Stock or Preferred Stock is determined in accordance with the rules of the Securities and Exchange Commission and includes general voting power and/or investment power with respect to securities. Except as otherwise indicated, all shares of our voting securities are beneficially owned, and sole investment and voting power is held, by the person named. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of voting securities, which such person has the right to acquire within 60 days after the date hereof. The inclusion herein of such shares listed beneficially owned does not constitute an admission of beneficial ownership. The Board of Directors expects that each of the shareholders listed in the following tables, including the officers and directors of the Company, will give their consent in favor of the Amendment.
Security Ownership of Certain Beneficial Owners
The following table sets forth information for any person (including any “group”) who is known to us to be the beneficial owner of more than 5% of each class of our voting securities, other than the named executive officers or directors of the Company.
| Name and Address of Beneficial Owner | Shares of Common Stock Beneficially Owned(1) | Percentage of Common Stock Beneficially Owned | Shares of Series D Preferred Beneficially Owned(2) | Percentage of Series D Preferred Beneficially Owned | Percentage of Capital Stock Beneficially Owned (on an as-if- converted basis) |
Winfried Kill Parkstrasse 32A Bergisch-Gladbach 2M 51427 Germany | 40,000,000 | 18.28% | 0 | 0 | 18.28% |
Borinquen Container Corporation P.O. Box 145170 Arecibo, Puerto Rico 00614 | 13,005,759 | 5.94% | 0 | 0 | 5.94% |
Advance Technology Investors, LLC(3) 154 Rock Hill Road Spring Valley, NY 10977 | 11,335,222 | 5.18% | 3,189 | 8.9% | 13.5% |
euromicron AG Speicherstrasse 1 D-60327 Frankfurt am Main Germany | 12,500,000 | 5.71% | 0 | 0 | 5.71% |
Laemi Real Estate, Inc. MMG Tower, 53rd E Street Marbella, Panama City Panama | 0 | 0 | 3,330 | 9.30% | 8.37% |
Commerce Financial, LLC 1050 Kapukalua Pl Paia, HI 96779 | 0 | 0 | 2,149 | 6.00% | 5.56% |
Comediahill Business S.A. MMG Tower, 53rd E Street Marbella, Panama City Panama | 0 | 0 | 2,220 | 6.20% | 5.74% |
Kofler Ventures S.a.r.1 R.C.S. Luxembourg B-0090554 412F, route d’Esch L-2086 Luxembourg | 5,000,000 | 2.28% | 2,000 | 5.58% | 7.36% |
Tim Whyte Rue La Mont Pertuise St. Clements, Jersey, C.I. | 0 | 0 | 2,000 | 5.58% | 5.20% |
Stephan Goetz Oberfohringer Str 105 81925 Munich, Germany | 0 | 0 | 3,000 | 8.37% | 7.60% |
Radenko Milakovic Les Caravelles 25 Boulevard Albert 1er, Bloc B. 13 etage Monaco 98000 | 0 | 0 | 4,000 | 11.17% | 9.88% |
__________
| (1) | Includes shares issuable pursuant to stock options and warrants exercisable within 60 days of May __, 2010. |
| (2) | Each share of Series D Preferred Stock is convertible into 6,000 shares of Common Stock. |
| (3) | Common Stock owned includes 11,135,222 shares of Common Stock, and 1,670,000 shares issuable upon exercise of warrants. Also includes 100,000 shares of Common Stock owned of record by Dina Weidman and 100,000 shares of Common Stock owned of record by U/W Mark Weidman Trust. The shares of Series D Preferred Stock owned are convertible into 19,134,000 shares of Common Stock. |
Security Ownership of Management
The following table sets forth information as of May 10, 2010, regarding the voting securities of each class beneficially owned by all directors, each of the named executive officers, and directors and executive officers as a group.
| Name of Beneficial Owner | Shares of Common Stock Beneficially Owned(1) | Percentage of Common Stock Beneficially Owned | Shares of Series D Preferred Beneficially Owned(2) | Percentage of Series D Preferred Beneficially Owned | Percentage of Capital Stock Beneficially Owned (on an as-if- converted basis) |
David G. Derrick(3) | 6,286,533 | 2.87% | 3,400 | 9.49% | 11.15% |
Chad Olsen(4) | 2,014,433 | * | 172 | * | 1.39% |
John L. Hastings(5) | 1,500,000 | * | 0 | * | * |
Robert Childers(6) | 2,057,614 | * | 50 | * | 1.08% |
Larry Schafran(7) | 1,235,306 | * | 110 | * | * |
David Hanlon(8) | 986,704 | * | 115 | * | * |
Bernadette Suckel(9) | 325,000 | * | 0 | * | * |
All Executive Officers and Directors as a Group (7 Persons)(10) | 14,805,590 | 6.77% | 3,847 | 10.74% | 15.66% |
________________
* Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our capital stock.
| (1) | Includes shares issuable pursuant to stock options and warrants exercisable within 60 days of May 10, 2010. |
| (2) | Each share of Series D Preferred Stock is convertible into 6,000 shares of Common Stock. |
| (3) | Mr. Derrick is our Chief Executive Officer and Chairman of the Board of Directors. Common Stock beneficially owned includes 1,641,470 shares owned of record by Mr. Derrick, 2,645,063 shares held in the name of ADP Management, an entity controlled by Mr. Derrick, and 2,000,000 vested stock purchase warrants. The Series D Preferred Stock is convertible into 20,400,000 shares of Common Stock. |
| (4) | Mr. Olsen is our Chief Financial Officer. Common Stock beneficially owned includes 271,433 shares owned of record by Mr. Olsen and 1,743,000 vested stock purchase warrants. The Series D Preferred Stock is convertible into 1,032,000 shares of Common Stock. |
| (5) | Mr. Hastings is our Chief Operating Officer and President. |
| (6) | Mr. Childers is a director. Common Stock beneficially owned by Mr. Childers includes 450,100 shares owned of record by the Robert E. Childers Living Trust and 546,647 shares owned of record by Mr. Childers directly, as well as 1,060,867 shares issuable upon the exercise of Common Stock purchase warrants. The 50 shares of Series D Preferred Stock owned of record by Mr. Childers are convertible into 300,000 shares of Common Stock. |
| (7) | Mr. Schafran is a director. Common Stock includes 121,406 shares owned of record by Mr. Schafran and 1,113,900 shares of Common Stock issuable upon exercise of stock purchase warrants. The 110 shares of Series D Preferred Stock are convertible into 660,000 shares of Common Stock. |
| (8) | Mr. Hanlon is a director. Amount indicated includes 127,704 shares of Common Stock owned of record by Mr. Hanlon and 859,000 shares issuable upon exercise of warrants. The 115 shares of Series D Preferred Stock are convertible into 690,000 shares of Common Stock. |
| (9) | Ms. Suckel is a Vice President of the Company, responsible for Sales and Marketing. |
| (10) | Duplicate entries have been eliminated. |
ADDITIONAL INFORMATION
Additional information concerning the Company, including its annual report on Form 10-K for the fiscal year ending September 30, 2009, quarterly reports on Form 10-Q, and current reports on Form 8-K, can be obtained by calling or writing the Company at 150 West Civic Center Drive, Suite 400, Sandy, UT 84070; telephone number (801) 451-6141. The annual report on Form 10-K contains our audited financial statements for the year ended September 30, 2009. Additional information on the Company which has been filed with the SEC may be accessed through the SEC’s EDGAR archives at www.sec.gov.
OTHER MATTERS
The Board of Directors of the Company is not aware that any matter other than those described in this Schedule 14A Consent Solicitation Statement is to be presented for the consent of the shareholders.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO CHAD OLSEN, CHIEF FINANCIAL OFFICER, AT SECUREALERT, INC., 150 WEST CIVIC CENTER DRIVE, SUITE 400, SANDY, UTAH 84070, TELEPHONE (801) 451-6141, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE PROVIDED WITHOUT CHARGE.
APPENDIX A
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
SECUREALERT, INC.
Pursuant to and in accordance with the provisions of Section 16-10a-1006 of the Utah Revised Business Corporation Act, as amended, (the “Act”), the undersigned, SecureAlert, Inc. (the “Corporation”) hereby declares and certifies as follows:
1. The name of the Corporation is SecureAlert, Inc.
2. Article III of the Articles of Incorporation of the Corporation shall be amended to read as follows:
“Article III, Capital Stock
The Corporation is authorized to issue two classes of shares to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock authorized to be issued is six hundred million (600,000,000) and the total number of shares of Preferred Stock authorized to be issued is twenty million (20,000,000). The Common Stock and the Preferred Stock shall each have a par value of $0.0001 per share.”
3. The amendment specified above does not provide for an exchange, reclassification, or cancellation of issued shares of the Corporation.
4. The amendment specified above was adopted as of January 13, 2010, by Unanimous Written Consent of the Board of Directors of the Corporation, and in accordance with the requirements of the Act and the Bylaws of the Corporation. The Board of Directors unanimously recommended approval of the amendment by the shareholders of the Corporation. Effective May __, 2010, such amendment specified above was approved by the written consent of shareholders owning a majority of the issued and outstanding voting securities of the Corporation, as described in Section 5 below, effective May __, 2010.
5. The foregoing amendment to the Articles of Incorporation of the Corporation was authorized and approved pursuant to section 16-10a-1003 of the Act by a vote of the majority of the Corporation’s shareholders entitled to vote as follows:
(a) The number of issued and outstanding shares of Common Stock, voting as a class and entitled to vote on the foregoing amendment to the Articles of Incorporation was 211,765,988 of which _________ shares by executing written consents voted for, and _____shares did not execute written consents in favor of the foregoing amendment to the Articles of Incorporation.
(b) The number of issued and outstanding shares of Series D Preferred entitled to vote on the foregoing amendment to the Articles of Incorporation was 35,825 of which _________ shares by executing written consents voted for, and _____shares did not execute written consents in favor of the foregoing amendment to the Articles of Incorporation.
(c) The number of issued and outstanding shares of Common Stock, on an as-converted basis, entitled to vote on the foregoing amendment to the Articles of Incorporation was __________ of which _________ shares by executing written consents voted for, and _____shares did not execute written consents in favor of the foregoing amendment to the Articles of Incorporation.
(d) No other class of stock was entitled to vote on the foregoing amendment.
Such votes cast were sufficient for approval of the Amendment.
[SIGNATURE TO FOLLOW]
WITNESS WHEREOF, this Amendment to the Articles of Incorporation of the Corporation is executed this ___ day of May, 2010.
| | SecureAlert, Inc., |
| | a Utah corporation |
| | |
| | |
| | By _________________________________ |
| | Name _______________________________ |
| | Title ________________________________ |
APPENDIX B
CONSENT SOLICITATION OF SHAREHOLDERS OF
SECUREALERT, INC.
Consent Expiration Date (see Consent Solicitation Statement)
| | MAIL – Mark, date, sign and mail your consent card to the Company, attention Chad Olsen at 150 West Civic Center Drive, Suite 400 Sandy, UT 84070. | |
| | - OR - | |
| | FACSIMILE – Mark, date, sign and fax your consent card to the Company, attention Chad Olsen at (801) 563-7435. | |
| | - OR - | |
| | Electronic Delivery – Mark, date, sign and e-mail your consent card to the Company at colsen@securealert.com. | |
CONSENT FORM
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK. |
| | FOR |
| 1. To amend the Company’s Articles of Incorporation to increase the authorized common stock of the Company to 600,000,000 shares of common stock, par value $.0001 per share. This proposal is more fully described in the Consent Solicitation Statement. | o |
The undersigned hereby consents to approval of the foregoing amendment with respect to all shares of Common Stock or Series D Preferred Stock of SecureAlert, Inc. held of record by the undersigned on May 10, 2010.
If no box is marked above, but this Consent is otherwise properly completed and signed, the shares will be voted “FOR” the Amendment.
| Name of Shareholder : | | | | Name of Shareholder: | | |
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| (printed) | | | | (printed) | | |
| | | | | | | | | |
| | | Date: | | | | | Date: | |
| (signature) | | | | | (signature) | | | |
| | | | | | | | | |
| | | | | | | | | |
| Title of Authorized Signer if | | | | Title of Authorized Signer if | | |
| Entity Shareholder: | | | | | Entity Shareholder: | | | |
| | | | | | | | | |
| | | | | | | | | |
Note: Please sign exactly as your name or names appear on the certificates representing shares of Company securities held by you. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person
