SUPPLEMENT TO OFFERING STATEMENT
FOR
SERIES C PREFERRED STOCK
ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
A California Corporation
10675 Sorrento Valley Road, Suite 200
San Diego, CA 92121
July 19, 2002
Advanced Remote Communication Solutions, Inc., a California corporation
(the "Company"), previously distributed an Offering Statement for Series C
Preferred Stock (the "Offering Statement"). This supplement to the Offering
Statement (the "Supplement") amends and supplements our offer to exchange all of
the outstanding shares of Series B Preferred Stock for shares of Series C-3
Preferred Stock. All capitalized terms not defined herein have the meanings
ascribed to them in the Offering Statement.
Please note the following:
SUMMARY OF TERMS
QUESTIONS AND ANSWERS
The following supplements the Offering Statement:
HOW WILL SECURITIES BE ACCEPTED FOR EXCHANGE AND HOW WILL PAYMENT BE MADE?
Upon the terms and conditions set forth in the Offering Statement,
we will accept for exchange on the Expiration Date all shares that are properly
tendered on or prior to the Expiration Date and not withdrawn, together with a
completed Exchange and Subscription Agreement. We will make payment for shares
which we accept by the third New York business day following the acceptance
date, or as soon thereafter as possible.
HOW WILL I BE NOTIFIED IF THE COMPANY CHOOSES TO EXTEND THE EXCHANGE OFFER?
We will notify you of any extension through a press release or other
public announcement.
THE TRANSACTIONS
General Description
The following supplements the Offering Statement:
Additional Terms of the Transactions
In connection with the Financing:
o Michael Silverman, Irene Shinsato, Scott Boden, QUALCOMM and
Lexington entered into separate voting agreements with the
Company and Housatonic pursuant to which they agreed to vote
all of their shares of capital stock of the Company to (i)
approve an increase in the reserve of shares under the
Company's 1996 Stock Option Plan by 4,500,000 shares and (ii)
approve the sale of the assets of the Company associated with
the Boatracs division in the event Housatonic exercises the
option described in clause (vii) under the caption "General
Description" above..
o The board of directors of the Company was set at 5.
o Scott Boden, Andrew Werth, Douglas Dwyer and Daniel Flanagan
resigned from the board of directors of the Company.
o Brandon Nixon, Joseph Niehaus and Harvey Gettleson were
appointed as members of the board of directors of the Company.
o Holders of outstanding Series C1 Preferred Stock and Series C2
Preferred Stock, voting together as a single class, will be
entitled to (a) elect two members of the Company's board of
directors for so long as shares of outstanding Series C
Preferred Stock equal at least 10% of the common stock of the
Company on an as converted basis or (b) elect one member of
the Company's board of directors for so long as shares of
outstanding Series C Preferred Stock equal at least 5% of the
common stock of the Company on an as converted basis.
o Holders of outstanding Series C3 Preferred Stock will be
entitled to elect one members of the Company's board of
directors for so long as shares of outstanding Series C
Preferred Stock equal at least 5% of the common stock of the
Company on an as converted basis.
o Michael Silverman resigned as the Chief Executive Officer and
Chairman of the Company.
o Brandon Nixon was appointed as the Chief Executive Officer
and Chairman of the Company.
o The Company entered into an employment agreement with Brandon
Nixon granting him an option to purchase 3,000,000 shares of
the Company's Common Stock.
o Holders of Series C Preferred Stock (including, without
limitation, any persons holding shares of Series C-3 Preferred
Stock as a result of the Exchange Offer) were granted demand
registration rights exercisable by holders of a majority of
the Series C Preferred Stock then outstanding; provided,
however, that the Company is not obligated to effect a
registration pursuant to such demand registration rights more
than twice in the aggregate nor more than once in any 12-month
period.
o The holders of Series C Preferred Stock (including, without
limitation, any persons holding shares of Series C-3 Preferred
Stock as a result of the Exchange Offer) were granted a right
of first refusal to purchase their pro rata share of all
equity securities that the Company may from time to time
propose to sell and issue, subject to customary exclusions.
THE OFFERING
Summary of the Offering
The reference to "as of May 31, 2002" should be deleted and ignored.
The paragraph now reads as follows.
The Company is making (1) the Exchange Offer to each holder of its
Series B Preferred Stock (each a "Series B Holder"), who is an Accredited
Investor, under the terms described herein, and (2) the Purchase Offer to each
Series B Holder, other than Lexington, who is an Accredited Investor, under the
terms described herein.
Exchange Offer
The Company is making the Exchange Offer to provide all accredited
investors holding shares of Series B Preferred Stock with the opportunity to
acquire shares of Series C-3 Preferred Stock on the same terms and conditions
as those provided in the Stock Purchase Agreement. The Company committed
pursuant to the terms of the Stock Purchase Agreement to commence the Exchange
Offer as soon as practicable following the closing of the transactions
contemplated by the Stock Purchase Agreement. All shares of Series B Preferred
Stock of the Company acquired in the Exchange Offer will be retired.
The following sentence should be deleted and ignored "The purpose of
the Exchange Offer is to acquire and retire all outstanding shares of the
Company's Series B Preferred Stock."