Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [[root]]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
PEN
PEN INTERCONNECT, INC
---------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
-
Payment of Filing Fee (Check the appropriate box):
[] No fee required
[] Fee computed on table below per Exchange Act Rules 14a- 6(i)(1) and
0-11
[] Title of each class of securities to which transaction applies: Common
shares
[] Aggregate number of securities to which transaction applies: 31,016,966
[] Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 Per unit price = $.05. Calculation -
$.05 times 31,016,966, times TAA ownership (.65%).
[] Proposed maximum aggregate value of transaction: $4,299,413
[] Total fee paid: $858.00
[X] Fee paid previously with preliminary materials.
[] Check box if any part of the fee is offset as provided b 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.
[] Amount Previously Paid:
[] Form, Schedule or Registration Statement No.:
[] Filing Party:
[] Date Filed:
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
PEN INTERCONNECT, INC.
2961 W. MacArthur Blvd., Suite 121, Santa Ana, CA 92704
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on Wednesday, April 11, 2001
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders (the
"Meeting") of Pen Interconnect, Inc., a Utah Corporation (the "Company"), will
be held at the Newport Beach Tennis Club, 2601 Eastbluff Drive, Newport Beach,
CA 92660, on Wednesday, April 11, 2001, at 10am, local time, to consider and act
upon the following:
1. The election of five persons named in the accompanying Proxy Statement
to serve as directors on the Company's board of directors (the "Board")
and until their successors are duly elected and qualified;
2. To ratify the appointment of Berg & Company, LL as independent auditors
for the Company, for the fiscal year ending September 30, 2001, for the
purpose of auditing the financial statements and books of the Company,
for, and during, the period ending on that date;
3. To vote in favor of the merger with tAA Inc., b an exchange of shares;
4. To approve an amendment to the Company's certificate of incorporation
(the "Certificate of Incorporation") to increase the number of shares
of the Common Stock, authorized to be issued, to 250,000,000 shares;
5. To approve an amendment to the Certificate of Incorporation in order to
effect a stock combination (reverse split) of the Common Stock in an
exchange ratio to be approved by the Board, ranging from one newly
issued share for each two outstanding shares of Common Stock to one
newly issued share for each ten outstanding shares of Common Stock;
6. To approve changing the Company name from Pen Interconnect, Inc., to
The Amanda Company, Inc., and;
7. To consider and transact such other business as may properly come
before the Meeting or any adjournment(s) thereof.
A Proxy Statement, form of Proxy and the Annual Report to Stockholders of the
Company for the fiscal year ended September 30, 2000 are enclosed herewith. Only
holders of record of Common Stock at the close of business on December 31, 2000
are entitled to receive notice of and to attend the Meeting and any
adjournment(s) thereof. The stock transfer books of the Company will remain open
between the record date and the date of the Meeting. At least 10 days prior to
the Meeting, a complete list of the stockholders entitled to vote will be
available for inspection by any stockholder, for any purpose germane to the
Meeting, during ordinary business hours, at the executive offices of the
Company. Should you receive
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
more than one Proxy because your shares are registered in different names and
addresses, each Proxy should be signed and returned to assure that all your
shares will be voted. You may revoke your Proxy at any time prior to the
Meeting. If you attend the Meeting and vote by ballot, your Proxy will be
revoked automatically and only your vote at the Meeting will be counted. If you
do not expect to be present at the Meeting, you are requested to fill in, date
and sign the enclosed Proxy, which is solicited by the Board of the Company, and
to mail it promptly in the enclosed envelope.
In the event there are not sufficient votes for a quorum or to approve or ratify
any of the foregoing proposals at the time of the Meeting, the Meeting may be
adjourned by a vote of the majority of the votes cast by the stockholders
entitled to vote thereon. Whether or not you expect to attend the Meeting, to
assure that a quorum is present at the Meeting or an adjournment thereof, and
there are sufficient votes to vote on all of the foregoing proposals, please
sign, date and return promptly your Proxy.
By Order of the Board of Directors
Stephen J. Fryer
Chairman of the Board and Chief Executive Officer
Dated: March 8, 2001
IMPORTANT
Shareholders are cordially invited to attend the Meeting Regardless of whether
you expect to attend the Meeting in person, we urge you to read the attached
Proxy Statement and sign and date the accompanying proxy card and return it in
the enclosed envelope. It is important that your shares be represented at the
Meeting. If you receive more than one proxy card because your shares are
registered in different names, or notices go to different addresses, each card
should be completed and returned to assure that all of your shares are voted.
Your proxy will not be used if you are present at the Meeting and desire to vote
your shares personally.
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
PEN INTERCONNECT, INC.
2961 W. MacArthur Blvd., Suite 121, Santa Ana, CA 92704
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
April 11, 2001
-------------------
Solicitation of Proxies
This Proxy Statement is furnished to the shareholders of Pen Interconnect, Inc.,
a Utah corporation (the "Company"), in connection with the solicitation by the
Board of Directors of the Company of proxies from the Company's shareholders for
use at the 2000 Annual Meeting of Shareholders of the Company to be held on,
Wednesday, April 11, 2001 at 10:00 a.m., Pacific time, at the Newport Beach
Tennis Club, 2601 Eastbluff Drive, Newport Beach, CA 92660, and any adjournment
or postponement thereof (the "Meeting"). At the Meeting, the Company's
shareholders will be asked to (i) elect five directors, (ii) approve independent
public accountants to audit the Company's financial statements for the fiscal
year ending September 30, 2001, (iii) to vote in favor of the merger with tAA,
Inc., (iv) to approve an increase in the number of shares of Common Stock, (v)
to approve a reverse split of the Common Stock, (vi) to approve the change the
name, (vii) ratify and vote on such other matters as may properly come before
the Meeting or any adjournment or postponement of the Meeting.
Only shareholders of record at the close of business on December 31, 2000 are
entitled to notice of and to vote at the Meeting. The approximate date upon
which this Proxy Statement, the enclosed proxy and the attached Notice of Annual
Meeting of Shareholders are first being sent to shareholders is M arch 15, 2001.
The entire cost of soliciting proxies for use at the Meeting will be borne by
the Company. Proxies will be solicited by use of the mails. Directors, officers
and regular employees of the Company may also solicit proxies by telephone,
telecopier, electronic transmission or personal contact. The Company will not
pay any special compensation, to any person, in connection with the solicitation
of proxies. The cost of the solicitation of proxies will include the cost of
supplying necessary copies of the solicitation materials to the beneficial
owners of those common shares which are held of record by brokers, dealers,
banks, voting trustees and their nominees, including, upon request, the
reasonable expenses which are incurred by such record holders in mailing the
solicitation materials to beneficial owners.
Proxies in the enclosed form will be effective if they are properly executed,
returned to the Company prior to the Meeting, and not revoked. The common shares
represented by each effective proxy will be voted at the Meeting in accordance
with the instructions of the shareholder. If no instructions are indicated on a
proxy, all common shares represented by that proxy will be voted (i) in favor of
the election of the nominees for directors described in this proxy statement,
(ii) in favor of ratification of the appointment of Berg & Company, LLP as the
Company's independent auditors for the fiscal year ending September 30, 2001,
(iii) to vote in favor of the merger, (iv) approval of an increase in the number
of authorized shares; (v) approval of a reverse split of the Common Stock; (vi)
approval to change the Company's name; (vii) in the discretion of the persons
named in the accompanying Proxy, upon such other matters as may properly come
before the Meeting.
A shareholder giving a proxy pursuant to this solicitation may revoke it at any
time prior to its exercise by delivering to the Secretary of the Company a
written notice of revocation, or a duly executed proxy bearing a later date, or
by attending the Meeting and voting in person. Any written notice revoking a
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
proxy should be sent to the principal executive offices of the Company addressed
as follows: Pen Interconnect, Inc., 2961 W. MacArthur Blvd., Suite 121, Santa
Ana, CA 92704.
Information on Outstanding Shares and Voting
On the record date, 31,016,966 of the Company's common shares, par value $.01
per share, were issued and outstanding and there were 1057 preferred shares
outstanding. Each shareholder is entitled to one vote on each matter to be voted
upon. There are no voting rights for each share of convertible Preferred held by
such stockholders on December 31, 2000.
A majority of the votes entitled to be cast at the Meeting is required for a
quorum for the transaction of business at the Meeting. Abstentions and broker
non-votes (i.e., shares held by brokers or nominees as to which the broker or
nominee indicates on a proxy that it does not have discretionary authority to
vote) are each included in the determination of the number of shares present and
voting for purposes of determining the presence of a quorum. Each is tabulated
separately. Under Utah law, once a quorum is established, shareholder approval
with respect to a particular proposal is generally obtained when the votes cast
in favor of the proposal exceed the votes cast against the proposal. In the
election of directors, the five nominees receiving the highest number of votes
will be elected. Abstentions and broker non-votes will not be considered as
votes cast for or against any matter considered at the Meeting and will not
affect the outcome of any matter considered at the Meeting.
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
PROPOSAL # 1 - ELECTION OF DIRECTORS
Nominees and Information
At the Meeting, five (5) directors are to be elected to serve one-year terms
expiring at the annual meeting of shareholders to be held in 2000. All directors
will serve until their successors are duly elected and qualified, subject,
however, to prior death, resignation, retirement, disqualification or removal
from office.
The persons named as proxy holders in the enclosed proxy card, Stephen J. Fryer
and Christine Risner have advised the Company that, unless a contrary direction
is indicated on the proxy card, they intend to vote for the five nominees named
below. They have also advised the Company that in the event of any of the five
nominees are not available for election for any reason, they will vote for the
election of such substitute nominee or nominees, if any, as the Board of
Directors may propose. The Board of Directors has no reason to believe that any
nominee will be unavailable to serve on the Board. The five nominees receiving
the highest number of votes at the Meeting will be elected.
The Company's nominees for the Board of Directors and their respective business
biographies are as follows:
Director
Name Age Principal Occupation Since
Stephen J. Fryer 62 CEO 1995
Brian Bonner 52 CEO - Imaging Technologies 1999
David Woo 39 President - tAA, Inc 2001
Bill Prevot 57 COO-OhGolley.com 2001
David P. Lieberman 56 CFO, tAA, Inc 2001
STEPHEN J. FRYER has served as a director of the Company since 1995 and as
President and CEO since September 15, 1998. From 1989 to 1996 Mr. Fryer was a
principal in Ventana International, Ltd., an Irvine, California based venture
capital and private investment banking firm. Mr. Fryer graduated from the
University of Southern California in 1960 with a Bachelors Degree in Mechanical
Engineering and has spent in excess of 28 years in the computer business in the
United States as well as Asia and Europe.
BRIAN BONNER has served as Director of Imaging Technologies Corporation (Itec)
since 1995 and became Chairman of the Board for Itec in 1999. Mr. Bonar has been
with Itec since 1994. Previous to that Mr. Bonar has been Vice President of
worldwide sales and marketing for Bezier Systems, Inc., Adaptec, Inc. Mr. Bonar
also was with Rastek Corporation, and QMS, Inc. Prior to 1984, Mr. Bonar was
employed by IBM, U.K. Ltd for approximately 17 years.
DAVID WOO, Founder and Chief Executive Officer of tAA, received his Bachelors
Degree in Computer Science from Columbia College, Columbia University, and his
Masters in Computer Science from the University of California, Irvine. His
primary emphasis has been concurrent software analysis with special interests in
software user interfaces. As a founding member of the Automatic Answer, he has
taken part in every aspect of voice processing including, systems installation,
systems configuration, customer support, marketing, and manufacturing. Having
spent over three years representing voice processing systems from
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
other manufacturers has put him in a unique position to design a well balanced
system with consideration to installation, configuration, support, marketing,
and manufacturing.
BILL PREVOT, serves as Chief Operating Officer of OhGolly.com. He brings more
than eleven years of experience from AT&T Wireless Services and the cellular
telephone industry, where he has served as Vice President of Customer Care,
Chief Information Office; and Director of Administration and Operations,
overseeing staff expansion of over 300% to accommodate the rapid growth of this
division and customer responsiveness. Mr. Prevot earned a Bachelors Degree in
Political Science and Economics from Claremont Men's College and has completed
additional graduate units at the University of Houston.
DAVID P. LIEBERMAN, has over thirty years of extensive experience managing the
financial and operations activities of many companies. He was the COO for both
Equinox International Corporation and Advanced Marketing Seminars. These
companies had combined sales in excess of $200,000,000 and employed over 300
people. In addition, since 1997, he was the President of both, JLS Services
Inc., where he managed twenty partnerships with net assets exceeding
$100,000,000, and International Purity Corporation, a manufacturer of water
filtration devices. Mr. Lieberman earned his Bachelor of Arts Degree in Business
at the University of Cincinnati, Ohio, and his CPA Certification is from the
State of California.
Board of Directors Meeting and Committees
The Board of Directors held 4 meetings in fiscal year ending September 30, 2000.
Each director attended at least 75% of all of the meetings of the Board of
Directors.
The Board of Directors has a standing Audit Committee and Compensation
Committee. The Audit Committee met twice during fiscal year 2000, and the
Compensation Committee met twice during the fiscal year 2000.
The responsibilities of the Audit Committee include: (1) the recommendation of
the selection and retention of the Company's independent public accountants; (2)
the review of the independence of such accountants; (3) the review of the
Company's internal control system; and (4) the review of the Company's annual
financial report to shareholders. The Audit Committee was comprised of, Milton
Haber, James E. Harward, and Stephen J. Fryer. The Compensation Committee was
comprised of, James E. Harward, Milton Haber, and Stephen J. Fryer.
Compensation of Directors
Members of the Board of Directors employed by the Company do not receive any
separate compensation for their services as directors. Members of the Board of
Directors not employed by the Company receive $250.00 per telephonic meetings,
and $1,000.00 for an on hand meeting. Directors are reimbursed for their actual
expenses incurred in connection with their attendance at meetings of the Board
of Directors.
Directors, Executive Officers and Key Employees
The following table lists the names, ages and positions held by all directors,
executive officers and key employees of the Company as of the date hereof.
Directors generally serve until the next annual meeting of shareholders and
until their successors have been duly elected or appointed. Executive officers
serve at the discretion of the Board of Directors.
Name Age Position Year Elected or
Appointed
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Stephen J. Fryer 62 Chairman and CEO 1998
T.A. Mercurio 57 Director 2000 (Resigned)
Brian Bonar 53 Director 1999
James Harward 47 Director 1997 (Resigned)
Milton Haber 76 Director 1998
Business Biographies
The business biographies of the Company's directors and director nominees are in
the section of this Proxy Statement entitled "Election of Directors".
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 and the rules there under
require the Company's executive officers and directors, and persons who
beneficially own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission, and to furnish the Company with copies.
Based on its review of the copies of such forms received by the Company, or
written representations from certain reporting persons, the Company believes
that during fiscal year 2000, except as otherwise noted below, each reporting
person has timely filed all requisite reports with the Securities and Exchange
Commission.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the number of shares of the Company's common
shares beneficially owned as of December 1, 2000, (i) by each person who is
known by the Company to own beneficially more than 5% of the Company's common
shares, (ii) by each director and director nominee, (iii) by each of the
Company's named executive officers, and (iv) by all directors, director nominees
and executive officers, as a group, as reported by each such person. Unless
otherwise indicated, each stockholder's address is c/o Pen Interconnect, Inc.,
2961 W. MacArthur Blvd., Suite 121, Santa Ana, CA 92704.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Owner Class (1)
- ---------------- ---------------- --------
Directors and Executive Officers
Stephen J. Fryer 3,092,500 9.97%
James E. Harward 115,000 .37%
Milton Haber 162,222 .52%
Brian Bonar 650,000 2.01%
Christine Risner 60,000 .2%
T.A. Mercurio 100,000 .3%
--------
All Executive Officer and Directors 13.37%
as a Group
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
1. Based on 31,016,966 outstanding shares of commo shares (and assumes the
exercise by each individual of options exercisable within sixty days
after December 31, 2000). The inclusion herein of any shares as
beneficially owned does not constitute an admission of beneficial
ownership of those shares. Unless otherwise indicated, each person
listed has sole investment and voting powers with respect to the shares
listed. In accordance with the rules of the Securities and Exchange
Commission, each person is deemed to beneficially own any shares
issuable upon exercise of stock options or warrants held by such person
that are currently exercisable or that become exercisable within 60
days after December 31, 2000.
Except as set forth above, the Company knows of no beneficial owner preferreds,
or more of the Company's common shares, and does not know of any arrangement,
which may, at a subsequent date, result in a change of control of the Company,
except for post-merger ownership.
Compensation of Executive Officers as of 2000
The following table shows the compensation paid by the Company to its CEO,
Stephen J. Fryer, and the Company's three other most highly paid executives.
None of the Company's other executive officer's total annual salary and bonus
exceeded $100,000 for the years presented.
Summary Compensation Table
Annual Compensation
Name and Principal Fiscal Year Salary Bonus
Stephen J. Fryer 2000 $148,802 $ 4,116
President & CEO 1999 139,000 17,304
1998 96,000 12,000
Jim Pendleton (1) 1999 139,666 0
Chairman/CEO 1998 129,000 0
Mehrdad Mobasseri (1) 1999 96,000 89,282
President-InCirT 1998 83,999
Alan Weaver (1) 1999 100,000 30,881
Vice President 1998 120,000 32,432
The tables above do not include certain insurance, the use of a car,
and other personal benefits, the total value of which does not exceed
$50,000 or 10% of such person's salary and bonus.
(1) - All resigned in 1999/2000.
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Option/SAR Grants in Fiscal Year 2000
Percent of
Number Total Options
of Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price per Expiration
Name Granted Year 2000 Share Date
Stephen J. Fryer 300,000 92% $0.30 March 2003
300,000 92% $0.22 June 2003
Aggregated Option/SAR Exercises in Fiscal
Year 2000 and Fiscal Year End Option Values
Value of
Unexercised
In-the-Money
Number of Options at
Shares Securities Underlying Fiscal Year End
Acquired Value Unexercised Options Exerciseable/
Name on Exercise Realized Exercised/Unexercised Unexercised
Stephen J. Fryer 0 None 1,092,500 / 1,092,500 $0.00
*The tables above do not include certain insurance, the use of a car, and other
personal benefits, the total value of which does not exceed $50,000 or 10% of
any listed person's salary and bonus.
Employment Agreements
The Company has an employment agreement with Stephen J. Fryer dated October 15,
1996 and is effective through October 2003.
The agreement includes all the terms of employment including, the employee's
duties, the duration of the contract, compensation (which includes salary,
bonus, commissions and vacation), car allowances, insurance coverage, and
deferred compensation and stock options. Each agreement also contains a non-
competition clause, provisions for early termination, and confidentiality
provisions.
Certain Relationships and Related Transactions
None
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL OF
THE FIVE DIRECTOR NOMINEES
PROPOSAL # 2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTING
At the Meeting, shareholders will be asked to elect, ratify, and approve the
Company's independent accountants for the fiscal year ending September 30, 2001.
Currently, Berg & Company, LLP ("Berg") acts as the Company's principal
accountant, and has acted in that capacity since February 2000. The Company does
not anticipate that any representative of Berg will be present at the Meeting.
If a representative is present, he or she will have the opportunity to make a
statement, and will be expected to be available to respond to appropriate
questions from shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE TO RATIFY
THE SELECTION OF BERG & COMPANY, LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2001.
PROPOSAL # 3 - VOTE IN FAVOR OF THE MERGER WITH tAA, Inc.
Pen Interconnect, Inc has entered into a binding Letter of Intent to merge with
tAA, Inc., a California based, private company in the communication services
business. Pen's board of directors has approved this merger and recommends a YES
vote of approval by their shareholders.
Pen Interconnect, Inc., has become a public shell and non-operating company,
without assets since the pre- packaged foreclosure of its' assets by its' bank,
Finova Capital in March 2000. The proposed merger with tAA is a new direction in
which the Board has agreed to move, which will give Pen Interconnect a business
base. Upon approval of the merger, the name of Pen Interconnect, Inc., will
change to The Amanda Company, Inc. The management of tAA, Inc., will take over
the day-to-day operating management of the merged company. Pen will retain it's'
OTC:BB symbol PENC.OB for the foreseeable future.
The binding Letter of Intent is not conclusive, and therefore copies are not
attached to this proxy statement, the Letter of Intent contemplates a merger as
described below: If any shareholder wishes to request a copy of the definitive
agreement, when it is complete, they will be available from the Company for a
small reproduction and mailing fee of $10.00. Please send a request and a check
for $10.00 to Pen at its' corporate address.
tAA, Inc., - Agreement and Company Summary
Specific Information
1. Summary term sheet: This will be a reverse merger whereby tAA will own
67% of Pen's stock through the issuance of unregistered Pen
Interconnect common shares, thus, causing major dilution to the present
Pen shareholders. tAA will take over the management of Pen, which at
present is a shell public company.
2. Contact information: tAA is a California based company with
headquarters at 27121 Calle Arroyo, Bldg., 2200, San Juan Capistrano,
CA 92675. Telephone 949-6641-2660, Facsimile 949-661-0778.
3. Business conducted: Background: Founded in 1988, The Automatic Answer
(tAA) was initially a distributor of third-party voicemail systems. In
1991, the Company began supplying an early version of Amanda and in
1994 the Company
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
expanded its' OEM portfolio. As a result, the Company experienced rapid revenue
gains, was able to channel the attendant gross profit increases into further
product refinement, expanded the Amanda software product line and corporate
infrastructure to accommodate future growth. In 1996 the Company decided to
enter the market under its' own label and the Amanda product line was introduced
to an expanding base of dealers and other value added resellers in both the
domestic and international markets. By late 1997, with the availability of next
generation Amanda products and the desire to extend brand recognition for Amanda
within the industry, the Company focused only on development of the dealer and
reseller channels.
Amanda, tAA's principal software product, is a client server telephony enabled
software solution optimized for Microsoft's Windows operating systems. Utilizing
the worldwide switched public telephone network and both Infranet and Internet
computer based technology. Amanda seamlessly integrates the computer and the
telephone enabling the PC to communicate. In addition to typical voicemail
functionality, Amanda can be employed to automatically answer incoming telephone
calls, greet, screen, and route the callers to any internal system user through
the on-premise telephone switching system or through cables that define the
local area, on-premise computer network (LAN). Utilizing the Internet or other
Wide Area Network (WAN) interconnection solutions, the same inbound callers can
be routed to geographically remote, off-premise locations. In call center
applications such as telemarketing, reservations, technical support and customer
service, where the knowledge worker, the computer terminal and the telephone
instrument with a software application creating a "phone on the screen". The
result is significant reduction of the equipment cost and duplication of premise
wiring that typically characterizes these call center environments.
tAA currently has a network of 550 dealers that resell the tAA line of precuts
to the small business market. The Amanda software product has been sold to over
55,000 small business users, of which over 25,000 were under the Amanda label.
The Market Opportunity:
The expanding telecommunications industry and the rapid growth of the Internet
are creating a massive opportunity for tAA to market services traditionally
available only to large corporate users or isolated groups on the Internet. tAA
will extend the current line of Amanda products to a broad group of services,
utilizing both communications networks, the public switched telephone network
and the Internet. These new services, including call routing, Voice over
Internet (VoIP), and computer-based telephony creates a substantial service fee
based revenue stream.
Pen Interconnect tAA Unaudited Pro forma
Proforma Pen tAA Historical un-audited as of Pro forma Pen Interconnect
As of Dec 31, 2000 Dec 31, 2000 Adjustments Unaudited Adjusted
Balance Sheet
Current Assets:
Cash and cash equivalents $ 6,244 $ 27,277 $ 33,521
Trade Acct Receivable 0 153,080 153,080
Prepaid expenses 0 49,440 49,440
Inventory 0 133,364 133,364
Other assets 37,020 2,515 39,535
--------- ---------- --------
Total Current Assets 43,264 365,676 408,940
Fixed Assets, net 848 400,312 401,160
Other long term assets 0 30,986 30,986
Total Assets 44,112 796,974 841,086
========= ========== ========
Liabilities and Stockholder Equity
Current Liabilities
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Accounts payable $ 248,689 $ 619,855 $ 868,544
Notes payable 131,648 523,000 654,648
Accrued liabilities 768,513 253,099 1,021,612
Lease obligations 0 88,657 88,657
Liabilities from discontinued
Operations 865,258 0 865,258
Convertible debentures 150,000 0 150,000
--------- ---------- ---------
Total Current Liabilities 2,164,108 1,484,611 3,648,719
Long term liabilities 0 92,000 92,000
Stockholders equity
Convertible Preferred Stock 10 767,140 (767,150) 0
Common Stock $.01 par value 310,170 315,818 784,182 1,410,170
Additional paid in capital 19,399,234 0 (19,399,234)
0
Accumulated earnings (deficit) (21,829,410) (1,862,595) 19,382,202 (4,309,803)
----------- ---------- ----------- ----------
Total stockholder's equity (deficit) ( 2,119,996) 0 (2,899,633)
Total Liabilities & Shareholder's
Equity 44,112 796,974 841,086
============ ======= =======
Statement of Operations
Quarter ended
December 31, 2000 Pen Interconnect TAA Adjustments Pen Consol
Sales $ -0- $ 1,107,227 $ 1,107,227
Cost of sales -0- 676,173 676,173
--------------- ------------- -----------
Gross profit -0- 431,054 431,054
Selling general and
administrative expenses 202,804 424,670 627,474
Operating income (loss) (202,804) 6,384 (196,420)
Other Income (expenses)
Loss on impairment (63,000) (63,000)
Non-Recurring
Acquisition Costs (2,119,996) (2,119,996)
Loss from discontinued
Operations (39,323) (39,323)
Extinguishment of debt 11,119 11,119
Investment & other income 40,693 40,693
Interest income (expenses) (45,723) (45,723)
------- --------
Income before taxes (294,008) 1,354 (2,119,996) (2,412,650)
Income taxes 201 0 201
------------------------------------------------------------------------------
Net income (loss) $( 294,008) $ 1,153 $ (2,119,996) $(2,412,851)
Shares Outstanding
Primary Diluted 31,016,966 110,000,000 141,016,966
Earning per Share
3/12/2001
13
Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Primary Diluted (.009) 0 (.017)
tAA - An Introduction
In the nearly 10 years since its founding, tAA has continued to set new
standards in almost every area of voice processing technology and has
emerged as the dominant player in this highly specialized marketplace.
The Automatic Answer (tAA) is the leading supplier of call processing
software and systems for industry-standard PC platforms. The Amanda
family of call processing solutions and application development
platforms represent tAA's leading-edge technology for all forms of
voice processing, now and into the future. Within the exploding
information technology markets, voice processing stands out in high
relief as one having the most profound impact on the fundamental way in
which we conduct business.
The stars of this rapid growth industry are a new breed of
high-performance, voice processing systems, designed to automate many
communications not requiring human interaction. They can record, replay
and redirect calls and messages; send, receive, and distribute faxes,
and even provide information over the phone from virtually any data
source. They are one of the most productive business tools a company
can implement. First among the architects and providers of these new
products are tAA, a recognized pioneer and fast-track innovator in this
exciting field.
For over a decade, tAA has marketed, sold, installed, and supported
automated attendants and voice-processing systems based on
industry-standard PC platforms. Our products and technology have been
designed from the start by highly skilled technical professionals who
have installed, configured, customized, and maintained, call processing
systems, and developed by programmers with advanced degrees in
concurrent processing and software engineering.
From the outset, tAA has recognized that the technology of the mid 80`s
call processing revolution would be inadequate for rapidly evolving
future communication needs. Flexibility, expandability, custom
configurability, ease of installation, support and use is essential,
perhaps critical, for the next generation of call processing systems.
Amanda is tAA`s answer to the technological challenges of the next
decade. Amanda represents over six years of direct telecommunications
experience in call processing; capable of delivering the most cost
effective, high performance combination of features and functionality.
tAA has led the voice processing industry with a succession of firsts
in innovative design and standards-based technology including the voice
processing industry's only fully scaleable, open-system migration path
leading well into the millennium. They have pioneered the first true
partnering approach to VAR business development with its unique Master
Application License program. This innovative program allows resellers
and developers to literally write their own business plans without
limit to their upside profit potential.
tAA also pioneered the use of the Internet and Worldwide web as both a
channel support and customer service platform through strategic
alliances with such partners as Dun & Bradstreet, Rhetorex and
AlphaGraphics among others.
3/12/2001
14
Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Products
The Amanda suite of products is designed for the full range of computer
telephony applications: simple voice mail and automated attendant;
custom, interactive voice response systems; distributed, multi-site
call control, and messaging. Whatever your communication needs, an
Amanda platform is tailored to meet them. All products are migratable
to more powerful versions of Amanda. For feature sets that overlap, the
transition is virtually transparent; the messaging interface is
standard across all products. Configurations defined in one system are
simply transferred to the upgraded system.
Amanda@Large.Office offers Auto Attendant, Voice Mail, IVR, Fax
capabilities (Fax on Demand, Fax Store and Forward and Fax Mail) and a
very comprehensive feature set, including Unified Messaging and Call
Control. This product runs on Windows NT 4.0 server pack 3, and when it
is connected to a LAN, the Workstations are presented with all
messages, (Voice, Fax and e-mail) directly in the Microsoft
Exchange/Inbox or Outlook Graphical User Interface (GUI). This means
users can visualize, play back, annotate, forward, archive etc, the
messaging, regardless of its nature, directly from their desktop PC.
Amanda@Front.Desk Amanda's voice recognition product is now available
for delivery with 4 to 8 Ports. This product easily integrates with
existing Amanda systems and is the perfect compliment to any new or
existing Amanda Voicemail system. In addition, Amanda@Front.Desk
features will soon be released with all (and more) of the features in
Amanda@Large.Office creating the ultimate Call Processing solution.
Amanda Smart Indavo is an advanced telephone system that provides a
complete telecommunications solution for a small office and delivers a
competitive edge in today's marketplace. By using the power of Internet
technology over a private and dedicated network designed for carrying
telephone calls, Amanda Smart Indavo delivers to you reliable,
dependable, high quality telephone service at incredibly low rates.
Integrated with the Amanda Smart Web Server, a hosted telephony
application, Amanda Smart Indavo provides competitive communication
services such as auto attendant, voice mail, and fax applications. With
Amanda Smart Indavo you get six voice lines and twelve extensions for
telephones. Auto attendant, voice mail, and fax applications are
included. All your calls are placed over a private and dedicated line
for a cost that's comparable to, or less than the Phone Company.
Amanda@WorkGroup II represents tAA's premier telephony vehicle for
enterprise-wide call processing and message handling solutions, and
extends the robust feature set of Amanda@Work.Group to a distributed
environment. It offers Auto Attendant, Voice Mail, IVR, Fax
capabilities (Fax on Demand, Fax Store and Forward and Fax Mail) and a
very comprehensive feature set, including Unified Messaging and Call
Control. This product runs on Windows 2000 and when it is connected to
a LAN, the Workstations are presented with all messages, (Voice, Fax
and e-mail) directly in the Microsoft Exchange/Inbox or Outlook
Graphical User Interface (GUI). This means users can visualize, play
back, annotate, forward, archive etc, the messaging, regardless of its
nature, directly from their desktop PC. Amanda@WorkGroup II, can
support up to 32 call processing ports in a single chassis, unlimited
number of mailboxes and can support up to 1500 simultaneous connections
(log on) to the Amanda Server (from Workstations on the LAN).
3/12/2001
15
Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
4. Terms of the transaction: As mentioned earlier this will be a reverse
merger with Pen giving up control of the company to tAA. There is no
cash involved in the transaction, except Pen has to provide initial
financing during the merger discussions of at least $250,000 and at
least $1 Million of available credit at the closing, which has been
accomplished.
It is anticipated that the merger will be a tax free exchange of
shares, with Pen exchanging 100,000,000 restricted common shares for
all the tAA, Inc., shares.
Pen will be responsible for maintaining its' Corporate records in a
proper manner; including on-time SEC reporting so as to maintain a
current filing position with the SEC.
Because of signing the Letter of Intent, and th Board's approval of the
merger, pending shareholder approval, the companies are working as one,
except that all monies provided to tAA, Inc., by Pen Interconnect,
Inc., are on a loan basis, Pen's loans to tAA will be forgiven at the
closing, and will then become a balance sheet item.
5. Regulatory approvals: There are no known regulatory approvals needed
from either State of Federal Agencies, with the exception of the notice
to the SEC on the expansion of Pen's shares.
6. Reports, opinions, appraisals: There have been no reports, opinions, or
appraisals from any outside sources of this transaction. The major
guiding principal is the public market place itself where typical
reverse mergers with shell companies range in the 60% to 95% give-up of
ownership, based on the conditions of the shell company, i.e.,
liabilities, fully reporting on SEC documents, market conditions, etc.
7. Past contacts, transactions or negotiations: Discussions on a potential
merger started in December of 2000, shortly after Pen's merger with
perFORMplace was terminated. The Chairman of Pen was acquainted with
one of tAA's directors through previous business activities. The
companies entered into a letter of intent on February 21, 2001 and are
working to complete the merger agreement in the next thirty (30) days.
8. Financial Background: tAA has been in business since 1988 and has had
good financial management through its' history, and is presently having
its' books audited.
9. Selected Financial Information: The summary information set forth below
is derived from the un-audited financial statements of (i) Pen
Interconnect for the period October 1, 2000 through December 31, 2000
and (ii) TAA, Inc., the pro forma selected financial data presented for
the same period are unaudited and were prepared by the Company's CPA on
the same basis as the un-audited financial statements of the Company
included elsewhere herein and, in the opinion of the Company include
all adjustments (consisting of normal recurring adjustments) necessary
to present fairly the information set forth therein.
10. Incorporation of Certain Documents by Reference The SEC allows us to
"incorporate by reference" the information we file with them, which
means that we can disclose important information to you by referring
you to those documents. We incorporate by reference in connection with
this pro forma, the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934.
1. Our Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2000;
2. Our Quarterly Reports on Form 10-QSB for the fiscal quarters
ended, March 31, 2000, June 30, 2000, December 31, 2000.
PROPOSAL # 4 - APPROVE AN AMENDMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF COMMON STOCK
3/12/2001
16
Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
General
On June 25, 2000, the Board unanimously adopted a resolution proposing to amend
the Certificate of Incorporation to increase the number of shares of Common
Stock, which the Company is authorized to issue from 50,000,000 to 250,000,000
shares. The Board determined that such amendment is advisable and directed that
the proposed amendment be considered at the Meeting. The additional 200,000,000
shares of Common Stock, if and when issued, will have the same rights and
privileges as the shares of Common Stock presently issued and outstanding. Each
holder of Common Stock is entitled to one vote per share on all matters
submitted to a vote of stockholders. The Common Stock does not have cumulative
voting rights except for those as may be required under California law. The
holders of Common Stock share pro-rata on a per share basis in any dividends
when, and if declared by the Board out of funds legally available and in all
assets remaining after the payment of liabilities in the event of the
liquidation, dissolution or winding up of the Company. There are no preemptive
or other subscription rights, conversion rights or redemption or sinking fund
provisions with respect to the Common Stock.
Reference is made to the proposed amendment to Article Four of the Certificate
of Incorporation, which is attached hereto as Exhibit A to this Proxy Statement.
The Certificate of Incorporation, as amended to date, authorizes the Company to
issue 250,000,000 shares of Common Stock, $.01 par value per share, of which
31,016,966 shares were issued and outstanding as of December, 31 2000, and 1057
shares of the Company's preferred stock, par value $1,000.00 per share (the
"Preferred Stock"). In addition to the 31,016,966 shares of Common Stock
outstanding as of June 30, 2000, shares of Common Stock are reserved for
possible future issuances as follows:
1. Preferred shareholders conversion fixed at 10,000,000 common
shares.
2. Options to purchase 3,777,000 shares at exercise prices
between $.04 and $8.45 per share;
3. Private warrants to purchase 6,869,654 shares at exercis
prices between $.04 and $6.50 per share; and
4. Public warrants to purchase 2,850,000 shares an exercise
prices of $6.50 per share.
The Company is contractually, by its' merger plan with tAA, Inc., obligated to
issue 100,000,000 shares of Common Stock in exchange for all of tAA stock. This
is 68,983,303 shares more than the 50,000,000 shares of Common Stock the Company
is currently authorized to issue, because 31,016,966 are already issued.
Accordingly, the Company is in violation of certain of its contractual
violations as it would be unable to issue any shares of Common Stock pursuant to
(a) the exercise of options or warrants or (b) the conversion of preferred
Convertible Stock, as such issuance, together with the merger would cause the
Company to issue more than 50,000,000 shares of Common Stock. Should the
shareholders approve the 200,000,000 additional shares, then after the merger
and issuance of all options and warrants, there would remain 195,493,380
available shares.
A vote for the increase in shares is independent of the outcome of Proposal # 3,
(the "Merger"). If proposal # 3 is not approved, the company still proposes to
increase its' number of shares.
Purposes and Certain Possible Effects of Increasing the Number of Authorized
Shares of Common Stock
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
The Company has historically either publicly offered or privately placed its
capital stock to raise funds to finance its operations, including research and
development and product development activities, and has issued securities to
management, non-management employees and consultants. The Company may seek
acquisitions of other companies products and assets. These activities are likely
to require the Company to sell shares of Common Stock or securities convertible
into or exchangeable for Common Stock. The Company has, at times in the past,
sold shares or securities instruments exercisable or convertible into shares at
below the market price of its Common Stock at the date of issuance and may be
required to do so in the future in order to raise financing.
The Board acknowledges that the increase in the number of authorized shares of
Common Stock at this time will provide the Company with the ability to issue the
shares of Common Stock it is currently obligated to issue pursuant to the
exercise and conversion of outstanding convertible securities and thereby avoid
certain contractual liabilities described above, and also provide it with the
flexibility of having an adequate number of authorized but un-issued shares of
Common Stock available for future financing requirements, including for funding
research and product development, acquisitions and other corporate purposes
without the expense or delay in seeking stockholder approval at any special or
other annual meeting. The proposed amendment would provide additional authorized
shares of Common Stock that could be used from time to time, without further
action or authorization by the stockholders (except as may be required by law or
by any stock exchange or over-the-counter market on which the Company's
securities may then be listed).
Although it is not the purpose of the proposed amendment and the Board is not
aware of any pending or proposed effort to acquire control of the Company, the
authorized but un-issued shares of Common Stock also could be used by the Board
to discourage, delay or make more difficult a change in control of the Company.
This proposed amendment will not affect the rights of existing holders of Common
Stock except to the extent that further issuances of Common Stock will reduce
each existing stockholder's proportionate ownership. In the event that
stockholder approval of this proposed amendment of the Certificate of
Incorporation to increase the authorized Common Stock is not obtained, the
Company will be unable to satisfy its exercise and conversion obligations under
the terms of certain of its outstanding convertible securities and holders of
such convertible securities may commence legal proceedings against us.
Use of Additional Shares
At the present time, the Company has no plans for use of the additional shares
except as noted in Proposal # 3 (the "Merger") with tAA, which will use
100,000,000 shares.
STOCKHOLDER APPROVAL
In accordance with the Utah Corporation Law and the Certificate of
Incorporation, the affirmative vote of a majority of the outstanding shares of
Common Stock entitled to vote thereon is required to adopt this proposed
amendment.
THE BOARD HIGHLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS PROPOSAL.
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
PROPOSAL # 5 - APPROVE AN AMENDMENT TO COMPANY'S CERTIFICATE OF
INCORPORATION TO EFFECT A REVERSE SPLIT OF THE COMMON STOCK
General
The Board has unanimously adopted resolutions proposing, declaring advisable and
recommending that stockholders authorize an amendment to the Certificate of
Incorporation to: (i) effect a stock combination (reverse split) of the
Company's Common Stock in an exchange ratio to be approved by the Board, ranging
from one (1) newly issued share for each two (2) outstanding shares of Common
Stock to one (1) newly issued share for each ten (10`) outstanding shares of
Common Stock (the "Reverse Split"); and (ii) provide that no fractional shares
or scrip representing fractions of a share shall be issued, but in lieu thereof,
each fraction of a share that any stockholder would otherwise be entitled to
receive shall be rounded up to the nearest whole share. There will be no change
in the number of the Company's authorized shares of Common Stock and no change
in the par value of a share of Common Stock.
If the Reverse Split is approved, the Board will have authority, without further
stockholder approval, to effect the Reverse Split pursuant to which the
Company's outstanding shares (the "Old Shares") of Common Stock would be
exchanged for new shares (the "New Shares") of Common Stock, in an exchange
ratio to be approved by the Board, ranging from one (1) New Share for each two
(2) Old Shares to one (1) New Share for each ten (10) Old Shares. The number of
Old Shares for which each New Share is to be exchanged is referred to as the
"Exchange Number". The Exchange Number may, within such range, be a whole number
or a whole number and fraction of a whole number. This Proposal # 5 is
independent upon the approval of Proposal # 3 (the "Merger") or proposal # 4
(the "Increase of Authorized Shares").
In addition, the Board will have the authority to determine the exact timing of
the effective date and time of the Reverse Split, which may be any time prior to
December 31, 2001, without further stockholder approval. Such timing and
Exchange Number will be determined in the judgment of the Board, with the
intention of maximizing the Company's ability to comply with the listing
requirements of The NASDAQ Stock Market, Inc. ("NASDAQ"), to raise financing, to
issue shares of Common Stock pursuant to outstanding contractual obligations,
and for other intended benefits as the Company finds appropriate. See "--
Purposes of the Reverse Split," below. The text of this proposed amendment
(subject to inserting the effective time of the Reverse Split and the Exchange
Number) is set forth in Exhibit B to this Proxy Statement.
The Board also reserves the right, notwithstanding stockholder approval and
without further action by stockholders, to not proceed with the Reverse Split
if, at any time prior to filing this amendment with the Secretary of State of
the State of Utah, the Board, in its sole discretion, determines that the
Reverse Split is no longer in the best interests of the Company and its
stockholders. The Board may consider a variety of factors in determining whether
or not to implement the Reverse Split and in determining the Exchange Number
including, but not limited to, the approval by the stockholders of Proposal 4
which would increase the number of the authorized Common Stock, overall trends
in the stock market, recent changes and anticipated trends in the per share
market price of the Common Stock, business and transactional developments and
the Company's actual and projected financial performance.
Purposes of the Reverse Split
The Common Stock is quoted on the OTDC-BB but had been, prior to being de-listed
on March 27, 1999, quoted on The NASDAQ National Market. In order for the Common
Stock to be re-listed on The NASDAQ SmallCap Market, the Company and its Common
Stock are required to comply with various listing standards established by
NASDAQ. Among other things, as such requirements pertain to the Company, the
Company is required to have a market capitalization of at least $50,000,000 and
its
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Common Stock must (a) have an aggregate market value of shares held by persons
other than officers and directors of at least $5,000,000, (b) be held by at
least 300 persons who own at least 100 shares and (c) have a minimum bid price
of at least $4.00 per share.
Under NASDAQ listing requirements, to be listed or re-listed, the Company must
demonstrate the ability to maintain a minimum bid price of at least $4.00 per
share. Although there are no strict guidelines in regard to how such an ability
to maintain stock price is to be demonstrated, at least a month of consistent
closing prices of more than $4.00 per share may be necessary for NASDAQ
consideration. Furthermore, if re-listed, under NASDAQ's listing maintenance
standards, if the closing bid price of the Common Stock falls under $1.00 per
share for 30 consecutive business days and does not thereafter regain compliance
for a minimum of 10 consecutive business days during the 90 calendar days
following notification by NASDAQ of failure to comply with listing maintenance
requirements, NASDAQ may again de-list the Common Stock from trading on The
NASDAQ SmallCap Market. The principal purpose of the Reverse Split is to
increase the market price of the Common Stock in order that the market price of
the Common Stock is well above the NASDAQ minimum bid requirement for re-listing
and if re-listed could better maintain the $1.00 maintenance requirement (which
does not adjust for the Reverse Split). The OTC-BB on which the Common Stock is
now traded is generally considered to be a less efficient market.
The purpose of the Reverse Split also would be to increase the market price of
the Common Stock in order to make the Common Stock more attractive to raise
financing (and, therefore, both raise cash to support the Company's operations
and increase the Company's net tangible assets to facilitate compliance with
NASDAQ requirements), and as a possible currency for acquisitions and other
transactions. The Common Stock traded on The NASDAQ National Market at market
prices ranging from approximately $.80 to approximately $2.10 from November 18,
1998 through March 29, 1999 and on the OTC-BB from approximately $.04 to
approximately $1.18 from March 29, 1999 through December 31, 2000. This has
reduced the attractiveness of using the Common Stock or instruments convertible
or exercisable into Common Stock in order to raise financing to support the
Company's operations and to increase the Company's net worth and as
consideration for potential acquisitions (which, when coupled with the Company's
need to deploy its available cash for operations, has rendered acquisitions
difficult to negotiate). Furthermore, the Company believes that re-listing the
Company's Common Stock on The NASDAQ SmallCap Market may provide the Company
with a broader market for its Common Stock and, therefore, facilitate the use of
the Common Stock in acquisitions and financing transactions in which the Company
may engage.
THERE CAN BE NO ASSURANCE, HOWEVER, THAT, EVEN AFTER CONSUMMATING THE REVERSE
SPLIT, THE COMPANY WILL MEET THE MINIMUM BID PRICE FOR RE-LISTING AND OTHERWISE
MEET THE REQUIREMENTS OF NASDAQ FOR INCLUSION FOR TRADING ON THE NASDAQ SMALLCAP
MARKET, OR THAT IT WILL BE ABLE TO UTILIZE ITS COMMON STOCK IN ORDER TO
EFFECTUATE FINANCING OR ACQUISITION TRANSACTIONS.
Furthermore, the Company is contractually obligated to issue 6,869,654 shares of
Common Stock more than the 50,000,000 shares of Common Stock the Company is
currently authorized to issue. Accordingly, the Company is in violation of
certain of its contractual violations as it would be unable to issue any shares
of Common Stock pursuant to the merger with TAA, Inc., as such issuance would
cause the Company to issue more than 50,000,000 shares of Common Stock. A
Reverse Split would allow the Company to issue shares pursuant to its
contractual obligations, as it would reduce the number of shares of Common Stock
outstanding and make available shares of authorized Common Stock to issue as
required.
Giving the Board authority to implement the Reverse Split will help avoid the
necessity of calling a special meeting of stockholders under time constraints to
authorize a reverse split should it become necessary in
3/12/2001
20
Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
order to seek to effectuate a financing or acquisition transaction or to meet
NASDAQ's listing maintenance criteria at a future time.
The Reverse Split will not change the proportionate equity interests of the
Company's stockholders, nor will the respective voting rights and other rights
of stockholders be altered, except for possible immaterial changes due to
rounding up to eliminate fractional shares. The Common Stock issued pursuant to
the Reverse Split will remain fully paid and non-assessable. The Company will
continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended.
Certain Effects of the Reverse Split
The following table illustrates the principal effects of the Reverse Split to
the 31,016,966 shares of Common Stock outstanding as of December 31, 2000:
Prior to After 1-for 2 After 1-for 10
Reverse Stock Reverse Stock Reverse Stock
Number of Shares Split Split Split
Common Stock:
Authorized ................ 50,000,000 50,000,000 50,000,000
Outstanding (2)............ 31,016,966 15,508,483 3,101,697
---------- ----------- ---------
Available for Future
Issuance................... 18,986,034 34,491,517 46,898,303
Common Stock
Authorized (1)........... 250,000,000 250,000,000 250,000,000
Outstanding.............. 31,016,966 15,508,483 3,040,697
----------- ---------- ---------
Available for Future
Issuance.................. 223,940,949 246,970,475 247,394,095
(1) If Proposal # 4 were approved by the stockholders, there would be
250,000,000 shares of Common Stock authorized.
(2) Gives effect to the Reverse Split, excluding New Shares to be issued in
lieu of fractional shares, and to conversions of convertible preferred
stock through December 31, 2000 and to exercise of warrants through
November 15, 2001. Excludes, on a pre-Reverse Split basis: 1057 shares
of Preferred Stock subject to potential issuance upon conversion of the
outstanding shares of Preferred Convertible Stock; approximately
13,489,654 shares of Common Stock which were subject to outstanding
options and warrants; and additional shares of Common Stock which would
be needed for the merger with tAA, Inc. The number of shares of Common
Stock issuable upon conversion of the Preferred Convertible Stock may
be dependent upon the market price of Common Stock. Accordingly, the
actual number of shares of Common Stock issued upon conversion of the
Preferred Convertible Stock may not be determined at this time. Upon
effectiveness of the Reverse Split, each option and warrant would
entitle the holder to acquire a number of shares equal to the number of
shares which the holder was entitled to acquire prior to the Reverse
Split divided by the Exchange Number at the exercise price in effect
immediately prior to the Reverse Split multiplied by the Exchange
Number.
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Stockholders should recognize that, if the Reverse Split is effectuated, they
will own a fewer number of shares than they presently own (a number equal to the
number of shares owned immediately prior to the filing of the amendment
regarding the Reverse Split divided by the Exchange Number, as adjusted to
include New Shares to be issued in lieu of fractional shares). While the Company
expects that the Reverse Split will result in an increase in the market price of
the Common Stock, there can be no assurance that the Reverse Split will increase
the market price of the Common Stock by a multiple equal to the Exchange Number
or result in a permanent increase in the market price (which is dependent upon
many factors, including the Company's performance and prospects). Also, should
the market price of the Company's Common Stock decline after the Reverse Split,
the percentage decline may be greater than would pertain in the absence of the
Reverse Split. Furthermore, the possibility exists that liquidity in the market
price of the Common Stock could be adversely affected by the reduced number of
shares that would be outstanding after the Reverse Split. In addition, the
Reverse Split will increase the number of stockholders of the Company who own
odd-lots (less than 100 shares). Stockholders who hold odd-lots typically will
experience an increase in the cost of selling their shares, as well as greater
difficulty in effecting such sales. In addition, an increase in the number of
odd-lot holders will reduce the number of holders of round lots (100 or more
shares), which could adversely affect the NASDAQ listing requirement that the
Company have at least 300 round lot holders. Consequently, there can be no
assurance that the Reverse Split will achieve the desired results that have been
outlined above.
Stockholders should also recognize that, as indicated in the foregoing table,
there would be an increase in the number of shares, which the Company will be
able to issue from authorized but un-issued shares of Common Stock. As a result
of any issuance of shares, the equity and voting rights of holders of
outstanding shares may be diluted.
Procedure for Effecting Reverse Split and Exchange of Stock Certificates
If this amendment is approved by the Company's stockholders, and if the Board
still believes that the Reverse Split is in the best interests of the Company
and its stockholders, the Company will file the amendment with the Secretary of
State of the State of Utah at such time as the Board has determined the
appropriate Exchange Number and the appropriate effective time for such split.
The Board may delay effecting the Reverse Split until as late as December 31,
2001 without re-soliciting stockholder approval. The Reverse Split will become
effective on the date of filing the amendment at the time specified in the
amendment (the "Effective Time"). Beginning at the Effective Time, each
certificate representing Old Shares will be deemed for all corporate purposes to
evidence ownership of New Shares.
As soon as practicable after the Effective Time, stockholders will be notified
that the Reverse Split has been effected and of the exact Exchange Number. The
Company expects that its transfer agent will act as exchange agent (the
"Exchange Agent") for purposes of implementing the exchange of stock
certificates. Holders of Old Shares will be asked to surrender to the Exchange
Agent certificates representing Old Shares in exchange for certificates
representing New Shares in accordance with the procedures to be set forth in a
letter of transmittal to be sent by the Exchange Agent. No new certificates will
be issued to a stockholder until such stockholder has surrendered such
stockholder's outstanding certificate(s) together with the properly completed
and executed letter of transmittal to the Exchange Agent. Any Old Shares
submitted for transfer, whether pursuant to a sale or other disposition, or
otherwise, will automatically be exchanged for New Shares at the exchange ratio.
Stockholders should not destroy any stock certificate and should not submit any
certificate until requested to do so by the Company or the Exchange Agent.
Fractional Shares
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
No scrip or fractional certificates will be issued in connection with the
Reverse Split. Any fraction of a share that any stockholders of record otherwise
would be entitled to receive shall be rounded up to the nearest whole share.
No Dissenter's Rights
Under Utah law, stockholders are not entitled to dissenter's rights with respect
to the proposed amendment.
Federal Income Tax Consequences of the Reverse Split
The following is a summary of certain material U.S. federal income tax
consequences of the Reverse Split and does not purport to be complete. It does
not discuss any state, local, foreign or minimum income or other U.S. federal
tax consequences. Also, it does not address the tax consequences to holders that
are subject to special tax rules, such as banks, insurance companies, regulated
investment companies, personal holding companies, foreign entities, nonresident
alien individuals, broker-dealers and tax-exempt entities. The discussion is
based on the provisions of the U.S. federal income tax law as of the date
hereof, which is subject to change retroactively as well as prospectively. This
summary also assumes that the Old Shares were, and the New Shares will be, held
as a "capital asset," as defined in the Code (generally, property held for
investment). The tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of such stockholder. Each stockholder should
consult with such stockholder's own tax advisor with respect to the consequences
of the Reverse Split.
The Reverse Split is an isolated transaction and is not part of a plan to
periodically increase any stockholder's proportionate interest in the assets or
earnings and profits of the Company. As a result, no gain or loss should be
recognized by a stockholder of the Company upon such stockholder's exchange of
Old Shares for New Shares pursuant to the Reverse Split. The aggregate tax basis
of the New Shares received in the Reverse Split will be the same as the
stockholder's aggregate tax basis in the Old Shares exchanged therefore. The
stockholder's holding period for the New Shares will include the period during
which the stockholder held the Old Shares surrendered in the Reverse Split.
Stockholder Approval
In accordance with the Utah Corporation Law and the Certificate of
Incorporation, the affirmative vote of a majority of the outstanding shares of
Common Stock entitled to vote thereon is required to adopt this proposed
amendment.
Use of Additional Shares
At the present time, the Company has no plans for use of the additional shares
except as noted in Proposal # 3 (the "Merger" with tAA which will use
100,000,000 shares.
Anti-Takeover Effects
The Company does not have any anti-takeover provisions in its' by-laws,
articles, or in any other corporate or employment agreements, and there are no
plans to incorporate such provisions. However, management might use the
additional shares to resist or frustrate a third-party transaction, providing an
above-market premium that is favored by a majority of independent shareholders.
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THIS PROPOSAL.
PROPOSAL # 6 - TO APPROVE THE NAME CHANGE OF PEN INTERCONNECT, INC., TO
THE AMANDA COMPANY, INC.
Should Proposal # 3 (the "Merger") be approved, the Board is asking the
shareholders to approve the change of Pen's name to The Amanda Company, Inc.
This would be so as to reflect the new direction of the Company.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THIS PROPOSAL.
PROPOSAL # 7 - TO CONSIDER AND TRANSACT SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT(s) THEREOF
The Company knows of no other matters that will be presented for consideration
at the Meeting. If any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed form of Proxy to vote the shares
they represent as the Board may recommend. Discretionary authority with respect
to such other matters is granted by the execution of the enclosed Proxy.
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Exhibit A
Proposed Form of Amendment to Certificate of Incorporation
Increasing the Number of Authorized Shares of Common Stock
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PEN INTERCONNECT, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
Pen Interconnect, Inc.
2. The Certificate of Incorporation of the Corporation (hereinafter called
the "Certificate of Incorporation") is hereby further amended by
deleting the current first paragraph of the Fourth Article and
replacing it with the following:
"FOURTH: The aggregate number of shares of stock which the Corporation
shall have authority to issue is 250,000,000 shares divided into two
classes; 250,000,000 shares of which shall be designated as Common
Stock, $.01 par value per share, and 100,000 shares of which shall be
designated as Preferred Stock, with $1,000.00 par value per share.
There shall be no preemptive rights with respect to any shares of
capital stock of the Corporation".
3. The amendment of the Certificate of Incorporation herein certified has
been duly adopted in accordance with the provisions of Sections 228 and
242 of the General Corporation Law of the State of Utah.
Dated: ___________, 2001
By:_________________________
Stephen J. Fryer
Chairman and CEO
ATTEST:
By:__________________________
Christine Risner, Secretary
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Exhibit B
Proposed Form of Amendment to Certificate of Incorporation
Effecting a Reverse Split
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PEN INTERCONNECT, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
Pen Interconnect, Inc.
2. The Certificate of Incorporation of the Corporation (hereinafter called
the "Certificate of Incorporation") is hereby further amended by
deleting the current first paragraph of the Fourth Article and
replacing it with the following:
"FOURTH: The aggregate number of shares of stock which the Corporation
shall have authority to issue is _________ shares divided into two classes;
_________ shares of which shall be designated as Common Stock, $.01 par
value per share, and _________ shares of which shall be designated as
Preferred Stock, with $1,000.00 par value per share. There shall be no
preemptive rights with respect to any shares of capital stock of the
Corporation.
Effective 12:01 a.m. on __________, 2001 (the "Effective Time"), each __
shares of Common Stock then issued shall be automatically combined into one
share of Common Stock of the Corporation. No fractional shares or scrip
representing fractions of a share shall be issued, but in lieu thereof,
each fraction of a share that any stockholder would otherwise be entitled
to receive shall be rounded up to the nearest whole share."
3. The amendment of the Certificate of Incorporation herein certified has
been duly adopted in accordance with the provisions of Sections 228 and
242 of the General Corporation Law of the State of Utah.
Dated: ___________, 2001
By:_________________________
Stephen J. Fryer
Chairman and CEO
ATTEST:
By:__________________________
Christine Risner, Secretary
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
THE BOARD OF DIRECTORS OF
PEN INTERCONNECT, INC.
Dated: February 22, 2001
PEN INTERCONNECT INCORPORATED - PROXY OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Stephen J. Fryer and Christine Risner jointly
and severally, as proxies, with full power of substitution and re-substitution,
to vote all shares of stock which the undersigned is entitled to vote at the
Annual Meeting of Stockholders (the "Annual Meeting") of Pen Interconnect, Inc.,
(the "Company") to be held at the Newport Beach Tennis Club, on Wednesday, April
11, 2001 at 10:AM local time, or at any postponements or adjournments thereof,
as specified below, and to vote in his or her discretion on such other business
as may properly come before the Annual Meeting and any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4, 5 AND 6.
1. ELECTION OF DIRECTORS:
Nominees: Stephen J. Fryer, Brian Bonar, David Woo, Bill Prevot,
David P. Lieberman.
[] VOTE FOR ALL NOMINEES ABOVE
[] VOTE WITHHELD FROM ALL NOMINEE
(Except as withheld in the space below)
Instruction: To withhold authority to vote for any individual nominee, check the
box "Vote FOR" and write the nominee's name on the line below.
2. RATIFICATION OF ACCOUNTANTS:
Ratification and approval of the selection of Berg & Company, LLP as
independent auditors for the fiscal year ending September 30, 2001.
[] VOTE FOR [] VOTE AGAINST [] ABSTAIN
3. VOTE FOR THE MERGER WITH tAA, Inc:
Vote in favor of the merger with tAA, Inc., by an exchange of shares.
[] VOTE FOR [] VOTE AGAINST [] ABSTAIN
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
4. APPROVAL OF INCREASE IN NUMBER OF COMMON STOCK:
Approval of an amendment to the Company's certificate of incorporation
to increase the number of the Common Stock authorized to be issued to
250,000,000 shares.
[] VOTE FOR [] VOTE AGAINST [] ABSTAIN
5. APPROVAL OF REVERSE SPLIT:
To approve an amendment to the Certificate of Incorporation in order to
effect a stock combination (reverse split) of the Common Stock in an
exchange ratio ranging from one newly issued share for each two
outstanding shares of Common Stock, to one newly issued share for each
ten outstanding shares of Common Stock.
[] VOTE FOR [] VOTE AGAINST [] ABSTAIN
6. APPROVAL OF CHANGING THE COMPANY NAME:
To Approve changing Pen's name to The Amanda Company, Inc.
[] VOTE FOR [] VOTE AGAINST [] ABSTAIN
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
UNLESS OTHERWISE SPECIFIED BY THE UNDERSIGNED, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, 3, 4, 5, and 6, AND WILL BE VOTED BY THE PROXY HOLDERS AT THEIR
DISCRETION AS TO ANY OTHER MATTERS PROPERLY TRANSACTED AT THE ANNUAL MEETING OR
ANY ADJOURNMENT(s) THEREOF TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS JUST SIGN BELOW, NO BOXES NEED BE CHECKED.
DATED: ____________________, 2001
SIGNATURE OF STOCKHOLDER
PRINTED NAME OF STOCKHOLDER
TITLE (IF APPROPRIATE)
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. IF SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH, AND, IF
SIGNING FOR A CORPORATION, GIVE YOUR TITLE. WHEN SHARES ARE IN THE NAMES OF MORE
THAN ONE PERSON, EACH SHOULD SIGN.
CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING. []
PEN
PEN INTERCONNECT, INC
2961 W. MacArthur Blvd., Suite 121, Santa Ana, CA 92704
714-436-9724 - 714-436-9728 (Fax)
3/12/2001
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Pen Interconnect, Inc - Annual Meeting of Stockholders - April 11, 2001
Shareholder Proposals
To be considered for inclusion in the Proxy Statement and for the consideration
at the Meeting, shareholder proposals must be submitted on a timely basis. The
Company must receive proposals for the 2000 Annual Meeting of Shareholders not
later than a reasonable time before the Meeting begins in order that they are
included in the proxy statement and for the proxy relating to that meeting. The
Company recommends that shareholders who wish to submit proposals contact the
Company substantially earlier than such date. Any such proposals, as well as any
questions related thereto, should be directed to the Secretary of the Company.
Additional Information
The Company will provide, without charge to any person from whom a Proxy is
solicited by the Board of Directors, upon written request of such person, a copy
of the Company's Annual Report on Form 10- KSB/A, including the financial
statements and schedules thereto (as well as exhibits thereto, if specifically
requested), required to be filed with the Securities and Exchange Commission.
Written requests for such information should be directed to: Investor Relations
Department, Pen Interconnect, Inc., 2961 W. MacArthur Blvd., Suite 121, Santa
Ana, CA 92704.
Incorporation by Reference
This Proxy Statement incorporates by reference the Company's Financial
Statements and the information contained under the heading "Management's
Discussion and Analysis or Plan of Operations", from the Company's Form 10-KSB/A
for the fiscal year 2000, and the 10QSB for the fiscal quarters ended, March 31,
2000, June 30, 2000, December 31, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
--------------------------------------
Stephen J. Fryer
Chairman and CEO
March 1, 2001
3/12/2001
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