<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[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 to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
SWISSRAY INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
SWISSRAY INTERNATIONAL, INC.
200 East 32nd Street, Suite 34-B
New York, New York 10016
July 24, 1998
Dear Stockholder
You are cordially invited to attend a Special Meeting of Stockholders
(the "Special Meeting") of SWISSRAY International, Inc. (the "Company"), which
will be held at the Hotel Intercontinental, 111 E. 48th Street, New York, New
York, on Monday, August 31, 1998 commencing at 2:00 p.m. (local time). We look
forward to greeting as many of our stockholders as are able to be with us.
At the Special Meeting, you will be asked to consider and act upon
proposals to (1) approve a reverse stock split of all issued and outstanding
shares of Common Stock, (2) adopt an amendment to the Company's Certificate of
Incorporation so as to authorize the creation of a class of Preferred Stock;
and (3) transact such other business as may properly come before the meeting
and any adjournment thereof.
We hope you will find it convenient to attend the meeting in person.
Whether or not you expect to attend, to assure your representation at the
meeting and the presence of a quorum, please complete, date, sign and mail
promptly the enclosed proxy card (the "Proxy"), for which a return envelope is
provided. No postage need be affixed to the Proxy it if is mailed in the United
States. After returning your Proxy, you may, of course, vote in person on all
matters brought before the meeting.
Yours sincerely,
Ruedi G. Laupper,
Chairman of the Board,
Chief Executive Officer and President
<PAGE> 3
SWISSRAY INTERNATIONAL, INC.
200 East 32nd Street, Suite 34-B
New York, New York 10016
---------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 31, 1998
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Special Meeting") of SWISSRAY International, Inc., a New York corporation (the
"Company"), will be held at the Hotel Intercontinental located at 111 E. 48th
Street, New York, New York on Monday, August 31, 1998, at 2:00 p.m. (local
time), for the purpose of considering and voting upon the following matters:
(1) To consider and act upon a proposal to approve and adopt a
reverse stock split of all issued and outstanding shares of
Company common stock thereby reducing the number of issued and
outstanding shares in accordance with such reverse stock split
and adding those shares of common stock otherwise canceled as
a result of the reverse stock split to its currently
authorized shares thereby increasing the number of authorized
and unissued shares of its common stock; it being understood
that the number of currently authorized but unissued shares of
Company common stock are not subject to reversal; and
(2) To consider and act upon a proposal to approve and adopt an
amendment to the Company's Certificate of Incorporation to
authorize the creation of a class of Preferred Stock; and
(3) To transact such other business as may properly come before
the meeting and any adjournment thereof.
The accompanying proxy is solicited by the Board of Directors of the
Company. A copy of the Company's Proxy Statement and form of proxy are enclosed.
Only stockholders of record as of the close of business on July 17,
1998 are entitled to notice of, and to vote at, the Special Meeting and any
adjournment thereof. Such stockholders may vote in person or by proxy.
You are cordially invited to be present at the Special Meeting. It is
important to you and to the Company that your shares be voted at the Special
Meeting.
By Order of the Board of Directors
Ruedi G. Laupper
Chairman of the Board,
July 24, 1998 Chief Executive Officer and President
IMPORTANT NOTICE:
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, YOU
ARE URGED TO READ THE ATTACHED PROXY STATEMENT CAREFULLY AND THEN TO SIGN, DATE,
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED STAMPED AND ADDRESSED
ENVELOPE. AS SET FORTH IN THE PROXY STATEMENT, THE GIVING OF THE PROXY WILL NOT
AFFECT YOUR RIGHT TO ATTEND AND TO VOTE AT THE SPECIAL MEETING.
<PAGE> 4
SWISSRAY INTERNATIONAL, INC.
----------------
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 31, 1998
This Proxy Statement and the accompanying form of proxy ("Proxy") are
being furnished to the stockholders of SWISSRAY International, Inc. , a New York
corporation (the "Company"), in connection with the solicitation of Proxies by
the Board of Directors of the Company for use at the Special Meeting of
Stockholders (the "Special Meeting") to be held at the Hotel Intercontinental
located at 111 E. 48th Street, New York, New York on August 31, 1998, at 2:00
p.m. (local time), and at any adjournment thereof. Only stockholders of record
as of the close of business on July 17, 1998 (the "Record Date") will be
entitled to notice of, and to vote at, the Special Meeting.
The Proxy Statement and the accompanying Proxy are being sent or given
to the stockholders on or about July 24, 1998.
At the Special Meeting, the stockholders of the Company will be asked
to consider and act upon proposals to (1) reverse stock split all issued and
outstanding shares of Company common stock thereby reducing the number of
issued and outstanding shares in accordance with such reverse stock split and
adding those shares of common stock otherwise canceled as a result of the
reverse stock split to its currently authorized shares thereby increasing the
number of authorized and unissued shares of its common stock; it being
understood that the number of currently authorized but unissued shares of
Company common stock are not subject to reversal; (2) consider and act upon a
proposal to approve and adopt an amendment to the Company's Certificate of
Incorporation to authorize the creation of a class of Preferred Stock; and (3)
transact such other business as may properly come before the meeting and any
adjournment thereof.
The principal executive office of the Company is located at
Turbistrasse 25-27, CH-6280 Hochdorf, Switzerland and the Company also has an
office at 200 East 32nd Street, Suite 34-B, New York, New York 10016. The
Company's telephone number in Switzerland is 011-4141-914-1200 and in the United
States is (212) 545-0095.
STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ACCOMPANYING FORM OF PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
GENERAL
SOLICITATION OF PROXIES
If the accompanying Proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the instructions specified
in the Proxy. In the absence of
<PAGE> 5
instructions to the contrary, such shares will be voted to (1) approve a
reverse stock split of all issued and outstanding shares of Company common
stock thereby reducing the number of issued and outstanding shares in
accordance with such reverse stock split and adding those shares of common
stock otherwise canceled as a result of the reverse stock split to its
currently authorizes shares thereby increasing the number of authorized and
unissued shares of its common stock; it being understood that the number of
currently authorized but unissued shares of Company common stock are not
subject to reversal; (2) consider and act upon a proposal to approve and adopt
an amendment to the Company's Certificate of Incorporation to authorize the
creation of a class of Preferred Stock; and (3) transact such other business as
may properly come before the meeting and any adjournment thereof. The Board of
Directors does not currently intend to bring any other matters before the
Special Meeting and is not aware of any matters that will come before the
Special Meeting other than as described herein. In the absence of instructions
to the contrary, however, it is the intention of each of the persons named in
the accompanying Proxy to vote all properly executed Proxies on behalf of the
stockholders they represent in accordance with their discretion with respect to
any such other matters properly coming before the Special Meeting. The expenses
with respect to this solicitation of Proxies will be paid by the Company.
REVOCATION OF PROXIES
Any stockholder may revoke such stockholder's Proxy at any time prior
to the voting thereof on any matter (without, however, affecting any vote taken
prior to such revocation). A Proxy may be revoked by written notice of
revocation received prior to the Special Meeting, by attending the Special
Meeting and voting in person or by submitting a signed Proxy bearing a
subsequent date. A written notice revoking a previously executed Proxy should be
sent to the Company at 200 East 32nd Street, Suite 34-B, New York, New York
10016, Attention: Secretary. Attendance at the Special Meeting will not in and
of itself constitute a revocation of a Proxy.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP
Only holders of record of the Common Stock of the Company as of the
close of business on the Record Date will be entitled to vote at the Special
Meeting. Each share of Common Stock entitles the registered holder thereof to
one vote on each matter to come before the Special Meeting. As of the close of
business on July 17, 1998 there were __________ shares of the Common Stock
outstanding. The presence, in person or by Proxy, of stockholders entitled to
cast a majority of all votes entitled to be cast at the Special Meeting will
constitute a quorum. Votes that are withheld will be counted for purposes of
determining the presence or absence of a quorum but will have no other effect.
Broker non-votes, if any, will similarly be counted solely for purposes of
determining the presence or absence of a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of July 17, 1998 (except where otherwise noted)
with respect to (a) each person or firm known by the Company to be the
beneficial owner of more than five percent of the
<PAGE> 6
outstanding shares of Common Stock, (b) each director of the Company, (c) each
executive officer of the Company and (d) all officers and directors of the
Company as a group:
<TABLE>
<CAPTION>
Number of Shares Percentage of
Beneficially Shares Beneficially
Name and Address of Beneficial Owner (1) Owned (2) Owned (2) (6)
- ---------------------------------------- --------- -------------
<S> <C> <C>
Ruedi G. Laupper (3) 4,102,590 . %
Josef Laupper (4) 500,000 . %
Erwin Zimmerli (5) 50,000 *
Ueli Laupper 0 --
Herbert Laubscher 0 --
Erich A. Kalbermatter
Dov Maor
All directors and officers as a group (7 persons)
</TABLE>
* Represents less than 1%
(1) Unless otherwise indicated, the address for each named individual is in
care of SWISSRAY International, Inc., 200 East 32nd Street, Suite 34-B,
New York, New York 10016.
(2) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of the Common Stock beneficially owned by them. A person is
deemed to be the beneficial owner of securities which may be acquired
by such person within 60 days from the date of this Proxy Statement
upon the exercise of options, warrants or convertible securities except
as indicated in footnote 6 below. Each beneficial owner's percentage
ownership is determined by assuming that options that are held by such
person (but not those held by any other person) and which are
exercisable within 60 days of the date of this Proxy Statement, have
been exercised.
(3) Includes (i) 300,000 shares owned indirectly by Ruedi G. Laupper
through SR Medical Equipment Ltd., a corporation which is wholly
owned by Ruedi G. Laupper; (ii) 3,682,590 shares owned indirectly by
Ruedi G. Laupper through Tomlinson Holding Inc., a corporation which
is wholly owned by Ruedi G. Laupper and (iii) 120,000 shares which
may be acquired upon exercise of immediately exercisable options,
which options are owned indirectly by Ruedi G. Laupper through SR
Medical Equipment Ltd.
(4) Includes 500,000 shares owned indirectly by Josef Laupper through
Lairy Investment Inc., a corporation of which Josef Laupper is a
majority shareholder.
(5) Includes 50,000 shares which may be acquired upon exercise of
immediately exercisable options.
(6) Does not include an estimated __________ shares which may be issued
upon conversion of outstanding convertible debentures (the "Convertible
Debentures") assuming conversion based on the last reported sales price
on July 17, 1998 (the Record Date) in accordance with conversion terms.
None of these Convertible Debentures are owned by officers and/or
directors of the Company.
<PAGE> 7
PROPOSAL NO. 1
REVERSE STOCK SPLIT
NO LESS THAN 1 FOR 4 BUT NO MORE THAN 1 FOR 10
GENERAL
The Board of Directors of the Company has approved a proposal (the
"Reverse Stock Split Proposal") to effect a reverse stock split of the
Company's outstanding Common Stock, $.01 par value per share (the "Common
Stock"), subject to the approval by the shareholders of the Company. Approval
of the reverse stock split will authorize the Board in its discretion to
effectuate a reverse stock split on no less than a 1 for 4 basis and no more
than a 1 for 10 basis dependent upon current stock price and related
considerations. For purposes of this Proxy Statement an assumption is being
made - solely for illustrative purposes - that the Board will choose to
effectuate a 1 for 4 reverse stock split. However, such may not be the case as
the Board has the discretion to authorize up to a 1 for 10 reverse stock split.
The Reverse Stock Split Proposal provides for the combination and
reclassification of the presently issued and outstanding shares of Common
Stock, into a smaller number of shares of identical Common Stock, on the basis
of one share of Common Stock for each four (or greater number of shares up to
10) shares of Common Stock previously issued and outstanding (the "Reverse
Stock Split"). Except as may result from the payment of cash for fractional
shares as described below, each shareholder will hold the same percentage of
Common Stock outstanding immediately following the Reverse Stock Split as each
shareholder did immediately prior to the Reverse Stock Split. If approved by
the shareholders of the Company as provided herein, the Reverse Stock Split
will be effected in as timely a manner as is practicable and in accordance with
applicable law (the "Effective Time" or "Effective Date"). Upon effectiveness
the reverse split shall have the effect of reducing the number of issued and
outstanding shares in accordance with such reverse stock split (thereby adding
those shares of Common Stock otherwise canceled as a result of the reverse
split to its currently authorized shares and thereby increasing the number of
authorized and unissued shares of Company Common Stock which are not subject to
reversal).
The following discussion assumes, solely for illustrative purposes, a
1 for 4 reverse stock split.
At the Effective Time, each share of Common Stock issued and
outstanding will automatically be reclassified and converted into one-fourth of
a share of Common Stock. Fractional shares of Common Stock will not be issued as
a result of the Reverse Stock Split. Shareholders entitled to receive a
fractional share of Common Stock as a consequence of the Reverse Stock Split
will, instead, receive from the Company a cash payment in U.S. dollars equal to
such fraction multiplied by four times the arithmetic mean average closing bid
price per share of the Common Stock on the Nasdaq Stock Market, Inc. ("Nasdaq")
for the five trading days immediately preceding the Effective Date.
The Company expects that, if the Reverse Stock Split Proposal is
approved by the shareholders at the Special Meeting, the Reverse Stock Split
will be effectuated promptly. However, notwithstanding approval of the Reverse
Stock Split Proposal by the shareholders of the Company, the Board of Directors
of the Company may elect not to effectuate or to delay the Effective Time of
the Reverse Stock Split, if the Board of Directors determines that the Reverse
Stock Split would not be in the best interest of the Company's shareholders at
such time. As heretofore indicated, the Board of Directors may also determine
the extent of the reverse stock split subject to the parameters hereinafter
indicated (but no greater than 1 for 10).
<PAGE> 8
Factors leading to such a determination could include, without limitation, any
possible effect on Nasdaq listing or future securities offerings (see "Reasons
for the Reverse Stock Split Proposal," below).
REASONS FOR THE REVERSE STOCK SPLIT
The primary purpose of the Reverse Stock Split is to combine the
outstanding shares of Common Stock so that the Common Stock outstanding after
giving effect to the Reverse Stock Split trades at a significantly higher price
per share than the Common Stock outstanding before giving effect to the Reverse
Stock Split.
During the 1997 calendar year, the closing bid price for the Common
Stock on the SmallCap tier of The Nasdaq Stock Market, Inc. (the "Nasdaq
SmallCap Market") ranged from $3.71875 to $0.9375 per share. The closing bid
price for the Common Stock on July 17, 1998, was $0.______ per share. The
Company believes that such a low quoted market price per share may discourage
potential new investors, increase market price volatility and decrease the
liquidity of the Common Stock. Most importantly, pursuant to new Nasdaq SmallCap
Market rules that went into effect on February 23, 1998 (the "New Nasdaq Listing
Requirements") the minimum bid price for the Company's Common Stock must be at
least $1.00 per share for continued inclusion of the Common Stock on the Nasdaq
SmallCap Market. The Company believes, but cannot assure, that the Reverse Stock
Split will enable the Common Stock to trade above the minimum bid price
established by the New Nasdaq Listing Requirements.
The Company believes that maintaining the listing of the Common Stock
on Nasdaq is in the best interests of the Company and its shareholders.
Inclusion on Nasdaq increases liquidity and may potentially minimize the spread
between the "bid" and "asked" prices quoted by market makers. Further, a Nasdaq
listing may enhance the Company's access to capital and increase the Company's
flexibility in responding to anticipated capital requirements. The Company
believes that prospective investors will view an investment in the Company more
favorably if its shares continue to qualify for listing on Nasdaq.
A secondary benefit that would be created as a result of approval of
the Reverse Stock Split proposal is that the number of authorized but unissued
shares would necessarily increase since only issued and outstanding shares are
subject to Reverse Stock Split and all shares canceled as a result of the
Reverse Stock Split will be added to authorized but unissued shares; it being
understood that the number of currently authorized but unissued shares of
Company Common Stock are not subject to reversal. The availability of additional
authorized but unissued shares may be of benefit to the Company in the event
that it engages in future (a) debt and/or equity financing and/or (b)
acquisitions, mergers or other forms of business combinations - in which
instances availability of such authorized but unissued shares may prove to be
essential.
For the above reasons, the Company believes that the Reverse Stock
Split is in the best interests of the Company and its shareholders. However,
there can be no assurances that the Reverse Stock Split will have the desired
consequences. The Company anticipates that, following the consummation of the
Reverse Stock Split, the Common Stock will trade at a price per share that is
significantly higher than the current market price of the Common Stock. However,
there can be no assurance that, following the Reverse Stock Split, the Common
Stock will trade at four times the market price of the Common Stock prior to the
Reverse Stock Split.
EFFECT OF THE REVERSE STOCK SPLIT PROPOSAL (ASSUMING 1 FOR 4 STOCK SPLIT
FOR ILLUSIVE PURPOSES ONLY)
Subject to shareholder approval, the Reverse Stock Split Proposal will be
effected in as timely a manner as in practicable and in accordance with
applicable law (the "Effective Time" or "Effective Date").
<PAGE> 9
The actual timing of the Effective Date (assuming approval of the Reverse Stock
Split Proposal at the Special Meeting) will be determined by the Company's
management (as well as the extent of the Reverse Stock Split as heretofore
indicated) based upon their evaluation as to when such action will be most
advantageous to the Company and its shareholders. The Company reserves the
right to forego or postpone effectiveness of the Reverse Stock Split Proposal,
if such action is determined to be in the best interests of the Company and its
shareholders.
Each shareholder that owns fewer than four shares of Common Stock will
have such shareholder's fractional share of Common Stock converted into the
right to receive cash as set forth below in "Exchange of Stock Certificates and
Payment for Fractional Shares." The interest of such shareholder in the Company
will thereby be terminated, and such shareholder will have no right to share in
the assets or future growth of the Company. Each shareholder that owns four or
more shares of Common Stock will continue to own shares of Common Stock and
will continue to share in the assets and future growth of the Company as a
shareholder. Such interest will be represented by one-fourth as many shares as
such shareholder owned before the Reverse Stock Split, subject to the
adjustment for fractional shares in which case such shareholder shall receive
cash in lieu of such fractional share. The number of shares of Common Stock
that may be purchased upon the exercise of outstanding options, warrants, and
other securities convertible into, or exercisable or exchangeable for, shares
of Common Stock (collectively, "Convertible Securities") and the per share
exercise or conversion prices thereof, will be adjusted appropriately as of the
Effective Date, so that the aggregate number of shares of Common Stock issuable
in respect of Convertible Securities immediately following the Effective Date
will be one-fourth of the number issuable in respect thereof immediately prior
to the Effective Date, the per share exercise price immediately following the
Effective Date will be 400% of the per share exercise or conversion price
immediately prior to the Effective Date, and the aggregate exercise or
conversion prices thereunder shall remain unchanged.
The Reverse Stock Split will also result in some shareholders owning
"odd lots" of less than 100 shares of Common Stock received as a result of the
Reverse Stock Split. Brokerage commissions and other costs of transactions in
odd lots may be higher, particularly on a per-share basis, than the cost of
transactions in even multiples of 100 shares.
The Company is authorized to issue 50,000,000 shares of Common Stock,
of which ___________shares were issued and outstanding at the close of business
on the Record Date (July 17, 1998).
Adoption of the Reverse Stock Split will reduce the shares of Common
Stock outstanding on the Record Date from __________ to approximately __________
(assuming a 1 for 4 Reverse Stock Split and could reduce the number of
outstanding common shares to approximately __________ assuming a 1 for 10
Reverse Stock Split) but will not effect the number of authorized shares of
Common Stock. After the Reverse Stock Split, the Company estimates that it will
have approximately the same number of shareholders. Except for the receipt of
cash in lieu of fractional interests, the reverse stock split will not affect
any shareholder's proportionate equity interest in the Company.
As a result of the Reverse Stock Split, the Company will have a greater
number of authorized but unissued shares of Common Stock than prior to the
Reverse Stock Split. The increase in the authorized but unissued shares of
Common Stock could make a change in control of the Company more difficult to
achieve. Under certain circumstances, such shares of Common Stock could be used
to create voting impediments to frustrate persons seeking to effect a takeover
or otherwise gain control of the Company. Such shares could be sold privately to
purchasers who might side with the Board of Directors in opposing a takeover bid
that the Board determines is not in the best interests of the Company and its
shareholders.
<PAGE> 10
The increase in the authorized but unissued shares of Common Stock also
may have the effect of discouraging an attempt by another person or entity,
through acquisition of a substantial number of shares of Common Stock, to
acquire control of the Company with a view to effecting a merger, sale of assets
or a similar transaction, since the issuance of new shares could be used to
dilute the stock ownership of such person or entity. Shares of authorized but
unissued Common Stock could be issued to a holder who would thereby have
sufficient voting power to assure that any such business combination or any
amendment to the Company's Articles of Incorporation would not receive the
shareholder vote required for approval thereof. The Board of Directors has no
current plans to issue any shares of Common Stock for any such or other purpose,
and does not intend to issue any stock except on terms or for reasons which the
Board of Directors deems to be in the best interests of the Company.
The Common Stock is currently listed on the Nasdaq SmallCap Market,
under the trading symbol SRMI.
EXCHANGE OF STOCK CERTIFICATES AND PAYMENT FOR FRACTIONAL SHARES
The combination and reclassification of shares of Common Stock pursuant
to the Reverse Stock Split will occur automatically on the Effective Date
without any action on the part of shareholders of the Company and without regard
to the date certificates representing shares of Common Stock prior to the
Reverse Stock Split are physically surrendered for new certificates. If the
number of shares of Common Stock to which a holder is entitled as a result of
the Reverse Stock Split would otherwise include a fraction, the Company will pay
to the shareholder, in lieu of issuing fractional shares of the Company, cash in
an amount equal to the same fraction multiplied by four times the average
closing price of the Common Stock on the Nasdaq SmallCap Market for the five
days immediately preceding the Effective Date. A change in the closing price of
the Common Stock will affect the amount received by shareholders in lieu of
fractional shares.
As soon as practicable after the Effective Date, transmittal forms will
be mailed to each holder of record of certificates for shares of Common Stock to
be used in forwarding such certificates for surrender and exchange for
certificates representing the number of shares of Common Stock such shareholder
is entitled to receive as a consequence of the Reverse Stock Split. The
transmittal forms will be accompanied by instructions specifying other details
of the exchange. Upon receipt of such transmittal form, each shareholder should
surrender the certificates representing shares of Common Stock prior to the
Reverse Stock Split, in accordance with the applicable instructions. Each holder
who surrenders certificates will receive new certificates representing the whole
number of shares of Common Stock that he holds as a result of the Reverse Stock
Split and any cash payable in lieu of a fractional share. SHAREHOLDERS SHOULD
NOT SEND THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM.
After the Effective Date, each certificate representing shares of
Common Stock outstanding prior to the Effective Date (an "Old Certificate")
will, until surrendered and exchanged as described above, be deemed, for all
corporate purposes, to evidence ownership of the whole number of shares of
Common Stock, and the right to receive from the Company the amount of cash for
any fractional shares, into which the shares of Common Stock evidenced by such
certificate have been converted by the Reverse Stock Split, except that the
holder of such unexchanged certificates will not be entitled to receive any
dividends or other distributions payable by the Company after the Effective
Date, until the Old Certificates have been surrendered. Such dividends and
distributions, if any, will be accumulated, and at the time of surrender of the
Old Certificates, all such unpaid dividends or distributions will be paid
without interest.
<PAGE> 11
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion describes certain material federal income tax
considerations relating to the Reverse Stock Split. This discussion is based
upon the Internal Revenue Code of 1986 (the "Code"), existing and proposed
regulations thereunder, legislative history, judicial decisions, and current
administrative rulings and practices, all as amended and in effect on the date
hereof. Any of these authorities could be repealed, overruled, or modified at
any time. Any such change could be retroactive and, accordingly, could cause the
tax consequences to vary substantially from the consequences described herein.
No ruling from the Internal Revenue Service (the "IRS") with respect to the
matters discussed herein has been requested, and there is no assurance that the
IRS would agree with the conclusions set forth in this discussion. All
shareholders should consult with their own tax advisors.
This discussion may not address certain federal income tax consequences
that may be relevant to particular shareholders in light of their personal
circumstances (such as persons subject to the alternative minimum tax) or to
certain types of shareholders (such as dealers in securities, insurance
companies, foreign individuals and entities, financial institutions, and tax-
exempt entities) who may be subject to special treatment under the federal
income tax laws. This discussion also does not address any tax consequences
under state, local, or foreign laws.
SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX
CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT, INCLUDING THE APPLICABILITY OF
ANY STATE, LOCAL, OR FOREIGN TAX LAWS, CHANGES IN APPLICABLE TAX LAWS, AND ANY
PENDING OR PROPOSED LEGISLATION.
The Company should not recognize any gain, or loss as a result of the
Reverse Stock Split. No gain or loss should be recognized by a shareholder who
receives only Common Stock upon the Reverse Stock Split. A shareholder who
receives cash in lieu of a fractional share of Common Stock that otherwise would
be held as a capital asset generally should recognize capital gain or loss on an
amount equal to the difference between the cash received and the shareholder's
basis in such fractional share of Common Stock. For this purpose, a
shareholder's basis in such fractional share of Common Stock will be determined
as if the shareholder actually received such fractional share. Except as
provided with respect to fractional shares, the aggregate tax basis of the
shares of Common Stock held by a shareholder following the Reverse Stock Split
will equal the shareholder's aggregate basis in the Common Stock held
immediately prior to the Reverse Stock Split and generally will be allocated
among the shares of Common Stock held following the Reverse Stock Split on a
pro-rata basis. Shareholders who have used the specific identification method to
identify their basis in shares of Common Stock combined in the Reverse Stock
Split should consult their own tax advisors to determine their basis in the
post-Reverse Stock Split shares of Common Stock received in exchange therefor.
REQUIRED VOTE FOR APPROVAL OF THE REVERSE STOCK SPLIT PROPOSAL
The affirmative vote of the holders of a majority of the Common Stock
present or represented at the Special Meeting is required to approve the
Reverse Stock Split Proposal. Proxies solicited by the Board of Directors will
be voted in favor of this Proposal unless stockholders specify otherwise.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE REVERSE STOCK SPLIT PROPOSAL.
<PAGE> 12
PROPOSAL NO. 2
APPROVAL OF THE CREATION OF A CLASS OF PREFERRED STOCK
The Board of Directors recommends that a class of preferred stock be
created to provide the Company with additional flexibility in raising capital
which it currently does not have.
The Board of Directors of the Company has adopted a resolution
unanimously approving and recommending to the Company's stockholders for their
approval an amendment to the Company's Certificate of Incorporation to provide
for the issuance of up to 1,000,000 shares of preferred stock, par value $.01
(the "Preferred Stock") in one or more series.
The designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions thereof (collectively, the
"Limitations and Restrictions") of the Preferred Stock will be determined by the
Board of Directors. Thus, the Board of Directors will, in the event of the
approval of this proposal by the Company's stockholders, be entitled to
authorize the creation and issuance of 1,000,000 shares of Preferred Stock in
one or more series with such Limitations and Restrictions as may be determined
in the Board of Director's sole discretion, with no further authorization by
security holders required for the creation and issuance thereof. Therefore, the
terms of any Preferred Stock subject to this proposal cannot be stated or
estimated at this time.
The issuance of Preferred Stock could adversely affect the voting power
and other rights of the holders of Common Stock. Preferred Stock may be issued
quickly with terms calculated to delay or prevent a change in control of the
Company or make removal of management more difficult. As a result, the Board of
Director's ability to issue Preferred Stock may discourage the potential
hostility of an acquiror, possibly resulting in beneficial negotiations.
Negotiating with an unfriendly acquiror may result in, among other things, terms
more favorable to the Company and its stockholders. Conversely, the issuance of
Preferred Stock may adversely affect the market price of, and the voting and
other rights of the holders of, the Common Stock. The Company presently has no
plans to issue Preferred Stock.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the outstanding shares of Common
Stock present in person or represented by proxies at the Special Meeting and
entitled to vote is required to approve the amendment set forth in Proposal 2.
If approved by the stockholders, the amendment to the Certificate of
Incorporation (authorizing the creation of the Preferred Stock) will become
effective upon filing with the Secretary of the State of New York of a
Certificate of Amendment to the Company's Certificate of Incorporation which
filing is expected to take place shortly after the Special Meeting.
The Certificate of Amendment would amend and restate Article Fourth of
the Company's Certificate of Incorporation to read as follows:
<PAGE> 13
The aggregate number of shares of all classes of stock which the
corporation shall have authority to issue is Fifty-one Million
(51,000,000), of which 50,000,000 shall be Common Stock, par value $.01
per share, and 1,000,000 shall be Preferred Stock, par value $.01 per
share without cumulative voting rights and without any preemptive
rights..
If Proposal 2 is not so approved, the Company's Certificate of
Incorporation will not be amended.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE AMENDMENT OF THE COMPANY'S
ARTICLES OF INCORPORATION TO EFFECT THE CREATION OF A CLASS OF PREFERRED STOCK
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
consideration at the Special Meeting other than the matters described in the
Notice of Special Meeting, but if other matters are presented, it is the
intention of the persons named in the accompanying Proxy to vote on such matters
in accordance with their judgment.
SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors, and the
cost of such solicitation will be borne by the Company. Proxies may be solicited
by directors, officers and employees of the Company, none of whom will receive
any additional compensation for his or her services. Solicitation of Proxies may
be made personally or by mail, telephone, telegraph, facsimile or messenger. The
Company will pay persons holding shares of the Common Stock in their names or in
the names of nominees, but not owning such shares beneficially (such as
brokerage houses, banks and other fiduciaries) for the reasonable expense of
forwarding soliciting materials to their principals.
By Order of the Board of Directors
Ruedi G. Laupper
Chairman of the Board of Directors,
Chief Executive Officer and President
New York, New York
July 24, 1998
<PAGE> 14
EXHIBIT INDEX
Number Description
Exhibit A Amended Certificate of Incorporation
<PAGE> 15
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF
SWISSRAY International, Inc.
------------------------------------
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
WE, THE UNDERSIGNED, Ruedi G. Laupper and Josef Laupper, being
respectively the president and the secretary of SWISSRAY International, Inc.
hereby certify:
1. The name of the corporation is SWISSRAY International, Inc.
2. The certificate of incorporation of said corporation was filed
with the Department of State on the 2nd day of January. 1968 under the name CGS
Units Incorporated.
3. That the amendment to the Certificate of Incorporation
effected by this Certificate is as follows:
Article 4 of the Certificate of Incorporation is amended to
add 1,000,000 shares of Preferred Stock, $.01 par value, and shall read as
follows:
"4. The total number of shares authorized which the
corporation shall have authority to issue is 51,000,000
shares, of which 50,000,000 shares shall be Common Stock, par
value $.01 per share without cumulative voting rights and
without any preemptive rights and 1,000,000 shares shall be
Preferred Stock, par value $.01 per share without cumulative
voting rights and without any preemptive rights.
4. The amendment to the Certificate of Incorporation was
authorized by an affirmative vote of the holders of at least a majority of all
outstanding shares entitled to vote on an amendment to the Certificate of
Incorporation at a special meeting of shareholders. Said authorization being
subsequent to the affirmative vote of the Board of Directors
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 31st day of
August, 1998.
/s/ Ruedi G. Laupper, President
-------------------------------
Ruedi G. Laupper, President
/s/ Josef Laupper, Secretary
-------------------------------
Josef Laupper, Secretary
<PAGE> 16
SWISSRAY INTERNATIONAL, INC.
Proxy for Special Meeting of Stockholders
This Proxy is Solicited by the Board of Directors
KNOW ALL MEN BY THESE PRESENTS that I (we), the undersigned Stockholder(s) of
SWISSRAY International, Inc. (the "Company"), do hereby nominate, constitute and
appoint Ruedi G. Laupper and Josef Laupper or either of them (with full power to
act alone), my true and lawful attorney(s) with full power of substitution, for
me and in my name, place and stead to vote all the Common Stock of said Company,
standing in my name on the books on the record date, July 17, 1998, at a Special
Meeting of its Stockholders to be held at the Hotel Intercontinental located at
111 E. 48th Street, New York, New York, on August 31, 1998, at 2:00 p.m., local
time, or at any postponement or adjournments thereof, with all the powers the
undersigned would possess if personally present.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTE AS DIRECTED BELOW. IN THE
ABSENCE OF ANY DIRECTION, THE SHARES REPRESENTED HEREBY WILL BE VOTED FOR THE
PROPOSAL TO REVERSE SPLIT THE ISSUED AND OUTSTANDING SHARES OF COMPANY COMMON
STOCK.
[ ] Please mark your votes in this example.
1. Approval of the proposal to reverse stock split the currently issued
and outstanding shares of Company Common Stock on the basis of no less
than 1 for 4 and no greater than 1 for 10; the exact number, (if any)
within such parameter to be determined by the Board of Directors in its
discretion.
For Against Abstain
[ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL.
2. Approval of the proposal to authorize the creation of a class of
Preferred Stock.
For Against Abstain
[ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before such meeting or adjournment or
postponement thereof.
SIGNATURE(S)
-----------------------------
-----------------------------
DATE
-------------------------------------
NOTE: PLEASE SIGN EXACTLY AS THE NAME(S) APPEAR HEREON. JOINT OWNERS SHOULD
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH.
