<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
/X/ Filed by the Registrant
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 to Rule 14a-11(c) or Rule 14a-12
HelpMate Robotics, 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):
/X/ No Fee Required
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
___________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________
(5) Total fee paid:
___________________________________________________________
Fee paid previously with preliminary materials.
<PAGE>
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 off its filing.
(1) Amount Previously Paid:
___________________________________________________________
(2) Form, Schedule or Registration Statement No.:
___________________________________________________________
(3) Filing Party:
___________________________________________________________
(4) Date Filed:
___________________________________________________________
<PAGE>
[HelpMate Logo]
_________________________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
MARCH 19, 1998
_________________________________________
A Special Meeting of Stockholders of HelpMate Robotics Inc. (the
"COMPANY") will be held on Thursday, March 19, 1998 at 10:00 a.m., at the
offices of the Company, Shelter Rock Lane, Danbury, Connecticut 06810 for the
following purposes:
1. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the number of authorized
shares of Common Stock, no par value per share, from 10,000,000 to
40,000,000 shares;
2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The proposal to be acted upon at the meeting is further described in
detail in the attached Proxy Statement. Only stockholders of record at the
close of business on January 30, 1998 (the "RECORD DATE"), will be entitled to
notice of and to vote at the meeting and any adjournments or postponement
thereof.
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED, REGARDLESS OF THE NUMBER OF SHARES
YOU HOLD. ACCORDINGLY, YOU ARE ENCOURAGED TO SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD IN THE REPLY ENVELOPE PROVIDED AS SOON AS POSSIBLE. THANK YOU FOR
ACTING PROMPTLY.
By Order of the Board of Directors,
___________________________________
Prudence Shepard
Assistant Secretary
February ___, 1998
<PAGE>
[HelpMate Logo]
February ___, 1998
Dear HelpMate Stockholder:
On behalf of the Board of Directors and management, I cordially invite you
to attend the Special Meeting of Stockholders on Thursday, March 19, 1998, at
10:00 a.m., at the offices of the Company, Shelter Rock Lane, Danbury,
Connecticut 06810.
The accompanying Notice of Special Meeting and Proxy Statement describes
the proposal to be considered at the meeting.
It is important that your shares be represented at the meeting. Whether
or not you plan to attend personally, please complete and mail the enclosed
proxy card in the return envelope.
Very truly yours,
Thomas K. Sweeny
President
<PAGE>
HELPMATE ROBOTICS INC.
SHELTER ROCK LANE
DANBURY, CONNECTICUT 06810
(203) 798-8988
PROXY STATEMENT
===============
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of proxies
on behalf of the Board of Directors (the "BOARD") of HelpMate Robotics Inc., a
Connecticut corporation (the "COMPANY"). Proxies are being solicited for use at
a Special Meeting of Stockholders (the "SPECIAL MEETING") to be held at 10:00
a.m., local time, on Thursday, March 19th, 1998, at the offices of the Company,
Shelter Rock Lane, Danbury, Connecticut 06810, and for all adjournments and
postponements thereof.
The purpose of the Special Meeting is to approve an amendment to the Company's
Certificate of Incorporation (the "CERTIFICATE OF INCORPORATION") to increase
the authorized number of shares of Common Stock, no par value per share (the
"COMMON STOCK"), from 10,000,000 to 40,000,000 shares.
Only stockholders of record (the "STOCKHOLDERS") as of the close of business on
January 30, 1998, the record date for the Special Meeting (the "RECORD DATE"),
will be entitled to notice of and to vote at the Special Meeting. At the close
of business on the Record Date, 6,951,300 shares of the Company's Common Stock
were outstanding and entitled to vote at the Special Meeting. Each share of
Common Stock is entitled to one vote.
The Notice of Special Meeting, this proxy statement, and the accompanying proxy
are first being mailed on or about February __, 1998 to stockholders of record
as of the close of business on the Record Date.
You can ensure that your shares are voted at the meeting by signing, dating and
promptly returning the enclosed proxy in the envelope provided.
INFORMATION CONCERNING SOLICITATION AND VOTING
Proposal One to approve the amendment of the Company's Certificate of
Incorporation increasing the authorized number of shares of Common Stock
requires the approval of a majority of the votes cast at the Special Meeting at
which a quorum is present.
In order to constitute a quorum for the conduct of business at the Special
Meeting, a majority of the outstanding shares of Common Stock entitled to vote
at the Special Meeting must be represented at the Special Meeting. If a share
is represented for any
<PAGE>
purpose at the Special Meeting, it is deemed to be present for all other
matters. Shares represented by proxies that reflect abstentions or broker
non-votes will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. Abstentions, broker non-votes
and votes withheld are not treated as votes cast at the Special Meeting, but
will have the effect of a negative vote on Proposal One, however, since the
Company's certificate of incorporation requires the affirmative vote of a
majority of the shares represented at the Special Meeting and entitled to vote
in order to approve an action.
Stockholders are encouraged to specify the way they wish to vote their shares by
marking the appropriate boxes on the enclosed proxy. All shares represented by
each properly executed, unrevoked proxy received in time for the Special Meeting
will be voted in the manner specified therein. If the manner of voting with
respect to a proposal is not specified in an executed proxy received by the
Company, the proxy will be voted FOR approval of such proposal.
Sending in a signed proxy will not affect a Stockholder's right to attend the
meeting and vote in person. Any Stockholder giving a proxy in the form
accompanying this proxy statement has the power to revoke the proxy prior to its
exercise. A proxy may be revoked at any time before it is exercised by the
Stockholder's delivering a written instrument of revocation to the Company's
Transfer Agent, American Stock Transfer & Trust Company, 40 Wall Street, New
York, New York 10005. A Stockholder may also revoke the proxy by presenting at
the Special Meeting a duly executed proxy bearing a later date or time than the
date or time of the proxy being revoked. Finally, a proxy may be revoked if the
Stockholder is present at the Special Meeting and elects to vote in person.
Mere attendance at the Special Meeting will not serve to revoke a proxy.
The expense of soliciting proxies will be borne by the Company. The
solicitation will be by mail. Expenses include reimbursement paid to brokerage
firms and others for their expenses incurred in forwarding solicitation material
regarding the Special Meeting to beneficial owners of the Company's Common
Stock. Further solicitation of proxies may be made by telephone or oral
communication with Stockholders by directors, officers and other employees of
the Company who will not receive additional compensation for the solicitation.
The Board does not intend to present any matters for a vote at the meeting
except for Proposal One described in this Proxy Statement. The persons named in
the proxy will, however, have discretionary voting authority regarding any other
business that may properly come before the Special Meeting.
INFORMATION ABOUT CERTAIN BENEFICIAL OWNERS OF COMMON STOCK
The following table sets forth information based upon the Company's records and
Securities and Exchange Commission filings with respect to each executive
officer, each director and each person known to be a beneficial owner of more
than 5% of the Common Stock of the Corporation and all officers and directors as
a group as of January 31, 1998. Under the rules and regulations of the
Securities and Exchange Commission, a
<PAGE>
person is deemed to own beneficially all securities of which that person owns or
shares voting or investment power as well as all securities which may be
acquired through the exercise of currently available conversion, warrant or
option rights. Unless otherwise indicated, each such person possesses sole
voting and investment power with respect to the shares owned by him.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owner Address Owned Ownership
---------------- ------- ----- ---------
<S> <C> <C> <C>
Connecticut Financial c/o Prospect Street Connecticut Capital Inc. 1,014,188 14.59%
Developments, LP 250 Park Avenue, 17th Floor
New York, NY 10177
Transitions Two c/o Landmark Partners Inc. 467,593 6.66%
Limited Partnership (1) 760 Hopmeadow Street
Simsbury, CT 06070
Joseph F. Engelberger(2) HelpMate Robotics Inc. 1,221,200 16.84%
Shelter Rock Lane
Danbury, CT 06810
Thomas K. Sweeny (3) HelpMate Robotics Inc. 359,189 5.16%
Shelter Rock Lane
Danbury, CT 06810
John F. Barry (4) Prospect Street Connecticut Capital Inc. 0 0
250 Park Avenue, 17th Floor
New York, NY 10177
Joseph G. Cote (4) Prospect Street Connecticut Capital Inc. 0 0
Exchange Place, 37th Floor
Boston, MA 02109
Theodore Sall(5) 47 Lake View Drive 13,000 (6)
Old Tappan, NJ 07675
Sheldon Sandler (4)(5) Ladenburg, Thalmann & Co., Inc. 10,000 (6)
590 Madison Avenue
New York, NY 10022
All Directors and Officers 1,606,953 22.13
as a Group
</TABLE>
(1) Includes warrants to purchase 57,326 shares which are currently exercisable
(2) Includes 72,589 shares of common stock owned by Mr. Engelberger's wife,
Margaret Engelberger, but does not include shares beneficially owned by Mr.
Engelberger's adult children or his brother. Also includes 311,616 shares owned
by the Joseph F. Engelberger Foundation. Also includes warrants to purchase
279,732 shares, and options to purchase 19,328 shares, each of which is
currently exercisable. Does not include the First Engelberger Warrants, Second
Engelberger Warrants or Engelberger Shares described under the heading
"Engelberger Loans."
(3) Includes options to purchase 9,872 shares.
(4) Does not include shares beneficially owned by these individuals' employers,
Prospect Street Connecticut Capital Inc., and Ladenburg, Thalmann & Co., Inc.
(5) Includes options to purchase 10,000 shares owned by such person.
(6) Less than one percent.
<PAGE>
PROPOSAL ONE: APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION
BACKGROUND. The Board unanimously adopted, subject to stockholder approval, an
amendment to the Company's Amended and Restated Certificate of Incorporation
(the "AMENDMENT") increasing the number of authorized shares of Common Stock
from 10,000,000 to 40,000,000. The Board is requesting Stockholder approval of
the Amendment.
The Company's Certificate of Incorporation currently authorizes the issuance of
10,000,000 shares of Common Stock (the "AUTHORIZED SHARES"). As of the Record
Date, 6,951,300 of these Authorized Shares were issued and outstanding (the
"OUTSTANDING SHARES"). In addition, as of the Record Date, an additional
2,658,867 of these Authorized Shares have been reserved for issuance pursuant to
the warrants, options and stock option plans described below (the "RESERVED
SHARES"):
<TABLE>
<CAPTION>
WARRANT, OPTION OR PLAN SHARES RESERVED FOR ISSUANCE
- ----------------------- ----------------------------
<S> <C>
Public Warrants and Underwriter Unit Options (1) 1,556,789
Stock Option Plans (2) 750,000
Investor Warrants (3) 352,078
---------
Total 2,658,867
</TABLE>
(1) Represents shares issuable upon exercise of (a) warrants expiring February
5, 2001 issued in connection with the Company's 1996 initial public
offering and (b) units (and warrants contained therein) expiring February
5, 2001 granted to the underwriters.
(2) Reflects shares reserved for issuance under the Company's 1984 Stock
Option Plan, 1988 Stock Option Plan and 1995 Stock Option Plan.
(3) Represents shares issuable upon exercise of warrants expiring at various
times issued to private investors and lenders.
Accordingly, all but 389,833 of the Company's Authorized Shares were issued and
outstanding or are currently reserved for some specific purpose. Moreover,
certain of the Investor Warrants contain anti-dilution provisions which, as a
result of the issuances of stock and other securities by the Company described
herein, could require the Company to issue more shares upon exercise of such
warrants than the Company currently has reserved for such issuance. In the event
the Stockholders approve Proposal One, and upon the effectiveness of the
Amendment, as described below, the Company intends to reserve an additional
number (estimated to be approximately 1,000,000) of shares of Common Stock
("EXCESS SHARES") for issuance upon exercise of all Investor Warrants in order
to give effect to these anti-dilution provisions. Given the exercise price of
the Public Warrants and Investor Warrants, the Company's management believes
that the likelihood is remote that outstanding warrants and options would be
exercised for a number of shares, if at all, in excess of the number of
authorized but unissued shares of stock in the event the Stockholders do not
approve Proposal One.
If the Amendment is approved, the Board intends to cause a certificate of
amendment to the Certificate of Incorporation (the "AMENDMENT CERTIFICATE") to
be filed with the
<PAGE>
Office of the Connecticut Secretary of the State (the "CONNECTICUT SECRETARY OF
STATE") as soon as practicable after the date of the Special Meeting to effect
the Amendment to the Certificate of Incorporation. Upon effectiveness of the
Amendment, the Company will have an additional 30,000,000 shares of Common Stock
authorized for issuance.
RECENT TRANSACTIONS. During the second half of 1997, the Company's financial
condition deteriorated and the Company experienced severe cash shortages. The
Company defaulted on loan payments to Connecticut Innovations Incorporated
("CII") and to the Company's Chairman, Joseph F. Engelberger. As of January
31, 1998, the outstanding principal and interest due under these loans,
respectively, were $454,545 and $171,862. Additionally, Leasing Technologies
International Inc. ("LTI") notified the Company in August 1997 that the Company
was in default under the terms of its Master Lease Agreement. The Company was
also served an eviction notice by its landlord due to non-payment of rent. As
of November 13, 1997, past due accounts payable were approximately $1.1 million.
The Company was also delisted by the Philadelphia Stock Exchange and NASDAQ
Small Cap Market tier of the NASDAQ Stock Market as a result of the Company's
inability to meet the applicable stock price and net worth requirements.
In light of the foregoing, the Company's management developed and
implemented a plan which resulted in significant actions being taken to reduce
expenses and to work out accommodations with creditors and lenders while seeking
alternative sources of capital. Management believed that if accommodations
could be made with creditors and lenders, then the Company could operate in a
downsized configuration, funded with the revenue streams generated by the
current and future rentals and sales of its HelpMate robots while the Company
pursued alternatives for addressing the long-term growth capital needs of the
business.
Accordingly, a substantial downsizing of the Company was accomplished in
the third quarter of fiscal 1997. The staff was reduced from 40 employees (35
full-time, 5 part-time) to 12 full-time and 2 part-time employees. The Vice
President of Engineering and the Vice President of Sales and Marketing resigned
and the remaining senior management of the Company took significant reductions
in pay. Staff reductions were made in all departments, including sales and
marketing, engineering, manufacturing and administration. The remaining staff
was dedicated to support of the existing base of robots in the field at customer
sites. The Company also continued to build and install robots at a reduced rate
to fill orders from its existing backlog production, using materials and parts
which had been previously ordered. No new materials for robots were ordered.
Sales and marketing activities for generating new customer orders were reduced
to responding to inquiries as received and no industry trade shows were
attended. To further reduce costs, the Company relocated to smaller office
space.
During December 1997 and January 1998, the Company completed negotiations
with respect to the settlement of debt and trade payables with its creditors in
exchange for stock and/or reduced payments as described below. The Company also
reached agreement with the landlord to forestall eviction and has negotiated a
new three year lease for the reduced space which the Company currently occupies.
The Company also
<PAGE>
resolved its default issues with LTI. Staff has been increased slightly to 15,
including the rehiring of a sales manager and management salary levels have been
reinstated. To further reduce costs, the Company changed its outside auditors
to Arthur Anderson LLP.
As of the date hereof, the Company is operating at slightly below cash
break-even level and management believes that at the Company's current level of
operations, it will have sufficient cash to maintain operations throughout 1998
and to complete the installation of robots from its then remaining backlog of
orders. The foregoing sentence is a forward looking statement made on a good
faith basis. Actual results may differ materially from forward looking statement
for reasons including, but not limited to, changes in the health care industry,
mix of robot rentals versus sales, the Company's ability to continue to generate
cash flow from operations, the Company's ability to fulfill a portion of its
backlog and withstand any resulting effects of nonfulfillment, the approval by
the stockholders of Proposal One and the acceptance for filing by the
Connecticut Secretary of the State of the Amendment Certificate and the
consummation of the other transactions described below.
Further, as a result of the above described efforts, the Company has
entered into the following financing transactions.
PRIVATE PLACEMENT OF INVESTOR UNITS. In February 1998, the Company
concluded a private placement ("PRIVATE PLACEMENT") of $1,350,000 of units
("INVESTOR UNITS"). Each Investor Unit consisted of a Promissory Note ("UNIT
NOTE") and a Warrant ("UNIT WARRANT"). Each Unit Note is in the principal
amount of $100,000 and bears interest at a rate of seven percent (7.00%) per
annum payable quarterly and comes due on October 1, 1998. Each Unit Note is
convertible into 303,030 shares of Common Stock ("UNIT NOTE SHARES") at a rate
of one (1) share of Common Stock for each $.33 of principal indebtedness
outstanding under the Unit Note. Each Unit Warrant will be immediately
exercisable for 100,000 shares of Common Stock ("UNIT WARRANT SHARES") at an
exercise price of $.33 per share. All of the Unit Notes will be converted into
an aggregate of 4,090,909 Unit Note Shares. All of the Unit Warrants are
exercisable for an aggregate of 1,350,000 Unit Warrant Shares. By their terms,
however, the Unit Notes will not be converted into Unit Note Shares and the Unit
Warrants will not be effective nor exercisable for Unit Warrant Shares unless
and until the Stockholders approve Proposal One and the Amendment Certificate is
accepted for filing by the Connecticut Secretary of State.
ENGELBERGER LOANS. In November 1997, the Company's Chairman, Joseph F.
Engelberger, (and a foundation established by Mr. Engelberger), made a demand
loan to the Company in the amount of $150,000. Mr. Engelberger is the Company's
co-founder, its Chairman, and a director. In exchange for that loan, the
Company issued two demand notes bearing interest at a rate of fifteen percent
(15%) per annum (collectively the "1997 ENGELBERGER NOTE"). In January 1998,
the 1997 Engelberger Note was converted into 467,424 shares of the Company's
Common Stock at a rate of one share of Common Stock for every $.33 of principal
and interest outstanding under the 1997 Engelberger Note. In consideration for
this loan, in January 1998, the Company issued to Mr.
<PAGE>
Engelberger warrants expiring December 31, 2001 ("FIRST ENGELBERGER WARRANTS")
to purchase 25,000 shares of Common Stock at an exercise price of $.33 per
share.
The Company is also indebted to Mr. Engelberger pursuant to a term note
dated May 26, 1995 bearing interest at a rate of 10% per annum (the "1995
ENGELBERGER NOTE"). The 1995 Engelberger Note required payments of interest
only for one year, and then equal payments of principal and interest for 48
months, through June, 2000. In January 1998, the Company and Mr. Engelberger
agreed to convert the 1995 Engelberger Note into Shares of the Company's Common
Stock (the "ENGELBERGER SHARES") so that the outstanding indebtedness thereunder
will be liquidated at the rate of one share of Common Stock for each $.33 of
indebtedness liquidated. In addition, the Company has agreed to issue to Mr.
Engelberger warrants expiring December 31, 2001 ("SECOND ENGELBERGER WARRANTS")
exercisable for shares of Common Stock at an exercise price of $.33 per share
for each dollar of indebtedness liquidated. The number of Engelberger Shares and
Second Engelberger Warrants to be issued in exchange for the liquidation of this
indebtedness will be determined as of the date of conversion based upon the
outstanding balance under the Second Engelberger Note. By way of illustration,
if the Second Engelberger Note were to have been liquidated as of January 31,
1998, Mr. Engelberger would have been entitled to receive an aggregate of
520,794 Engelberger Shares and Second Engelberger Warrants to purchase an
aggregate of 171,862 shares in exchange for the liquidation of $171,862 of
principal and interest outstanding as of that date.
The 1995 Engelberger Note will not be converted, the Engelberger Shares
will not be issued, and by their terms the First Engelberger Warrants and the
Second Engelberger Warrants will not be effective nor exercisable for shares of
the Company's Common Stock (the "ENGELBERGER WARRANT SHARES") unless and until
the Stockholders approve Proposal One and the Amendment Certificate is accepted
for filing by the Connecticut Secretary of State.
Mr. Engelberger has advised the Company that he intends to vote all
994,140 outstanding shares beneficially owned by him (representing approximately
14.3% of the outstanding shares entitled to vote at the Special Meeting) FOR
Proposal One to amend the Company's Certificate of Incorporation.
BROOKEHILL LOAN. In November, 1997, Brookehill Equities, Inc.
("BROOKEHILL") made a demand loan to the Company in the amount of $150,000, as
evidenced by a note bearing interest at a rate of fifteen percent (15%) per
annum ("BROOKEHILL NOTE"). In January 1998, the Company repaid $75,000 of this
loan. In consideration of this loan, in January 1998, the Company issued to
Brookehill warrants expiring December 31, 2001 ("BROOKEHILL WARRANTS") to
purchase 25,000 shares ("BROOKEHILL WARRANT SHARES") of Common Stock at an
exercise price of $.33 per share. By their terms, the Brookehill Warrants will
not be effective nor exercisable for the Brookehill Warrant Shares unless and
until the Stockholders approve Proposal One and the Amendment Certificate is
accepted for filing by the Connecticut Secretary of State.
<PAGE>
SWEENY LOAN. In July 1997, the Company's President and director, Thomas
K. Sweeny, made a demand loan to the Company in the amount of $60,000 evidenced
by a note bearing interest at a rate of eight and one-half percent (8.5%) per
annum. In January 1998, that Note was converted into 189,845 shares of the
Company's Common Stock at a rate of one share of Common Stock for every $.33 of
principal and interest outstanding thereunder.
Mr. Sweeny has advised the Company that he intends to vote all 349,317
outstanding shares beneficially owned by him (representing approximately 5% of
the outstanding shares entitled to vote at the Special Meeting) FOR Proposal One
to amend the Company's Certificate of Incorporation.
CREDITOR SHARES. In December 1997 and January 1998, the Company entered
into agreements with certain of its creditors pursuant to which each of those
creditors agreed to liquidate the Company's payables to such creditor in
exchange for shares of the Company's stock ("CREDITOR SHARES"). The Creditor
Shares will be issued at the rate of one Creditor Share for each $.33 of
indebtedness liquidated. The Company proposes to issue to the creditors an
aggregate of 468,958 Creditor Shares. The Creditor Shares will not be issued
unless and until the Stockholders approve Proposal One and the Amendment
Certificate is accepted for filing by the Connecticut Secretary of State.
CREDITOR PAYMENTS. In December 1997 and January 1998, the Company
completed transactions with other certain other of its creditors pursuant to
which each of those creditors agreed to liquidate the Company's payables to such
creditor in exchange an immediate cash payment of a portion of the payable. The
Company used approximately $515,000 of the Private Placement proceeds to make
these payments and, as a result, liquidated approximately $850,000 of the $1.1
million of past due payables outstanding as of November 13, 1997.
BOSTON GROUP SHARES. In consideration for its services to the Company in
connection with the Private Placement, the Boston Group, LP will be issued a
warrant expiring December 31, 2001 ("BOSTON GROUP WARRANT") immediately
exercisable to purchase up to approximately 2,379,000 shares of Common Stock
("BOSTON GROUP WARRANT SHARES") at an exercise price of $.33 per Boston Group
Warrant Share. The number of Boston Group Warrant Shares will be determined as
of the date the Amendment Certificate is accepted for filing and will be based
upon, among other things, the gross proceeds of the Private Placement, and the
dollar amount of payables and other creditor payments liquidated, including
those to Messrs. Engelberger and Sweeny and to CII described herein. By its
terms, the Boston Group Warrant will not be effective nor exercisable for the
Boston Group Warrant Shares unless and until the Stockholders approve Proposal
One and the Amendment Certificate has been accepted for filing the Connecticut
Secretary of State. In addition to the Boston Group Warrant, the Company also
paid the Boston Group, LP commissions and a non-accountable expense allowance in
connection with the Private Placement in the amount of $189,000.
CII SECURITIES AND ROYALTIES. In January 1998, the Company reached an
agreement in principle with CII, a security-holder and creditor of the Company,
pursuant to which
<PAGE>
CII has agreed to convert the Company's loan indebtedness and certain accrued
royalty payments to CII into shares of Common Stock and warrants to purchase
Common Stock, and to accept shares of Common Stock and warrants in lieu of
certain royalty payments which may come due during the calendar year 1998.
LOAN OBLIGATIONS. The Company's loan indebtedness to CII is evidenced by
a note dated June 14, 1995 ("CII NOTE") bearing interest at a rate of 10% per
annum. The CII Note requires payments of interest only for one year, and then
equal payments of principal and interest for 48 months, through June, 2000, and
is secured by a security interest in all of the Company's intellectual property
relating the HelpMate in the North and South American markets. As of January
31, 1998, the outstanding principal and interest due under the CII Loan was
$454,545. Under the CII loan agreements, the Company is also required, among
other things, to retain its principal place of business and a majority of its
employees and operations in the State of Connecticut ("CONNECTICUT PRESENCE
REQUIREMENTS") until June, 2001.
ROYALTY OBLIGATIONS. The Company also has certain royalty obligations to
CII under a Development Agreement dated December 29, 1986, pursuant to which CII
reimbursed the Company for certain development costs related to the HelpMate
robotics courier system ("SPONSORED PRODUCTS"). Under the Development
Agreement, the Company must pay royalties to CII equal to (i) a specified
percentage ("COMPANY PERCENTAGE RATE") of the Company's net sales of Sponsored
Products, (ii) fifty percent of license fees paid to the Company under licenses
granting to third parties the rights to produce or sell the Sponsored Products,
and (iii) fifty percent of any royalties received by the Company on net sales of
Sponsored Products by third-party licensees of the Company. During the two-year
period ending February 1998 ("REDUCED ROYALTY TERM"), the Company Percentage
Rate was equal to the greater of (i) one and one-half percent of the net sales
of Sponsored Products or (ii) twenty percent (20%) of the Company's pre-tax
profits (but in no event more than five percent of net sales of Sponsored
Products). After February 1998, the Company Percentage Rate increases to five
percent of the Company's net sales of Sponsored Products. Subject to the
satisfaction of certain conditions, at the expiration of the Reduced Royalty
Term, the Company will be credited with an additional $300,000 in royalty
payments against the Royalty Threshold described below. The Company must pay
royalties at the rate described above until the total royalties paid or credited
have aggregated $2,205,000 ("ROYALTY THRESHOLD"). Once royalties paid or
credited have reached the Royalty Threshold, the Company must thereafter pay
royalties for a period equal to the period of time taken to reach the Royalty
Threshold except that the Company Percentage Rate during that period would be
reduced to one-half of one percent. Royalties payable only to the extent that
sales and license fees are realized. Through December 31, 1997, the Company has
paid approximately $265,000 in royalties to CII.
1998 AGREEMENT IN PRINCIPLE. CII has agreed to convert the outstanding
indebtedness under the CII Note and royalty payments accrued under the
Development Agreement through December 31, 1997 into shares of the Company's
Common Stock and such amounts will be liquidated at the rate of one share of
Common Stock for each $.33 of indebtedness and royalty liquidated. In addition,
the Company will issue to CII warrants expiring December 31, 2001 ("CII
WARRANTS") exercisable for shares of
<PAGE>
Common Stock at an exercise price of $.33 per CII Warrant Share for each dollar
of indebtedness and royalty liquidated. The number of CII Shares and CII
Warrants to be issued will be determined as of the date of conversion. By way
of illustration, if the CII Note and the December 31, 1997 accrued royalty were
to be so liquidated as of January 31, 1998, CII would have been entitled to
receive an aggregate of 1,447,591 CII Shares and CII Warrants to purchase an
aggregate of 477,705 shares of Common Stock. In lieu of cash payments of the
royalties accruing during the fiscal year ending December 31, 1998, CII has also
agreed to accept one share of Common Stock ("CII ROYALTY SHARES") for each $.33
of royalties required to be paid and warrants expiring December 31, 2001 ("CII
ROYALTY WARRANTS") to purchase one share of Common Stock at an exercise price of
$.33 per share for each dollar of royalties required to be paid.
As part of its agreement with CII the Company must agree to extend the
Connecticut Presence Requirements to a term ending ten years from the date of
closing. In the event the Company violates the Connecticut Presence
Requirements, CII can (a) demand immediate payment of the balance of the Royalty
Threshold; and (b) require the Company to repurchase its Company Securities.
The security interest previously granted to CII in the intellectual property
relating to HelpMate in the North and South American markets will be extended so
that it also secures the Company's obligations to make the royalty payments
under the Development Agreement. In addition, a representative of CII would
continue to have the right to attend meetings of the Company's board of
directors so long as CII owns shares of the Company's stock and the Company has
any outstanding obligations under the Development Agreement.
The CII Shares and the CII Royalty Shares will not be issued, and by their
terms, the CII Warrants and CII Royalty Warrants will not be effective nor
exercisable for shares of the Company's Common Stock (the "CII WARRANT SHARES")
unless and until the Stockholders approve Proposal One and the Amendment
Certificate is accepted for filing by the Connecticut Secretary of State.
REGISTRATION RIGHTS. None of the securities issued in the transactions
described under the heading "Recent Transactions" may be resold to the public
unless they are registered under the Securities Act of 1933, as amended or
unless an exemption from such registration is available. If Proposal One is
approved by the Stockholders, the Company has agreed to use its diligent efforts
to register the Unit Warrants, the Unit Note Shares, the Unit Warrant Shares the
Boston Group Shares and the Boston Group Warrants and the Boston Group Warrant
Shares for public sale thirty (30) days after the closing of the issuance of the
Creditor Shares.
AGREEMENT TO SEEK STOCKHOLDER APPROVAL. Because the Company did not have
sufficient shares available to provide for the issuance of the Unit Note Shares,
Unit Warrant Shares, Engelberger Note Shares, Engelberger Warrant Shares,
Creditor Shares, Creditor Warrant Shares, CII Shares, CII Royalty Shares, CII
Warrant Shares and the Boston Group Warrant Shares (collectively, the
"CONTINGENT SHARES"), the Company agreed to take steps necessary to provide for
sufficient additional authorized shares of Common Stock. Specifically, the
Company agreed to seek the approval of the Company's stockholders of an
amendment to the Company's Certificate of Incorporation
<PAGE>
to provide additional authorized shares for issuance of the Contingent Shares.
The Amendment for which Stockholder approval is being sought would provide
sufficient shares for the issuance of the Contingent Shares. The Board of
Directors has approved the Amendment and has recommended that the Stockholders
approve the Amendment.
REASONS FOR APPROVAL. The Board is of the opinion that the proposed increase in
the number of authorized shares of Common Stock is in the best interest of the
Company and its stockholders. First, additional authorized shares will permit
the Company to issue the Contingent Shares. If Proposal One is not approved,
the Unit Notes will not be converted into common stock. In that event, the Unit
Notes will come due and payable on October 1, 1998. The Company does not expect
to have sufficient funds to make repay the Unit Notes when they come due. If
Proposal One is approved, however, the Unit Notes will be converted into shares
of the Company's common stock, and the Company will not be required to use its
cash to make any payments on the Unit Notes. Moreover, the Company believes
that many of the Company's creditors have refrained from commencing legal
proceedings to enforce the payment of the Company's obligations to them in
anticipating of the issuance of their Contingent Shares. If Proposal One is not
approved by the Stockholders, the Company anticipates that some of those
creditors could commence legal proceedings seeking repayment of sums owed to
them. In that event, the Company could be compelled to seek protection from its
creditors under the bankruptcy laws.
The Board also considers it advisable to have additional authorized but
unissued shares of Common Stock available to allow the Company to act promptly
with respect to possible financings, and for other corporate and business
purposes approved by the Board. In many situations prompt action may be
required which would not permit seeking stockholder approval to authorize
additional shares for the specific transaction on a timely basis. The Board of
Directors believes that it is important to have the flexibility to act promptly
in the best interests of shareholders. Having additional authorized shares of
Common Stock available for issuance in the future would give the Company greater
flexibility and allow shares of Common Stock to be issued without the expense or
delay of a stockholders' meeting, except as may be required by applicable laws
or regulations or the rules of any stock exchange on which the Company's
securities may then be listed. Other than for issuance of the Contingent Shares
and the reservation of the Excess Shares, the Company has no current specific
plans for issuance of additional shares of Common Stock.
The Board is authorized to approve the issuance of additional Common Stock
at any time. Although the increase in the authorized number of shares is not
proposed for the purpose of any anti-takeover effect and the Company has no
present intention of issuing additional shares of Common Stock for that purpose,
the issuance of such shares may have an anti-takeover effect, depending upon the
identity of the purchasers, the number of shares issued and the then current
ownership of outstanding shares of the Company. In addition, the issuance of
additional shares of Common Stock would dilute existing stockholders' equity
interest in the Company. Stockholders of the Company do not have preemptive
rights to purchase additional shares.
<PAGE>
STOCKHOLDER VOTE NECESSARY FOR APPROVAL. The affirmative vote of a majority of
the votes cast at the Special Meeting at which a quorum is present is required
to approve Proposal One. Properly executed, unrevoked proxies will be voted FOR
Proposal One unless a vote against the proposal or abstention is specifically
indicated in the proxy.
DESCRIPTION OF COMMON STOCK. Holders of Common Stock are entitled to one vote
per share on all matters on which the holders of Common Stock are entitled to
vote and do not have any cumulative voting rights. Holders of Common Stock are
entitled to receive such dividends as may be declared by the Board of Directors
of the Company from time to time out of funds legally available therefor.
Holders of Common Stock have no preemptive, conversion, redemption or sinking
fund rights. In the event of a liquidation, dissolution or winding-up of the
Company, holders of Common Stock are entitled to share ratably in the assets of
the Company, if any, remaining after the payment of all debts and liabilities of
the Company. The outstanding shares of Common Stock are fully paid and
nonassessable.
ANTI-TAKEOVER PROVISIONS. Although the purpose of seeking an increase in the
number of authorized shares of Common Stock is not-intended for anti-takeover
purposes, SEC rules require disclosure of charter and by-law provisions that
could have an anti-takeover effect. Certain provisions of the Company's
Certificate of Incorporation and of its By-Laws, and of the Connecticut General
Statutes ("CGS") could, individually or in the aggregate, have an anti-takeover
effect. These provisions are discussed generally below, but for a fuller
understanding of these provisions and their potential effect, reference should
be made to the Company's Certificate of Incorporation and By-Laws, which are
available by writing to Investor Relations at the Company's address listed at
the beginning of this proxy statement, and to the CGS. The Company believes
that these provisions will increase the probability that the public stockholders
will be treated fairly if an unsolicited attempt is made to acquire the Company.
The provisions also will encourage any person intending to attempt such an
acquisition to negotiate with the board of directors and will curtail such
person's use of a large ownership position to control both sides of any
potential acquisition negotiations. Under such circumstances the Board may be
better able to make and implement sound business decisions and protect the
interests of stockholders.
The By-Laws provide that the board of directors shall fill all board
vacancies, and that the board of directors also may increase the size of the
board and fill the vacancies created thereby. In addition to any requirements
in connection with a proposal by a security-holder pursuant to Regulation 14A
under the Securities Exchange Act, the By-Laws also establish advance notice
procedures with respect to stockholder proposals relating to the nomination of
candidates for election as directors, the removal of directors and amendments to
the Certificate of Incorporation or By-Laws to be brought before meetings of the
Company's stockholders. These procedures require that the notice of such
stockholder proposals must be timely given in writing to the Company's Secretary
prior to the meeting at which the directors are to be elected or other action is
to be taken. Generally, to be timely, notice must be received at the principal
offices of the Company not less than fifty days prior to the meeting (or if
fewer than fifty days notice or prior public disclosure of the meeting date is
given by the Company, not later than the seventh day after which the notice was
mailed or such public disclosure was made). The notice
<PAGE>
must contain certain information specified in the By-Laws. Finally, although
the CGS permits the Company to provide for stockholder action in certain cases
by less than unanimous written consent, the Company has not elected to include
such a provision in the Certificate of Incorporation; therefore, stockholder
action may only be taken at a duly held stockholder meeting or by unanimous
written stockholder consent. The Certificate of Incorporation and By-Law
provisions discussed in this paragraph may individually or cumulatively have the
effect of discouraging attempts to obtain control of the Company, even though
such an attempt might be beneficial to the Company and its stockholders. In
addition, these provisions may, individually or cumulatively, have the effect of
entrenching current management or preventing or delaying stockholders from
bringing matters before the stockholders at annual or special meetings.
Under Connecticut law, certain actions to be taken by a corporation
require stockholder approval. These actions generally include, without
limitation, the sale of all or substantially all of the corporation's assets
outside of the usual course of business, most mergers, consolidations, certain
amendments to the corporation's certificate of incorporation and the dissolution
of the corporation. Any such action must first be approved by the Board of
Directors who must recommend the action to the stockholders who, in turn, must
then approve the action.
The Company is subject to CGS Section 33-841 (the "FAIR PRICE STATUTE").
In general, the Fair Price Statute prevents an "interested shareholder" or an
"associate" or "affiliate" of an interested shareholder from engaging in a
"business combination" (as such terms are defined in the Fair Price Statute)
with a subject Connecticut corporation unless (i) the business combination was
approved by the corporation's board of directors prior to the time that the
interested shareholder first became an interested shareholder; (ii) the
interested shareholder satisfies the requirements of Fair Price Statute
with respect to the amount and form of the consideration it is paying in certain
types of business transactions and certain other conditions are satisfied; or
(iii) the business combination is approved by the corporation's board of
directors and then by both the holders of eighty percent of the voting power of
the outstanding shares of voting stock of the corporation and the holders of
two-thirds of the voting power of the outstanding shares of voting stock of the
corporation other than voting stock held by the interested shareholder and its
affiliates and associates. Any voting requirements set forth in Section 33-841
are in addition to any other voting requirements specified by law. Thus, to the
extent a business combination may be a matter requiring a shareholder vote as
described in the preceding paragraph, it may not be exempted from any otherwise
required shareholder vote by board of director action alone. To the extent the
provisions of the Fair Price Statute require a supermajority vote of the
Company's stockholders to approve certain corporate transactions, they may
enable a minority of the Company's common stockholders to exercise veto power
over such transactions.
The Company is also subject to the requirements of CGS Section 33-844 (the
"CONTROL SHARE STATUTE"). The Control Share Statute generally prohibits a
subject Connecticut corporation from engaging in any "business combination" with
any "interested shareholder" of the corporation for a period of five years
following the interested shareholder's "stock acquisition date" (as such terms
are defined in the Control
<PAGE>
Share Statute) unless such business combination or the purchase of stock made by
such interested shareholder on such interested shareholder's stock acquisition
date is approved by both the corporation's board of directors and by a majority
of its nonemployee directors, of which there shall be at least two, prior to
such stock acquisition date. Thus the Company's board of directors will have
great flexibility in dealing with potential acquirors of the Company, which will
increase the board's ability to negotiate in the best interest of the Company
and its stockholders, but which also may increase the board's ability to
entrench itself.
In reaching a decision with respect to any merger or consolidation of the
Company, any sale of all or substantially all of the Company's assets (whether
or not in the usual or regular course of business), or any business combination
with an interested shareholder under the Fair Price Statute or the Control Share
Statute, each of the Company's directors will be required by CGS Section
33-756(c) (the "OTHER CONSTITUENCY STATUTE") to consider, in determining what he
or she reasonably believes to be the best interests of the Company, the
following factors: (i) the long-term as well as the short-term interests of the
Company; (ii) the long-term as well as short-term interests of the stockholders,
including the possibility that those interests might best be served by the
continued independence of the Company; (iii) the interests of the Company's
employees, customers, creditors and suppliers; and (iv) community and societal
considerations, including those of any community in which any office or facility
of the Company is located. A director performing his or her duties in
accordance with the Other Constituency Statute will be deemed by that Section
"to have no liability for any action taken as a director, or any failure to take
any action." As a result of this statutory requirement, which is imposed on
Connecticut corporations having a class of voting stock registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended, the directors of
the Company will be required by law to consider factors other than value to the
stockholders in making a determination with respect to any proposed sale of the
Company.
Under existing law, the Company could amend its Certificate of
Incorporation so as to avoid the application of the Fair Price Statute and the
Control Share Statute. Such amendments would require the approval of the
Company's stockholders and board of directors. The Fair Price Statute, the
Control Share Statute, the Other Constituency Statute and other statutes,
independently or together with the provisions of the Company's Certificate of
Incorporation and By-Laws described above, may operate to delay or discourage
transactions affecting control of the Company.
PROPOSED LANGUAGE CHANGE. The Company proposes to amend paragraph 3 of the
Company's Certificate of Incorporation to read as follows to effect the increase
in authorized shares of Common Stock:
3. The authorized capital stock of the Corporation shall consist of forty
million (40,000,000) shares of common stock without par value.
THE BOARD RECOMMENDS A VOTE FOR PROPOSAL ONE.
OTHER BUSINESS
<PAGE>
The Board does not intend to bring any matters before the Special Meeting
other than those set forth in the accompanying notice. The Board knows of no
other matters to be brought before the Special Meeting by others. However, if
any other matters are brought before the meeting, the proxies named in the
enclosed form of proxy will vote in accordance with their judgment on such
matters.
By Order of the Board of Directors,
Prudence Shepard
Assistant Secretary
February __, 1998
<PAGE>
PROXY
HELPMATE ROBOTICS INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON MARCH 19, 1998
The undersigned stockholder hereby appoints JOSEPH F. ENGELBERGER and THOMAS K.
SWEENY, and each of them, with full power of substitution, as proxies to vote
all shares which the undersigned is entitled to vote at the Special Meeting of
HelpMate Robotics Inc. (the "Company") to be held at the offices of the Company,
Shelter Rock Lane, Danbury, Connecticut 06810 on Thursday, March 19, 1998 at
10:00 a.m. or any adjournment or postponement thereof, and directs said proxies
to vote as instructed on the matters set forth below AND OTHERWISE AT THEIR
DISCRETION.
UNLESS OTHERWISE INDICATED BELOW, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED "FOR" PROPOSAL ONE.
[Continued on back side - please complete and sign on back]
<PAGE>
Proposal One. Approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the authorized shares of Common Stock
to 40,000,000
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL ONE.
Receipt of a copy of the Notice of the Special Meeting and the accompanying
Proxy Statement is hereby acknowledged. This proxy revokes all prior proxies
given by the undersigned.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person.
___________________________
Signature
___________________________
Signature, if held jointly ___________________________
Title
________________ ___, 1998
Date
IMPORTANT - PLEASE SIGN AND RETURN PROMPTLY.
