<PAGE>
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:
[ X ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION
(AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
I/OMAGIC CORPORATION
(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 O-11.
Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
Per unit prices or other underlying value of transaction computed pursuant
to Exchange Act Rule O-11 (Set for the amount on which the filing fee is
calculated and state how it was determined):
---------------------------------------------------------------------
Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
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 O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
---------------------------------------------------------------------
Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
Filing Party:
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Date Filed:
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Notes:
<PAGE>
I/OMAGIC CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 15, 2000
TO ALL STOCKHOLDERS OF I/OMAGIC CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of I/OMagic
Corporation, a Nevada corporation, will be held at The Sports Club/Irvine, 1980
Main Street, Irvine, California, 92614 on September 15, 2000 at 9:00 a.m.
Pacific time, for the following purposes:
To elect five Directors for a term of one year or until their successors
are duly elected and qualified;
To approve an acquisition of IOM Holdings Corp. by the Company, subject to
a fairness opinion;
To increase the number of authorized shares of common stock of the Company
from 50,000,000 to 100,000,000;
To ratify the appointment of Singer Lewack Greenbaum & Goldstein, LLP, as
the Company's independent public accountants for the fiscal year ending
December 31, 2000; and
To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only stockholders of record at the close of business on August 17, 2000,
are entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By Order of the Board of Directors,
s/ Tony Shahbaz
---------------------------------------
By: Tony Shahbaz
Its: Chief Executive Officer, President,
Secretary and Chief Financial Officer
Irvine, California
August 2, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE
BOARD OF DIRECTORS OF THE COMPANY, AND RETURN IT IN THE ENCLOSED ENVELOPE.
THE PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED, AND STOCKHOLDERS
EXECUTING PROXIES MAY ATTEND THE MEETING AND VOTE IN PERSON, SHOULD THEY
SO DESIRE.
<PAGE>
I/OMAGIC CORPORATION
6 AUTRY
IRVINE, CALIFORNIA 92618
----------------------
PROXY STATEMENT
----------------------
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of
I/OMagic Corporation (the "Company") for the Annual Meeting of Stockholders
of the Company to be held at The Sports Club/Irvine, 1980 Main Street,
Irvine, California 92614 on September 15, 2000 at 9:00 a.m. Pacific time. All
proxies duly executed and received will be voted on all matters presented at
the Annual Meeting in accordance with the instructions given by such proxies.
In the absence of specific instructions, proxies so received will be voted
for the named nominees relating to the class of Common Stock for which the
proxy relates for election to the Company's Board of Directors, for approval
of the acquisition of IOM Holdings Corp. by the Company, for approval of the
increase in authorized shares and for the ratification of Singer Lewack
Greenbaum & Goldstein, LLP as the Company's independent public accountants.
The Board of Directors does not anticipate that any of its nominees will be
unavailable for election and does not know of any other matters that may be
brought before the Annual Meeting. In the event that any other matter should
come before the Annual Meeting or that any nominee is not available for
election, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies not marked to the contrary with respect to such
matter in accordance with their best judgement. The proxy may be revoked at
any time before being voted. The Company will pay the entire expense of
soliciting the proxies, which solicitation will be by use of the mails. This
Proxy Statement is being mailed to stockholders on or about August 31, 2000.
Only holders of shares of Common Stock of record at the close of
business on August 17, 2000 will be entitled to notice of and to vote at the
Annual Meeting and at all adjournments thereof. As of the close of business
on July 25, 2000, the Company had outstanding 31,862,039 shares of Common
Stock.
At the Annual Meeting, the holders of Common Stock will be entitled, as
a class, to elect five Directors ("Directors"). The vote of a majority of the
shares of Common Stock represented at the Annual Meeting is required for the
election of the Directors. The vote of a majority of the shares of Common
Stock represented at the Annual Meeting is required for approval of the
acquisition of IOM Holdings Corp. by the Company, for approval of the
increase in authorized shares, and for the ratification of the appointment of
Singer Lewack Greenbaum & Goldstein, LLP, as the Company's independent public
accountants.
Shares represented by proxies which are marked "abstained" or which are
marked to deny discretionary authority will only be counted for determining
the presence of a quorum. Votes withheld in connection with the election of
one or more of the nominees for Director will not be counted as votes cast
for such individuals. In addition, where brokers are prohibited from
exercising discretionary authority for beneficial owners who have not
provided voting instructions (commonly referred to as "broker non-votes"),
those shares will not be included in the vote totals.
A list of the stockholders entitled to vote at the Annual Meeting will
be available at the Company's office, 6 Autry, Irvine, California 92618, for
a period of ten days prior to the Annual Meeting for examination by any
stockholder.
Officers and Directors of the Company beneficially own approximately 73%
of the outstanding shares of Common Stock. See "Security Ownership of
Management and Principal Stockholders." Accordingly, approval of the
aforesaid matters is virtually assured.
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL #1)
Five Directors are to be elected for the ensuing year or until their
successors are duly elected and qualified. If, at the time of election, any of
the nominees should be unavailable for election, a circumstance which is not
expected by the Company, it is intended that the proxies will be voted for such
substitute nominee as may be selected by the Company. Proxies not marked to the
contrary will be voted for the election of the following persons with respect to
Common Stock. All of the nominees are standing for re-election by the
stockholders from the current term.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE DIRECTOR
NOMINEES NAMED BELOW.
<TABLE>
<CAPTION>
NAME AND AGE AGE DIRECTOR SINCE POSITION WITH THE COMPANY
------------ --- -------------- -------------------------
<S> <C> <C> <C>
Tony Shahbaz 38 1993 Chairman, President, Chief Executive Officer,
Secretary, Chief Financial Officer
Daniel Hou 50 1998 Director
Anthony Andrews 37 1997 Vice President, Director of Engineering,
Director
Steel Su 51 N/A Nominee for Director
Young-Hyun Shin 47 N/A Nominee for Director
</TABLE>
MR. TONY SHAHBAZ, CHAIRMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER, SECRETARY, CHIEF
FINANCIAL OFFICER, is the Company's founder. In addition, he has played a key
role in developing the Company's multimedia strategy. Mr. Shahbaz has a
technical background with approximately 20 years in the PC industry. He was
employed by Western Digital Corporation from September 1986 to March 1993. At
Western Digital Corporation, he held several positions including Vice President
of Worldwide Sales for Western Digital Paradise, and Regional Director of Asia
Pacific Sales and Marketing Operations. While at Western Digital Paradise's
business unit, he established a multi-channel world wide retail distribution
structure, with a full line of video multimedia products. As Regional Director
of Asia Pacific Sales, he managed two of the company's wholly owned subsidiaries
that managed the Asia Pacific Sales and Marketing and Design Support for OEM and
regional distributors throughout the region. Since 1993, Mr. Shahbaz has been
the President of I/OMagic Corporation. Prior to his positions with Western
Digital, he held management positions with Tandon Corporation and Lapin
Technology, in the marketing and sales divisions of those companies.
MR. DANIEL HOU, DIRECTOR, Mr. Hou is the Founder of Hou Electronics, Inc. a
computer peripheral supplier. This company was formed in 1986 and has
continually grown to have revenues of $45 million in 1998. Mr. Hou has been the
president of Hou Electronics from 1986 through the present. He is responsible
for all business activities associated with Hou Electronics. Mr. Hou is active
in related organizations such as holding the office of President with the
Southern California Chinese Computer Association as well as a membership in
American Chemistry Society. Mr. Hou received his Masters in Science from
University of Utah.
MR. ANTHONY ANDREWS, VICE PRESIDENT, DIRECTOR OF ENGINEERING, joined the Company
in February 1994. Mr. Andrews has over 15 years of experience in the computer
industry. His background includes product and software design, with his most
recent position as Principal Engineer at Western Digital Corporation from March
1988 to February 1994. As Principal Engineer, he played a key role in the
development of portable notebook power management designs for companies such as
IBM and AST. He also played a lead role in developing power management features
that are being commonly used in the industry today. Mr. Andrews has his own
software design company which has developed embedded system designs as well as
game software. Mr. Andrews works closely with the Company's sales channels to
identify product/market opportunities for the Company. He is responsible for
bringing products from concept to market launch. This includes sourcing
manufacturers for
3
<PAGE>
hardware, developing any necessary software, and packaging designs and
specification sheets. He received a Bachelor of Science in Math and Computer
Science from the University of California at Los Angeles.
MR. STEEL SU, nominee for Director, founded Behavior Design Corporation eighteen
years ago. Mr. Su currently holds the following positions: Behavior Design
Corporation, Chairman; GenNet Technology Corp. Ltd., Chairman; Emprex
Technologies Corp., Chairman; Cybernetic Generator Corp., Chairman; Main Tek,
Inc., Chairman; ATOP Technologies, Inc., Director; Behavior Tech Computer Corp.,
Chairman; Behavior Tech Computer (USA) Corp., Chairman; Behavior Tech Computer
Affiliates, N.V., Chairman; BTC Korea Co. Ltd., Director; Arescom, Inc.,
Director; and Aurora Systems Corp., Director. He has the following education:
Ching Yuar Christian University, Electronic Engineering Department; National
Taiwan University, Graduate Institute of International Business, Department of
International Business; The Graduate School of Business, Stanford University,
Stanford Executive Program 1992; and Massachusetts Institute of Technology,
Sloan School of Management, Entrepreneurship Development Program 2000.
MR. YOUNG-HYUN SHIN, nominee for Director, has been the Chief Executive Officer
of BTC Korea Co., Ltd. from March, 1988 through the present. He received a
degree in electronics from Yonsei University in 1979. Mr. Shin resides in Korea.
There is no family relationship between any of the directors or officers
of the Company.
MEETINGS OF THE BOARD OF DIRECTORS AND INFORMATION REGARDING COMMITTEES
The Board of Directors currently does not have any committees.
The Board of Directors held one meeting in fiscal 1999. All Directors
attended at least 75% of the meetings of the Board of Directors.
EXECUTIVE COMPENSATION
GENERAL COMPENSATION DISCUSSION. All decisions regarding compensation for
the Company's Executive Officers and executive compensation programs are
reviewed, discussed, and approved by the Board of Directors or stockholders for
approval, as appropriate. All compensation decisions are determined following a
detailed review and assessment of external competitive data, the individual's
contributions to the Company's success, any significant changes in role or
responsibility, and internal equity of pay relationships.
Set forth below is a summary of compensation for the Company's officers for
fiscal years 1999, 1998 and 1997. There are no annuity, pension or retirement
benefits proposed to be paid to officers, directors or employees of the Company
in the event of retirement at normal retirement date pursuant to any presently
existing plan provided or contributed to by the Company or its subsidiary.
4
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
----------------------- -------------------------------------------- ------------------------------------------------------
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Other All Other
Annual Restricted Compensation
Name and Compen- Stock Options LTIP
Principal Position Year Salary Bonus sation Awards SARs Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tony Shahbaz 1999 $140,000 -0- -0- -0- -0- -0- 6,000 (auto)
CEO, President, 1998 $140,000 11,500 -0- -0- 300,000(1) -0- 6,000 (auto)
Secretary & CFO 1997 $140,000 -0- -0- -0- 300,000(2) -0- 6,000 (auto)
Anthony Andrews 1999 $74,286 -0- -0- -0- -0- -0- -0-
Vice President 1998 $70,269 3,000 -0- -0- -0- -0- -0-
----------------------- -------- ------------ --------- ------------ ------------- ------------ ---------- ----------------
</TABLE>
--------
(1) On January 2, 1997 the Company issued 300,000 options to purchase common
stock of the Company at an exercise price of $1.82 for a term of five
years to Mr. Shahbaz under the Company's 1997 Incentive and Nonstatutory
Stock Option Plan.
(2) On January 2, 1998 the Company issued 300,000 options to purchase common
stock of the Company at an exercise price of $1.13 for a term of five
years to Mr. Shahbaz under the Company's 1998 Incentive and Nonstatutory
Stock Option Plan.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Tony Shahbaz, its
Chairman, President, Chief Executive Officer, Secretary, and Chief Financial
Officer, on October 25, 1993 pursuant to which the Company has agreed to pay Mr.
Shahbaz an annual salary of $140,000 per year payable in twelve equal payments
on the first day of each month. The agreement provides for a bonus based on the
"net profits" of the Company as defined. The bonus amount ranges from $20,000 to
$70,000 for net profits up to $500,000. For net profits in excess of $500,000,
the bonus is 7%.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive any cash compensation, but are
entitled to reimbursement of their reasonable expenses incurred in attending
directors' meetings.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL OWNERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the date of this Report by: (i)
each stockholder known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock, (ii) each director of the Company
and (iii) all directors and officers as a group.
<TABLE>
<CAPTION>
---------------------------------------------------- ----------------------------- -----------------------------------
NAME NUMBER OF SHARES(1) PERCENTAGE BENEFICIALLY OWNED
---------------------------------------------------- ----------------------------- -----------------------------------
<S> <C> <C>
Tony Shahbaz(2) 29,254,417(3) 88.8%
---------------------------------------------------- ----------------------------- -----------------------------------
Anthony Andrews(2) 116,666(4) *
---------------------------------------------------- ----------------------------- -----------------------------------
Daniel Hou (2) (5) -0- *
---------------------------------------------------- ----------------------------- -----------------------------------
All officers and directors as a group (3 persons) 28,871,083 73%
---------------------------------------------------- ----------------------------- -----------------------------------
Susha, LLC(2) 19,916,667 62.5%
---------------------------------------------------- ----------------------------- -----------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------- ----------------------------- -----------------------------------
NAME NUMBER OF SHARES(1) PERCENTAGE BENEFICIALLY OWNED
---------------------------------------------------- ----------------------------- -----------------------------------
<S> <C> <C>
IOM Holdings(2) 4,548,077 12%
---------------------------------------------------- ----------------------------- -----------------------------------
Hou Electronics, Inc.(2) 2,000,000 5%
---------------------------------------------------- ----------------------------- -----------------------------------
</TABLE>
---------------
* Less than one percent
(1) Except as otherwise indicated, the Company believes that the beneficial
owners of Common Stock listed above, based on information furnished by
such owners, have sole investment and voting power with respect to such
shares, subject to community property laws where applicable. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable, or exercisable within 60 days, are deemed
outstanding for purposes of computing the percentage of the person holding
such options or warrants, but are not deemed outstanding for purposes of
computing the percentage of any other person.
(2) c/o Company's address: 6 Autry, Irvine, CA 92618.
(3) Includes 4,548,077 shares of common stock owned by IOM Holdings, Inc., a
Nevada corporation, of which Tony Shahbaz is a shareholder, director, and
officer. Also includes 19,916,667 shares of common stock owned by Susha,
LLC. Susha, LLC was created as a holding company to hold certain
securities contributed by BTC and Mr. Shahbaz. While Mr. Shahbaz has
voting powers associated with the shares held by Susha, 50% of all
financial benefits derived from the shares held by Susha are for the
benefit of BTC and 50% of all financial benefits derived from the shares
held by Susha are for the benefit of Mr. Shahbaz. Also includes 300,000
options to purchase shares of common stock at $1.82 expiring January 2,
2002 and 300,000 options to purchase shares of common stock at $1.13
expiring January 2, 2003. Also includes 250,000 options to purchase
shares of common stock expiring in 2002 and 250,000 options to purchase
shares of common stock expiring in 2003 held by Mrs. Fedra Shabaaz.
(4) Includes 50,000 options to purchase common stock at $0.01 expiring April
1, 2001.
(5) Pursuant to a written agreement, Hou Electronics, Inc. has a Board seat on
the Board of Directors of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On February 3, 1999, I/OMagic entered into a subscription agreement with
Behavior Technology Corporation (USA), a California corporation ("BTC"). In this
transaction, BTC: (i) contributed $5 million worth of inventory in exchange for
16,666,667 shares of restricted Common Stock of I/OMagic and (ii) provided a $5
million credit line for the purchase of additional inventory. Borrowings are
non-interest bearing and are due 75 days from the date of borrowing. As of
December 31, 1999, the Company had $829,009 outstanding in trade payables
generated in the ordinary course of business.
Effective January 4, 2000, the Company issued to an affiliated company of
BTC 6,250,000 shares of restricted common stock valued at $0.80 per share for
$5,000,000 of inventory, as defined (valued at transferor's cost basis).
In March 2000, the Company sold 632,912 shares of restricted common stock
to an affiliate of BTC for cash at $3.16 per share or $2,000,000 in aggregate,
which includes a 20% discount.
APPROVAL OF THE ACQUISITION OF IOM HOLDINGS CORP.
(PROPOSAL #2)
The Board of Directors has proposed that the Company acquire IOM Holdings
Corp. such that IOM Holdings Corp. ("IOM Holdings") shall be a wholly-owned
subsidiary of the Company (the "Acquisition"), subject to a fairness opinion.
There are currently two shareholders of IOM Holdings. These shareholders would
agree to exchange all of their shares of IOM Holdings for an equivalent number
of shares of the Company subject to the following lock-up agreement: (a) 33.3%
of the Company shares would not be eligible for sale for 24 months from the date
of the Acquisition; (b) an additional 33.3% of the Company shares would not be
eligible for sale for 36 months from the date of the Acquisition; and (c) the
remaining 33.4% of the Company shares would not be eligible for sale for 48
months from the date of the Acquisition. IOM Holdings' line of credit with
Finova Capital Corporation ("Finova") would be assigned to the Company. Finova
has already approved of this assignment.
6
<PAGE>
The vote of a majority of the shares of Common Stock represented at the
Annual Meeting is required for the authorization of the Acquisition.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AUTHORIZATION OF THE
ACQUISITION OF IOM HOLDINGS CORP. BY THE COMPANY.
APPROVAL OF INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
(PROPOSAL #3)
The Board of Directors has proposed that the Company increase its
authorized shares of common stock from 50,000,000 to 100,000,000. This increase
will allow the Company to have flexibility in future transactions which may be
accomplished through the issuance of new stock.
The vote of a majority of the shares of Common Stock represented at the
Annual Meeting is required for the authorization of the increase in authorized
shares of common stock of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AUTHORIZATION OF THE
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK OF THE COMPANY.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR FISCAL 2000
(PROPOSAL #4)
The Company has retained, subject to stockholder ratification, Singer
Lewack Greenbaum & Goldstein, LLP ("SLGG"), as its independent public
accountants for the fiscal year ending December 31, 2000. SLGG has been the
independent accountants for the Company for the last year and has no financial
interest, either direct or indirect, in the Company. A representative of SLGG is
expected to attend the Annual Meeting and to have an opportunity to make a
statement and/or respond to appropriate questions from stockholders. If the
stockholders do not ratify the appointment of SLGG as the Company's independent
public accountants, the Board of Directors will consider the selection of
another accounting firm.
The vote of a majority of the shares of Common Stock represented at the
Annual Meeting is required for the ratification of SLGG as the Company's
independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF SINGER LEWACK GREENBAUM & GOLDSTEIN, LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2001
The rules of the Securities and Exchange Commission permit stockholders of
the Company, after notice to the Company, to present proposals for stockholder
action in the Company's proxy statement where such proposals are consistent with
applicable law, pertain to matters appropriate for stockholder action, and are
not properly omitted by Company action in accordance with the proxy rules
published by the Securities and Exchange Commission. The Company's 2001 annual
meeting of stockholders is expected to be held on or about September 15, 2001,
and proxy materials in connection with that meeting are expected to be mailed on
or about August 15, 2001. Proposals of stockholders of the Company that are
intended to be presented at the Company's 2001 annual meeting must be received
by the Company no later than April 15, 2001 in order for them to be included in
the proxy statement and form of proxy relating to that meeting.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires that the Company's Officers and Directors, and persons who own more
than ten percent of a registered class of the Company's equity securities, file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, Directors and
7
<PAGE>
greater than 10% stockholders are required by regulation to furnish to the
Company copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons the Company believes that
during it 1999 fiscal year, all such filing requirements applicable to its
Officers, Directors, and greater than ten percent beneficial owners were
complied with.
OTHER MATTERS
The Board of Directors of the Company does not intend to present any
business at the Annual Meeting other than the matters specifically set forth in
the Proxy Statement and knows of no other business to come before the Annual
Meeting. However, on all matters properly brought before the Annual Meeting by
the Board or by others, the persons named as proxies in the accompanying proxy
will vote in accordance with their best judgement.
It is important that your shares are represented and voted at the Annual
Meeting, whether or not you plan to attend. Accordingly, we respectfully request
that you sign, date, and mail your Proxy in the enclosed envelope as promptly as
possible.
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999, which has been filed with the SEC pursuant to the Exchange
Act, has been mailed to you along with this Proxy Statement. Additional copies
of the Company's Annual Report may be obtained without charge upon written
request to Lydia Hernandez, I/OMagic Corporation, 6 Autry, Irvine, California
92618 or on the Internet at www.sec.gov from the SEC's EDGAR database.
By Order of the Board of Directors
/s/ Tony Shahbaz.
-----------------
Tony Shahbaz, Chief Executive Officer,
President, Secretary, Chief Financial Officer
Irvine, California
August 2, 2000
8
<PAGE>
I/OMagic Corporation
6 Autry
Irvine, California 92618
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark your votes as [ X ] indicated in this example.
ELECTION OF DIRECTORS
FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the to vote for all nominees
contrary below) listed below
(To WITHHOLD authority to vote for any individual nominee, strike a line through
the nominee's name below)
Tony Shahbaz Daniel Hou Tony Andrews Steel Su Y.H. Shin
Proposal to authorize the acquisition of IOM Holdings Corp. by the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal to increase the authorized shares of common stock of the Company from
50,000,000 to 100,000,000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal to ratify the appointment of Singer Lewack Greenbaum & Goldstein, LLP
as the Company's independent auditors for fiscal 2000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR, "FOR"
PROPOSALS #2, #3, AND #4, AND IN THE PROXY'S DISCRETION ON ANY OTHER MATTERS TO
COME BEFORE THE MEETING.
Dated:______________________ _____, 2000
------------------------------------------
(Signature)
-----------------------------------------
(Second Signature)
PLEASE DATE AND SIGN ABOVE EXACTLY AS YOUR NAME
APPEARS AT LEFT, INDICATING WHERE APPROPRIATE,
OFFICIAL POSITION OR REPRESENTATIVE CAPACITY.
9
