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SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
/ / Preliminary Information Statement / / Confidential,
for Use of the Commission Only
/X/ Definitive Information Statement (as permitted by Rule 14c-5(d)(2))
INTERNATIONAL MERCANTILE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, schedule or registration statement no.:
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(4) Date filed:
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INTERNATIONAL MERCANTILE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, SEPTEMBER 11, 1998
TO ALL SHAREHOLDERS:
The Annual Meeting of Shareholders of International Mercantile Corporation, (the
"Company"), will be held the at 3400 Las Vegas Boulevard South, Las Vegas,
Nevada, at 10:00 a.m. on Friday, September 11, 1998 for the following purposes:
(1) To elect a Board of Directors, each to serve for a term of one (1) year or
until the nest Annual Meeting of Shareholders, or until his successor is duly
elected and qualified.
(2) To ratify the engagement of Thomas P. Monaghan, C.P.A., as the Company's
Independent Auditor.
(3) To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on August 17, 1998, as
the record date for determination of the stockholders entitled to notice of and
to vote at the meeting. A copy of the list of Shareholders as of August 10,
1998, will be present during the meeting.
You are urged to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
OF INTERNATIONAL MERCANTILE
CORPORATION
By: /s/ MAX APPLE
------------------------------
Chairman of the Board
Kansas City, Missouri
August 28, 1998
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INTERNATIONAL MERCANTILE CORPORATION
1801 GOLD MINE ROAD,
BROOKEVILLE, MARYLAND 20814
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 11, 1998
DEFINITIVE
INFORMATION STATEMENT
GENERAL INFORMATION
This Information Statement is furnished to the Shareholders of
International Mercantile Corporation (the "Company", or "IMTL") in connection
with the Annual Meeting of Shareholders to be held on Friday, September 11,
1998, at 10:00 a.m. at 3400 Las Vegas Boulevard South, Las Vegas, Nevada, or at
any adjournment or adjournments of such meeting for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders. This Information
Statement is being mailed to Shareholder on or about August 28, 1998.
RECORD DATE AND VOTING RIGHTS
Only Shareholders of record at the close of business on August 17,
1998, are entitled to notice of, and to vote at, the Annual Meeting of
Shareholders. On the record data, there were 2,485 shares of common stock of
the Company ("Shares") issued and outstanding and entitled to vote at the
Annual Meeting.
At the Annual Meeting, each shareholder is entitled to one (1) vote
for each Share held of record on all matters to come before the meeting, except
in the case of the election of directors, in which case the Bylaws of the
Company provide for cumulative voting. Cumulative voting entitles each
shareholder to cast as many votes in the aggregate as shall equal the number of
Shares held by him or her, multiplied by the number of directors to be elected,
and each shareholder may cast the whole number of votes, whether in person or
by proxy, for one candidate or distribute them between two or more candidates.
REVOCABILITY OF PROXY AND VOTING OF PROXY
Shareholders may cast votes by executing a Proxy in form approved in
advance by the Company and delivering same to the Company at the following
address no later than September 8, 1998: International Mercantile Corporation
c/o Fillmore & Griffin, Attn: Arthur E. Fillmore, 4600 Madison, Suite 210,
Kansas City, Missouri 64112. Any Proxy may be revoked by the person giving it at
any time before it is exercised. A Proxy may be revoked by the giving of another
Proxy bearing a later date or by notifying the Secretary of the Company in
writing of such revocation at any time before the proxy is exercised. Any Proxy
delivered to the Company will, unless it is revoked or unless it is received in
such form as to render it invalid, be voted in accordance with the instructions
indicated thereon.
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The Proxy may confer discretionary authority with respect to the
voting of the Shares represented thereby on any other business that may properly
come before the meeting or any adjournment thereof. The Board of Directors is
not aware that any such other business is to be presented for action at the
meeting and does not itself intend to present any such other business; however,
if any such other business does come before the meeting, Shares represented by
any such Proxy conferring discretionary authority pursuant to this paragraph
will be voted by the person(s) named in the Proxy in accordance with their best
judgement.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of December 31, 1997, the only
persons known to the Company to be the beneficial owners of more than five
percent (5%) of the outstanding number of Shares of the Company:
<TABLE>
<CAPTION>
Amount & Equity Voting
Title Nature of Percent Percent
of Name and Address of Beneficial of of
Class Beneficial Owner Ownership (1) Class Class
- ----- ---------------- ------------- ----- -----
<S> <C> <C> <C> <C>
Common Continent Finance 1,500,000 47.21 47.21
Corporation
Common AB Securities, Inc. 310,000 9.76 9.76
Common Scott Hess 310,000 9.76 9.76
</TABLE>
(1) To the best knowledge of the Company, as of December 31, 1997, such holders
had the sole voting and investment power with respect to the voting securities
of IMC beneficially owned by them, unless otherwise indicated by footnote. In
July, 1997 the Company reverse split the number of shares of common stock
outstanding in a ratio of 31 to 1, restating the number of shares of common
stock outstanding to 101,0834.
RATIFICATION OF ENGAGEMENT OF AUDITORS
At the Annual Meeting the Shareholders will consider the
ratification of the engagement of the firm of Thomas P. Monahan, C.P.A., as the
Company's Independent Auditor. The firm of Weinberg & Company, P.A. resigned as
the Company's Independent Auditors and said new firm was engaged as reported in
forms 8-K filed with the Securities and Exchange Commission on July 9, July 16,
and July 22, 1998.
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NOMINEES FOR DIRECTORS
If a nominee refuses or is unable to serve as a Director another
nominee will be substituted or designated by a majority of the present Board of
Directors.
The following table and the notes thereto provide certain information
regarding the nominees for Directors of the Company including their beneficial
ownership of voting securities of IMC and the Company as of December 31, 1997.
<TABLE>
<CAPTION>
Principal
Occupation Director/
or Employment Officer IMC
for Past Five Years of Shares
and Director- Company Beneficially
Age Ship Since Owned
--- ---- ----- -----
<S> <C> <C> <C> <C>
Max Apple 58 Chairman of the Board 1995 180,000
Secretary and Director,
IMTL. 1991 to present,
attorney, private law practice,
Jasper, Indiana
Roger B. Arnold 40 President, Director IMTL; 1997
History as Mortgage N/A
Banker, Financial Services
Walt DeRonde 49 Chief Operating Officer, 1997
Chief Financial Officer, 120,000
Treasurer, Vice President,
Director IMTL; History in
Financial Services and Modular
Housing Market; November, 1996
to August, 1998 Mutual of New
York, Financial Planner;
November, 1995 to November, 1996
Home American, Inc, General
Manager; July, 1993 to November,
1995, Division Manager, Reymar
Industries, Inc.
Ed Huyta 55 Director, Vice President 1997 60,000
IMTL; History in Healthcare
and Senior Age Market
Scott Hess 34 History in Insurance and Mortgage N/A 310,000
Operations; November 1997 to
Present, Chairman and Chief
Executive Officer, AB
Securities, Inc.; January 1991
to December 1995, President and
Chief Executive Officer,
Atlantic International Resources
Corp.
Frederic Richardson 38 Investment Banker; History N/A 45,000
In Financial Services Industry
</TABLE>
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BOARD COMMITTEES AND MEETING OF THE BOARD OF DIRECTORS
The Company has an Executive Committee which met twelve (12) times
during 1997. Pursuant to the Company's Bylaws, this Committee may exercise any
and all of the powers of the Board of Directors in the management of the
business and affairs of the Company to the extent authorized by the Board of
Directors. The Executive Committee has three (3) members, Walter Deronde, Roger
B. Arnold, and Ed Huyta.
The Company does not have a nominating committee. Nominees for
Director are recommended by the Executive Committee to the Board of Directors
for approval and submission at the Annual Shareholders Meetings.
The Board of Directors held twelve (12) regular meetings and fifteen
(15) special meetings during 1997. No Director attended fewer that 75% of the
total number of meetings of the Board of Directors and meeting of committees on
which he served.
EXECUTIVE COMPENSATION
The following sets forth the cash compensation, including bonuses and deferred
compensation, paid during 1997 to those executive officers which compensation
exceeded $60,000 and to all executive officers as a group for services rendered
in all capacities to the Company
a. Employment Agreement with Mr. Walter Deronde
On January 1, 1997, the Company entered into an employment agreement
with Mr. Walter Deronde as Treasure and Vice President for an annual salary of
$120,000. In addition, Mr. Deronde is responsible for evaluating merger and
acquisition candidates in the mortgage banking industry.
For the year ending December 31, 1997, the Company had accrued
$120,000 in salary.
b. Employment Agreement with Mr. Max Apple
On May 1, 1995, the Company entered into an employment agreement
with Mr. Max Apple as Chairman for an annual salary of $120,000 per annum and
reimbursement of all "out-of-pocket" expenses.
For the year ending December 31, 1997, the Company had accrued
$120,000 in salary.
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c. Financial Consulting Agreement
On May 1, 1995, the Company entered into a financial consulting
agreement with Frederic Richardson for a monthly fee of $10,000 per month and
reimbursement of all out-of-pocket expenses. In October of 1997 Mr Richardson
assigned his contract to FSR Group . The term of this agreement is 10 years and
is renewable. From time to time, FSR has engaged in business transactions with
affiliates of the placement agent, including a loan to a corporate stockholder
of the placement agent.
For the year ending December 31, 1997, the Company had accrued
$120,000.
d. General
Except as set forth above no cash compensation, including bonuses
and deferred compensation, was paid during 1997 by IMC to any of its executive
officers. No fees were paid to Board members for attending Board meetings during
1997. Shares of the Company's common stock may be issued to its officers
representing the fair market value of services actually rendered by them with
out pay and as reimbursement for expenses actually incurred by them in the
performance of their duties as officers of the Company.
RELATED PARTY TRANSACTIONS
a. Issuance of Shares of Capital Stock
The company issued 1,500,000 shares of common stock to Continent Finance
Corporation (" CFC") to acquire University Mortgage, Inc. ("UMI") and Home
America Mortgage Company ("HAMC"). HAMC was a former indirect subsidiary of the
Company through Frontier Insurance Company ("FIC"). On November 17, 1995, the
Company sold FIC and retained its interest in HAMC. In 1996, the Company sold
HAMC to CFC in consideration for the forgiveness of certain debt and cash. On
December 25, 1996, HAMC was sold by CFC to University Mortgage, Inc. ("UMI")
and in January, 1997, the transaction with UMI was rescinded with HAMC being
returned back to CFC. On August 1, 1997, the Company acquired UMI and
reacquired HAMC from CFC.
CFC is the majority shareholder of the Company.
The Company issued 60,000 shares of common stock to Ed Huyta, a
Director, in consideration for the forgiveness of debt arising from expenses
paid on behalf of the Company aggregating $60,000,
The Company has issued an aggregate of 200,000 shares of common
stock to Ventana Consulting, Inc., a Michigan corporation.
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b. Due to Related Parties
Certain officers and consultants of the Company paid expenses in the
amount of $180,263 on behalf of the Company during 1995. This amount is due on
demand and bears no interest. All expenses incurred during 1996 were paid by the
officers of the Company who waived reimbursement.
c. Employment Agreement with Mr. Walter Deronde
On January 1, 1997, the Company entered into an employment
agreement with Mr. Walter Deronde as COO, Treasurer and Vice President for an
annual salary of $120,000. In addition, Mr. Deronde is responsible for
evaluating merger and acquisition candidates in the mortgage banking industry.
For the year ending December 31, 1997, the Company had accrued
$120,000 in salary.
d. Employment Agreement with Mr. Max Apple
On May 1, 1995, the Company entered into an employment agreement
with Mr. Max Apple as Chairman for an annual salary of $120,000 per annum and
reimbursement of all "out-of-pocket expenses".
For the year ending December 31, 1997, the Company had accrued
$120,000 in salary.
e. Financial Consulting Agreement
On May 1, 1995, the Company entered into a financial consulting
agreement with Frederic Richardson for a monthly fee of $10,000 per month and
reimbursement of all "out-of-pocket expenses". The contract was assigned to FSR
Group in October 1997. The term of this agreement is 10 years and is renewable.
For the year ending December 31, 1997, the Company had accrued
$120,000.
f. Capital contribution
On August 15, 1997, AB Securities, Inc., ("ABS"), contributed to UMI
1,000,000 shares of common stock of Global Link Technology, which is traded on
the NASDAQ Bulletin Board with the trading symbol GLTK. The Market price at the
date of contribution and at December 31, 1997 was $0.08 per share.
g. Loans Payable- Affiliated Companies
UMI has Loans receivable - affiliated parties from W-C Consultants,
Inc. aggregating $292,091 at December 31, 1997.
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h. Managerial Relationship
On January 1, 1997, the UMI entered into an agreement with James E.
Clare, Donald E. Wolpe and W-C Consultants, Inc., (collectively referred to as
"W-C"), whereby W-C will participate in the management of the UMI's licensed
branch at 5480 Wisconsin Avenue, Chevy Chase, Maryland. W-C's sole shareholder
is Jeffrey A. Wolpe who is also Vice President/Counsel to UMI. W-C's Chairman,
Donald E. Wolpe, (Jeffrey A. Wolpe's father) and W-C's President, James E.
Clare, represent UMI as branch managers. For the year ending December 31, 1997,
W-C received $377,970, which was charged to operations.
i. Sublease Agreement
On July 1, 1996, UMI entered into a lease agreement with W-C for
the lease of approximately 1,322 square feet of office and storage space from
Highland House Limited Partnership at Highland House, 5480 Wisconsin Avenue,
Suite LL-4, Chevy Chase, Maryland 20815 at a monthly rental of $1,665 for a term
ending September 30, 1997. On October 1, 1997, the lease agreement was extended
to September 30, 2000 with a monthly rental of $1,766.
For the year ended December 31, 1997, rent expense was $21,483.
j. Change in Managerial Control
As of December 31, 1997, the Company acquired all of the issued and
outstanding capital stock of the UMI. This acquisition enables the Company to
have majority managerial and financial control in the decision making process of
the UMI.
k. Change in Equity Ownership
1. On December 25, 1996, UMI acquired all of the issued and
outstanding capital stock of HAMC from CFC in consideration for the issuance of
10,000 shares of nonvoting convertible Class A Preferred stock by the UMI.
2. On January I, 1997, pursuant to an agreement by and between ABS
and University Consulting, Inc. ("University Consulting"), both Maryland
corporations owned and controlled by M. Scott Hess, University Consulting
exchanged 1,000 shares of the Company's common stock in settlement for a note
payable to AB Securities.
3. In January, 1997, an agreement was executed by and between the UMI
and CFC, whereby CFC caused to be issued 100,000 shares of common stock of the
Company valued at $5.00 per share in consideration for all of the issued and
outstanding capital stock of HAMC with a book value of $471,637. The recording
of the transaction realized a gain of $28,363.
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4. On May 14, 1997, the UMI, CFC and ABS entered into an "Agreement
and Plan of Reorganization" whereby CFC exchanged all of the issued and
outstanding Class A preferred shares of the UMI to AB Securities for 10,500
shares of preferred stock of ABS.
5. On December 31, 1997, the UMI was party to an agreement by and
between the Company and ABS controlled by M. Scott Hess, President of UMI and
President of ABS. ABS exchanged all of the UMI's issued and outstanding stock to
the Company for 175,00 shares of the Company's common stock valued at $385,000
or $2.20 per share.
SUBSEQUENT EVENT
Subsequent to the date of the financial statements, the Company had
appointed Mr. Roger Arnold as President of the Company.
SHAREHOLDER PROPOSALS
Written recommendations to the Board of Directors from Shareholders of the
Company will be considered by the Executive Committee if received in writing by
the Secretary of the Company on or before September 8, 1998.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The independent certified public accounting firm of Thomas P. Monaghan, C.P.A.,
examined the financial statements of the Company. It is not anticipated that a
representative from the said firm will be present at the Shareholders' Meeting.
OTHER MATTERS
The management of the Company knows of no other matters that may come before the
meeting. However, if any matters other than those referred to herein should
properly come before the meeting, it is intention of management to vote on such
matters in accordance with their best business judgment.
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FINANCIAL STATEMENTS
The Annual Report to Shareholders covering the fiscal year ended December 31,
1997, is enclosed herewith.
BY THE ORDER OF THE BOARD OF
DIRECTORS OF INTERNATIONAL
MERCANTILE CORPORATION
/s/ Max Apple
-------------------------------------
Board Chairman
Kansas City, Missouri
August 28, 1998
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