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
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Sectioin 240.14a-12
Equitex, Inc.
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(Name of Registrant as Specified in its Charter)
Gerald Raskin, Esq.
Seth Weiss, Esq.
Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
1400 Glenarm Place
Denver, Colorado 80111
(303) 571-1400
(303) 595-3970
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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
pursuat to Exchange Act Rule 0-11:____________________________
(4) Proposed Maximum aggregate value of transaction:______________
(5) Total Fee Paid:_______________________________________________
[ ] Fee previously paid 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 regitration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:__________________________________
(2) Form, Schedule or Registration Statement No.:____________
(3) Filing Party:____________________________________________
(4) Date Filed:______________________________________________
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EQUITEX, INC.
7315 East Peakview Avenue
Englewood, Colorado 80111
________________________________________________________________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on __________ __, 1999
________________________________________________________________________________
________ __, 1999
TO THE STOCKHOLDERS OF EQUITEX, INC.
A Special Meeting of Stockholders of Equitex, Inc., a Delaware corporation
(the "Company"), will be held at 2401 PGA Blvd., Suite 190, Palm Beach Gardens,
Florida 33410, on __________ __, 1999 at ___ a.m. Eastern Daylight Savings Time,
to consider and take action on:
1. A proposal to amend Paragraph 4 of the Certificate of Incorporation to
increase the number of authorized shares of the Company's common stock, $.02 par
value, from 7,500,000 shares to 50,000,000 shares. (Passage of this proposal
requires the affirmative vote of a majority of the outstanding stock entitled to
vote thereon, and a majority of the outstanding stock of each class entitled to
vote thereon as a class.)
2. Such other business as may properly come before the meeting, or any
adjournment or adjournments thereof.
The discussion of the proposal of the Board of Directors set forth above is
intended only as a summary, and is qualified in its entirety by the information
relating to the proposals set forth in the accompanying Proxy Statement.
Only holders of record of Common Stock at the close of business on
May 25, 1999 will be entitled to notice of and to vote at this Special
Meeting, or any postponements or adjournments thereof.
By Order of the Board of Directors:
Thomas B. Olson
Secretary
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR
SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES. THE GIVING OF SUCH PROXY
DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
YOUR VOTE IS IMPORTANT
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Equitex, Inc.
7315 East Peakview Avenue
Englewood, Colorado 80111
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON __________ __, 1999
___________ __, 1999
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH A SOLICITATION OF PROXIES
(IN THE FORM ENCLOSED) BY THE BOARD OF DIRECTORS OF EQUITEX, INC. (THE "COMPANY"
OR "EQUITEX") TO BE USED AT A SPECIAL MEETING OF STOCKHOLDERS AT ___ A.M.
EASTERN DAYLIGHT SAVINGS TIME, ON __________ ___, 1999 AT 2401 PGA BLVD., SUITE
190, PALM BEACH GARDENS, FLORIDA 33410. THE PROXY AND PROXY STATEMENT WILL BE
MAILED TO STOCKHOLDERS ON OR ABOUT ________ __, 1999.
FORWARD-LOOKING STATEMENTS
THIS PROXY STATEMENT MAY CONTAIN CERTAIN "FORWARD-LOOKING" STATEMENTS AS
SUCH TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR
BY THE SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND
RELEASES, WHICH REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING BUT
NOT LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S OPERATIONS, ECONOMIC
PERFORMANCE, FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES,
INVESTMENTS, AND FUTURE OPERATIONAL PLANS. FOR THIS PURPOSE, ANY STATEMENTS
CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE
FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE," "ANTICIPATE," "INTEND,"
"COULD," "ESTIMATE," "MIGHT," OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS
THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS, BY THEIR NATURE, INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND ACTUAL
RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF IMPORTANT FACTORS,
INCLUDING UNCERTAINTY RELATED TO ACQUISITIONS, GOVERNMENTAL REGULATION, MANAGING
AND MAINTAINING GROWTH, VOLATILITY OF STOCK PRICES AND ANY OTHER FACTORS
DISCUSSED IN THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, NW, Washington, DC
20549 or at the Regional Offices of the Commission which are located as follows:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can also be obtained from the Commission
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at prescribed rates. Written requests for such material should be addressed to
the Public Reference Section, Securities and Exchange Commission, 450 Fifth
Street, NW, Washington, DC 20549. The Commission maintains a Web site that
contains reports, proxy statements and other information filed electronically by
the Company with the Commission which can be accessed over the internet at
http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
THIS PROXY STATEMENT INCORPORATES BY REFERENCE DOCUMENTS RELATING TO THE
COMPANY WHICH ARE NOT INCLUDED IN OR DELIVERED WITH THESE PROXY MATERIALS.
DOCUMENTS RELATING TO THE COMPANY (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE AVAILABLE TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT IS
DELIVERED, ON WRITTEN OR ORAL REQUEST, WITHOUT CHARGE, FROM EQUITEX, INC., 7315
EAST PEAKVIEW AVENUE, ENGLEWOOD, COLORADO 80111, ATTENTION: SECRETARY, TELEPHONE
(303) 796-8940. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY SUCH
REQUEST SHOULD BE MADE BY _______________ ___, 1999. COPIES OF DOCUMENTS SO
REQUESTED WILL BE SENT BY FIRST CLASS MAIL, POSTAGE PAID WITHIN ONE BUSINESS DAY
OF THE RECEIPT OF SUCH REQUEST.
The following documents of the Company are incorporated by reference
herein:
1. Annual report on Form 10-KSB for the year ended December 31, 1998; and
2. The description of Equitex, Inc. Common Stock contained in its
Registration Statement on Form 8-A (Commission File No. 0-12374) as filed
with the Commission on July 21, 1983.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior
to the date of the Meeting shall be deemed to be incorporated by reference
herein and shall be a part hereof from the date of filing of such documents. Any
statements contained in a document incorporated by reference herein or contained
in this Proxy Statement shall be deemed to be modified or superseded for
purposes hereof to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
REVOCABILITY OF PROXY
If the enclosed Proxy is executed and returned, it will be voted on the
proposals as indicated by the stockholder. The Proxy may be revoked by the
stockholder at any time prior to its use by notice in writing to the Secretary
of the Company, by executing a later dated proxy and delivering it to the
Company prior to the meeting or by voting in person at the meeting.
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SOLICITATION
The cost of preparing, assembling and mailing the Notice of Meeting, Proxy
Statement and Proxy (the "Proxy Materials"), miscellaneous costs with respect to
the Proxy Materials and solicitation of the Proxies will be paid by the Company.
The Company also may use the services of its directors, officers and employees
to solicit Proxies, personally or by telephone and tele graph, but at no
additional salary or compensation. The Company intends to request banks,
brokerage houses and other custodians, nominees and fiduciaries to forward
copies of the Proxy Materials to those persons for whom they hold such shares
and request authority for the execution of the Proxies. The Company will
reimburse them for the reasonable out-of-pocket expenses incurred by them in so
doing.
VOTING SECURITIES
Holders of record of the Company's common stock, $.02 par value (the
"Common Stock"), at the close of business on May 25, 1999 (the "Record Date")
will be entitled to vote on all matters. On the Record Date, the Company had
outstanding _________ shares of Common Stock. The holders of all shares of
Common Stock are entitled to one vote per share. The Common Stock is the only
class of voting securities outstanding. One-third of the issued and outstanding
shares of the Common Stock entitled to vote, represented in person or by proxy,
constitutes a quorum at any stockholders' meeting. Passage of Proposal Number
One requires the affirmative vote of a majority of the outstanding stock
entitled to vote thereon, and a majority of the outstanding stock of each class
entitled to vote thereon as a class. Abstentions on a proposal will be counted
as votes against that proposal. Broker non-votes will not be counted as shares
represented at the meeting.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Set forth below is certain information as of March 31, 1999, with
respect to ownership of the Company's Common Stock held of record or
beneficially by (i) the Company's executive officers named in the summary
compensation table, (ii) each director of the Company, (iii) each person who
owns beneficially more than five percent of the Company's outstanding Common;
and (iv) all directors and executive officers as a group:
Percentage
Number of Owned of
Name and Address Common Common
of Beneficial Owner Stock Owned (1) Stock
- ------------------- --------------- ----------
Henry Fong 1,574,384 (2)(3) 22.3%
7315 East Peakview Avenue
Englewood, Colorado 80111
Wayne W. Mills 475,000 7.9%
5020 Blake Road South
Edina, Minnesota 55436
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Russell L. Casement 506,900 (4) 8.8%
1355 S. Colorado Blvd., Suite 320
Denver, Colorado 80222
Aaron L. Grunfeld 334,700 (5) 5.3%
10390 Santa Monica Blvd., Fourth Floor
Los Angeles, California 90025
All officers and directors
as a group (four persons) 2,484,284 (2)(3)(6)(7) 32.2%
(1) The beneficial owners exercise sole voting and investment power.
(2) Includes 576,200 shares underlying options granted under the Company's
1993 Stock Option Plan and 469,700 shares underlying options granted under
the Company's 1999 Stock Option Plan.
(3) Includes 479,554 shares owned by a corporation in which Mr. Fong is an
officer and director; and 48,940 shares owned by a partnership in which Mr.
Fong is a general partner.
(4) Includes 36,400 shares underlying options granted under the Company's
1993 Stock Option Plan for Non-Employee Directors and 245,500 shares
underlying options granted under the Company's 1999 Stock Option Plan.
(5) Includes 50,000 shares underlying options granted under the Company's
1993 Stock Option Plan for Non-Employee Directors and 245,500 shares
underlying options granted under the Company's 1999 Stock Option Plan.
(6) Includes 50,000 shares underlying options granted under the Company's
1993 Stock Option Plan for Non-Employee Directors and 491,000 shares
underlying options granted under the Company's 1999 Stock Option Plan.
(7) 25,000 shares underlying options granted under the Company's 1993 Stock
Option Plan and 31,300 shares underlying options granted under the
Company's 1999 Stock Option Plan.
The Company does not know of any arrangements, the operation of which may,
at a subsequent date, result in a change in control of the Company.
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<PAGE>
PROPOSAL NUMBER ONE
TO CHANGE PARAGRAPH 4 OF THE
CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors recommends an amendment to the Company's Certificate
of Incorporation to cause an increase in the number of authorized shares. The
Certificate of Incorporation of the Company currently authorizes the issuance of
up to 7,500,000 shares of common stock with a par value of $0.02 per share (the
"Common Stock") and 2,000,000 shares of preferred stock with a par value of
$0.02 per share (the "Preferred Stock"). As of April 26, 1999, of the 7,500,000
shares of Common Stock authorized, 6,797,245 shares were outstanding and 669,405
shares of Common Stock are reserved for issuance upon the exercise of
outstanding warrants and options. As of April 26, 1999, of the 2,000,000 shares
of Preferred Stock authorized no shares were outstanding. The Board of Directors
deems it advisable to amend the Certificate of Incorporation to increase the
number of authorized shares of Common Stock to 50,000,000 shares. A copy of
Paragraph 4 of the Certificate of Incorporation as it would read following
adoption of this Proposal is included herewith as Exhibit 1.
The additional shares of Common Stock would become part of the existing
class of Common Stock, and the additional shares, when issued, would have the
same rights and privileges as the shares of Common Stock now issued. There are
no preemptive rights relating to the Common Stock.
To the extent that any further issue of shares is made on other than a pro
rata basis to current stockholders, the present ownership of current
stockholders may be diluted.
If the proposed amendment is approved, the additional authorized shares
would be available for issuance by the Board of Directors for any proper
corporate purpose at any time without further stockholder approval except as
otherwise required by applicable law or securities exchange listing rules.
Nonetheless, it is the intention of the Board of Directors to use a portion of
the additional shares to satisfy the Company's obligations under the terms of a
stock dividend declared by the Board of Directors on April 9, 1999. The Company
may use a portion of the additional shares in connection with one or more equity
financings and to issue shares issuable pursuant to Company stock option plans.
On April 9, 1999, the Company entered into a non-binding letter of intent
to merge with First TeleBanc Corp. Consummation of the merger is subject to a
number of conditions, including the requirement that stockholders of both
companies receive at least 45% of the resulting entity. The merger, if it
proceeds, will be submitted to a vote of the stockholders at another meeting to
be called for that purpose.
The Preferred Stock is so-called "blank check" preferred since the Board of
Directors of the Company may fix or change the terms, including: (i) the
division of such shares into series; (ii) the dividend or distribution rate;
(iii) the dates of payment of dividends or distributions and the date from which
they are cumulative; (iv) liquidation price; (v) redemption rights and price;
(vi) sinking fund requirements; (vii) conversion rights; (viii) restrictions on
the issuance of additional shares of any class or series. As a
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result, the Board of Directors of the Company are entitled to authorize the
creation and issuance of up to 2,000,000 shares of Preferred Stock in one or
more series with such terms, limitations and restrictions as may be determined
in the Board's sole discretion, with no further authorization by the Company's
stockholders except as may be required by applicable laws or securities exchange
listing rules.
The Board has no present commitment, arrangement or plan that would require
the issuance of shares of Preferred Stock in connection with an equity offering,
merger, acquisition or otherwise.
The holders of shares of Preferred Stock have only such voting rights as
are granted by law and authorized by the Board of Directors with respect to any
series thereof. The Board of the Company has the right to establish the relative
rights of the Preferred Stock in respect of dividends and other distributions
and in the event of the voluntary or involuntary liquidation, dissolution or
winding up of affairs of the Company as compared with such rights applicable to
the Common Stock and any other series of Preferred Stock.
The effect of Preferred Stock upon the rights of holders of Common Stock
may include: (i) the reduction of amounts otherwise available for payment of
dividends on Common Stock to the extent that dividends are payable on any issued
shares of Preferred Stock; (ii) restrictions on dividends on Common Stock if
dividends on Preferred Stock are in arrears; (iii) dilution of the voting power
of the Common Stock and dilution of net income and net tangible book value per
share of Common Stock as a result of any such issuance, depending on the number
of shares of Common Stock not being entitled to share in the Company's assets
upon liquidation until satisfaction of any liquidation preference granted to
shares of Preferred Stock. It is not possible to state the effect that other
series of Preferred Stock may have upon the rights of the holder of Common Stock
until the Board determines the terms relating to those series of Preferred
Stock.
Vote Required
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The affirmative vote of the majority of the outstanding shares entitled to
vote thereon, and a majority of the outstanding stock of each class entitled to
vote thereon as a class, at the stockholders' meeting will be required to adopt
the proposed amendment to Paragraph 4 of the Certificate of Incorporation. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE THE NUMBER OF
SHARES OF COMMON STOCK.
FINANCIAL INFORMATION
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998 will be made available upon request. See Documents
Incorporated By Reference.
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OTHER MATTERS
Management does not know of any other matters to be brought before the
meeting. However, if any other matters properly come before the meeting, it is
the intention of the appointee named in the enclosed form of Proxy to vote in
accordance with his best judgment on such matters.
By Order of the Board of Directors:
Equitex, Inc.
Date: April __, 1999 Thomas B. Olson
Secretary
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EXHIBIT 1
The total number of shares of stock which the corporation shall have
authority to issue is fifty-two million (52,000,000) shares, of which fifty
million (50,000,000) shares shall be common stock having a par value of $.02 per
share, and two million (2,000,000) shares shall be preferred stock, having a par
value of $.01 per share.
<PAGE>
________________________________________________________________________________
PROXY
________________________________________________________________________________
EQUITEX, INC.
7315 East Peakview Avenue
Englewood, Colorado 80111
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON __________ ___, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Equitex, Inc. (the "Company") hereby
constitutes and appoints Henry Fong as attorney and proxy, to appear, attend and
vote all of the shares of the common stock of Equitex, Inc. standing in the name
of the undersigned at a Special Meeting of Stockholders of Equitex, Inc. to be
held at 2401 PGA Blvd, Suite 190, Palm Beach Gardens, Florida 33410, on _____
__, 1999, at ___ a.m. Eastern Daylight Savings Time, and at any postponements or
adjournments thereof:
1. To consider and vote upon an amendment to Paragraph 4 of the
Certificate of Incorporation to increase the number of authorized shares of the
Company's common stock, $.02 par value, from 7,500,000 shares to 50,000,000
shares.
FOR ______ AGAINST ______ ABSTAIN ______
2. To transact such other business as may properly come before the
meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED HEREON WITH
RESPECT TO PROPOSAL ONE AND FOR PROPOSAL ONE IF NO SPECIFICATION IS MADE. THIS
PROXY WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON ANY
OTHER BUSINESS.
Please mark, date and sign your name exactly as it appears hereon and
return the Proxy in the enclosed envelope as promptly as possible. It is
important to return this Proxy properly signed in order to exercise your right
to vote if you do not attend the meeting and vote in person. When signing as
agent, partner, attorney, administrator, guardian, trustee or in any other
fiduciary or official capacity, please indicate your title. If stock is held
jointly, each joint owner must sign.
Date: ____________, 1999
____________________________________
Signature(s)
Address if different from that on label:
____________________________________
Street Address
____________________________________
City, State and Zip Code
____________________________________
Number of shares
Please check if you intend to be present at the meeting: ___________
