<PAGE i>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 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
DSSI CORPORATION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
DSSI CORPORATION
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] No fee required.
[X] 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: N/A
(2) Aggregate number of securities to which transactions applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1) N/A
(4) Proposed maximum aggregate value of transaction: $400,000
(5) Total fee paid: $80
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form
or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
- -----------------------------
1 Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE ii>
DSSI Corporation
P.O. Box 1570
West Chester, PA 19380
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
October 22, 1997
To the shareholders of DSSI Corporation
Notice is hereby given that a Special Meeting of
Shareholders of DSSI Corporation (the "Company") will be held at
the offices of Wachtel & Masyr, LLP, 110 East 59th Street, New
York, New York, on Wednesday, October 22, 1997, at 2:00 o'clock
in the afternoon for the following purposes:
(1) To authorize the Company to enter the business of
manufacturing and distributing sports equipment, which action
will be effected through: (a) the sale of 10,000,000 shares of
the Company's Common Stock, $0.01 par value (the "Common
Stock"), to Michael J. Blumenfeld at $.20 per share or an
aggregate purchase price of $2,000,000 and (b) the sale by Mr.
Blumenfeld to the Company, at cost, of the assets (including
corporate name) of Collegiate Pacific Inc. f/k/a Nitro Sports
Inc., which company is commencing engagement in the business of
distributing sports equipment to the institutional markets.
(2) To authorize the change of name of the Company from
DSSI Corporation to Collegiate Pacific Inc., but only if the
prior proposal is approved and the sale to Mr. Blumenfeld is
consummated.
Each shareholder of record at the close of business on
Tuesday, September 30, 1997, is entitled to cast, in person by
proxy, one vote for each share of the Common Stock held by such
shareholder on such date.
By order of the Board of Directors
Patrick J. Brennan, CPA
Secretary
Dated: October 2, 1997
_____________________________________________________________________
YOUR PROXY IS IMPORTANT NO MATTER NOW MANY SHARES YOU OWN.
PLEASE FILL-IN, DATE, SIGN AND MAIL IT TODAY IN THE ACCOMPANYING
SELF-ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
_____________________________________________________________________
<PAGE 1>
DSSI Corporation
P.O. Box 1570
West Chester, PA 19380
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
To be held on October 22, 1997
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of DSSI
Corporation (the "Company"), a Pennsylvania corporation which,
pending the acquisition of a new business, uses the residence of
its Chief Financial Officer as its principal office, the mailing
address of which is P.O. Box 1570, West Chester, Pennsylvania
19380, for use at a Special Meeting of Shareholders to be held on
Wednesday, October 22, 1997 or at any adjournment or adjournments
thereof. Only shareholders of record at the close of business on
Tuesday, September 30, 1997 (the "Record Date"), are entitled to
vote at the meeting. Proxy material is first being mailed on or
about Thursday, October 2, 1997, to the Company's shareholders of
record on the Record Date.
VOTING SECURITIES
The voting securities at the meeting will consist of
4,446,017 shares of Common Stock $0.01 par value (the "Common
Stock"). Each shareholder of record is entitled to cast, in
person or by proxy, one vote for each share of the Common Stock
held by such shareholder at the close of business on the Record
Date.
Shareholders who execute proxies retain the right to revoke
them by notifying the Company at any time before they are voted.
Such revocation may be effected by execution of a subsequently
dated proxy or by a letter to the Company, sent to the attention
of the Secretary at the address of the Company's principal office
set forth above in the introductory paragraph of this Proxy
Statement or delivered at the Meeting, revoking the proxy. Unless
so revoked, the shares represented by proxies solicited by the
Board of Directors of the Company will be voted at the Meeting in
accordance with the direction given therein. If no direction is
given, a properly executed proxy will be voted in favor of the two
proposals set forth in the Notice of Special Meeting to authorize
the Company (1) to enter the new business of manufacturing and
distributing sports equipment and (2) to change its name from DSSI
Corporation to Collegiate Pacific Inc. The latter proposal, if
approved by the shareholders, will be implemented only if the
first proposal is approved and the sale of shares to Michael J.
Blumenfeld as described in the succeeding paragraph is consummated
and will be effected by the filing of a Certificate of Amendment
to the Company's Articles of Incorporation.
A majority of the votes cast at the Meeting shall be
necessary to approve each of the proposals set forth in the Notice
of Special Meeting to authorize (1) the Company to enter the
business of manufacturing and distributing sports equipment, which
action will be effected through (a) the sale of 10,000,000 shares
of the Common Stock to Michael J. Blumenfeld at $.20 per share or
an aggregate purchase price of $2,000,000 and (b) the sale by Mr.
Blumenfeld to the Company, at his cost (estimated to be $400,000),
of the assets (including cash advances and the corporate name) of
Collegiate Pacific Inc. f/k/a Nitro Sports Inc.; and (2) the
change of the name of the Corporation from DSSI Corporation to
Collegiate Pacific Inc. Simultaneously with the closing of the
sale to Mr. Blumenfeld, two current directors of the Company (Jeff
Davidowitz and John
<PAGE 2>
Pappajohn, their affiliates and designees and a non-affiliated 5%
beneficial shareholder (James A. Gordon) will purchase an aggregate
of 1,500,000 shares also at $.20 per share or an aggregate purchase
price of $300,000. If the sale to Mr. Blumenfeld is consummated,
he will have the right to designate a majority of the directors.
See "Proposal One: To Enter a New Business - Sale to Michael J.
Blumenfeld."
A shareholder shall not have the right to receive payment for
his, her or its shares of the Common Stock as a result of
shareholder approval of either of the proposals. As indicated
under "Securities Ownership of Certain Beneficial Owners and
Management," the three directors of the Company and a non-
affiliated beneficial owner therein named may vote an aggregate of
2,722,820 shares of the Common Stock or 61.2% of the outstanding
shares of the Common Stock as of the Record Date (without giving
effect to any stock options or Common Stock purchase warrants held
by them) and have committed themselves to vote for the two
proposals. Assuming that these commitments are kept, the two
proposals will be approved even if all of the other shareholders
vote against such proposals. Under the Business Corporation Law
of the Commonwealth of Pennsylvania (the "BCL"), no shareholders'
approval is required as to either proposal; however, in the
Company's Proxy Statement dated May 23, 1997 (the "Prior Proxy
Statement") for the Annual Meeting of the Shareholders held on
June 16, 1997, the Board committed itself that "any proposal for
entering into new operations will be presented to the shareholders
for approval at either an annual or special shareholders' meeting"
and that, at the time the Company commences new operations, the
"directors will consider a more desirable name relating to the
type of business and submit the same to the shareholders for their
approval." Even though their votes may not change the outcome of
the vote, the Board urges all shareholders to vote on the two
proposals which are important to the future of the Company and
recommends a vote in favor of both proposals for the reasons set
forth in this Proxy Statement. Assuming that the two proposals
submitted herewith are approved, all future proposals regarding
the operations of the Company will be submitted for vote by the
shareholders only as required by the BCL or other applicable law.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information as of the
Record Date with respect to (1) all persons who are known to the
Company to own beneficially, or exercise voting or dispositive
control over, 5% or more of the outstanding shares of the Common
Stock, (2) each current director, (3) the former acting chief
executive officer of the Company and the other executive officer
of the Company whose compensation exceeded $100,000 during the
fiscal year ended June 30, 1997 ("Fiscal 1997") and (4) all
directors and officers as a group. Each beneficial owner, except
James A. Gordon and William Davidowitz, has advised the Company
that he has sole voting and investment power with respect to his
shares except as to those shares still subject to exercise of a
stock option or a Common Stock purchase warrant as to which there
are no voting rights until the option or warrant is exercised.
The information in the table as to each of Mr. Gordon and Mr.
William Davidowitz was derived from a Schedule 13D filed by him
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
<PAGE 3>
Number of Shares
Name and Address of of Common Stock Percent of
Beneficial Owner Beneficially Owned Class (1)
- ------------------- ------------------ ----------
James A. Gordon 785,093 17.7%
Edgewater Private Equity
Fund L.P.
666 Grand Avenue, Suite 200
De Moines, IA 50309
John Pappajohn (2) 1,436,408(3) 31.3%
c/o Pappajohn Capital Resources
2116 Financial Center
Des Moines, IA 50309
Jeff Davidowitz (2) 410,000(4) 9.2%
c/o JIBS Equities
Line and Grove Streets
P.O. Box 87
Nanticoke, PA 18634
William Davidowitz 260,000 5.8%
c/o JIBS Equities
Line and Grove Streets
P.O. Box 87
Nanticoke, PA 18634
Stephen C. Turner (2) 26,000(4) nil
c/o Oncor, Inc.
209 Perry Parkway
Gaithersburg, MD 20877
Joseph R. Shaya (5) 125,000(6) 2.7%
1951 Sage Drive
Golden, CO 80401
Patrick J. Brennan (7) 50,000(8) 1.1%
1341 Greenhill Road
Westchester, PA 19380
All Executive Officers and 1,922,408(9) 41.0%
Directors as a Group (4
Persons)
__________________________
(1) The percentages are based upon 4,446,017 shares of the Common
Stock being outstanding on the Record Date and, where
appropriate, effect is given to the exercise of stock options
or
<PAGE 4>
Common Stock purchase warrants as required by Rule 13d-
3(d)(1)(i) under the Exchange Act.
(2) A director of the Company.
(3) The shares reported in the table include an aggregate of
144,681 shares, after giving effect to anti-dilution
provisions, subject to Common Stock purchase warrants
expiring February 17, 1998, March 11, 1998 and March 30, 1998
granted to Mr. Pappajohn in connection with a loan guaranty
and pledge.
(4) The shares reported in the table reflect or include 25,000
shares issuable upon exercise of a stock option expiring
August 9, 1999.
(5) M. Shaya served as a consultant to the Company from June 1,
1994 to June 27, 1997, during which period he served as the
Acting President and Chief Executive Officer of the Company.
(6) The shares reported in the table reflect 125,000 shares
issuable upon exercise of a stock option expiring August 9,
1999.
(7) Mr. Brennan is the Vice President, Finance, the Secretary,
the Chief Financial Officer and the Chief Accounting Officer
of the Company.
(8) The shares reported in the table reflect 25,000 shares
issuable upon the exercise of each of two stock options, one
expiring August 9, 1999 and the other expiring June 16, 2002.
(9) The shares reported in the table reflect those reported for
a director elsewhere in the table (see the text relating to
Notes (3) and (4)) and for the sole executive officer (see
the text relating to Note (8) for Mr. Brennan). The shares
reported in the table do not include those for Mr. Shaya
because he was not an executive officer on the Record Date.
PROPOSAL ONE: TO ENTER A NEW BUSINESS
Background
From August 1989 to June 16, 1987, the Company was engaged in
the business of developing and marketing tests for cocaine,
opiates (heroin, morphine and codeine), methamphetamine, THC
(marijuana), barbiturates, PCP (phencyclidine), amphetamines and
benzodiazepines using urine samples. As a result of the Company's
net losses and negative cash flow from these operations and the
Board's recognition that the Company had not been able to become a
competitive force in the on-site drug testing industry because it
is an emerging market requiring a significant amount of on-going
resources, which the Company was unable to raise, while all of the
industry competition were substantially better funded than the
Company and thus able to invest more money and people in the
process of getting products to market, the Company's Board of
Directors initiated a search for a suitable strategic partner or a
purchaser, which search, after a two-year period, culminated in a
purchase and sale agreement dated March 17, 1997 (the "Sales
Agreement") with Casco Standards, Inc. ("Casco"), a Wisconsin
corporation with its principal offices at 500 Riverside Industrial
Parkway, Portland, ME 04103-1418. Casco is a
<PAGE 5>
subsidiary of Erie Scientific, which is a subsidiary of Sybron
International Corporation, a publicly traded company (NYSE: SYB).
On June 16, 1997, after receiving shareholder approval at the Annual
Meeting of Shareholders held on the same day, the Company sold the
business and substantially all of its assets (other than cash and
accounts receivable) to Casco for $1,950,000. In addition, the
Company agreed to furnish to Casco a six-month supply of products
for which Casco agreed to pay the Company's standard charges.
Pursuant to the Sales Agreement, the Company paid $600,000 to
AccuScreen Labs, Inc. ("AccuScreen") to terminate the Company's
exclusive license and distributorship agreement with AccuScreen,
which agreement Casco did not want to assume and for which
termination Casco had increased the purchase price from $1,600,000
to $1,950,000.
As a result of the sale to Casco, the Company became a shell
corporation and, after the payment to AccuScreen, the payment of
closing costs and the payment of some of the then existing
liabilities, became a publicly held company with $305,559 in
liabilities, a cash reserve of $801,979, subject to collection of
accounts receivable (which, as indicated above, were not part of
the assets sold to Casco and which were $53,073 as of June 30,
1997), the collection of the holdback of $160,000 as part of the
Casco purchase and the incurrence of expenses relating to a
company registered under Section12(g) of the Exchange Act,
including completion of the audit for Fiscal 1997. From July 1,
1997 to August 31, 1997, the Company had collected $51,629 of the
accounts receivable with $1,414 still to be collected. After the
sale, the Board of Directors initiated a search for strategic
opportunities so that the Company could enter a new business not
related to drug testing. As previously reported in the Prior
Proxy Statement, the directors were of the opinion that the
shareholders would have a better opportunity to realize more
though the Company entering a new business than by liquidating the
Company (estimated then that the shareholders would receive $.23
per share on liquidation).
After the sale, Patrick J. Brennan, Vice President, Chief
Financial Officer and Secretary of the Company, and John G.
Connolly were employed full time until the audit for Fiscal 1997
was completed. All other employees were terminated. Mr. Brennan
has continued to serve the Company on a part-time basis, with
responsibility for all necessary filings under the federal
securities laws and federal, state and local tax laws. The
monthly costs for these services are approximately $3,500, which
outlay is largely offset by interest income from the sale
proceeds. In addition, the Company continues to incur stock
transfer agent fees and expenses and has continued its directors'
and officers' liability insurance, all other insurance coverages
being terminated as a result of the sale of assets to Casco.
Sale to Michael J. Blumenfeld
As a result of its search, the Board received an offer from
Michael J. Blumenfeld to purchase 10,000,000 shares of the Common
Stock at $.20 per share or an aggregate purchase price of
$2,000,000. Mr. Blumenfeld was the founder, chief executive
officer (serving as such for 25 years) and largest individual
shareholder of Sport Supply Group, Inc. ("Sport Supply") (NYSE:
GYM) until December 1996, at which time control of Support Supply
was sold to Emerson Radio Corp. ("Emerson") (ASE: MSN). Sport
Supply is recognized as the nation's largest supplier of sports
equipment to the institutional markets. Subsequently, Mr.
Blumenfeld has had incorporated a corporation named Collegiate
Pacific Inc. ("CPI") in which he owns 100% of the stock, has
engaged a staff and is preparing sales brochures to enter the
business of manufacturing and distributing sports equipment to the
institutional markets. He has advised the Company that he has
<PAGE 7>
no non-compete arrangements with either Sport Supply or Emerson, so
that there are no restrictions on him operating CPI or, after
consummation of the proposed sale by the Company to him of the
controlling shares, for the Company to enter the same business.
After performing certain background checks with respect to
Mr. Blumenfeld and reviewing with him his intended plans for the
Company, the Board of Directors approved the sale on August 12,
1997 and the Company entered into a Stock Purchase Agreement dated
as of August 18, 1997 (the "Stock Purchase Agreement" ) with Mr.
Blumenfeld. The directors unanimously concluded that, in view of
Mr. Blumenfeld's apparently substantial experience on behalf of
Sports Supply and the opportunities in the industry, combined with
the capital infusion he would make, this was the type of strategic
opportunity for a new business for the Company for which they had
been searching. The Stock Purchase Agreement provides that, if
the sale to Mr. Blumenfeld is consummated, the Board of Directors
shall consist of one designee of the existing Board (which
designee is expected to be Jeff Davidowitz) and at least two
designees of Mr. Blumenfeld. Information with respect to his
three proposed nominees is given under "Proposed Nominees for
Directorships." The Stock Purchase Agreement also provides that
Mr. Brennan's services on behalf of the Company will be phased out
during the 30-day period following the closing of the stock
transaction. One of the other conditions to closing is that
shareholder approval be obtained. A copy of the Stock Purchase
Agreement has been filed as an exhibit to the Company's Current
Report on Form 8-K which was filed with the Securities and
Exchange Commission (the "Commission") on September 11, 1997. The
Report can be inspected and copies made at the public reference
facilities of the Commission at Room 104, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices
of the Commission: 7 World Trade Center, Suite 1300, New York,
New York, 10048 and Northwestern Atrium Center, 500West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. A copy of the
Report can also be obtained at prescribed rates from the Public
Reference Section of the Commission at its principal office at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains a Web Site that contains reports, proxy and information
statements and information regarding registrants like the Company
that file electronically with the Commission at the following Web
site address: http://www/sec.gov. A copy can also be obtained
from the Company by writing Mr. Brennan at the address shown in
the introductory heading to this Proxy Statement or by calling him
at (610) 696-3479.
As of the Record Date, there were 4,446,017 shares of the
Common Stock outstanding and there were reserved an aggregate of
916,029 shares of the Common Stock consisting of (1) an aggregate
of 345,000 shares reserved for issuance upon the exercise of stock
options (the "Options") granted under the Company's 1994 Stock
Option Plan (the "Option Plan"), (2) an aggregate of 155,000
shares reserved for issuance upon the exercise of the Options to
be granted under the Option Plan and (3) an aggregate of 416,029
shares reserved for issuance upon the exercise of outstanding
Common Stock purchase warrants (the "Warrants"). If the
10,000,000 shares are sold to Mr. Blumenfeld and the 1,500,000
shares are sold to the other prospective purchasers (see the
section "Sales to Others" under this caption "Proposal One: To
Enter A New Business"), Mr. Blumenfeld will own 62.7% of the
outstanding shares assuming that no Options and Warrants are
exercised and 59.3% assuming that the outstanding Options and
Warrants are exercised. The Stock Purchase Agreement provides
that the Board of Directors will reserve an additional 400,000
shares of the Common Stock for issuance to members of the Board of
Directors designated by Mr. Blumenfeld at a price not less than
the fair market value of such shares.
<PAGE 7>
The purposed purchase price represented approximately the
market price of the Common Stock at the time Mr. Blumenfeld's
offer was made and accepted by the Board of Directors on August
12, 1997. The following were the high and low bid prices of the
Common Stock as reported in the OTC Bulletin Board by the National
Association of Securities Dealers, Inc. on the dates indicated:
Bid Prices(1)
----------------
Date High Low
- ------ ---- ---
8/7/97 $0.25 $0.25
8/8/97 0.203 0.203
8/11/97 0.25 0.203
8/12/97 0.203 0.203
8/13/97 0.250 0.203
8/14/97 0.250 0.203
8/15/97 0.328 0.250
8/18/97(2) 0.563 0.281
___________________
(1) The foregoing quotations reflect inter-dealer prices,
without mark-up, mark-down or commissions, and may not
represent actual transactions.
(2) The date of the Stock Purchase Agreement.
Sale to Others
At the closing for the sale to Mr. Blumenfeld, the Company
will sell an aggregate of 1,500,000 shares of the Common Stock to
persons other than Mr. Blumenfeld, also at $.20 per share or an
aggregate purchase price of $300,000. The prospective purchasers
are:
1. John Pappajohn, a director of the Company and his
designees, as to 500,000 shares. As of the Record Date, Mr.
Pappajohn was the beneficial owner of 1,436,408 shares of the
Common Stock, which amount includes 144,681 shares issuable upon
the exercise of Warrants and constitutes 31.3% of the outstanding
shares (29.1% of the voting shares at this Meeting).
2. Jeff Davidowitz, a director of the Company, William
Davidowitz, his father, and their designees, as to 500,000
shares. As of the Record Date, Jeff Davidowitz was the beneficial
owner of 410,000 shares of the Common Stock, which amount includes
25,000 shares issuable upon the exercise of an Option and
constitutes 9.2% of the outstanding shares (8.7% of the voting
shares at this Meeting), and William Davidowitz was the beneficial
owner of 260,000 shares of the Common Stock or 5.8% of the
outstanding shares.
3. James A. Gordon, a beneficial owner of 5% or more of the
outstanding shares of the Common Stock as of the Record Date, and
his designees as to 500,000 shares. As of the Record Date, Mr.
Gordon through Edgewater Private Equity Fund L.P., owned 785,093
shares of the Common Stock or 17.7% of the outstanding shares.
<PAGE 8>
Accordingly, the prospective purchasers include the persons
who own sufficient shares of the Common Stock to approve the two
proposals at this Meeting no matter how the other shareholders
vote with respect thereto and also constitute two of the three
current directors. Only Stephen C. Turner of the current
directors is not participating in the purchase.
As a result of these prospective purchases of an aggregate of
1,500,000 shares of the Common Stock, Messrs. Pappajohn,
Davidowitz and Mr. Gordon and their affiliates and designees will
own beneficially 4,221,820 shares or 26.5% of the outstanding
without giving effect to their outstanding Options and Warrants
and 4,391,501 shares or 27.5% when such effect is given.
The result of the sales to Mr. Blumenfeld and the persons
named in this section is to further dilute the stock ownership of
persons other than the current directors and their affiliates (the
"Minority Shareholders") as indicated in the following table which
does not give effect to the outstanding Options and Warrants:
Minority
Shareholders'
Date Outstanding Shares Number of Shares Percentages
- ------ ------------------ ---------------- ------------
Before sale 4,446,017 1,723,197 38.8%
After sales 15,946,017 1,723,197 10.8%
Purchase of Collegiate Pacific, Inc.
If the sale of 10,000,000 shares of the Common Stock to Mr.
Blumenfeld is consummated, he will sell to the Company, at his
cost (currently estimated to approximate $400,000), the assets
(including cash advances and the corporate name) of Collegiate
Pacific, Inc. ("CPI") f/k/a Nitro Sports, Inc., a Texas
corporation. The Company will also assume the then liabilities of
CPI, the offices of which are located at 13950 Semlac Drive,
Dallas, Texas 75234 and the telephone number of which is (972)
243-8100. CPI, of which Mr. Blumenfeld owns 100% of the
outstanding shares of stock, was incorporated on April 14, 1997 to
engage in the business of manufacturing and distributing sports
equipment; however, as of this date, CPI has not begun marketing
and thus has produced no revenues. CPI has, however, been doing
market research, purchasing inventory, developing sales brochures
and making arrangements for the products it intends to distribute,
which will be distributed by the Company instead if the proposal
for a change of business is approved at this Meeting. For
information as to contemplated products, see the section "Change
of Business" under this caption "Proposal One: To Enter A New
Business."
Mr. Blumenfeld currently serves as the President and Chief
Executive Officer of CPI and will serve in such capacities with
the Company after his purchase of the controlling shares.
Certain information with respect to current executive officers
of CPI who will hold similar officerships in the Company after
the sale is as follows:
Arthur Coerver, age 55, is the Chief Operating Officer of
CPI. From 1981 until 1997, Mr. Coerver was Vice President, Sales
and Marketing, of Sports Supply. Mr. Coerver graduated from the
University of Texas at Austin in 1965 with a BS in Mechanical
Engineering.
<PAGE 9>
Chad Edlein, age 26, is the Vice President of Corporate
Development of CPI. From 1994 until 1997, Mr. Edlein was
Marketing Manager at Sports Supple. Mr. Edlein graduated from the
University of North Texas in 1994.
Under the Stock Purchase Agreement, Mr. Blumenfeld is to
submit an itemized statement of his costs to the Board promptly
after the closing at which he purchases the 10,000,000 shares of
the Common Stock. The Board is obligated to meet within five
business days of the receipt of such statement and the Company is
obligated to make such purchase within three business days after
the Board approves the purchase price (including any resolutions
as to items in dispute). Based upon its current information, the
Company believes that the purchase of the assets of CPI will be
treated as a purchase for accounting purposes and that there will
be no federal income tax consequences to the Company or its
shareholders as a result thereof.
Change of Business
If the first proposal set forth in the Notice of Special
Meeting is approved and, subsequently, the sale of the controlling
stock interest in the Company is purchased by Mr. Blumenfeld, the
Company will enter the business of manufacturing and distributing
sports equipment, including inflatable balls, nets for all sports,
standards and goals for sports requiring such, weight lifting
equipment and recreational products such as frisbees and
horseshoes, to the institutional markets. Mr. Blumenfeld has been
engaged in the sports equipment business for over 25 years. During
his 25 years as a Chief Executive Officer of Sports Supply or its
predecessors, such company completed 75 acquisitions and grew to
have over 100,000 customers and to offer nearly 5,000 products. If
the proposal is approved and the sale of stock is consummated, Mr.
Blumenfeld intends to pursue a policy of strategic acquisitions,
new licensing programs and corporate joint ventures in an attempt
to grow the Company's business. He anticipates that the Company
will initially offer 300 products. There can be no assurance that
these acquisitions, licenses or joint ventures will be effectuated
or obtained or as to the number of products to be offered by the
Company. Furthermore, there can be no assurance that the sports
equipment business or any other business hereafter entered into by
the Company will be profitable or successful.
Except for compliance with Section 14(a) of the Exchange Act
and Regulation 14A promulgated thereunder relating to this Proxy
Statement and the accompanying proxy, there are no federal or
state regulatory requirements as to which the Company must comply
or any approvals obtained in order for the Company to enter into
the business of distributing sports equipment. Whenever the
Company will hereafter elect to commence manufacturing sports
equipment, compliance with certain federal and state regulatory
requirements may become applicable to the Company.
PROPOSAL TWO: CHANGE OF CORPORATE NAME
The Stock Purchase Agreement requires the Company to change
its name from DSSI Corporation to Collegiate Pacific, Inc. As
indicated in the Prior Proxy Statement, the name DSSI Corporation
was adopted only temporarily, because the name Drug Screening
Systems, Inc. was sold to Casco, until a more desirable name
relating to the new business could be adopted. Although the BCL
does not require shareholder approval of a change in corporate
name, the Board had agreed in the Prior Proxy Statement to seek
such approval.
<PAGE 10>
RECOMMENDATION FOR APPROVAL OF BOTH PROPOSALS
The Board of Directors unanimously recommends that
shareholders approve the proposals to enter the business of
manufacturing and distributing sports equipment and to change the
corporate name to Collegiate Pacific Inc. because they believe
that this new business, under the leadership of Mr. Blumenfeld,
will afford the shareholders an opportunity to recoup potentially
their investment in the Company and for the Company to realize
future profits, as to neither of which results there can be any
assurance. The Board also believes that the shareholders will
realize more than if the Company were liquidated rather than
consummating the transaction with Mr. Blumenfeld. As of June 30,
1997, the book value of the Company was $761,628 or $.17 per
share, while the liquidation value (after paying all liquidating
expenses) was estimated by management to be $.15 per share.
Although, as indicated under the section "Sales to Others"
under the caption "Proposal One: To Enter A New Business," the
percentage of ownership of the shareholders who are not affiliated
with the current directors and James A. Gordan (i.e., the Minority
Shareholders) would be reduced, the Board does not consider this
to be a material reason for the Minority Shareholders to vote
against either proposal. Because of its history of continuing
losses when the Company was engaged in the drug testing business,
no dividends were ever paid nor was there a likely chance of such
dividends because of the continuing cash requirements of the
Company. Although the directors believe that, as a result of the
Company's entry into the sports equipment business, the Company
will achieve profitability at an earlier date that the Company
would have (if at all) in the drug testing business, thereby
permitting legally the payment of dividends, Mr. Blumenfeld has
advised the directors that any earnings will be used to develop
the business and, accordingly, no dividends are currently
contemplated even if the Company achieves his expectations. The
directors believe that the Minority Stockholders will realize some
return on their investments through an increase in the market
price of the Common Stock if such earnings are achieved. There
can be no assurance as to the Company achieving profitability or,
if it does, as to the timing thereof or as to any increase in the
market price of the Common Stock. In addition, the prior
percentage ownership did not permit the Minority Shareholders to
effect the vote on the election of directors or on any other
matters so long as the directors and the 5% beneficial owner voted
together. Accordingly, the further reduction in their percentage
ownership caused by the transactions contemplated by this Proxy
Statement will not deprive the Minority Stockholders of a voting
right which they currently have. There will be no other changes
in the rights of the Minority Shareholders.
PROPOSED NOMINEES FOR DIRECTORSHIPS
If the first proposal set forth in the Notice of Special
Meeting is approved and Mr. Blumenfeld subsequently purchases the
controlling stock interest in the Company, he intends to designate
to the current Board the three persons hereinafter named for
election as directors of the Company and, pursuant to the Stock
Purchase Agreement, the Board will elect them. In addition, two
current directors (currently expected to be John Pappajohn and
Stephen C. Turner) will resign and only one current director
(expected to be Jeff Davidowitz) will continue to serve.
Certain information with respect to Mr. Blumenfeld's
designees for election as directors is as follows:
<PAGE 11>
Michael J. Blumenfeld, age 51, will serve as the President
and Chief Executive Officer of the Company, currently serving in
such capacities for CPI. From 1992 until November 1996, he was
the Chairman of the Board and Chief Executive Officer of Sports
Supply, from which public company he resigned in November 1996.
Robert W. Philip, age 62 was an Executive in Residence and
Lecturer in the Department of Accounting of the College of
Business Administration at the University of North Texas in
Denton, Texas from September 1989 until May 1994. Prior to that
time, Mr. Philip served as an audit partner with Arthur Andersen,
S.C. for approximately 18 years. Mr. Philip is also a director of
Medical Control, Inc. (Nasdaq: MDCL), a health care cost
management company. Mr. Philip is currently retired from the
University of North Texas and Arthur Andersen, S.C.
William A. Watkins, Jr., age 55, has been a partner of
Watkins, Watkins and Keenan, a certified public accounting firm,
since December 1971. He also serves as a director of Aurora
Electronics, Inc. (AMEX: AUR), a provider of specialized
distribution and materials support services to the electronics
industry.
There are no family relationships between any of the
foregoing designees and the current directors or between the
foregoing designees and the officers named under "Proposal One: To
Enter A New Business-Purchase of Collegiate Pacific, Inc."
FINANCIAL STATEMENTS
The following audited financial statements appear in the
Company's Annual Report on Form 10-KSB (the "Annual Report"), a
copy of which Annual Report accompanies the Proxy Statement, and
are incorporated herein by this reference.
Page in
Item Form 10-KSB
---- -----------
Independent Auditors' Report...................... 10
Balance Sheets as of June 30, 1997 and 1996....... 11
Statements of Operations for the years ended
June 30, 1997 and 1996.......................... 12
Statements of Changes in Stockholders' Equity
for the years ended June 30, 1997 and 1996...... 13
Statements of Cash Flows for the years ended
June 30, 1997 and 1996.......................... 14
Notes to Financial Statements..................... 15
UNAUDITED PRO FORMA BALANCE SHEET
The following Unaudited Pro Forma Balance Sheet of the
Company is based on the historical financial statements of the
Company incorporated by reference into this Proxy Statement as
adjusted to give effect to (1) the proposed purchase of shares of
the Common Stock by Michael J. Blumenfeld and the others as set
forth in this Proxy Statement and (2) the proposed subsequent
acquisition of CPI even though it has conducted no marketing
activities and its sole operations have been to do market
research, acquire inventory, prepare marketing brochures and
engage personnel
<PAGE 12>
in anticipation of entering the business of manufacturing and
distributing sports equipment to the institutional markets.
The Unaudited Pro Forma Balance Sheet gives effect to the
sale of such shares as if the sale had occurred as of June 30,
1997. The Unaudited Pro Forma Balance Sheet should be read in
conjunction with the historical financial statements of the
Company, including the notes thereto. The Unaudited Pro Forma
Balance sheet does not purport to represent what the Company's
actual financial position would have been if the sale of shares in
fact occurred on such date or to project the Company's financial
position at any future date. The Unaudited Pro Forma Balance
Sheet does not give effect to any transactions other than the sale
of an aggregate of 11,250,000 shares of the Common Stock for an
aggregate purchase price of $2,300,000 and the proposed subsequent
acquisition of CPI for an estimated cost of $400,000.
No pro forma statement of operations is included because
CPI is a start-up operation, having realized no revenues and
incurring only expenses related to doing market research,
acquiring inventory, preparing sales catalogs and engaging
personnel. Its loss through August 22, 1997 is reflected in the
adjustment column of the Unaudited Pro Forma Balance Sheet.
DSSI CORPORATION
UNAUDITED PRO FORMA BALANCE SHEET
As of June 30, 1997
Pro Forma Pro Forma
Historical Adjustments As Adjusted
---------- ----------- -----------
Assets
Current Assets:
Cash $ 801,979 $2,300,000(1) $3,101,978.60
Accounts receivable, not of
allowance of $60,000 at
June 30, 1997 53,073 - 53,073
Receivable from purchase
holdback 160,000 - 160,000
Inventory - 177,855(2) 177,855
Prepaid expenses and other 42,044 500(2) 42,544
--------- --------- ---------
Total Current Assets 1,057,096 2,478,355 3,535,451
Equipment and improvements,
net 1,506 33,455(2) 34,961
Other Assets:
Deposits 8,585 - 8,585
Patents or Trademark - 41,928(2) 41,928
Miscellaneous - 26,374(2) 26,374
---------- ---------- ----------
Total Assets $1,067,187 $2,580,112 $3,647,299
---------- ---------- ----------
---------- ---------- ----------
Liabilities and Stockholders'
Equity
Current Liabilities:
Current maturities of
long-term debt and capital
leases $233,213 - $233,213
Accounts payable and
accrued expenses 72,346 $ 9,827(2) 82,173
Loan from Shareholder - 355,908(2) 355,908
-------- --------- -------
Total Current Liabilities 305,559 365,735 671,294
Stockholders' Equity
Class "A" preferred stock,
$0.01 par value; 2,000
Shares authorized; none issued
Common stock, $0.01 par
value; 20,000,000
Shares authorized: 4,446,017
shares at June 30, 1997
issued and outstanding 44,460 115,000 159,460
Additional paid-in-capital 15,118,555 2,185,500 17,303,555
<PAGE 13>
Pro Forma Pro Forma
Historical Adjustments As Adjusted
---------- ----------- -----------
Accumulated deficit (14,401,387) (85,623)(2) (14,487,010)
------------ -------- -----------
Total Stockholders'
Equity 761,628 2,214,377 2,976,005
------------ --------- -----------
Total Liabilities and
Stockholders' Equity $ 1,067,187 $2,580,112 $ 3,647,299
------------ ---------- -----------
------------ ---------- -----------
_______________________
(1) This amount represents the gross purchase price for
11,250,000 shares of the Common Stock and does not reflect
any reduction for the expenses relating to the proposed sales
of shares of the Common Stock.
(2) These amounts are derived from the unaudited balance sheet of
CPI as of August 22, 1997 and, of course, may vary from those
on the actual date of purchase of the CPI assets.
MISCELLANEOUS
Costs of Solicitation
The expenses in connection with the solicitation of proxies,
including the cost of preparing assembling and mailing this Proxy
Statement and the related material, will be borne by the Company.
The Company will pay brokers and other custodians, nominees and
fiduciaries their reasonable expenses for sending proxy materials
to principals and obtaining their proxies. In addition to
solicitations by mail, proxies may be solicited personally or by
telephone or telegraph by directors and the sole officer of the
Company, who will receive no additional compensation therefor.
Annual Report to Shareholders
A copy of the Annual Report accompanies this Proxy Statement
and its financial statements (Items 6 and 7) are incorporated
herein by this reference. A copy of any exhibits to the Annual
Report may be obtained by written or oral request to Patrick J.
Brennan, Vice President, Chief Financial Officer and Secretary of
the Company, at the principal office of the Company, the address
of which is set forth in the introductory paragraph heading to
this Proxy Statement. A reasonable fee for duplicating and
mailing will be charged if a copy of any exhibit is requested.
DSSI CORPORATION
/s/ Patrick J. Brennan
-----------------------
Patrick J. Brennan, CPA
Secretary
Dated: October 2, 1997
<PAGE A>
PROXY
DRUG SCREENING SYSTEMS, INC.
P.O. Box 1570, West Chester, PA 19380
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF SHAREHOLDERS - OCTOBER 22, 1997
The undersigned hereby appoints Jeff Davidowitz and John
Pappajohn, or either of them, as Proxy or Proxies of the
undersigned with full power of substitution or revocation to
attend and to represent the undersigned at the Special Meeting of
Shareholders of DSSI Corporation (the "Company") to be held on
October 22, 1997, and at any adjournments thereof, and to vote
thereat the number of shares of Common Stock, $0.01 par value
(the "Common Stock"), of the Company the undersigned would be
entitled to vote if personally present, in accordance with the
directions indicated below.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE.
Authorize the Company to enter the business of manufacturing
and distributing sports equipment, which action will be effected
through: (1) the sale of 10,000,000 shares of the Common Stock to
Michael J. Blumenfeld at $.20 per share or an aggregate purchase
price of $2,000,000 and (2) the sale by Mr. Blumenfeld to the
Company, at cost, of the assets (including corporate name) of
College Pacific Inc. f/k/a Nitro Sports Inc.:
[] FOR [] AGAINST [] ABSTAIN
Authorize the change of name of the Company from DSSI
Corporation to Collegiate Pacific Inc., but only if the prior
proposal is approved and the sale to Mr. Blumenfeld is
consummated.
[] FOR [] AGAINST [] ABSTAIN
If no specification is made, this proxy will be voted FOR the
Proposals listed above.
Dated:_________________, 1997
Name:________________________________________
_________________________________________
Please sign exactly
as name appears
above. For joint
accounts, each joint
owner must sign.
Please give full
title if signing in
a representative
capacity.
Please check if you
plan to attend this
Special Meeting []
