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LINKON CORPORATION
587 CONNECTICUT AVE.
NORWALK, CONNECTICUT 06854
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders:
The Annual Meeting of Stockholders of the Company will be held on Friday,
November 26, 1999 at 10:00 a.m., at 587 Connecticut Ave., Norwalk, Connecticut
06854, for the following purposes:
1. Election of a new three member Board of Directors, containing new
nominees pursuant to the reorganization with PacketPort, Inc. as described
below.
2. Vote upon the ratification of the majority share acquisition by
PacketPort, Inc. While management does not believe such shareholder ratification
is required under Nevada Law, the Board has determined to submit this proposal
for majority shareholder approval before restructuring the Company's debt as the
basis for allowing PacketPort, Inc. to become a majority shareholder of Linkon
Corporation.
3. Ratify the continuing retention of the accounting firm of Radin
Glass & Co., LLP for an additional one year term as the Company's independent
auditors.
4. Vote upon such other and further matters as may regularly and
properly come before the special meeting.
Stockholders of record at the close of business on October 25, 1999 will
be entitled to notice of and to vote at the Annual Meeting and any continuation
or adjournment thereof.
Dated: November , 1999 By Order of the Board of Directors,
---------------------------------
Charles A. Castelli
Chairman of the Board
MANAGEMENT IS SOLICITING YOUR AFFIRMATIVE VOTE
FOR ELECTION OF THE DIRECTOR NOMINEES,
AND EACH OF THE ABOVE IDENTIFIED AGENDA ITEMS
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PROXY STATEMENT
LINKON CORPORATION
A NEVADA CORPORATION
1999 SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 26, 1999
Pursuant to a unanimous resolution of the Board of Directors of Linkon
Corporation (hereinafter sometimes "Linkon", or "the Company"), the Board has
designated November 26th, 1999 at 10:00 a.m. at 587 Connecticut Ave., Norwalk,
Connecticut 06854 as the date, time and place for a Special Shareholders'
Meeting. Each shareholder of the Company is cordially invited to attend such
meeting and vote upon the matters presented. If you cannot be present
personally, you may vote upon the matters presented and grant or withhold
general authority to the Board of Directors to otherwise vote your shares by
completing and timely returning the enclosed Proxy.
VARIOUS ITEMS OF IMPORTANT INFORMATION AND ACCOUNTING FOR THE COMPANY
RELATED TO THIS PROXY STATEMENT ARE SET-OUT IN THE MOST CURRENT ENCLOSED ANNUAL
REPORT ON FORM 10-KSB AND INCORPORATED AUDITED FINANCIAL STATEMENTS FOR LINKON
DATED JANUARY 31, 1999. ALSO ENCLOSED IS THE MOST CURRENT QUARTERLY REPORT ON
FORM 10-QSB. SUCH DETAILED INFORMATION MAY BE RELEVANT IN REVIEWING THIS PROXY
STATEMENT, BUT IS NOT REPEATED IN THIS DOCUMENT.
AGENDA
The matters to be considered and voted upon at this Special Shareholders'
Meeting will include the following as more particularly set-out in this Proxy
Statement:
1. Election of a new three member Board of Directors, containing new
nominees pursuant to the reorganization with PacketPort, Inc. as described
below.
2. Vote upon the ratification of the majority share acquisition by
PacketPort, Inc. While management does not believe such shareholder ratification
is required under Nevada Law, the Board has determined to submit for majority
shareholder approval before proceeding the details of the restructuring of the
Company's debt as the basis for allowing PacketPort, Inc. to become a majority
shareholder of Linkon Corporation.
3. Ratify the continuing retention of the accounting firm of Radin
Glass & Co., LLP for an additional one year term as the Company's independent
auditors.
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4. Vote upon such other and further matters as may regularly and
properly come before the special meeting.
It is also intended at the Special Shareholders' Meeting that a
management representative will give a general report on the completion of the
majority share acquisition by PacketPort, Inc. and related terms and
expectations of restructuring of the Company's debt. An outline summary of the
restructuring arrangements made by management or other representatives of
PacketPort, Inc. is set forth below. PacketPort, Inc. is a Delaware corporation
having its principal place of business c/o Robert H. Jaffe & Associates, P.A. at
8 Mountain Avenue, Springfield, New Jersey, 07081-1728. PacketPort, Inc. is
currently a holding company not directly engaged in business other than
serving as an investment vehicle for its president, Ronald A. Durando.
REVOCABILITY & VOTING SECURITIES
Each shareholder is cordially invited to attend and vote at the meeting in
person. However, if it is not possible or practical for you to attend the
meeting, you may vote by executing and returning the enclosed Proxy which
solicits your votes on each of the specific matters outlined above and then
allows you to grant or withhold general authority for the Board of Directors to
vote your proxy on such other matters as may properly come before the meeting.
Management is not aware of any other matters which have been proposed or
submitted for consideration at the Special Shareholders' Meeting, and it is not
anticipated that other matters will be discussed or voted upon.
If you wish to vote by Proxy, you need to complete, sign and return the
enclosed Proxy to the transfer agent for the Company in the enclosed envelope.
You may revoke your proxy at any time prior to your Proxy being counted at the
meeting. Attendance in person will not constitute a revocation of your proxy,
unless you otherwise instruct the Inspector of Elections to register your vote
in person in lieu of voting by Proxy. The Board of Directors, acting through any
Election Committee or an Inspector of Elections, shall remain responsible for
determining the eligibility of any person or proxy to cast votes for or against
any matter to be heard and voted upon at the Special Shareholders Meeting, as
well as the shares to be counted for quorum purposes.
For your information, management represents that there is presently issued
and outstanding approximately 13,696,866 voting shares of an authorized
24,900,000 shares of common stock of Linkon. The Company also has 1,000,000
preferred shares authorized which are not issued. The Board of Directors
authorized a three-to-one (3:1) reverse split of all outstanding shares in
September, 1999 as a term of the restructuring. Under Nevada law, a reverse
split does not require shareholder approval. However, by voting to ratify the
proposed restructuring, each shareholder would also be voting to ratify the
reverse split. After giving effect to the 3:1 reverse split, there would be
approximately 4,565,622 shares outstanding.
It will be necessary for one-half of the issued and outstanding shares to
be present to constitute a quorum, or approximately 6,848,433 pre-split shares
held in person or by proxy. If
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a quorum is present, then a majority of the shares present and voted in person
or by proxy may act upon any matter by majority vote. If a quorum is not
present, the management of the Company, through its representative, will elect
to continue the meeting to a date to be reset by the Board of Directors.
Shares entitled to vote will be determined based upon the official
shareholder record of October 25, 1999. Actual votes cast will be determined by
the physical counting of votes in person or proxy by the Inspector of Elections
to be appointed prior to the meeting by the Board of Directors. Abstentions,
broker non-votes and any Treasury Shares will not be counted for either quorum
or ballot purposes.
There are no matters to be voted upon as described by this Proxy upon
which management will proceed absent majority shareholder approval as described
above.
The expense of preparing, printing and mailing proxy materials will be
borne by the Company. In addition, in person or telephonic solicitation of proxy
material may be made by directors, officers and other employees of the Company.
The Company will request brokers and nominees that hold shares of common stock
in their names to furnish proxy materials to the beneficial owners of the shares
and will reimburse such brokers and nominees for the reasonable expenses
occurred in forwarding solicitation materials to such beneficial owners.
The Company knows of no person or group, except the following, which, as
of the date of this Proxy Statement, beneficially owns and has the right to vote
more than five (5%) percent of the Company's Common Stock:
<TABLE>
<CAPTION>
NAMES AND ADDRESS OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED PERCENT OF CLASS
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<S> <C> <C>
1. Mr. Charles A. Castelli 1,800,000 13.14%
2. RG Capital, Inc. 1,480,000 10.80%
3. Patrick J. Kane 760,000 5.5%
</TABLE>
ESSENTIAL OUTLINE OF PROPOSED RESTRUCTURING
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Management hereby summarizes what is deemed to be the most significant
aspects of the acquisition of a majority of the Company's shares by PacketPort,
Inc. and the related restructuring of the Company's debt:
1. PacketPort, Inc., the acquiring company, has entered into a commitment
effective immediately upon shareholder ratification to loan to the Company
$250,000 on a one year note with simple annual interest payable at 12% per
annum. Charles A. Castelli and James Linley, two of the present principal
shareholders in the Company, have concurrently agreed to sell one million of
their pre-split shares in Linkon to Packetport, Inc. at ten cents ($0.10) per
share. Mr. Castelli
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holds approximately 1.8 million pre-split shares and Mr. Linley approximately
600,000 pre-split shares. While such conveyance was a necessary term of the
proposed restructuring, the Board deems that the decision and actions of Messrs.
Castelli and Linley were as individual shareholders and independent of the
actions of the Company.
2. The Company has agreed to a three-to-one (3:1) reverse stock split
effective as implemented by a Board of Directors' resolution.
3. Lee W. Hill, a former director of the Company has resigned. The three
present directors of the Company, Messrs. Charles A. Castelli, Daniel Zwiren and
Joao Carvalho have agreed to resign immediately upon the shareholder approval of
the proposed restructuring of the Company's debt and election of their proposed
substitute nominees to the Board: Messrs. RONALD A. DURANDO, GUSTAVE T. DOTOLI
and ROBERT H. JAFFE, ESQ.. The biographical information for these replacement
nominee directors is more particularly set out in a following section.
4. PacketPort, Inc. will acquire 4,500,000 reverse split shares of Linkon
at a cost of $.05 a share and will also be granted an option to acquire an
additional 1,500,000 reverse split shares at $.10 per share in consideration for
making the loan required to discharge certain creditor obligations of the
Company as outlined below.
5. PacketPort, Inc. has agreed to discharge the principal creditor
outstanding obligations of Linkon, as part of the restructuring arrangements set
forth in this Proxy Statement, based upon the following negotiated settlement
terms:
A. As to RG capital fund, PacketPort, Inc. has negotiated a
commitment to discharge $1,900,000 of debt by paying $190,000,
$95,000 will be paid with the balance of $95,000 payable in
four equal monthly installments. PacketPort, Inc. will also
tender to this creditor 250,000 shares which it holds in a
publicly traded company known as mPhase Technologies, Inc.
(XDSL). These shares will be donated to PacketPort, Inc. by
Mr. Durando, or associates, as part of the restructuring and
to be tendered as set-out above.
B. The second major creditor Syrinx Speech Systems, Inc., holds a
Judgment against Linkon in the amount of $802,500, PacketPort,
Inc. has agreed to pay $100,00 cash upon the ratification of
the restructuring of the Company's debt and a second $100,000
and to tender 65,000 mPhase shares to discharge this debt.
These shares are to be donated to PacketPort, Inc. by Mr.
Durando, or his associates, and to be tendered as set-out
above.
6. Assuming acquisition by PacketPort, Inc. of 2,400,000 pre-split shares
from existing Linkon Corporation shareholders and creditors of the
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Company, and assuming the exercise of the options described above, PacketPort,
Inc. would then hold approximately 6,800,000 shares or sixty (60%) percent of
all reverse split shares in the Company.
7. Finally, the proposed restructuring calls for the employment or
consultancy of certain prior officers/directors of Linkon by PacketPort, Inc. to
insure an orderly transition and continuing technical expertise. In essential
terms, Mr. Lee W. Hill, the prior Chief Executive Officer, President and member
of the Board of Directors of Linkon will be paid a total of $50,000 by the
Company in consideration of the execution of a Consultant Agreement and Mr.
Hill's agreement to release all claims he has for accrued compensation, options,
etc. Mr. Thomas Cerabona, former Senior Vice President and Secretary, has agreed
to enter into a consultancy agreement with PacketPort, Inc. for a minimum one
year term at $50,000 and to release all claims he has for accrued compensation,
options, etc. Mr. James Linley, the prior Vice President of Engineering at
Linkon, will be employed as a technical engineer for $75,000/year plus benefits
by PacketPort, Inc. for a minimum one year term and has agreed to release all
claims he has for accrued compensation, options, etc. Finally, Mr. Charles A.
Castelli, the prior Chairman and Chief Technology Officer at Linkon, will be
employed for a minimum one year term by PacketPort, Inc. as an engineer at
$84,000 per year, plus benefits and has agreed to release all claims he has for
accrued compensation, options, etc.
It is believed by management that the foregoing arrangement will allow
Linkon to recommence present business activities without the necessity of filing
a bankruptcy petition or otherwise remaining insolvent. Accordingly, management
would urge your vote in favor of the proposed restructuring as the most viable
alternative for the Company to continue operations at the present time. It is
anticipated that PacketPort, Inc. may supply additional capital, as necessary,
to insure ongoing operations of the Company, though no assurance or warranty of
this fact can be made.
Linkon has been engaged in the development production and distribution of
telephony devices and software allowing networked computers to have simultaneous
access to fax, modem and other types of communication lines through multiple
access ports. As of May 10, 1999, the Company became inactive due to cash flow
deficiencies and numerous creditor claims. At present, the Company has no
employees, other than its president, no active business, and a negative net
worth.
PROPOSAL NO.1
ELECTION OF DIRECTORS
Management of Linkon Corporation indicates that the following individuals
constitute management's nominees for the Board of Directors:
1. MR. RONALD A. DURANDO, Age 42. Mr. Durando is a co-founder of
mPhase, a small public technology company, and has served as its President and
Chief Executive Officer since its inception in October 1996. Prior to joining
mPhase Technologies, Inc.,
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Mr. Durando was President and Chief Executive Officer of Nutley Securities,
Inc., a registered broker-dealer. In addition, Mr. Durando currently serves as
the Chief Operating Officer of Microphase Corporation, a leading developer of
telecommunications technology.
2. MR. GUSTAVE T. DOTOLI, Age 62. Gustave T. Dotoli has served as the
Chief Operating Officer of mPhase since October 1996. In addition, Mr. Dotoli
currently serves as the Vice President of Corporate Development of Microphase
Corporation. He is formerly the President and Chief Executive Officer of the
following corporations: Imperial Electro-Plating, Inc., World Imports USA,
Industrial Chemical Supply, Inc., SISCO Beverage, Inc. and Met Pack, Inc. Mr
Dotoli received a B.S. degree in Industrial Engineering from Fairleigh Dickinson
University in 1959.
3. ROBERT H. JAFFE, ESQ, Age 63. Mr. Jaffe is an attorney at law in
the State of New Jersey, and the principal officer of a professional association
of attorneys known as Robert H. Jaffe & Associates, P.A. He graduated in 1957
from Harvard College in Cambridge, Massachusetts, where he received a Bachelor
of Arts degree. Mr. Jaffe did post-graduate work at Columbia University in New
York, where he received a Masters in Business Administration in 1961. Mr. Jaffe
was commissioned as a certified public accountant in New Jersey during the year
1964. Thereafter, while employed as an executive for a water and sewer utility
holding company, Mr. Jaffe attended Seton Hall University Law School in Newark,
New Jersey, where he received a Juris Doctor degree in 1969.
After becoming a member of the Bar of the State of New Jersey in 1970, Mr.
Jaffe has specialized in securities litigation and employment discrimination
cases, and, in connection with these specialities, has practiced before the
United States Supreme Court, the Washington State Supreme Court, the New Jersey
Supreme Court and various federal and state appellate and trial courts
throughout the United States.
The following chart sets out the essential information regarding the
number of reverse split shares held and the present compensation which each of
the Director nominees will receive from Linkon.
<TABLE>
<CAPTION>
NAME OF DIRECTOR/NOMINEE NUMBER OF % OF OPTIONS(2) COMPENSATION(3)
LINKON SHARES OUTSTANDING
PRESENTLY HELD1 SHARES
<S> <C> <C> <C>
Mr. Ronald A. Durando 0 % 0 $
Mr. Gustave T. Dotoli 0 0 0 0
Robert H. Jaffe, Esq. 10,000 0 0 0
</TABLE>
(1) Includes all shares legally or beneficially owned.
(2) There are presently no outstanding options, warrants or other share
acquisition rights.
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(3) Compensation includes base salary. The value of all benefits, viz. health
insurance, vehicle are less than 5% of salary. Directors are not paid a salary,
but receive per diem compensation for attending Board Meetings of $500 per
meeting.
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PROPOSAL NO.2
RESTRUCTURING
The Company has determined, because the existing company will continue as
the surviving company and because no present shareholders are required to
exchange shares other than the consenting management shareholders, there is no
requirement for prior notice or recognizing "dissenting shareholder rights"
under Nevada LawFurther, the Company had earlier elected to exclude itself from
the application of the "Acquisition of Controlling Interest" provisions of the
Nevada Corporate Code, Nev. Rev. Statutes ss. 78.378 ET. SEQ.
Management further believes this transaction does not require shareholder
approval under Nevada law, but has elected to submit the same for ratification,
as outlined above, and requests your affirmative vote in favor of the proposed
restructuring described in this proxy statement.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF AUDITORS
Management proposes, as a final item of business, that the Shareholders
ratify the appointment of the accounting firm of Radin Glass & Co. LLP of New
York, New York as the continuing auditors for the Company for an additional one
year term.
CONCLUSION
Each shareholder receiving this Proxy Statement should now complete and
return the enclosed Proxy in the enclosed envelope to the transfer agent for the
Company. You are requested to complete and return the Proxy even if you plan on
attending the meeting in person so the Company may assure itself of having a
quorum for the conduct of the business requested. As noted above, you may revoke
your proxy at any time or by attendance and voting in person at the meeting.
There are no shareholder proposals currently pending at the meeting.
Should you wish to submit any shareholder proposals for the next regular
meeting, you should do so in writing and send them to the Company prior to
November 22, 1999.
If you have any questions concerning any of the matters in this Proxy
Statement, please feel free to contact current management for the Company,
through Robert H. Jaffe, Esq. at 8 Mountain Avenue, Springfield, New Jersey
07081, Telephone: (973) 467-2246.
Dated: November , 1999.
BY AUTHORITY OF THE BOARD OF DIRECTORS:
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Charles A. Castelli, Chairman of the Board
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LINKON CORPORATION
PROXY FORM AND BALLOT
ANNUAL MEETING, NOVEMBER 26TH, 1999
PLEASE COMPLETE, SIGN AND PROVIDE ANY ADDITIONAL INFORMATION ON THIS PROXY
STATEMENT AND RETURN IT TO THE TRANSFER AGENT BY MAILING IT BACK PRIOR TO
NOVEMBER 22, 1999 IN THE ENCLOSED ENVELOPE.
FOR AGAINST ABSTAIN PROPOSAL
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ELECTION OF MANAGEMENT NOMINEES TO THE
BOARD OF DIRECTORS. IF NOT VOTING FOR
ELECTION OF ALL, INDICATE BELOW YOUR
INDIVIDUAL VOTE.
YOU MAY VOTE FOR ALL NOMINEES ABOVE; OR
YOU MAY VOTE INDIVIDUALLY AS TO EACH PROPOSED
DIRECTOR BELOW
FOR AGAINST ABSTAIN
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MR. RONALD A. DURANDO
MR. GUSTAVE T. DOTOLI
MR. ROBERT H. JAFFE
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OTHER MATTERS
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FOR AGAINST ABSTAIN
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APPROVAL TO RATIFY MAJORITY SHARE
ACQUISITION BY PACKETPORT, INC. AS PART
OF RESTRUCTURING OF THE COMPANY'S DEBT
AND A 3:1 REVERSE STOCK SPLIT. ELECTION
TO RETAIN RADIN GLASS & CO., LLP AS
INDEPENDENT CPAS FOR THE COMPANY. GRANT
TO CURRENT MANAGEMENT THE RIGHT TO VOTE
YOUR PROXY IN ACCORDANCE WITH THEIR
JUDGMENT ON OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
OTHER SHAREHOLDER PROPOSALS AND/OR NOMINATIONS
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(UNLESS OTHERWISE INDICATED, YOUR PROXY WILL BE VOTED IN FAVOR OF ANY NOMINATION
OR PROPOSAL INDICATED BELOW.)
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(ATTACH SHEETS AS NECESSARY)
CHECK HERE IF YOU PLAN
- ----- TO ATTEND MEETING. --------------------------------------------
SIGNATURE
PRINT SHAREHOLDER NAME(S) EXACTLY
AS THEY APPEAR ON YOUR CERTIFICATE: COMPLETE IF KNOWN:
CERTIFICATE #:
- ----------------------------- ------------
NO. OF SHARES:
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THIS PROXY IS SOLICITED BY MANAGEMENT
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