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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
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 Section 240.14a-11(c) or
Section 240.14a-12
JMAR INDUSTRIES, INC.
(Name of Registrant as Specified in its Charter)
-------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 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
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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:
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JMAR INDUSTRIES, INC.
3956 Sorrento Valley Blvd.
San Diego, CA 92121
April ___, 1998
To the Holders of JMAR Redeemable Common Stock Purchase Warrants:
The Board of Directors of JMAR Industries, Inc. (the "Company") is
seeking your consent, as a holder of the Company's Redeemable Common Stock
Purchase Warrants (the "Warrants"), to the amendments to the Warrants described
in the accompanying Warrantholder Consent Solicitation Statement. The principal
purpose of the proposed amendments is to amend the Warrants to (i) extend their
expiration date to May 15, 2000, (ii) increase the exercise price to $5.50 per
share and (iii) adjust the redemption provision to provide that the Company may
redeem the Warrants if the average closing price of the Company's Common Stock
is $7.00 per share or more over a period of ten consecutive trading days.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE PROPOSED
AMENDMENTS AND REQUESTS THAT THE WARRANTHOLDERS CONSENT TO THE PROPOSED
AMENDMENTS. NO MEETING OF WARRANTHOLDERS IS BEING HELD IN CONNECTION WITH THIS
CONSENT SOLICITATION.
PLEASE NOTE that all Warrants which are not amended as provided herein
will expire on May 15, 1998.
YOUR CONSENT IS IMPORTANT. In order to extend the expiration date of
your Warrants and to effect the other amendments to your Warrants proposed
herein, you must consent in the manner provided herein by no later than May 15,
1998. There is no minimum number of consents by the holders of the Warrants
required in order to give effect to the consent by any given holder.
THE FAILURE TO RECEIVE YOUR CONSENT BY MAY 15, 1998 WILL RESULT IN YOUR
WARRANTS EXPIRING ON MAY 15, 1998.
On behalf of the Board of Directors, I encourage you to indicate your
consent to the proposed amendments on the enclosed Consent Card and return it
promptly as instructed.
Sincerely,
John S. Martinez, Ph.D.
Chairman of the Board, President
and Chief Executive Officer
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JMAR INDUSTRIES, INC.
3956 Sorrento Valley Blvd.
San Diego, CA 92121
WARRANTHOLDER CONSENT SOLICITATION STATEMENT
GENERAL
The Board of Directors of JMAR Industries, Inc. (the "Company") hereby
requests the consent of the holders of the Company's Redeemable Common Stock
Purchase Warrants (herein called either the "Securities" or the "Warrants") to
the amendments described herein. These materials were first given or mailed to
Warrantholders on or about April ___, 1998.
Current Terms of the Warrants
In February, 1993, Warrants to purchase a total of 2,705,882 shares of
the Company's Common Stock were issued by the Company in a registered public
offering of Units consisting of one share of Common Stock and one Warrant. The
Warrants currently entitle the holders to purchase one share of Common Stock for
$4.68 per share and originally were scheduled to expire on February 17, 1998. In
anticipation of seeking the consent of the holders to the amendments proposed
herein, the Company has temporarily extended the expiration date of the Warrants
to May 15, 1998 (referred to herein as the "Expiration Date"). The Warrants also
currently provide that the Company may redeem the Warrants, at a redemption
price of $0.05 per Warrant, upon 30 days' notice, provided that the high closing
bid quotation price of the Company's Common Stock for a period of 20 consecutive
trading days exceeds $6.38 per share.
Description of Proposed Amendments
The amendments to the Warrants proposed herein will effect the following
changes: (i) the Expiration Date will be extended to May 15, 2000, (ii) the
exercise price will be increased from $4.68 to $5.50 per share and (iii) the
Warrant's redemption provision will be amended to provide that the Company may
redeem the Warrants at a redemption price of $0.05 per Warrant, upon 30 days'
notice, provided that the average of the closing price of the Company's Common
Stock for a period of 10 consecutive trading days exceeds $7.00 per Warrant.
Reasons for Amendments
The Company is under no obligation to extend the expiration date of the
Warrants. In recognition of the investment by the holders in the Warrants,
however, the Board of Directors believes that it is in the best interests of the
Company and its shareholders to extend the expiration date of the Warrants, but
only in conjunction with the additional proposed amendments to the Warrants.
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Consequences of Not Consenting
The failure of a holder's Consent to be received by the Warrant Agent by
5:00 p.m. (Colorado time) on May 15, 1998 will result in the expiration of such
holder's Warrants at such time on May 15, 1998.
MARKET FOR WARRANTS AND RELATED MATTERS
The Warrants are traded on the NASDAQ National Market tier of the NASDAQ
Stock Market under the symbol "JMARW." As of March 3, 1998, there were
approximately 477 holders of the Warrants.
The shares of Common Stock issuable upon exercise of the Warrants are
registered under a currently effective Registration Statement on Form S-3 (the
"Registration Statement"). Concurrently with the effectiveness of the amendments
proposed herein, the Company will make an appropriate filing with the SEC to
supplement the Registration Statement to include, among other things, the
amended Warrant Certificate. The Company intends to de-register all shares of
Common Stock issuable under those Warrants which expire on May 15, 1998.
RECORD DATE AND SUBSEQUENT TRANSFERS
This Consent Solicitation Statement is being mailed to Warrantholders of
record on the date prior to the date this Consent Solicitation Statement is
mailed. Any Consent signed and dated by the registered holder of a Warrant or
Warrants will bind all beneficial owners and all subsequent transferees of
either registered or beneficial owners of such Warrants. A transferee, being so
bound, should consult the transferor concerning whether there were pre-transfer
Consents. If Warrants are traded through a brokerage, the broker or its nominee
can make such inquiries. In addition, the Warrant Agent will be available to
respond to written inquires. For the Warrant Agent's address, see "Information
and Solicitation."
CONSENT SOLICITATION PERIOD
Subject to the right of the Board of Directors to elect not to proceed
with the proposed amendments as described in "Board of Directors' Discretion and
Reservation of Rights" below, each Consent which has been received by the
Warrant Agent by 5:00 p.m. (Colorado time) on May 15, 1998 will be effective at
5:00 p.m. May 15, 1998 with respect to the Warrants owned by a consenting
registered holder as to all (but no less than all) of the proposed amendments.
The Company reserves the right to extend the Consent Solicitation Period and/or
the Warrant expiration date beyond the then current Expiration Date from time to
time as it may determine in its sole discretion.
CONSENT PROCEDURE
Enclosed herewith is a Consent Card to be used to indicate your consent
to the proposed
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amendments. By marking the "Approve" box, you will be recorded as consenting to
the proposed amendments. Marking the "Disapprove" or "Abstain" boxes, or failing
to return the Consent Card to the Warrant Agent by 5:00 p.m. (Colorado time) on
May 15, 1998 will be treated as not having consented to the proposed amendments
with the consequence that your Warrants will expire on the Expiration Date.
Only registered holders of Warrants may give a Consent as to such
Warrants. The Consent Card provided herein may be executed by the registered
holder or pursuant to authority given by the record holder. Beneficial holders
must instruct the broker or other nominee holder how to complete the Consent
Card.
INFORMATION AND SOLICITATION
The Company is required to undertake to reimburse, and does reimburse,
brokerage firms and other persons representing beneficial owners of the Warrants
for their expense in forwarding the Consent Solicitation materials to such
beneficial owners. The Warrant Agent will mail, or cause to be mailed, at the
Company's cost and expense, copies of this Warrantholder Consent Solicitation
Statement (and any other documents contemplated hereby). The Warrant Agent,
acting as Registrar, will also collect and tabulate the Consents. The Warrant
Agent will not advise Warrantholders concerning the request for Consent.
Appropriate written questions or comments regarding the consent procedure,
however, may be addressed to American Securities Transfer, Inc. at 938 Quail
Street, Suite 101, Lakewood, Colorado 80215.
The above-described fees, costs and expenses, in addition to the costs
of administrative matters related to distribution of this statement and related
documents, will be borne by the Company. Consents may be solicited personally or
by telephone, telegram or fax by certain of the Company's directors, officers
and regular employees, without additional compensation.
BOARD OF DIRECTORS' DISCRETION AND RESERVATION OF RIGHTS
The Board of Directors reserves the right, notwithstanding the receipt
of Consents by one or more Warrantholders and without further action by the
Warrantholders, to elect not to proceed with the proposed amendments if at any
time prior to May 22, 1998 (or any extension thereof) the Board of Directors, in
its sole discretion, determines that the proposed amendments are no longer in
the best interests of the Company.
NO DISSENTERS' RIGHTS
Under Delaware law, Warrantholders are not entitled to dissenters'
rights of appraisal with respect to the proposed amendments.
CONSENTS EXPECTED
The proposed amendments require a Warrantholder's Consent in order to be
effective as
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to such holder's Warrants. In light of the fact that Warrants will otherwise
expire on May 15, 1998, the Company anticipates that Consent will be given by
substantially all of the holders of the Warrants.
AMENDED WARRANT CERTIFICATES
Promptly following the Expiration Date and tabulation of the Consents,
the Warrant Agent will deliver to each of the consenting registered holders a
sticker to be affixed to the registered holder's Warrant Certificate which
describes the amendments described herein. Subsequent transferees of Warrants
will receive an amended Warrant Certificate which reflects the amended terms of
the Warrants.
INTERESTS OF CERTAIN PERSONS
The directors and executive officers of the Company do not own any
Warrants and have no substantial interest, direct or indirect, by Warrant
holdings or otherwise, in the approval or disapproval of the Proposal, except as
holders of Common Stock generally.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of March 6, 1998, certain
information regarding the beneficial ownership of the Company's Common Stock by
(1) each person or entity known to the Company to be the beneficial owner of
more than five percent of the Company's Common Stock, (2) each director of the
Company, (3) each executive officer of the Company, and (4) all directors and
executive officers of the Company as a group. In all cases, unless otherwise
indicated, the named person has sole voting power and sole investment power over
the securities.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE OF OUTSTANDING
COMMON STOCK BENEFICIALLY COMMON STOCK BENEFICIALLY
BENEFICIAL OWNER OWNED OWNED
<S> <C> <C>
John S. Martinez (1) 1,597,340 8.58%
Kernco Trust SA (2) 1,250,000 6.86%
2 rue Jargonnant
CH-1211 Geneva 6
Switzerland
Marvin W. Sepe (3) 189,452 1.04%
Dennis E. Valentine (4) 133,120 (13)
Richard M. Foster (5) 78,980 (13)
</TABLE>
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<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE OF OUTSTANDING
COMMON STOCK BENEFICIALLY COMMON STOCK BENEFICIALLY
BENEFICIAL OWNER OWNED OWNED
<S> <C> <C>
Leonid Yoffe (6) 55,679 (13)
James H. Banister, Jr. (7) 51,984 (13)
Vernon H. Blackman (8) 26,921 (13)
Barry Ressler (9) 21,857 (13)
John P. Ricardi (10) 20,000 (13)
C. Neil Beer (11) 14,247 (13)
All executive officers and 2,189,580 11.45%
directors as a group (10
persons) (12)
</TABLE>
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The references in the footnotes below to the ownership of "warrants" refers to
various warrants issued from time to time in private placements with varying
exercise prices, expiration dates and other terms. Such "warrants" are not the
Warrants which are the subject of this Warrant Solicitation Statement.
(1) Includes (a) 372,965 shares owned of record by the John S. Martinez
Separate Property Trust, of which Dr. Martinez as trustee, has sole
voting power and investment power; (b) 648,375 shares of Common Stock
which are issuable upon exercise of currently exercisable warrants and
stock options; and (c) 576,000 shares of Common Stock subject to a
voting agreement pursuant to which Dr. Martinez has sole voting power
(but no investment power) until the earlier of October 6, 2003 or until
the transfer of the shares according to the terms of the voting
agreement (the "Voting Agreement").
(2) Includes 250,000 shares which are issuable upon exercise of currently
exercisable warrants.
(3) Includes 187,251 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(4) Includes 131,115 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(5) Includes 28,333 shares which are issuable upon exercise of currently
exercisable stock options.
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(6) Includes 42,297 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(7) Includes 43,396 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(8) Includes 26,733 shares issuable upon exercise of currently exercisable
stock options and warrants.
(9) Includes 21,669 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(10) All shares are issuable upon exercise of currently exercisable stock
options.
(11) Includes 12,499 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(12) Includes 1,161,668 shares which are issuable upon exercise of currently
exercisable stock options and warrants.
(13) Less than one percent.
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INCORPORATION BY REFERENCE
Enclosed herewith, for the purpose of providing Warrantholders with
substantially the financial information that Item 13 of Schedule 14A under the
Securities Exchange Act identifies, is a copy of the Company's Annual Report on
Form 10-K, as filed with the Commission on March 31, 1998, related to the fiscal
year ended December 31, 1997 ("1997 Form 10-K"). Regarding the Company's 1997
Form 10-K, only Auditors' Reports, Financial Statements and the Notes thereto
and the Management's Discussion and Analysis of Financial Condition and Results
of Operations are incorporated herein by this reference.
Requests for information or documents may be directed to the attention
of Mr. Dennis E. Valentine, Chief Financial Officer, at the principal executive
office of the Company located at 3956 Sorrento Valley Blvd., San Diego, CA
92121.
MANAGEMENT REQUESTS A CONSENT FOR APPROVAL OF THE PROPOSED
AMENDMENTS TO THE WARRANTS.
BY ORDER OF THE BOARD OF DIRECTORS
Dennis E. Valentine
Secretary and Chief Financial Officer
April ___, 1998
San Diego, California
TO ENSURE YOUR CONSENT IS RECEIVED PRIOR TO THE CURRENT EXPIRATION DATE
OF THE WARRANTS (MAY 15, 1998), REGISTERED HOLDERS ARE REQUESTED TO COMPLETE,
SIGN AND DATE THE ENCLOSED CONSENT CARD AND PROMPTLY MAIL IT IN THE ENCLOSED,
SELF-ADDRESSED ENVELOPE TO AMERICAN SECURITIES TRANSFER, INC., 938 QUAIL STREET,
LAKEWOOD, COLORADO 80215.
ANY BENEFICIAL OWNERS (OF WARRANTS REGISTERED IN A BROKER'S OR OTHER
NOMINEE'S NAME) SHOULD PROVIDE A COMPLETE, SIGNED AND DATED CONSENT CARD
DIRECTLY TO THE BROKER OR OTHER NOMINEE WHO ACTS AS THE REGISTERED HOLDER, AND
THE REGISTERED NOMINEE HOLDER SHOULD IN TURN COMPLETE, SIGN AND DATE A CONSENT
CARD AND SEND IT TO THE WARRANT AGENT AT THE ADDRESS ABOVE.
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[FORM OF FRONT OF CARD]
JMAR INDUSTRIES, INC.
THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF JMAR
INDUSTRIES, INC. (THE "COMPANY"). THE MANAGEMENT AND BOARD OF DIRECTORS OF JMAR
INDUSTRIES, INC. RECOMMEND "APPROVAL" OF THE PROPOSED AMENDMENTS TO THE WARRANTS
AS DESCRIBED IN THE ACCOMPANYING CONSENT SOLICITATION STATEMENT.
Warrantholders are urged to mark, sign, date and mail promptly this Consent Card
in the envelope provided. Consents must be received at the address of the
Warrant Agent by 5:00 p.m. (Colorado time), on or before May 15, 1998 unless the
deadline is extended by the Company.
EACH CONSENT MUST BE SIGNED AND DATED.
Sign exactly as addressed to you. Joint owners should each sign. If signing as
executor, administrator, attorney, trustee, or guardian, give title as such. If
a corporation, sign in full corporate name by authorized officer. If a
partnership, sign in the name of authorized person.
Please return this Consent Card promptly, using the enclosed envelope. No
postage is required if mailed in the United States of America.
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[FORM OF BACK OF CARD]
PLEASE SIGN, DATE AND INDICATE YOUR APPROVAL OR DISAPPROVAL BELOW.
PROPOSAL 1: [ ] APPROVE PROPOSED [ ] DISAPPROVE [ ] ABSTAIN
AMENDMENT TO
WARRANTS
SIGNATURE(S)
- ---------------------------------------------------
- ---------------------------------------------------
Signature (if held jointly)
Title or authority (if applicable)
Date: ------------------------------------
THE FAILURE TO RETURN THIS CONSENT FORM AS INSTRUCTED BY 5:00 P.M. (COLORADO
TIME) ON MAY 15, 1998 OR THE DISAPPROVAL OF THE PROPOSED AMENDMENTS OR
ABSTENTION WILL RESULT IN THE EXPIRATION OF THE WARRANTS AT 5:00 P.M. (COLORADO
TIME) ON MAY 15, 1998, UNLESS SUCH WARRANTS ARE FURTHER EXTENDED BY THE COMPANY
IN ITS SOLE DISCRETION.
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
______ Consent of Arthur Andersen LLP dated
___________, 1998
</TABLE>
