<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
(Amendment No. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(3)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Pioneer Commercial Funding Corp.
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(Name of Registrant as Specified in its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date filed:
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<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
6660 RESEDA BOULEVARD
RESEDA, CALIFORNIA 91335
April 4, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend a Special Meeting of Shareholders which
will be held on May 8, 1997 at 11:00 A.M., Eastern Time, at the offices of
Gratch Jacobs & Brozman, P.C., 950 Third Avenue, 11th Floor, New York, NY 10022.
At this meeting, you will be asked to consider and vote upon the proposal
to amend the Certificate of Incorporation of the Company by increasing the
authorized capital of the Company from 5,000,000 shares of common stock, par
value $.01 per share ("Common Stock"), to 20,000,000 shares of Common Stock.
The accompanying Notice of Special Meeting and Proxy Statement set forth in
detail the business intended to be transacted. Time will be made available for a
discussion of these items as well as for other questions about the business
affairs of the Company.
If you are unable to join us at the meeting it is very important that you
be represented by proxy. Therefore, please take a moment to sign, date, and
return your proxy in the enclosed envelope. If you do not have a proxy, please
call your broker or the Company, and ask that a proxy be mailed to you. Your
cooperation in mailing your proxy promptly will be greatly appreciated.
Sincerely yours,
/s/ Albert Nissim
Albert Nissim
President
<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
6660 RESEDA BOULEVARD
RESEDA, CALIFORNIA 91335
____________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 8, 1997
____________________
TO THE HOLDERS OF COMMON STOCK OF
PIONEER COMMERCIAL FUNDING CORP.:
A Special Meeting of the holders of the Common Stock of Pioneer Commercial
Funding Corp. (the "Company") will be held at the offices of Gratch Jacobs &
Brozman, P.C., 950 Third Avenue, 11th Floor, New York, New York 10022, on
Thursday May 8, 1997 at 11:00 A.M., Eastern time, to consider and vote upon a
proposal to amend the Company's Certificate of Incorporation to increase the
authorized capital stock of the Company from 5,000,000 shares of Common Stock to
20,000,000 shares of Common Stock.
Only holders of record of the Company's Common Stock at the close of
business on April 4, 1997 are entitled to notice of or to vote at this meeting
and any adjournment or adjournments thereof.
By Order of the Board of Directors
/s/ GLENDA S. KLEIN
GLENDA S. KLEIN,
Secretary
Reseda, California
April 4, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. THIS IS IMPORTANT FOR
THE PURPOSE OF ENSURING A QUORUM AT THE MEETING.
<PAGE>
PRELIMINARY COPY FOR THE INFORMATION OF
THE SECURITIES AND EXCHANGE COMMISSION ONLY
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
OF
PIONEER COMMERCIAL FUNDING CORP.
6660 RESEDA BOULEVARD
RESEDA, CALIFORNIA 91335
To Be Held May 8, 1997
The enclosed proxy materials are furnished in connection with the
solicitation of proxies by the Board of Directors of Pioneer Commercial Funding
Corp., a New York corporation (the "Company"), for use at the Special Meeting of
shareholders of the Company to be held at 11:00 A.M., Eastern Time, on Thursday,
May 8, 1997, at the offices of Gratch Jacobs & Brozman, P.C., 950 Third Avenue,
New York, New York 10022, and any adjournment or adjournments of such meeting
(the "Meeting").
This proxy statement and the enclosed form of proxy are first being
mailed to the shareholders of the Company on or about April 8, 1997.
RIGHT OF REVOCATION
A proxy may be revoked by notice in writing to the Secretary of the
Company at any time prior to the exercise thereof. Each valid proxy received in
time will be voted at the Meeting and, if a choice is specified on the proxy, it
will be voted in accordance with such specifications. If no such specification
is made, the persons named in the accompanying proxy have advised the Company of
their intention to vote the shares represented by the proxies received by them
in favor of the proposal to amend the Company's Certificate of Incorporation to
increase the authorized capital stock of the Company from 5,000,000 shares of
common stock, par value $0.01 per share ("Common Stock"), to 20,000,000 shares
of Common Stock.
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<PAGE>
MATTER TO BE ACTED UPON
The purpose of the Meeting is to consider and vote upon a proposal to
amend the Company's Certificate of Incorporation to increase the authorized
capital stock of the Company from 5,000,000 shares of Common Stock to 20,000,000
shares of Common Stock.
BACKGROUND; REASONS FOR THE PROPOSAL
From August 1996 through January 1997, the Company engaged in
discussions with approximately 14 financial institutions seeking to obtain a
commitment to provide the Company with financing which the Company had
determined was necessary in order to successfully operate its mortgage warehouse
lending business. The Company was unable to obtain any such commitment, having
been advised by such financing institutions that the Company would need to
increase its capital base to obtain a significant financial commitment.
To address this issue, in January 1997, the Company negotiated with
eight investors (the "Investors") to invest an aggregate of $4 million in the
Company through a private placement of securities (the "Private Placement").
During the negotiations, the Board of Directors determined that a subscription
price of $1.00 per share of Common Stock was a fair and equitable price to the
Company. This determination was based upon, among other things, (i) the market
price of the Company's Common Stock during the period preceding the January 31,
1997 press release announcing the proposed Private Placement, (ii) the net
asset value of the Company at such time, which was slightly below $1.00 per
share, (iii) the restricted nature of the securities to be issued in the Private
Placement, (iv) limited financing alternatives available to the Company and (v)
the Company's funding needs.
Although the Investors indicated their willingness to invest $4
million in consideration for the issuance of an aggregate of 4 million shares of
Common Stock, the Company did not have 4 million authorized and unreserved
shares available for issuance. Consequently, the Investors agreed to subscribe
for an aggregate of 2.2 million shares of Common Stock at a subscription price
of $1.00 per share and acquire an aggregate of $1.8 million principal amount of
convertible notes (the "Notes") at a conversion rate of $1.00 principal amount
of Notes per share of Common Stock (the "Conversion Rate"), conditioned on the
agreement of the Company to use its best efforts to secure approval of an
amendment to its Certificate of Incorporation that would increase the number of
authorized shares of Common Stock to a number sufficient to provide for
conversion of the Notes into Common Stock at the Conversion Rate (the
"Amendment").
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<PAGE>
Pursuant to the subscription agreements entered into by the Company
and each Investor, and, in addition, in order to create sufficient authorized
shares of Common Stock to provide for the long term stock issuance needs of the
Company at a time when the Company's management believes that prudence favors
the appropriateness of doing so, the Company has scheduled the Meeting to seek
shareholder approval of the Amendment in accordance with (S)803(a) of the New
York Business Corporation Law. If the shareholders of the Company approve the
Amendment, the Notes shall automatically be converted into Common Stock
immediately upon the filing of the Amendment with the New York Secretary of
State, without the necessity for any further action to be taken by the
Investors.
RISK OF DILUTION
The trading price of the Common Stock on April 1, 1997 as reported by
Bloomberg Business News was $2 1/4 per share. To the extent that the trading
price of the Common Stock quoted on the NASDAQ SmallCap market exceeds $1.00 per
share at the time the Amendment is approved, the conversion of the Notes at the
Conversion Rate may result in the dilution of the interests of existing
shareholders of the Company.
EFFECT OF DISAPPROVAL
If the Amendment is not approved and the Notes remain outstanding, the
entire aggregate of $1,800,000 principal amount of the Notes will become due and
payable on December 31, 1997. Commencing August 28, 1997, the Notes shall bear
interest on the unpaid principal amount thereof at the rate of eight (8%)
percent per annum. In addition, as a consequence, the Company may encounter
difficulties in obtaining financing commitments from third party lenders in
connection with the operation of its mortgage warehouse lending operations.
Although the Company has recently obtained a commitment for $25 million line of
credit from a third party lender, the failure to obtain approval of the
Amendment may impair the Company's ability to maintain such commitment and
address future funding needs.
IMPACT OF THE CONVERSION OF THE NOTES
If the shareholders approve the Amendment, upon the conversion of the
Notes, the Company will have eliminated a $1,800,000 liability and have the
benefit of enhancement of its assets base and net worth, which the management of
the Company believes will enable the Company to obtain increased credit lines
from financial institutions.
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<PAGE>
PROPOSAL:
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company to amend the Certificate of
Incorporation of the Company to increase the number of authorized
shares of Common Stock of the Company and permit the conversion of the
Notes into Common Stock at the Conversion Rate and, in addition,
permit the Company to issue additional shares in the future if the
Board of Directors shall determine such issuance to be in the best
interests of the Company; now therefore it is
RESOLVED, that Article FOURTH of the Company's Certificate of
Incorporation, as heretofore amended, be further amended to increase
the authorized capital stock of the Company from 5,000,000 shares of
Common Stock, par value $.01 per share, to 20,000,000 shares of Common
Stock.
The affirmative vote of the holders of at least a majority of all
outstanding shares of Common Stock is required for the approval of this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH PROPOSAL.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The outstanding voting securities of the Company on April 4 1997 (the
"Record Date") consisted of 3,642,272 shares of Common Stock. The Common Stock
is the only class of voting stock of the Company. Only shareholders of record at
the close of business on the Record Date are entitled to notice of or to vote at
the Meeting. Each share of Common Stock is entitled to one vote with respect to
the proposal. The holders of a majority of the outstanding shares entitled to
vote must be present at the Meeting in person or by proxy to constitute a
quorum.
CHANGE IN CONTROL - VOTING SECURITIES
AND PRINCIPAL HOLDERS THEREOF
As a result of the completion of the Private Placement by the Company
on February 28, 1997, a change in control of the Company occurred, as previously
reported in the Company's Report on Form 8-K dated March 5, 1997, and as more
particularly described below:
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<PAGE>
For consideration of $2,500,000 paid by Leedan International Holdings B.V.
("Leedan"), of which $2,300,000 represented internal funds of Leedan and
$200,000 were proceeds of a 6 month loan, bearing interest at a variable annual
rate equal to the London Interbank Offering Rate ("Leedan Business"), which loan
was made to Leedan by Leedan Business Enterprise Ltd., an indirect parent
company of Leedan, Leedan acquired 1,375,000 shares of Common Stock and
$1,125,000 principal amount of Notes.
Upon the closing of the Private Placement, Leedan became the largest
shareholder of the Company with direct and indirect holdings of 42.6% of the
issued and outstanding Common Stock.
Based on the conversion rate of each $1.00 principal amount of Notes
into one share of Common Stock, if the shareholders approve the Amendment,
Leedan will own, directly and indirectly, 49% of the issued and outstanding
Common Stock.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
Set forth below are the holders of 5% or more of the Common Stock as
of April 1, 1997 and management ownership of Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
---------------------------------------
<S> <C> <C>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS
OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
- ------------------- ------------------ ------------------
Leedan Business Enterprise Ltd. 1,551,136/1/ 42.6%
8 Shaul Hamelech Blvd.
Tel-Aviv 64733, Israel
Jay Botchman 330,000 9%
1500 E. Tropicana Avenue
Suite 100
Las Vegas, Nevada 89113
Michael Lauer 330,000/2/ 9%
200 Park Avenue
Suite 3900
New York, New York 10166
Tamar Lieber 322,122 9%
160 West 66th Street
New York, New York 10022
Glenda Klein 197,546/3/ 5%
19644 Pine Valley Avenue
Northridge, California 91326
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME TITLE OF COMMON STOCK OF CLASS
- ---- ----- ---------------- --------
<S> <C> <C> <C>
Glenda Klein Director and 197,546/3/ 5%
Senior Vice
President, Secretary,
Treasurer and Chief
Financial Officer
Tamar Lieber Director 322,122 9%
Richard Fried Director 12,046 Less than 1%
Directors and 531,714/3/ 13.8%
Executive
Officers as a
group (6 persons)
</TABLE>
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/1/ Leedan, which together with Leedan Systems & Properties
Promotion (1993) Ltd. holds 42.6% of the issued and outstanding
Common Stock of the Company, is an indirect wholly-owned
subsidiary of Leedan Business Enterprises Ltd ("Leedan Business").
Certain members of the Harel family, collectively, own
approximately 57.5% of the outstanding shares of Leedan Business.
Mr. Boaz Harel, a director of the Company, owns approximately 17%
of the outstanding shares of Leedan Business and disclaims
beneficial ownership of any stock of Leedan Business held by any
other member of the Harel family.
/2/ Mr. Lauer owns shares of the Company and is the investment
manager with authority to vote and sell securities owned by three
entities that he manages. The shares of the Company owned by
Mr. Lauer directly and by the entities he manages total more than
5% of the outstanding shares of Common Stock of the Company.
/3/ Includes 188,637 shares of Common Stock which Ms. Klein has the
right to acquire within 60 days from the date hereof upon exercise
of an option held by her.
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<PAGE>
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Mr. Boaz Harel has served as a director of the Company since November 11,
1996. Mr. Harel owns approximately 17% of the shares of Leedan Business, which
is the beneficial owner of 42.6% of the Common Stock through its indirect
wholly-owned subsidiary, Leedan. Mr. Harel also serves as the Managing Director
of Leedan Business, as a Managing Director of Leedan and is also the Chairman of
ICTS USA (1994) Inc., an indirect subsidiary of Leedan.
Mr. M. Albert Nissim has served as the President of the Company since
January 9, 1997. Mr. Nissim is a Managing Director of Leedan, which
beneficially owns 42.6% of the Common Stock. He also serves as the Secretary of
ICTS International N.V., a subsidiary of Leedan, and as the President of ICTS
USA (1994) Inc., a subsidiary of ICTS International, N.V.
COST OF SOLICITATION
The cost of solicitation of proxies, including reimbursements to banks and
brokers for reasonable expenses in sending proxy material to their principals,
will be borne by the Company. The Company's transfer agent, American Stock
Transfer & Trust Company, is assisting the Company in the solicitation of
proxies from brokers, banks, institutions and other fiduciaries by mail, and
will charge the Company its customary fee therefor plus out-of-pocket expenses
which, in the aggregate, are estimated to be approximately $800. In addition,
proxies may be solicited by officers of the Company by mail, in person or by
telephone, telegraph or telex. It is anticipated that the total cost of
solicitation of proxies will be approximately $2000.
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<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
Proxy for Special Meeting of Shareholders
May 8, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PIONEER
COMMERCIAL FUNDING CORP. (THE "COMPANY").
The undersigned hereby appoints Messrs. M. Albert Nissam and Boaz
Harel as Proxies, each with the power to appoint his substitute and hereby
authorizes each one of them to represent and vote, as designated below, all
shares of Common Stock of Pioneer Commercial Funding Corp. held of record by the
undersigned on April 4, 1997, at the Special Meeting of Shareholders to be held
on May 8, 1997 or any adjournment thereof.
The shares of Common Stock that the undersigned would be entitled to
vote if personally present at the Special Meeting to be held at 11:00 A.M.,
Eastern Time, on Thursday, May 8, 1997, at the offices of Gratch Jacobs &
Brozman, P.C., 950 Third Avenue, New York, New York, or any adjournment or
adjournments thereof, shall be voted with respect to the proposed resolution as
set forth below, as indicated herein.
THE PROPOSED RESOLUTION
To amend the Company's Certificate of Incorporation as follows:
RESOLVED, that Article FOURTH of the Company's Certificate of Incorporation,
as heretofore amended, be further amended to increase the authorized capital
stock of the Company from 5,000,000 shares of Common Stock, par value $.01
per share, to 20,000,000 shares of Common Stock.
Unless otherwise indicated, this Proxy confers authority to vote "FOR"
for the above resolution. The Board of Director recommends a vote of "FOR" for
the above resolution. This proxy is solicited on behalf of the Board of
Directors of Pioneer Commercial Funding Corp. and may be revoked prior to its
exercise by a written notice to the Secretary of the Company.
<PAGE>
[X] Please mark your vote as indicated in this example.
APPROVAL OF AN AMENDMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
For Against Abstain
[_] [_] [_]
NOTE: Signature(s) should follow exactly the name(s) on the stock
certificate. Executor, administrator, trustee or guardian should
sign as such. If more than one trustee, all should sign. ALL
JOINT OWNERS MUST SIGN.
Dated:
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Signature of Shareholder
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Signature of Shareholder
