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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] 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
PIONEER COMMERCIAL FUNDING CORP.
.................................................................
(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)(1)
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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[LOGO] PIONEER COMMERCIAL FUNDING CORP.
January 16, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend a Special Meeting of Shareholders of
Pioneer Commercial Funding Corp. (the "Company"), which will be held on February
14, 1997 at 10:00 A.M., local time, at the offices of Hall Dickler Kent Friedman
& Wood, LLP, 909 Third Avenue, New York, New York 10022, on the 27th Floor.
At the Special Meeting of Shareholders which was held on January 15,
1997, the shareholders refused, by a vote of against and for, with
abstaining, to approve a proposal to increase the Company's authorized
capital from 5,000,000 shares of common stock, par value $.01 per share
("Common Stock"), to 25,000,000 shares, of which 20,000,000 shares would have
been Common Stock, and 5,000,000 shares would have been preferred shares, par
value $.01 per share.
By reason of the facts that (1) an increase in the Company's authorized
Common Stock is absolutely essential to its ability to go forward with a planned
$7,500,000 public offering of securities; and (2) the Company's management
believes that the infusion of the net proceeds of such offering is critical to
the Company's ability to raise the additional bank lines of credit that it needs
in order to expand the scope of its mortgage warehouse lending activities to a
point where such activities will become profitable, the Board of Directors has
authorized management to submit a second request to the Company's shareholders
- -- this time seeking only an increase in authorized Common Stock.
Accordingly, at the meeting to be held on February 14, 1997, you will be
asked to consider and vote upon one proposal to amend the Company's Certificate
of Incorporation to increase the authorized capital of the Company from
5,000,000 shares of 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
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mailing your proxy promptly will not only be greatly appreciated; it will also
result in a significant benefit to the Company.
Sincerely yours,
ARTHUR H. GOLDBERG
Chairman and Chief Executive Officer
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PIONEER COMMERCIAL FUNDING CORP.
6660 RESEDA BOULEVARD
RESEDA, CALIFORNIA 91335
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be Held February 14, 1997
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To the Holders of Common Stock of
PIONEER COMMERCIAL FUNDING CORP.
A Special Meeting of the holders of the common stock, $.01 par value
(the "Common Stock") of Pioneer Commercial Funding Corp. (the "Company") will be
held at the offices of Hall Dickler Kent Friedman & Wood, LLP, 909 Third Avenue,
New York, New York 10022, on the 27th Floor, on February 14, 1997 at 10:00 A.M.,
local time, for the following purposes:
1. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to increase the authorized capital of the
Company from 5,000,000 shares of Common Stock to 20,000,000 shares of
Common Stock; and
2. To transact such other business as may properly come before the
meeting.
Only holders of record of the Company's Common Stock at the close of
business on January 9, 1997 are entitled to notice of or to vote at this meeting
and any adjournment or adjournments thereof. Shareholders are entitled to vote
upon all business as may properly be presented for consideration at the meeting.
By Order of the Board of Directors
GLENDA S. KLEIN,
Secretary
Reseda, California
January 16, 1996
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.
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PROXY STATEMENT
PIONEER COMMERCIAL FUNDING CORP.
6660 RESEDA BOULEVARD
RESEDA, CALIFORNIA 91335
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SPECIAL MEETING OF SHAREHOLDERS
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SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Pioneer
Commercial Funding Corp. (the "Company") for use at a Special Meeting of
Shareholders to be held February 14, 1997, and at any adjournment or
adjournments thereof (the "Meeting"). A proxy may be revoked by notice in
writing to the President 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 (i) in favor of the proposal to amend the Company's
Certificate of Incorporation to increase the authorized capital of the Company
from 5,000,000 shares of Common Stock, $.01 par value (the "Common Stock"), to
20,000,000 shares of Common Stock; and (ii) in accordance with their best
judgment on any other matters that may come before the meeting.
The cost of solicitation of proxies, including the reimbursement to
banks and brokers for reasonable expenses in sending proxy material to their
principals, will be borne by the Company. Hill & Knowlton, Inc. and the
Company's transfer agent, American Stock Transfer & Trust Company, are assisting
the Company in the solicitation of proxies from shareholders, brokers, banks,
institutions and other fiduciaries by mail, in person or by telephone,
facsimile, telegraph or telex, and will charge the Company their customary fees
therefor plus out-of-pocket expenses which, in the aggregate, are estimated to
be less than $10,000. In addition, proxies may be solicited by officers of the
Company by mail, in person or by telephone, facsimile, telegraph or telex. It is
anticipated that on or about January 17, 1997, this proxy statement and the
enclosed form of proxy will be mailed to shareholders.
The outstanding voting securities of the Company on January 9, 1997 (the
"Record Date") consisted of 1,442,272 shares of Common Stock. 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 each
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proposal which shall properly come before the Meeting for consideration by the
shareholders. 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.
PROPOSAL NO. 1:
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL
In accordance with the Company's Certificate of Incorporation, it is
authorized to issue a maximum of 5,000,000 shares of Common Stock.
As of the Record Date, 1,442,272 shares of Common Stock are issued and
outstanding, and an aggregate of 1,207,939 shares of Common Stock have been
reserved for issuance under the Company's Incentive Stock Option Plan and with
respect to various options and warrants which were heretofore issued by the
Company. Accordingly, as of the Record Date, the Company may not issue more than
an additional 2,349,789 shares of Common Stock in the absence of authorization
from the shareholders to amend the Company's certificate of incorporation to
provide for an increase in the aggregate number of authorized shares of Common
Stock which the Company may issue.
When the Company successfully completed its initial public offering in
August 1996 (the "IPO"), it had been management's belief that the $1.9 million
which was thereby added to the Company's asset base and shareholders' equity
would enable it to increase its lines of revolving credit by an amount which
would thereby enable the Company to conduct its operations on a profitable
basis. In an effort to obtain such additional financing, the Company has engaged
in negotiations with approximately 20 financial institutions between the end of
August 1996 and the date of this proxy statement, but it has not yet been able
to obtain a commitment from any of such institutions to provide the additional
financing which the Company will need in order to be able to operate its
mortgage warehouse lending business profitably. Based upon the foregoing
experience, management has concluded that it must raise additional capital in
order to attract additional lines of revolving credit, and in order to be able
to explore other opportunities to enhance shareholder values.
To that end, the Company has entered into a letter of intent with an
underwriter (the "Underwriter"), and has filed a registration statement on Form
SB-2 with the Securities and Exchange Commission (File No. 333-18865), for a
$7,500,000 public offering of the Company's securities to be made on a firm
commitment basis by such Underwriter (the "Offering"). Such securities shall
consist of units (the "Units"), each of which will consist of one share of
Common Stock and one five year warrant entitling the holder thereof to purchase
one share of Common Stock at an exercise price calculated on the basis of the
market value of the Common Stock
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on the day immediately preceding the effective date of the Offering (the
"Warrant").(1) The Company intends to use the net proceeds of the Offering to
increase the volume of mortgage warehouse loan transactions that it will be able
to undertake directly, and through increased credit lines from institutional
financing sources which it believes it will be able to attract by reason of the
enhancements in its asset base and net worth which will result from the
successful completion of such Offering. Management may also use a portion of
such net proceeds to provide capital in the form of loans to Trans Lending
Corporation ("Trans Lending"), a 50% owned subsidiary based in Florida, which
originates automobile financing contracts which it acquires primarily from
franchised and independent used car dealers for "non-prime" borrowers, i.e.,
consumers who are typically unable to obtain financing from traditional sources.
Based upon the closing price of the Common Stock on the Record Date
($X.XX per share), and assuming solely for the purpose of this analysis that the
Company would not receive any proceeds from the sale of the Warrant components
of the Units, the Company would be obligated to issue an additional X,XXX,XXX
shares of Common Stock, and it would have to reserve an additional X,XXX,XXX
shares of Common Stock which would be issuable upon exercise of the Warrants.
Thus, in order to undertake the Offering based upon the foregoing pricing
analysis, the Company would have to issue an additional X,XXX,XXX shares of
Common Stock, i.e., X,XXX,XXX shares in excess of the number of shares of Common
Stock which the Company can presently issue in accordance with the provisions of
its Certificate of Incorporation.
In order to enable the Company to undertake the Offering, and to have
sufficient additional authorized but unissued shares of Common Stock available
for future transactions involving the issuance of Common Stock, the Board of
Directors is seeking permission from the Company's shareholders to increase the
pool of authorized but unissued shares of capital stock which may be drawn upon.
In order to provide for the above-mentioned immediate and longer 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 Board of
Directors is recommending that the shareholders vote in favor of passage of the
following resolution:
"RESOLVED, that Article FOURTH of the Corporation's Certificate
of Incorporation, as heretofore amended, shall be further
amended to
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(1) The offering prices of the Units, the Common Stock and the Warrants will be
determined by reference to the market value of the Common Stock at the time of
commencement of the Offering.
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increase 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"
Restrictions Imposed by Prior Underwriting Agreement
The underwriting agreement that the Company executed in August 1996 with
National Securities Corporation ("National") in connection with the Company's
initial public offering of securities (the "IPO Underwriting Agreement")
contains provisions which require the Company to obtain National's written
consent during the one year period ending on August 12, 1997 before the Company
may issue any securities, other than the shares underlying options and warrants
issued prior to or in connection with the IPO, or securities issuable under the
Company's incentive stock option plan. Although National has not yet delivered
written consent to the Company regarding the proposed issuances of securities to
be made in connection with the Offering, management has received assurances from
National's Chairman and Chief Executive Officer that National believes the
Offering would be in the Company's best interests. Furthermore, Mark Roth, Esq.,
National's Vice President and General Counsel, who was appointed to the
Company's Board of Directors as National's designee pursuant to rights granted
to National under the IPO Underwriting Agreement, voted, along with all of the
other members of the Board, in favor of resolutions authorizing the Company to
undertake and consummate the Offering. Based upon the foregoing actions by
National's Chief Executive and General Counsel, management believes that
National will give its written consent to the Company to go forward with the
securities issuance transactions contemplated the Offering. Although no
assurance can be given in that regard, in anticipation of the granting of such
consent, management intends to prepare and file a registration statement with
regard to the securities to be issued in the Offering, and pursue the
registration of such securities to a successful conclusion. Management believes
that completion of the Offering is of paramount importance to the Company's well
being, and that the Company's best interests can only be served by pursuing the
Offering to a successful conclusion.
Vote Required for Approval
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.
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OTHER MATTERS
Discretionary Authority to Vote Proxy
Management does not know of any other matters to be considered at the
Meeting. If any other matters do properly come before the Meeting, the proxy
will be voted in respect thereof in accordance with the best judgment of the
persons authorized therein, and the discretionary authority to do so is included
in the proxy.
Reseda, California
Dated: January 17, 1997
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APPENDIX 1
PROXY CARD
PIONEER COMMERCIAL FUNDING CORP.
This Proxy is Solicited on Behalf of the Board of Directors of Pioneer
Commercial Funding Corp.
The undersigned holder of the $.01 par value common stock (the "Common Stock")
of Pioneer Commercial Funding Corp. (the "Company"), hereby acknowledges receipt
of the Notice of Special Meeting of the Company and Proxy Statement attached
thereto, all relating to such Special Meeting of Shareholders (the "Special
Meeting"), and does appoint Arthur H. Goldberg and Elie Housman, and each of
them, the true and lawful attorney or attorneys of the undersigned, with power
of substitution, for and in the name of the undersigned, to vote as proxies for
the undersigned according to the number of shares of Common Stock the
undersigned would be entitled to vote if then personally present at the Special
Meeting of Shareholders to be held at the offices of Hall Dickler Kent Friedman
& Wood, LLP, 909 Third Avenue, 27th Floor, on February 14, 1997, at 10:00 A.M.,
or at any adjournment or adjournments thereof, and thereat to vote all shares of
Common Stock of the Company held by the undersigned and entitled to be voted
thereat upon the following matters:
1. To amend the Company's Certificate of Incorporation to increase the
authorized capital of the Company from 5,000,000 shares of Common Stock, par
value $.01 per share, to 20,000,000 shares of Common Stock, par value $.01 per
share; and
2. To transact such other business as may properly come before the
meeting.
This Proxy confers authority to vote "FOR" proposition 1 listed above unless
otherwise indicated. If any other business is transacted at said meeting, this
proxy shall be voted in accordance with the best judgment of the proxies. The
Board of Directors recommends a vote of "FOR" for proposition 1. This proxy is
solicited on behalf of the Board of Directors of Pioneer Commercial Funding
Corp. and may be revoked prior to its exercise.
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
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