SCHEDULE 14A
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 Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240-11(c) or ss.240.14a-12
Sims Communications, Inc.
(Name of Registrant as Specified in Its Charter)
William T. Hart - Attorney for Registrant
1624 Washington St., Denver, CO 80203
(303) 839-0061
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] 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:
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4) Proposed maximum aggregate value of transaction:
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[ ] 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 No.:
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3) Filing Party:
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4) Date Filed:
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Sims Communications, Inc.
18001 cowan
Suite C & D
Irvine CA 92614
(949) 261-6665
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NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD OCTOBER 14, 1999
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To the Shareholders:
Notice is hereby given that a Special Meeting of the shareholders of Sims
Communications, Inc. (the "Company") will be held at 18001 cowan, Suite C & D,
Irvine, CA 92614 on October 14, 1999, at 10:30 A.M., for the following purpose:
To approve the issuance of such number of shares of common stock as may be
required by the terms of the Company's Series C Preferred Stock: and
to transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on September 15, 1999 as
the record date for the determination of shareholders entitled to notice of and
to vote at such meeting. Shareholders are entitled to one vote for each share
held. As of September 15, 1999, there were 17,478,452 shares of the Company's
Common Stock issued and outstanding.
Sims Communications, Inc.
September 20, 1999 By Mark Bennett
President
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, AND SIGN,
DATE AND RETURN THE PROXY CARD. TO SAVE THE COST OF FURTHER SOLICITATION PLEASE
MAIL YOUR PROXY CARD PROMPTLY.
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Sims Communications, Inc.
18001 cowan
Suite C & D
Irvine CA 92614
(949) 261-6665
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PROXY STATEMENT
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The accompanying proxy is solicited by the Board of Directors of the Company
for voting at a Special Meeting of shareholders to be held on October 14, l999,
and at any and all adjournments of such meeting. If the proxy is executed and
returned, it will be voted at the meeting in accordance with any instructions,
and if no specification is made, the proxy will be voted for the proposal set
forth in the accompanying notice of the Special Meeting of shareholders.
Shareholders who execute proxies may revoke them at any time before they are
voted, either by writing to the Company at the address set forth above or in
person at the time of the meeting. Additionally, any later dated proxy will
revoke a previous proxy from the same shareholder. This proxy statement was
mailed to shareholders of record on or about September 20, 1999.
There is one class of capital stock outstanding. Provided a quorum
consisting of one-third of the shares entitled to vote is present at the
meeting, the affirmative vote of a majority of the shares of Common Stock voting
in person or represented by proxy is required to approve the proposal to come
before the meeting.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of September 15, 1999, information with
respect to the only persons owning beneficially 5% or more of the outstanding
Common Stock and the number and percentage of outstanding shares owned by each
director and officer and by the Company's officers and directors as a group.
Unless otherwise indicated, each owner has sole voting and investment powers
over his shares of Common Stock.
Name and Address Shares Owned (1) Percent of
- ---------------- ----------------- -----------
Class
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Mark Bennett 224,900 1%
18001 Cowan, Suite C&D
Irvine, CA 92614
Michael Malet 157,802 *
18001 Cowan, Suite C&D
Irvine, CA 92614
Marvin Berger 65,000 *
18001 Cowan, Suite C&D
Irvine, CA 92614
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David Breslow 10,000 *
701 N. Brand, #380
Glendale, CA 91203
Julio Curra __ *
1767 Veterans Memorial Highway, #6
Islandia, NY 11722 ________ ____
Officers and Directors as a
Group (5 persons) 457,702 2.6%
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*Less than 1%
(1) Excludes shares issuable prior to December 31, 1998 upon the exercise of
options or warrants granted to the following persons:
Name Options exercisable prior to December 31, 1998
---- ----------------------------------------------
Mark Bennett 1,575,500
Michael Malet 1,382,000
Mavin Berger 25,000
David Breslow 10,000
Julio Curra --
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PROPOSAL TO APPROVE ISSUANCE OF COMMON STOCK AS REQUIRED
BY TERMS OF SERIES C PREFERRED STOCK
In November and December 1998 the Company sold 1,700,000 shares of its
Series C Preferred Stock (the "Preferred Shares") to a group of institutional
investors for $1,700,000. In connection with the sale of the Preferred Shares
the Company also issued 45 Preferred Shares to a sales agent. Each Preferred
Shares is convertible into shares of the Company's common stock equal in number
to the amount determined by dividing $1,000 by the lower of (i) $1.50 ($1.28 in
the case of 750 Preferred Shares sold in December 1998), or (ii) the average
price of the Company's common stock for any two trading days during the
twenty-two trading days preceding the conversion date.
The Company's common stock trades on the NASDAQ SmallCap Market. The rules
of NASDAQ require a corporation, the securities of which are listed on NASDAQ,
to obtain shareholder approval if 20% or more a corporation's common stock will
be sold in a private offering and below the greater of the book value or market
price of the corporation's common stock.
Immediately prior to the sale of the Preferred Shares, the Company had
9,417,957 issued and outstanding shares of common stock. The market price of the
Company's common stock on the date the Preferred Shares were sold was $1.25 per
share.
For purposes of applying this particular rule to shares issuable upon the
conversion of the Preferred Shares, the NASDAQ considers (i) the issuance of
common stock upon the conversion of the Preferred Shares to be a sale of the
Company's common stock, (ii) the price at which the Preferred Shares are
converted (the "Conversion Price") to be the price at which the shares of common
stock are sold, (iii) the price of the Company's common stock on the date of the
sale of the Preferred Shares ($1.25) to be the "market price" and (iv) any
shares issued at a Conversion Price which is less than $1.25 to be issued at
less than market price.
Consequently, the NASDAQ rule would prohibit the Company from issuing more
than 1,883,591 shares at a Conversion Price of less than $1.25 unless
shareholder approval is obtained for the issuance of these additional shares.
Since the Series C Preferred Shares could be converted into shares of the
Company's common stock at a Conversion Price which is less than $1.25, it is
possible, depending upon the market price of the Company's common stock on the
date of the conversion, that more than 1,883,591 shares could be issued at a
conversion price of less than $1.25 per share.
In order to avoid any violation of the NASDAQ rules relating to the issuance
of shares below the market price of the Company's common stock, the terms of the
Preferred Shares provide that no more than 1,883,591 shares may be issued at a
Conversion Price which is less than $1.25, unless the Company obtains
shareholder approval for the issuance of more than 1,883,591 shares at a
Conversion Price of less than $1.25.
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If a majority of the shareholders present in person or by proxy at the
annual meeting do not approve the additional issuance of shares, the Company may
be required to redeem those Preferred Shares which would otherwise be
convertible, at a Conversion Price of less than $1.25, into more than 1,883,591
shares. The redemption price for each Preferred Share is $1,150.
The Company is requesting the Company's shareholders to approve the issuance
of such number of common shares as may be required upon the conversion of the
Preferred Shares. The Company's Board of Directors believes that approval of
this proposal is in the best interests of both the Company and its shareholders
and unanimously recommends that shareholders vote "FOR" this Proposal.
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement, and all other costs in connection with
solicitation of proxies will be paid by the Company, including any additional
solicitation made by letter, telephone or telegraph. Failure of a quorum to be
present at the meeting will necessitate adjournment and will subject the Company
to additional expense.
Management of the Company does not intend to present and does not have
reason to believe that others will present any other items of business at the
Special Meeting. However, if other matters are properly presented to the meeting
for a vote, the proxies will be voted upon such matters in accordance with the
judgment of the persons acting under the proxies.
Please complete, sign and return the enclosed proxy promptly. No postage is
required if mailed in the United States.
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SIMS COMMUNICATIONS INC.
PROXY
This Proxy is Solicited by the Board of Directors
The undersigned stockholder of the Company, acknowledges receipt of the
Notice of the Special Meeting of stockholders, to be held October 14, 1999,
10:30 A.M. local time, at 18001 cowan, Suite C & D, Irvine CA 92614, and hereby
appoints Mark Bennett or Michael Malet, each with the power of substitution, as
Attorneys and Proxies to vote all the shares of the undersigned at said Special
Meeting of stockholders and at all adjournments thereof, hereby ratifying and
confirming all that said Attorneys and Proxies may do or cause to be done by
virtue hereof. The above named Attorneys and Proxies are instructed to vote all
of the undersigned's shares as follows:
(1) To approve the issuance of such number of shares of common stock as may
be required by the terms of the Company's Series C Preferred Stock.
/ / FOR / / AGAINST / / ABSTAIN
To transact such other business as may properly come before the
meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DISCRETION IS INDICATED, THIS PROXY WILL BE VOTED
IN FAVOR OF ITEM 1.
Dated this ____ day of ___________ 1999.
___________________________
(Signature)
___________________________
(Signature)
Please sign your name exactly as it
appears on your stock certificate.
If shares are held jointly, each
holder should sign. Executors,
trustees, and other fiduciaries
should so indicate when signing.
Please Sign, Date and Return this
Proxy so that your shares may be
voted at the meeting.
