PROTOSOURCE CORP
PRES14A, 1997-01-24
COMPUTER INTEGRATED SYSTEMS DESIGN
Previous: ENERGY SEARCH INC, 424B1, 1997-01-24
Next: WASHINGTON MUTUAL INC, 424B4, 1997-01-24



                             Preliminary Proxy Statement dated January 24, 1997.


                             PROTOSOURCE CORPORATION
                          2300 Tulare Street, Suite 210
                            Fresno, California 93721

                               PROXY STATEMENT AND
                    NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                          TO BE HELD FEBRUARY 28, 1997


     To the stockholders of Protosource Corporation:

     A Special  Meeting of the  stockholders  of  Protosource  Corporation  (the
"Company") will be held at the Company's executive offices,  2300 Tulare Street,
Suite 210, Fresno,  California  93721, at 10:00 A.M. on February 28, 1997, or at
any adjournment or postponement thereof, for the following purposes:

     1.   To reverse split the Company's  Common Stock on the basis of one share
          for each ten shares outstanding.

     2.   To  transact  such other  business  as may  properly  come  before the
          Special Meeting.

     Details  relating to the above matters are set forth in the attached  Proxy
Statement. All stockholders of record of the Company as of the close of business
on February  4, 1997 will be  entitled to notice of and to vote at such  Special
Meeting or at any adjournment or postponement thereof.

         ALL STOCKHOLDERS  ARE CORDIALLY  INVITED TO ATTEND THE SPECIAL MEETING.
IF YOU DO NOT PLAN TO ATTEND THE SPECIAL  MEETING,  YOU ARE URGED TO SIGN,  DATE
AND  PROMPTLY  RETURN THE  ENCLOSED  PROXY.  A REPLY CARD IS  ENCLOSED  FOR YOUR
CONVENIENCE.  THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
IF YOU ATTEND THE SPECIAL MEETING.

                                            BY ORDER OF THE BOARD OF DIRECTORS


                                            Andrew Chu
                                            President

February 7, 1997



<PAGE>



                                 PROXY STATEMENT

                             PROTOSOURCE CORPORATION
                          2300 Tulare Street, Suite 210
                            Fresno, California 93721
                            Telephone: (209) 486-8638

                         SPECIAL MEETING OF STOCKHOLDERS
                          TO BE HELD FEBRUARY 28, 1997

     This Proxy  Statement is furnished in connection  with the  solicitation of
proxies by the Board of Directors of Protosource Corporation (the "Company"),  a
California  corporation,  of no par value  Common Stock  ("Common  Stock") to be
voted at the Special Meeting of Stockholders of the Company ("Special  Meeting")
to be held at  10:00  A.M.  on  February  28,  1997,  or at any  adjournment  or
postponement  thereof. The Company anticipates that this Proxy Statement and the
accompanying  form of proxy will be first mailed or given to all stockholders of
the Company on or about February 7, 1997. The shares  represented by all proxies
that are properly executed and submitted will be voted at the Special Meeting in
accordance with the instructions  indicated thereon.  Unless otherwise directed,
votes  will be cast for the  proposed  reverse  stock  split.  The  holders of a
majority of the shares  represented at the Special Meeting in person or by proxy
will be required to approve any proposed matters.

         Any stockholders  giving a proxy may revoke it at any time before it is
exercised by delivering  written  notice of such  revocation to the Company,  by
substituting a new proxy executed at a later date, or by requesting,  in person,
at the Special Meeting, that the proxy be returned.

         All of the expenses involved in preparing,  assembling and mailing this
Proxy Statement and the materials  enclosed herewith and all costs of soliciting
proxies will be paid by the Company.  In addition to the  solicitation  by mail,
proxies may be  solicited  by officers  and regular  employees of the Company by
telephone,  telegraph  or  personal  interview.  Such  persons  will  receive no
compensation for their services other than their regular salaries.  Arrangements
will also be made with  brokerage  houses  and other  custodians,  nominees  and
fiduciaries to forward  solicitation  materials to the beneficial  owners of the
shares  held of record by such  persons,  and the  Company  may  reimburse  such
persons for reasonable out of pocket expenses incurred by them in so doing.

                    VOTING SHARES AND PRINCIPAL STOCKHOLDERS

         The close of  business  on February 4, 1997 has been fixed by the Board
of  Directors  of the  Company as the record  date (the  "record  date") for the
determination  of stockholders  entitled to notice of and to vote at the Special
Meeting.  On the record date, there were outstanding  7,730,001 shares of Common
Stock,  each  share of which  entitles  the  holder  thereof to one vote on each
matter  which  may come  before  the  Special  Meeting.  Cumulative  voting  for
directors is permitted.

         A majority  of the  issued and  outstanding  shares  entitled  to vote,
represented at the Special  Meeting in person or by proxy,  constitutes a quorum
at any stockholders' meeting.



<PAGE>



Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets forth  certain  information  with respect to the
beneficial  ownership of the  Company's  Common Stock as of February 4, 1997, by
(i) each  person who is known by the  Company  to own of record or  beneficially
more than 5% of the Company's Common Stock, (ii) each of the Company's directors
and (iii) all directors and officers of the Company as a group. The stockholders
listed in the table have sole voting and  investment  powers with respect to the
shares indicated  (although share ownership  includes  ownership by spouses) and
their  shareholdings  include stock options and common stock  purchase  warrants
exercisable within 60 days from the date hereof. The address of all stockholders
is in care of the Company at 2300 Tulare Street,  Suite 210, Fresno,  California
93721.

                                         Amount of                Percent
Name                                     Ownership                of Class     
- ----                                     ---------                --------     

Raymond J. Meyers (1)                     550,000                   6.6%
Andrew   Chu (2)                          585,000                   7.0%
Steven  A. Kriegsman (3)                1,765,000                  18.6% 
Howard P.  Silverman (4)                  850,000                   9.9%
Andrew, Alexander, Wise & Company,
 Incorporated (5)                       1,350,000                  14.9%
Gloria  Ippolito                          600,000                   7.8%
Anaka Parkash                             700,000                   9.1% 
Isaac  Paschaldis                         900,000                  11.6% 
John  Benedetto                           700,000                   9.1% 
Matthew  Mulhern                          400,000                   5.2% 
All officers and directors
  as a group (4 persons)(1)(2)(3)(4)    3,750,000                  32.7% 

- ---------- 

(1)  Represents  stock options to purchase  550,000  shares at $.25 per share at
     any time until October 2001.

(2)  Represents  common stock  purchase  warrants to purchase  585,000 shares at
     $.25 per share at any time until October 2001.

(3)  Represents common stock purchase  warrants to purchase  1,765,000 shares at
     $.25 per share at any time until October 2001 held by the  Kriegsman  Group
     of which Mr. Kriegsman is the President and a principal stockholder.

(4)  Represents  common stock  purchase  warrants to purchase  850,000 shares at
     $.25 per share at any time until October 2001.

(5)  Represents common stock purchase  warrants to purchase  1,370,000 shares at
     $.25 per share at any time until October 2001.


                                        2

<PAGE>

                               REVERSE STOCK SPLIT

     The Company's  Board of Directors has approved an amendment to its Articles
of Incorporation  which provides for the  implementation of a one share for each
ten shares reverse Common Stock split while maintaining  10,000,000 no par value
authorized  shares.  As a result  of the  reverse  stock  split,  the  number of
outstanding  shares of Common  Stock would be reduced to 773,000  based upon the
number of shares of Common Stock  outstanding  on the record date without giving
effect to the  rounding up to the next whole  number of shares  with  respect to
fractional shares.

     If the reverse  stock  split is approved  and  effected,  the Company  will
notify current  stockholders of the filing of the applicable  documents with the
Secretary of State of California and will furnish  stockholders  of record as of
the close of business on such filing date with a letter of  transmittal  for use
in exchanging such certificates. The Company's stockholders,  promptly after the
amendment to the Articles of Incorporation  becomes  effective,  must mail their
certificates  representing their Common Stock to the Company's Transfer Agent if
they wish to obtain a new stock  certificate  giving effect to the reverse stock
split.

     The Company has been advised  that:  (i) the proposed  reverse  stock split
will  not  be  a  taxable  transaction  to  the  Company;   (ii)  the  Company's
stockholders  will not  recognize  any gain or loss as a result  of the  reverse
stock split;  (iii) the aggregate tax basis of the Common Stock  received by the
stockholder  pursuant to the reverse  stock split will equal the  aggregate  tax
basis of the  stockholders'  Common Stock prior to the reverse stock split;  and
(iv)  the  holding  period  of  the  Common  Stock  received  by  the  Company's
stockholders will include the holding period of the  stockholders'  Common Stock
before the reverse stock split, provided the Common Stock was a capital asset in
the hands of such stockholder.

     The purpose of the reverse  stock split is to increase  the market price of
the Company's  Common Stock in order to meet  requirements for future listing of
the  Company's  Common  Stock on the  NASDAQ  SmallCap  Market.  There can be no
assurance  that any such  listing will be made by the Company or approved by the
NASDAQ SmallCap Market.

     The Board of Directors  recommends that the Company's  stockholders approve
this  amendment to the Articles of  Incorporation  providing for a one share for
ten shares reverse stock split of all outstanding shares of the Company's Common
Stock,  while  maintaining  the  authorized  number of shares of Common Stock at
10,000,000 no par value shares. A majority of the outstanding shares represented
at the Special Meeting is required to approve the reverse stock split.



                                        3

<PAGE>



                                 OTHER BUSINESS

     The  management  of the Company is not aware of any other matters which are
to be  presented  to the Special  Meeting,  nor has it been  advised  that other
persons will present any such matters.  However,  if other matters properly come
before the Special Meeting, the individual named in the accompanying proxy shall
vote on such matters in accordance with his best judgment.

     The  above  notice  and Proxy  Statement  are sent by order of the Board of
Directors.



                                                 Andrew Chu
                                                  President

February 7, 1997



                                        4

<PAGE>


          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS


                                     PROXY
                   FOR THE SPECIAL MEETING OF STOCKHOLDERS OF
                            PROTOSOURCE CORPORATION
                          TO BE HELD FEBRUARY 28, 1997

     The undersigend hereby appoints Andrew Chu as the lawful agent and Proxy of
the undersigned (with all the powers the undersigned would possess if personally
present,  including full power of  substitution),  and hereby  authorizes him to
represent and to vote, as  designated  below,  all the shares of Common Stock of
Protosource  Corporation  held of record by the undersigned on February 4, 1997,
at the Special  Meeting of  Stockholders  to be held  February 28, 1997,  or any
adjournment or postponement thereof.

     1. To reverse  split the  Company's  Common Stock on the basis of one share
for each ten shares outstanding.

             For [  ]         Against  [  ]           Abstain  [  ]

     2. In his  discretion,  the Proxy is  authorized  to vote upon any  matters
which may  properly  come  before the Special  Meeting,  or any  adjournment  or
postponement thereof.

     It is understood that when properly  executed,  this Proxy will be voted in
the manner directed herein by the  undersigned  stockholder.  WHERE NO CHOICE IS
SPECIFIED  BY THE  STOCKHOLDER  THE PROXY  WILL BE VOTED FOR THE  REVERSE  STOCK
SPLIT.

     The undersigned  hereby revokes all previous proxies relating to the shares
covered hereby and confirms all that said Proxy may do by virtue hereof.

     Please sign  exactly as name appears  below.  When shares are held by joint
tenants,  both should sign. When signing as attorney,  executor,  administrator,
trustee or guardian,  please give full title as such. If  a corporation,  please
sign in full  corporate  name by President  or other  authorized  officer.  If a
partnership, please sign in partnership name by authorized person.

Dated:
      ---------------------------        ---------------------------------------
                                         Signature

PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED
ENVELOPE.                                ---------------------------------------
                                         Signature, if held jointly

     PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE SPECIAL MEETING OF
STOCKHOLDERS. [ ]






© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission