SCHEDULE 14A
(Rule 14a-101)
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
_ Definitive proxy statement
_ Definitive additional materials
_ Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
Multimedia Concepts International, Inc.
(Name of Registrant as Specified in Its Charter)
Ilan Arbel Chief Executive Officer
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
_
|X| $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-
6(i), or 14a-6(j)(2).
_
|_| $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:
Common Stock, par value $001 per share
(2) Aggregate number of securities to which transactions
applies:
3,005,000
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
_
|_| 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:
<PAGE>
Multimedia Concepts International, Inc.
448 West 16th Street
New York, NY 10011
PROXY STATEMENT
FOR
Special Meeting of Stockholders
To Be Held on November __, 1996
This proxy statement and the accompanying form of proxy
have been mailed on November__, 1996 to the stockholders of
record on October __, 1996 of Multimedia Concepts International,
Inc., a Delaware corporation (the "Corporation") in connection
with the solicitation of proxies by the Board of Directors of the
Corporation for use at the Special Meeting to be held on
November 31, 1996 and at any adjournment thereof.
SOLICITATION, VOTING AND REVOCABILITY OF
PROXIES
Shares of the Corporation's common stock. par value,
$.001 per share (the "Common Stock") represented by an effective
proxy in the accompanying form will, unless contrary instructions
are specified in the proxy, be voted FOR the proposal to authorize
the Company to sell or dispose of its shares of common stock of
American Eagle Industries Corp. ("American Eagle").
Any such proxy may be revoked at any time before it is
voted. A stockholder may revoke this proxy by notifying the
Secretary of the Corporation either in writing prior to the Special
Meeting or in person at the Special Meeting, by submitting a
proxy bearing a later date or by voting in person at the Special
Meeting. An affirmative vote of a plurality of the shares of
Common Stock, present in person or represented by proxy, at the
Special Meeting and entitled to vote thereon is required to approve
the proposal. A stockholder voting through a proxy who abstains
with respect to the proposal is considered to be present and entitled
to vote on the proposal at the meeting, and is in effect a negative
vote, but a stockholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote, on the
proposal shall not be considered present and entitled to vote on the
proposal. A stockholder voting through a proxy who abstains with
respect to approval of any other matter to come before the meeting
is considered to be present and entitled to vote on that matter and
is in effect a negative vote, but a stockholder (including a broker)
who does not give authority to a proxy to vote, or withholds
authority to vote, on any such matter shall not be considered
present and entitled to vote thereon.
The Corporation will bear the cost of the solicitation of
proxies by the Board of Directors. The Board of Directors may
use the services of its executive officers and certain directors to
solicit proxies from stockholders in person and by mail, telegram
and telephone. Arrangements may also be made with brokers,
fiduciaries, custodians, and nominees to send proxies, proxy
statements and other material to the beneficial owners of the
Corporation's Common Stock held of record by such persons, and
the Corporation may reimburse them for reasonable out-of-pocket
expenses incurred by them in so doing.
A copy of the Corporation's report on Form 10-QSB for
the nine months ended June 30, 1996 accompanies this proxy
statement.
The principal executive offices of the Corporation are
located at 448 West 16th Street, New York, NY 10011 the
Corporation's telephone number is (212) 675-6666.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The securities entitled to vote at a meeting are the
Company's Common Stock. The presence, in person or by proxy,
of a majority of shares entitled to vote will constitute a quorum for
the meeting. Each share of Common Stock entitles its holder to
one vote on each matter submitted to stockholders. On the Record
Date there were 3,005,000 shares of Common Stock outstanding.
Voting of the shares of Common Stock is on a non-cumulative
basis.
The following table sets forth information as of November
__, 1996, with respect to the beneficial ownership of shares of
Common Stock by (i) each person (including any "group" as that
term is used in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended), known by the Company to be the owner of
more than 5% of the outstanding shares of Common Stock, (ii)
each director, and (iii) all officers and directors as a group. Except
to the extent indicated in the footnotes to the following table, each
of the individuals listed below possesses sole voting power with
respect to the shares of Common Stock listed opposite his name.
<TABLE>
<CAPTION>
Percent of
Number of Common Stock
Name Shares Owned (1)
<S> <C> <C>
Ilan Arbel (2)(3)(4) 1,045,000 34.8%
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York
Yair Arbel (2)(3) 1,045,000 34.8%
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York
American Toys, Inc.(5) 400,000 13.3%
2694 Bishop Drive
San Ramon, CA 94583
Moses Mika/European Ventures Corp. (2)(3)(5) 1,045,000 34.8%
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York
Alan Berkun (6) -- --
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York
All Officers and Directors 1,045,000 34.8%
(3 as a Group) (2)-(6)
</TABLE>
(1) Does not give effect to (i) 5,910,000 shares of Common Stock reserved
for issuance upon the exercise of the Warrants, (ii) 240,000 shares of
Common Stock reserved for issuance upon the exercise of the
Underwriter's Warrants and the Warrants underlying the Underwriter's
Warrants or (iii) 150,000 shares of Common Stock reserved for
issuance under the Company's 1995 Senior Management Incentive Plan,
of which an option to purchase 75,000 shares at $8.75 per share has
been granted.
(2) Moses Mika, the father of Yair Arbel and Ilan Arbel, is the sole
officer, director and stockholder of EVC.
(3) Yair Arbel, a director is the brother of Ilan Arbel, the Chief Executive
Officer and a director of the Company. It can be expected that the
shares of Common Stock of record and beneficially owned by members
of the Arbel family would be voted as a group on matters presented to
the Company's stockholders; however there is no voting agreement or
arrangements which require such unified voting.
(4) Does not include (i) 2,900,000 shares of Common Stock issuable upon
the exercise of Warrants issued to Mr. Arbel, upon Mr. Arbel's
exercise of options to purchase 1,900,000 Warrant and 1,000,000
Warrants in April 1996 and May 1996, respectively, which Warrants
were sold pursuant to a Form S-8 registration statement or (ii) 585,000
shares of Common Stock and 1,170,000 Warrants sold by Europe
American Capital Corp. ("EACC"), a company of which Yair Arbel is
an officer, director and sole stockholder, pursuant to the Company's
registration statement on Form SB-2. See "-- Employment Agreements"
and "Recent Developments."
(5) In June 1996 EVC, exchanges 400,000 shares if the Company's
Common Stock for 3,106,005 shares of common stock of American
Toys, Inc. EVC had the right to either pay $1,800,000 for the shares
of American Toys, Inc. or transfer 400,000 shares of the Company's
Common Stock.
(6) Does not include 50,000 shares and 75,000 shares of Common Stock
issued pursuant to the exercise of stock options granted to Alan Berkun
in March 1995 and June 1995, respectively, which were sold pursuant
to Form S-8 Registration Statements on March 21, 1995 and June 19,
1995, respectively.
RECENT DEVELOPMENTS
On April 4, 1996, the board of directors authorized the
Company to enter into a compensation agreement with director,
Ilan Arbel, and pursuant thereto granted to Ilan Arbel an option to
purchase 1,900,000 warrants, identical to the Warrants sold by the
Company in its initial public offering. The option was exercisable
at $.04 per Warrant. The Warrants and shares underlying the
Warrants were registered for resale pursuant to a Form S-8
registration statement. Mr. Arbel exercised this option in full and
sold the Warrants in April 1996. In addition, the board authorized
the Company to issue an additional option to Mr. Arbel to
purchase 200,000 shares of Common Stock at $3.70 per share.
On April 19, 1996, the board of directors of the Company
and Mr. Arbel amended the compensation agreement and
terminated the option to purchase 200,000 shares of Common
Stock and in lieu thereof issued an option to purchase an additional
1,000,000 Warrants. The option was exercisable at $.04 per
Warrant. The Warrants were registered for resale pursuant to an
amendment to the Form S-8 registration statement. Mr. Arbel
exercised this option in full and sold the Warrants in May 1996.
As of May 15, 1996, the Company entered into an
employment agreement (a copy of which is annexed hereto as
Appendix A) with Mr. Arbel, for a period of five years, pursuant
thereto Mr. Arbel became the President and Chief Executive
Officer of the Company. At such time the Company and Mr. Arbel
determined that the price paid for the Warrants was to low, and
agreed to increase the price to $1.90 per Warrant, whereby Mr.
Arbel owes the Company $5,394,000, which may be paid either
in cash, or other securities. The term securities is defined as any
debt or equity security or convertible security, the underlying
security of which, is traded on either a national securities exchange
or on the Nasdaq Stock Market. The price for which the securities
may be exchanged to reduce the debt shall be 50% of the average
bid price of the securities or the underlying securities of a
convertible security, for a period of ninety days ending five days
prior to the exchange. The employment agreement provides that no
other compensation or remuneration be paid to Mr. Arbel during
its term. On __________, 1996, Mr. Arbel transferred
____________ shares of Play Co. Toys & Entertainment Corp.'s
Common Stock to the Company as payment of the debt owed for
the Warrants.
In May 1996, the Company in anticipation of the execution
of an employment agreement (a copy of which is annexed hereto
as Appendix B) with Rivka Arbel, granted Mrs. Arbel an option
to purchase from the Company up to 600,000 Warrants, which
Warrants are to be identical to the Warrants issued in the
Company's initial public offering. Initially Mrs. Arbel was to pay
$.04 per Warrant and resell the Warrants pursuant to a Form S-8
registration statement, however, the Company and Mrs. Arbel
have determined that such price is to low and have decided to
increase the price to $1.90 per Warrant, which may be paid either
in cash, or other securities, as such term is described above. In
June 1996 Mrs. Arbel entered into an employment agreement with
the Company, for a period of five years, pursuant thereto Mrs.
Arbel became a Vice-President of the Company. The employment
agreement provides that no other compensation or remuneration be
paid to Mrs. Arbel during its term. In August this agreement was
terminated and the 600,000 Warrants returned to the Company's
treasury unexercised.
In May, 1996 the Company acquired 51% of the
outstanding shares of common stock of Video On-Line USA, Inc.,
a company which entered into a letter of intent to purchase from
Video Authoring Systems Group, Inc. ("VAS Group") 51% of its
outstanding shares of common stock for $1,000,000. VAS Group
manufactures and sells computer hardware systems used in
scanning and converting to digital format existing film and video
sources that results in greatly enhanced projection and playback
quality from computer to video transfer. The Company purchased
51 shares of Video for $100,000 and agreed to loan an additional
$900,000 for the purpose of consummating the purchase of VAS
Group. No stock purchase agreement was ever entered into and
the acquisition was never consummated. The Company is no
longer pursuing this acquisition.
On May 5, 1996, Video entered into a letter of intent to
purchase from the current stockholders of Software Affiliates, Inc.
("Software") 80% of the issued and outstanding shares of its
common stock for 150,000 shares of the Company's Common
Stock. Additionally, Video agreed to loan to Software an aggregate
of $250,000. No stock purchase agreement was ever entered into
and the acquisition was never consummated. The Company is no
longer pursuing this acquisition.
It is expected that the following will be considered at the
meeting and action taken thereon.
I. Adoption of a resolution authorizing the Company to
Sell or Dispose of its Shares of Common Stock of
American Eagle Industries Corp.
The Board of Directors and Management of the Corporation
is of the opinion that the continued financing of its subsidiary,
American Eagle is no longer in the best interests of the Company
and therefore, desires that the stockholders of the Company
approve the proposed sale or disposition of the shares of American
Eagle by it. Section 271 of the Delaware General Corporation Law
requires that a majority of the stockholders of the Company shall
be required to approve the sale, lease or exchange of substantially
all of the assets and property of the corporation. In the event that
the Company can not sell its shares of American Eagle,
representing 55% of the outstanding shares of such company, then
as majority stockholder it will seek the dissolution and winding up
of the affairs of American Eagle, including the sale of any assets
of American Eagle and the distribution of such to its stockholders.
Pursuant to Section 275 of the Delaware General Corporation Law
the shareholders representing a majority of a corporation's
stockholders may resolve to dissolve the corporation. The
Company cannot assess whether it will be able to sell its shares of
American Eagle, of if sold what the Company can expect to
receive therefrom nor can it assess whether the Company will
receive any distributions upon the dissolution of American Eagle.
As of ___________, 1996, American Eagle owes to the Company
$___________ for ________________. In addition, American
Eagles total liabilities are $___________ and total assets are
$___________, therebeing $__________ in cash and $__________
of receivables. There are no security interests on any of the assets
of American Eagle.
Upon the consent of a majority of the Company's
stockholders, the Company shall terminate the financing of
American Eagle's operations. The Company's board of directors
has reviewed and analyzed the market for the products of
American Eagle and its current operating costs and has determined
that American Eagle's long term Though American Eagle is
currently shipping products pursuant to purchase orders received
it has not received any new purchase orders since __________,
1996.
The Company believes that American Eagle's consulting
arrangements with American Eagle Imports, Inc. ("AEI") and its
principal, Carolyn Seymour Jones, whereby it pays a weekly fee
of $5,000, is no longer a profitable venture and should be
terminated. In addition, Ms. Amarasekera its designer resigned in
May 1996. The Company will continue to seek products,
investment and potential acquisitions in companies in the
multimedia industry. Any proceeds from the sale of the share of
American Eagle or proceeds from its dissolution shall be used for
such.
In the event that the Company does not engage in any
additional business activities, through, it is possible that the
Nasdaq Stock Market will view the Company after its disposition
of American Eagle as a "blind pool", an thereby seek to delist its
securities from quotation thereon. The Company shall seek other
business ventures in an attempt to avoid delisting.
The affirmative vote of the holders of a majority of the
shares of the Common Stock issued and outstanding on the record
date, voting together as a single class, is required for the approval
of this proposal. The Directors and Officers of the Corporation
and other principal stockholders owning of record, beneficially,
directly and indirectly, an aggregate of approximately 48.1% of
such shares outstanding on the record date, have agreed to vote in
favor of approval of this proposal.
The Board of Directors deems this Proposal No. I to be
in the best interests of the Corporation and its stockholders and
recommends a vote "FOR" approval thereof.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
In June 1994, in connection with the incorporation of the
Company, European Ventures Corp. ("EVC") acquired 1,500,000
shares of the Company's Common Stock for aggregate
consideration of $400,000. Moses Mika, the sole officer, director
and stockholder of EVC is the father of Ilan and Yair Arbel.
Between July 1994 and March 1995, the Company obtained bridge
financing (the "Bridge Loan") from Europe American Capital
Corp. ("EACC"), of which Yair Arbel is an officer, director and
sole stockholder, in the amount of $2,500,000. The Bridge Loan
was evidenced by a promissory note dated June 1, 1995 in such
principal amount, bearing interest at the rate of 10% per annum
and due and payable on September 30, 1996. In connection with
such loan, in July 1994, the Company issued EACC 300,000
shares and 600,000 Warrants for aggregate consideration of $300
and $600, respectively. On September 28, 1995 EACC converted
$1,510,500 principal amount of the Bridge loan into 285,000
shares of Common Stock and 570,000 Warrants. The sale of the
shares of Common Stock, Warrants and shares of Common Stock
issuable upon the exercise of the Warrants issued to EACC were
registered and sold pursuant to the Company's registration
statement on Form SB-2 dated November 9, 1995.
In May 1994, MMP was incorporated in the State of
Delaware. Mitchell Lampert, a partner of Lampert & Lampert,
prior counsel to the Company, was a director of MMP until June
1995, when he resigned. The current owners of MMP and their
percentage interest is as follows: affiliates of Lampert & Lampert
own 22%; Dr. Bert Spilker owns 22%; Howard Wertheim,
D.M.D., the President and sole director of MMP, owns 22%; and
the Company owns 34%, which in June 1995, TransAtlantic
Commerce Corp., a British Virgin Island corporation of which Ilan
Arbel is the sole officer and director, and of which Yair Arbel is
the sole stockholder were received as a capital contribution.
In June 1994, American Eagle Industries Corp. ("American
Eagle") sold 110,000 shares, 50,000 shares, 20,000 shares, 10,000
shares and 10,000 shares of its Common Stock to EACC, Carolyn
Seymour Jones, Dorothy Zimmerman, Anita Friedman and Neil
Benedaret, respectively, for consideration of $1,100, $500, $200,
$100 and $100, respectively. Anita Friedman, Neil Benedaret and
Dorothy Zimmerman are all related to each other. The shares
owned by EACC were transferred to the Company as a capital
contribution, whereby American Eagle became a 55% owned
subsidiary of the Company.
In July 1994, the stockholders of MMP entered into a
stockholders agreement (i) limiting the resale of shares of Common
Stock of MMP by its stockholders without giving MMP and the
other stockholders the right of first refusal on a pro rata basis (ii)
requiring the unanimous consent of the board of directors to take
certain actions including (a) amending MMP's certificate of
incorporation or by-laws, (b) acquisitions, mergers or the
dissolution of MMP, (c) discharge of its officers, (d) sale or lease
of assets, (e) borrowing of money by MMP or any of its officers
or directors, (f) the payment of dividends and salaries, (g) capital
expenditures of $50,000 or more or (h) the issuance of additional
shares. The sole member of the board of directors of MMP is
Howard Wertheim, and therefore, Mr. Wertheim controls the
operations of MMP.
In July 1994, MMP and Raven Press entered into an
agreement, pursuant to which the CD-ROM version of "Guide to
Clinical Trials" and "Patient Recruitment in Clinical Trials" is
being co-published by MMP and Raven Press, with expenses and
profits, if any, to be split equally between the parties. In addition,
under such agreement, the CD-ROM version of "Medical
Dictionary in Six Languages" is being published solely by MMP,
with a 15% royalty on gross sales payable to Raven Press.
In March 1995, American Eagle loaned the sum of
$135,000 to Dytex Honduras, S.A. ("Dytex"), an entity located in
Honduras which is responsible for dyeing the fabric provided by
the Company. The loan is due on demand and is payable without
interest. As consideration for the loan, Dytex has reduced the
Company's labor rate to $1.30 per pound, which is a reduction of
$.50 per pound from its normal labor rate of $1.80 per pound.
In April 1995, EVC, the principal stockholder of the
Company, issued a subordinated debenture to Euro-Atlantic
Securities, Inc., the underwriter of the Company's initial public
offering, in the principal amount of $250,000. The loan is
subordinate to all debts of the underwriter, accrues interest at the
rate of 10% per annum and the principal amount and accrued
interest is due and payable on March 31, 1998. A copy of the loan
was filed with the NASD in April 1995. On April 4, 1995 and
May 26, 1995, EVC loaned to the Underwriter $50,000 and
$75,000, respectively. The loans accrued interest at 10% per
annum and matured on the later of August 15, 1995 and the
completion by the underwriter of its first public offering in which
it acts as an underwriter. These loans were assigned to an
unaffiliated party on June 1, 1995.
In May 1996 the Company acquired 51% of the outstanding
shares of common stock of Video On-Line USA, Inc. ("Video"),
a company which has entered into a letter of intent to purchase
from Video Authoring Systems Group, Inc. ("VAS Group") 51%
of its outstanding shares of common stock for $1,000,000. The
Company purchased 51 shares of Video for $100,000 and agreed
to loan an additional $900,000 for the purpose of consummating
the purchase of VAS Group. The $900,000 loan shall be
evidenced by a 36 month promissory note accruing interest at 8%
per annum. The Company shall obtain the funds needed for this
venture by obtaining a loan from EVC, the Company's principal
stockholder, on terms not greater that can be obtained from a non-
affiliated party.
On May 5, 1996, Video entered into a letter of intent to
purchase from the current stockholders of Software Affiliates, Inc.
("Software") 80% of the issued and outstanding shares of its
common stock for 150,000 shares of the Company's Common
Stock. Additionally, Video agreed to loan to Software an aggregate
of $250,000.
See "Executive Compensation" for a discussion of the
Company's employment agreements.
FINANCIAL INFORMATION
A COPY OF THE CORPORATION'S ANNUAL
REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 WILL BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT THE ACCOMPANYING EXHIBITS
TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN
REQUEST THEREFOR SENT TO _____________,
SECRETARY, MULTIMEDIA CONCEPTS INTERNATIONAL,
INC., 448 WEST 16TH STREET, NEW YORK, NY 10011.
EACH SUCH REQUEST MUST SET FORTH A GOOD FAITH
REPRESENTATION THAT AS OF __________, 1996 THE
PERSON MAKING THE REQUEST WAS THE BENEFICIAL
OWNER OF COMMON SHARES OF THE CORPORATION
ENTITLED TO VOTE AT THE SPECIAL MEETING OF
STOCKHOLDERS.
II. OTHER BUSINESS
As of the date of this proxy statement, the only business
which the Board of Directors intends to present, and knows that
others will present, at the Special Meeting is that herein above set
forth. If any other matter or matters are properly brought before
the Special Meeting, or any adjournments thereof, it is the
intention of the persons named in the accompanying form of proxy
to vote the proxy on such matters in accordance with their
judgment.
Stockholder Proposals
Proposals of stockholders intended to be presented at the
Corporation's 1996 Annual Meeting of Stockholders must be
received by the Corporation on or prior to July 31, 1996 to be
eligible for inclusion in the Corporation's proxy statement and
form of proxy to be used in connection with the 1996 Annual
Meeting of Stockholders.
By Order of the Board of Directors,
__________
Secretary
November __, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING, PLEASE COMPLETE AND RETURN YOUR
PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF IT IS MAILED IN THE
UNITED STATES OF AMERICA.
