ALANCO ENVIRONMENTAL RESOURCES CORPORATION
15900 North 78th Street, Suite 101
Scottsdale, Arizona 85260
(602) 607-1010
PROXY STATEMENT
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held May 13, 1998
TO THE SHAREHOLDERS OF ALANCO ENVIRONMENTAL RESOURCES CORPORATION
NOTICE HEREBY IS GIVEN that a Special Meeting of Shareholders of Alanco
Environmental Resources Corporation, an Arizona corporation (the "Company"),
will be held at the Company offices, 15900 North 78th Street, Scottsdale,
Arizona on May 13, 1998, at 10:00 a.m., Mountain Standard Time, and at any and
all adjournments thereof, for the purpose of considering and acting upon the
following Proposal:
Proposal No. 1. TO REVERSE SPLIT THE OUTSTANDING SHARES OF COMMON STOCK ON
THE BASIS OF UP TO ONE SHARE OF COMMON STOCK FOR EVERY
SEVEN SHARES OF COMMON STOCK PRESENTLY OUTSTANDING ON THE
EFFECTIVE DATE WITH ANY RESULTING FRACTIONAL SHARE ROUNDED
UP TO THE NEXT WHOLE SHARE.
This Special Meeting is called as provided for by Arizona law and the Company's
By-laws.
Only holders of the outstanding Common Stock of the Company of record at the
close of business on April 8, 1998, will be entitled to notice of and to vote
at the Meeting or at any adjournment or adjournments thereof.
All shareholders, whether or not they expect to attend the Special Meeting of
Shareholders in person, are urged to sign and date the enclosed Proxy and
return it promptly in the enclosed postage-paid envelope which requires no
additional postage if mailed in the United States. The giving of a proxy will
not affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
CYNTHIA CASTELLANO
SECRETARY
Scottsdale, Arizona
April 10, 1998<PAGE>
Alanco Environmental Resources Corporation
15900 North 78th Street, Suite 101
Scottsdale, Arizona 85260
(602)607-1010
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 1998
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
Alanco Environmental Resources Corporation, an Arizona corporation (the
"Company"), for use at the Company's Special Meeting of Shareholders to be held
at the Company offices, 15900 North 78th Street, Scottsdale, Arizona, on the
13th day of May, 1998, at 10:00 a.m., Mountain Standard Time, and at any
adjournment thereof. It is anticipated that this Proxy Statement and the
accompanying Proxy will be mailed to the Company's shareholders on or before
April 10, 1998.
Any person signing and returning the enclosed Proxy may revoke it at any time
before it is voted by giving written notice of such revocation to the Company,
or by voting in person at the Meeting. The expense of soliciting proxies,
including the cost of preparing, assembling and mailing this proxy material to
shareholders, will be borne by the Company. It is anticipated that
solicitations of proxies for the Meeting will be made only by use of the mails;
however, the Company may use the services of its Directors, Officers and
employees to solicit proxies personally or by telephone without additional
salary or compensation to them. Brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the proxy soliciting materials to the
beneficial owners of the Company's shares held of record by such persons, and
the Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance therewith
at the Meeting. Shares not voting as a result of a proxy marked to abstain
will be counted as part of total shares voting in order to determine whether or
not a quorum has been achieved at the Meeting. Shares registered in the name of
a broker-dealer or similar institution for beneficial owners to whom the
broker-dealer distributed notice of the Special Meeting and proxy information
and which such beneficial owners have not returned proxies or otherwise
instructed the broker-dealer as to voting of their shares, will be counted as
part of the total shares voting in order to determine whether or not a quorum
has been achieved at the Meeting. Abstaining proxies and broker-dealer non-
votes will not be counted as part of the vote on any business at the Meeting on
which the shareholder has abstained.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's Common
Stock with each common share entitled to one vote. Only shareholders of record
at the close of business on April 8, 1998, are entitled to notice of and to
vote at the Meeting or any adjournment thereof. On April 8, 1998, the
Company had 35,346,527 shares of its Common Stock outstanding, each of which is
entitled to one vote on all matters to be voted upon at the Meeting. No
fractional shares are presently outstanding. A majority of the Company's
outstanding voting stock represented in person or by proxy shall constitute a
quorum at the Meeting. The affirmative vote of a majority of the votes cast,
providing a quorum is present, is necessary to approve the Reverse Split
Proposal. The only business to be conducted at the Special Meeting shall be
matters relevant to the Reverse Split Proposal.
1<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
(a) The following table sets forth persons known to the Company as
beneficially owning more than five percent (5%) of the outstanding shares of
the Registrant.
% of Shares
Name and Address Shares Outstanding
- ------------------------------- ----------- --------------
Harbinger Capital L.P.
4365 Executive Drive, Suite 740
San Diego, CA 92121 7,105,720 20.1%
(b) The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of April 8, 1998, by individual directors
and executive officers and by all directors and executive officers of the
Company as a group.
% of Shares
Name and Address Shares Outstanding
- --------------------------------- ------------- -------------
Harold S. Carpenter 764,186 (1) 2.16%
James Hecker 13,895 (2) 0.04%
Officers and Directors as a Group 2.20%
(6 individuals)
(1) Includes 256,606 shares indirect ownership
(2) Includes 1,150 shares indirect ownership
PROPOSAL NO. 1. TO REVERSE SPLIT THE OUTSTANDING SHARES OF COMMON STOCK ON
THE BASIS OF UP TO ONE SHARE OF COMMON STOCK FOR EVERY
SEVEN SHARES OF COMMON STOCK PRESENTLY OUTSTANDING ON THE
EFFECTIVE DATE WITH ANY RESULTING FRACTIONAL SHARE ROUNDED
UP TO THE NEXT WHOLE SHARE.
On March 20, 1998, the Board of Directors approved an up to 7-for-1
reverse stock split of the Company's Common Stock. Assuming that a reverse
stock split would cause the trading price of the Company's Common Stock to
increase in the same proportion as the amount of the split, a reverse stock
split would result in an increase in the quoted bid price of the Common Stock
to approximately $4.38 or more (based on the average of the closing prices for
the three month period ended March 10, 1998) and thereby keep the Common Stock
eligible to be quoted on The Nasdaq Stock Market ("Nasdaq"). By a letter dated
February 27, 1998, the Company was notified by Nasdaq of its concern regarding
the continued listing of the Company on The Nasdaq SmallCap Market ("SmallCap
Market") because of the Company's failure to maintain a minimum bid price of
$1.00 per share for the ten consecutive trading dates prior to the notice.
Therefore, on March 20,1998, the Board of Directors declared May 14, 1998 as
the effective date for the up to 7-for-1 reverse stock split and called for a
special meeting of the Company's Shareholders to approve the reverse stock
split.
The Board of Directors is recommending that the Company's Shareholders now
approve the up to 7-for-1 reverse stock split of the Company's Common Stock.
The Board believes that retaining the Company's listing on Nasdaq is important
to the short-term liquidity of its Shareholders' Common Stock and may affect
the Company's long term business prospects and Shareholder value.
As a result of the up to 7-for-1 reverse stock split, each seven issued
shares of the Company's Common Stock held on the record date will automatically
be converted into one share of Common Stock. No fractional shares will be
issued and no cash will be paid for fractional shares. Instead, each fractional
share would be rounded up to a whole share.
2<PAGE>
EFFECT OF REVERSE SPLIT ON HOLDERS OF ODD LOTS OF SHARES
If approved, the proposed reverse split will result in holders of 690 or fewer
shares holding an "odd lot" of less than 100 shares. The reverse split may
also result in shareholders having an odd lot of shares if their resulting
total number of shares is not a multiple of 100. A securities transaction of
100 or more shares is a "round lot" transaction of shares for securities
trading purposes and a transaction of less than 100 shares is an "odd lot"
transaction. Round lot transactions are the standard size requirements for
securities transactions and odd lot transactions may result in higher
transaction costs to the odd lot seller.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the Company's 1999 Annual
Meeting, including nominations for election as directors must be received at
the offices of the Company, 15900 N. 78th Street, Suite 101, Scottsdale,
Arizona 85260, no later than July 31, 1998.
CYNTHIA CASTELLANO
Scottsdale, Arizona SECRETARY
April 10, 1998
3<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
The undersigned appoints Edward Maley (and Charles Goyette, if Mr. Maley is
unable to serve), as the undersigned's lawful attorney and proxy, with full
power of substitution and appointment, to act for and vote all of the
undersigned's shares of the Common Stock of Alanco Environmental Resources
Corporation, an Arizona corporation, at the Special Meeting of Shareholders to
be held at the Company's offices, 15900 N. 78th Street, Scottsdale, Arizona, at
10:00 a.m., Mountain Standard Time, on May 13, 1998, and any and all
adjournments thereof, for the following purpose:
PROPOSAL NO. 1: TO REVERSE SPLIT THE OUTSTANDING SHARES OF COMMON STOCK ON
THE BASIS OF UP TO ONE SHARE OF COMMON STOCK FOR EVERY
SEVEN SHARES OF COMMON STOCK PRESENTLY OUTSTANDING ON THE
EFFECTIVE DATE WITH ANY RESULTING FRACTIONAL SHARE ROUNDED
UP TO THE NEXT WHOLE SHARE.
____ FOR ___ AGAINST ___ ABSTAIN
IF THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE, MANAGEMENT INTENDS TO VOTE
IN FAVOR OF THE PROPOSAL.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE
WITH THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS FOR WHICH THE SHAREHOLDER HAS NOT INDICATED A
PREFERENCE OR IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE SPECIAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
THE UNDERSIGNED REVOKES ANY PROXIES HERETOFORE GIVEN BY THE UNDERSIGNED AND
ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF SHAREHOLDERS AND PROXY
STATEMENT FURNISHED HEREWITH.
Dated:_____________, 199__ ____________________________
____________________________
SIGNATURE(S) SHOULD AGREE WITH THE NAME(S) HEREON. EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS AND ATTORNEYS SHOULD INDICATE WHEN SIGNING. ATTORNEYS
SHOULD SUBMIT POWERS OF ATTORNEY.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALANCO
ENVIRONMENTAL RESOURCES CORPORATION. PLEASE SIGN AND RETURN THIS PROXY TO
ALANCO ENVIRONMENTAL RESOURCES CORPORATION, C/O AMERICAN SECURITIES TRANSFER,
INC., 938 QUAIL STREET, SUITE 101, LAKEWOOD, CO 80215-5513. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
