-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OTn+NFvuWRAPp2eAllugthmtQdK+1MG1DTe3DvB0bVNRY/iBwCDGrSittRnqKwH2 4c5bsnGqYVZc2eTcQsXovA== 0000944209-97-000464.txt : 19970409 0000944209-97-000464.hdr.sgml : 19970409 ACCESSION NUMBER: 0000944209-97-000464 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970508 FILED AS OF DATE: 19970408 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER COMMERCIAL FUNDING CORP /NY/ CENTRAL INDEX KEY: 0000867713 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 133763437 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-24940 FILM NUMBER: 97576613 BUSINESS ADDRESS: STREET 1: 6660 RESODA BOULEVARD CITY: RESODA STATE: CA ZIP: 91335 BUSINESS PHONE: 8187760590 MAIL ADDRESS: STREET 1: 6660 RESODA BOULEVARD CITY: RESODA STATE: CA ZIP: 91335 FORMER COMPANY: FORMER CONFORMED NAME: PCF ACQUISITION CORP DATE OF NAME CHANGE: 19941017 DEFS14A 1 DEFINITIVE PROXY STATEMENT FOR SPECIAL MEETING SCHEDULE 14A INFORMATION REQUIRED IN PROXY STATEMENT 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 a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(3)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 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)(4) 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: - ------------------------------------------------------------------------------- PIONEER COMMERCIAL FUNDING CORP. 6660 RESEDA BOULEVARD RESEDA, CALIFORNIA 91335 April 4, 1997 TO OUR SHAREHOLDERS: You are cordially invited to attend a Special Meeting of Shareholders which will be held on May 8, 1997 at 11:00 A.M., Eastern Time, at the offices of Gratch Jacobs & Brozman, P.C., 950 Third Avenue, 11th Floor, New York, NY 10022. At this meeting, you will be asked to consider and vote upon the proposal to amend the Certificate of Incorporation of the Company by increasing 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. 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 mailing your proxy promptly will be greatly appreciated. Sincerely yours, /s/ Albert Nissim Albert Nissim President PIONEER COMMERCIAL FUNDING CORP. 6660 RESEDA BOULEVARD RESEDA, CALIFORNIA 91335 ____________________ NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 8, 1997 ____________________ TO THE HOLDERS OF COMMON STOCK OF PIONEER COMMERCIAL FUNDING CORP.: A Special Meeting of the holders of the Common Stock of Pioneer Commercial Funding Corp. (the "Company") will be held at the offices of Gratch Jacobs & Brozman, P.C., 950 Third Avenue, 11th Floor, New York, New York 10022, on Thursday May 8, 1997 at 11:00 A.M., Eastern time, to consider and vote upon a proposal to amend the Company's Certificate of Incorporation to increase the authorized capital stock of the Company from 5,000,000 shares of Common Stock to 20,000,000 shares of Common Stock. Only holders of record of the Company's Common Stock at the close of business on April 4, 1997 are entitled to notice of or to vote at this meeting and any adjournment or adjournments thereof. By Order of the Board of Directors /s/ GLENDA S. KLEIN GLENDA S. KLEIN, Secretary Reseda, California April 4, 1997 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. PRELIMINARY COPY FOR THE INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION ONLY PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS OF PIONEER COMMERCIAL FUNDING CORP. 6660 RESEDA BOULEVARD RESEDA, CALIFORNIA 91335 To Be Held May 8, 1997 The enclosed proxy materials are furnished in connection with the solicitation of proxies by the Board of Directors of Pioneer Commercial Funding Corp., a New York corporation (the "Company"), for use at the Special Meeting of shareholders of the Company to be held at 11:00 A.M., Eastern Time, on Thursday, May 8, 1997, at the offices of Gratch Jacobs & Brozman, P.C., 950 Third Avenue, New York, New York 10022, and any adjournment or adjournments of such meeting (the "Meeting"). This proxy statement and the enclosed form of proxy are first being mailed to the shareholders of the Company on or about April 8, 1997. RIGHT OF REVOCATION A proxy may be revoked by notice in writing to the Secretary of the Company 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 in favor of the proposal to amend the Company's Certificate of Incorporation to increase the authorized capital stock of the Company from 5,000,000 shares of common stock, par value $0.01 per share ("Common Stock"), to 20,000,000 shares of Common Stock. -2- MATTER TO BE ACTED UPON The purpose of the Meeting is to consider and vote upon a proposal to amend the Company's Certificate of Incorporation to increase the authorized capital stock of the Company from 5,000,000 shares of Common Stock to 20,000,000 shares of Common Stock. BACKGROUND; REASONS FOR THE PROPOSAL From August 1996 through January 1997, the Company engaged in discussions with approximately 14 financial institutions seeking to obtain a commitment to provide the Company with financing which the Company had determined was necessary in order to successfully operate its mortgage warehouse lending business. The Company was unable to obtain any such commitment, having been advised by such financing institutions that the Company would need to increase its capital base to obtain a significant financial commitment. To address this issue, in January 1997, the Company negotiated with eight investors (the "Investors") to invest an aggregate of $4 million in the Company through a private placement of securities (the "Private Placement"). During the negotiations, the Board of Directors determined that a subscription price of $1.00 per share of Common Stock was a fair and equitable price to the Company. This determination was based upon, among other things, (i) the market price of the Company's Common Stock during the period preceding the January 31, 1997 press release announcing the proposed Private Placement, (ii) the net asset value of the Company at such time, which was slightly below $1.00 per share, (iii) the restricted nature of the securities to be issued in the Private Placement, (iv) limited financing alternatives available to the Company and (v) the Company's funding needs. Although the Investors indicated their willingness to invest $4 million in consideration for the issuance of an aggregate of 4 million shares of Common Stock, the Company did not have 4 million authorized and unreserved shares available for issuance. Consequently, the Investors agreed to subscribe for an aggregate of 2.2 million shares of Common Stock at a subscription price of $1.00 per share and acquire an aggregate of $1.8 million principal amount of convertible notes (the "Notes") at a conversion rate of $1.00 principal amount of Notes per share of Common Stock (the "Conversion Rate"), conditioned on the agreement of the Company to use its best efforts to secure approval of an amendment to its Certificate of Incorporation that would increase the number of authorized shares of Common Stock to a number sufficient to provide for conversion of the Notes into Common Stock at the Conversion Rate (the "Amendment"). -3- Pursuant to the subscription agreements entered into by the Company and each Investor, and, in addition, in order to create sufficient authorized shares of Common Stock to provide for the long 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 Company has scheduled the Meeting to seek shareholder approval of the Amendment in accordance with (S)803(a) of the New York Business Corporation Law. If the shareholders of the Company approve the Amendment, the Notes shall automatically be converted into Common Stock immediately upon the filing of the Amendment with the New York Secretary of State, without the necessity for any further action to be taken by the Investors. RISK OF DILUTION The trading price of the Common Stock on April 1, 1997 as reported by Bloomberg Business News was $2 1/4 per share. To the extent that the trading price of the Common Stock quoted on the NASDAQ SmallCap market exceeds $1.00 per share at the time the Amendment is approved, the conversion of the Notes at the Conversion Rate may result in the dilution of the interests of existing shareholders of the Company. EFFECT OF DISAPPROVAL If the Amendment is not approved and the Notes remain outstanding, the entire aggregate of $1,800,000 principal amount of the Notes will become due and payable on December 31, 1997. Commencing August 28, 1997, the Notes shall bear interest on the unpaid principal amount thereof at the rate of eight (8%) percent per annum. In addition, as a consequence, the Company may encounter difficulties in obtaining financing commitments from third party lenders in connection with the operation of its mortgage warehouse lending operations. Although the Company has recently obtained a commitment for $25 million line of credit from a third party lender, the failure to obtain approval of the Amendment may impair the Company's ability to maintain such commitment and address future funding needs. IMPACT OF THE CONVERSION OF THE NOTES If the shareholders approve the Amendment, upon the conversion of the Notes, the Company will have eliminated a $1,800,000 liability and have the benefit of enhancement of its assets base and net worth, which the management of the Company believes will enable the Company to obtain increased credit lines from financial institutions. -4- PROPOSAL: AMENDMENT OF CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED CAPITAL STOCK WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company to amend the Certificate of Incorporation of the Company to increase the number of authorized shares of Common Stock of the Company and permit the conversion of the Notes into Common Stock at the Conversion Rate and, in addition, permit the Company to issue additional shares in the future if the Board of Directors shall determine such issuance to be in the best interests of the Company; now therefore it is RESOLVED, that Article FOURTH of the Company's Certificate of Incorporation, as heretofore amended, be further amended to increase the authorized capital stock of the Company from 5,000,000 shares of Common Stock, par value $.01 per share, to 20,000,000 shares of Common Stock. 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. OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS The outstanding voting securities of the Company on April 4 1997 (the "Record Date") consisted of 3,642,272 shares of Common Stock. The Common Stock is the only class of voting stock of the Company. 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 the proposal. 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. CHANGE IN CONTROL - VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF As a result of the completion of the Private Placement by the Company on February 28, 1997, a change in control of the Company occurred, as previously reported in the Company's Report on Form 8-K dated March 5, 1997, and as more particularly described below: -5- For consideration of $2,500,000 paid by Leedan International Holdings B.V. ("Leedan"), of which $2,300,000 represented internal funds of Leedan and $200,000 were proceeds of a 6 month loan, bearing interest at a variable annual rate equal to the London Interbank Offering Rate ("Leedan Business"), which loan was made to Leedan by Leedan Business Enterprise Ltd., an indirect parent company of Leedan, Leedan acquired 1,375,000 shares of Common Stock and $1,125,000 principal amount of Notes. Upon the closing of the Private Placement, Leedan became the largest shareholder of the Company with direct and indirect holdings of 42.6% of the issued and outstanding Common Stock. Based on the conversion rate of each $1.00 principal amount of Notes into one share of Common Stock, if the shareholders approve the Amendment, Leedan will own, directly and indirectly, 49% of the issued and outstanding Common Stock. [REST OF PAGE INTENTIONALLY LEFT BLANK] -6- Set forth below are the holders of 5% or more of the Common Stock as of April 1, 1997 and management ownership of Common Stock.
COMMON STOCK --------------------------------------- NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED - ------------------- ------------------ ------------------ Leedan Business Enterprise Ltd. 1,551,136/1/ 42.6% 8 Shaul Hamelech Blvd. Tel-Aviv 64733, Israel Jay Botchman 330,000 9% 1500 E. Tropicana Avenue Suite 100 Las Vegas, Nevada 89113 Michael Lauer 330,000/2/ 9% 200 Park Avenue Suite 3900 New York, New York 10166 Tamar Lieber 322,122 9% 160 West 66th Street New York, New York 10022 Glenda Klein 197,546/3/ 5% 19644 Pine Valley Avenue Northridge, California 91326
SECURITY OWNERSHIP OF MANAGEMENT
NUMBER OF SHARES PERCENT NAME TITLE OF COMMON STOCK OF CLASS - ---- ----- ---------------- -------- Glenda Klein Director and 197,546/3/ 5% Senior Vice President, Secretary, Treasurer and Chief Financial Officer Tamar Lieber Director 322,122 9% Richard Fried Director 12,046 Less than 1% Directors and 531,714/3/ 13.8% Executive Officers as a group (6 persons)
-------------------------------------- /1/ Leedan, which together with Leedan Systems & Properties Promotion (1993) Ltd. holds 42.6% of the issued and outstanding Common Stock of the Company, is an indirect wholly-owned subsidiary of Leedan Business Enterprises Ltd ("Leedan Business"). Certain members of the Harel family, collectively, own approximately 57.5% of the outstanding shares of Leedan Business. Mr. Boaz Harel, a director of the Company, owns approximately 17% of the outstanding shares of Leedan Business and disclaims beneficial ownership of any stock of Leedan Business held by any other member of the Harel family. /2/ Mr. Lauer owns shares of the Company and is the investment manager with authority to vote and sell securities owned by three entities that he manages. The shares of the Company owned by Mr. Lauer directly and by the entities he manages total more than 5% of the outstanding shares of Common Stock of the Company. /3/ Includes 188,637 shares of Common Stock which Ms. Klein has the right to acquire within 60 days from the date hereof upon exercise of an option held by her. -7- INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON Mr. Boaz Harel has served as a director of the Company since November 11, 1996. Mr. Harel owns approximately 17% of the shares of Leedan Business, which is the beneficial owner of 42.6% of the Common Stock through its indirect wholly-owned subsidiary, Leedan. Mr. Harel also serves as the Managing Director of Leedan Business, as a Managing Director of Leedan and is also the Chairman of ICTS USA (1994) Inc., an indirect subsidiary of Leedan. Mr. M. Albert Nissim has served as the President of the Company since January 9, 1997. Mr. Nissim is a Managing Director of Leedan, which beneficially owns 42.6% of the Common Stock. He also serves as the Secretary of ICTS International N.V., a subsidiary of Leedan, and as the President of ICTS USA (1994) Inc., a subsidiary of ICTS International, N.V. COST OF SOLICITATION The cost of solicitation of proxies, including reimbursements to banks and brokers for reasonable expenses in sending proxy material to their principals, will be borne by the Company. The Company's transfer agent, American Stock Transfer & Trust Company, is assisting the Company in the solicitation of proxies from brokers, banks, institutions and other fiduciaries by mail, and will charge the Company its customary fee therefor plus out-of-pocket expenses which, in the aggregate, are estimated to be approximately $800. In addition, proxies may be solicited by officers of the Company by mail, in person or by telephone, telegraph or telex. It is anticipated that the total cost of solicitation of proxies will be approximately $2000. -8- PIONEER COMMERCIAL FUNDING CORP. Proxy for Special Meeting of Shareholders May 8, 1997 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PIONEER COMMERCIAL FUNDING CORP. (THE "COMPANY"). The undersigned hereby appoints Messrs. M. Albert Nissam and Boaz Harel as Proxies, each with the power to appoint his substitute and hereby authorizes each one of them to represent and vote, as designated below, all shares of Common Stock of Pioneer Commercial Funding Corp. held of record by the undersigned on April 4, 1997, at the Special Meeting of Shareholders to be held on May 8, 1997 or any adjournment thereof. The shares of Common Stock that the undersigned would be entitled to vote if personally present at the Special Meeting to be held at 11:00 A.M., Eastern Time, on Thursday, May 8, 1997, at the offices of Gratch Jacobs & Brozman, P.C., 950 Third Avenue, New York, New York, or any adjournment or adjournments thereof, shall be voted with respect to the proposed resolution as set forth below, as indicated herein. THE PROPOSED RESOLUTION To amend the Company's Certificate of Incorporation as follows: RESOLVED, that Article FOURTH of the Company's Certificate of Incorporation, as heretofore amended, be further amended to increase the authorized capital stock of the Company from 5,000,000 shares of Common Stock, par value $.01 per share, to 20,000,000 shares of Common Stock. Unless otherwise indicated, this Proxy confers authority to vote "FOR" for the above resolution. The Board of Director recommends a vote of "FOR" for the above resolution. This proxy is solicited on behalf of the Board of Directors of Pioneer Commercial Funding Corp. and may be revoked prior to its exercise by a written notice to the Secretary of the Company. [X] Please mark your vote as indicated in this example. APPROVAL OF AN AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION For Against Abstain [_] [_] [_] 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: ------------------------------------------------ ------------------------------------------------------ Signature of Shareholder ------------------------------------------------------ Signature of Shareholder -----END PRIVACY-ENHANCED MESSAGE-----