REMOTE
DYNAMICS, INC.
200
Chisholm Place, Suite 120
Plano,
Texas 75075
NOTICE
OF ACTION TO BE TAKEN PURSUANT TO A WRITTEN CONSENT TO ACTION
WITHOUT
A MEETING OF STOCKHOLDERS
To
be taken on April **, 2009
To the
stockholders of Remote Dynamics, Inc. (the "Company"):
Notice is
hereby given that our majority stockholder, pursuant to a signed written consent
to action without a meeting, to approve an amendment of our Amended and Restated
Articles of Incorporation to authorize 15,000,000,000 authorized shares of our
common stock having a par value of $0.0001 per share.
Common
stockholders of record on the close of business on March 3, 2009 are entitled to
notice of the consent to action; however, the majority stockholder does not need
your vote to effect the changes above.
The actions to be taken
pursuant to the written consent shall be taken on or about April **, 2009, 20
days after the mailing of this Information Statement.
This
notice is accompanied by an Information Statement that provides details of each
of the proposals.
THIS
IS NOT A NOTICE OF AN ANNUAL OR SPECIAL MEETING OF STOCKHOLDERS AND NO
STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY OF THE MATTERS LISTED
ABOVE.
|
|
By
Order of the Board of Directors,
|
|
|
|
|
|
|
|
/s/ David Walters
|
|
|
|
|
|
|
|
David
Walters
|
|
|
|
Chairman
|
|
|
|
March
13, 2009
|
|
REMOTE
DYNAMICS, INC.
200
Chisholm Place, Suite 120
Plano,
Texas 75075
INFORMATION
STATEMENT
This Information Statement is being
furnished by the Board of Directors of Remote Dynamics, Inc. (the "Company") to
provide notice that our majority stockholder has given its signed written
consent to action without a meeting to approve an amendment to the Company's
Amended and Restated Certificate of Incorporation to authorize 15,000,000,000
authorized shares of our common stock having a par value of $0.0001 per
share.
The record date for determining
stockholders entitled to receive this Information Statement has been established
as the close of business on March 3, 2009 (the "Record Date"). This Information
Statement will be first mailed on or about March **, 2009 to stockholders of
record at the close of business on the Record Date. As of the Record Date, there
were outstanding 4,079,966,026 shares of the Company's common stock, 522 shares
of the Company’s series B convertible preferred stock (which were convertible
into 168 shares of common stock) and 5,379 shares of the Company’s series C
convertible preferred stock (which were convertible into 111,639,998,754 shares
of common stock). Each holder of shares of the Company’s common stock
is entitled to one vote per share of common stock registered in their names on
the books of the Company at the close of business on the Record
Date. The holders of the Company’s series B convertible
preferred stock and the Company’s series C convertible preferred stock have the
right to vote on all matters before the common stockholders on an as-converted
basis voting together with the common stockholders as a single class, provided
that the holder of series B convertible preferred stock cannot vote shares which
are greater than 9.99% of our outstanding common stock. Thus, as of the Record
Date, the total voting power of our common stock was 115,719,964,948
shares. The actions to be
taken pursuant to the written consent shall be taken on or about April **, 2009,
20 days after the mailing of this Information Statement.
Approval of the action described in
this Information Statement requires the approval of holders of a majority of the
voting power of our common stock as of the Record Date. Bounce Mobile Systems,
Inc. (“BMSI” or the "Majority Stockholder") can vote an aggregate of
112,244,309,718 shares (or 97%) of the voting power of our common stock and will
be able to approve the matters presented in this Information Statement. The
Company is not soliciting your vote as the Majority Stockholder has given its
signed written consent to action without meeting, and already has the vote in
hand.
There are no dissenters' rights
applicable to any of the actions described in this Information
Statement.
We
Are Not Asking You for a Proxy and You are Requested
Not
To Send Us a Proxy.
INTRODUCTION
AND SUMMARY
The Majority Stockholder’s action to
approve an amendment to our Amended and Restated Certificate of Incorporation to
authorize 15,000,000,000 authorized shares of our common stock having a par
value of $0.0001 per share is intended to permit us to comply with the terms of
our existing financing and other contractual arrangements.
PROPOSAL
1
AMENDMENT
TO CERTIFICATE OF INCORPORATION
WHAT
IS THE MAJORITY STOCKHOLDER APPROVING?
Our Majority Stockholder has approved
an amendment of our Amended and Restated Certificate of Incorporation to
authorize 15,000,000,000 authorized shares of our common stock having a par
value of $0.0001 per share. The amendment will not alter the number
of authorized shares of our preferred stock.
As amended, Article IV of our
Amended and Restated Certificate of Incorporation will read in its entirety as
follows:
“ IV.
CAPITALIZATION
The
aggregate number of shares of capital stock which the corporation shall have
authority to issue is 15,002,000,000 shares consisting of 15,000,000,000 shares
of common stock, par value $0.0001 per share (the “Common Stock”), and 2,000,000
shares of preferred stock, par value $0.01 per share. Each holder of a share of
Common Stock shall be entitled to one vote for each share held in any
stockholder vote in which any of such holders is entitled to
participate.
The Board
of Directors of the corporation, by resolution or resolutions, may at any time
and from time to time, divide and establish any or all of the unissued shares of
Preferred Stock not then allocated to any series of Preferred Stock into one or
more series and, without limiting the generality of the foregoing, fix and
determine the designation of each such share, the number of shares which shall
constitute such series and certain powers, preferences and relative,
participating, optional or other special rights and qualifications, limitations
and restrictions and voting rights of the shares of each series so
establishing.”
The additional shares proposed to be
authorized would be part of the existing class of our common stock and, if and
when issued, would have the same rights and privileges as the shares of our
common stock presently outstanding. The holders of our common stock are entitled
to all of the rights and privileges of holders of shares of common stock under
the Delaware General Corporation Law. Subject to the preferences applicable to
shares of our preferred stock, the holders of our common stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by
our board of directors out of legally available funds. In the event of the
liquidation, dissolution or winding up of the Company, the holders of our common
stock will be entitled to share ratably in all assets remaining after payment of
debts and other liabilities, subject to the prior distribution rights of holders
of shares of our preferred stock. There are no redemption or sinking fund
provisions applicable to our common stock. All of the outstanding shares of our
common stock are currently duly authorized, validly issued, fully paid and
nonassessable.
Each holder of our common stock is
entitled to one vote for each share of common stock held by such holder on all
matters submitted to the vote of stockholders.
Once the proposed amendment is
effective, no further action or authorization by our stockholders will be
necessary prior to the issuance of the additional shares of common stock, except
as may be required by applicable law or by the rules of any exchange on which
our common stock is then listed.
WHAT
IS THE PURPOSE OF THE AMENDMENT?
The amendment to our Amended and
Restated Certificate of Incorporation will authorize 15,000,000,000 shares of
our common stock having a par value of $0.0001 per share.
The
increase in the number of authorized shares of our common stock is necessary for
us to meet our payment and conversion obligations in respect of our outstanding
convertible securities.
Even with
the increase, we will have insufficient authorized shares of common stock to
comply with the terms of our existing financing and other contractual
arrangements, as described below. In general, these arrangements require us to
maintain reserved shares of our common stock for issuance upon the conversion of
outstanding convertible notes and preferred stock, and upon the exercise of
outstanding warrants, in an amount equal to 100-150% of the amount needed at any
one time for the conversion and exercise. As of March 3, 2008, we
were obligated to reserve a total of 215,357,855,984
shares
of our common stock for issuance in respect of our existing financing and other
contractual arrangements.
Our
decision to increase our authorized shares only to 15,000,000,000 (and not the
full amount of our contractual obligations) was based on the following principal
factors: (a) our belief that the increased number of shares will
permit us to satisfy our payment and conversion obligations in respect of our
outstanding convertible securities at least through the third quarter of 2009,
and (b) the potential cost (in terms of increased state franchise tax fees) of
increasing our authorized shares of common stock to the full number necessary to
satisfy our contractual obligations.
We also
continue to pursue alternatives to restructure or otherwise satisfy our
obligations under our outstanding convertible securities, which may reduce or
eliminate the requirement to further increase our authorized
shares. However, if these efforts are unsuccessful, we will
likely need to seek a further increase in the number of authorized shares of our
common stock or a reverse stock split, or both.
The increase in the number of
authorized shares of our common stock will also provide our board of directors
flexibility to issue common stock in the future in connection with the raising
of capital, the acquisition of new businesses, employee stock benefit plans and
other corporate purposes as deemed necessary or appropriate by our board of
directors.
Our
Outstanding Debt, Preferred Securities and Warrants
Series
A Notes
As of
March 3, 2009 we had $3,108,315 principal amount of our series A secured
convertible notes and original issue discount series A secured convertible notes
(collectively, “Series A Notes”) outstanding. The Series A Notes
matured on February 23, 2008 and are currently due and payable. The Series A
Notes are secured by substantially all of the our assets. The Series
A Notes are convertible at the option of the holder into our common stock at a
fixed conversion price of $0.000105 per share, subject to adjustment for stock
splits and combinations, certain dividends and distributions, reclassification,
exchange or substitution, reorganization, merger, consolidation or sales of
assets; issuances of additional shares of common stock, and issuances of common
stock equivalents. We may make scheduled principal installment
payments in cash or in registered shares of its common stock. If paid in common
stock, certain conditions must be satisfied, and the number of registered shares
to be paid to the holder must be an amount equal to the principal installment
amount divided by eighty percent (80%) of the average of the closing price for
the ten (10) trading days immediately preceding the principal payment
date.
Upon the occurrence of specified
events of default on the Series A Notes, the holders may (a) demand prepayment
of the notes as described below, (b) demand that the principal amount of the
notes then outstanding be converted into shares of our common stock; and/or (c)
exercise any of the holder’s other rights or remedies under the transaction
documents or applicable law. If the holders require us to prepay all
or a portion of the notes, the prepayment price would equal to 120% of the
principal amount of the notes. The holders would also recover all
other costs or expenses due in respect of the notes and the other transaction
documents.
Series
B Notes
As of
March 3, 2009 we had $6,974,232 principal amount of our series B subordinated
secured convertible notes and original issue discount series B subordinated
secured convertible notes (collectively, “Series B Notes”)
outstanding. The Series B Notes are secured by all of our assets,
subject to existing liens, are due December 4, 2009 and began scheduled
amortization of principal (in nine quarterly installments) on August 1,
2007. We may make principal installment payments in cash or in
registered shares of its common stock. If paid in common stock, certain
conditions must be satisfied, and the number of registered shares to be paid to
the holder must be an amount equal to the principal installment amount divided
by the lesser of (i) $400 or (ii) 90% of the average of the volume weighted
average trading prices of the common stock for the ten trading days immediately
preceding the principal payment. The Series B Notes are convertible
into our common stock at a conversion price of $0.000105 per share, subject to
adjustment for stock splits and combinations, certain dividends and
distributions, reclassification, exchange or substitution, reorganization,
merger, consolidation or sales of assets; issuances of additional shares of
common stock, and issuances of common stock equivalents.
Upon the occurrence of specified
events of default on the Series B Notes, the holders may (a) demand prepayment
of the notes as described below, (b) demand that the principal amount of the
notes then outstanding be converted into shares of our common stock; and/or (c)
exercise any of the holder’s other rights or remedies under the transaction
documents or applicable law. If the holders require us to prepay all
or a portion of the notes, the prepayment price would equal to 120% of the
principal amount of the notes. The holders would also recover all
other costs or expenses due in respect of the notes and the other transaction
documents.
Series
B Preferred Stock
The
series B convertible preferred stock has a face amount of $10,000 per share
($5,220,000 in the aggregate), ranks senior to our series C convertible
preferred stock and our common stock with respect to payment of amounts upon any
liquidation, dissolution or winding up of the Company, and is entitled to
receive non-cumulative dividends in an amount equal to 3% per year when, as and
if declared by our Board of Directors.
The
series B convertible preferred stock is convertible into common stock at a
conversion price of $31,000 per share, subject to adjustment for stock splits
and combinations, and certain dividends and distributions,
The
holders of shares of series B convertible preferred stock have the right to
cause us to redeem any or all of its shares at a price equal to 100% of face
value, plus accrued but unpaid dividends in the following events:
|
|
·
|
We
fail to remove any restrictive legend on any certificate or any shares of
common stock issued to the holders of Series B convertible preferred stock
upon conversion of the Series B convertible preferred stock as and when
required and such failure continues uncured for five business
days;
|
|
|
·
|
We
provide written notice (or otherwise indicate) to any holder of Series B
convertible preferred stock, or state by way of public announcement
distributed via a press release, at any time, of our intention not to
issue, or otherwise refuse to issue, shares of common stock to any holder
of Series B convertible preferred stock upon conversion in accordance with
the terms of the certificate of designation for our Series B convertible
preferred stock;
|
|
|
·
|
We
or any of our subsidiaries make an assignment for the benefit of
creditors, or applies for or consents to the appointment of a receiver or
trustee for us or for a substantial part of our property or
business;
|
|
|
·
|
Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings
for the relief of debtors shall be instituted by or against us or any of
our subsidiaries which shall not be dismissed within 60 days of their
initiation;
|
|
|
·
|
We
sell, convey or dispose of all or substantially all of our assets;
or
|
|
|
·
|
We
otherwise breach any material term under the private placement transaction
documents, and if such breach is curable, shall fail to cure such breach
within 10 business days after we have been notified thereof in writing by
the holder.
|
The series B convertible preferred
stock generally has the right to vote on all matters before the common
stockholders on an as-converted basis voting together with the common
stockholders as a single class. In addition, the holders of a majority of the
Series B convertible preferred stock, voting as a separate class, have the right
to appoint one member of our Board of Directors and one observer to meetings of
our Board of Directors and its committees. Although the holder of our
Series B convertible preferred stock retains the right to do so in the
future, it has not yet exercised its right to appoint a board
member.
Series
C Preferred Stock
The
series C convertible preferred stock has a face amount of $1,000 per share
($5,379,000 in the aggregate), ranks junior to our series B convertible
preferred stock and senior to our common stock with respect to payment of
dividends and amounts upon any liquidation, dissolution or winding up of the
Company, and is entitled to receive cumulative dividends in an amount equal to
8% per year (payable at the election of the holder in cash or additional
shares).
The
series C convertible preferred stock was initially convertible into 51% of the
number of our fully diluted shares, as defined to include, without
limitation:
|
|
·
|
Shares
of common stock outstanding on the date of issuance of the Series C
Preferred Stock;
|
|
|
·
|
Shares
of common stock issuable upon conversion, exercise or exchange of any
convertible security or purchase right outstanding on the date
of issuance (including, without limitation, the series C
convertible preferred stock, our series B convertible preferred stock, the
Series A Notes, the Series B Notes and outstanding
warrants);
|
|
|
·
|
Shares
of common stock issuable upon conversion, exercise or exchange of any
convertible security or purchase right issued after the issuance date of
the series C convertible preferred stock in conversion, exercise or
exchange of securities outstanding as of the issuance date or as a
dividend, interest payment, liquidated damages, penalty, compromise,
settlement or other payment of certain securities or pursuant
to or in connection with any agreement, indebtedness or other obligation
of the Company existing as of the issuance date, or with respect to any
amendment, waiver or modification thereto or extension
thereof;
|
|
|
·
|
Shares
of common stock issued after the issuance date of the series C convertible
preferred stock as a dividend, interest payment, liquidated damages,
penalty, compromise, settlement or other payment of certain securities
or pursuant to or in connection with any agreement,
indebtedness or other obligation of the Company existing as of the
issuance date, or with respect to any amendment, waiver or modification
thereto or extension thereof; and
|
|
|
·
|
Shares
of common stock authorized for issuance from time to time under our equity
incentive plans.
|
The
holders of shares of Series C convertible preferred stock have the right to
cause us to redeem any or all of its shares at a price equal to 100% of face
value, plus accrued but unpaid dividends in the following events:
|
|
·
|
We
fail to remove any restrictive legend on any certificate or any shares of
common stock issued to the holders of Series B convertible preferred stock
upon conversion of the Series B convertible preferred stock as and when
required and such failure continues uncured for five business
days;
|
|
|
·
|
We
provide written notice (or otherwise indicate) to any holder of Series B
convertible preferred stock, or state by way of public announcement
distributed via a press release, at any time, of our intention not to
issue, or otherwise refuse to issue, shares of common stock to any holder
of Series B convertible preferred stock upon conversion in accordance with
the terms of the certificate of designation for our Series B convertible
preferred stock;
|
|
|
·
|
We
or any of our subsidiaries make an assignment for the benefit of
creditors, or applies for or consents to the appointment of a receiver or
trustee for us or for a substantial part of our property or
business;
|
|
|
·
|
Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings
for the relief of debtors shall be instituted by or against us or any of
our subsidiaries which shall not be dismissed within 60 days of their
initiation;
|
|
|
·
|
We
sell, convey or dispose of all or substantially all of our
assets;
|
|
|
·
|
We
merge or consolidate with or into, or engage in any other business
combination with, any other person or entity, in any case which results in
either (i) the holders of our voting securities immediately prior to such
transaction holding or having the right to direct the voting of fifty
percent (50%) or less of our total outstanding voting securities of or
such other surviving or acquiring person or entity immediately following
such transaction or (ii) the members of our board of directors comprising
fifty percent (50%) or less of the members of our board of directors or
such other surviving or acquiring person or entity immediately following
such transaction;
|
|
|
·
|
We
have fifty percent (50%) or more of the voting power of our capital stock
owned beneficially by one person, entity or
“group”;
|
|
|
·
|
We
experience any other change of control not otherwise addressed above;
or
|
|
|
·
|
We
otherwise breach any material term under the private placement transaction
documents, and if such breach is curable, shall fails to cure such breach
within 10 business days after we have been notified thereof in writing by
the holder.
|
The
series C convertible preferred stock generally has the right to vote on all
matters before the common stockholders on an as-converted basis voting together
with the common stockholders as a single class. In addition, the holders of a
majority of the Series C convertible preferred stock, voting as a separate
class, have the right to appoint a majority of the members of our Board of
Directors.
Warrants
As of
March 3, 2009, we had outstanding the following common stock purchase
warrants:
|
|
·
|
Series A-7
warrants to purchase 1,031 shares of common stock at an exercise
price of $0.000105 per share subject to adjustment for stock
splits and combinations, certain dividends and distributions,
reclassification, exchange or substitution, reorganization, merger,
consolidation or sales of assets; issuances of additional shares of common
stock, and issuances of common stock equivalents. The series
A-7 warrants can be exercised on a cashless basis beginning one year after
issuance if (i) the per share market value of a share of our common stock
(either the volume the weighted average price or the fair market value as
determined by an independent appraiser) is greater than the warrant price;
and (ii) a registration statement for the warrant stock is not then in
effect. The series A-7 warrants are exercisable for a
seven-year period from the date of issuance (95 of these warrants are
exercisable over 5 years).
|
|
|
·
|
Series B-4
warrants to purchase 688 shares of common stock at an exercise price
of $0.000105 per share subject to adjustment for stock splits and
combinations, certain dividends and distributions, reclassification,
exchange or substitution, reorganization, merger, consolidation or sales
of assets; issuances of additional shares of common stock, and issuances
of common stock equivalents. The series B-4 warrants can be
exercised on a cashless basis beginning one year after issuance if (i) the
per share market value of a share of our common stock (either the volume
the weighted average price or the fair market value as determined by an
independent appraiser) is greater than the warrant price; and (ii) a
registration statement for the warrant stock is not then in effect. The
series B-4 warrants are exercisable for a four-year period beginning on
the date a resale registration statement for the shares underlying the
warrants is declared effective by the Securities and Exchange Commission
(65 of these warrants are exercisable over 5
years).
|
|
|
·
|
Series C-3
warrants to purchase 1,375 shares of common stock at an exercise price of
$0.000105 per share subject to adjustment for stock
splits and combinations, certain dividends and distributions,
reclassification, exchange or substitution, reorganization, merger,
consolidation or sales of assets; issuances of additional shares of common
stock, and issuances of common stock equivalents. The series
C-3 warrants can be exercised on a cashless basis beginning one year after
issuance if (i) the per share market value of a share of our common stock
(either the volume the weighted average price or the fair market value as
determined by an independent appraiser) is greater than the warrant price;
and (ii) a registration statement for the warrant stock is not then in
effect. The series C-3 warrants are exercisable for a
three-year period from the date of issuance. 125 of these
warrants are exercisable over 5
years.
|
|
|
·
|
Series
D-1 warrants (callable only at our option) to purchase 963 shares in the
aggregate of common stock at an exercise price per share equal to the
lesser of: (a) $7,000.00 or (b) 90% of the average of the 5 day
volume weighted average price of our common stock on the OTC Bulletin
Board preceding the call notice, as defined in the
warrant.
|
|
|
·
|
Series
E-7 Warrants to purchase 314,839 shares of common stock at an exercise
price of $.000105 per share, subject to adjustment for stock splits and
combinations, certain dividends and distributions, reclassification,
exchange or substitution, reorganization, merger, consolidation or sales
of assets; issuances of additional shares of common stock, and issuances
of common stock equivalents. The series E-7 warrants are
exercisable for a seven-year period from the date of
issuance.
|
|
|
·
|
Series
F-4 Warrants to purchase 314,839 shares of common stock at an exercise
price of $.000105 per share, subject to adjustment for stock splits and
combinations, certain dividends and distributions, reclassification,
exchange or substitution, reorganization, merger, consolidation or sales
of assets; issuances of additional shares of common stock, and issuances
of common stock equivalents. The series F-4 warrants are exercisable for a
four-year period beginning on the date a resale registration statement for
the shares underlying the warrants is declared effective by the Securities
and Exchange Commission.
|
|
|
·
|
The
following warrants issued to SDS in connection with our 2005
financings: (i) a common stock purchase warrant with a 5-year
term to purchase 83 shares of common stock at an exercise price of $200
per share, (ii) a common stock purchase warrant with a 5-year term to
purchase 1,453 shares of common stock at an exercise price of $843, and
(iii) a common stock purchase warrant with a 5-year term to purchase 100
shares at an exercise price of $35,000.00 per
share.
|
|
|
·
|
Warrants
issued to the placement agents in our Series A Note financing to purchase
125 shares of common stock at an exercise price per share equal to
$0.000105 per share with a term of 5 years following the
closing.
|
|
|
·
|
Warrants issued to the placement
agents in our Series B Note financing to purchase 617 shares of common
stock at an exercise price per share equal to $0.000105 per share with a
term of 5 years following the
closing.
|
As of the Record Date, we were
obligated to reserve a total of 215,357,855,984
shares of our common stock for issuance
in respect of the foregoing securities and had insufficient authorized shares to
do so.
Recent
Developments Regarding Our Outstanding Debt and Preferred
Securities
As of
March 3, 2009, approximately $3,108,315 in principal amount of our outstanding
Series A Notes have reached their maturity date and are due and
payable. We have failed to comply with certain of our other
obligations relating to the Series A and Series B Notes, including our failure
to make scheduled principal payments and to register for resale the shares of
common stock underlying the notes and warrants issued in the related private
placements. The notes provide for a default interest rate of
10% per annum on the outstanding principal amount of the notes for periods in
which certain specified events of default occur and are continuing and for
liquidated damages for non-compliance with our registration
obligations.
Our
non-compliance with the terms of the notes also exposes to the risk that our
note holders could seek to exercise prepayment or other remedies under the
notes. We have received one outstanding notice of default from a
holder of our Series A Notes. The notice demands immediate payment
in cash of $287,500. To date, we have made no payment in respect of the
note holder demand and it remains outstanding.
We do not
currently have the cash on hand to repay amounts due under our secured
convertible notes if the note holders elect to exercise their repayment or other
remedies. If our efforts to restructure or otherwise satisfy
our obligations under the notes are unsuccessful, and we are unable to raise
enough money to cover the amounts payable under the notes, we may be forced to
restructure, file for bankruptcy, sell assets or cease operations.
In March,
2008, we resumed making payments to certain of our note holders of amounts due
under the notes by issuing shares of our common stock under the terms of the
notes:
|
|
·
|
In
2008, these payments were in the form of 73,543,205 shares of our common
stock (after giving effect to our 1-for-400 reverse stock split completed
in August 2008) in satisfaction of $811,934 of obligations due under the
notes. These represent issuance prices ranging from $0.000267
to $0.0043 per share (for the Series A Notes) and from $0.00045 to $0.0049
per share (for the Series B Notes).
|
|
|
·
|
In
2009 through the Record Date, these payments were in the form of
3,402,107,525 shares of our common stock in satisfaction of $710,748 of
obligations due under the notes. These represent issuance
prices ranging from $0.0001 to $0.000587 per share (for the Series A
Notes) and from $0.000118 to $0.000477 per share (for the Series B
Notes).
|
In
general, the shares issued to our note holders are available for immediate
resale by the holders in accordance with Rule 144 under the Securities Act of
1933, as amended.
In 2008, BMSI converted 564 shares of
series C convertible preferred stock into 604,310,965 shares of our common stock
(after giving effect to our 1-for-400 reverse stock split completed in August
2008).
We expect to continue to issue
additional shares of our common stock in payment of amounts due under our
secured convertible notes and convertible preferred stock during the remainder
of 2009 and thereafter.
DOES
THE COMPANY HAVE PLANS TO ISSUE ADDITIONAL SHARES OF COMMON STOCK?
We anticipate that we will issue the
full number of newly authorized shares of common stock in payment
of amounts due under, or in connection with the conversion of,
our outstanding convertible
securities.
Except for the issuance of the
additional shares of common stock in connection with the payment of amounts due
under or the conversion of our outstanding convertible securities and the
exercise of our outstanding warrants as described above, the Company has no
plans or arrangements for the issuance of additional shares of common stock for
any specific purpose, including but not limited to rendering more difficult or
discouraging a change of control of the Company.
WHAT
EFFECT WILL THE INCREASE IN OUR AUTHORIZED SHARES HAVE ON EXISTING
STOCKHOLDERS?
Following the increase in the number of
our authorized shares of common stock, the Company will have the ability to
issue additional shares of common stock from time to time without further
stockholder approval. Since holders of common stock have no
preemptive rights to purchase or subscribe for any of our unissued stock, the
issuance of additional shares of common stock will reduce the current
stockholders' percentage ownership interest in the total outstanding shares of
common stock.
In general, any shares of common stock
we issue in respect of our senior securities will be available for immediate
resale by the holders in accordance with Rule 144 under the Securities Act of
1933, as amended. Sales of significant amounts of common stock in the public
market, or the perception that such sales may occur, could materially decrease
the market price of our common stock.
Our ability to issue additional shares
of common stock without further stockholder approval could have a number of
effects on our stockholders depending upon the exact nature and circumstances of
any actual issuances of authorized but unissued shares. The ability
to issue additional shares could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by applicable law)
in one or more transactions that could make a change in control or takeover more
difficult. For example, additional shares could be issued by the
Company so as to dilute the stock ownership or voting rights of persons seeking
to obtain control of the Company, even if the persons seeking to obtain control
offer an above-market premium that is favored by a majority of the independent
stockholders. Similarly, the issuance of additional shares to certain persons
allied with the Company's management could have the effect of making it more
difficult to remove current management by diluting the stock ownership or voting
rights of persons seeking to cause such removal. The Board of Directors is not
aware of any attempt, or contemplated attempt, to acquire control of the
Company, and this proposal is not being presented with the intent that it be
utilized as a type of anti-takeover device.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Mr. David Walters, our Chairman, is the
Chairman and Chief Executive Officer of BMSI and also Managing Member of Monarch
Bay Capital Group, LLC (the majority stockholder of BMSI). As of the
Record Date, BMSI held 5,379 shares of our series C convertible preferred stock,
604,310,965 shares of our common stock, $2,163,000 principal amount of Series B
Notes, our series E-7 warrants to purchase 220,007 shares of our common stock,
and our series F-4 warrants to purchase 220,007 shares of our common
stock.
Mr. Walters and Mr. Keith Moore,
another member of our Board of Directors, each are a Managing Members of Strands
Management Company, LLC (“Strands”). As of the Record Date, Strands
held $203,226 principal amount of our Series B Notes.
We currently do not have sufficient
authorized shares of our common stock to fulfill our obligations under the
securities held by BMSI or Strands
.
No other director, executive officer,
nominee for election as a director, associate of any director, executive
officer, or nominee, or any other person has any substantial interest, direct or
indirect, by security holdings or otherwise, in the proposed authorization of
15,000,000,000 shares of our common stock that is not shared by all other
stockholders.
No
director has opposed any of these actions.
WHAT
VOTE IS REQUIRED FOR APPROVAL?
Approval of this proposal requires the
affirmative vote of shares representing a majority of the voting power of our
common stock as of the Record Date. The Majority Stockholder can vote
an aggregate of 112,244,309,718 shares (or 97%) of the voting power of our
common stock and has approved this proposal.
IS
THE COMPANY ASKING FOR MY PROXY?
Our Board of Directors has unanimously
approved the amendment to our Amended and Restated Certificate of Incorporation
to authorize 15,000,000,000 shares of our common stock having a par value of
$0.0001 per share. Our Majority Stockholder has given its signed
written consent to action without a meeting to approve the amendment to our
Amended and Restated Certificate of Incorporation. Therefore, we are
not asking for your proxy, and we request that you do not send a proxy, as no
further stockholder approval is either required or sought.
[Remainder
of page left intentionally blank.]
SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The
following table sets forth certain information regarding beneficial ownership of
our common stock as of March 13, 2009.
|
|
·
|
by
each person who is known by us to beneficially own more than 5% of our
common stock;
|
|
|
·
|
by
each of our executive officers and directors;
and
|
|
|
·
|
by
all of our executive officers and directors as a
group.
|
|
|
|
|
|
Beneficial
Ownership
Number
of Shares
|
|
|
|
|
|
Name
and Address of
|
|
Nature
of
|
|
|
|
|
Series
B
|
|
|
Series
C
|
|
|
|
|
|
Percent of
|
|
|
Beneficial
Owner (1)
|
|
Beneficial
Owner (1)
|
|
Common
Stock
|
|
|
Preferred
Stock
|
|
|
Preferred
Stock
|
|
|
Total
|
|
|
Total
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bounce
Mobile Systems, Inc.
|
|
Stockholder
|
|
|
21,204,750,979
|
|
|
|
-
|
|
|
|
111,639,998,754
|
|
|
|
132,844,749,733
|
(3)
|
|
|
61.69
|
%
|
|
30950
Rancho Viejo Rd. #120
San
Juan Capistrano, CA 92675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis
Ackerman
|
|
Director
|
|
|
63,354,922
|
|
|
|
-
|
|
|
|
-
|
|
|
|
63,354,922
|
(4)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith
Moore
|
|
Director
|
|
|
1,935,485,714
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,935,485,714
|
(5)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
Friedberg
|
|
Director
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Walters
|
|
Cha irman
and Director
|
|
|
23,140,236,694
|
|
|
|
-
|
|
|
|
111,639,998,754
|
|
|
|
134,780,235,447
|
(6)
|
|
|
62.58
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
Hallgren
|
|
Chief
Executive Officer
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greg
Jones
|
|
Senior
VP, Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
executive officers and directors as a group (6
persons)
|
|
|
|
|
25,139,077,330
|
|
|
|
-
|
|
|
|
111,639,998,754
|
|
|
|
136,779,076,084
|
|
|
|
63.51
|
%
|
* Less
than 1%
(1)
Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect to
securities. In accordance with Commission rules, shares of the Company's common
stock which may be acquired upon exercise of stock options or warrants which are
currently exercisable or which become exercisable within 60 days of the date of
the table are deemed beneficially owned by the optionees. Subject to community
property laws, where applicable, the persons or entities named in the table
above have sole voting and investment power with respect to all shares of the
Company's common stock indicated as beneficially owned by them.
(2) Based
upon the following outstanding securities: (a) 4,079,966,026 shares of common
stock, (b) 522 shares of our series B convertible preferred stock (which were
convertible into 168 shares of common stock), (c) 5,379 shares of our series C
convertible preferred stock (which were convertible into 111,639,998,754 shares
of common stock), (d) $3,108,315 principal amount of our series A senior secured
convertible promissory notes (which were convertible into 33,215,997,781 shares
of common stock), (e) $6,974,232 principal amount of our series B subordinated
secured convertible promissory notes (which were convertible into 66,421,257,143
shares of common stock), (f) series A-7 warrants exercisable for 1,031 shares of
common stock, (g) series B-4 warrants exercisable for 688 shares of common
stock, (h) series C-3 warrants exercisable for 1,375 shares of common stock, (i)
series D-1 warrants exercisable for 963 shares of common stock, (j) series E-7
warrants exercisable for 314,839 shares of common stock, (k) series F-4 warrants
exercisable for 314,839 shares of common stock, and (l) other warrants
exercisable for 2,378 shares of common stock.
(3)
Consists of shares of common stock issuable upon conversion or exercise of the
following outstanding securities held by BMSI: (a) 5,379 shares of
our series C convertible preferred stock, (b) 604,310,965 shares of our common
stock, (c) $2,163,000 principal amount of series B subordinated secured
convertible notes (including original issue discount series B subordinated
secured convertible notes), (c) our series E-7 warrants to purchase 220,007
shares of our common stock, and (d) our series F-4 warrants to purchase 220,007
shares of our common stock.
(4) This
individual beneficially owns 63,354,922 shares issuable upon conversion of a
convertible promissory note issued by the Company.
(5)
Represents shares of our Common Stock held by Strands Management Company,
LLC. Keith Moore is a managing member and owns 50% of the interests
of Strands Management Company, LLC.
(6)
Represents shares of our Common Stock held by BMSI (as described in note #3
above) as well as shares of our Common Stock held by Strands Management Company,
LLC. David Walters is a managing member and owns 50% of the interests
of Strands Management Company, LLC.
Company
Contact Information
All
inquires regarding our Company should be addressed to our Company's principal
executive office:
REMOTE
DYNAMICS, INC.
200
Chisholm Place, Suite 120
Plano,
Texas 75075
Attention: David
Walters, Chairman
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
/s/ David Walters
|
|
|
|
David
Walters, Chairman
|
|
|
|
Dated
March 13, 2009
|