a couple interesting excerpts from the 1/24/02 14A Proxy...
You are invited to attend a Special Meeting of Stockholders of General
Magic, Inc. (the "Company"), which will be held on February 26, 2002, at 2:00
p.m. Pacific Standard Time at The Westin Santa Clara, 5101 Great America
Parkway, Santa Clara, California, for the following purposes:
1. To approve the issuance, on or before June 30, 2002, of those shares of
the Company's Common Stock equal to 20% or more of the outstanding
Common Stock or voting power of the Company before the issuance, in one
or more transactions, of up to a maximum of 50,000,000 shares of the
Company's Common Stock (or securities convertible into or exercisable
for Common Stock) for an aggregate offering price of up to $20,000,000,
at a maximum discount to market of up to 20%.
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the authorized Common Stock of the Company from 150,000,000
shares to 200,000,000 shares.
3. To transact such other business as may properly come before the
meeting....
REASONS FOR REQUESTING STOCKHOLDER APPROVAL OF FUTURE FINANCINGS
As stated above, the Company intends to raise $15 to $20 million in
additional capital in 2002 through the issuance and sale of its securities, and
the Marketplace Rules require stockholder approval of the issuances of certain
discounted securities in excess of the Exchange Cap. The Company anticipates
that it will raise these additional funds in the first and second quarters of
2002 and expects that current market conditions may require the Company to issue
its securities at a discount. Hence, the Company is today seeking advance
stockholder approval of the issuance of its securities in excess of the Exchange
Cap because the issuance of any discounted securities in the first or second
quarter of 2002 may be integrated with the December Financing to exceed the
Exchange Cap, and because the Company anticipates that the Company may be
required to issue securities in excess of the Exchange Cap (independently of the
December Financing) in order to meet its financing objectives in 2002.
In addition, the Company believes that the procurement of additional
financing is necessary to strengthen the Company's financial position, to
provide the Company with the resources necessary to pursue growth and new market
opportunities, and to assure current and potential customers that the Company
has sufficient financial resources to successfully continue to develop and
support the Company's products.
EFFECT OF FAILURE TO OBTAIN STOCKHOLDER APPROVAL
Should the Company fail to obtain the approval of its stockholders, then
the Company will be restricted from issuing Common Stock in excess of the
Exchange Cap, and the Company's ability to raise additional capital to continue
to fund its operations would be severely limited. The Company believes that,
should this proposal fail, the Company's ability to raise additional financing
to fund its continued operations will be materially and adversely affected and
its ability to continue its operations curtailed. In addition, if the Company is
not able to generate sufficient additional revenues or obtain sufficient
additional financing, the Company may be unable to meet The Nasdaq National
Market's continued listing requirements, and the Company's Common Stock could be
delisted from that market.
sec.gov |
