SCHEDULE
14C INFORMATION
(RULE
14c-101)
INFORMATION
REQUIRED IN INFORMATION STATEMENT
SCHEDULE
14C INFORMATION
INFORMATION
STATEMENT PURSUANT TO SECTION 14(C)
OF
THE SECURITIES EXCHANGE ACT OF 1934
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x
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Preliminary
Information Statement
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o
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Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
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o
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Definitive
Information Statement
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PROTOCALL
TECHNOLOGIES INCORPORATED
(Name
of
Registrant As Specified In Charter)
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o
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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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):
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4)
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Proposed
maximum aggregate value of
transaction:
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o
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Fee
paid previously with preliminary
materials.
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o
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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.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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PROTOCALL
TECHNOLOGIES INCORPORATED
47
Mall Drive
Commack,
NY 11725
INFORMATION
STATEMENT AND NOTICE OF ACTION TAKEN WITHOUT A MEETING OF
STOCKHOLDERS
We
are not asking for a proxy and
you
are requested not to send us a proxy
INTRODUCTION
This
Information Statement and Notice of Action Taken Without a Meeting of
Stockholders is being furnished by us to our stockholders of record as of
February 12, 2008, to inform them of the February 8, 2008 approval by written
consent of stockholders owning a majority, as of the record date, of our
outstanding shares of common stock and series A convertible preferred stock,
the
only classes of our voting securities outstanding as of the record date, of
an
amendment to our articles of incorporation to increase the aggregate number
of
authorized shares of our common stock from 200 million to 550 million.
We
are
contractually obligated to increase our authorized shares pursuant to a previous
financing. The previous financing was first reported in our current report
on
Form 8-K filed with the U.S. Securities and Exchange Commission (or SEC) on
August 10, 2006, and amended in our current report on Form 8-K filed with the
SEC on June 6, 2007. As a result of the change in our stock price since the
date
of the financing transaction and the built-in conversion price and exercise
price adjustment features of the callable secured convertible notes and the
warrants issued by us in that financing transaction, we no longer have the
necessary authorized, unissued shares of common stock available for the maximum
number of shares of common stock potentially issuable upon conversion of the
notes and exercise of the warrants at this time, as well as for our employee
stock option plan and other uses for our stock. As a consequence, we must
increase the aggregate number of authorized shares of our common stock from
200
million to 550 million to allow us to reserve adequate shares for conversion
of
the notes and warrants, and to provide additional shares for issuance as needed.
We anticipate reserving 319,107,539 of the newly authorized shares of common
stock for potential issuance pursuant to conversion or exercise of the callable
secured convertible notes and warrants. Other than these shares, we have no
present plans, proposals or arrangements to issue any of the shares being
authorized.
This
information statement is dated March 19, 2008 and is first being sent or given
to our stockholders as of the record date on or about March 19,
2008.
VOTING
RIGHTS AND OUTSTANDING SHARES
The
amendment to our articles of incorporation was approved by written stockholder
consent on February 8, 2008, by our stockholders owning a majority of the
outstanding shares of our common stock. As of the date of the stockholder
consent, our only outstanding voting securities were our shares of common stock
and holders of our series A convertible preferred stock. As of the date of
the
stockholder consent, there were 126,133,894 shares outstanding of our common
stock and 3,000,000 common shares if converted from 30 shares of our series
A
convertible preferred stock outstanding. With respect to the action approved
by
the stockholder consent, each share of our common stock entitled its holder
to
one vote. Holders of series A convertible preferred stock are entitled to one
vote on an as if converted basis. The stockholder consent was signed by holders
of 64,602,731 (or 50.03%) of the 129,133,894 votes that were entitled to be
cast
on these matters.
As
a
result of requirements under applicable federal securities and state law, the
stockholder consent will not be effective, and therefore the amendment to our
articles of incorporation cannot occur, until at least 20 calendar days after
this information statement is sent or given to our stockholders of record as
of
the record date.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information regarding the number of shares of our
common stock beneficially owned as of February 20, 2008 by (i) each person
known
to us to be the beneficial owner of more than 5% of our common stock; (ii)
each
director; (iii) each executive officer; and (iv) all of our directors and
executive officers as a group. Unless otherwise indicated in the footnotes
following the table, the persons as to whom the information is given had sole
voting and investment power over the shares of common stock shown as
beneficially owned by them. Unless otherwise indicated, the address of each
person shown is c/o Protocall Technologies Incorporated, 47 Mall Drive, Commack,
New York 11725-5717.
Beneficial
ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares of our
common stock which may be acquired upon exercise of stock options or warrants
which are currently exercisable or which become exercisable within 60 days
after
the date indicated in the table are deemed beneficially owned by the optionees.
Subject to any applicable community property laws, the persons or entities
named
in the table above have sole voting and investment power with respect to all
shares indicated as beneficially owned by them.
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Name
of Beneficial Owner
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Number
of Shares
Beneficially
Owned
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Percentage
of Shares
Beneficially
Owned
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Bruce
Newman
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5,218,965
(1
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)
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3.90
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%
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Peter
Greenfield
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11,874,732
(3
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)
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8.91
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%
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Brenda
Newman
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4,501,393
(2
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)
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3.39
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%
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Syd
Dufton
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1,966,011
(6
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)
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1.50
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%
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CIMOS,
Inc
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12,110,982
(4
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)
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9.14
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%
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Joachim
R Anzer
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51,841,471
(5
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)
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35.12
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%
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Monarch
Capital Fund
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12,298,133
(7
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)
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9.32
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%
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Directors
and executive officers as a group (four persons)
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23,561,101
(8
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)
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16.64
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%
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(1)
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Includes
605,494 shares of common stock issuable upon exercise of stock options
granted under the Protocall 2000 Stock Incentive Plan which are currently
exercisable and 3,930,871 shares of common stock issuable upon exercise
of
stock options granted under the Protocall 2004 Stock Incentive Plan
which
are currently exercisable.
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(2)
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Includes
591,012 shares of common stock issuable upon exercise of stock options
granted under the Protocall 2000 Stock Incentive Plan which are currently
exercisable and 3,227,781 shares of common stock issuable upon exercise
of
stock options granted under the Protocall 2004 Stock Incentive Plan
which
are currently exercisable.
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(3)
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Includes
4,130,871 shares of common stock issuable upon the exercise of stock
options granted and currently exercisable under the Protocall 2004
Stock
Incentive Plan.
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(4)
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Includes
3,385,452 shares of common stock issuable upon the exercise of currently
exercisable warrants. Based on a Schedule 13G filed on February 27,
2006,
and other information known to us.
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(5)
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Includes
18,468,336 shares of common stock issuable upon the exercise of currently
exercisable warrants that expire between June 2008 and October 2010.
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(6)
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Includes
1,966,011 shares of common stock issuable upon the exercise of stock
options granted and currently exercisable under the Protocall 2004
Stock
Incentive Plan to current and former directors and executive
officers.
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(7)
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Included
2,884,615 shares of common stock issuable upon the exercise of currently
exercisable warrants that expire November 2013. Based on a Schedule
13G
filed on January 3, 2008 and other information known to
us.
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(8)
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Includes
1,196,506 shares of common stock issuable upon exercise of stock
options
granted and currently exercisable under the Protocall 2000 Stock
Incentive
Plan. Also includes 13,255,534 shares of common stock issuable upon
exercise of stock options granted under the Protocall 2004 Stock
Incentive
Plan.
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AMENDMENT
TO CERTIFICATE OF INCORPORATION
Our
board
of directors and stockholders owning a majority of the outstanding shares of
our
common stock have approved an amendment to our articles of incorporation to
increase the aggregate number of authorized shares of our common stock from
200
million to 550 million. Our articles of incorporation presently authorize the
issuance of 200 million shares of common stock. Our board of directors recently
authorized the issuance of 5,000 shares of preferred stock.
Text
of Amendment
The
amendment would result in the text of Article III of our Articles of
Incorporation reading as follows:
1.
Number
of Shares
.
The
aggregate number of capital stock shares which the Corporation shall have
authority to issue is five hundred fifty million (550,000,000) shares, of common
stock, $.001 par value. The Board may, in its discretion, issue preferred stock
and debt securities with such terms and conditions as it may decide, without
shareholder approval.
General
Effect of the Proposed Amendment and Reasons for Approval
Our
board
of directors unanimously recommended that we approve the amendment for the
following reasons:
Availability
.
Of our
200 million authorized shares of common stock 126,133,894 were outstanding
as of
the record date. As of the record date, after taking into account shares of
common stock reserved for issuance under compensation plans, outstanding
warrants and shares underlying convertible notes, we determined we have an
insufficient number of shares available for issuance. As a result of the change
in our stock price since the date of a previous financing transaction first
reported in our current report on Form 8-K filed with the SEC on August 10,
2006, and the built-in conversion price and exercise price adjustment features
of the callable secured convertible notes and the warrants issued by us in
that
financing transaction, we no longer have the necessary authorized, unissued
shares of common stock available for the maximum number of shares of common
stock potentially issuable upon conversion of the notes and exercise of the
warrants at this time, as well as for our employee stock option plan and other
uses for our stock. The following table sets forth
as
of
February 20, 2008
(a)
the
number of shares of our common stock issued and outstanding; (b) the number
of
shares of our common stock authorized and reserved for issuance, identifying
each purpose for which shares are being reserved; and (c) the number of shares
of our common stock authorized and unreserved (showing the current
deficit):
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(a)
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Issued
Common Stock
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126,293,894
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Outstanding
Common Stock
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126,133,894
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(b)
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Authorized
Common Stock
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200,000,000
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Reserved
Common Stock:
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for
exercise of stock options
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17,907,901
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for
exercise of warrants
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40,849,783
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for
conversion/exercise of notes and warrants
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331,055,961
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for
conversion of series A preferred stock
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3,000,000
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Total
Reserved
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392,813,645
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(c)
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Authorized
and Unreserved Common Stock (deficit)
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(319,107,539)
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As
a
consequence, we must increase the aggregate number of authorized shares of
our
common stock from 200 million to 550 million to allow us to reserve adequate
shares for conversion of the notes and warrants. We will reserve 319,107,539
of
the newly authorized shares of common stock for potential issuance pursuant
to
conversion or exercise of the callable secured convertible notes and/or
warrants. Other than with respect to these shares, we have no present plans,
proposals or arrangements to issue any of the shares being
authorized.
Adoption
of the amendment would enable our board of directors from time to time to issue
additional shares of our common stock authorized by the amendment for such
purposes and such consideration as our board of directors may approve without
further approval of our stockholders, except as may be required by law or the
rules of any national securities exchange on which our shares of common stock
are at the time listed. As is true for shares presently authorized, common
stock
authorized by the amendment may, when issued, have a dilutive effect on the
equity and voting power of existing holders of common stock.
The
effective increase in the number of authorized, unissued shares of our common
stock may be construed as having an anti-takeover effect by permitting the
issuance of shares to purchasers who might oppose a hostile takeover bid or
oppose any efforts to amend or repeal certain provisions of our articles of
incorporation or by-laws. Such a use of these additional authorized shares
could
render more difficult, or discourage, an attempt to acquire control of our
company through a transaction opposed by our board of directors. Our management
could use the additional shares to resist or frustrate a third-party transaction
providing an above-market premium that is favored by a majority of the
stockholders. In addition, certain provisions of the Nevada General Corporation
Law, as embodied in our articles of incorporation, could have the effect of
making it more difficult or more expensive for a third party to acquire, or
of
discouraging a third party from attempting to acquire, control of our company.
We do not currently have any plans or proposals to adopt other provisions or
enter into other arrangements that may have material anti-takeover consequences.
There
are
no preemptive rights with respect to our common stock. The additional authorized
shares of common stock would have the identical powers, preferences and rights
as the shares now authorized. Under Nevada law, stockholders will not have
any
dissenters’ or appraisal rights in connection with the amendment. The amendment
will become effective upon the filing, promptly after the expiration of the
20-day period commencing on the mailing of this Information, of the Certificate
of Amendment required by the Nevada General Corporation Law.
REASONS
WE USED STOCKHOLDER CONSENT AS OPPOSED TO SOLICITATION OF STOCKHOLDER APPROVAL
VIA PROXY STATEMENT AND SPECIAL MEETING
The
increase in our authorized shares of common stock requires an amendment to
our
articles of incorporation, which cannot proceed until stockholder approval
is
obtained and effective. Stockholder approval could have been obtained by us
in
one of two ways: (i) by the dissemination of a proxy statement and subsequent
majority vote in favor of the actions at a stockholders meeting called for
such
purpose, or (ii) by a written consent of the holders of a majority of our
voting securities. However, the latter method, while it represents the requisite
stockholder approval, is not deemed effective until 20 days after this
information statement has been sent to all of our stockholders giving them
notice of and informing them of the actions approved by such
consent.
Given
that we have already secured the affirmative consent of the holders of a
majority of our voting securities to the amendment to our articles of
incorporation, we determined that it would be a more efficient use of limited
corporate resources to forego the dissemination of a proxy statement and
subsequent majority vote in favor of the actions at a stockholders’ meeting
called for such a purpose, and rather proceed through the written consent of
the
holders of a majority of our voting securities. Spending the additional company
time, money and other resources required by the proxy and meeting approach
would
have been potentially wasteful and, consequently, detrimental to completing
the
amendment in a manner that is timely and efficient for us and our
stockholders.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None
of
our directors or officers or their associates have any interest, direct or
indirect, by security holdings or otherwise, in any of the matters to be
approved by the stockholders as described in this information
statement.
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and special reports, proxy statements and other information
with the U.S. Securities and Exchange Commission. You may read and copy any
reports, statements or other information we file at the Securities and Exchange
Commission’s public reference room in Washington, D.C. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information
on
the public reference rooms. Our filings with the Securities and Exchange
Commission are also available to the public from commercial document retrieval
services and at the website maintained by the Securities and Exchange Commission
at “http://www.sec.gov.”
You
should rely only on the information contained or incorporated by reference
in
this information statement. We have not authorized anyone to provide you with
information that is different from what is contained in this information
statement. This information statement is dated March 19, 2008. You should not
assume that the information contained in this information statement is accurate
as of any date other than that date, and the mailing of this information
statement to stockholders shall not create any implication to the
contrary.
Dated:
March 19, 2008
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|
By
Order of the Board of Directors,
Bruce
Newman
Chief
Executive Officer
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