SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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12
CONECTISYS CORPORATION
_______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
_______________________________________________________________________________
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_______________________________________________________________________
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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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1. Amount Previously Paid:________________________________________________
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4. Date Filed:____________________________________________________________
CONECTISYS CORPORATION
24730 Avenue Tibbitts, Suite 130
Valencia, California 91355
July 7, 2005
To Our Shareholders:
You are cordially invited to attend the 2005 annual meeting of shareholders
of ConectiSys Corporation that will be held at 10:00 a.m., local time, on
August 10, 2005 at the Valencia Hyatt, the Newhall Room, 24500 Town Center
Drive, Valencia, California 91355. All holders of our outstanding common stock
as of the close of business on June 27, 2005 are entitled to vote at the 2005
annual meeting.
Enclosed is a copy of the notice of annual meeting of shareholders, a proxy
statement and a proxy card. Also enclosed is a copy of our 2004 annual report
to shareholders. A current report on the business operations of ConectiSys will
be presented at the meeting, and shareholders will have an opportunity to ask
questions.
We hope you will be able to attend the 2005 annual meeting. Whether or not
you expect to attend, it is important that you complete, sign, date and return
the proxy card in the enclosed envelope in order to make certain that your
shares will be represented at the 2005 annual meeting.
Sincerely,
/s/ Robert A. Spigno
Robert A. Spigno,
Chairman of the Board and Chief Executive Officer
CONECTISYS CORPORATION
24730 Avenue Tibbitts, Suite 130
Valencia, California 91355
NOTICE OF 2005 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 10, 2005
__________________________
NOTICE IS HEREBY GIVEN that the 2005 annual meeting of shareholders
of ConectiSys Corporation, a Colorado corporation, will be held at 10:00
a.m., local time, on August 10, 2005 at the Valencia Hyatt, the Newhall Room,
24500 Town Center Drive, Valencia, California 91355, for the following
purposes:
1. To elect three directors to the board of directors;
2. To consider and vote upon a proposal to approve an amendment to our
Articles of Incorporation to increase our authorized shares of common
stock from 7.5 billion shares to 15 billion shares;
3. To ratify the selection of Hurley & Company as our independent
certified public accountants to audit the financial statements
of ConectiSys for the year ending September 30, 2005; and
4. To transact such other business as may properly come before the 2005
annual meeting or any adjournment or adjournments thereof.
The board of directors has fixed the close of business on June 27, 2005 as
the record date for the determination of shareholders entitled to notice of and
to vote at the 2005 annual meeting and all adjourned meetings thereof.
By Order of the Board of Directors
/s/ Robert A. Spigno
Robert A. Spigno,
Chairman of the Board and Chief Executive Officer
Dated: July 7, 2005
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY
REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.
CONECTISYS CORPORATION
24730 Avenue Tibbitts, Suite 130
Valencia, California 91355
PROXY STATEMENT
_____________________
2005 ANNUAL MEETING OF SHAREHOLDERS
AUGUST 10, 2005
_____________________
THESE PROXY MATERIALS ARE FIRST BEING MAILED TO
SHAREHOLDERS ON OR ABOUT JULY 7, 2005
_____________________
VOTING AND PROXY
This proxy statement is being furnished in connection with the solicitation
of proxies by our board of directors for use at the 2005 annual meeting of
shareholders to be held at 10:00 a.m., local time, on August 10, 2005 at the
Valencia Hyatt, the Newhall Room, 24500 Town Center Drive, Valencia, California
91355 and at any adjournments of the 2005 annual meeting. When a proxy is
properly executed and returned, the shares it represents will be voted
according to directions noted on the proxy. If no specification is indicated,
the shares will be voted "for" each of the proposals listed on the proxy. Any
shareholder giving a proxy has the power to revoke it at any time before it is
voted by providing written notice to our corporate Secretary, by issuance of a
subsequent proxy, or by voting in person at the 2005 annual meeting.
At the close of business on June 27, 2005, the record date for determining
shareholders entitled to notice of and to vote at the 2005 annual meeting, we
had issued and outstanding 5,101,666,998 shares of common stock. Only
shareholders of record at the close of business on the record date are entitled
to notice of and to vote at the 2005 annual meeting or at any adjournments of
the meeting.
Each share of common stock entitles the holder of record to one vote on any
matter coming before the 2005 annual meeting. In voting for directors, however,
shares may be voted cumulatively for persons whose names have been placed in
nomination prior to the voting for the election of directors, but only if a
shareholder present at the 2005 annual meeting gives notice at the 2005 annual
meeting, prior to the voting for the election of directors, of his or her
intention to vote cumulatively. Notice of intention to vote cumulatively may
not be given by simply marking and returning a proxy.
If any shareholder gives proper notice of his or her intention to vote
cumulatively, then each shareholder eligible to vote will be entitled to
cumulate his or her votes and to give any one or more of the nominees whose
names have been placed in nomination prior to the voting a number of votes
equal to the total number of directors to be elected multiplied by the number
of shares that the shareholder is entitled to vote. In addition, the person or
persons holding the proxies solicited by our board of directors will exercise
their cumulative voting rights, at their discretion, to vote the shares they
hold in such a way as to ensure the election of as many of the nominees of the
board of directors as they deem possible. This discretion and authority of the
proxy holders may be withheld by checking the box on the proxy card marked
"withhold authority to vote for all nominees." However, such an instruction
will also deny the proxy holders the authority to vote for any or all of the
nominees of the board of directors, even if cumulative voting is not called for
at the 2005 annual meeting.
<page>1
A shareholder may choose to withhold from the proxy holders the authority
to vote for any of the individual candidates nominated by our board of
directors by marking the appropriate box on the proxy card and striking out the
names of the disfavored candidates as they appear on the proxy card. In that
event, the proxy holders will not cast any of the shareholder's votes for
candidates whose names have been crossed out, whether or not cumulative voting
is called for at the 2005 annual meeting. However, the proxy holders will
retain the authority to vote for the candidates nominated by the board of
directors whose names have not been struck out and for any candidates who may
be properly nominated at the 2005 annual meeting. If a shareholder wishes to
specify the manner in which his or her votes are allocated in the event of
cumulative voting, he or she must appear and vote in person at the 2005 annual
meeting. Ballots will be available at the 2005 annual meeting for shareholders
who desire to vote in person.
Under Colorado law and our Bylaws, a majority of the shares entitled to
vote, represented in person or by proxy, will constitute a quorum at a meeting
of shareholders. Generally, if a quorum is present, then the affirmative vote
of a majority of the shares represented and voting on any matter other than the
election of directors will constitute the act of the shareholders, so long as
the number of shares voting in favor of any proposal equals at least a majority
of the quorum. Although abstentions and "broker non-votes" are not counted
either "for" or "against" any proposals, if the number of abstentions or
"broker non-votes" results in the votes "for" a proposal not equaling at least
a majority of the quorum required for the meeting, the proposal will not be
approved. This will be the case even though the number of votes "for" the
proposal exceeds the number of votes "against" the proposal.
In any election of directors, the candidates receiving the highest number
of affirmative votes of the shares entitled to be voted for them, up to the
number of directors to be elected by such shares, are elected. Votes against a
candidate and votes withheld have no legal effect.
We will pay the expenses of soliciting proxies for the 2005 annual meeting,
including the cost of preparing, assembling and mailing the proxy solicitation
materials. Proxies may be solicited personally, by mail or by telephone, or by
our directors, officers and regular employees who will not be additionally
compensated. We have no present plans to hire special employees or paid
solicitors to assist in obtaining proxies, but we reserve the option to do so
if it appears that a quorum otherwise might not be obtained. The matters to be
considered and acted upon at the 2005 annual meeting are referred to in the
preceding notice and are discussed below more fully.
ELECTION OF DIRECTORS
(Proposal 1)
Our Bylaws provide for a range of three to seven directors and our board of
directors has fixed the number of directors at three. Directors are elected
annually and hold office until the next annual meeting of shareholders, until
their respective successors are elected and qualified or until their earlier
death, resignation or removal. It is intended that the proxies solicited by our
board of directors will be voted "for" election of the following three nominees
unless a contrary instruction is made on the proxy: Robert A. Spigno, Lawrence
Muirhead and Melissa McGough. If, for any reason, one or more of the nominees
is unavailable as a candidate for director, an event that is not anticipated,
the person named in the proxy will vote for another candidate or candidates
nominated by our board of directors. However, under no circumstances may a
proxy be voted in favor of a greater number of persons than the number of
nominees named above. As described above, the candidates receiving the highest
number of affirmative votes of the shares entitled to be voted for them, up to
the number of directors to be elected by such shares, are elected. All of the
nominees for director are, at present, directors of ConectiSys and have been
nominated by the full board of directors of ConectiSys.
<page>2
The current directors and executive officers of ConectiSys, and the
director nominees, and their ages, positions, business experience and education
are as follows:
Name Age Position
- ----- --- ---------
Robert A. Spigno (1)(2)..............51 Chairman of the Board, Chief
Executive Officer and Director
Lawrence Muirhead (1)(2).............45 Chief Technology Officer and
Director
Patricia A. Spigno...................47 Chief Financial Officer,
Treasurer and Secretary
Melissa McGough (1)..................28 Corporate Administrator and
Director
_______________
(1) Member of Stock Option Committee.
(2) Member of the Nominating Committee.
All directors hold office until the next annual meeting of shareholders and
until their respective successors are elected or until their earlier death,
resignation or removal. Each officer of ConectiSys serves at the discretion of
the board of directors. Robert A. Spigno and Patricia A. Spigno were formerly
husband and wife. There are no other family relationships between or among any
other directors, director nominees or executive officers of ConectiSys.
Directors and Director Nominees
Robert A. Spigno has served as our Chief Executive Officer, Chairman of the
Board and as a member of our board of directors since August 1995. Prior to
that time, Mr. Spigno was President, for more than a decade, of S.W. Carver
Corp., a company founded by he and his former wife, Patricia A. Spigno, that
was a commercial builder of residential homes. Mr. Spigno has over 25 years of
experience in executive management and majority ownership of several privately
held companies.
Lawrence Muirhead has served as our Chief Technical Officer and as a member
of our board of directors since October 1997. Prior to that time, Mr. Muirhead
worked for TRW. Mr. Muirhead has over 18 years of engineering and research and
development experience in the aerospace industry, including over 13 years of
experience with TRW, where helped lead new product development and deployment.
Mr. Muirhead holds a B.S. degree in physics and a B.A. degree in mathematics
from the University of California, Santa Barbara, and holds an M.S. degree in
physics from the California Institute of Technology.
Melissa McGough has served as a member of our board of directors since
November 1999. Ms. McGough has also been an employee since December 1998 and
whose current responsibilities include public relations and management of our
daily office activities. Prior to that time, Ms McGough was a student.
Executive Officer
Patricia A. Spigno has served as our Chief Financial Officer and Secretary
since August 1995 and as a member of our board of directors from August 1995
until October 1997. Prior to that time, Ms. Spigno was Chief Financial Officer
and the head of administration of S.W. Carver Corp., a company founded by her
and her former husband, Robert A. Spigno. Ms. Spigno has over 22 years of
experience in accounting and asset management.
<page>3
Corporate Governance
Our board of directors has adopted a Code of Business Conduct and Ethics
that applies to all of our directors, officers and employees and an additional
Code of Business Ethics that applies to our Chief Executive Officer and our
Senior Financial Officers.
The Code of Ethics, as applied to our principal financial officers,
constitutes our "code of ethics" within the meaning of Section 406 of the
Sarbanes-Oxley Act of 2002 and would also constitute our "code of conduct"
within the meaning of the listing standards of Nasdaq. You may view the Codes
of Ethics on our website at http://www.conectisys.com under the headings
"Investor Relations" and "Corporate Governance" or request copies, which will
be provided free of charge upon written request to Investor Relations,
ConectiSys Corporation, 24730 Avenue Tibbitts, Suite 130, Valencia, California
91355.
We intend to satisfy the disclosure requirement under Item 10 of Form 8-K
relating to amendments to or waivers from provision of these codes that relate
to one or more of the items set forth in Item 406(b) of Regulation S-K, by
describing on our Internet website, within five business days following the
date of a waiver or a substantive amendment, the date of the waiver or
amendment, the nature of the amendment or waiver, and the name of the person to
whom the waiver was granted.
Information on our Internet website is not, and shall not be deemed to be,
a part of this proxy statement or incorporated into any other filings we make
with the Securities and Exchange Commission.
Shareholder Communications with the Board
Our board of directors has implemented a process by which shareholders may
send written communications directly to the attention of our board of directors
or any individual member of our board of directors. Robert A. Spigno will be
primarily responsible for monitoring communications from shareholders and
providing copies of such communications to the other directors as he considers
appropriate until an independent member of our board of directors is elected or
appointed and can undertake such duties. Communications will be forwarded to
all directors if they relate to substantive matters and include suggestions or
comments that Mr. Spigno, or his replacement, the independent member of our
board of directors, considers to be important for the directors to consider.
Shareholders who wish to communicate with our board of directors can write to
The Board of Directors, ConectiSys Corporation, 24730 Avenue Tibbitts, Suite
130, Valencia, California 91355.
Board Committees and Meetings
Our board of directors has a Stock Option Committee and a Nominating
Committee. Our board of directors does not have an Audit Committee. In the
absence of an Audit Committee, the entire board of directors intends to satisfy
the duties of that committee. Our Nominating Committee has a written charter.
During fiscal 2004, our board of directors held twelve meetings and took
action by written consent on ten occasions. During fiscal 2004, no incumbent
director attended fewer than 75% of the aggregate of the total number of
meetings of the board of directors held during the period for which he or she
has been a director and the total number of meetings held by all committees of
the board on which he or she served during the periods that he or she served.
We typically schedule a meeting of our board of directors in conjunction
with our annual meeting of shareholders and expect that all of our directors
will attend the 2005 annual meeting, absent a valid reason. Except for Lawrence
Muirhead, all individuals then serving as directors attended our 2004 annual
meeting of shareholders.
<page>4
Our board of directors has a Stock Option Committee and a Nominating
Committee. Our board of directors does not have an Audit Committee. In the
absence of an Audit Committee, the entire board of directors intends to satisfy
the duties of that committee.
Stock Option Committee. Our Stock Option Committee makes recommendations to
our board of directors concerning incentive compensation for employees and
consultants of ConectiSys and selects the persons entitled to receive options
under our stock option plans and establishes the number of shares, exercise
price, vesting period and other terms of the options granted under those plans.
The Stock Option Committee currently consists of Robert A. Spigno, Lawrence
Muirhead and Melissa McGough. During 2004, the Stock Option Committee held two
meetings and did not take action by written consent on any occasion. No
executive officer of ConectiSys has served as a director or member of the
compensation committee of any other entity whose executive officers served as a
director of ConectiSys.
Audit Committee. We do not currently have an Audit Committee. In addition,
having no Audit Committee, we do not have an Audit Committee financial expert.
As a small, development-stage company, it has been exceedingly difficult for us
to attract an independent member of our board of directors, who would qualify
as an Audit Committee financial expert, to serve as the sole member of the
Audit Committee of our board of directors. We plan to form an Audit Committee
consisting solely of one or more independent members of our board of directors,
at least one of whom will qualify as an Audit Committee financial expert under
the rules and regulations of the Securities and Exchange Commission, once we
are able to identify and attract a satisfactory candidate.
Nominating Committee. Our Nominating Committee currently consists of two
directors, Mr. Robert A. Spigno, who serves as Chairman, and Mr. Lawrence
Muirhead, neither of whom is "independent" under the rules and regulations of
the Securities and Exchange Commission or under the current Nasdaq listing
standards. We intend to reconstitute our Nominating Committee with one or more
independent members of our board of directors once we are able to identify and
attract a satisfactory candidate.
Our Nominating Committee assists our board of directors in the selection of
nominees for election to the board. The committee determines the required
selection criteria and qualifications of director nominees based upon the needs
of ConectiSys at the time nominees are considered and recommends candidates to
be nominated for election to the board. The Nominating Committee was
constituted, and our board of directors adopted a written charter for the
Nominating Committee, in June 2004. A copy of the current charter is available
on our website at http://www.conectisys.com under the headings "Investor
Relations" and "Corporate Governance." Because our Nominating Committee was
formed in June 2004, our Nominating Committee did not meet during fiscal 2004,
but did consider and nominate candidates for directorship in connection with
our 2005 annual meeting. No candidates for director nominations were submitted
to our board of directors by any shareholder in connection with the election of
directors at the 2005 annual meeting.
Criteria for Director Nominees. Our board of directors believes that it
should be comprised of directors with varied, complementary backgrounds, and
that directors should, at a minimum, exhibit proven leadership capabilities and
experience at a high level of responsibility within their chosen fields, and
have the ability to quickly grasp complex principles of business, finance and
automatic meter reading technologies. Directors should possess the highest
personal and professional ethics, integrity and values and should be committed
to representing the long-term interests of our shareholders.
When considering a candidate for director, the Nominating Committee intends
to take into account a number of factors, including the following:
o independence from management;
<page>5
o depth of understanding of technology, manufacturing, sales and marketing,
finance and/or other elements directly relevant to the technology and
business of ConectiSys;
o education and professional background;
o judgment, skill, integrity and reputation;
o existing commitments to other businesses as a director, executive or
owner;
o personal conflicts of interest, if any; and
o the size and composition of our existing board of directors.
Prior to nominating a sitting director for re-election at an annual meeting
of shareholders, the Nominating Committee intends to consider the director's
past attendance at, and participation in, meetings of our board of directors
and its committees and the director's formal and informal contributions to his
or her respective activities.
When seeking candidates for director, the Nominating Committee may solicit
suggestions from incumbent directors, management, shareholders and others.
Additionally, the Nominating Committee may use the services of third party
search firms to assist in the identification of appropriate candidates. After
conducting an initial evaluation of a prospective candidate, the Nominating
Committee may interview that candidate if it believes the candidate might be
suitable to be a director. The Nominating Committee may also ask the candidate
to meet with management. If the Nominating Committee believes a candidate would
be a valuable addition to our board of directors, it may recommend to the full
board of directors that candidate's appointment or election.
Shareholder Recommendations for Nominations to the Board of Directors. The
Nominating Committee will consider candidates for director recommended by any
shareholder that is the beneficial owner of shares representing more than one
percent of the then-outstanding shares of common stock of ConectiSys and that
has beneficially owned those shares for at least one year. The Nominating
Committee will evaluate such recommendations applying its regular nominee
criteria and considering the additional information set forth below. Eligible
shareholders wishing to recommend a candidate for nomination as a director are
to send the recommendation in writing to the Chairman of the Nominating
Committee, ConectiSys Corporation, 24730 Avenue Tibbitts, Suite 130, Valencia,
California 91355. A shareholder recommendation must contain the following
information:
o documentation supporting that the writer is a shareholder of
ConectiSys and has been a beneficial owner of shares representing
more than one percent of the then-outstanding shares of common stock
of ConectiSys for at least one year and a statement that the writer
is recommending a candidate for nomination as a director;
o a resume of the candidate's business experience and educational
background that also includes the candidate's name, business and
residence addresses, and principal occupation or employment and an
explanation of how the candidate's background and qualifications are
directly relevant to the business of ConectiSys;
o the number of shares of common stock of ConectiSys beneficially owned
by the candidate;
o a statement detailing any relationship, arrangement or understanding,
formal or informal, between or among the candidate, any affiliate of
the candidate, and any customer, supplier or competitor of
ConectiSys, or any other relationship, arrangement or understanding
that might affect the independence of the candidate as a member of
our board of directors;
o detailed information describing any relationship, arrangement or
understanding, formal or informal, between or among the proposing
shareholder, the candidate, and any affiliate of the proposing
shareholder or the candidate;
<page>6
o any other information that would be required under SEC rules in a
proxy statement soliciting proxies for the election of such candidate
as a director; and
o a signed consent of the candidate to serve as a director, if
nominated and elected.
In connection with its evaluation, the Nominating Committee may request
additional information from the candidate or the recommending shareholder and
may request an interview with the candidate. The Nominating Committee has
discretion to decide which individuals to recommend for nomination as
directors.
Compensation Committee Interlocks and Insider Participation
No member of our board of directors has a relationship that would
constitute an interlocking relationship with executive officers and
directors of another entity.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and directors, and persons who beneficially own more than 10% of a
registered class of our common stock to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission.
These officers, directors and stockholders are required by the Securities and
Exchange Commission regulations to furnish us with copies of all such reports
that they file.
Based solely upon a review of copies of these reports furnished to us
during 2004 and thereafter, or written representations received by us from
reporting persons that no other reports were required, we believe that all
Section 16(a) filing requirements applicable to our reporting persons during
2004 were complied with, except as described below.
The following individuals did not timely file the following numbers of
Forms 4 to report the following numbers of transactions: Mr. Robert Spigno - 2
reports, 2 transactions; and Ms. Patricia Spigno - 1 report, 1 transaction.
<page>7
Compensation of Executive Officers
The Summary Compensation Table below provides information concerning the
annual and long-term compensation for services in all capacities as an employee
of ConectiSys of our Chief Executive Officer, our Chief Technology Officer and
our Chief Financial Officer, or the named executives, during the years ended
September 30, 2004, 2003 and 2002. There were no other executive officers whose
annual salary and bonus compensation exceeded $100,000 during the year ended
September 30, 2004.
<Table>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
------------
Awards
------------
Annual Compensation Securities
Name and ------------------- Underlying All Other
Principal Position Year Salary($) Bonus($)(1) Options(#) Compensation ($)
------------------- ------- --------------------- ------------ ----------------
Robert A. Spigno, 2004 $160,000 $80,000 -- --
Chief Executive Officer 2003 $160,000 $80,000 -- --
2002 $160,000 $80,000 -- --
Lawrence Muirhead, 2004 $150,000 -- -- --
Chief Technology Officer 2003 $150,000 -- -- --
2002 $150,000 -- -- --
Patricia A. Spigno, 2004 $ 80,000 $40,000 -- --
Chief Financial Officer 2003 $ 80,000 $40,000 -- --
and Secretary 2002 $ 80,000 $40,000 -- --
_____________
</table>
(1) Amounts represent bonus earned, but deferred and recorded on the books
and records of ConectiSys as accrued compensation. Amounts are payable
in common stock of ConectiSys based on a conversion price equivalent to
50% of the average of the closing bid and asked prices of a share of
ConectiSys common stock for the 30 days prior to the end of the
year in which such bonus was earned. Although our agreements with
Robert Spigno and with Patricia Spigno provide that the conversion
price is to be equal to 50% of the average of the closing bid and
asked prices of a share of our common stock for the 30 days prior to
the end of the calendar year, Mr. Spigno and Ms. Spigno both
voluntarily relinquished their right to receive shares for 2004, 2003
and 2002 based on this conversion price in favor of a conversion price
equal to 100% of the average of the closing bid and asked prices of a
share of our common stock for the 30 days prior to December 31, 2004,
2003 and 2002, respectively.
Stock Option Grants in 2004
In fiscal 2004, no options or stock appreciation rights were granted to the
named executives.
<page>8
Option Exercises and Fiscal Year-End Values
The following table sets forth the number of shares acquired and value
realized upon exercise of options during the fiscal year ended September 30,
2004 and the number of exercisable and unexercisable in-the-money stock options
and their values at September 30, 2004 for the named executives. An option is
"in-the-money" if the fair market value for the underlying securities exceeds
the exercise price of the option.
<table>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities Underlying Value ($)of Unexercised
Shares Unexercised Options In-the-Money Options at
Acquired on Value September 30, 2004 September 30, 2004 (1)
Name Exercise Realized ($) ------------------ ----------------------
- --------------------- ------------ ------------ Exercisable Unexercisable Exercisable Unexercisable
-------------- ---------------- -------------- ----------------
Robert A. Spigno --- --- 6,453,634 --- --- ---
Lawrence Muirhead --- --- --- 2,000,000 --- ---
Patricia Spigno --- --- 500,000 --- --- ---
_______________
(1) The closing sale price of our common stock on the OTC Bulletin Board(R)as of September 30, 2004 was $.0007.
</table>
Long-Term Incentive Plan Awards
In fiscal 2004, no awards were given to named executives under long-term
incentive plans.
Compensation of Directors
Our directors do not receive any compensation in their capacity as members
of the board of directors, but may be reimbursed for reasonable expenses
incurred in connection with attendance of meetings of the board of directors.
The advisors to our board of directors each receive 250,000 shares of
common stock as annual compensation for their advisory services.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
In October 1995, our board of directors set the compensation for Robert A.
Spigno, our Chairman of the Board and Chief Executive Officer. Mr. Spigno has
executed an employment agreement with ConectiSys effective October 2, 1995, as
amended by employment agreement amendments effective July 24, 1996, August 11,
1997, September 1, 1999 and March 27, 2000 that provide for annual salary of
$160,000 and a bonus of 50% of Mr. Spigno's annual salary, with the bonus
payable in common stock of ConectiSys.
In August 1998, our board of directors set the compensation for Lawrence
Muirhead, our Chief Technology Officer. Mr. Muirhead has executed an employment
agreement with ConectiSys effective August 1, 1998, that provides for annual
salary compensation of $150,000. On November 22, 1999, Mr. Muirhead was granted
an option initially expiring December 31, 2002 to purchase up to 2,000,000
shares of common stock at an exercise price of $.50 per share, which was the
closing price of a share of our common stock on that date. This option vests
upon the achievement of certain specified performance criteria. On January 6,
2003, we extended the expiration date of this option to December 31, 2004.
<page>9
In October 1995, our board of directors set the compensation for Patricia
A. Spigno, our Chief Financial Officer and Secretary. Ms. Spigno has executed
an employment agreement with ConectiSys effective October 2, 1996, as amended
by employment agreement amendments effective July 24, 1996, September 1, 1999
and March 27, 2000 that provide for annual salary of $80,000 and a bonus of 50%
of Ms. Spigno's annual salary, with the bonus payable in common stock of
ConectiSys.
Report on Repricing of Options and SARs
No adjustments to or amendments of the exercise price of stock options or
stock appreciation rights previously awarded to the named executives occurred
in fiscal 2004, except as provided below.
On January 6, 2004, we repriced Robert Spigno's fully-vested option to
purchase up to 500,000 shares of Class B Preferred Stock from an exercise price
of $0.50 per share to an exercise price of $.05 per share. The exercise price
of $.05 per share equates to $.005 per share of common stock if the Class B
Preferred Stock were converted, which was in excess of the price of our common
stock on that date. The closing price of a share of our common stock on the OTC
Bulleting Board on January 6, 2004 was $.0033. This option expires on November
1, 2009. This option was repriced to maintain the viability of the incentives
provided to Mr. Spigno through the grant of the stock option. To achieve this
goal, we repriced the stock option to an exercise price per share more
reflective of the market price of a share of our common stock at the time of
repricing.
Indemnification of Directors and Officers
The Colorado Business Corporation Act, or CBCA, requires that each director
discharge his duties to ConectiSys in good faith, with the care an ordinarily
prudent person in a like position would exercise under similar circumstances,
and in a manner that he reasonably believes to be in the best interests of
ConectiSys. Generally, a director will not be liable to ConectiSys or its
shareholders, for any action he takes or omits to take as a director if, in
connection with such action or omission, he performed the duties of his
position in compliance with the standards described above.
Our Articles of Incorporation provide that ConectiSys may indemnify any
director or officer of ConectiSys to the full extent permitted by Colorado law.
Under the CBCA, except for the situation described below, a corporation may
indemnify a person made a party to a proceeding because the person is or was a
director against liability incurred in the proceeding if:
o the person conducted himself in good faith;
o the person reasonably believed, in the case of conduct in an official
capacity with ConectiSys, that his conduct was in the best interests
of ConectiSys and, in all other cases, that his conduct was at least
not opposed to the best interests of ConectiSys; and
o in the case of any criminal proceeding, the person had no reasonable
cause to believe his conduct was unlawful.
Under the CBCA, ConectiSys may not indemnify a director as described above:
o in connection with a proceeding by or in the right of ConectiSys, in
which the director was adjudged liable to ConectiSys; or
o in connection with any other proceeding charging that the director
derived an improper personal benefit, whether or not involving action
in an official capacity, in which proceeding the director was
<page>10
adjudged liable on the basis that he derived an improper personal
benefit.
Under the CBCA, ConectiSys is required to indemnify any director who is
wholly successful on the merits or otherwise, in the defense of any proceeding
to which the director was a party because the person is or was a director,
against reasonable expenses incurred by him in connection with the proceeding.
To the extent indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
ConectiSys under the above provisions, or otherwise, we have been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
Certain Relationships and Related Transactions
In October 1995, our board of directors set the compensation for Robert A.
Spigno, our Chairman of the Board and Chief Executive Officer. Mr. Spigno has
executed an employment agreement with ConectiSys effective October 2, 1995, as
amended by employment agreement amendments effective July 24, 1996, August 11,
1997, September 1, 1999 and March 27, 2000 that provide for annual salary of
$160,000 and a bonus of 50% of Mr. Spigno's annual salary, with the bonus
payable in common stock of ConectiSys.
In August 1998, our board of directors set the compensation for Lawrence
T In October 1995, our board of directors set the compensation for Patricia
A. Spigno, our Chief Financial Officer and Secretary. Ms. Spigno has executed
an employment agreement with ConectiSys effective October 2, 1996, as amended
by employment agreement amendments effective July 24, 1996, September 1, 1999
and March 27, 2000 that provide for annual salary of $80,000 and a bonus of 50%
of Ms. Spigno's annual salary, with the bonus payable in common stock of
ConectiSys.
On September 1, 2002, we executed a promissory note due September 1, 2003
in favor of Robert Spigno in the principal amount of $87,100 representing
amounts borrowed from Mr. Spigno prior to that date. On September 1, 2003 we
executed a replacement promissory note in favor of Mr. Spigno in the amount of
$36,000. As of September 30, 2004, approximately $12,000 of principal and
accrued and unpaid interest under this note remained outstanding. As of June 27,
2005, approximately $13,000 of principal and accrued and unpaid interest under
this note remained outstanding. The loan balance is currently due on demand and
accrues interest at an annual rate of 18%.
On October 1, 2002, we owed Patricia A. Spigno approximately $8,140
resulting from cash advances, other borrowings and related accrued interest. On
September 1, 2003 we executed a replacement promissory note in favor of Ms.
Spigno in the amount of $50,000. We borrowed additional funds from Ms. Spigno
resulting in approximately $49,000 owed to Ms. Spigno as of September 30, 2004.
As of June 27, 2005, approximately $3,500 was owed to Ms. Spigno. The loan
balance is currently due on demand and accrues interest at an annual rate of
18%.
<page>11
In October 2002, Laurus Master Fund transferred into its name 279,539
shares of our common stock pledged by Robert Spigno as security for a loan made
by Laurus to us in April 2001 in the original principal amount of $300,000.
In October 2002, Laurus Master Fund transferred into its name 1,458,059
shares of our common stock pledged by Patricia Spigno as security for a loan
made by Laurus to us in April 2001 in the original principal amount of
$300,000.
In November 2002, Laurus Master Fund transferred into its name 1,556,346
shares of our common stock pledged by Robert Spigno as security for a loan made
by Laurus to us in April 2001 in the original principal amount of $300,000.
In November 2002, we issued 636,886 shares of common stock to Lawrence
Muirhead to reimburse him for 636,886 shares pledged by him as security for a
loan made by Laurus Master Fund to us in April 2001 in the original principal
amount of $300,000, which pledged shares were transferred by Laurus into its
name in connection with a default on that loan.
In November 2002, we issued 2,630,742 shares of common stock to Robert
Spigno to reimburse him for 2,630,742 shares pledged by him as security for a
loan made by Laurus Master Fund to us in April 2001 in the original principal
amount of $300,000, which pledged shares were transferred by Laurus into its
name in connection with a default on that loan.
In November 2002, we issued 1,458,059 shares of common stock to Patricia
Spigno to reimburse her for 1,458,059 shares pledged by her as security for a
loan made by Laurus Master Fund to us in April 2001 in the original principal
amount of $300,000, which pledged shares were transferred by Laurus into its
name in connection with a default on that loan.
On December 12, 2002, we issued 250,000 shares of common stock valued at
$1,250 to Melissa McGough as bonus compensation.
Effective December 31, 2002, Robert Spigno earned bonus compensation under
his employment arrangement with ConectiSys in the amount of $80,000 payable in
common stock of ConectiSys based on a conversion price equal to 100% of the
average of the closing bid and asked prices of a share of our common stock for
the 30 days prior to December 31, 2002. Although our agreement with Mr. Spigno
provides that the conversion price is to be equal to 50% of the average of the
closing bid and asked prices of a share of our common stock for the 30 days
prior to December 31, 2002, Mr. Spigno voluntarily relinquished his right to
receive shares for 2002 based on this conversion price in favor of a conversion
price equal to 100% of the average of the closing bid and asked prices of a
share of our common stock for the 30 days prior to December 31, 2002. The
number of shares of common stock of ConectiSys issuable in connection with this
bonus is 3,720,930.
Effective December 31, 2002, Patricia Spigno earned bonus compensation
under her employment arrangement with ConectiSys in the amount of $40,000
payable in common stock of ConectiSys based on a conversion price equal to 100%
of the average of the closing bid and asked prices of a share of our common
stock for the 30 days prior to December 31, 2002. Although our agreement with
Ms. Spigno provides that the conversion price is to be equal to 50% of the
average of the closing bid and asked prices of a share of our common stock for
the 30 days prior to December 31, 2002, Ms. Spigno voluntarily relinquished her
right to receive shares for 2002 based on this conversion price in favor of a
conversion price equal to 100% of the average of the closing bid and asked
prices of a share of our common stock for the 30 days prior to December 31,
2002. The number of shares of common stock of ConectiSys issuable in connection
with this bonus is 1,860,465.
<page>12
In January 2003, we issued 2,361,814 shares of common stock to Robert
Spigno to reimburse him for 2,361,814 shares pledged by him as security for a
loan made by Mercator Momentum Fund to us in February 2002 in the original
principal amount of $340,000, which pledged shares were transferred by Mercator
into its name in connection with a default on that loan.
In January 2003, we issued 47,521 shares of common stock to Lawrence
Muirhead to reimburse him for 47,521 shares pledged by him as security for a
loan made by Laurus Master Fund to us in April 2001 in the original principal
amount of $300,000, which pledged shares were transferred by Laurus into its
name in connection with a default on that loan.
On January 6, 2003, we extended to December 31, 2004, the expiration date
of an option granted to Mr. Muirhead on November 22, 1999 that initially
expired December 31, 2002, to purchase up to 2,000,000 shares of common stock
at an exercise price of $.50 per share, which was the closing price of a share
of our common stock on the date of grant. This option vests upon the
achievement of certain specified performance criteria.
On January 6, 2003, we extended to December 31, 2004, the expiration date
of an option granted to Mr. Spigno on November 22, 1999 that initially expired
December 31, 2002, to purchase up to 500,000 shares of common stock at an
exercise price of $.15 per share, which was 50% of the closing price of a share
of our common stock on the date of grant. This option vested immediately.
On January 6, 2003, we extended to December 31, 2004, the expiration date
of an option granted to Ms. McGough on September 1, 1999 that initially expired
December 31, 2002, to purchase up to 100,000 shares of common stock at an
exercise price of $.38 per share, which was 50% of the closing price of a share
of our common stock on the date of grant. This option vested immediately.
On December 10, 2003, Mr. Spigno exercised a portion of an option to
purchase 15,845 shares of Class A Preferred Stock for $1.00 per share, which
was the estimated value on that date.
Effective December 31, 2003, Robert Spigno earned bonus compensation under
his employment arrangement with ConectiSys in the amount of $80,000 payable in
common stock of ConectiSys based on a conversion price equal to 50% of the
average of the closing bid and asked prices of a share of our common stock for
the 30 days prior to December 31, 2003. Although our agreement with Mr. Spigno
provides that the conversion price is to be equal to 50% of the average of the
closing bid and asked prices of a share of our common stock for the 30 days
prior to December 31, 2003, Mr. Spigno voluntarily relinquished his right to
receive shares for 2003 based on this conversion price in favor of a conversion
price equal to 100% of the average of the closing bid and asked prices of a
share of our common stock for the 30 days prior to December 31, 2003. The
number of shares of common stock of ConectiSys issuable in connection with this
bonus is 15,094,340.
Effective December 31, 2003, Patricia Spigno earned bonus compensation
under her employment arrangement with ConectiSys in the amount of $40,000
payable in common stock of ConectiSys based on a conversion price equal to 50%
of the average of the closing bid and asked prices of a share of our common
stock for the 30 days prior to December 31, 2003. Although our agreement with
Ms. Spigno provides that the conversion price is to be equal to 50% of the
average of the closing bid and asked prices of a share of our common stock for
the 30 days prior to December 31, 2003, Ms. Spigno voluntarily relinquished her
right to receive shares for 2003 based on this conversion price in favor of a
conversion price equal to 100% of the average of the closing bid and asked
prices of a share of our common stock for the 30 days prior to December 31,
2003. The number of shares of common stock of ConectiSys issuable in connection
with this bonus is 7,547,170.
<page>13
On January 6, 2004, we repriced Robert Spigno's fully-vested option to
purchase up to 500,000 shares of Class B Preferred Stock from an exercise price
of $0.50 per share to an exercise price of $.05 per share. The exercise price
of $.05 per share equates to $.005 per share of common stock if the Class B
Preferred Stock were converted, which was in excess of the price of our common
stock on that date. This option was granted on September 11, 2001 and vested
immediately with an initial exercise price of $2.50 per share which equaled
$.25 per share of common stock if the Class B Preferred Stock were converted,
which was the price of our common stock on that date. On June 28, 2002 this
option was repriced from an exercise price of $2.50 per share to an exercise
price of $.50 per share, which was in excess of the price of our common stock
on that date. This option expires on November 1, 2009.
Effective December 31, 2004, Robert Spigno earned bonus compensation under
his employment arrangement with ConectiSys in the amount of $80,000 payable in
common stock of ConectiSys based on a conversion price equal to 50% of the
average of the closing bid and asked prices of a share of our common stock for
the 30 days prior to December 31, 2004. Although our agreement with Mr. Spigno
provides that the conversion price is to be equal to 50% of the average of the
closing bid and asked prices of a share of our common stock for the 30 days
prior to December 31, 2004, Mr. Spigno voluntarily relinquished his right to
receive shares for 2004 based on this conversion price in favor of a conversion
price equal to 100% of the average of the closing bid and asked prices of a
share of our common stock for the 30 days prior to December 31, 2004. The
number of shares of common stock of ConectiSys issuable in connection with this
bonus is 27,586,207.
Effective December 31, 2004, Patricia Spigno earned bonus compensation
under her employment arrangement with ConectiSys in the amount of $40,000
payable in common stock of ConectiSys based on a conversion price equal to 50%
of the average of the closing bid and asked prices of a share of our common
stock for the 30 days prior to December 31, 2004. Although our agreement with
Ms. Spigno provides that the conversion price is to be equal to 50% of the
average of the closing bid and asked prices of a share of our common stock for
the 30 days prior to December 31, 2004, Ms. Spigno voluntarily relinquished her
right to receive shares for 2004 based on this conversion price in favor of a
conversion price equal to 100% of the average of the closing bid and asked
prices of a share of our common stock for the 30 days prior to December 31,
2004. The number of shares of common stock of ConectiSys issuable in connection
with this bonus is 13,793,103.
We are or have been a party to various employment, consulting and
compensation arrangements with related parties, as more particularly described
above under the headings "Employment Contracts and Termination of Employment
and Change-in-Control Arrangements," "Compensation of Executive Officers" and
"Compensation of Directors."
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of June 27, 2005, certain information
with respect to (i) each director of our company, (ii) the named executives,
and (iii) all directors and executive officers of our company as a group, and
(iv) each person known to our company to be the beneficial owner of more than
5% of our common stock. The information with respect to each person specified
is as supplied or confirmed by such person or based upon statements filed with
the Commission.
Beneficial ownership is determined in accordance with Rule 13d-3
promulgated by the Securities and Exchange Commission, and generally includes
voting or investment power with respect to securities. Except as indicated in
the footnotes to the table, we believe each holder possesses sole voting and
investment power with respect to all of the shares of common stock owned by
that holder, subject to community property laws where applicable. In computing
the number of shares beneficially owned by a holder and the percentage
ownership of that holder, shares of common stock subject to options or warrants
held by that holder that are currently exercisable or are exercisable within 60
<page>14
days after the date of the table are deemed outstanding. Those shares, however,
are not deemed outstanding for the purpose of computing the percentage
ownership of any other person or group.
<Table>
Name and Address of Amount and Nature of
of Beneficial Owner (1) Title of Class Beneficial Ownership(2) Percent of Class
- -------------------------- ----------------- ------------------------- ------------------
Robert A. Spigno Common 57,837,687(3) 1.12%
Class A Preferred 450,020(4) 100.00%
Class B Preferred 500,000(5) 50.00%
Patricia A. Spigno Common 25,624,601(6) *
Lawrence Muirhead Common 971,393 *
Melissa McGough Common 354,138 *
All directors and executive
officers as a group
(4 persons) Common 84,787,819(7) 1.64%
Class A Preferred 450,020(4) 100.00%
Class B Preferred 500,000(5) 50.00%
</table>
_______________
* Less than 1.00%
(1) The address of each director and executive officer named in this table
is c/o ConectiSys Corporation, 24730 Avenue Tibbitts, Suite 130,
Valencia, California 91355. Mr. Spigno and Mr. Muirhead are directors
and executive officers of ConectiSys. Ms. McGough is a director of
ConectiSys. Ms. Spigno is an executive officer of ConectiSys.
(2) Based upon information furnished to us by the directors and executive
officers or obtained from our stock transfer books showing
5,101,666,998 shares of common stock outstanding as of June 8, 2005.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power
with respect to all shares of common stock shown as beneficially owned
by them. Shares of common stock subject to options currently
exercisable, or exercisable within 60 days after June 27, 2005,
are deemed to be outstanding in calculating the percentage ownership
of a person or group but are not deemed to be outstanding as to any
other person or group.
(3) Includes (i) 4,992,556 shares held directly, (ii) 1,443,654 shares
underlying options, (iii) 5,000,000 shares issuable upon conversion of
Class B Preferred Stock, and (iv) 46,401,477 shares issuable in
connection with payment of annual bonuses for calendar years 2002
through 2004. Mr. Spigno holds an option to purchase up to 500,000
shares of Class B Preferred Stock.
(4) Includes (i) 215,865 shares held directly, and (ii) 234,155 shares
underlying an option to purchase Class A Preferred Stock.
(5) Represents an option to purchase up to 500,000 shares of Class B
Preferred Stock.
<page>15
(6) Includes (i) 1,923,863 shares held directly, (ii) 500,000 shares
underlying options, and (iii) 23,200,738 shares issuable in connection
with payment of annual bonuses for calendar years 2002 through 2004.
(7) Includes (i) 8,241,950 shares held directly, (ii) 1,943,654 shares
underlying options, (iii) 5,000,000 shares issuable upon conversion of
Class B Preferred Stock, and (iv) 69,602,215 shares issuable in
connection with payment of annual bonuses for calendar years 2002
through 2004. Mr. Spigno holds an option to purchase up to 500,000
shares of Class B Preferred Stock.
Equity Compensation Plan Information
The following table gives information about our common stock that may be
issued upon the exercise of options, warrants and rights under our Amended
Non-Qualified Stock Option and Stock Bonus Plan as well as stock
options, warrants and rights issued outside of any formal plan as of September
30, 2004.
Number of Securities Weighted Average Number of
to be Issued Upon Exercise Exercise Price of Securities
of Outstanding Options, Outstanding Remaining
Warrants Options, Warrants Available for
Plan Category and Rights(1) and Rights Future Issuance
- ------------------- -------------------- ------------------ -----------------
Equity compensation
plans approved by
security holders N/A N/A N/A
Equity compensation
plans not approved
by security holders 4,493,654(2) $0.26 N/A
Total 4,493,654 $0.26 N/A
_______________
(1) Number of shares is subject to adjustment for changes in capitalization
for stock splits, stock dividends and similar events.
(2) Represents 4,493,654 shares of common stock underlying stock options,
warrants and rights issued under our Amended Non-Qualified Stock Option
and Stock Bonus Plan and no shares of common stock underlying stock
options, warrants and rights issued outside of any formal plan.
Our Amended Non-Qualified Stock Option and Stock Bonus Plan permits grants
of stock bonuses and non-qualified stock options. Vesting periods under our
Amended Non-Qualified Stock Option and Stock Bonus Plan vary from person to
person, and options under the plan are exercisable subject to certain standard
conditions.
<page>16
Audit Committee Report
The full board of directors of ConectiSys Corporation, discharging the
duties of an audit committee of the board of directors, discussed with the
independent auditors of ConectiSys Corporation all matters required to be
discussed by generally accepted auditing standards, including those described
in Statement on Auditing Standards No. 61, as amended, "Communication with
Audit Committees." Prior to the inclusion and filing with the Securities and
Exchange Commission of the consolidated audited financial statements in
ConectiSys Corporation's annual report on Form 10-KSB for the year ended
September 30, 2004, the board of directors discussed with management and
reviewed ConectiSys Corporation's consolidated audited financial statements. In
addition, the board of directors obtained from the independent auditors a
formal written statement indicating that no relationships exist between the
auditors and ConectiSys Corporation that might bear on the auditors'
independence consistent with Independence Standards Board Standard No. 1,
"Independent Discussions with Audit Committees," discerned from discussions
with the auditors that no relationships exist that may impact their objectivity
and independence and satisfied itself as to the auditors' independence. Prior
to the filing of the Form 10-KSB with the Securities and Exchange Commission,
and based on the review and discussions referenced above, the board of
directors recommended that the audited financial statements be included in the
Form 10-KSB.
Respectfully submitted,
Board of Directors of ConectiSys Corporation
Robert A. Spigno
Lawrence Muirhead
Melissa McGough
Principal Accountant Fees and Services
The following table shows the fees paid or accrued by ConectiSys
Corporation for the audit and other services provided by Hurley & Company for
the fiscal years shown.
2004 2003
-------- --------
Audit Fees $22,200 $17,500
Audit - Related Fees $ 3,500 $ 3,005
Tax Fees $ -- $ --
All Other Fees -- --
-------- --------
Total $25,700 $20,505
======== ========
The Audit - Related Fees shown above all related to work performed in
connection with the issuance of Consents of Independent Registered Public
Accounting Firm included in Registration Statements on Forms SB-2 and S-8 and
the review thereof by Hurley & Company.
We do not have an Audit Committee. Our Board of Directors approved the
Audit Fees for fiscal 2004, but none of the other fees for 2004 were
specifically approved by our Board of Directors. Our Board of Directors
approved the Audit Fees for fiscal 2003, but none of the other fees for 2003
were specifically approved by our Board of Directors.
<page>17
AMENDMENT TO ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(Proposal 2)
Effective as of June 1, 2005, our board of directors approved an amendment
to Article IV of our Articles of Incorporation to increase the number of shares
of our authorized common stock from 7.5 billion to 15 billion. We refer to this
amendment as the authorized share increase. The full text of the amendment is
attached to this proxy statement as Exhibit A. Our board of directors believes
that the authorized share increase is in the best interests of ConectiSys and
our shareholders because it makes additional shares of common stock available
for acquisitions, financings, present and future employee benefit programs and
other corporate purposes.
In addition, our board of directors believes that the authorized share
increase is necessary in light of our recent issuances of convertible
debentures and related warrants. The convertible debentures and related
warrants are convertible into or exercisable for shares of our common stock.
After taking into account the number of shares currently outstanding or
issuable upon conversion or exercise of our outstanding derivative securities,
the number of authorized shares of common stock provided for in our Articles of
Incorporation is not sufficient to satisfy our obligations to issue shares of
common stock to the convertible debenture investors upon conversion of the
convertible debentures and exercise of the related warrants.
The agreements we entered into in connection with our offerings of the
convertible debentures and related warrants required us to, among other things,
reserve subject to shareholder approval, the shares of common stock underlying
the convertible debentures and related warrants and, on a best efforts basis,
increase the authorized number of shares of our common stock immediately. If we
are unsuccessful in timely increasing our authorized number of shares of common
stock, we will be in default under those agreements and could face significant
adverse consequences. Those consequences include, among other things, the
holders of the convertible debentures and related warrants, requiring us to pay
substantial penalties, requiring us to repay the convertible debentures and/or
foreclosing upon their security interests in our assets, including our
intellectual property. Any of these events could have a material adverse effect
on our business, operating results, financial condition, cash flows and ability
to service our indebtedness.
As of the date of this proxy statement, we believe that we are in imminent
default under our agreements with our debenture investors as a result of
exhausting our authorized capital. As of June 27, 2005, we had approximately
shares 5,101,666,998 of common stock issued and outstanding and our
authorized capital currently includes 7.5 billion shares of common stock.
Our board of directors believes that it is in the best interests of
ConectiSys and our shareholders to amend our Articles of Incorporation to
provide sufficient shares of common stock to enable us to satisfy our
obligations to issue shares of common stock as described above and to make
additional shares of common stock available for acquisitions, financings,
present and future employee benefit programs and other corporate purposes. The
additional shares of common stock proposed to be authorized through the
authorized share increase may be issued from time to time as our board of
directors may determine without further action by our shareholders unless such
action is required in a specific case by applicable laws, rules or regulations.
Although our board of directors has no current plans to use these additional
shares of common stock to entrench present management, it may be able to use
these additional shares as a defensive tactic against hostile takeover
attempts. However, no hostile takeover attempts are, to management's knowledge,
currently threatened.
<page>18
Our Articles of Incorporation, as currently in effect and as proposed to be
amended through the authorized share increase, do not provide our common
shareholders with preemptive rights that would entitle such persons, as a
matter of right, to subscribe for the purchase of any shares, rights, warrants
or other securities or obligations convertible into, or exchangeable for,
securities of ConectiSys.
Required Vote of Shareholders and Board Recommendation
The affirmative vote of a majority of the shares of common stock
represented and voting on this proposal is required for approval of this
proposal, provided that the number of shares voting in favor of the proposal
equals at least a majority of the quorum.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED
AMENDMENT TO OUR ARTICLES OF INCORPORATION.
APPROVAL OF INDEPENDENT AUDITORS
(Proposal 3)
Our board of directors has selected the independent certified public
accounting firm of Hurley & Company to audit and comment on our financial
statements for the year ending September 30, 2005, and to conduct whatever
audit functions are deemed necessary. Hurley & Company audited our financial
statements for the year ended September 30, 2004 that were included in our most
recent annual report on Form 10-KSB.
We do not anticipate that a representative of Hurley & Company will be
present at the 2005 annual meeting.
Required Vote of Shareholders and Board Recommendation
Although a vote of shareholders is not required on this proposal, our board
of directors is asking our shareholders to ratify the appointment of our
independent auditors. The affirmative vote of a majority of the shares of
common stock represented and voting on this proposal will constitute
shareholder ratification of the appointment, provided that the number of shares
voting in favor of the proposal equals at least a majority of the quorum. If
shareholder approval of this proposal is not obtained, our board of directors
may reconsider its appointment of our independent auditors.
OUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT AUDITORS.
OTHER MATTERS
Our board of directors knows of no other matters to be brought before the
2005 annual meeting. However, if other matters should come before the 2005
annual meeting, it is the intention of the person named in the proxy to vote
such proxy in accordance with his or her judgment on such matters.
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ANNUAL REPORT
A copy of our 2004 annual report to shareholders has been mailed
concurrently with this proxy statement to all shareholders entitled to notice
of and to vote at the 2005 annual meeting. The 2004 annual report to
shareholders is not incorporated into this proxy statement and is not
considered proxy solicitation material.
A copy of our annual report to the Securities and Exchange Commission on
Form 10-KSB for the year ended September 30, 2004 is available without charge
to shareholders and may be obtained by writing to Investor Relations,
Conectisys Corporation, 24730 Avenue Tibbitts, Suite 130, Valencia, California
91355 (telephone number: (661) 295-6763). The annual report on Form 10-KSB for
the year ended September 30, 2004 is not incorporated into this proxy statement
and is not considered proxy solicitation material.
SUBMISSION OF SHAREHOLDER PROPOSALS
Under Rule 14a-8 of the Securities and Exchange Commission, proposals by
shareholders that are intended for inclusion in our proxy statement and proxy
and to be presented at our next annual meeting must be received by us by April
12, 2006, in order to be considered for inclusion in our proxy materials. These
proposals must be addressed to our Secretary and may be included in next year's
proxy materials if they comply with certain rules and regulations of the
Securities and Exchange Commission governing shareholder proposals. Under Rule
14a-4 of the Securities and Exchange Commission, for all other proposals by
shareholders to be timely, a shareholder's notice must be delivered to, or
mailed and received at, the principal executive offices of ConectiSys not later
than June 26, 2006. If a shareholder fails to so notify us of any such proposal
prior to such date, management of ConectiSys will be allowed to use their
discretionary voting authority with respect to proxies held by management if
the proposal is raised at the annual meeting, without any discussion of the
matter in our proxy statement.
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EXHIBIT A
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
CONECTISYS CORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is ConectiSys Corporation.
SECOND: The following amendment to the Articles of Incorporation of
ConectiSys Corporation was adopted on , 2005, as prescribed by
the Colorado Business Corporation Act, by a vote of the shareholders of the
corporation. The number of shares voted for the amendment was sufficient for
approval. The preliminary paragraph of Article IV to the Articles of
Incorporation of ConectiSys Corporation is replaced with the following:
ARTICLE IV
CAPITAL STOCK.
The aggregate number of shares which this Corporation shall
have authority to issue is Fifteen Billion (15,000,000,000)
shares of no par value each, which shares shall be
designated "Common Stock"; and Fifty Million (50,000,000)
shares of $1.00 par value each, which shares shall be
designated "Preferred Stock" and which may be issued in one
or more series at the discretion of the Board of Directors.
In establishing a series the Board of Directors shall give
to it a distinctive designation so as to distinguish it from
the shares of all other series and classes, shall fix the
number of shares in such series, and the preferences, rights
and restrictions thereof. All shares of any one series shall
be alike in every particular except as otherwise provided by
these Articles of Incorporation or the Colorado
Corporation Code.
THIRD: There is no exchange, reclassification or cancellation of issued
shares provided for in this amendment.
FOURTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: the number of shares of "Common Stock" that the
corporation is authorized to issue has increased by Seven Billion Five Hundred
Million (7,500,000,000) resulting in the corporation having the authority to
issue up to Fifteen Billion (15,000,000,000) shares of "Common Stock."
Date: , 2005
The persons who cause this document to be delivered for filing are:
Robert A. Spigno, Chief Executive Officer
Patricia A. Spigno, Secretary
The address for the above-referenced persons is:
24730 Avenue Tibbitts, Suite 130
Valencia, California 91355
PROXY FOR 2005 ANNUAL MEETING OF SHAREHOLDERS
CONECTISYS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of ConectiSys Corporation (the "Company")
hereby constitutes and appoints Robert A. Spigno, with the power to appoint his
substitute, as attorney and proxy to appear, attend and vote all of the shares
of common stock of the Company standing in the name of the undersigned on the
record date at the 2005 annual meeting of shareholders of the Company to be
held at 10:00 a.m., local time, on August 10, 2005 at the Valencia Hyatt, the
Newhall Room, 24500 Town Center Drive, Valencia, California 91355 and at any
adjournment or adjournments thereof, upon the below proposals. The Company's
board of directors recommends a vote FOR each of the following proposals:
1. To elect three directors to the Company's board of directors as follows:
O FOR all nominees listed below, except O WITHHOLD AUTHORITY to
as marked to the contrary below vote for all nominees
listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list
provided below.)
Robert A. Spigno
Lawrence Muirhead
Melissa McGough
IF THE UNDERSIGNED SHAREHOLDER WISHES TO CUMULATE VOTES IN THE ELECTION
OF DIRECTORS, THE UNDERSIGNED MUST APPEAR AND VOTE IN PERSON AT THE 2005
ANNUAL MEETING. IF ANY SHAREHOLDER GIVES PROPER NOTICE AT THE 2005 ANNUAL
MEETING OF HIS OR HER INTENTION TO CUMULATE VOTES IN THE ELECTION OF
DIRECTORS, THE PROXY HOLDER WILL HAVE THE FULL DISCRETION AND AUTHORITY
TO VOTE CUMULATIVELY EXCEPT TO THE EXTENT DESCRIBED IN THE "VOTING AND
PROXY" SECTION OF THE PROXY STATEMENT.
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to increase the Company's number of
authorized shares of common stock from 7.5 billion shares to 15 billion
shares.
O FOR approval O AGAINST approval O ABSTAIN
3. To consider and vote upon a proposal to ratify the appointment of Hurley
& Company as independent certified public accountants of the Company for
the year ending September 30, 2005.
O FOR approval O AGAINST approval O ABSTAIN
4. To vote in his or her discretion on such other business as may properly
come before the meeting, or any adjournment or adjournments thereof.
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE PROPOSALS INDICATED AND IN ACCORDANCE WITH THE DISCRETION OF THE
PROXY HOLDER ON ANY OTHER BUSINESS. ALL OTHER PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED IN CONNECTION WITH THE ACTIONS PROPOSED ON THIS PROXY CARD ARE
HEREBY EXPRESSLY REVOKED. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS
VOTED BY WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY, BY ISSUANCE OF A
SUBSEQUENT PROXY OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
Please mark, date, sign and return this proxy promptly in the enclosed
envelope. When shares are held by joint tenants, both should sign. When signing
as attorney, as executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
DATED:___________________________________________
_________________________________________________
(Signature of Shareholder(s))
_________________________________________________
(Print Name(s) Here)
O PLEASE CHECK IF YOU ARE PLANNING
TO ATTEND THE 2005 ANNUAL MEETING.
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