UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
(Amendment No. )
Check the
appropriate box:
¨
Preliminary Information
Statement
¨
Confidential, for Use
of the Commission Only (as permitted by Rule 14A-6(e)(2))
x
Definitive
Information Statement
Aspyra,
Inc.
(Name
of Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
x
No fee
required.
¨
Fee computed on table
below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title
of each class of securities to which transaction
applies:___________
(2)
Aggregate number of securities to which transaction
applies:___________
(3) Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11
(Set
forth the amount on which the filing fee is calculated and state how it was
determined):____________
(4)
Proposed maximum aggregate value of transaction:____________
(5) Total
fee paid:____________
¨
Fee paid previously
with preliminary materials.
¨
Check box if any part
of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and
identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by
registration
statement number, or the Form or Schedule and the date of its
filing.
(1)
Amount Previously Paid:___________
(2) Form,
Schedule or Registration Statement No.:___________
(3)
Filing Party:___________
(4) Date
Filed:___________
Aspyra,
Inc.
26115-A
Mureau Rd.
Calabasas,
CA 91302
NOTICE
OF ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
NOTICE
IS HEREBY GIVEN that the holders of more than a majority of the outstanding
common stock of Aspyra, Inc., a California corporation (the “Company” “we”,
“us”, or “our”), have approved the following action without a meeting of
stockholders in accordance with Section 603 of the California General
Corporation Law:
The
approval of a temporary reduction in the exercise price of the Company’s
outstanding warrants to purchase shares of the Company’s common stock, to $0.15
per share, in effect from June 17, 2009 through June 26, 2009, and the issuance
of shares of the Company’s common stock in accordance therewith. The action will
become effective on the 20
th
day
after this Information Statement is mailed to our stockholders.
The
enclosed information statement contains information pertaining to the matters
acted upon.
Pursuant
to rules adopted by the Securities and Exchange Commission, you may access a
copy of the information statement at www.aspyra.com.
WE ARE NOT ASKING YOU FOR A
PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY
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Order
of the Board of Directors
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By:
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/s/ Rodney
Schutt
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Rodney
Schutt
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Chief
Executive Officer
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July
31, 2009
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ASPYRA,
INC.
26115-A
Mureau Rd.
Calabasas,
CA 91302
INFORMATION
STATEMENT
Action
by Written Consent of Stockholders
GENERAL
INFORMATION
WE ARE NOT ASKING YOU FOR A
PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY
This
information statement is being furnished in connection with the action by
written consent of stockholders taken without a meeting of a proposal to approve
the actions described in this information statement. We are mailing this
information statement to our stockholders on or about July 31,
2009.
What
action was taken by written consent?
We
obtained stockholder consent for a temporary reduction in the exercise price of
the Company’s outstanding warrants to purchase shares of the Company’s common
stock, to $0.15 per share, in effect from June 17, 2009 through June 26, 2009,
and the issuance of shares of the Company’s common stock in accordance
therewith.
How
many shares of common stock were outstanding on July 20, 2009?
On
July 20, 2009, the date we received the consent of the holders of more than a
majority of the outstanding shares, there were 12,437,150 shares of common stock
outstanding.
What
vote was obtained to approve the temporary reduction in the exercise price of
the Company’s outstanding warrants and issuance of shares of the Company’s
common stock in accordance therewith described in this information
statement?
We
obtained the approval of the holders of approximately 58% of our outstanding
shares of common stock that were entitled to give such consent.
Who
is paying the cost of this information statement?
We
will pay for preparing, printing and mailing this information statement. Our
costs are estimated at approximately $10,000.
TEMPORARY REDUCTION IN
EXERCISE PRICE OF OUTSTANDING WARRANTS AND ISSUANCE OF SHARES OF COMMON STOCK IN
ACCORDANCE THEREWITH
Our
board of directors and the holders of a majority of our outstanding shares of
common stock have approved a temporary reduction in the exercise price of our
outstanding warrants to purchase shares of our common stock, to $0.15 per share,
in effect from June 17, 2009 through June 26, 2009 (the “Special Warrant
Offer”), and the issuance of shares of the Company’s common stock in accordance
therewith. We will issue shares of our common stock in accordance with the
Special Warrant Offer approximately (but not less than) 20 days after this
Information Statement is mailed to stockholders.
Issuance
of the Warrants
March
2008 Private Placement
On March
26, 2008, the Company entered into a Securities Purchase Agreement (the “March
2008 Purchase Agreement”), by and among the Company, Jay Weil as collateral
agent, and the purchasers named on the signature pages thereto (the “March 2008
Purchasers”).
Pursuant
to the March 2008 Purchase Agreement, the Company issued and sold to the March
2008 Purchasers, all of whom are accredited investors, $2,775,000 in principal
amount of secured convertible notes (the “March 2008 Purchaser Notes”)
(including $600,000 in March 2008 Purchaser Notes that was rolled over from
bridge loans), and warrants to purchase 5,045,454 shares of the Company’s common
stock (“March 2008 Purchaser Warrants”). The March 2008 Purchaser Notes are
convertible into shares of the Company’s common stock at a conversion price of
$0.55 per share, subject to adjustment in the event of stock splits, stock
dividends, and similar transactions. The March 2008 Purchaser Notes bear
interest at the rate of 8% per annum compounded on each July 15 and January 15.
Upon issuance, the March 2008 Purchaser Notes had a maturity date of March 26,
2010. In April 2009, the maturity date of the March 2008 Purchaser Notes was
extended to August 26, 2010. Each March 2008 Purchaser was issued March 2008
Purchaser Warrants, with an initial exercise price of $0.55 per share, equal to
the total number of shares of common stock initially issuable upon conversion of
the related March 2008 Purchaser Note. Upon issuance, the March 2008 Purchaser
Warrants had a term of three years. In February 2009, the termination date of
the March 2008 Purchaser Warrants was extended to March 26, 2012.
We issued
the placement agent for the March 2008 private placement, a note in the amount
of $210,000 (the “March 2008 Broker Note”, and together with the March 2008
Purchaser Notes, the “March 2008 Notes”), and warrants to purchase 451,193
shares of our common stock (the “March 2008 Broker Warrants”, and together with
the March 2008 Purchaser Warrants, the “March 2008 Warrants”). The March 2008
Broker Notes and March 2008 Broker Warrants have the same terms as the March
2008 Purchaser Notes and March 2008 Purchaser Warrants.
The
issuance and sale of the March 2008 Notes and March 2008 Warrants was made in
reliance upon the exemption provided in Section 4(2) of the Securities Act
and/or Regulation D promulgated under the Securities Act. No form of general
solicitation or general advertising was conducted in connection with the
issuance. Each of the March 2008 Notes and March 2008 Warrants contain
restrictive legends preventing the sale, transfer or other disposition of such
March 2008 Notes and March 2008 Warrants, unless registered under the Securities
Act, or pursuant to an exemption therefrom.
February
2009 Private Placement
On
February 12, 2009 we entered into a Securities Purchase Agreement (the “February
2009 Purchase Agreement”), by and among the Company, Jay Weil as collateral
agent, and the purchasers named on the signature pages thereto (the “February
2009 Purchasers”).
Pursuant
to the February 2009 Purchase Agreement, the Company issued and sold to the
February 2009 Purchasers, all of whom are accredited investors, $1,000,000 in
principal amount of secured convertible notes (the “February 2009 Purchaser
Notes”), and warrants to purchase 5,774,194 shares of the Company’s common stock
(“February 2009 Purchaser Warrants”). The February 2009 Purchaser Notes are
convertible into shares of the Company’s common stock at a conversion price of
$0.31 per share, subject to adjustment in the event of stock splits, stock
dividends, and similar transactions. The Purchaser Notes bear interest at the
rate of 12% per annum compounded on each July 15 and January 15. Upon
issuance, the February 2009 Purchase Notes had a maturity date of March 26,
2010. In April 2009, the maturity date of the February 2009 Purchaser Notes was
extended to August 26, 2010. Each February 2009 Purchaser was issued
February 2009 Purchaser Warrants, with an initial exercise price of $0.31 per
share, equal to the difference between: (A) the sum of: (i) the total number of
conversion shares which would have been be issuable upon full conversion of the
February 2009 Purchaser Note determined by dividing the aggregate principal
amount of the February 2009 Purchaser Notes by an assumed conversion rate of
$.25 (such quotient is referred to as the “Assumed Note Conversion Shares”),
plus (ii) 125% of the Assumed Note Conversion Shares, and (B) the number of
conversion shares which are issuable upon conversion of the entire original
principal amount of the February 2009 Purchaser Notes based on the actual
conversion price of such February 2009 Purchaser Notes which is equal to the
closing price per share of the Company’s common stock at closing plus
$.01.
We issued
the placement agent for the February 2009 private placement warrants to purchase
129,032 shares of our common stock (the “February 2009 Broker Warrants”, and
together with the February 2009 Purchaser Warrants, the “February 2009
Warrants”). The February 2009 Broker Warrants have the same terms as the
February 2009 Purchaser Warrants.
The
issuance and sale of the February 2009 Notes and February 2009 Warrants was made
in reliance upon the exemption provided in Section 4(2) of the Securities Act
and/or Regulation D promulgated under the Securities Act. No form of general
solicitation or general advertising was conducted in connection with the
issuance. Each of the February 2009 Notes and February 2009 Warrants contain
restrictive legends preventing the sale, transfer or other disposition of such
Notes and Warrants, unless registered under the Securities Act, or pursuant to
an exemption therefrom.
The
Special Warrant Offer
From July
17, 2009 through July 26, 2009, pursuant to the Special Warrant Offer, the
Company temporarily reduced the exercise price of the March 2008 Warrants and
the February 2009 Warrants (collectively, the “Warrants”) from $0.55 and $0.31
per share, respectively, to $0.15 per share. In response to the
Special Warrant Offer, the Company received an aggregate of $690,395.85 (the
“Funds”) from holders (the “Holders”) of the Warrants seeking to exercise an
aggregate of 4,602,639 Warrants (including 3,159,091 March 2008 Warrants and
1,443,548 February 2009 Warrants) pursuant to the Special Warrant Offer. The
Company obtained shareholder approval for the Special Warrant Offer in
accordance with the rules and regulations of the NYSE Amex, where the Company’s
common stock is listed. The shareholder approval will become effective 20 days
after this Information Statement to shareholders. At such time as the
shareholder approval becomes effective, the Company will issue an aggregate of
4,602,639 shares of its common stock to the Holders in accordance with the
Special Warrant Offer. In accordance with the rules and regulations of the NYSE
Amex, no shares of common stock have been or will be issued pursuant to the
Special Warrant Offer prior to the effectiveness of the shareholder
approval.
The
Letter Agreements
From July
13, 2009, through July 20, 2009, the Company entered into a series of identical
letter agreements (the “Letter Agreements’) with the Holders. Pursuant to the
Letter Agreements, the parties agreed that the Funds, in the aggregate amount of
$690,395.85, received by the Company from the Holders in response to the Special
Warrant Offer, will be deemed loans (the “Loans”) to the Company, until such
time as Shareholder Approval (defined below) is obtained. Pursuant to the Letter
Agreements, the Company agreed to obtain shareholder approval, and have such
shareholder approval become effective in accordance with applicable law
(including, without limitation, Section 14 of the Securities Exchange Act of
1934, as amended) (the “Shareholder Approval”), by October 31, 2009 (the
“Approval Date”), for the Special Warrant Offer, and the issuance of shares of
the Company’s common stock in accordance therewith. Upon Shareholder Approval,
provided Shareholder Approval has been received by the Approval Date, the Funds
will be deemed an exercise of the Special Warrant Offer, the Company will issue
shares of its common stock in accordance therewith, and no interest or other
payments shall be due on the Loans. If the Shareholder Approval is not received
by the Approval Date, the Loans shall become due and payable on the Approval
Date, together with accrued interest thereon. The Loans shall accrue interest at
the rate of 12% per annum and may not be prepaid without the written consent of
the Holders.
Reasons
for the Special Warrant Offer
The
Company instituted the Special Warrant Offer to encourage the Holders to
exercise the Warrants. The Company sought to encourage the Holders to exercise
the Warrants to obtain working capital.
Effect
of Special Warrant Offer and Issuance of Shares of Common Stock
Thereunder
As noted
above, the Company is using the Funds, in the aggregate amount of $690,395.85,
received in response to the Special Warrant Offer, for working capital purposes.
Approximately (but not less than) 20 days after this Information Statement is
mailed to stockholders, the Company will issue an aggregate of 4,602,639 shares
of common stock in accordance with the Special Warrant Offer. Upon issuance of
these shares, there will be an aggregate of 17,309,789 shares of the Company’s
common stock issued and outstanding. Accordingly, upon issuance, the shares of
common stock issued pursuant to the Special Warrant Offer will represent
approximately 27% of the Company’s issued and outstanding common stock. Thus,
the issuance of shares of the Company’s common stock pursuant to the Special
Warrant Offer will have a substantial dilutive effect on existing shareholders,
which may have a negative effect on the price of our common stock. As of July
17, 2009, the last closing price of the Company’s common stock on the NYSE Amex
was $0.29.
The
Holders may not sell the shares issued pursuant to the Special Warrant Offer
except pursuant to an effective registration statement or an available exemption
therefrom. A portion of the shares of common stock issuable upon exercise of the
March 2008 Warrants have been registered with the Securities and Exchange
Commission. The Company intends to file a post-effective amendment to the
registration statement.
BENEFICIAL OWNERSHIP OF SECURITIES AND
SECURITY OWNERSHIP OF MANAGEMENT
The
following table provides information about shares of common stock beneficially
owned as of July 20, 2009 by:
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each
of our directors, executive officers and our executive officers and
directors as a group; and
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each
person owning of record or known by us, based on information provided to
us by the persons named below, to own beneficially at least 5% of our
common stock;
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Name
and Position
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Shares
of Common Stock Beneficially Owned
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Percentage
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James
R. Helms
Vice
President of Strategic Analysis
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119,300
(1)
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*
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Robert
Pruter
Senior
Vice President, Sales and Marketing
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35,250 (2)
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*
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Lawrence
S. Schmid
Director
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39,166
(3)
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*
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Robert
S. Fogerson, Jr.
Director
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35,666
(4)
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*
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Norman
R. Cohen
Director
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14,166
(5)
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*
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James
Zierick
Chairman
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231,666
(6)
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1.83%
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C.
Ian Sym-Smith
Director
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1,758,966
(7)
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13.73%
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Jeffrey
Tumbleson
Director
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16,665
(8)
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*
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All
officers and directors as a group (eight individuals)
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2,250,845
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16.899%
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Bradford
G. Peters (9)
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2,647,513
(10)
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20.09%
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Bicknell
Family Holding Co. LLC (11)
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1,380,371
(12)
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9.99%
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Potomac
Capital Management (13)
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946,000
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7.61%
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James
Shawn Chalmers (14)
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1,277,594
(15)
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9.99%
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*
less than 1%.
(1) Includes
7,500 shares of common stock issuable under currently exercisable stock options
and options that may be exercisable within 60 days of July 20, 2009 held by Mr.
Helms but excludes 2,500 shares of common stock issuable under currently
non-exercisable stock options held by Mr. Helms.
(2)
Includes 31,250 shares of common stock issuable under currently exercisable
stock options and options that may be exercisable within 60 days of July 20,
2009 held by Mr. Pruter but excludes 93,750 shares of common stock issuable
under currently non-exercisable stock options held by Mr. Pruter.
(3)
Includes 14,166 shares of common stock issuable under currently exercisable
stock options and options that may be exercisable within 60 days of July 20,
2009 held by Mr. Schmid, but excludes 25,834 shares of common stock issuable
under currently non-exercisable stock options held by Mr. Schmid.
Mr. Schmid’s address is c/o Strategic Directions International, Inc.,
6242 Westchester Parkway, Suite 100, Los Angeles, CA 90045.
(4)
Includes 14,166 shares of Common Stock issuable under currently exercisable
stock options and options that may be exercisable within 60 days of July 20,
2009 held by Mr. Fogerson but excludes 25,834 shares of common stock issuable
under currently non-exercisable stock options held by Mr. Fogerson.
Mr. Fogerson’s address is 2111 Austrian Pine Lane, Minnetonka, MN
55305.
(5)
Includes 14,166 shares of common stock issuable under currently exercisable
stock options and options that may be exercisable within 60 days of July 20,
2009 held by Mr. Cohen but excludes 25,834 shares of common stock issuable under
currently non-exercisable stock options held by Mr. Cohen.
(6)
Includes 231,166 shares of common stock issuable under currently exercisable
stock options and options that may be exercisable within 60 days of July 20,
2009 held by Mr. Zierick but excludes 23,334 shares of Common Stock issuable
under currently non-exercisable stock options held by Mr. Zierick.
(7)
Includes 377,802 shares of Common Stock issuable under currently exercisable
stock options, shares of common stock issuable upon exercise of notes, and
warrants that may be exercisable within 60 days of July 20, 2009. Does not
include (i) 25,834 shares of common stock under currently non-exercisable stock
options held by Mr. Sym-Smith (ii) 241,935 shares of common stock issuable upon
conversion of a note and (iii) 433,065 shares issuable upon exercise of
warrants. The note and warrants owned by the selling stockholder provide that
they cannot be converted or exercised, as applicable, to the extent such
conversion or exercise, as applicable, would result in the holder and its
affiliates beneficially owning more than 9.99% of our outstanding common stock
on the date of such conversion or exercise, as applicable. The number and
percentage of common stock deemed beneficially owned is limited
accordingly.
(8)
Includes 16,665 shares of common stock issuable under currently exercisable
stock options and options that may be exercisable within 60 days of July 20,
2009 held by Mr. Tumbleson but excludes 53,335 shares of common stock issuable
under currently non-exercisable stock options held by Mr.
Tumbleson. Mr. Tumbleson’s address is 2107 Ipswitch Ct, Thompson’s
Station, TN 37179.
(9)
Bradford G. Peters was a director of the Company from November 2005 to January
2008.
(10)
Includes 747,272 shares of common stock issuable under currently exercisable
stock options, shares of common stock issuable upon conversion of notes, and
warrants that may be exercisable within 60 days of July 20, 2009. The note and
warrants owned by Mr. Peters provide that they cannot be converted or exercised,
as applicable, to the extent such conversion or exercise, as applicable, would
result in the holder and its affiliates beneficially owning more than 9.99% of
our outstanding common stock on the date of such conversion or exercise, as
applicable. The number and percentage of common stock deemed beneficially owned
is limited accordingly. Mr. Peters’ address is 21 Grove Lane, Greenwich, CT
06831.
(11)
Martin C. Bicknell is the manager of Bicknell Family Holding Co., LLC and in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, may be deemed a control person, with voting and investment power
(directly or with others), of the securities of the Company owned by Bicknell
Family Holding Co., LLC. Mr. Bicknell disclaims beneficial ownership of
these securities. Bicknell Family Holding Co., LLC’s address is 7400 College
Blvd., Suite 205, Overland Park, Kansas 66210.
(12) The
holder owns note in the amount of $1,250,000, convertible into 2,272,727 shares
of common stock at a conversion price of $0.55 per share, and warrants to
purchase 2,272,727 shares of common stock. The notes and warrants owned by the
holder provide that they cannot be converted or exercised, as applicable, to the
extent such conversion or exercise, as applicable, would result in the holder
and its affiliates beneficially owning more than 9.99% of our outstanding common
stock on the date of such conversion or exercise, as applicable. The number and
percentage of common stock deemed beneficially owned is limited
accordingly.
(13)
Potomac Capital Management LLC’s address is 825 Third Avenue, 33rd Floor, New
York, NY 10022. Based on information contained in Schedule 13G/A filed with the
SEC on May 6, 2009 by Potomac Capital Management LLC, Potomac Capital Management
Inc. and Paul J. Solit as joint filers. Paul J. Solit is the Managing Member of
Potomac Capital Management LLC and President of Potomac Capital Management Inc.
All of the joint filers state that they have shared voting and shared
dispositive power over 946,000 shares. The joint filers state that they own an
aggregate of 946,000 shares of Common Stock.
(14) Mr.
James Shawn Chalmers’ address is 705 South 10th Street, Blue Springs, Missouri
64015. Based on information contained in Schedule 13D filed with the SEC on
April 3, 2008 by Mr. Chalmers. Mr. Chalmers states that he does not own any
Common Stock directly but he is (i) the sole director and President and majority
shareholder of J&S Ventures, Inc.; (ii) the sole manager and holder of 75%
of the membership interests of Orion Capital Investments, LLC; and (iii) the
sole trustee and sole beneficiary of the J. Shawn Chalmers Revocable Trust dated
August 13, 1996.
(15)
Includes 926,023 shares of common stock and an additional 351,571 shares of
common stock issuable upon exercise of warrants or conversion of notes. The
notes and warrants provide that they cannot be converted or exercised, as
applicable, to the extent such conversion or exercise, as applicable, would
result in the holder and its affiliates beneficially owning more than 9.99% of
our outstanding common stock on the date of such conversion or exercise, as
applicable. The number and percentage of common stock deemed beneficially owned
is limited accordingly.
Except as
otherwise indicated each person has the sole power to vote and dispose of all
shares of common stock listed opposite his name. Each person is deemed to own
beneficially shares of common stock which are issuable upon exercise of warrants
or upon conversion of convertible securities if they are exercisable or
convertible within 60 days of July 20, 2009. None of the persons named in the
table own any options or convertible securities.
ADDITIONAL
AVAILABLE INFORMATION
We
are subject to the information and reporting requirements of the Securities
Exchange Act of 1934 and in accordance with such act we file periodic reports,
documents and other information with the Securities and Exchange Commission
relating to our business, financial statements and other matters. Such reports
and other information may be inspected and are available for copying at the
public reference facilities of the Securities and Exchange Commission at 100 F
Street, N.E., Washington D.C. 20549. or may be accessed at
www.sec.gov
.
FINANCIAL
STATEMENTS
Our
annual report on Form 10-K for the year ended December 31, 2008, and our
quarterly report on Form 10-Q for the three months ended March 31, 2009, are
incorporated by reference into this information statement. Copies of these
reports, without exhibits, are being mailed with this information statement.
Stockholders are referred to these reports for financial and other information
about us.
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Order
of the Board of Directors
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By:
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/s/ Rodney
Schutt
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Rodney
Schutt
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Chief
Executive Officer
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July
31, 2009
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8
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