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 (Amendments No.)
Check the appropriate box:
[X] Preliminary Information Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[ ] Definitive Information Statement Rule 14c-5 (d)(2))
PAPERCLIP SOFTWARE, INC.
(Name of Registrant As Specified In Charter)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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2) Aggregate number of securities to which transaction applies:
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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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[ ] 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:
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4) Date Filed:
PAPERCLIP SOFTWARE, INC.
Jilin Dongsheng Weiye Science and Technology Development Co., Ltd.
Jifeng East Road, Gaoxin District
Jilin, Jilin Province, PRC
c/o American Union Securities
100 Wall Street, 15th Floor
New York, NY 10005
November __, 2006
Dear Stockholder:
The accompanying Information Statement is being furnished to the holders of
shares of the common stock, Series A Preferred Stock and Series B Convertible
Preferred Stock of PaperClip Software, Inc. (the "Company"), a Delaware
corporation. The Board of Directors (the "Board") is not soliciting your proxy
and you are requested not to send us a proxy. The purpose of this Information
Statement is to notify you of actions already approved by written consent of a
majority of the voting stockholders and directors. Pursuant to Rule 14c-2 of the
Securities Exchange Act of 1934, the following actions will not be effective
until twenty (20) days after the date the Information Statement is mailed to the
stockholders:
1. To authorize the Company's Board of Directors to (a) amend our
Articles of Incorporation to: (i) change the Company's name to
"Sunrise International, Inc."; and (ii) increase the number of
authorized shares of Common Stock to one hundred million (100,000,000)
shares of common stock, par value $0.00001 per share; and (b)
effectuate a 1-for-30.37453333 reverse stock split of our issued and
outstanding shares of common stock.
The enclosed Information Statement is being mailed on or about November __,
2006 to stockholders of record as of the close of business on November 22, 2006.
You are urged to read the enclosed Information Statement in its entirety.
For the Board of Directors of
PAPERCLIP SOFTWARE, INC.
By: /s/ William Weiss
---------------------
WILLIAM WEISS
Chairman
THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU BY THE BOARD OF DIRECTORS
OF THE COMPANY
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
PAPERCLIP SOFTWARE, INC.
Jilin Dongsheng Weiye Science and Technology Development Co., Ltd.
Jifeng East Road, Gaoxin District
Jilin, Jilin Province, PRC
c/o American Union Securities
100 Wall Street, 15th Floor
New York, NY 10005
INFORMATION STATEMENT
November __, 2006
GENERAL INFORMATION
This Information Statement has been filed with the Securities and Exchange
Commission and is being furnished, pursuant to Section 14C of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to the holders of the
common stock, par value $0.01 per share (the "Common Stock"), Series A Preferred
Stock, par value $0.01 per share, and Series B Convertible Preferred Stock, par
value $0.01 per share, of which each share automatically converts into 500
shares of Common Stock, without any action on the part of the holder, upon there
being sufficient authorized common shares to satisfy full conversion ("Series B
Preferred Stock"), of PaperClip Software, Inc., a Delaware Corporation (the
"Company"), (collectively, the "Stockholders"), to notify such Stockholders of
the following:
On November 22, 2006, pursuant to Section 228 of the Delaware General
Corporation Law ("D.G.C.L."), the Company received written consents in lieu
of a meeting of shareholders from one stockholder holding (A) 9,746,847
common shares, representing 32.49% of the 30,000,000 outstanding shares of
Common Stock and (B) 946,275 Series B Convertible Preferred Stock shares,
of which each share entitles the holder to 500 votes, which equates to
473,137,500 votes, representing 53.69% of the outstanding shares of Series
B Convertible Preferred Stock (collectively, the "Majority Stockholder"),
which aggregates to 482,884,347 votes or 52.78% of the 914,885,168 shares
entitled to vote, authorizing the Company's Board of Directors to (a) amend
our Certificate of Incorporation to: (i) change the Company's name to
"Sunrise International, Inc."; and (ii) increase the number of authorized
shares of Common Stock to one hundred million (100,000,000) shares of
Common Stock, par value $0.001 per share; and (b) effectuate a
1-for-30.37453333 reverse stock split of our issued and outstanding shares
of Common Stock and Preferred Stock.
On November 22, 2006, pursuant to D.G.C.L. Sec.141, the Board of Directors
of the Company unanimously approved the above actions, subject to stockholder
approval. According to D.G.C.L. Sec.216, a majority of the outstanding shares of
voting capital stock entitled to vote on the matter is required in order to
amend the Company's Certificate of Incorporation. The Majority Stockholder
approved the actions by written consent in lieu of a meeting on November 22,
2006 in accordance with the Delaware General Corporation Law. Accordingly, your
consent is not required and is not being solicited in connection with the
approval of the Amendments.
We Are Not Asking You For A Proxy And You Are Requested Not To Send A Proxy.
The entire cost of furnishing this Information Statement will be borne by
the Company. The Company will request brokerage houses, nominees, custodians,
fiduciaries and other like parties to forward this Information Statement to the
beneficial owners of the Common Stock held of record by them and will reimburse
such persons for their reasonable charges and expenses in connection therewith.
The Board of Directors has fixed the close of business on November 22, 2006 as
the record date (the "Record Date") for the determination of Stockholders who
are entitled to receive this Information Statement.
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You are being provided with this Information Statement pursuant to Section
14C of the Exchange Act and Regulation 14C and Schedule 14C thereunder, and, in
accordance therewith, the Amendments will not be filed with the Secretary of
State of the State of Delaware or become effective until at least 20 calendar
days after the mailing of this Information Statement.
This Information Statement is being mailed on or about December __, 2006 to
all Stockholders of record as of the Record Date.
OUTSTANDING VOTING SECURITIES
As of the date of the consent by the Majority Stockholder, November 22,
2006, we had issued and outstanding 30,000,000 shares of Common Stock, par value
$0.01 per share, 3,649,543 shares of Series A Preferred Stock, par value $0.01
per share, and 946,275 shares of Series B Convertible Preferred Stock, par value
$0.01 per share (collectively, the "Voting Stock"). Each share of outstanding
Common Stock and Series A Preferred Stock is entitled to one vote on matters
submitted for stockholder approval. Each share of Series B Convertible Preferred
Stock is entitled to 500 votes on matters submitted for stockholder approval.
On November 22, 2006, the holder of 52.78% of the Voting Stock executed and
delivered to the Company a written consent approving the above actions. Since
the actions have been approved by the Majority Stockholder, no proxies are being
solicited with this Information Statement.
The Delaware General Corporation Law provides in substance that unless the
Company's Certificate of Incorporation provides otherwise, stockholders may take
action without a meeting of stockholders and without prior notice if a consent
or consents in writing, setting forth the action so taken, is signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which all shares
entitled to vote thereon were present.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the number of shares
of the Company's Common Stock beneficially owned on November 20, 2006, the
Record Date, by each person who is known by the Company to beneficially own 5%
or more of the Company's Common Stock, each of the Company's directors and
executive officers, and all of the Company's directors and executive officers,
as a group:
Amount and
Nature of
Name and Address of Beneficial Percent of Class
Title of Class Beneficial Owner Owner (2)
---------------------------------------------------------------------------------------------------------------
Common Stock William Weiss (1) (3) 3,569,643 (4) 11.90%
Common Stock Michael Suleski (1) (3) 780,936 (5) 2.60%
Common Stock D. Michael Bridges (1) (3) 556,500 (6) 1.86%
Common Stock Aidong Yu (7) (3) 9,746,847 32.49%
Common Stock Huizhu Xie (7) (3) 0 -
Common Stock Dekui Wang (7) (3) 0 -
Common Stock All officers and directors as a 14,653,926 48.85%
group (6 in number)
Series A Preferred Stock William Weiss (1) (3) 2,533,869 (9) 69.43%
Series A Preferred Stock D. Michael Bridges (1) (3) 150,000 (9) 4.11%
Series A Preferred Stock All officers and directors as a 2,683,869 (9) 73.54%
group (2 in number)
Series B Preferred Stock Aidong Yu (7) (3) 946,275 (8) 53.69%
Series B Preferred Stock All officers and directors as a 946,275 (8) 53.69%
group (1 in number)
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(1) The address for each beneficial owner is 1 University Plaza, Hackensack, New
Jersey 07601.
(2) Based on 30,000,000 shares of common stock issued and outstanding as of
November 20, 2006.
(3) The person listed is an officer and/or director of the Company.
(4) Includes (a) 770,921 shares of Common Stock issuable upon the exercise of
options currently exercisable under the 1995 Stock Option Plan, and (b)
2,533,869 shares of Common Stock issuable upon the conversion of 2,533,869
shares of Series A Preferred Stock.
(5) Includes 744,921 shares of Common Stock issuable upon the exercise of
options currently exercisable under the 1995 Stock Option Plan.
(6) Includes 405,000 shares of Common Stock issuable upon the exercise of
options currently exercisable under the 1995 Stock Option Plan, and 150,000
shares of Common Stock issuable upon the conversion of 150,000 shares of Series
A Preferred Stock.
(7) The address for each beneficial owner is Jilin Dongsheng Weiye Science and
Technology Development Co., Ltd., Jifeng East Road, Gaoxin District, Jilin,
Jilin Province, PRC
(8) Each share of Series B Convertible Preferred Stock entitles the holder to
500 votes, which equates to 473,137,500 votes, representing 482,884,347 votes or
52.78% of the 914,885,168 shares entitled to vote.
(9) Each share of Series A Preferred Stock entitles the holder to 1 vote.
DISSENTER'S RIGHTS OF APPRAISAL
The Stockholders have no dissenter's rights of appraisal.
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
A. Change the Name of the Company to "Sunrise International, Inc."
The Board of Directors and Majority Stockholder have adopted a resolution
amending the Company's Certificate of Incorporation to change the Company's name
to "Sunrise International, Inc.". The name change will become effective when the
amended Certificate of Incorporation is filed with the Delaware Secretary of
State. The Board believes that the name change is in the best interests of the
Company after the reverse merger, which was reported on the Form 8-K filed on
November 9, 2006, as amended November 17, 2006, since it better reflects the
Company's new business of development and manufacturing of nutritional
supplements and personal care products domestically in China.
B. Increase the Number of Authorized Shares of Common Stock From 30,000,000 to
100,000,000
General
-------
The Company's Certificate of Incorporation authorizes the maximum number of
shares outstanding at any time shall be thirty million (30,000,000) shares of
Common Stock. On November 22, 2006, the Board of Directors approved an amendment
to the Certificate of Incorporation to authorize one hundred million
(100,000,000) shares of Common Stock. The Board of Directors is authorized to
fix the number of shares of and to determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon the Common Stock. On
November 22, 2006, the holders of a majority of the outstanding shares of Common
Stock approved the amendment by written consent.
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Specifically, the increase in authorized shares is necessary to issue
shares to the American Sunrise International, Inc. ("ASI") shareholders pursuant
to the Stock Purchase and Share Exchange Agreement dated November 6, 2006, which
will complete the reverse merger reported in the Form 8-K filed on November 9,
2006, as amended November 17, 2006.
Reverse Merger
--------------
On November 9, 2006, we acquired all of the outstanding capital stock of
ASI in exchange for the issuance to the ASI shareholders, upon the increase in
the authorized capital stock, of a total number of shares of PaperClip Software
common stock, which will represent, and equate to, 98.70% of PaperClip
Software's issued and outstanding common stock after the transaction is closed.
Once our capital stock is increased we will be able to close this transaction by
issuing the requisite number of shares.
After the additional shares are used for the specific purposes set forth
above, the general purpose and effect of the amendment to the Company's
Certificate of Incorporation in authorizing additional shares of Common Stock
will be to use such additional shares of common stock for general corporate
purposes, including acquisitions, equity financings, stock dividends, stock
splits or other recapitalizations, and grants of stock options. When the Board
of Directors deems it to be in the best interests of the Company and the
Stockholders to issue additional shares of Common Stock in the future from
authorized shares, the Board of Directors generally will not seek further
authorization by vote of the Stockholders, unless such authorization is
otherwise required by law or regulations.
The additional authorized shares of Common Stock could have an
anti-takeover effect. If the Company's Board of Directors desires to issue
additional shares in the future, such issuance could dilute the voting power of
a person seeking control of the Company, thereby deterring or rendering more
difficult a merger, tender offer, proxy contest or an extraordinary corporate
transaction opposed by the Company.
APPROVAL OF 1-FOR-30.37453333 REVERSE STOCK SPLIT
General
-------
The Board of Directors and Majority Stockholder approved the
1-for-30.37453333 reverse stock split (the "Reverse Stock Split") of our Common
Stock on November 22, 2006. Upon the effectuation of this Reverse Stock Split,
each 30.37453333 shares of our Common Stock will be automatically converted into
one (1) share of Common Stock. To avoid the issuance of fractional shares of
Common Stock, the Company will issue an additional share to all holders of a
fractional share .50 or greater and no additional shares shall be issued to a
holder of a fractional share less than .50.
Shareholder approval for a reverse stock split of the Company's Common
Stock is valid for one year following the date of such approval. If no such
reverse stock split is effectuated for one year following November 22, 2006, the
Company will be required to present the matter to the shareholders again for
approval prior to effectuating the Reverse Stock Split.
Please note that the Reverse Stock Split will become effective as of the
date approved by the Nasdaq. The Board will have one year from the date hereof
to declare the Reverse Stock Split. However, upon effectuation, the reverse
stock split will not change your proportionate equity interests in the company,
except as may result from the issuance or cancellation of shares pursuant to the
fractional shares.
Purpose and Material Effects of the Reverse Stock Split
-------------------------------------------------------
The Reverse Stock Split is necessary to complete the reverse merger and
issue shares to the ASI shareholders as referenced above.
Additionally The Board of Directors had proposed the Reverse Stock Split as
one method to attract business opportunities in the Company. When a company
engages in a reverse stock split, it substitutes one share of stock for a
predetermined amount of shares of stock. It does not increase the market
capitalization of the company.
We believe that, upon effectuation, the Reverse Stock Split may improve the
price level of our Common Stock and that the higher share price could help
generate interest in the Company among investors and other business
opportunities. However, the effect of a reverse split upon the market price for
our Common Stock cannot be predicted, and the history of similar stock split
combinations for companies in like circumstances is varied. There can be no
assurance that the market price per share of our Common Stock after a reverse
split will rise in proportion to the reduction in the number of shares of Common
Stock outstanding resulting from the reverse split. The market price of our
Common Stock may also be based on our performance and other factors, some of
which may be unrelated to the number of shares outstanding.
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Upon effectuation, the reverse split will affect all of our stockholders
uniformly and will not affect any stockholder's percentage ownership interests
in the Company or proportionate voting power, except to the extent that the
reverse split results in any of our stockholders owning a fractional share. In
lieu of issuing fractional shares, an additional share will be issued to all
holders of a fractional share .50 or greater and no additional shares shall be
issued to a holder of a fractional share less than .50. The principal effect of
a reverse split is that the number of shares of Common Stock issued and
outstanding will be reduced proportionately with the reverse split. The number
of authorized shares of Common Stock is not affected.
The reverse split will not affect the par value of our Common Stock. As a
result, on the effective date of the Reverse Stock Split, the stated capital, on
a fully diluted basis, on our balance sheet attributable to our Common Stock
will be reduced by up to 1/30.37453333 of its present amount, and the additional
paid-in capital account shall be credited with the amount by which the stated
capital is reduced. The per share net income or loss and net book value of our
Common Stock will be increased because there will be fewer shares of our Common
Stock outstanding.
The reverse split will not change the proportionate equity interests of our
stockholders, nor will the respective voting rights and other rights of
stockholders be altered, except for possible immaterial changes due to the
cancellation of fractional shares. The Common Stock issued pursuant to the
reverse split will remain fully paid and non-assessable. The reverse split is
not intended as, and will not have the effect of, a "going private transaction"
covered by Rule 13e-3 under the Securities Exchange Act of 1934. We will
continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934.
Stockholders should recognize that they will own a fewer number of shares
than they presently own. While we expect that upon effectuation the reverse
split will result in an increase in the potential market price of our Common
Stock, there can be no assurance that the reverse split will increase the
potential market price of our Common Stock by a multiple equal to the exchange
number or result in the permanent increase in any potential market price (which
is dependent upon many factors, including our performance and prospects). Also,
should the market price of our Common Stock decline, the percentage decline as
an absolute number and as a percentage of our overall market capitalization may
be greater than would pertain in the absence of a reverse split. Furthermore,
the possibility exists that potential liquidity in the market price of our
Common Stock could be adversely affected by the reduced number of shares that
would be outstanding after the reverse split. In addition, the reverse split may
increase the number of stockholders of the Company who own odd lots (less than
100 shares). Stockholders who hold odd lots typically will experience an
increase in the cost of selling their shares, as well as possible greater
difficulty in effecting such sales. Consequently, there can be no assurance that
the reverse split will achieve the desired results that have been outlined
above.
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information including annual
and quarterly reports on Form 10-KSB and 10-QSB (the "1934 Act Filings") with
the Securities and Exchange Commission (the "Commission"). Reports and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained at the Commission at Room 1580, 100 F Street,
NE, Washington, DC 20549. Copies of such material can be obtained upon written
request addressed to the Commission, Public Reference Section, 100 F Street, NE,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a web site
on the Internet (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the Commission through the Electronic Data Gathering,
Analysis and Retrieval System ("EDGAR").
The following documents as filed with the Commission by the Company are
incorporated herein by reference:
1. Quarterly Reports on Form 10-QSB for the fiscal quarters ended March
31, 2006 and June 30, 2006; and September 30, 2006; and
2. Annual Report on Form 10-KSB for the fiscal year ended December 31,
2005.
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EFFECTIVE DATE OF AMENDMENTS
Pursuant to Rule 14c-2 under the Exchange Act, the filing of the Amendments
to the Certificate of Incorporation with the Delaware Secretary of State or the
effective date of such filing, shall not occur until a date at least twenty (20)
days after the date on which this Information Statement has been mailed to the
Stockholders. The Company anticipates that the actions contemplated hereby will
be effected on or about the close of business on December __, 2006.
By Order of the Board of Directors
/s/ William Weiss
-----------------
WILLIAM WEISS
Chairman
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