Information Statement Pursuant to Section 14(c)
Of the Securities Exchange Act of 1934
Preliminary Information Statement
Date: April 5, 2004
KLEVER MARKETING, INC.
350 WEST 300 SOUTH, SUITE 201
SALT LAKE CITY, UTAH 84101
Payment of Filing Fee No Fee Required
INFORMATION STATEMENT
CONCERNING AMENDMENT OF CERTIFICATE OF INCORPORATION
General
The following is information given by KLEVER MARKETING, INC., a Delaware
corporation (the "Company"), to its shareholders prior to seeking the consent of
the shareholders pursuant to Section 228(a) of the Delaware General Corporation
Law to amendment of the Company's Certificate of Incorporation to increase the
number of authorized shares.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
Voting Rights and Outstanding Shares
As of March 26, 2004 (the "Record Date"), the Company had 45,587,919 shares of
Stock issued and outstanding, comprised of 35,351,267 shares of common stock,
par value $.01 per share (the "common stock"), and 5,493,727 Class A, 2,789,956
Class B and 1,952,969 Class C Convertible preferred stock, par value $.01 per
share (the "preferred Stock"). Holders of common stock are entitled to one vote
for each such share so held of record. Holders of preferred Stock are entitled
to one vote for each share of common stock into which such preferred Stock is
convertible. [Each share of preferred Stock is convertible into one (1) share of
common stock.] Stockholders of record at the close of business on the Record
Date are entitled to vote on the proposal to amend the Certificate of
Incorporation.. A written consent signed by the holders of a majority of the
total number of shares issued and outstanding on the Record Date will constitute
approval by the Stockholders of the proposed amendment. Abstentions and "broker
non-votes" (which occur if a broker or other nominee does not have discretionary
authority and has not received voting instructions from the beneficial owner
with respect to the particular item) are counted for purposes of determining
whether or not a majority of the share of Stock entitled to vote has signed
written consents in favor of the amendment of the Certificate of Incorporation.
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PROPOSAL TO AMEND TO CERTIFICATE OF INCORPORATION
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On March 30, 2004 the Board of Directors considered, and approved for
recommendation to the stockholders, an amendment to the Certificate of
Incorporation. The Certificate of Incorporation, as currently in force, provides
that the Company is authorized to issue up to 50,000,000 shares of common stock,
par value $.01 per share. The proposed amendment provides for an increase in the
number of shares of common stock the Company would be authorized to issue in the
future, from 50,000,000 shares to 250,000,000 shares. This increase is needed to
provide sufficient authorized common stock for the current and future needs of
the Company.
The Board of Director's recommendation was based upon two reasons. First,
although there are currently 35,351,267 shares of common stock issued and
outstanding, the number of shares of common stock that would be required to be
issued if all options, preferred and debt conversion rights and Stock Incentive
Plan shares (collectively "Prospective Stock Rights")were exercised exceeds the
currently authorized 50,000,000 shares by 14,026,562 shares. Thus, an increase
in authorized common stock is needed to provide for these Prospective Stock
Rights . Second, the Company is in the process of seeking additional equity
capital investments in connection with both short term and long term financing
transactions. If the Company are successful in securing additional investments
in the Company ,the issuance of addition shares of common stock will be required
However, the Board of Directors anticipates that both the short and long term
financing may require at least an additional 100,000,000 shares of stock In
addition, it is the Board of Directors' recommendation that the Company have a
number of additional authorized shares in reserve for unknown contingencies.
Hence, the Board of Directors recommends the increase in the number of
authorized shares from 50,000,000 to 250,000,000 shares.
Consent Required for Approval. The written consent of a majority of the shares
of the issued and outstanding Stock entitled to vote is required to approve the
proposal to amend the Certificate of Incorporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 26, 2004, certain information
regarding the ownership of the Company's common stock and preferred Stock by:
(1) all those known by the Company to be beneficial owners of more than five
percent of the outstanding shares of the Company's Common and preferred stock,
who are not directors, nominees for director, or executive officers; (2) each
director and nominee for director; (3) each of the executive officers; and (4)
all directors and executive officers of the Company as a group.
KLEVER MARKETING PRINCIPAL SHAREHOLDERS BENEFICIAL OWNERSHIP
3/26/2004
Common Shares Issuable
Upon Conversion of:
Total (Fully Diluted)
Outstanding Convertible Total Option & Accrued, Beneficial Beneficial
Common Preferred Votable Convertible Warrant but Unpaid Ownership Ownership
Shares Shares(1) Shares Debt(1) Shares Dividend (Fully Diluted) Percentage
TOP HOLDERS
Olson Foundation
& Affiliated Entities 2,835,130 4,982,065 7,817,195 9,384,260 735,722 287,413 18,224,590 32.56%
Olson Holdings 759,765 3,786,369 4,546,134 0 3,060 130,668 4,679,862 10.24%
Estate of PDO 951,762 0 951,762 0 512,000 0 1,463,762 3.18%
Olson Legacy Trust 1,171,850 0 1,171,850 0 84,510 0 1,256,360 2.75%
Presidio 94,858 438,422 533,280 8,521,821 0 4,843 9,059,944 16.76%
Paul Begum
& Affiliated Entities 3,113,660 159,426 3,273,086 0 237,000 5,534 3,515,620 7.67%
Seabury Entities 0 5,095,161 5,095,161 1,427,618 412,936 232,527 7,168,243 15.05%
Warner 2,526,574 0 2,526,574 10,597 661,335 0 3,198,506 6.91%
Primavera 3,252,771 0 3,252,771 0 0 0 3,252,771 7.14%
Arbinger 3,490,756 0 3,490,756 42,386 97,176 0 3,630,319 7.94%
DIRECTORS AND OFFICERS
Bailey
& Affiliated Entities 3,244,914 0 3,244,914 0 520,000 0 3,764,914 8.17%
D. Paul Smith 1,041,301 0 1,041,301 13,188 1,309,813 0 2,364,302 5.04%
Michael L. Mills 951,762 0 951,762 0 512,000 0 1,463,762 3.18%
Richard J. Trout 65,645 0 65,645 0 1,028,278 0 1,093,922 2.35%
William J. Dupre 400,000 0 400,000 0 200,000 0 600,000 1.31%
Daniel L. Warner 0 0 0 0 100,000 0 100,000 0.22%
NOTES:
(1) Number of common shares issuable upon conversion of preferred stock and
debt are estimated based on the conversion formulas applicable to those
securities. Current adjusted conversion prices for preferred shares are
$0.2509 for Class A, $0.2509 for Class B and $0.2509 for Class C. The
adjusted conversion price for preferred shares is current as of the
date written above. All convertible debt assumed converted. Dividends
on preferred shares are undeclared, but accrue to date.
By Order of the Board of Directors
/s/D. Paul Smith
Corporate Secretary Salt Lake City, Utah
April 5, 2004