M-GAB Development Corporation Pre 14C 5.11.05
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14C INFORMATION
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M-GAB
Development Corporation
22342
Avenida Empresa, Suite 220
Rancho
Santa Margarita, CA 92688
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON MAY 11, 2005
TO OUR
SHAREHOLDERS:
You are
cordially invited to attend the Annual Meeting of the Shareholders of M-GAB
Development Corporation (the “Company”) to be held on Wednesday, May 11, 2005,
at 10:00 AM, Pacific Standard Time, at our corporate headquarters at 22342
Avenida Empresa, Suite 220, Rancho Santa Margarita, CA 92688, to consider and
act upon the following proposals, as described in the accompanying Information
Statement:
|
1. |
To
elect three (3) directors to serve until the next Annual Meeting of
Shareholders and thereafter until their successors are elected and
qualified; |
|
2. |
To
renew the policy and practice of, and to authorize the Board of Directors
in their sole discretion to, sell the Corporation’s common stock at less
than its current net asset value and to sell warrants, options, or rights
to acquire any common stock at less than net asset
value; |
|
3. |
To
ratify the appointment of Ramirez International as independent auditors of
the Company for the fiscal year ending December 31,
2005; |
|
4. |
To
transact such other business as may properly come before the meeting or
any adjournments thereof. |
The
foregoing items of business are more fully described in the Information
Statement accompanying this Notice. The Board of Directors has fixed the close
of business on April 7, 2005, as the record date for Shareholders entitled to
notice of and to vote at this meeting and any adjournments thereof.
|
By
Order of Board of Directors |
|
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|
|
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Carl
Berg, President |
Rancho Santa Margarita,
California |
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April ____, 2005 |
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WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
INFORMATION
STATEMENT
INTRODUCTION
This
information statement is being mailed or otherwise furnished to stockholders of
M-GAB Development Corporation, a Florida corporation (the “Company”) in
connection with the upcoming annual meeting of its shareholders. This
Information Statement is being first sent to stockholders on or about April 18,
2005.
Proposals
The
following proposals are being presented at the meeting (the
“Proposals”):
|
1. |
To
elect three (3) directors to serve until the next Annual Meeting of
Shareholders and thereafter until their successors are elected and
qualified; |
|
2. |
To
renew the policy and practice of, and to authorize the Board of Directors
in their sole discretion to, sell the Corporation’s common stock at less
than its current net asset value and to sell warrants, options, or rights
to acquire any common stock at less than net asset
value; |
|
3. |
To
ratify the appointment of Ramirez International as independent auditors of
the Company for the fiscal year ending December 31,
2005; |
|
4. |
To
transact such other business as may properly come before the meeting or
any adjournments thereof. |
Vote
Required
The vote
which is required to approve the above Proposals is the affirmative vote of the
holders of a majority of the Company’s voting stock. Each holder of common stock
is entitled to one (1) vote for each share held.
The
record date for purposes of determining the number of outstanding shares of
voting stock of the Company, and for determining stockholders entitled to vote,
is the close of business on April 7, 2005 (the “Record Date”). The Board of
Directors of the Company adopted the resolution approving and recommending each
of the Proposals on April 7, 2005. As of the Record Date, the Company had
outstanding 6,550,512 shares
of common stock, and no shares of preferred stock were issued or outstanding.
Holders of the shares have no preemptive rights. All outstanding shares are
fully paid and nonassessable. The transfer agent for the common stock is Island
Stock Transfer, 100 First Avenue South, Suite 212, St. Petersburg, Florida
33701,
telephone (727) 287-1512.
Vote
Obtained - Section 607.0704 Florida Revised Statutes
Section
607.0704 of the Florida Revised Statutes (the “Florida Law”) provides that the
written consent of the holders of the outstanding shares of common stock, having
not less than the minimum number of votes which would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted, may be substituted for such a meeting. In order to
eliminate the costs and management time involved in obtaining proxies and in
order to effect the Proposals as early as possible in order to accomplish the
purposes of the Company as hereafter described, the Board of Directors of the
Company voted to utilize, and did in fact obtain, the written consent of the
holders of a majority in interest of the common stock of the Company, approving
each of the Proposals.
Pursuant
to Section 607.0704 of the Florida Revised Statutes, the Company is required to
provide prompt notice of the taking of the corporate action without a meeting to
the stockholders of record who have not consented in writing to such action.
This Information Statement is intended to provide such notice. Under Florida
Law, no dissenters’ or appraisal rights are afforded to the Company's
stockholders as a result of the approval of the Proposals.
PROPOSAL
ONE
ELECTION
OF DIRECTORS
Directors
are elected by the shareholders at each annual meeting to hold office until
their respective successors are elected and qualified, and need not be
shareholders of the Company or residents of the State of Florida. Directors may
receive compensation for their services as determined by the Board of Directors.
See “Compensation of Directors.” The number of Directors as set by the Bylaws of
the Company shall be no less than one (1) nor more than seven (7). Presently,
the Board consists of three (3) members, namely Carl Berg, Kevin J. Gadawski,
and Mark Stewart. Mr. Berg is an employee-director and Messrs. Gadawski and
Stewart are outside (non-employee) directors.
Voting
for the election of directors is non-cumulative, which means that a simple
majority of the shares voting may elect all of the directors. Each share of
common stock is entitled to one (1) vote and, therefore, has a number of votes
equal to the number of authorized directors.
Although
management of the Company expects that each of the following nominees will be
available to serve as a director, in the event that any of them should become
unavailable prior to the shareholders meeting, a replacement will be appointed
by a majority of the then-existing Board of Directors. Management has no reason
to believe that any of its nominees, if elected, will be unavailable to serve.
All nominees are expected to serve until the next Annual Meeting of Shareholders
or until their successors are duly elected and qualified.
Nominees
For Election As Director
The
following table sets forth certain information with respect to persons nominated
by the Board of Directors of the Company for election as Directors of the
Company and who will be elected following the annual shareholders
meeting:
Name |
|
Age |
|
Position(s) |
|
|
|
|
|
Carl
Berg |
|
37 |
|
Chairman
of the Board, President, Secretary, and Treasurer
(2001) |
|
|
|
|
|
Kevin
J. Gadawski |
|
38 |
|
Director
(2003) |
|
|
|
|
|
Mark
Stewart |
|
39 |
|
Director
(2003) |
Carl M.
Berg has
served as the Company’s director and officer since our inception. He also
currently serves as a company executive with STSN, Inc., a provider of wired and
wireless broadband communications for business travelers, where he has served
since 2003. Prior to STSN, from 1999 to 2003, he was a company executive with
Sandlot Corporation, a startup subscription management software company. Sandlot
is involved in managing subscription-based e-commerce. Mr. Berg directed
business initiatives as the Business Development Manager, which resulted in
growth of the company from 10 to 75 employees worldwide with offices in the U.S.
and Windsor, United Kingdom. Prior to Sandlot Corporation, from 1992 to 1999,
Mr. Berg served in various management positions in the technology division of
Ameritech Corporation. His roles varied from the overall management of library
automation implementation projects to directing the implementation division of
roughly 75 technical staff. Job titles included Project Coordinator, Project
Manager and Director of Implementation.
Kevin
J. Gadawski joined
the Company’s Board of Directors in May 2003. He also serves as the President of
Worldwide Medical in Lake Forest, California, where he previously served as the
Chief Operating Officer and Chief Financial Officer for Worldwide Medical
Corporation from May of 2002. From May of 2001 to May of 2002, Mr. Gadawski
served as the Chief Financial Officer of California Software Corporation in
Irvine, California. From June of 2000 through May of 2001, Mr. Gadawski was the
Chief Financial Officer for e-net Financial.com in Costa Mesa, California. His
primary duties included financial reporting and financial management. For the
five years prior to that, Mr. Gadawski served in various capacities including
Director of Internal Audit and Divisional Controller with Huffy Corporation in
Miamisburg, Ohio. Mr. Gadawski began his career in the audit department of KMPG
Peat Marwick, LLP.
Mark
Stewart joined
the Company’s Board of Directors in November 2003. Mr. Stewart has been a
principal with Mark Stewart Securities, Inc., a NASD broker-dealer, since 1996.
Mr. Stewart started his career with American Express Financial Advisors (IDS) in
1991, and served as head trader at numerous firms from 1991 to
1996.
Our
directors do not currently serve as directors of any other reporting
issuers.
Compensation
of Directors
In November 2003, we
agreed to issue to each of Mr. Gadawski and Mr. Stewart options to acquire
300,000 shares of our common stock, under the terms of the M-GAB, Inc. 2001
Stock Option Plan, effective June 1, 2001, approved by the Company’s
shareholders and directors on May 15, 2001, for serving as directors of the
Corporation. The issuance of the options is subject to approval of the SEC
pursuant to provisions of the Investment Company Act of 1940 (the “1940 Act”).
The options are to be exercisable for a period of ten years from their grant
date, at an
exercise
price equal to the fair market value on the grant date, and will expire upon
their resignation from the Board. In addition, we have agreed to pay Mr.
Gadawski $1,250 per quarter for additional consulting services.
Mr. Berg
has not received any compensation for serving as a director. Other than as set
forth herein, no compensation has been given to any of the directors, although
they may be reimbursed for any pre-approved out-of-pocket expenses.
Board
Meetings and Committees
During
the fiscal year ended December 31, 2004, the Board of Directors did not meet,
but did take action by unanimous written consent on several
occasions.
On May
16, 2003, an Audit Committee of the Board of Directors, established in
accordance with section 3(a)(58)(A) of the Exchange Act, was formed. The
directors who are members of the Audit Committee are Kevin J. Gadawski and Mark
Stewart, with Mr. Gadawski considered an audit committee financial expert and an
independent director.
PROPOSAL
TWO
RENEWAL
OF POLICY TO SELL STOCK
AT
LESS THAN NET ASSET VALUE
Pursuant
to Section 63(2) of the 1940 Act, the Company is prohibited from selling any
common stock of which it is the issuer at a price below the current net asset
value of such stock, and from selling warrants, options, or rights to acquire
any such common stock at a price below the current net asset value of such
stock, unless (i) the shareholders have first approved a policy and practice of
making such sales of securities within one year immediately prior to any such
sale, (ii) a majority of the Board of Directors have determined that any such
sale would be in the best interests of the Company and its shareholders, and
(iii) a majority of the Board of Directors, in consultation with any underwriter
if applicable, have determined in good faith that the price at which such
securities are to be sold is not less than a price which closely approximates
the market value of those securities, less any commission or
discount.
On April
20, 2004, the Board of Directors approved a policy which would allow for the
sale of securities at less than the current net asset value consistent with the
requirements set forth above, and seeks the renewal of that policy consistent
with Section 63(2) of the 1940 Act.
PROPOSAL
THREE
RATIFICATION
OF APPOINTMENT
OF
INDEPENDENT AUDITORS
The Board
of Directors has appointed Ramirez International, independent auditors, to audit
the consolidated financial statements of the Company for the fiscal year ending
December 31, 2005, and seeks ratification of such appointment. In the event of a
negative vote on such ratification, the Board of Directors will reconsider its
appointment.
Representatives
of Ramirez International are not expected to be present at the annual
meeting.
Audit
Fees
During
the fiscal years ended December 31, 2004 and 2003, Ramirez International billed
us $18,680 and $13,420, respectively, in fees for professional services for the
audit of our annual financial statements and review of financial statements
included in our Forms 10-KSB and 10-QSB.
Audit
- Related Fees
During
the fiscal years ended December 31, 2004 and 2003, Ramirez International billed
us $18,680 and $13,420, respectively, in fees for
assurance and related services related to the performance of the audit and
review of the Company’s financial statements.
Tax
Fees
During
the fiscal years ended December 31, 2004 and 2003, Ramirez International billed
us $175 and $200, respectively, in fees for
professional services for tax planning and preparation.
All
Other Fees
During
the fiscal years ended December 31, 2004 and 2003, Ramirez International did not
bill the Company for any other fees.
Of the
fees described above for the fiscal year ended December 31, 2004, 100% were
approved by the by the Audit Committee of the Board of Directors of the Company.
Of the fees described above for the fiscal year ended December 31, 2003, 100%
were either approved in advance by the Audit Committee if it was in existence at
the time of approval, or subsequently ratified by the Audit
Committee.
OTHER
INFORMATION
Directors and Executive Officers
The
following table sets forth the names and ages of the current directors and
executive officers of the Company, the principal offices and positions with the
Company held by each person and the date such person became a director or
executive officer of the Company. The executive officers of the Company are
elected annually by the Board of Directors. The directors serve one-year terms
until their successors are elected. The executive officers serve terms of one
year or until their death, resignation or removal by the Board of Directors.
Unless described below, there are no family relationships among any of the
directors and officers.
Name |
|
Age |
|
Position(s) |
|
|
|
|
|
Carl
M. Berg |
|
37 |
|
Chairman
of the Board, President, Secretary, and Treasurer
(2001) |
|
|
|
|
|
Kevin
J. Gadawski |
|
38 |
|
Director
(2003) |
|
|
|
|
|
Mark
Stewart |
|
39 |
|
Director
(2003) |
Carl
M. Berg has
served as our director and officer since our inception. He also currently serves
as a company executive with STSN, Inc., a provider of wired and wireless
broadband communications for business travelers, where he has served since 2003.
Prior to STSN, from 1999 to 2003, he was a company executive with Sandlot
Corporation, a startup subscription management software company. Sandlot is
involved in managing subscription-based e-commerce. Mr. Berg directed business
initiatives as the Business Development Manager, which resulted in growth of the
company from 10 to 75 employees worldwide with offices in the U.S. and Windsor,
United Kingdom. Prior to Sandlot Corporation, from 1992 to 1999, Mr. Berg served
in various management positions in the technology division of Ameritech
Corporation. His roles varied from the overall management of library automation
implementation projects to directing the implementation division of roughly 75
technical staff. Job titles included Project Coordinator, Project Manager and
Director of Implementation.
Kevin
J. Gadawski joined
our Board of Directors in May 2003. He also serves as the President of Worldwide
Medical in Lake Forest, California, where he previously served as the Chief
Operating Officer and Chief Financial Officer for Worldwide Medical Corporation
from May of 2002. From May of 2001 to May of 2002, Mr. Gadawski served as the
Chief Financial Officer of California Software Corporation in Irvine,
California. From June of 2000 through May of 2001, Mr. Gadawski was the Chief
Financial Officer for e-net Financial.com in Costa Mesa, California. His primary
duties included financial reporting and financial management. For the five years
prior to that, Mr. Gadawski served in various capacities including Director of
Internal Audit and Divisional Controller with Huffy Corporation in Miamisburg,
Ohio. Mr. Gadawski began his career in the audit department of KMPG Peat
Marwick, LLP.
Mark
Stewart joined
our Board of Directors in November 2003. Mr. Stewart has been a principal with
Mark Stewart Securities, Inc., a NASD broker-dealer, since 1996. Mr. Stewart
started his career with American Express Financial Advisors (IDS) in 1991, and
served as head trader at numerous firms from 1991 to 1996.
Audit
Committee
On May
16, 2003, an Audit Committee of the Board of Directors, established in
accordance with section 3(a)(58)(A) of the Exchange Act, was formed. The Audit
Committee has not yet had any meetings, and has taken only one action, that
being the approval of our independent auditor to prepare the Corporation’s
federal and state tax returns. In accordance with a written charter adopted by
the Company’s Board of Directors, the Audit Committee assists the Board of
Directors in fulfilling its responsibility for oversight of the quality and
integrity of the Company’s financial reporting process, including the system of
internal controls. For the financial statements included with the Company Annual
Report on Form 10-KSB for the year ended December 31, 2004, the Audit Committee:
(i) reviewed and discussed the audited financial statements with management,
(ii) one member of the Audit Committee discussed with the independent auditors
the matters required to be discussed by SAS 61, (iii) received the written
disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1, (iv) one member of the Audit
Committee discussed with the independent accountant the independent accountant’s
independence, and (v) made any recommendations to the Company’s Board of
Directors concerning inclusion of the audited financial statements in the
Company’s annual report on Form 10-KSB.
The directors
who are members of the Audit Committee are Kevin J. Gadawski and Mark Stewart,
with Mr. Gadawski considered an audit committee financial expert and an
independent director in accordance with Exchange Act Rule
10A(m)(3).
The
Company’s Audit Committee has a charter, which was approved by the Board of
Directors on May 16, 2003.
Compensation
Committee
On May
16, 2003, a Compensation Committee of the Board of Directors was formed. The
Compensation Committee consists of Mr. Gadawski and Mr. Stewart, has not had any
meetings, and has not taken any actions.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Section
16(a) of the Securities Exchange Act of 1934 requires the Company's directors
and executive officers and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
To the
Company’s knowledge, none of the required parties are delinquent in their 16(a)
filings.
Code
of Ethics
We have
not adopted a written code of ethics, primarily because we believe and
understand that our officers and directors adhere to and follow ethical
standards without the necessity of a written policy.
Executive
Compensation
None of
our employees are subject to a written employment agreement. Our president
elected to forego a salary during the early developmental stages, and also
provided office space. We estimate the value of these services to be $6,000 for
each year for the years ended December 31, 2004 and 2003. As of December 31,
2004 we did not have any amounts owed to our president as he elected to forgive
any outstanding amounts he was owed and to forego a salary until further
notice.
On May
15, 2001, our directors and shareholders approved the M-GAB, Inc. 2001 Stock
Option Plan, effective June 1, 2001. The plan offers selected employees,
directors, and consultants an opportunity to acquire our common stock, and
serves to encourage such persons to remain employed by us and to attract new
employees. The plan allows for the award of stock and options, up to 600,000
shares of our common stock. In November 2003, we agreed to issue options to
acquire 600,000 shares under the Plan to our two independent directors; however,
these options will not be issued until such time as approved by the Commission
in accordance with rules and regulations applicable to BDC’s. Our Application
For an Order Pursuant to Section 61(a)(3)(B) of The Investment Company Act of
1940 to Permit the Issuance of Stock Options to Non-Interested Directors is
currently pending before the Commission. We hope to receive approval to issue
the options to our non-interested directors during the second quarter of our
fiscal year ended December 31, 2005.
The
Summary Compensation Table shows certain compensation information for services
rendered in all capacities for the fiscal years ended December 31, 2004 and
2003. Other than as set forth herein, no executive officer's salary and bonus
exceeded $100,000 in any of the applicable years. The following information
includes the dollar value of base salaries, bonus awards, the number of stock
options granted and certain other compensation, if any, whether paid or
deferred.
|
|
Annual
Compensation |
|
Long
Term Compensation |
|
|
|
|
|
|
Awards |
|
Payouts |
Name
and
Principal
Position |
Year |
Salary
($) |
Bonus
($) |
Other
Annual
Compensation
($) |
|
Restricted
Stock
Awards
($) |
Securities
Underlying Options SARs
(#) |
|
LTIP
Payouts
($) |
All
Other
Compensation
($) |
|
|
|
|
|
|
|
|
|
|
|
Carl
M. Berg |
2004 |
-0- |
-0- |
$-0- |
|
-0- |
-0- |
|
-0- |
-0- |
Chairman,
President, |
2003 |
-0- |
-0- |
$6,000
(1) |
|
-0- |
-0- |
|
-0- |
-0- |
Secretary, Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin
J. Gadawski |
2004 |
-0- |
-0- |
$5,000
(2) |
|
-0- |
-0- |
|
-0- |
-0- |
Director |
2003 |
-0- |
-0- |
$5,000 |
|
-0- |
-0- |
|
-0- |
-0- |
|
|
|
|
|
|
|
|
|
|
|
Mark
Stewart |
2004 |
-0- |
-0- |
$-0- |
|
-0- |
-0- |
|
-0- |
-0- |
Director |
2003 |
-0- |
-0- |
$-0- |
|
-0- |
-0- |
|
-0- |
-0- |
(1) |
This
amount was accrued until March 26, 2004, when Mr. Berg elected for forgive
all amounts owed to him, as well as any future salary until further
notice. |
(2) |
As
of December 31, 2004, Mr. Gadawski received $2,500 of this amount. The
other $2,500 has been accrued. |
OPTION/SAR
GRANTS IN LAST FISCAL YEAR
(Individual
Grants) |
|
Name |
Number
of Securities
Underlying
Options/SARs
Granted
(#) |
Percent
of Total
Options/SARs
Granted
to
Employees In Fiscal
Year |
Exercise
or Base Price
($/Sh) |
Expiration
Date |
|
|
|
|
|
Carl
M. Berg |
-0- |
N/A |
N/A |
N/A |
|
|
|
|
|
Kevin
J. Gadawski |
-0- |
N/A |
N/A |
N/A |
|
|
|
|
|
Mark
Stewart |
-0- |
N/A |
N/A |
N/A |
AGGREGATED
OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND
FY-END OPTION/SAR VALUES |
|
|
|
|
|
Name |
Shares
Acquired On
Exercise
(#) |
Value
Realized
($) |
Number
of Unexercised
Securities
Underlying
Options/SARs
at FY-End
(#)
Exercisable/Unexercisable |
Value
of Unexercised
In-The-Money
Option/SARs
at
FY-End
($)
Exercisable/Unexercisable |
|
|
|
|
|
Carl
M. Berg |
N/A |
N/A |
N/A |
N/A |
|
|
|
|
|
Kevin
J. Gadawski |
N/A |
N/A |
N/A |
N/A |
|
|
|
|
|
Mark
Stewart |
N/A |
N/A |
N/A |
N/A |
Compensation
of Directors
In
November 2003, we agreed to issue to each of Mr. Gadawski and Mr. Stewart
options to acquire 300,000 shares of our common stock for serving as directors
of the Corporation. The issuance of the options is subject to approval of the
SEC pursuant to provisions of the Investment Company Act of 1940, and will not
be issued until the issuance is approved by the SEC. The options are to be
exercisable for a period of ten years from their grant date, at an exercise
price equal to the fair market value on the grant date, and will expire upon
their resignation from the Board. Our Application For an Order Pursuant to
Section 61(a)(3)(B) of The Investment Company Act of 1940 to Permit the Issuance
of Stock Options to Non-Interested Directors is currently pending before the
Commission. We hope to receive approval to issue the options to our
non-interested directors during the second quarter of our fiscal year ended
December 31, 2005.
In
addition, we have agreed to pay Mr. Gadawski $1,250 per quarter for additional
consulting services.
Mr. Berg
has not received any compensation for serving as a director. Other than as set
forth herein, no compensation has been given to any of the directors, although
they may be reimbursed for any pre-approved out-of-pocket expenses.
Certain
Relationships and Related Transactions
On April
20, 2001, our founder, Carl M. Berg, purchased 2,550,000 shares of common stock
for $255.00. On April 20, 2001, Sadie, LLC, an entity wholly-owned and
controlled by Mr. Berg, purchased 3,000,000 shares of common stock for $300.00.
Also on April 20, 2001, Brian A. Lebrecht, our legal counsel, purchased 450,000
shares of common stock for $45.00. The total purchase price from these
transactions was $600.00.
We have
engaged one of our shareholders, Mr. Lebrecht, as our corporate counsel. For the
twelve months ended December 31, 2004, we did not incur any legal fees to Mr.
Lebrecht’s law firm since he has agreed to forego all fees for legal services
related to our Company until further notice. Prior to this agreement, we
incurred fees related to legal services and out of pocket costs to Mr.
Lebrecht’s firm of $37,730 for the twelve months ended December 31, 2003.
However, Mr. Lebrecht agreed to forgive amounts due to his law firm in
2004.
Our
President, Mr. Berg, has elected to forego a salary during our early development
stages. He also provided office space for us. We estimate the value of these
services to be $6,000 per year for the twelve months ended December 31, 2004 and
2003. As of December 31, 2004, we did not have any amounts owed to Mr. Berg as
he has agreed to forgive all amounts we owed to him until further notice. In
addition, one of our directors, Mr. Gadawski, provides consulting services to
us
In
November 2003, we agreed to issue to each of Mr. Gadawski and Mr. Stewart
options to acquire 300,000 shares of our common stock for serving as directors
of the Corporation. The issuance of the options is subject to approval of the
SEC pursuant to provisions of the Investment Company Act of 1940. The options
are to be exercisable for a period of ten years from their grant date, at an
exercise price of $0.15 per share, and will expire upon their resignation from
the Board. In addition, we have agreed to pay Mr. Gadawski $1,250 per quarter
for consulting services.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth, as of April 7, 2005, certain information with
respect to the Company's equity securities owned of record or beneficially by
(i) each Officer and Director of the Company; (ii) each person who owns
beneficially more than 10% of each class of the Company's outstanding equity
securities; and (iii) all Directors and Executive Officers as a
group.
Common
Stock |
Title
of Class
|
Name
and Address
of
Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership
|
Percent
of
Class (1)
|
Common
Stock |
Carl
Berg (2)
|
5,550,000
(3)
|
84.7%
|
Common
Stock |
Kevin
Gadawski (2)
|
300,500
(4)(5)
|
4.4%
(5)
|
Common
Stock |
Mark
Stewart (2)
|
300,000
(5)
|
4.4%
(5)
|
Common
Stock |
All
Directors and Officers
as
a Group (3 persons)
|
6,150,500
(3)(4)(5)
|
86%
(5)
|
|
(1) |
Unless
otherwise indicated, based on 6,550,512 shares of common stock issued and
outstanding as of April 7, 2005. Shares of common stock subject to options
or warrants currently exercisable, or exercisable within 60 days, are
deemed outstanding for purposes of computing the percentage of the person
holding such options or warrants, but are not deemed outstanding for the
purposes of computing the percentage of any other
person. |
|
(2) |
The
address of each shareholder is c/o M-GAB Development Corporation, 22342
Avenida Empresa, Suite 220, Rancho Santa Margarita, CA
92688. |
|
(3) |
Includes
3,000,000 shares held in the name of Sadie, LLC, an entity wholly-owned
and controlled by Mr. Berg. Mr. Berg is the Company’s sole officer.
|
|
(4) |
Includes
500 shares held by Mr. Gadawski’s spouse. |
|
(5) |
Includes
options to acquire 300,000 shares of common stock which will be granted to
each of Mr. Gadawski and Mr. Stewart upon approval by the Commission in
compliance with the Investment Company Act of 1940.
|
The
issuer is not aware of any person who owns of record, or is known to own
beneficially, five percent or more of the outstanding securities of any class of
the issuer, other than as set forth above. The issuer is not aware of any person
who controls the issuer as specified in section 2(a)(1) of the Investment
Company Act of 1940. There are no classes of stock other than common stock
issued or outstanding. There are currently warrants outstanding to acquire
333,334 shares of our common stock at $0.15 per share, and other than as set
forth herein, there are no options, warrants, or other rights to acquire common
stock outstanding. The Company does not have an investment advisor.
There are
no current arrangements which will result in a change in control.
SHAREHOLDER
PROPOSALS
Any
shareholder desiring to submit a proposal for action at the 2006 Annual Meeting
of Shareholders and presentation in the Company's Information or Proxy Statement
with respect to such meeting, should arrange for such proposal to be delivered
to the Company's offices, located at 22342 Avenida Empresa, Suite 220, Rancho
Santa Margarita, California 92688, addressed to the corporate Secretary, no
later than March 1, 2006, in order to be considered for inclusion in the
Company's Information or Proxy Statement relating to the meeting. Matters
pertaining to such proposals, including the number and length thereof,
eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities Exchange Act of 1934, Rules and
Regulations of the Securities and Exchange Commission and other laws and
regulations to which interested persons should refer. The Company anticipates
that its next annual meeting will be held in May 2006.
On May
21, 1998, the Securities and Exchange Commission adopted an amendment to Rule
14a-4, as promulgated under the Securities and Exchange Act of 1934, as amended.
The amendment to Rule 14a-4(c)(1) governs the Company's use of its discretionary
proxy voting authority with respect to a shareholder proposal which is not
addressed in the Company's proxy statement. The new amendment provides that if a
proponent of a proposal fails to notify the Company at least 45 days prior to
the month and day of mailing of the prior year's proxy statement, then the
Company will be allowed to use its discretionary voting authority when the
proposal is raised at the meeting, without any discussion of the matter in the
proxy statement.
OTHER
MATTERS
The
Company has enclosed a copy of the Annual Report on Form 10-KSB to Shareholders
for the year ended December 31, 2004 with this Information
Statement.
|
By
Order of Board of Directors |
|
|
|
|
|
|
|
|
|
Carl
Berg, President |
Rancho Santa Margarita,
California |
|
April ____, 2005 |
|