SCHEDULE 14C INFORMATION
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| x | Preliminary Information Statement |
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| o | Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
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| o | Definitive Information Statement |
BY DESIGN, INC.
(Name of Registrant As Specified In Charter)
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| x | No fee required. |
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| o | Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. |
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| 1) | Title of each class of securities to which transaction applies: |
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| 2) | Aggregate number of securities to which transaction applies: |
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| 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): |
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| 4) | Proposed maximum aggregate value of transaction: |
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| 5) | Total fee paid: |
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| o | Fee paid previously with preliminary materials. |
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| o | 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. |
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| 1) | Amount Previously Paid: |
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| 2) | Form, Schedule or Registration Statement No.: |
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| 3) | Filing Party: |
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| 4) | Date Filed: |
BY DESIGN, INC.
2519 East Kentucky Avenue
Denver, Colorado 80209
INFORMATION STATEMENT AND NOTICE OF ACTION TAKEN WITHOUT A MEETING OF STOCKHOLDERS
We are not asking for a proxy and
you are requested not to send us a proxy
INTRODUCTION
This Information Statement and Notice of Action Taken Without a Meeting of Stockholders is being furnished by us to our stockholders of record as of July __, 2010, to inform them of the June 24, 2010 approval by written consent of stockholders owning a majority, as of the record date, of our outstanding shares of common stock, the only class of our voting securities outstanding as of the record date, of an amendment to our articles of incorporation to (1) increase the number of authorized shares of our common stock from 50 million to 500 million shares, and (2) change our corporate name to Global Gate Property Corp. We have no present plans, proposals or arrangements to issue any of the new shares being authorized.
This information statement is dated July __, 2010, and is first being sent or given to our stockholders as of the record date on or about July __, 2010.
VOTING RIGHTS AND OUTSTANDING SHARES
The amendment to our articles of incorporation was approved by written consent on June 24, 2010 by our stockholders owning a majority of the outstanding shares of our common stock. As of the date of the stockholder consent, our only outstanding voting securities were our shares of common stock. As of the date of the stockholder consent, there were 50,000,000 shares outstanding of our common stock. With respect to the action approved by the stockholder consent, each share of our common stock entitled its holder to one vote. The stockholder consent was signed by holders of 40,802,198 shares (or 81.6%) of the 50,000,000 shares that were entitled to be voted on these matters.
As a result of requirements under applicable federal securities and state law, the stockholder consent will not be effective, and therefore the amendment to our articles of incorporation cannot occur, until at least 20 calendar days after this information statement is sent or given to our stockholders of record as of the record date.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the number of shares of our common stock beneficially owned as of June 24, 2010, by (i) each person known to us to be the beneficial owner of more than 5% of our common stock; (ii) each director; (iii) each executive officer; and (iv) all of our directors and executive officers as a group. Unless otherwise indicated, the persons as to whom the information is given had sole voting and investment power over the shares of common stock shown as beneficially owned by them. Unless otherwise indicated, the address of each person shown is c/o By Design, Inc., 2519 East Kentucky Avenue, Denver, Colorado 80209.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days after the date indicated in the table are deemed beneficially owned by the optionees. Subject to any applicable community property laws, the persons or entities named in the table below have sole voting and investment power with respect to all shares indicated as beneficially owned by them.
| | | | | Shares of Common Stock Beneficially Owned(1) |
| Name | | Position | | Number of Shares | Percent of Class(2) |
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| Executive Officers and Directors: | | | | | |
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| Gary S. Ohlbaum | | President, Chief Executive Officer and Chief Financial Officer | | -- | * |
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| Deanie J. Underwood | | Director and Former President, Chief Executive Officer, Secretary, Treasurer and Chief Financial Officer | | 1,921,978 | 3.8% |
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All executive officers and directors as a group (2 persons) | | -- | | 1,921,978 | 3.8% |
| 5% Stockholders: | | | | | |
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| Mr. Guoping Jiang(3) | | Stockholder | | 4,950,000 | 9.9% |
| Elemental Investments Ltd.(4) | | Stockholder | | 4,400,000 | 8.8% |
| Rabeord Ltd.(5) | | Stockholder | | 4,330,220 | 8.7% |
| Olghochpo Ltd.(6) | | Stockholder | | 4,330,220 | 8.7% |
| Tyrells Lessisbest Holdings Pte. Ltd.(7) | | Stockholder | | 3,550,000 | 7.1% |
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| * | Less than 1% of outstanding shares. |
| (1) | Unless otherwise indicated, includes shares owned by a spouse, minor children and relatives sharing the same home, as well as entities owned or controlled by the named person. Also includes shares if the named person has the right to acquire those shares within 60 days after June 24, 2010, by the exercise of any warrant, stock option or other right. Unless otherwise noted, shares are owned of record and beneficially by the named person. |
| (2) | Based upon 50,000,000 shares of common stock outstanding on June 24, 2010. |
| (3) | The address for Mr. Guoping Jiang is Qing Yun Nan Qu Se She 9 Dong 51 Hao, Beijing, China. |
| (4) | The address for Elemental Investments Ltd. is 9B, Amtel Building, 148 Des Voeux Road Central, Hong Kong. |
| (5) | The address for Rabeord Ltd. is R.G. Hodge Plaza, 3rd Floor, Wickham’s Cay 1, P.O. Box 3483, Road Town, Tortola, British Virgin Islands VG1110. |
| (6) | The address for Olghochpo Ltd. is R.G. Hodge Plaza, 3rd Floor, Wickham’s Cay 1, P.O. Box 3483, Road Town, Tortola, British Virgin Islands VG1110. |
| (7) | The address for Tyrells Lessisbest Holdings Pte. Ltd. is 279 River Valley Road, #06-01 FDAWU Tower, Singapore 238320. |
AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF OUR AUTHORIZED SHARES
OF COMMON STOCK
Our board of directors and stockholders owning a majority of the outstanding shares of our common stock have approved an amendment to our articles of incorporation to increase the number of authorized shares of our common stock from 50 million to 500 million shares. Our articles of incorporation presently authorize the issuance of 50 million shares of common stock and 1 million shares of preferred stock.
Text of Amendment
The amendment would result in the text of the first paragraph of Article FOURTH of our Articles of Incorporation reading as follows:
“FOURTH. CAPITAL STOCK: The amount of the total authorized capital stock of the corporation is FIVE HUNDRED TEN THOUSAND DOLLARS ($510,000) consisting of Five Hundred Million (500,000,000) shares of one class of common stock of the par value of One Mill ($.001) each; and One Million (1,000,000) shares of preferred stock of the par value of One Cent ($.01) each, to have such classes, series and preferences as the Board of Directors may determine from time to time.”
General Effect of the Proposed Amendment and Reasons for Approval
Our board of directors unanimously recommended that we approve the amendment for the following reasons:
Availability. Of our 50 million authorized shares of common stock, all of these shares were outstanding as of the record date. As of the record date, after taking into account shares of common stock reserved for issuance under our outstanding stock options and warrants, we determined that we lack a sufficient number of shares for potential future issuance, though we have no present plans, proposals or arrangements to issue any shares. The following table sets forth as of July __, 2010, and following the proposed amendment, (a) the number of shares of our common stock issued and outstanding; (b) the number of shares of our common stock authorized; (c) the number of shares of our common stock reserved for issuance, identifying each purpose for which shares are being reserved; and (d) the number of shares of our common stock authorized and unreserved:
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| (a) | Issued and Outstanding Common Stock | | | 50,000,000 | | | | 50,000,000 | |
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| (b) | Authorized Common Stock | | | 50,000,000 | | | | 500,000,000 | |
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| (c) | Reserved Common Stock (for stock options or warrants) | | | 0 | | | | 0 | |
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| (d) | Authorized and Unissued or Unreserved Common Stock | | | 0 | | | | 450,000,000 | |
We have no present plans, proposals or arrangements to issue any of the additional shares being authorized; however, adoption of the amendment would enable our board of directors from time to time to issue additional shares of our common stock authorized by the amendment for such purposes and such consideration as our board of directors may approve without further approval of our stockholders, except as may be required by law or the rules of any national securities exchange on which our shares of common stock are at the time listed. As is true for shares presently authorized, common stock authorized by the amendment may, when issued, have a dilutive effect on the equity and voting power of existing holders of common stock.
The effective increase in the number of authorized, unissued shares of our common stock may be construed as having an anti-takeover effect by permitting the issuance of shares to purchasers who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain provisions of our articles of incorporation or by-laws. Such a use of these additional authorized shares could render more difficult, or discourage, an attempt to acquire control of our company through a transaction opposed by our board of directors. Our management could use the additional shares to resist or frustrate a third-party transaction providing an above-market premium that is favored by a majority of the stockholders. In addition, certain provisions of the Nevada General Corporation Law, as embodied in our articles of incorporation, could have the effect of making it more difficult or more expensive for a third party to acquire, or of discouraging a third party from attempting to acquire, control of our company. We do not currently have any plans or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover consequences.
There are no preemptive rights with respect to our common stock. The additional authorized shares of common stock would have the identical powers, preferences and rights as the shares now authorized. Under Nevada law, stockholders will not have any dissenters’ or appraisal rights in connection with the amendment.
The amendment will become effective upon the filing, promptly after the expiration of the 20-day period commencing on the mailing of this information statement, of the articles of amendment required by the Nevada General Corporation Law.
AMENDMENT TO ARTICLES OF INCORPORATION
TO CHANGE OUR CORPORATE NAME
Our board of directors has deemed it advisable and in the best interests of our company to change our corporate name to Global Gate Property Corp. The new name is consistent with this company’s expanded focus of its property-related business on international markets including in Asia.
REASONS WE USED STOCKHOLDER CONSENT AS OPPOSED TO SOLICITATION OF STOCKHOLDER APPROVAL VIA PROXY STATEMENT AND SPECIAL MEETING
The increase in our authorized shares of common stock requires an amendment to our articles of incorporation, which cannot proceed until stockholder approval is obtained and effective. Stockholder approval could have been obtained by us in one of two ways: (i) by the dissemination of a proxy statement and subsequent majority vote in favor of the actions at a stockholders meeting called for such purpose, or (ii) by a written consent of the holders of a majority of our voting securities. However, the latter method, while it represents the requisite stockholder approval, is not deemed effective until 20 days after this information statement has been sent to all of our stockholders giving them notice of and informing them of the actions approved by such consent.
Given that we have already secured the affirmative consent of the holders of a majority of our voting securities to the amendment to our articles of incorporation, we determined that it would be a more efficient use of limited corporate resources to forego the dissemination of a proxy statement and subsequent majority vote in favor of the actions at a stockholders meeting called for such a purpose, and rather proceed through the written consent of the holders of a majority of our voting securities. Spending the additional company time, money and other resources required by the proxy and meeting approach would have been potentially wasteful and, consequently, detrimental to completing the amendment in a manner that is timely and efficient for us and our stockholders.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of our directors or officers or their associates have any interest, direct or indirect, by security holdings or otherwise, in any of the matters to be approved by the stockholders as described in this information statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file at the SEC’s public reference room in Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our filings with the SEC are also available to the public from commercial document retrieval services and at the website maintained by the SEC at “http://www.sec.gov.”
You should rely only on the information contained or incorporated by reference in this information statement. We have not authorized anyone to provide you with information that is different from what is contained in this information statement. This information statement is dated July __, 2010. You should not assume that the information contained in this information statement is accurate as of any date other than that date, and the mailing of this information statement to stockholders shall not create any implication to the contrary.
Dated: July __, 2010
| | By Order of the Board of Directors, |
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| | Gary S. Ohlbaum |
| | President, Chief Executive Officer and |
| | Chief Financial Officer |
