SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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[_] Soliciting Material Pursuant to
Section 240.14a-11(c) or Section
240.14a-12
GULF COAST OIL & GAS, INC.
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(Name of Registrant as Specified In Its Charter)
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PRELIMINARY COPY
Gulf Coast Oil & Gas, Inc.
584 San Felipe
Suite 1700
Houston, TX 77057
(604) 876-7157
To our Stockholders:
The Board of Directors has approved, and is requesting your approval of
an amendment to the Company's articles of incorporation increasing the number of
authorized shares of Company common stock. The Company's Articles of
Incorporation currently authorize the issuance of 500,000,000 shares of common
stock. The Company needs to increase the number of authorized shares of common
stock in order to have an adequate reserve of common stock available for
issuance upon exercise of outstanding convertible securities and for future
issuance in equity financings.
The Board of Directors unanimously recommends that the stockholders
approve the proposed amendment, which is more fully described in the
accompanying materials. Toward that end, the Board asks that you complete, sign
and return the enclosed consent form by April__, 2006. Your consent is
important, since approval of the amendment requires the execution of written
consents on behalf of the holders of a majority of the outstanding shares of
common stock. As a result, if you do not return a properly completed and signed
consent, you will effectively be voting against the amendment.
The consent that the Board of Directors is soliciting will allow the
Company to proceed with the proposed amendment to the articles of incorporation
without the necessity of convening a special meeting of stockholders.
Please take a moment to review the materials and to complete, sign and
return your consent.
Very truly yours,
Rahim Rayani
Chief Executive Officer
March__, 2006
PRELIMINARY COPY
Gulf Coast Oil & Gas, Inc.
584 San Felipe
Suite 1700
Houston, TX 77057
(604) 876-7157
Consent Solicitation
March __, 2006
This consent solicitation contains important information relating to a proposed
amendment to the articles of incorporation of Gulf Coast Oil & Gas, Inc. to
increase its authorized common stock from 500,000,000 to 1,000,000,000 shares.
The Board of Directors is recommending approval of the amendment.
The following pages include information on:
* the proposed amendment to the articles of incorporation
(questions 1 to 3);
* procedures for the consent solicitation (questions 4 to 11);
* current stock ownership and other matters relating to the Company
(questions 12 and 13).
This consent solicitation was first mailed to stockholders on March __,
2000. Stockholders are requested to return their consent forms by April __,
2006.
AMENDMENT OF THE ARTICLES OF INCORPORATION
1. What is the proposed amendment to the Articles of Incorporation?
The Company's articles of incorporation currently authorize the
issuance of a total of 600,000,000 shares, composed of 500,000,000 shares of
common stock, par value $0.001 per share, and 100,000,00 shares of preferred
stock, par value $0.001 per share. The proposed amendment will increase the
total number of authorized shares to 1,100,000,000 and the number of shares of
common stock authorized to 1,000,000,000. The amendment will modify the first
paragraph of Article Two of the Articles of Incorporation to read as follows:
"ARTICLE 2 (SHARES) : The total number of shares of stock which the
Corporation shall have authority to issue is 1,100,000,000 shares, composed of
1,000,000,000 shares of common stock, par value $0.001 per share ("Common
Stock"), and 100,000,000 shares of preferred stock, par value $0.001 per share
("Preferred Stock")."
Each of the newly authorized shares of common stock will have the same
rights and privileges as currently authorized common stock. The new shares, like
the currently authorized shares, will not have preemptive rights. The amendment
will not change the par value of the common stock.
The amendment will not change the currently authorized number of shares
of preferred stock, which will remain set at 100,000,000. No shares of preferred
stock are issued and outstanding.
2. Why is the amendment necessary?
INCREASE IN AUTHORIZED COMMON STOCK
The Amendment will increase the authorized shares of Common Stock from
500,000,000 to 1,000,000,000. The Company needs to increase the number of
authorized shares of Common Stock in order to have an adequate reserve of Common
Stock available for issuance upon conversion of existing convertible securities
and exercise of outstanding warrants (see "Outstanding and Issuable
Securities"). The Company also needs to increase the number of authorized shares
of Common Stock in order to have an adequate reserve of Common Stock available
for future issuance in equity financings.
The increase in the number of authorized but unissued shares of Common Stock
would enable the Company, without further stockholder approval, to issue shares
from time to time as may be required for proper business purposes such as
raising capital for ongoing operations, business and asset acquisitions, present
and future employee benefit programs and other corporate purposes. It is
anticipated that such purposes may include the issuance for cash as a means of
obtaining capital for use by the Company, issuance in exchange for debt or
issuance as part or all of the consideration required to be paid by the Company
for acquisitions of other businesses or assets.
The Company has no current plan or commitment to issue shares of Common Stock
for purposes other than those discussed above or described below in "Outstanding
and Issuable Securities".
OUTSTANDING AND ISSUABLE SECURITIES
At March 10, 2006, the Company had outstanding 119,536,793 shares of Common
Stock, no shares of Preferred Stock, and the following convertible securities,
warrants, options and commitments to issue Company securities:
CONVERTIBLE DEBENTURES
On February 1, 2006, we entered into a Securities Purchase Agreement with
Cornell Capital, Ltd., Certain Wealth, Ltd., and TAIB Bank, B.S.C.(c) (the
"Buyers") pursuant to which the Buyers agreed to purchase secured convertible
debentures in the principal amount of $2,000,000 (the "Debentures"). On February
2, 2006 we sold and issued $1,000,000 in principal amount of Debentures to the
Buyers (the "First Closing").
In connection with the Securities Purchase Agreement, we issued Cornell Capital
five-year warrants to purchase 30,000,000 shares of our common stock at the
following exercise prices: 7,500,000 at $0.02 per share, 7,500,000 at $0.03 per
share, 5,000,000 at $0.04 per share, 5,000,000 at $0.05 per share, and 5,000,000
at $0.06 per share (the "Warrants").
The Debentures are convertible at the option of the Buyers any time up to
maturity into shares of our common stock, par value $0.001 per share, at the
price per share equal to the lesser of (a) $.02916 (the "Fixed Price") or (b) an
amount equal to eighty percent (80%) of the lowest volume weighted price of our
common stock, as quoted by Bloomberg, LP, for the five (5) trading days
immediately preceding the conversion date, which may be adjusted pursuant to the
other terms of the Debentures (the "Issuance Formula").
We have agreed to prepare and file a registration statement under the Securities
Act of 1933, as amended (the "Registration Statement"), that includes the shares
of common stock issuable upon conversion of the Debentures and upon exercise of
the Warrants, by March 4, 2006, and to use our best efforts to have the
Registration Statement declared effective by the SEC by May 3, 2006. Pursuant to
the Securities Purchase Agreement, we are obligated to register for resale a
number of shares of common stock equal to five times the number of shares that
would be issuable on the Closing Date pursuant to the Issuance Formula. Thus, we
are obligated to register a total of 514,403,292 shares of common stock for
issuance under the Debentures, and 30,000,000 for issuance under the Warrants.
We have agreed to pursue the Amendment to our Certificate of Incorporation to
increase the authorized shares to permit the issuance by the Company of the
number of shares it is required to register under the Securities Purchase
Agreement.
The Buyers are, subject to compliance with certain customary conditions
precedent, obligated to purchase an additional $1,000,000 of principal amount of
Debentures two (2) days before we file a Registration Statement covering the
shares issuable upon conversion of the Debentures and Warrants with the
Securities and Exchange Commission.
3. How will the additional authorized common stock be used?
The initial authorized common stock will be used until such time as the
application of the Issuance Formula upon conversion of the Debentures and the
exercise of the warrants requires the Company to issue more than the 500,000,000
shares currently authorized. The Company has no current plan or commitment to
issue shares of stock for purposes other than those discussed above.
The additional authorized shares could be used to discourage persons
from attempting to gain control of the Company, by diluting the voting power of
shares then outstanding or increasing the voting power of persons who would
support the Board in opposing a takeover bid or a solicitation in opposition to
management. The Company is not currently aware of any effort to obtain control
of the Company, and has no plans to use the new shares for purposes of
discouraging any such effort.
THE CONSENT SOLICITATION
4. Who is being asked to approve the amendment?
Only stockholders of record at the close of business on March 10, 2006
are entitled to execute and deliver consents with respect to the proposed
amendment. On that date, there were 119,536,793 shares of Company common stock
outstanding. Each share is entitled to one consent.
5. What level of approval is required for the amendment?
Approval of the amendment will require the execution and delivery to
the Company of written consents on behalf of the holders of an absolute majority
of the issued and outstanding shares of the Company's common stock.
6. What are the consequences to the Company if the amendment is not approved?
If the amendment is not approved in connection with this consent
solicitation, the Company will not meet one of the conditions precedent to
receiving the additional investment of $1,000,000 under the Securities Purchase
Agreement. The Company would then file (or amend before effectiveness) its
registration statement to register fewer shares (one half of the 514,403,292, or
257,201,646, plus 30,000,000 covered by the warrants, or a total of 287,201,646
shares of common stock).
7. How do I consent to the amendment?
You may consent to the proposed amendment with respect to your shares
by completing and signing the enclosed consent form and returning it to the
Company on or before the final consent date (as described under question 8
below).
If your shares are held in "street name," your broker or nominee may
authorize consent on your behalf if you do not direct your broker or nominee not
to do so.
Please note that not returning your consent or abstaining from the vote
has the same impact as disapproving the amendment, since approval of the
amendment requires written consent on behalf of the holders of an absolute
majority of the common stock outstanding and entitled to vote, rather than
simply a majority of those who actually execute and deliver consents.
8. What is the deadline for delivering my consent?
The Board of Directors has set April ___, 2006 as the targeted final
date for receipt of consents. If the Company has received consents on behalf of
the holders of a majority of the Company's common stock by that date, the
consent solicitation will expire, and the Company will proceed with the
amendment of the certificate of incorporation.
The Board of Directors has reserved the right to extend the final date
for receipt of consents beyond April___, 2006 in the event that the requisite
majority approval has not been obtained by that date. Any such extension may be
made without notice to individual stockholders.
9. Is my consent irrevocable?
No. Even after you have submitted your consent form, you may file with
the Secretary of the Company a notice of revocation or a subsequently dated
consent form at any time before the final consent date.
10. What is the recommendation of the Board of Directors?
The sole director has approved the amendment of the articles of
incorporation and believes that the amendment is in the best interest of the
Company and its stockholders. Accordingly, the sole Board member recommends that
stockholders consent to the amendment.
11. How are costs of this solicitation being borne?
All of the costs of this consent solicitation will be paid by the
Company. Officers and regular employees of the Company may, but without
compensation other than their regular compensation, solicit consents. Such
solicitations may be made personally, or by mail, facsimile, telephone,
telegraph, messenger, or via the internet. The Company will, upon request,
reimburse brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of stock.
ADDITIONAL INFORMATION
17. What is the Stock Ownership?
The following table gives information about the ownership of Company common
stock as of March 10, 2006 by the directors, the chief executive officer, the
four most highly compensated other executive officers and the executive officers
and directors as a group and beneficial owners of more than 5% of the Company's
common stock.
Name and Address Number of Shares
of Beneficial Owner(1) Beneficially Owned Percent of Class
- ------------------------------ --------------------- -----------------
Rahim Rayani 16,500,000 13.8%
All Directors and Officers as 16,500,000 13.8%
a Group (1 person)
(1) The address of Mr. Rayani is c/o Gulf Coast Oil & Gas, Inc., 5847
San Felipe, Houston Texas 77057
18. How can I obtain more information about the Company?
The Company files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information filed by the
Company at the SEC's public reference rooms in Washington, D.C., New York City,
and Chicago, Illinois. The Company's SEC filings are also available from
commercial document retrieval services or on the SEC's web site at
http://www.sec.gov. You may also request a copy of the Company's financial
reports filed with the SEC by contacting the Company's Corporate Secretary, c/o
Gulf Coast Oil & Gas, Inc., 5847 San Felipe, Houston, Texas 77057.
By order of the Board of Directors,
Rahim Rayani
Corporate Secretary
March __, 2006
[Form of Consent]
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PRELIMINARY COPY
Please mark vote as in example / X /
Gulf Coast Oil & Gas, Inc.
Consent Card
Solicited on Behalf of the Board of Directors
The undersigned hereby takes the following action with respect to all of the
shares of Gulf Coast Oil & Gas, Inc. common stock that the undersigned is
entitled to vote:
Consents Does Not Consent Abstains To the amendment of the
Certificate of Incorporation
of Gulf Coast Oil & Gas, Inc. to
increase the authorized number
of shares of common stock to
[ ] [ ] [ ] 1,000,000,000
The Board of Directors unanimously recommends giving consent to the amendment.
Marking the box "CONSENTS" constitutes your written consent to the amendment.
However, if no box is marked, your signature below will evidence your written
consent to the amendment as recommended by the Board of Directors.
Please sign exactly as your name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
Signature: Date:
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Signature: Date:
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