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COMTECH GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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INFORMATION STATEMENT
OF
COMTECH GROUP, INC.
ROOM 10001, TOWER C, SKYWORTH BUILDING
HIGH TECH INDUSTRIAL PARK
NANSHAN, SHENZEN 5180, PRC
THIS INFORMATION STATEMENT IS BEING PROVIDED
TO YOU BY THE BOARD OF DIRECTORS
OF COMTECH GROUP, INC.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO
SEND US A PROXY
This Information Statement is being mailed or furnished to the
stockholders of Comtech Group, Inc., a Maryland corporation (the "Company"), in
connection with the approval by a majority of the Company's Board of Directors
at a meeting of the Board of Directors held on September 27, 2004, of the
corporate action referred to below and the subsequent adoption of such corporate
action by written consent on September 27, 2004 of holders entitled to vote at
least two - thirds of the aggregate shares of common stock par value $0.01 per
share (the "Common Stock") of the Company representing 83.88% of the aggregate
shares of Common Stock of the Company entitled to vote. Such approval and
consent constitute the approval and consent of at least two - thirds of the
total number of shares of outstanding common stock and are sufficient under the
Maryland General Corporation Law and the Company's By-Laws to approve the
action. Accordingly, this Information Statement is furnished solely for the
purpose of informing the stockholders of the Company, in the manner required
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of
this corporate action before it takes effect.
This Information Statement is intended to be mailed or furnished to the
stockholders of the Company on or about October 11, 2004, and the transaction
described herein shall not become effective until at least 20 days thereafter.
ACTION BY BOARD OF
DIRECTORS AND
CONSENTING STOCKHOLDERS
The following corporate action was authorized and approved by a
majority of the Board of Directors of the Company at a meeting held on September
27, 2004, the minutes of which are attached hereto as EXHIBIT A, and by the
written consent of holders entitled to vote at least two - thirds of the Common
Stock on September 27, 2004, a copy of which is attached hereto as EXHIBIT B:
1. The approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 50,000,000 to 200,000,000 shares.
The reasons for, and general effect of, the Amendment to the
Articles of Incorporation to increase the authorized number of shares of the
Company's Common Stock is described in "AMENDMENT TO ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY'S COMMON STOCK." A
form of the Amendment is attached hereto as EXHIBIT C.
The Board of Directors of the Company knows of no other matters other
than those described in this Information Statement which have been recently
approved or considered by the holders of the Company's Common Stock.
GENERAL
The Company will pay all costs associated with the distribution of this
Information Statement, including the costs of printing and mailing. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending this Information Statement
to the beneficial owners of the Company's Common Stock.
The Company will only deliver one Information Statement to multiple
security holders sharing an address unless the Company has received contrary
instructions from one or more of the security holders. Upon written or oral
request, the Company will promptly deliver a separate copy of this Information
Statement and any future annual reports and information statements to any
security holder at a shared address to which a single copy of this Information
Statement was delivered, or deliver a single copy of this Information Statement
and any future annual reports and information statements to any security holder
or holders sharing an address to which multiple copies are now delivered. You
should direct any such requests to the following address: Room 10001, Tower C,
Skyworth Building, High Tech Industrial Park, Nanshan, Shenzen 5180, PRC.
VOTING SECURITIES AND INFORMATION
ON CONSENTING STOCKHOLDERS
Pursuant to the Maryland General Corporation Act, a vote by the
holders of at least two - thirds of the Company's outstanding capital stock is
required to effect the action described herein. The Company's Articles of
Incorporation do not authorize cumulative voting. As of September 27, 2004,
there were 44,422,050 shares of Common Stock, of which 29,614,700 shares are
required to pass the stockholder resolution approving the action described
herein. Each holder of Common Stock is entitled to one vote for each share held
by such holder. The consenting stockholders voted in favor of the actions
described herein in a written consent, dated September 27, 2004, attached hereto
as EXHIBIT B. The consenting stockholders are collectively the record and
beneficial owners of 37,261,978 shares, which represents 83.88% of the issued
and outstanding shares of the Company's Common Stock. No consideration was paid
for the consent. The consenting stockholders' names, and their beneficial
holdings are as follows:
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NAME SHARES BENEFICIALLY HELD PERCENTAGE
- ------------------------------------------- ------------------------------------ ---------------------------------
Comtech Global Investment Ltd. 26,326,398(1) 59.26%
- ------------------------------------------- ------------------------------------ ---------------------------------
Ren Investment International Ltd. 10,935,580 (2) 24.62%
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(1) Mr. Jeffrey Kang and his wife, Ms. Nan Ji, share voting and
investment power over the shares held by Comtech Global Investment Ltd.
(2) Mr. Jeffrey Kang, as sole director of Ren Investment International
Ltd., has sole voting and investment power over the shares owned by Ren
Investment International Ltd. Mr. Kang is not a shareholder of Ren Investment
International Ltd.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of September 27, 2004, certain
information as to the stock ownership of (i) each person known by the Company to
own beneficially more than 5% of the Company's Common Stock, (ii) each of the
Company's directors, and (iii) each of the Company's executive officers:
Number of Shares Beneficially
Name of Beneficial Owner Owned (1) Percentage Ownership
- ----------------------------------------- -------------------------------------- ----------------------------
Jeffrey Kang 37,261,978 (2) 83.88%
Amy Kong 0(3) *
Bin Li 0 *
Zhou Li 0(4) *
Jason Kim 0(5) *
Mark S. Hauser 677,871(6) 1.53%
Mark B. Segall 180,000(7) *
Comtech Global Investment, Ltd. 26,326,398 59.26%
Ren Investment International, Ltd. 10,935,580 24.62%
Purple Mountain Holding, Ltd. 3,240,172 7.29%
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* Represents less than one percent (1%)
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(1)In computing the number of shares beneficially owned by a person and the
percentage ownership of a person, shares of Common Stock subject to options or
warrants held by that person that are currently exercisable or exercisable
within 60 days are deemed outstanding. Such shares, however, are not deemed
outstanding for purposes of computing the percentage ownership of each other
person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of common stock.
(2)Includes (i) 26,326,398 shares beneficially owned by Comtech Global
Investment Ltd., over which Mr. Kang and his wife, Ms. Nan Ji, share voting and
investment power, and (ii) 10,935,580 shares beneficially owned by Ren
Investment International Ltd., over which Mr. Kang, as sole director, has sole
voting and investment power. Mr. Kang is not a shareholder of Ren Investment
International Ltd.
(3)Does not include shares held by Ren Investment International Ltd., in which
Ms. Kong owns less than a 1% interest. Ms. Kong disclaims beneficial ownership
of such shares.
(4)Does not include shares held by Ren Investment International Ltd., in which
Mr. Li has an approximate 3.7% interest. Mr. Li disclaims beneficial ownership
of such shares.
(5)Does not include shares held by Ren Investment International Ltd. in which
Mr. Kim owns less than a 1% interest. Mr. Kim disclaims beneficial ownership of
such shares.
(6)Includes warrants to purchase 468,337 shares.
(7)Includes 30,000 presently exercisable options and warrants to purchase an
aggregate of 150,000 shares issued to Kidron Corporate Advisors LLC, an
affiliate of Mark B. Segall.
NOTICE TO STOCKHOLDERS OF ACTIONS
APPROVED BY CONSENTING STOCKHOLDERS
The following action has been approved by the written consent of
holders entitled to vote at least two - thirds of the aggregate shares of Common
Stock of the Company:
AMENDMENT TO ARTICLES
OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES
OF THE COMPANY'S COMMON STOCK
The Board of Directors adopted a resolution at a meeting of the
Board of Directors to amend the Company's Articles of Incorporation to increase
the number of authorized shares of Common Stock of the Company. The Company is
authorized to issue 50,000,000 shares of Common Stock. The amendment (the
"Amendment") to the Company's Articles of Incorporation in the form attached
hereto as EXHIBIT C, increases the authorized shares of the Company's Common
Stock from 50,000,000 shares to 200,000,000 shares. Of the 50,000,000 shares of
Common Stock currently authorized, 44,422,050 shares of Common Stock are issued
and outstanding.
Paragraph 4.1 of ARTICLE IV of the Company's Articles of Incorporation
will read as follows:
"4.1 Number of Shares Authorized; Par Value. The total number of shares
of all classes of stock which the Corporation shall have authority to issue is
200,000,000 shares of common stock, par value $0.01 per share (the "Common
Stock").
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The Company is increasing the number of authorized shares of its Common
Stock to provide additional shares for general corporate purposes, including
stock dividends and splits, raising additional capital, issuance of shares
pursuant to employee stock option plans, and for possible future acquisitions.
The Company's officers may from time to time engage in discussions with
other companies concerning the possible acquisition of such companies by the
Company in which the Company may consider issuing stock as part or all of the
acquisition price. The Board of Directors believes that an increase in the total
number of shares of authorized Common Stock will better enable the Company to
meet its future needs and give it greater flexibility in responding quickly to
business opportunities. The increase will also provide additional shares for
corporate purposes generally.
The Board of Directors of the Company knows of no other matters other
than those described in this Information Statement, which have been recently
approved or considered by the holders of the Company's Common Stock.
By Order of the Board of Directors
Hope Ni
Secretary
Dated: September 27, 2004
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EXHIBIT A
MINUTES OF A MEETING
OF THE BOARD OF DIRECTORS
OF COMTECH GROUP, INC.
SEPTEMBER 27, 2004
A meeting (the "Meeting") of the Board of Directors (the "Board") of
Comtech Group, Inc., a Maryland corporation (the "Corporation"), was held on
September 27, 2004. In attendance were the following members of the Board:
Jingwei (Jeffrey) Kang, Mark Hauser, Amy Kong and Li Zhou. The following members
of the Board were not present: Mark Segall, Jason Kim and Bin Li. Also in
attendance was Hope Ni, Chief Financial Officer and Secretary of the
Corporation.
Mr. Kang acted as Chairman of the Meeting and Ms. Ni was Secretary of
the Meeting. There being a majority of the Directors of the Board present in
person at the Meeting, the Chairman declared that there was a quorum and the
Meeting could commence.
AMENDMENT TO INCREASE AUTHORIZED SHARES
The first order of business was the discussion of an amendment to
the Corporation's Articles of Incorporation to increase the Corporation's
authorized shares of Common Stock. The Board discussed the reasons for
increasing the authorized shares, including to provide additional shares for
general corporate purposes, such as stock dividends and splits, raising
additional capital, issuance of shares pursuant to employee stock option plans,
and for possible future acquisitions. Upon motion duly made, properly seconded
and unanimously approved, it is:
RESOLVED, that an amendment to the Corporation's Articles of
Incorporation to increase the number of authorized shares of the Corporation's
Common Stock from 50,000,000 to 200,000,000 shares, is hereby approved;
RESOLVED, the Articles of Incorporation of the Corporation are hereby
amended so that Paragraph 4.1 of ARTICLE IV is amended in its entirety to read
as follows:
"4.1 Number of Shares Authorized; Par Value. The total number of shares
of all classes of stock which the Corporation shall have authority to issue is
200,000,000 shares of common stock, par value $0.001 per share (the "Common
Stock")."
OMNIBUS AUTHORITY
RESOLVED, that the officers of the Corporation be, and each of them
individually hereby is, authorized, empowered and directed, to execute and file
with the Secretary of State of Maryland any and all such certificates,
amendments, instruments and documents, in the name of, and on behalf of, the
Corporation, with such changes thereto as any officer may approve, and to take
all such further action as they, or any of them, may deem necessary or
appropriate to carry out the purpose and intent of the foregoing resolutions.
Thereafter, there being no further matters to discuss, the Meeting was
adjourned.
/s/ Hope Ni
Hope Ni, Secretary
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EXHIBIT B
WRITTEN CONSENT OF THE
STOCKHOLDERS OF
COMTECH GROUP, INC.
The undersigned, constituting the holders of at least two - thirds
of the outstanding capital stock of Comtech Group, Inc., a Maryland corporation
(the "Company"), adopt the following resolutions by written consent in lieu of a
meeting, pursuant to provisions of the Maryland General Corporation Law and the
Company's By-laws:
RESOLVED, that an amendment to the Company's Articles of Incorporation
to increase the number of authorized shares of the Company's Common Stock from
50,000,000 to 200,000,000 shares, in substantially the form attached hereto as
Exhibit A, is hereby approved;
RESOLVED, that the officers of the Company be, and each of them
individually hereby is, authorized, empowered and directed, to execute and file
with the Secretary of State of Maryland any and all such certificates,
amendments, instruments and documents, in the name of, and on behalf of, the
Company, with such changes thereto as any officer may approve, and to take all
such further action as they, or any of them, may deem necessary or appropriate
to carry out the purpose and intent of the foregoing resolutions.
IN WITNESS WHEREOF, the 27th day of September, 2004.
Comtech Global Investment, Ltd.
By:/s/ Jeffrey Kang
---------------------------------------------
Jeffrey Kang, authorized officer
Ren Investment International, Ltd.
By:/s/ Jeffrey Kang
---------------------------------------------
Jeffrey Kang, authorized officer
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EXHIBIT C
ARTICLES OF AMENDMENT
1. Comtech Group, Inc., a Maryland corporation (the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
2. The charter of the Corporation is hereby amended as follows:
3. Paragraph 4.1 of ARTICLE IV of the Articles of Incorporation of the
Corporation is hereby amended as follows:
"4.1 Number of Shares Authorized; Par Value. Prior to the amendment of
the Articles of Incorporation of the Corporation, the total number of shares of
all classes of stock which the Corporation had authority to issue was 50,000,000
shares of common stock, par value $0.01 per share (the "Common Stock"). After
giving effect to the amendment to the Articles of Incorporation of the
Corporation, the total number of shares of all classes of stock which the
Corporation shall have authority to issue is 200,000,000 shares of Common Stock,
par value $0.01 per share."
4. This amendment of the charter has been approved by the directors and
shareholders.
5. We, the undersigned President and Secretary swear under penalties of
perjury that the foregoing is a corporate act.
/s/ Jeffrey Kang /s/ Hope Ni
- ------------------------ -----------------------------
Jeffrey Kang, President Hope Ni, Secretary
Comtech Group, Inc.
c/o Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
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