UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement.
|_| Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
|_| Definitive Proxy Statement
|_| Definitive additional materials.
|_| Soliciting material pursuant to Rule 14a-11 (c) or Rule 14a-12.
MAGNITUDE INFORMATION SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
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):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| 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.
1. Amount Previously Paid: _____________________________________
2. Form, Schedule or Registration Statement No.: _______________
3. Filing Party: _______________________________________________
4. Date Filed: _________________________________________________
MAGNITUDE INFORMATION SYSTEMS, INC.
401 State Route 24
Chester, New Jersey 07930
NOTICE OF ACTION OF SHAREHOLDERS BY WRITTEN CONSENT
IN LIEU OF SHAREHOLDER'S MEETING
To the Stockholders:
On behalf of the Board of Directors and management of Magnitude Information
Systems, Inc. (the "Company"), we urge you to consider and act upon the
following proposed amendment to the Company's Certificate of Incorporation,
which the Board of Directors recommends that shareholders approve by Written
Consent in lieu of a Shareholder's Meeting:
1. Increase the number of shares of Common Stock that the Company is
authorized to issue from 200,000,000 to 300,000,000 shares.
Pursuant to the applicable provisions of the Delaware General Corporation
Law and our Company's Certificate of Incorporation, as amended, the written
consent of stockholders owning no less than the majority of the Company's
outstanding shares of common stock are required in order to amend the Company's
Certificate of Incorporation. Your Board of Directors has fixed September 26,
2005 as the record date for purposes of this solicitation. Therefore, only
holders who owned Company common shares as of the close of business on September
26, 2005, are permitted to provide their Written Consent.
The proposal to amend our Certificate of Incorporation and procedure to
exercise your rights in connection with this solicitation is described in the
accompanying Consent Solicitation Statement. It is requested that your written
consent, using the accompanying Consent Card, be delivered to Securities
Transfer Corporation, 2591 Dallas Parkway, Suite 102 Frisco, Texas 75034,
Attention: Proxy Department, on or before October 30, 2005. An addressed return
envelope is enclosed for this purpose, which requires no postage if mailed in
the United States.
By Order of the Board of Directors
Joerg H. Klaube,
Secretary
Chester, New Jersey
2
September , 2005
MAGNITUDE INFORMATION SYSTEMS, INC.
401 State Route 24
Chester, New Jersey 07930
CONSENT SOLICITATION STATEMENT
FOR
THE SOLICITATION OF WRITTEN CONSENTS
FOR THE ADOPTION OF AN AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
This Consent Solicitation Statement (the "Consent Statement") is furnished to
the stockholders of MAGNITUDE INFORMATION SYSTEMS, INC., a Delaware corporation
(the "Company"), by the Board of Directors in connection with the solicitation
by the Company of the written consent of stockholders. The stockholders are
being asked to provide their written consent for the adoption of an amendment
(the "Amendment") to the Certificate of Incorporation of the Company. The
Amendment would increase the number of shares of common stock, $.0001 par value
(the "Common Stock"), which the Company has authority to issue from 200,000,000
to 300,000,000 shares. The text of the Amendment is attached hereto as Exhibit
A.
The Company intends to distribute this Consent Statement and the accompanying
Consent Card commencing on or about October__, 2005 to the holders of record of
the Common Stock as of the close of business on September 26, 2005. This date is
referred to as the "record date." Written consents of stockholders representing
a majority of the outstanding shares of Common Stock at the record date are
required to approve the Amendment.
The principal executive offices of the Company are located at 401 State Route
24, Chester, New Jersey 07930, and the telephone number of the Company is (908)
879-2722.
PURPOSE AND APPROVAL OF AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Company's Certificate of Incorporation, as amended, currently authorizes the
issuance of 200,000,000 shares of Common Stock. The Company's Board of Directors
has unanimously adopted, subject to stockholder approval, an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of the Company's Common Stock from 200,000,000 shares to 300,000,000
shares. As of September 26, 2005, the Company has 137,190,006 shares of issued
and outstanding Common Stock, outstanding options to purchase 7,448,074 shares
of Common Stock as well as 45,602,684 outstanding common stock purchase warrants
and convertible preferred stock, convertible into 13,004,805 shares of Common
Stock. Of the 13,004,805 common shares underlying our outstanding convertible
preferred stock, 11,247,607 are only issueable in March, 2006, upon the
automatic conversion of the 112,476 Series E preferred shares issued to our
officers and directors in exchange for their surrender and cancellation of
11,247,607 common shares in September, 2005, to provide sufficient shares to
accommodate the Company's current private placement.
In September, 2005, our officers and directors surrendered for cancellation
4,507,709 stock options, 2,283,916 common stock purchase warrants and 11,247,607
common shares in order to provide sufficient authorized common shares to
accommodate the Company's current private placement. We replaced the surrendered
and cancelled common shares with shares of our Series E preferred stock which
are automatically convertible in March, 2006, into 11,247,607 common shares, the
amount of common shares equal to those surrendered. We also intend to reissue
the 4,507,709 stock options and 2,283,916 warrants also surrendered for
cancellation by our officers and directors with an equal amount of common shares
underlying these securities following adoption by the shareholders of the
proposed amendment.
3
Each share of the Company's Common Stock entitles the holder to one vote on each
matter submitted to a vote of stockholders. There is no cumulative voting. The
holders of the Company's Common Stock are entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. Holders of the Company's
Common Stock have no preemptive, conversion or other subscription rights. There
are no redemption or sinking fund provisions available to the Company's Common
Stock.
The general purpose and effect of the amendment to the Company's Certificate of
Incorporation is to authorize 100,000,000 additional shares of Common Stock. The
Board of Directors has approved this amendment to provide additional common
shares to accommodate outstanding options, warrants and convertible securities
as well as to have the additional shares of Common Stock available for general
corporate purposes, including acquisitions, equity financings, stock dividends
or stock splits.
At the present time, your Board of Directors intends to utilize an aggregate
18,039,232 of the new common shares to be authorized to underlie the 4,507,709
stock options, 2,283,916 common stock purchase warrants and the 112,476 Series E
preferred shares we will reissue or issue to replace those securities previously
surrendered by our officers and directors for cancellation, following the
adoption of the subject amendment, and for future equity financings. Apart from
utilizing these new common shares in connection with the replacement of stock
options, warrants and common shares for our officers and directors and for
issuance in future equity financings, the Board of Directors has no other
current plan, arrangement or proposal to issue any additional shares of Common
Stock. However, you should know that if the Board of Directors deems it to be in
the best interests of the Company and the stockholders to issue additional
shares of Common Stock in the future from authorized shares, the Board of
Directors generally will not seek further authorization by vote of the
Stockholders, unless such authorization is otherwise required by law or
regulations.
OUR OUTSTANDING PREFERRED STOCK
Our Outstanding Series A, Series C and Series E Preferred Stock.
We have issued an aggregate (1) 29,300 shares of Series A Preferred Stock, (2)
100,000 shares of Series C Preferred Stock and (3) 112,476 shares of Series E
Preferred Stock. The Series A and C preferred shares are presently convertible
into 1,757,198 common shares while the 112,476 Series E preferred shares are
automatically convertible into 11,247,607 common shares in March, 2006.
TERMS OF OUR SERIES A STOCK
The Series A Stock has no voting rights and their holders do not have a right to
cast a vote on shareholder matters. The holders of Series A Stock are entitled
to receive semi-annual cumulative dividends before any dividends are declared
and paid upon the Common Stock, but on par with the holders of any Series B
Stock and Series C Stock, calculated against their liquidation price of $5.00
per share at the rate of 7% annually during the first year of their issuance,
increasing thereafter in increments of 1/2 of 1% per year for the next six years
when the interest rate is fixed at 10% annually. In the event of a liquidation,
dissolution or winding up of the affairs of Magnitude and after payment of its
debts and liabilities, the holders are entitled to be paid out of the remaining
assets a liquidation price of $5.00 per share of Series A Stock, on an equal
basis with the holders of any Series B Stock and Series C Stock.
4
Magnitude has the right to redeem or buy back part or all of the Series A Stock
three years after their issuance by paying to the holders the liquidation price
($5.00 per share), any accumulated but unpaid dividends and a payment (a "call
premium") equal to 15% of the liquidation price. Holders of the Series A Stock
can convert their shares into Magnitude Common stock at a conversion rate equal
to 150% of the "market price" of Magnitude's Common Stock at the time of
conversion. "Market price" is based upon the average bid and asked prices for
Magnitude's Common Stock as quoted by the then stock exchange during the 20
consecutive trading day period immediately preceding the conversion.
TERMS OF OUR SERIES C STOCK
The Series C Stock has no voting rights and their holders do not have a right to
cast a vote on shareholder matters. The holders of Series C Stock are entitled
to receive monthly cumulative dividends before any dividends are declared and
paid upon the Common Stock, but on par with the holders of any Series A Stock
and Series B Stock, calculated against their liquidation price of $9.00 per
share at the rate of 7% annually. In the event of a liquidation, dissolution or
winding up of the affairs of Magnitude and after payment of its debts and
liabilities, the holders are entitled to be paid out of the remaining assets a
liquidation price of $9.00 per share of Series C Stock, on an equal basis with
the holders of any Series A Stock and Series B Stock. Magnitude has the right to
redeem or buy back part or all of the Series C Stock three years after their
issuance by paying to the holders the liquidation price ($9.00 per share), any
accumulated but unpaid dividends and a payment (a "call premium") equal to 10%
of the liquidation price. Holders of the Series C Stock can convert their shares
into Magnitude Common Stock on the basis of 10 shares of Common stock for one
share of Series C Stock at any time.
TERMS OF OUR SERIES E STOCK
As stated above, we have 112,476 shares of Series E Stock currently outstanding.
Our shares of Series E Stock are automatically convertible into 100 Company
common shares six months after their issuance, and will convert into an
aggregate 11,247,607 common shares. The Series E Stock accrues cumulative
dividends at the rate of 6% per annum on the stated value of the shares, payable
in cash upon their automatic conversion date and when declared by the Board of
Directors. The Series E Stock has priority in dividend payments over all of the
Company's common stock and all of the other series of Company preferred shares
outstanding. In the event of liquidation, the Series E Stock has rights to be
paid out of the net assets of the Company on a par, prorated basis with all of
the other series of outstanding preferred shares. The Company's outstanding
preferred stock have a liquidation preference and priority over the Company's
outstanding common stock. The holders of the Series E stock as well as the
holders of all other series of outstanding preferred shares, have no voting
rights.
The officers and directors who surrendered an aggregate 11,247,607 common shares
and received 112,476 Series E Stock in exchange, waived their rights to receive
any dividends associated with these shares of preferred stock.
5
1. Private Placements. Commencing in October,2004 and terminating in
April, 2005, we conducted a private placement and issued 13,970,000 units,
comprised of 13,970,000 common shares and 13,970,000 warrants, to 23
foreign-based and U.S. accredited investors at the subscription price of $0.10
per unit, raising gross proceeds of $1,397,000 and out of which the Company paid
aggregate fees of $101,000 to its Swiss and U.S. placement agents. Of this
amount, we paid one of our Swiss placement agents, S&I Consulting, $3,000 and
our other Swiss placement agent, Mr. Nicholas Rogivue, a finder's fee of
$20,000, and our U.S. placement agent vFinance, Inc., a placement fee of
$78,000. Commencing in July, 2005 and continuing through the date hereof, we are
engaged in our current private placement and have issued and have irrevocable
subscription agreements to issue an aggregate 9,083,333 units, comprised of
9,083,333 common shares and 9,083,333 warrants, to 5 foreign-based and U.S.
accredited investors at the subscription price of $0.06 per unit, raising gross
proceeds of approximately $545,000 and out of which the Company will pay
aggregate finder's fees to its Swiss placement agents of $12,000. As a result of
their continuing investments in our securities, Messrs. Christoph Marti of
Switzerland and Victor Cilli and James Morton of the U.S., each currently own in
excess of 5% of our outstanding common shares: see, the table under "SECURITY
OWNERSHIP", below.
2. Stock Options, Warrants and Common Shares Surrendered for Cancellation.
In September, 2005, our officers and directors surrendered an aggregate
4,507,709 stock options, 2,283,916 common stock purchase warrants and 11,247,607
common shares in order to accommodate the Company's need to have available
common shares for its current private placement. We issued 112,476 shares of our
Series E convertible preferred shares to our officers and directors in exchange
for the cancellation of their aggregate 11,247,607 common shares. These Series E
preferred shares will automatically convert in March, 2006, into an amount of
common shares equal to those common shares. Following the adoption of the
Amendment to our Certificate of Incorporation, increasing our authorized common
shares from 200,000,000 to 300,000,000, we intend to replace all of the stock
options and common stock purchase warrants surrendered by our officers and
directors, without any change, modification or amendment of any of their terms
or provisions. In addition, we will authorize the issuance of the 11,247,607
common shares to underlie the 112,476 Series E preferred shares issued to our
officers and directors which are necessary to accommodate the automatic
conversion of these preferred shares in March, 2006.
3. Stock Issued in Lieu of Salary. In May, 2005, we issued 1,000,000
units, comprised of 1,000,000 common shares and 1,000,000 warrants, to Steven D.
Rudnik, our President, Chief Executive Officer and a Director, in lieu of paying
him $100,000 cash of his salary for fiscal year 2005. The 1,000,000 units paid
to Mr. Rudnik, valued at the then private placement unit price of $0.10 per
unit, are equivalent to the $100,000 in salary for which these units were
issued.
4. Stock Issued for Consulting Services. Beginning in January, 2005 and
continuing through the date hereof, we issued an aggregate 3,350,000 common
shares and 1,200,000 stock options to consultants for investor relations and
general business consulting services rendered to the Company pursuant to the
terms of their consulting agreements.
As of the date of this consent solicitation, we have outstanding 137,190,006
common shares, currently exercisable stock options to purchase 7,448,074 common
shares, warrants to purchase 45,602,684 common shares all of which are currently
exercisable, convertible preferred stock, presently convertible into 1,757,198
common shares, and irrevocable subscription agreements to issue 4,166,666 common
shares and common stock purchase warrants. These outstanding securities
currently require an authorized amount of 196,164,628 common shares. Following
the reissuance of the stock options and common stock purchase warrants to
6
replace the same securities previously surrendered for cancellation by our
officers and directors, as well as authorizing the issuance of 11,247,607 common
shares to accommodate the conversion of the Series E preferred shares and the
issuance of 4,166,666 common shares and equivalents pursuant to irrevocable
subscription agreements in our current private placement, we will have
214,203,860 common shares outstanding on a fully diluted basis, comprised of
150,520,946 outstanding common shares, currently exercisable stock options to
purchase 11,955,783 common shares, warrants to purchase 49,969,933 common shares
and convertible preferred stock, convertible into 1,757,198 common shares.
Accordingly, if our shareholders approve the amendment to our Certificate of
Incorporation to increase our authorized common shares from 200,000,000 to
300,000,000, we will utilize an aggregate 214,203,860 authorized common shares
to cover our existing common share requirements.
The increase in the authorized number of shares of Common Stock could have an
anti-takeover effect. If the Company's Board of Directors desires to issue
additional shares in the future, such issuance could dilute the voting power of
a person seeking control of the Company, thereby deterring or rendering more
difficult a merger, tender offer, proxy contest or an extraordinary corporate
transaction opposed by the Company.
The Amendment to increase the number of authorized shares will have no effect on
the legal rights of the holders of the existing shares of Common Stock.
THE BOARD OF DIRECTORS HAS ADOPTED RESOLUTIONS THAT SET FORTH THE AMENDMENT,
DECLARE THE ADVISABILITY OF THE AMENDMENT, AND SUBMIT THE AMENDMENT TO THE
STOCKHOLDERS FOR APPROVAL. THE BOARD RECOMMENDS APPROVAL OF THE AMENDMENT BY THE
STOCKHOLDERS.
THE CONSENT PROCEDURE
GENERAL
Section 228 of the General Corporation Law of the State of Delaware states that,
unless otherwise provided in the certificate of incorporation, any action that
may be taken at any annual or special meeting of stockholders, may be taken
without a meeting, without prior notice and without a vote, if consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, and those consents are
delivered to the corporation by delivery to its registered office in Delaware,
its principal place of business or an officer or agent of the corporation having
custody of the book in which the proceedings of meetings of stockholders are
recorded. The Company's Certificate of Incorporation contains no provision or
language in any way limiting the right of stockholders of the Company to take
action by written consent.
Only stockholders of record as of September 26, 2005 are entitled to consent, to
withhold their consent, or to revoke their consent, to the Amendment.
Stockholders are entitled to one vote for each outstanding share of Common Stock
held at the record date. As of the record date there were 139,273,339 issued and
outstanding shares of Common Stock.
7
Consents, once dated, signed, and delivered to the Company, will remain
effective unless and until revoked by written notice of revocation dated,
signed, and delivered to the Company at the address set forth below on or before
October , 2005.
The Amendment will be approved if by October __, 2005 the Company holds
unrevoked written consents of stockholders approving the Amendment from a
majority of the outstanding shares of Common Stock at the Record Date.
Consequently, the withholding of consent, abstentions and the failure to deliver
a Consent Card would all have the effect of a vote against approval of the
Amendment. If a stockholder holds his shares in "street name" and fails to
instruct his broker or nominee as to how to vote his shares, the broker or
nominee may not, pursuant to applicable stock exchange rules, vote such shares
and, accordingly, such shares will have the effect of a vote against the
Amendment.
Stockholders are requested to indicate approval of the Amendment by signing and
dating the Consent Card, checking the box on the Consent Card which corresponds
to the approval of the Amendment, and delivering the Consent Card to the
Company's transfer agent at the address set forth below. Withholding of consent
to the Amendment, or abstention with respect to the approval of the Amendment,
may be indicated by signing and dating the Consent Card, checking the box which
corresponds to withholding of consent to the Amendment or abstention with
respect to the approval of the Amendment, respectively, and delivering the
Consent Card to the Company's transfer agent at the address set forth below.
A CONSENT CARD WHICH HAS BEEN SIGNED, DATED AND DELIVERED TO THE COMPANY'S
TRANSFER AGENT WITHOUT INDICATING APPROVAL, WITHHOLDING OF CONSENT, OR
ABSTENTION WILL CONSTITUTE A CONSENT TO THE AMENDMENT.
Consent Cards may be delivered to the following address:
Securities Transfer Corporation
2591 Dallas Parkway,
Suite 102
Frisco, Texas 75034
Attention: Proxy Department
Consent Cards should be delivered to the Company's transfer agent as soon as
possible. An addressed return envelope is enclosed for this purpose, which
requires no postage if mailed in the United States. Consent Cards and
revocations of consents will be deemed to have been received by the Company upon
actual delivery at the above address.
ABSENCE OF APPRAISAL RIGHTS
Stockholders who abstain from consenting with respect to the Amendment, who
withhold consent to the Amendment, or who do not deliver a Consent Card do not
have the right to an appraisal of their shares of Common Stock or any similar
dissenters' rights under applicable law.
EXPENSE OF CONSENT SOLICITATION
The Company will bear the entire cost of the solicitation, including the
preparation, assembly, printing and mailing of this Consent Statement and any
additional material furnished to stockholders. Brokerage firms and other
custodians, nominees, and fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorization for the
execution of consents. The Company may, upon request, reimburse brokerage firms,
and other custodians, nominees, and fiduciaries for their reasonable expenses in
forwarding solicitation materials to their principals.
8
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the Company's
Common Stock, as of September 26, 2005, by each person known by the Company to
be the beneficial owner of more than five percent of the Common Stock, each
director, each executive officer and by all directors and executive officers of
the Company as a group:
Title Name and Address of Amount and Nature of Percent of
of Class )* Beneficial Owner Beneficial Ownership(1) Class
- ----------- ---------------- ---------------------- ----------
Common Ivano Angelastri 1,025,000 (2) 0.75%
Stock
Mark Chroscielewski -- --
Steven L. Gray 708,100 0.52%
Steven W. Jagels 622,083 (3) 0.45%
Joerg H. Klaube -- --
Steven D. Rudnik 2,827,709 (4) 2.04%
Joseph J. Tomasek -- --
Address of all persons above: c/o the Company.
All Directors and Executive 5,182,892 3.72%
Officers as a Group (7 persons)
Christoph Marti 10,300,000 (5) 7.23%
Kuerzestrasse 25, CH-4562 Biberist, Switzerland
Victor Cilli 12,833,334 (6) 8.97%
61 E. Central Ave., Maywood, N.J. 07607
James Morton 7,848,700 (7) 5.62%
* The Company also has issued and outstanding as of September 26, 2005, 241,776
shares of its Senior Convertible Preferred Stock, with concentrations in excess
of 10% for one or more of the holders of such stock, however, none of such
shares bear any voting rights.
- ----------
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days of October __, 2005. For purposes of
computing the percentage of outstanding shares of Common Stock held by
each person or group of persons named above, any security which such
person or persons has or have the right to acquire within such date is
deemed to be outstanding but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. Except
as indicated in the footnote to this table and pursuant to applicable
community property laws, the Company believes based on information
supplied by such persons, that the persons named in this table have sole
voting and investment power with respect to all shares of Common Stock
which they beneficially own.
9
(2) Includes 425,000 shares held by affiliates.
(3) Includes options to acquire 602,083 shares.
(4) Includes options to acquire 1,244,375 shares and warrants for 250,000
shares.
(5) Includes warrants for 5,300,000 shares.
(6) Includes 2,916,667 shares held by affiliates and warrants for 5,916,667
shares also held by affiliates.
(7) Includes warrants for 1,666,667 shares and 2,542,777 shares and warrants
for 688,000 shares held by affiliates.
ADDITIONAL INFORMATION
The Company files reports and other information with the Securities and Exchange
Commission. Copies of these documents may be obtained at the SEC's public
reference room in Washington, D.C. 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. Stockholders may also request a copy of the Company's
financial reports filed with the SEC by contacting the Company's Secretary in
writing at 401 State Route 24, Chester, New Jersey 07930 or by calling
(908)879-2722.
By Order of the Board of Directors
Joerg H. Klaube, Secretary
October , 2005
- ----------------
Chester, New Jersey
10
IMPORTANT
PLEASE COMPLETE, SIGN AND DATE
YOUR WRITTEN CONSENT AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE
WRITTEN CONSENT OF THE STOCKHOLDERS
OF
MAGNITUDE INFORMATION SYSTEMS, INC.
This consent is solicited by the Board of Directors. When properly executed,
this consent will be voted as designated by the undersigned on the reverse side.
If this consent is signed, dated, and delivered to Magnitude Information
Systems, Inc. with no designation by the undersigned, this consent will
constitute the stockholder's consent to and approval of the amendment.
|X| PLEASE MARK AS IN THIS SAMPLE.
Amendment to increase the authorized Common Stock of the Company from
200,000,000 shares to 300,000,000 shares.
MARK ONLY ONE OF THE FOLLOWING THREE BOXES:
|_| FOR |_| WITHHOLD |_| ABSTAIN
(Please sign and date below)
Dated:____________________,
Signature of Stockholder(s) _____________________________________
Signature of Stockholder(s) _____________________________________
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign.
When signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
11
EXHIBIT A CERTIFICATE OF AMENDMENT
OF
CERTIFICATE of INCORPORATION
OF
MAGNITUDE INFORMATION SYSTEMS, INC.
MAGNITUDE INFORMATION SYSTEMS, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That by majority vote of the Corporation's Board of
Directors at a duly organized meeting held on September ,
2005, pursuant to Section 141 of the General Corporation law
of the State of Delaware (the "DGCL"), and pursuant to the
written consents of shareholders owning a majority of the
Corporation's issued and outstanding common shares on
September 26, 2005, pursuant to Section 228 of the DGCL, the
following resolution was duly adopted:
RESOLVED, that the Board of Directors and the shareholders of
the Corporation hereby declare it advisable and in the best
interests of the Corporation that Article IV of the
Corporation's Certificate of Incorporation, filed with the
Secretary of State, State of Delaware on April 19, 1988, as
amended (the "Certificate of Incorporation") be amended to
read as follows:
FOURTH: The aggregate number of shares of all classes of stock
which the Corporation is authorized to issue is 303,000,000
shares, consisting of 300,000,000 shares of Common Stock, par
value $.0001 per share, and 3,000,000 shares of Preferred
Stock, par value $.001 per share.
SECOND: That the above stated amendment was approved by the Board of
Directors of the Corporation by majority vote pursuant to Section
141 of the DGCL and by written consents of the shareholders of the
Corporation owning a majority of the Corporation's issued and
outstanding common shares on September 26, 2005 pursuant to Section
228 of the DGCL.
THIRD: That the above stated amendment was duly adopted in accordance with
the provisions of Section 242 of the DGCL.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
be signed by Steven D. Rudnik, President, an Authorized Officer, this ____ day
of October, A.D. 2005.
MAGNITUDE INFORMATION SYSTEMS, INC.
By:
------------------------------------
Steven D, Rudnik, President
12