UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
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|_| Preliminary Information Statement
|_| Confidential, for Use of the Commission Only (as permitted
by Rule 14c-5(d)(2))
|X| Definitive Information Statement
MAGNUM D'OR RESOURCES INC.
(Name of Registrant As Specified In Its Charter)
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MAGNUM D'OR RESOURCES INC.
1108 W Valley Blvd, STE 6-399
Alhambra, CA 91803
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND REGULATION 14C THEREUNDER
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
Dear Shareholder:
Effective March 13, 2006, the stockholders of Magnum D'Or Resources, Inc.
("Magnum"), a Nevada corporation, executed a written consent signed by the
holders of the majority of its issued and outstanding voting stock, and the
stockholders approved a one-for-forty (1-for-40) reverse stock split of its
outstanding Common Stock.
The cost of distributing this Information Statement will be borne by Magnum
which will reimburse brokerage houses, custodians, nominees and fiduciaries for
their expenses in forwarding the material to the beneficial owners of its Common
Stock.
Proposal: Reverse Stock Split
Magnum has approved a one-for-forty (1-for-40) reverse split of its currently
issued and outstanding shares of its Common Stock. As a result of the reverse
split, each share of Common Stock outstanding at the effective time of the
reverse split, will, without any action on the part of the holder thereof,
become one-fortieth of a share of Common Stock. For purposes of this
description, the Common Stock, as presently constituted, is referred to as the
"Old Common Stock" and the Common Stock resulting from the reverse split is
referred to as the "New Common Stock." It is expected that the reverse stock
split will be effective at the beginning of business on Monday, April 24, 2006.
In connection with the reverse stock split, Magnum will not issue any fractional
shares and any fractional shares will be rounded up to the next higher full
share. In addition, the Board of Directors authorized special treatment to
certain stockholders in order to preserve round lot holders (i.e., holders
owning at least 100 shares) after the reverse split. Therefore, the stockholders
of Magnum holding 4,000 or fewer shares of Common Stock but at least 100 shares
of Common Stock will be deemed to hold 100 shares of Common Stock after the
reverse stock split, and persons holding less than 100 shares of Common Stock
will not be affected and will continue to hold and own the same number of shares
as before the reverse stock split.
Principal Effects of the Reverse Split. The principal effects of the reverse
split will be as follows:
Based upon the 199,667,370 shares of Old Common Stock presently outstanding, the
reverse split will decrease the number of outstanding shares of Old Common Stock
to approximately 4,991,684 shares.
Magnum will obtain a new CUSIP number for the New Common Stock at the time of
the reverse split. Following the effectiveness of the reverse split, each 40
shares of Old Common Stock, without any action on the part of the holder, will
represent one share of New Common Stock.
Subject to minor differences resulting from the rounding up of fractional
shares, as described below, consummation of the reverse split will not result in
a material change in the relative equity position or voting power of the holders
of Old Common Stock.
Purposes of the Reverse Stock Split. The reverse split will decrease the number
of shares of Old Common Stock outstanding and may increase the per share market
price for the New Common Stock. Theoretically, the number of shares outstanding
should not, by itself, affect the marketability of the stock, the type of
investor who acquires it, or Magnum's reputation in the financial community, but
in practice this is not necessarily the case.
Many leading brokerage firms are reluctant to recommend lower-priced securities
to their clients and a variety of brokerage house policies and practices
currently tend to discourage individual brokers within firms from dealing in
lower-priced stocks. Some of those policies and practices pertain to the payment
of brokers' commissions and to time-consuming procedures that make the handling
of lower priced stocks unattractive to brokers from an economic standpoint. In
addition, the structure of trading commissions also tends to have an adverse
impact upon holders of lower priced stocks because the brokerage commission on a
sale of a lower priced stock generally represents a higher percentage of the
sales price than the commission on a relatively higher priced issue.
In addition, in the absence of the reverse split, there are not a sufficient
number of authorized but unissued shares of Common Stock to consummate future
stock offerings or acquisitions. The Board of Directors believes that the
Reverse Split is in the best interest of Magnum. The reverse split would reduce
the number of shares of its Common Stock outstanding to amounts that the Board
of Directors believes are more reasonable in light of its size and market
capitalization. Finally, Magnum needs additional capital for its operations.
However, no assurance can be given that the reverse split will result in any
increase in the Common Stock price or that Magnum will be able to complete any
financing following the reverse split.
When the trading price of Magnum's Common Stock is below $5.00 per share, the
Common Stock is considered to be "penny stocks" that are subject to rules
promulgated by the United States Securities and Exchange Commission (the
"Commission") (Rule 15-1 through 15g-9) under the Securities Exchange Act of
1934. These rules impose significant requirements on brokers under these
circumstances, including: (a) delivering to customers the Commission's
standardized risk disclosure document; (b) providing to customers current bid
and offers; (c) disclosing to customers the broker-dealer and sales
representatives compensation; and (d) providing to customers monthly account
statements.
The possibility exists that the reduced number of outstanding shares will
adversely affect the market for the Common Stock by reducing the relative level
of liquidity. Shareholders who own odd lots typically find it difficult to sell
their shares and frequently find odd lot sales more expensive than round lot
sales of 100 shares or more.
After the reverse split, Magnum will have issued and outstanding approximately
4,9915,684 shares of its Common Stock, and Magnum will have the corporate
authority to issue approximately 195,008,316 additional shares of authorized but
unissued Common Stock. These authorized and unissued shares may be issued
without shareholder approval at any time, in the sole discretion of the Board of
Directors. The authorized and unissued shares may be issued for cash, to acquire
property or for any other purpose that is deemed in the best interests of
Magnum. Any decision to issue additional shares will reduce the percentage of
Magnum's shareholders' equity held by the current shareholders and could dilute
Magnum's net tangible book value.
No Exchange of Stock Certificates and Elimination of Fractional Share Interests.
On the effective date of the reverse split, each 40 shares of Old Common Stock
will automatically be combined and changed into one share of New Common Stock.
No additional action on the part of Magnum or any shareholder will be required
in order to effect the reverse split. Shareholders will not be requested to
exchange their certificates representing shares of Old Common Stock held prior
to the reverse split for new certificates representing shares of New Common
Stock. However, shareholders will be furnished the necessary materials and
instructions to effect such exchange upon request.
No fractional shares of New Common Stock will be issued to any shareholder, and
all fractional shares will be rounded up to the next whole number.
Federal Income Tax Consequences of the Reverse Split. The combination of 40
shares of the Old Common Stock into one share of New Common Stock should be a
tax-free transaction under the Internal Revenue Code of 1986, as amended, and
the holding period and tax basis of the Old Common Stock will be transferred to
the New Common Stock received in exchange therefore.
This discussion should not be considered as tax or investment advice, and the
tax consequences of the Reverse Stock Split may not be the same for all
shareholders. Shareholders should consult their own tax advisors to know their
individual Federal, state, local and foreign tax consequences.
AVAILABLE INFORMATION
Magnum is subject to the informational requirements of the Securities Exchange
Act of 1934 and, in accordance therewith, files reports and other information
with the Commission. The Registration Statement and such reports and other
information may be inspected without charge at the Public Reference Room
maintained by the U.S. Securities and Exchange Commission (the "Commission") at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
material may be obtained from the Public Reference Room of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549, at prescribed rates. Information on
the operation of the Public Reference Room is available by calling the
Commission at 1-800-SEC-0330. In addition, the Commission maintains an Internet
site where the Registration Statement and other information filed with the
Commission may be retrieved, and the address of such site is http://www.sec.gov.
Statements made in this Information Statement concerning the contents of any
document referred to herein are not necessarily complete.
BY ORDER OF THE BOARD OF DIRECTORS OF
MAGNUM D'OR RESOURCES INC.
By /s/ Shaojun Sun
------------------------------------------------
SHAOJUN SUN, SECRETARY