SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
(Rule 14C-101)
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
X Preliminary Information Statement
Confidential, for Use of the Commission Only (as permitted by Rule
14a-5(d) (1))
Definitive Information Statement
CASTLE & MORGAN HOLDINGS, 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 14c-5(g) and 0-11.
(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:
Fee previously paid 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:
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(4) Date Filed:
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CASTLE & MORGAN HOLDINGS, INC.
1175 Walt Whitman Road
Melville, New York 11747
631-424-9009
August , 2004
Dear Stockholder:
This Information Statement is furnished to holders of shares of common stock,
par value $.0001 per share (the "Common Stock"), of CASTLE & MORGAN HOLDINGS,
INC. (the "Company"). The purpose of this Information Statement is to notify the
stockholders that on July 11, 2004, the Company received written consent (the
"Written Consent") from certain principal stockholders of the Company
(identified in the section entitled "Voting Securities and Principal Holders
Thereof") holding 2,414,584 shares of Common Stock, representing approximately
65.1% of the total issued and outstanding Common Stock, adopting a resolution to
amend the Company's Articles of Incorporation to increase the authorized shares
of Common Stock from 25,000,000 to 100,000,000. The Company's Certificate of
Incorporation already authorizes up to 1,000,000 shares of undesignated
Preferred Stock ("Preferred Stock") which allows the Board of Directors to
issue, without further stockholder action, one or more series of Preferred
Stock.
The Board believes that the terms of the amendment to the Articles of
Incorporation (the "Amended Articles") are beneficial to the Company. The full
text of the Amended Articles is attached as Annex I to this Information
Statement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOUR ARE NOT REQUESTED TO SEND US A PROXY
The enclosed Information Statement is being furnished to you to inform you that
the foregoing action has been approved by the holders of a majority of the
outstanding shares of Common Stock. The Board is not soliciting your proxy in
connection with the adoption of these resolutions and proxies are not requested
from stockholders. The resolutions will not become effective before the date
which is 20 days after this Information Statement was first mailed to
stockholders. You are urged to read the Information Statement in its entirety
for a description of the action taken by the majority stockholders of the
Company.
This Information Statement is being mailed on or about August , 2004 to
stockholders of record on July 11, 2004 (the "Record Date").
---------------------------
Christopher Kern, President
CASTLE & MORGAN HOLDINGS, INC.
1175 Walt Whitman Road
Melville, New York 11747
631-424-9009
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INFORMATION STATEMENT
PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14C-2 THEREUNDER
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NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED IN CONNECTION
WITH THIS INFORMATION STATEMENT.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
We are sending you this Information Statement to inform you of the adoption of a
resolution on July 11, 2004 by consent (the "Written Consent") from the Board of
Directors (the "Board") and certain principal stockholders of the Company
(identified in the section entitled "Voting Securities and Principal Holders
Thereof") holding 2,414,584 shares of Common Stock, representing approximately
65.1% of the total issued and outstanding Common Stock, adopting a resolution to
amend the Company's Articles of Incorporation to increase the authorized shares
of Common Stock from 25,000,000 to 100,000,000.
The adoption of the foregoing resolution will become effective 21 calendar days
after the mailing of this Information Statement. The Board of Directors is not
soliciting your proxy in connection with the adoption of these resolutions and
proxies are not requested from stockholders.
The Company is distributing this Information Statement to its stockholders in
full satisfaction of any notice requirements it may have under Securities and
Exchange Act of 1934, as amended, and the Delaware General Corporation Law. No
additional action will be undertaken by the Company with respect to the receipt
of written consents, and no dissenters' rights with respect to the receipt of
the written consents, and no dissenters' rights under the Delaware General
Corporation Law are afforded to the Company's stockholders as a result of the
adoption of these resolutions.
Expenses in connection with the distribution of this Information Statement,
which are anticipated to be less than $2,000 will be paid by the Company.
AMENDED ARTICLES OF INCORPORATION
GENERAL
The Company's current Articles of Incorporation, as amended to date, provides
for an authorized capitalization consisting of 25,000,000 shares of common
stock, $.0001 par value per share (the "Common Stock") as well as 1,000,000
shares of Preferred Stock, par value $.0001 per share. As of July 11, 2004,
there were 3,709,570 shares of Common Stock outstanding. The Board of Directors
believes that it is in the best interests of both the Company and its
stockholders to increase the authorized shares of Common Stock from 25,000,000
to 100,000,000. The Board believes this increase will provide several long-term
advantages to the Company and its shareholders to increase the number of
authorized common stock
The Amended Articles of Incorporation has been approved by the Board and the
stockholders holding approximately 65.1% of the outstanding shares. The Board
reserves the right, notwithstanding stockholder approval and without further
action on the part of the stockholders, not to proceed with the filing of the
Amended Articles of Incorporation with the Secretary of State of the State of
Delaware if, at any time prior to such filing, the Board, in its sole
discretion, determines that the terms of the Amended Articles of Incorporation
are no longer in the best interests of the Company and its stockholders.
VOTE REQUIRED; MANNER OF APPROVAL
Approval to amend and restate the current Articles of Incorporation of the
Company under the Delaware General Corporation Law ("GCL") requires the
affirmative vote of the holders of a majority of the voting power of the
Company. The Company has no class of voting stock outstanding other than the
Common Stock and the 1,000,000 shares of Preferred Stock heretofore referred to.
Section 228 of the GCL provides in substance that, unless the Company's Articles
of Incorporation provides otherwise, stockholders may take action without a
meeting of stockholders and without prior notice if a consent or consents in
writing, setting forth the action so taken, is signed by the holders of
outstanding voting stock holding not less than the minimum number of votes that
would be necessary to approve such action at a stockholders meeting. Under the
applicable provisions of the GCL, this action is effective when written consents
from holders of record of a majority of the outstanding shares of voting stock
are executed and delivered to the Company.
In accordance with the GCL, the affirmative vote on the Amended Articles of
Incorporation of at least a majority of the outstanding shares has been
obtained. As a result, no vote or proxy is required by the stockholders to
approve the adoption of the Amended Articles of Incorporation.
Under Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), the Amended Articles of Incorporation cannot take effect
until 20 days after this Information Statement is sent to the Company's
stockholders. As mentioned earlier, the Amended Articles will become effective
upon its filing with the Secretary of State of the State of Delaware which is
anticipated to be on or about September ____, 2004, 20 days after the mailing of
this Information Statement.
PURPOSE
Increase in Authorized Number of Common Stock
The Directors believe that this increase might enable the Company to pursue
acquisitions or enter into transactions which the Board believes provide the
potential for growth and profit. With the limited number of shares currently
available for such uses, it may become impracticable for the Company to evaluate
or seek to consummate business combinations or other transactions which, if they
could be accomplished, might enhance shareholder value. Additional authorized
shares could be used to raise cash assets through sales of stock to public and
private investors. If additional shares are available, transactions dependent
upon the issuance of additional shares would be less likely to be undermined by
delays and uncertainties occasioned by the need to obtain shareholder
authorization prior to the consummation of such transactions. The Company
presently has no specific plans, arrangements or understandings, either written
or oral, to issue any of the additional authorized shares of Common Stock.
EFFECT
The issuance by the Company of any additional shares of Common Stock would
dilute both the equity interests and the earnings per share, if any, of existing
holders of the Common Stock. Such dilution may be substantial, depending upon
the amount of shares issued. The newly authorized shares of Common Stock will
have voting and other rights identical to those of the currently authorized
shares of Common Stock.
NO DISSENTERS' RIGHTS
Pursuant to the Delaware Code, the holders of the Company's Common Stock are not
entitled to dissenters' rights in connection with the increase in the number of
authorized shares. Furthermore, the Company does not intend to independently
provide those shareholders with any such rights.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table lists, as of July 11, 2004, the number of shares of common
stock beneficially owned by (i) each person or entity known to the Company to be
the beneficial owner of more than 5% of the outstanding common stock; (ii) each
officer and director of the Company; and (iii) all officers and directors as a
group. Information relating to beneficial ownership of common stock by our
principal stockholders and management is based upon information furnished by
each person using "beneficial ownership" concepts under the rules of the
Securities and Exchange Commission. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest.
The percentages below are calculated based on 3,709,570 shares of CASTLE &
MORGAN HOLDINGS, INC. common stock issued and outstanding.
Percentage of
Name and Address of Number of Shares Shares
Beneficial Owner 1 Beneficially Owned 2 Beneficially Owned
- ------------------------ ----------------------- -------------------
Christopher Kern 2,414,5843 65.09%
Thomas Murphy 200,0004 5.39%
Lon Taylor 320,000 8.63%
Isabel Weeks 270,000 7.28%
Officers and Directors
as a group (1 person) 2,414,584 65.09%
INTEREST OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON
No director, executive officer, associate of any director or executive officer
or any other person has any substantial interest, direct or indirect, by
security holdings or otherwise, in the proposal to amend the Certificate of
Incorporation and take all other proposed actions which is not shared by all
other holders of the Company's Common Stock. See "Security Ownership of Certain
Beneficial Owners and Management."
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1 Unless otherwise indicated, the address for each person listed above
is: 1175 Walt Whitman Road, Suite 100, Melville, New York 11747
2 Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all shares of
the Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities which may be acquired by such person within 60
days from the date indicated above upon the exercise of options, warrants or
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants or convertible securities that are
held by such person (but not those held by any other person) and which are
exercisable within 60 days of the date indicated above, have been exercised.
3 Includes 1,404,584 shares owned by Internet Finance International
Corporation, a firm wholly owned by the Company's President, Christopher Kern.
4 Does not include an additional 16,667 shares of Company common stock
owned by Mr. Murphy's mother in that Mr. Murphy disclaims any beneficial
interest in or control over those shares owned by his mother other than that
which may be attributed to him by operation of law.
OTHER MATTERS
The Board knows of no other matters other than those described in this
Information Statement which have been approved or considered by the holders of a
majority of the shares of the Company's voting stock.
IF YOU HAVE ANY QUESTIONS REGARDING THIS INFORMATION STATEMENT AND/OR THE
AMENDED ARTICLES, PLEASE CONTACT:
Christopher Kern
CASTLE & MORGAN HOLDINGS, INC.
1175 Walt Whitman Road
Melville, New York 11747
Telephone: 631-424-9009
By order of the Board of Directors of CASTLE & MORGAN HOLDINGS, INC.
EXHIBITS
ANNEX I. Amended Articles of Incorporation
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION OF
CASTLE & MORGAN HOLDINGS, INC.
The undersigned, a natural person, for the purpose of organizing a corporation
for conducting the business and promoting the purposes hereinafter stated, under
the provision and subject to the requirements of the Laws of the State of
Delaware (particularly Chapter 1 Title 8 of the Delaware Code and the acts
amendatory thereof and supplemental thereto, and known, identified and referred
to as the "General Corporation Law of the State of Delaware"), hereby certifies
that:
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation")
is CASTLE & MORGAN HOLDINGS, INC..
2. The Certificate of Incorporation of the Corporation is hereby amended by
striking out Article FOURTH thereof and by substituting in lieu of said Article,
the following new Article FOURTH:
FOURTH: The total number of shares of Common Stock which the
Corporation shall have authority to issue is One Hundred One Million
(101,000,000) shares, of which One Hundred Million (100,000,000) shall be Common
Stock, par value $.0001 per share without cumulative voting rights and without
any preemptive rights and One Million (1,000,000) shall be Preferred Stock, par
value $.0001 per share.
3. The effective date of the Amended Certificate of Incorporation of
the Corporation shall be its date of filing.
4. The capital of said corporation shall not be reduced under or by
reason of this Amendment.
5. This Amendment to the Certificate of Incorporation herein certified
has been duly adopted and written consent has been given in accordance with the
provisions of Sections 228 and 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, this Amended Certificate has been subscribed this
__ day of _________, 2004, by the undersigned who affirms that the statements
made herein are true under the penalties of perjury.
Signed: New York, New York
____________, 2004
CASTLE & MORGAN HOLDINGS, INC.
By: ________________________________
Name: Christopher Kern
Title: President