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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
RULE 14F-1
REPORT OF CHANGE IN MAJORITY OF DIRECTORS
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INFORMATION PURSUANT TO SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DISCOVERY INVESTMENTS, INC.
23805 Stuart Ranch Road
Suite 220
Malibu, California 90265
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REPORT OF CHANGE IN MAJORITY OF DIRECTORS
August 11, 2000
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This report is furnished by the Board of Directors of Discovery
Investments, Inc., a Nevada corporation (the "Company"), to the holders of
Common Stock, $.001 par value per share, of the Company (the "Common Stock") in
connection with the rescission of the Plan and Agreement of Reorganization
wherein the Company acquired all of the issued and outstanding shares of stock
of LLO-Gas, Inc. from John Castellucci.
This information is provided for information purposes only. We are not
soliciting proxies in connection with the items described herein. You are not
required to respond to this report.
This report is first being mailed to shareholders on or about August 11,
2000.
On December 10, 1999, the Company entered into a Plan and Agreement of
Reorganization with LLO-Gas, Inc. and John Castellucci. On December 20, 1999,
there was a closing under the Plan and Agreement of Reorganization and LLO-Gas,
Inc. became a wholly owned subsidiary of the Company and there was a change of
control of the Company. Between December 20, 1999 and the date hereof,
differences of opinion as to matters of fact and as to matters of law have
arisen by and between certain of the shareholders of the Company, who were
shareholders prior to the closing, and between the Company, John Castellucci and
LLO-Gas,
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Inc. In addition, on June 7, 2000, LLO-Gas, Inc. filed a Voluntary Petition
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court,
Central District of California, San Fernando Valley Division, case number SV
00-15398-AG. Said Chapter 11 Bankruptcy is currently pending and effects
LLO-Gas, Inc. Predicated upon the differences of matters of fact and matter of
law, the parties entered into a Mutual Rescission Agreement and Mutual Release.
The Mutual Rescission Agreement and Mutual Release provides, inter alia,
that the Company consents and agrees to rescind that certain Plan and Agreement
of Reorganization with John Castellucci consenting and agreeing to the
rescission. The parties mutually agreed, pursuant to said Mutual Rescission
Agreement and Mutual Release to forgo all rights and benefits provided to each
other under the Plan and Agreement of Reorganization, as consideration for the
rescission, ab initio, of the closing described therein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of August 10, 2000, the security ownership of
(i) all persons known by the Company to own beneficially 5% or more of Common
Stock; (ii) all executive officers; and (iii) each director of the Company.
Name and Amount and
Address of Nature of
Title of Class Beneficial Beneficial Percent
Owner Owner of Class
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Common Kimberly Lynn Jack 550,000 26.2%
1916 East 50th Street
Wichita, Kansas 67216
Common Scott A. Jack 550,000 26.2%
1916 East 50th South
Wichita, Kansas 67216
Common Debra S. Hackney 340,000 16.2%
5262 S. Madison
Wichita, Kansas 67216
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Common John Castellucci (1) --
23805 Stewart Ranch Road
Suite 265
Malibu, California 90265
Common All Officers and 1,440,000 68.6
Directors as a Group
(three [3] individuals)
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(1) John Castellucci entered into a Pledge Agreement with Mehdi Mostaedi on or
about December 16, 1999, subject to the closing of the Plan and Agreement
of Reorganization on December 20, 1999, wherein John Castellucci
collaterally pledged 2,000,000 shares of his common stock of the Company to
Mehdi Mostaedi. The mutual rescission is subject to the rights, if any,
that Mehdi Mostaedi may have under said collateral pledge agreement. Upon
full performance by John Castellucci and LLO-Gas, Inc., or either, said
shares of common stock will be retired and restored to the status of
authorized and unissued shares. The pledge holder under the collateral
pledge agreement holds as additional collateral certain shares of LLO-Gas,
Inc. as additional collateral, under the collateral pledge agreement.
To the extent that any shares of stock issued to John Castellucci have not
been restored to the Company as part of the mutual rescission, the Company
deems said shares to be treasury shares. Treasury shares do not carry
voting rights or participate in distribution, may not be counted as
outstanding shares for any purpose and may not be counted as assets of the
Company for purposes of computing amounts available for distributions. Upon
physical delivery of said certificates to Pacific Stock Transfer Company,
the Company's transfer agent, said shares will be canceled, retired and
restored to the status of authorized and unissued shares in accordance with
law.
PRIOR CHANGES IN CONTROL
Giving effect to the closing which occurred on December 20, 1999, John D.
Castellucci had served as the President, Chief Financial Officer, Secretary and
Director of the Company. There are no agreements or understandings for any
officer or director to serve as such or resign at the request of another person,
other than on December 20, 1999, Kimberly Lynn Jack, Scott A. Jack and Debra S.
Hackney, directors and officers resigned all
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positions in connection with the Plan and Agreement of Reorganization. Other
than restoring Kimberly Lynn Jack, Scott A. Jack and Debra S. Hackney as current
directors as part of the rescission described above, there has been no other
changes in control of the Company.
DIRECTORS AND OFFICERS
None of the Company's current officers and directors receive any
compensation for their services. All compensation for services of John
Castellucci have been allocated to LLO-Gas, Inc., the wholly owned subsidiary of
the Company. The Board of Directors has not established any standing committees
or subcommittees. In the past fiscal year, the Board of Directors held three (3)
meetings.
The reinstalled and new directors are as are follows:
Kimberly Lynn Jack
Scott A. Jack
Debra S. Hackney
The background information on each of the directors is as follows:
Kimberly Lynn Jack, age 31, has been a shareholder of the Company since
1996 and has been its President and a director of the of the Company
since 1999. From 1993 to 1997. she was a student and homemaker. From
1997 to the present, she has been a parent-involvement worker for the
Wichita, Kansas United School District at Lawrence Elementary, with
responsibilities for the identification and resolution of troubled
children syndrom and provides counseling to both the parent and child.
Scott A. Jack, age 34, has been a shareholder of the Company since 1996
and has been Secretary/Treasurer and a director of the Company since
1999. From 1992 to 1997, he was the owner of Kansas Building Supply, a
company which designed and installed, primarily, floor covering. From
1997 to the present, he has been employed by Star Lumber Company as a
senior floor covering specialist.
Debra S. Hackney, age 40, has been a shareholder of the Company since
1996 and has been a director of the Company since 1999. From 1989 to
the present, she has been the facility coordinator and senior
construction specialist for Pizza Hut, Inc., with responsibilities
involving construction documentation and payments for the company's
expansion and dotting program.
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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than 10% of the Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of beneficial ownership
("Forms 3") and reports of changes in beneficial ownership of Common Stock and
other equity securities of the Company ("Forms 4"). Officers, directors, and
greater than 10% shareholders of the Company are required by SEC regulations to
furnish to the Company copies of all Section 16(a) reports that they file. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company, all Section 16(a) disclosures that are required to be
made have been disclosed in the Company's SEC filings; however, technical filing
requirements applicable to John D. Castellucci may not have been complied with
for the year ended December 31. 1999.
Kimberly Lynn Jack, Scott A. Jack and Debra S. Hackney, and each of them,
have caused to be filed with the SEC a Form 3, the Initial Statement of
Beneficial Ownership. Kimberly Lynn Jack and Scott A. Jack, and each of them,
caused said Form 3 to be filed on July 7, 1999, and Debra S. Hackney caused her
Form 3 to be filed on July 8, 1999.
DISCOVERY INVESTMENTS, INC.
By Order of the Board of Directors
/s/ John Castellucci
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John Castellucci
President
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