U.S. 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
(AMENDMENT NO. )
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14(a)-6(e)(2))
[ ] Definitive Information Statement
THE MAJESTIC COMPANIES, LTD.
(Name of the Registrant as Specified in its Charter)
Brian F. Faulkner, Esq., 3900 Birch Street, Suite 113,
Newport Beach, California 92660
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee Computed on table below per Exchange Act Rules 14a-
6(I)(4) 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 aggregate offering price:
________________________________________________________________
5. Total fee paid:
________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box is 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 number:
________________________________________________________________
3. Filing party:
________________________________________________________________
4. Date filed:
________________________________________________________________
Notes:
INFORMATION STATEMENT
The Majestic Companies, Ltd.
8880 Rio San Diego Road, 8th Floor
San Diego, California 92108
We Are Not Asking You for a Proxy and You Are
Requested Not To Send Us a Proxy
This Information Statement is furnished by the Board of
Directors of The Majestic Companies, Ltd., a Nevada corporation
("Company"), to the holders of record at the close of business
on July 1, 2000 ("Record Date"), of the Company's outstanding
common stock, par value $0.001 per share ("Common Stock",)
pursuant to Rule 14c-2 promulgated under the Securities Exchange
Act of 1934, as amended ("Exchange Act"). This Information
Statement is being furnished to such stockholders in connection
with seeking the written consent of a majority in interest of
the stockholders to increase the authorized shares of common
stock in the Articles of Incorporation of the Company from
50,000,000 to 200,000,000.
The Company's Board of Directors unanimously approved this
increase in authorized shares of common stock by written consent
of the Directors on July 11, 2000. Under applicable Nevada Law,
approval of an amendment to the Articles of Incorporation of the
Company requires an affirmative vote of a majority of the
outstanding shares of Common Stock. The Company is currently
soliciting the written consent of a majority of the outstanding
shares of Common Stock, and the filing of an Amendment to the
Articles of Incorporation with the Nevada Secretary of State to
so increase the authorized shares will not be filed until after
a date which is at least thirty (30) days after the filing of
this Information Statement.
This Information Statement will be sent on or about
July 31, 2000 to the Company's stockholders of record who are
not solicited for their consent of this corporate action.
VOTING SECURITIES
The record date of shareholders entitled to receive notice of
this corporate action by the Company is the close of business on
July 1, 2000. On such date, the Company had issued and
outstanding 36,061,770 shares of $0.001 par value common stock.
Each share is entitled to one vote per share on any matter which
may properly come before the shareholders and there is no
cumulative voting right on any shares. Pursuant to applicable
Nevada, there are no dissenter's or appraisal rights relating to
the matters to be voted
All matters to be voted on require an affirmative written vote
of a majority of the issued and outstanding shares of the
Company. As management and other major shareholders hold,
directly or indirectly, a majority of the outstanding shares as
of the record date and intend to vote in favor of the proposal,
it is anticipated that the proposal will pass.
STOCK OWNERSHIP
The following table sets forth information regarding the
beneficial ownership of shares of the Company's common stock as
of July 5, 2000 (36,061,770 issued and outstanding) by (i) all
shareholders known to the Company to be beneficial owners of
more than 5% of the outstanding Common Stock; (ii) each director
and executive officer; and (iii) all officers and directors of
the Company as a group. Except as may be otherwise indicated in
the footnotes to the table, each person has sole voting power
and sole dispositive power as to all of the shares shown as
beneficially owned by them.
Title of Name and Address Amount of Percent of
Class of Beneficial Class (2)
Beneficial Owner Ownership (1)
Common Francis A. Zubrowski 2,923,553(3) 7.56%
Stock 8880 Rio San Diego Road
8th Floor
San Diego, CA 92108
Common Clayton S. Chase 524,800(4) 1.36%
Stock 8880 Rio San Diego Road
8th Floor
San Diego, CA 92108
Common Alejandro V. Tovar 400,000(5) 1.03%
Stock 8880 Rio San Diego Road
8th Floor
San Diego, CA 92108
Common Ralph D. Morren 103,000 0.27%
Stock 8880 Rio San Diego Road
8th Floor
San Diego, CA 92108
Common Adrian P. Corbett 100,000 0.26%
Stock 8880 Rio San Diego Road
8th Floor
San Diego, CA 92108
Common Paul S. Hewitt 0 0.00%
Stock 8880 Rio San Diego Road
8th Floor
San Diego, CA 92108
Common Shares of directors and 4,051,353 10.48%
Stock executive officers as a
group (6 persons)
(1) Other than as footnoted, none of these security holders has
the right to acquire any amount of the Shares within sixty days
from options, warrants, rights, conversion privilege, or similar
obligations.
(2) The percent of class is based on the issued and outstanding
common stock, plus the options for the persons shown which are
currently exercisable.
(3) Includes the following currently exercisable options: (a)
options granted on November 1, 1998 to purchase 250,000 of
shares of common stock at an exercise price of $1.00 per share,
expiring on November 1, 2000; (b) options granted on November 1,
1999 to purchase 250,000 of shares of common stock at an
exercise price of $1.25 per share, expiring on November 1, 2001;
and (c) options granted on July 3, 2000 under The Majestic
Companies Ltd. Employee Stock Option Plan to purchase 1,500,000
shares of common stock at an exercise price of $0.20 per share,
expiring on July 3, 2010.
(4) Includes options granted on July 3, 2000 under The Majestic
Companies Ltd. Employee Stock Option Plan to purchase 300,000
shares of common stock at an exercise price of $0.20 per share,
expiring on July 3, 2010.
(5) Includes options granted on July 3, 2000 under The Majestic
Companies Ltd. Employee Stock Option Plan to purchase 300,000
shares of common stock at an exercise price of $0.20 per share,
expiring on July 3, 2010.
INCREASE IN AUTHORIZED SHARES
Description of Securities.
(a) Shareholder Rights.
The Company's articles of incorporation authorize the issuance
of 50,000,000 shares of common stock, with a par value of
$0.001. The holders of the shares:
have equal ratable rights to dividends from funds legally
available therefore, when, as, and if declared by the board of
directors of the company
are entitled to share ratably in all of the assets of the
company available for distribution upon winding up of the
affairs of the company
are entitled to one non-cumulative vote per share on all matters
on which shareholders may vote at all meetings of shareholders.
These securities do not have any of the following rights
special voting rights
preference as to dividends or interest
preemptive rights to purchase in new issues of shares
preference upon liquidation
any other special rights or preferences.
In addition, the shares are not convertible into any other
security. There are no restrictions on dividends under any loan
other financing arrangements or otherwise. As of July 1, 2000,
the company had 31,974,070 shares of common stock issued and
outstanding. There are 2,000,000 preferred shares authorized,
but none have been issued.
(b) Non-Cumulative Voting.
The holders of shares of common stock of the company do not have
cumulative voting rights, which means that the holders of more
than 50% of such outstanding shares, voting for the election of
directors, can elect all of the directors to be elected, if they
so choose. In such event, the holders of the remaining shares
will not be able to elect any of the company's directors.
(c) Dividends.
The company does not currently intend to pay cash dividends. The
company's proposed dividend policy is to make distributions of
its revenues to its stockholders when the company's board of
directors deems such distributions appropriate. Because the
company does not intend to make cash distributions, potential
shareholders would need to sell their shares to realize a return
on their investment. There can be no assurances of the projected
values of the shares, nor can there be any guarantees of the
success of the company.
A distribution of revenues will be made only when, in the
judgment of the company's board of directors, it is in the best
interest of the company's stockholders to do so. The board of
directors will review, among other things, the investment
quality and marketability of the securities considered for
distribution; the impact of a distribution of the investee's
securities on its customers, joint venture associates,
management contracts, other investors, financial institutions,
and the company's internal management, plus the tax consequences
and the market effects of an initial or broader distribution of
such securities.
(d) Possible Anti-Takeover Effects of Authorized but Unissued
Stock.
The Company's authorized but unissued capital stock
consists of 13,938,230 shares of common stock. One effect of
the existence of authorized but unissued capital stock may be to
enable the Board of Directors to render more difficult or to
discourage an attempt to obtain control of the company by means
of a merger, tender offer, proxy contest, or otherwise, and
thereby to protect the continuity of the Company's management.
If, in the due exercise of its fiduciary obligations, for
example, the Board of Directors were to determine that a
takeover proposal was not in the Company's best interests, such
shares could be issued by the Board of Directors without
stockholder approval in one or more private placements or other
transactions that might prevent, or render more difficult or
costly, completion of the takeover transaction by diluting the
voting or other rights of the proposed acquiror or insurgent
stockholder or stockholder group, by creating a substantial
voting block in institutional or other hands that might
undertake to support the position of the incumbent board of
directors, by effecting an acquisition that might complicate or
preclude the takeover, or otherwise.
(e) Transfer Agent.
The company has engaged the services of ChaseMellon Shareholder
Services, 400 South Hope Street, 4th Floor, Los Angeles,
California 90071, to act as transfer agent and registrar.
Increase of Authorized Shares.
The corporate action to be taken consists of increasing the
number of authorized common shares of the Company from
50,000,000 to 200,000,000. This is increase will allow the
Board of Directors flexibility in structuring financing
arrangements for the Company and in issuing common stock in
exchange for services for the Company. Specifically, the
Company proposes to issue up to 90,000,000 shares of common
stock in an offering under a Form SB-2 Registration Statement to
be filed on or about July 25, 2000 with the Securities and
Exchange Commission (the remainder of the authorized shares will
be held in treasury for further unspecified uses in the future).
The shares under this offering are to be issued for a
combination of cash, consulting services for the Company,
acquisitions of assets and/or stock by the Company, and to
register the shares of certain selling shareholders of the
Company. The price for sale of the shares under this offering
will be in relation to the current market price of the shares,
and the Registration Statement will be updated to reflect this
by the filing of a 424 Prospectus with the Securities and
Exchange Commission. Therefore, the amount of consideration to
be received under this offering cannot be determined at this
time. The net cash proceeds from this offering will be used as
working capital for the Company.
FINANCIAL AND OTHER INFORMATION
The following documents previously filed by the Company (File
No. 000-28083) with the Securities and Exchange Commission
pursuant to the Exchange Act are incorporated herein by
reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1999 containing audited financial
statements for the fiscal years ended December 31, 1999 and
1998, filed pursuant to Section 13(a) of the Exchange Act.
(b) All other reports filed by the Company pursuant to Section
13(a) of the Exchange Act since December 31, 1999, consisting of
the Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 2000.
The latest Annual Report on Form 10-KSB will be given to
shareholders receiving this Information Statement.
By order of the Board of Directors
July 11, 2000
/s/ Alejandro V. Tovar
Alejandro V. Tovar, Corporate Secretary
