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
Check the appropriate box:
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x Preliminary Information Statement
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o Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2))[ ]
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o Definitive Information Statement
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M LINE HOLDINGS, INC.
(Name of Registrant As Specified In Charter)
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x
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No fee required.
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Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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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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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No:
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Date Filed:
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THIS INFORMATION STATEMENT IS BEING PROVIDED TO
YOU BY THE BOARD OF DIRECTORS OF M LINE HOLDINGS, INC.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
M Line Holdings, Inc.
2672 Dow Avenue
Tustin, CA 92780
(714) 630-6253
INFORMATION STATEMENT
October 24, 2014
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
GENERAL INFORMATION
To the Holders of Common Stock of M Line Holdings, Inc.:
This Information Statement has been filed with the United States Securities and Exchange Commission (the “SEC”) and is being furnished, pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to the holders (the “Stockholders”) of common stock, par value $0.001 per share (the “Common Stock”), of M Line Holdings, Inc., a Nevada corporation (the “Company,” “we,” “our,” or “us”), to notify the Stockholders that on October 21, 2014, the Company received a unanimous written consent in lieu of a meeting of the holders of at least a majority of the voting capital stock of the Company (the “Majority Stockholders”), consisting of Common Stock and Series B Preferred Stock of the Company (“Preferred Stock”), which authorized the following:
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The increase in the number of authorized shares of Common Stock from one billion (1,000,000,000) shares to ten billion (10,000,000,000) shares (the “Authorized Share Increase”).
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On October 9, 2014, the Board of Directors of the Company (“Board”) approved the Authorized Share Increase and recommended to the Majority Stockholders that they approve the Authorized Share Increase. On October 21, 2014, the Majority Stockholders approved the Authorized Share Increase by written consent in lieu of a meeting in accordance with the applicable sections of the Nevada Revised Statutes. Accordingly, your consent is not required and is not being solicited in connection with the approval of the Authorized Share Increase.
We will mail the Notice of Stockholder Action by Written Consent to the Stockholders on or about November 14, 2014.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY.
The Board believes the Authorized Share Increase is necessary and advisable in order to maintain the Company’s financing and capital raising ability and to generally maintain our flexibility in today’s competitive and rapidly changing environment. Accordingly, it is the Board’s opinion that the Authorized Share Increase would better position the Company to attract potential business candidates and provide the Stockholders a greater potential return.
INTRODUCTION
The Nevada Revised Statutes provide that the written consent of the holders of outstanding shares of voting capital stock having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted can approve an action in lieu of conducting a special meeting of the Stockholders convened for the specific purpose of such action. The Nevada Revised Statutes, however, require that in the event an action is approved by written consent, a company must provide prompt notice of the taking of any corporate action without a meeting to the Stockholders of record who have not consented in writing to such action and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to a company.
In accordance with the foregoing, we will mail the Notice of Stockholder Action by Written Consent on or about November 14, 2014.
This Information Statement contains a brief summary of the material aspects of the Authorized Share Increase approved by the Board and the Majority Stockholders.
Approval of Majority Stockholders
As of October 21, 2014, there were 942,437,603 issued and outstanding shares of Common Stock and 10,000,000 issued and outstanding shares of Preferred Stock. Pursuant to the Nevada Revised Statutes, at least a majority of the voting equity of the Company (which consists of Common Stock and Preferred Stock) are required to approve the Authorized Share Increase by written consent. The Majority Stockholders, who hold in the aggregate 84,191,446 shares of Common Stock and 10,000,000 shares of Preferred Stock, or shares representing approximately 54.5% of the voting equity of the Company, have voted in favor of the Authorized Share Increase, thereby satisfying the requirement under the Nevada Revised Statutes that at least a majority of the voting equity vote in favor of a corporate action by written consent.
The following table sets forth the names of the Majority Stockholders, the number of shares held by the Majority Stockholders, the total number of votes that the Majority Stockholders voted in favor of the Authorized Share Increase and the percentage of the issued and outstanding voting equity of the Company that voted in favor thereof.
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Name of Majority
Stockholder
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Number of Shares
of Preferred Stock
Held
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Number of Shares
of Common Stock
Held
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Percentage of the
Voting Equity that
Voted in favor of the
Action*
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Anthony Anish
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10,000,000 |
26,432,500 |
51.4% |
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Jitendra Banker
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0 |
19,325,000 |
1.0% |
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Bruce Barren
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0 |
18,000,000 |
1.0% |
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Money Line Capital, Inc.
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0 |
7,068,478 |
0.4% |
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George Colin
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0 |
5,790,468 |
0.3% |
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Spagus Capital Partners, LLC
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0 |
4,900,000 |
0.3% |
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Giovanni, LLC
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0 |
2,675,000 |
0.14% |
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Total
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10,000,000 |
84,191,446 |
54.5% |
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* The Preferred Stock has an aggregate voting power equal to 50% of the combined voting power of the Common Stock and Preferred Stock, as explained below.
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ACTIONS TO BE TAKEN
The Authorized Share Increase will become effective on the date that we file the Certificate of Amendment to the Company’s Articles of Incorporation, as amended (the “Amendment”) with the Secretary of State of the State of Nevada. We intend to file the Amendment with the Secretary of State of the State of Nevada promptly after the twentieth (20th) day following the date on which this Information Statement is mailed to the Stockholders.
INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
GENERAL
The number of authorized shares of our Common Stock will be increased from one billion (1,000,000,000) shares to ten billion (10,000,000,000) shares (the “Authorized Share Increase” or the “Action”).
The primary purpose of the Action is for general corporate purposes, including, without limitation, capital raising, merger and acquisition opportunities, the issuance of stock dividends or stock splits, and other general corporate purposes.
The effect of the adoption of Action would be to grant the Board the authority to issue shares of Common Stock.
The Board has made no decisions or commitments with respect to the use of the requested shares of Common Stock and it has no plans to commence an offering of any of the Company’s shares at this time. The Board believes, however, that the Action provides the flexibility the Company needs to satisfy its obligation to raise additional capital to support the Company. Approval of the Action permits the Company to take advantage of opportunities as they arise.
POTENTIAL FOR DILUTION TO THE OWNERSHIP OF EXISTING STOCKHOLDERS AND OTHER EFFECTS OF THE ACTION
Pursuant to the Authorized Share Increase, the additional authorized shares of Common Stock may be issued for such consideration, cash or otherwise, at such times and in such amounts as the Board may determine without further stockholder approval, except to the extent that stockholder approval is required by applicable laws, rules or regulations.
The additional shares of Common Stock to be authorized by adoption of the Amendment would have rights identical to our currently outstanding Common Stock. The Authorized Share Increase will not change the number of shares of stock outstanding, nor will it have any immediate dilutive effect or change the rights of current holders of our Common Stock. However, to the extent that the additional authorized shares are issued in the future, they may dilute the percentage equity ownership of existing Stockholders and, depending on the price at which they are issued, may also dilute earnings and book value on a per share basis. The Stockholders have no preemptive rights to subscribe for additional shares of Common Stock when issued, which means that current Stockholders do not have a prior right to purchase any newly-issued shares in order to maintain their proportionate ownership of Common Stock.
POSSIBLE ANTI-TAKEOVER EFFECTS OF THE ACTION
Common Stock. The increase in the authorized number of shares of Common Stock could, in some situations, have the effect of discouraging unsolicited takeover attempts or inhibiting the removal of incumbent management and may limit the opportunity for Stockholders to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. For example, the issuance of the newly authorized shares of Common Stock could be used to discourage persons from attempting to gain control of the Company by diluting the voting power of shares then outstanding or increasing the voting power of persons who would support the Board in a potential takeover situation, including by rendering a transaction proposed by such persons more costly, or by preventing or delaying a proposed business combination that is opposed by the Board although perceived to be desirable by some Stockholders.
Preferred Stock. The Board is authorized to issue a total of 20,000,000 shares of Preferred Stock. The increase in the authorized number of shares of Common Stock could dilute the voting power of the holders of Preferred Stock and have a similar effect as stated for Common Stock above.
PURPOSE AND EFFECT OF INCREASING THE NUMBER OF AUTHORIZED SHARES
The Board believes the Action is necessary and advisable in order to maintain our financing and capital raising ability and to generally maintain our flexibility in today’s competitive and rapidly changing environment. The additional nine billion (9,000,000,000) shares of Common Stock, as well as the already authorized one billion (1,000,000,000) shares of Common Stock and twenty million (20,000,000) shares of Preferred Stock, will be available for issuance by the Board for stock splits or stock dividends, acquisitions, raising additional capital, stock options or other corporate purposes. Assurances cannot be provided that any such transactions will be consummated on favorable terms or at all, that they will enhance stockholder value or that they will not adversely affect the Company’s business or the trading price of the Common Stock. The additional shares of Common Stock may be used for future issuances of stock options pursuant to employee benefit plans and to provide for issuances to satisfy conversions of future convertible debt or convertible preferred stock. The Company does not anticipate that it would seek authorization from the Stockholders for issuance of such additional shares unless required pursuant to applicable law or regulations.
The increase in the authorized number of shares of Common Stock and any subsequent issuance of such shares could have the effect of delaying or preventing a change in control of the Company without further action by the Stockholders. Shares of authorized and unissued Common Stock and/or shares of Preferred Stock could (within the limits imposed by applicable law and stock exchange regulations) be issued in one or more transactions which would make a change in control of the Company more difficult, and therefore less likely. Any such issuance of the additional shares of Common Stock or Preferred Stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common Stock, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company. The Board is not aware of any attempt to take control of the Company and has not presented this proposal with the intention that the increase in the number of authorized shares of Common stock be used as a type of antitakeover device. Any additional Common Stock, when issued, would have the same rights and preferences as the shares of Common Stock presently outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of Common Stock and Preferred Stock as of October 21, 2014, by (a) each person who is known by us to beneficially own 5% or more of Common Stock, (b) each of our directors and executive officers, and (c) all of our directors and executive officers as a group. As of October 21, 2014, there were a total of 942,437,603 shares of Common Stock and 10,000,000 shares of Preferred Stock outstanding. Each share of Common Stock is entitled to one vote on matters on which holders of voting stock of the Company are eligible to vote. The Preferred Stock has an aggregate voting power equal to 50% of the combined voting power of the Common Stock and Preferred Stock. The column entitled “Percentage of Common Stock” shows the percentage of Common Stock beneficially owned by each listed party and the column entitled “Percentage of Preferred Stock” shows the percentage of Preferred Stock beneficially owned by each listed party.
The number of shares beneficially owned is determined under the rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which a person or entity has sole or shared voting power or investment power plus any shares which such person or entity has the right to acquire within sixty (60) days of October 21, 2014, through the exercise or conversion of any stock option, convertible security, warrant or other right. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares such power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.
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Common Stock
Beneficially Owned
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Preferred Stock
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Anthony L. Anish (5)
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26,432,500 |
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10,000,000 |
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2.80% |
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100.00% |
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51.40% |
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Jitendra Banker (5)
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19,325,000 |
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2.05 |
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1% |
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Bruce Barren (5)
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18,000,000 |
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1.91% |
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1% |
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George Colin (5)
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5,790,468 |
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0.61% |
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0.30% |
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Money Line Capital, Inc. (6)
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7,068,478 |
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0.76% |
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0.40% |
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17702 Mitchell North, Suite 201
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Irvine, CA 92614
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All Executive Officers and Directors as a group (4 people)
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69,547,968 |
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8.13% |
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54.10% |
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5% Stockholders (7)
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(1)
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Except as otherwise below, the address of each beneficial owner is c/o M Line Holdings, Inc., 2672 Dow Avenue Tustin, CA 92780.
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(2)
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Applicable percentage ownership is based on 942,437,603 shares of Common Stock outstanding as of October 21, 2014.
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(3)
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Applicable percentage ownership is based on 10,000,000 shares of Preferred Stock outstanding as of October 21, 2014.
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(4)
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Based on total holdings of Common Stock and Preferred Stock.
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(5)
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Indicates officer or director.
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(6)
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Three of our officers and directors own stock in Money Line Capital, Inc. but none individually or as a group control Money Line Capital’s investment or control decisions.
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(7)
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No 5% stockholders other than management stockholders.
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ADDITIONAL INFORMATION
We are subject to the applicable disclosure requirements of the Exchange Act and in accordance therewith, file reports, information statements and other information, including annual and quarterly reports on Form 10-K and 10-Q, respectively, with the SEC. Reports and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such material can also be obtained upon written request addressed to the SEC, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the SEC maintains a web site on the Internet (http://www.sec.gov) that contains reports, information statements and other information regarding issuers that file electronically with the SEC through the Electronic Data Gathering, Analysis and Retrieval System.
The following documents, as filed with the SEC by the Company, are incorporated herein by reference:
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(1)
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Annual Report on Forms 10-K and 10-K/A for the fiscal year ended June 30, 2013 filed on December 31, 2013 and January 2, 2014, respectively;
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(2)
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Quarterly Report on Forms 10-Q and 10-Q/A for the three months ended September 30, 2013 filed on January 13, 2014 and January 15, 2014, respectively;
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(3)
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Quarterly Report on Form 10-Q for the three months ended December 31, 2013 filed on February 11, 2014;
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(4)
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Quarterly Report on Form 10-Q for the three months ended March 31, 2014 filed on May 20, 2014; and
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(5)
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Current Report on Form 8-K filed on April 3, 2014.
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You may request a copy of these filings, at no cost, by writing M Line Holdings, Inc., 2672 Dow Avenue Tustin, CA 92780 or telephoning the Company at (714) 630-6253. Any statement contained in a document that is incorporated by reference will be modified or superseded for all purposes to the extent that a statement contained in this Information Statement (or in any other document that is subsequently filed with the SEC and incorporated by reference) modifies or is contrary to such previous statement. Any statement so modified or superseded will not be deemed a part of this Information Statement except as so modified or superseded.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
If hard copies of the materials are requested, we will send only one Information Statement and other corporate mailings to Stockholders who share a single address unless we received contrary instructions from any Stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a separate copy of the Information Statement to a Stockholder at a shared address to which a single copy of the Information Statement was delivered. You may make such a written or oral request by (a) sending a written notification stating (i) your name, (ii) your shared address, and (iii) the address to which the Company should direct the additional copy of the Information Statement, to the Company at 2672 Dow Avenue Tustin, CA 92780; or (b) telephoning the Company at (714) 630-6253.
If multiple Stockholders sharing an address have received one copy of this Information Statement or any other corporate mailing and would prefer the Company to mail each Stockholder a separate copy of future mailings, you may mail notification to, or call the Company at, its principal executive offices. Additionally, if current Stockholders with a shared address received multiple copies of this Information Statement or other corporate mailings and would prefer the Company to mail one copy of future mailings to Stockholders at the shared address, notification of such request may also be made by mail or telephone to the Company’s principal executive offices.
This Information Statement is provided to the holders of Common Stock of the Company only for information purposes in connection with the Action, pursuant to and in accordance with Rule 14c-2 of the Exchange Act. Please carefully read this Information Statement.
By Order of the Board of Directors
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Date: October 24, 2014
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By:
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/s/ Bruce Barren |
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Bruce Barren |
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Chief Executive Officer |
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