SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
Check the appropriate box:
|_| Preliminary Information Statement
|_| Confidential, for use of the Commission Only (as permitted by Rule
14c-5(d)(2))
|X| Definitive Information Statement
NETFABRIC 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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
|_| Fee paid previously 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
NETFABRIC HOLDINGS, INC.
3 Stewart Court
Denville, NJ 07834
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
TO ALL STOCKHOLDERS:
This Information Statement is first being mailed on or about October 25,
2006 to the holders of record of the common stock, par value $.001 (the "Common
Stock") of Netfabric Holdings, Inc. ("we", "us" or the "Company") as of the
close of business on October 23, 2006 (the "Record Date"). This Information
Statement relates to certain actions taken by the written consent of the holders
of a majority of the Company's outstanding Common Stock, dated October 12, 2006
(the "Written Consent").
The Written Consent authorized, effective upon the 21st day following the
mailing of this Information Statement to the Stockholders of the Company, the
following:
(1) An amendment to the Company's Certificate of Incorporation (the
"Amendment") to increase the number of authorized shares of the Company's Common
Stock from 100 million shares to 200 million shares of Common Stock.
The Written Consent constitutes the consent of a majority of the total
number of shares of outstanding Common Stock and is sufficient under the General
Corporation Law of the State of Delaware (the "DGCL") and the Company's Bylaws
to approve the Amendment. Accordingly, the Amendment shall not be submitted to
the Company's other stockholders for a vote.
This Information Statement is being furnished to you to provide you with
material information concerning the actions taken in connection with the Written
Consent in accordance with the requirements of the Securities Exchange Act of
1934 and the regulations promulgated there under, including Regulation 14C. This
Information Statement also constitutes notice under Section 228 of the DGCL of
the action taken in connection with the Written Consent.
Only one Information Statement is being delivered to two or more security
holders who share an address, unless the Company has received contrary
instruction from one or more of the security holders. The Company will promptly
deliver, upon written or oral request, a separate copy of the Information
Statement to a security holder at a shared address to which a single copy of the
document was delivered. If you would like to request additional copies of the
Information Statement, or if in the future you would like to receive multiple
copies of information or proxy statements, or annual reports, or, if you are
currently receiving multiple copies of these documents and would, in the future,
like to receive only a single copy, please so instruct the Company, by writing
to us at 3 Stewart Court, Denville, NJ 07834, Attn: Vasan Thatham.
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS
MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
Date: October 24, 2006
/s/ Fahad Syed
Fahad Syed, Chairman of the Board of
Directors and Chief Executive Officer
2
INFORMATION STATEMENT
INTRODUCTION
This Information Statement is being mailed or otherwise furnished to
stockholders of the Company in connection with the prior receipt by the Board of
Directors (the "Board") of approval by Written Consent of the holders of a
majority of the Company's Common Stock to approve the Amendment.
The Board believes it is in the best interests of the Company to increase
the authorized number of shares of Common Stock to enable additional equity
financings, debt financings and stock based acquisitions that may occur in the
future.
This Information Statement is being first sent to stockholders on or about
October 25, 2006. The Amendment will become effective following the twentieth
(20) day after the mailing.
MEETING NOT REQUIRED
The Amendment was approved by the Written Consent. No further vote is
required to approve the Amendment. The Amendment will become effective following
the filing of the Certificate of Amendment with the Secretary of State of the
State of Delaware, which will occur promptly following the twentieth (20) day
after the mailing of this Information Statement to the stockholders of the
Company.
FURNISHING INFORMATION
This Information Statement is being furnished to all holders of Common
Stock of the Company. The Form 10-KSB for the year ending December 31, 2005 and
all subsequent filings may be viewed on the Securities and Exchange Commission
web site at www.sec.gov in the EDGAR Archives and are incorporated herein by
reference. The Company is presently current in the filing of all reports
required to be filed by it.
DISSENTERS RIGHTS OFAPPRAISAL
There are no dissenters' rights of appraisal applicable to the action
authorized by the Written Consent.
PROPOSALS BY SECURITY HOLDERS
No security holders entitled to vote have transmitted any proposals to be
acted upon by the Company.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
3
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Amendment requires the approval of a majority of the outstanding
shares of Common Stock. Each holder of Common Stock is entitled to one (1) vote
for each share held. The record date for the purpose of determining the number
of shares outstanding and for determining stockholders entitled to vote, is the
close of business on the Record Date, the day in which the Board of Directors of
the Company adopted the resolution setting forth and recommending the Amendment.
As of the Record Date, the Company had 74,693,883 shares of Common Stock issued
and outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of October 12, 2006, each person known
by us to be the beneficial owner of five percent or more of the Company's Common
Stock, all directors individually and all directors and officers as a group.
Each person named below has sole voting and investment power with respect to the
shares shown unless otherwise indicated.
Name and Address of Beneficial Owner Amount of Beneficial Ownership Percentage of Class
- ----------------------------------------------------------------------------------------------------------------------
Jeffrey Robinson 4,832,476 6.5%
Five Tomaselli Court
Ballston Spa, NY 12020
- ----------------------------------------------------------------------------------------------------------------------
Fred Nazem 15,807,477(1) 21.0%
44 East 73rd Street
New York, New York 10021
- ----------------------------------------------------------------------------------------------------------------------
Fahad Syed 7,331,731(2) 9.7%
c/o NetFabric Corporation
Three Stewart Court
Denville, NJ 07834
- ----------------------------------------------------------------------------------------------------------------------
Vasan Thatham 75,000(3) *
c/o NetFabric Corporation
Three Stewart Court
Denville, NJ 07834
- ----------------------------------------------------------------------------------------------------------------------
Charlotte G. Denenberg 109,375(4) *
c/o NetFabric Corporation
Three Stewart Court
Denville, NJ 07834
- ----------------------------------------------------------------------------------------------------------------------
4
Name and Address of Beneficial Owner Amount of Beneficial Ownership Percentage of Class
- ----------------------------------------------------------------------------------------------------------------------
Joseph Perno 31,250(5) *
c/o NetFabric Corporation
Three Stewart Court
Denville, NJ 07834
- ----------------------------------------------------------------------------------------------------------------------
Faisal Syed 13,238,462 17.7%
12 Kings Brook Court
Mendham, NJ 07945
- ----------------------------------------------------------------------------------------------------------------------
Mohamed Asif 13,238,462 17.7%
53 Burnet Hill Road
Livingston, NJ 07039
- ----------------------------------------------------------------------------------------------------------------------
Utek Corporation 7,165,000(6) 9.6%
2109 Palm Avenue
Tampa, FL 33605
- ----------------------------------------------------------------------------------------------------------------------
(Directors and Officers as a group, 4 Persons) 7,547,356(7) 10.0%
- ----------------------------------------------------------------------------------------------------------------------
(1) Includes 100,000 shares issuable upon exercise of warrants and 400,000
shares issuable upon conversion of convertible debentures. Includes 6,592,212
shares held by the Fred F. Nazem Children's Trust, whose trustees are Alexander
Nazem, Farhad Nazem and Sohelya Gharib. Fred Nazem disclaims beneficial
ownership of these securities.
(2) Includes 300,000 shares issuable upon exercise of warrants and 300,000
shares issuable upon conversion of a convertible debenture.
(3) Includes 75,000 shares issuable upon exercise of options.
(4) Includes 109,375 shares issuable upon exercise of options.
(5) Includes 75,000 shares issuable upon exercise of options.
(6) Dr. Clifford M. Gross, PhD, Chairman and Chief Executive Officer, Ms. Carole
R. Wright, Chief Financial Officer and Mr. Douglas Schaedler, Chief Operating
Officer, make the investment decisions on behalf of Utek Corporation.
(7) Includes 215,625 shares issuable upon exercise of options, 300,000 shares
issuable upon exercise of warrants and 300,000 shares issuable upon conversion
of a convertible debenture.
* less than 1%.
5
There are no arrangements, known to the Company, including any pledge by
any person, of securities of the Company, the operation of which may at a
subsequent date result in a change in control of the Company.
PROPOSAL
TO AMEND THE
CERTIFICATE OF INCORPORATION
The Board has determined that it would be in the best interests of the
Company to increase the number of authorized shares of Common Stock from 100
million shares to 200 million shares of Common Stock. The proposed Certificate
of Amendment to the Certificate of Incorporation is attached hereto as Exhibit
A.
PURPOSE FOR THE AMENDMENT
The increase in the number of authorized shares of Common Stock would
provide the Company with greater flexibility with respect to its capital
structure for such purposes as additional equity financings and stock based
acquisitions that may occur in the future. Having a substantial number of
authorized, but unissued shares of Common Stock that are not reserved for
specific purposes will allow the Company to take prompt action with respect to
corporate opportunities that develop, without the delay and expense of convening
a meeting of stockholders or obtaining the written consent of stockholders for
the purpose of approving an increase in the Company's capitalization. The
issuance of additional shares of Common Stock may, depending upon the
circumstances under which these shares are issued, reduce stockholders' equity
per share and may reduce the percentage ownership of Common Stock by existing
stockholders.
It is not the present intention of the Board to seek stockholder approval
prior to any issuance of shares of Common Stock that would become authorized by
the Amendment unless otherwise required by law or regulation. Frequently,
opportunities arise that require prompt action, and it is the belief of the
Board that the delay necessitated for stockholder approval of a specific
issuance could be to the detriment of the Company and its stockholders. When
issued, the additional shares of Common Stock authorized by the Amendment will
have the same rights and privileges as the shares of Common Stock currently
authorized and outstanding. Holders of Common Stock have no preemptive rights
and, accordingly, stockholders would not have any preferential rights to
purchase any of the additional shares of Common Stock when additional shares are
issued.
6
REQUIRED VOTES
The Amendment was approved pursuant to the Written Consent. No further
vote is required to approve the Amendment. The Amendment will become effective
following the filing of the Certificate of Amendment to the Certificate of
Incorporation with the Secretary of State of the State of Delaware, which will
occur promptly following the twentieth (20) day after the mailing of this
Information Statement to the stockholders of the Company.
VOTES OBTAINED
The following individuals own the number of shares and percentages set
forth opposite their names and executed the Written Consent:
Name of Beneficial Owner Amount of Percentage of
Beneficial Class
Ownership
- --------------------------------------------------------------------------------
Jeffrey Robinson 4,832,476 6.5%
- --------------------------------------------------------------------------------
Fred Nazem 8,715,265 11.7%
- --------------------------------------------------------------------------------
Fred F. Nazem Children's Trust 6,592,212 8.8%
- --------------------------------------------------------------------------------
Fahad Syed 6,731,731 9.0%
- --------------------------------------------------------------------------------
Faisal Syed 13,238,462 17.7%
- --------------------------------------------------------------------------------
Mohamed Asif 13,238,462 17.7%
- --------------------------------------------------------------------------------
Total 53,348,608 71.4%
- --------------------------------------------------------------------------------
INTEREST OF CERTAIN PERSONS IN FAVOR OF OR IN OPPOSITION TO THE AMENDMENT
No officer or director will receive any direct or indirect benefit from
the Company's proposed Amendment.
By Order of the Board of Directors
/s/ Fahad Syed
Fahad Syed, Chairman of the Board of
Directors and Chief Executive Officer
7
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
NETFABRIC HOLDINGS, INC.
(Pursuant to Section 242 of the
General Corporation Law of the State of Delaware)
Netfabric Holdings, Inc., a Delaware corporation, hereby certifies as follows:
1. The name of the corporation (hereinafter called the "Corporation") is
Netfabric Holdings, Inc. The date of the filing of the Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation") with the
Secretary of State of the State of Delaware was August 31, 1989. An Amended and
Restated Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware on April 18, 2005.
2. The Certificate of Incorporation, filed on August 31, 1989, as amended and
restated on April 18, 2005, is hereby further amended to increase the amount of
the authorized capital stock of Netfabric Holdings, Inc. by striking out Article
IV, Section A thereof and by substituting in lieu of said Article IV, Section A,
the following new Article IV, Section A:
ARTICLE IV
CAPITAL STOCK
Section A: The amount of total authorized capital stock of this Corporation
shall be Two Hundred Ten Million Shares, divided as follows: (i) Two Hundred
Million shares of Common Stock, with $0.001 par value (the "Common Stock"), and
Ten Million shares of Preferred Stock (the "Preferred Stock").
3. The Amendment of the Certificate of Incorporation herein certified has
been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
Signed this ___ day of November, 2006.
-------------------------------------
Fahad Syed, Chairman of the Board of
Directors and Chief Executive Officer