Unassociated Document
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c)
of
the
Securities Exchange Act of 1934 (Amendment No. )
Check
the
appropriate box:
o
Preliminary Information
Statement
o
Confidential, for use of the Commission
only (as permitted by Rule 14c-5(d)(21))
x
Definitive Information
Statement
GL
Energy
& Exploration, Inc.
(Name
of
Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
x
No fee required
o
Fee computed on table below per Exchange
Act Rules 14c-5(g) and 0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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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
is
calculated and state how it was
determined.):
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____________________________________________________________________
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4)
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Proposed
maximum aggregate value of
transaction:
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____________________________________________________________________
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5)
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Total
Fee
Paid:______________________________________________________
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o
Fee paid previously with preliminary
materials.
o
Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
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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
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_________________________________________
__________________________________________
__________________________________________
GL
ENERGY & EXPLORATION, INC.
8721
Sunset Blvd., Penthouse 7
Hollywood,
California 90069
____________________
NOTICE
OF SHAREHOLDER ACTION BY WRITTEN CONSENT
____________________
July
26,
2006
A
majority of the shareholders of GL Energy & Exploration, Inc., have taken
action by written consent to approve an amendment to our Certificate of
Incorporation, which amendment will (i) change our corporate name to “American
Southwest Music Distribution, Inc.” and (ii) effectuate a reverse stock split of
our common stock by changing and reclassifying each seventy four (74) shares
our
issued and outstanding common stock, par value $.001 per share (“Common Stock”)
into one (1) fully paid and non-assessable share of Common Stock.
Shareholders
of record at the close of business on July 7, 2006 will be entitled to notice
of
this shareholder action by written consent. Since the actions will be approved
by the holders of the required majority of the outstanding shares of our voting
stock, no proxies were or are being solicited. We anticipate that the name
change and the reverse split will become effective on or after August 18,
2006.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE
REQUESTED NOT TO SEND US A PROXY.
GL
ENERGY & EXPLORATION, INC.
____________________
INFORMATION
STATEMENT
____________________
INFORMATION
CONCERNING THE ACTION BY WRITTEN CONSENT
Date
and Purpose of Written Consent
Shareholders
holding a majority of the voting power of the company took action by written
consent on July 7, 2006 for the purpose of approving an amendment to the
company’s certificate of incorporation (the “Charter Amendment”) to (i) change
the company’s corporate name to “American Southwest Music Distribution, Inc.”
(the “Name Change”) and (ii) effectuate a 1-for 74 reverse split of the
company’s issued and outstanding common stock (the “Reverse
Split”).
Shareholders
Entitled to Vote
Approval
of the matters described herein requires the written consent of the holders
of
outstanding stock of each voting group entitled to vote on such matters. As
of
June 27, 2006, there were 63,882,042 shares of our common stock outstanding
and
23,980 shares of our series A preferred stock outstanding. Holders of our common
stock are entitled to one vote per share. Holders of our series A preferred
stock are entitled to the number of votes equal to the number of whole shares
of
common stock into which the shares of series A preferred stock held by such
holder are convertible, and for the actions described herein, vote together
with
the holders of common stock as a single class. The number of shares of common
stock issuable upon conversion of each share of series A preferred stock is
determined by dividing the Stated Value ($1,000) by the Conversion Price ($.04).
As such each share of Series A preferred stock is convertible into 25,000 shares
of common stock and the 23,980 shares of Series A preferred stock outstanding
are entitled to 599,500,000 votes. Accordingly, there are 663,382,042 votes
outstanding voting together as a single class. Shareholders of record at the
close of business on July 7, 2006, will be entitled to receive this notice
and
information statement.
Proxies
No
proxies are being solicited.
Consents
Required
The
Charter Amendment requires the consent of the holders of a majority of the
shares of common stock and Series A preferred stock voting together as a single
class.
On
July
7, 2006, David Michery and Kent Puckett, holders of the voting rights with
respect to (i) 22,500,000 shares of our common stock and (ii) 599,500,000 voting
rights with respect to 23,980 shares of our series A preferred stock delivered
written consents to us adopting the proposals set forth herein. For a detailed
breakdown of Messrs. Michery and Puckett’s holders please see “COMMON STOCK
OUTSTANDING AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.”
Information
Statement Costs
The
cost
of delivering this information statement, including the preparation, assembly
and mailing of the information statement, as well as the cost of forwarding
this
material to the beneficial owners of our capital stock will be borne by us.
We
may reimburse brokerage firms and others for expenses in forwarding information
statement materials to the beneficial owners of our capital
stock.
COMMON
STOCK OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of June 30, 2006 by the following persons:
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·
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each
person who is known to be the beneficial owner of more than five
percent
(5%) of our issued and outstanding shares of common
stock;
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·
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each
of our directors and executive officers;
and
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·
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all
of our directors and executive officers as a
group.
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Except
as
set forth in the footnotes to the table, the persons names in the table have
sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them, subject to community property laws where
applicable. A person is considered the beneficial owner of any securities as
of
a given date that can be acquired within 60 days of such date through the
exercise of any option, warrant or right. Shares of common stock subject to
options, warrants or rights which are currently exercisable or exercisable
within 60 days are considered outstanding for computing the ownership percentage
of the person holding such options, warrants or rights, but are not considered
outstanding for computing the ownership percentage of any other person.
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Name
And Address (1)
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Number
Of Shares
Beneficially
Owned
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Percentage
Owned (2)
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Number
of Shares Beneficially Owned Post Reverse Split
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Percentage
Owned Post Reverse Split (3)
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David
Michery
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561,045,000
(4)
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92.8%
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7,581,689
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84.6%
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Kent
Puckett
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60,995,000
(5)
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49.7%
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824,527
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9.2%
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Donald
Byers
#300
- 1497 Marine Drive
West
Vancouver, BC
Canada
V7T 1B8
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16,400,000
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25.7%
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221,622
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2.5%
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All
directors and officers as a group (2 persons)
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622,000,000
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93.6%
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8,406,216
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93.8%
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*
Less
than 1% of the outstanding shares of common stock.
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(1)
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Unless
otherwise noted, the address for each person is 8721
Sunset Blvd., Penthouse 7, West Hollywood, California 90069.
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(2)
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Based
on 63,882,042 common shares issued and
outstanding.
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(3)
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Based
on 8,964,622 shares of common stock outstanding after (i) the 1-for-74
reverse split and (ii) full conversion of all series A preferred
stock
held by Messrs Michery and Puckett immediately following effectiveness
of
the reverse split.
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(4)
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Includes
540,750,000 shares of common stock issuable upon conversion of 21,630
shares of series A preferred stock. Mr. Michery has submitted an
irrevocable conversion notice pursuant to which he agreed to convert
all
of these shares of series A preferred stock into common stock immediately
following effectiveness of the reverse split discussed herein. Mr.
Michery
is our President and Chief Executive
Officer.
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(5)
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Includes
58,750,000 shares of common stock issuable upon conversion of 2,350
shares
of series A preferred stock. Mr. Puckett has has submitted an irrevocable
conversion notice pursuant to which he agreed to convert all of these
shares of series A preferred stock into common stock immediately
following
effectiveness of the reverse split discussed herein. Mr. Puckett
is our
Chief Financial Officer.
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PROPOSAL
1
AMENDMENT
TO OUR CERTIFICATE OF
INCORPORATION
TO EFFECTUATE A 1-FOR-74 REVERSE STOCK SPLIT
Introduction
On
March
10, 2006, our board of directors unanimously adopted a resolution declaring
it
advisable to amend our certificate of incorporation to effectuate a 1-for-35
reverse stock split, which resolution was superceded by a new resolution
unanimously adopted by our board of directors on April 21, 2006 to increase
the
reverse split to 1-for-74. Our board of directors further directed that this
amendment to our certificate of incorporation be submitted for consideration
by
our stockholders. On July 7, 2006, the holders of our voting stock approved
the
1-for-74 reverse stock split.
Effective
Time of the Reverse Split
We
intend
to file, as soon as practicable on or after the twentieth (20th)
day
after this information statement is sent to our shareholders, an amendment
to
our certificate of incorporation effectuating the reverse stock split with
the
Secretary of State of Delaware. This amendment to our certificate of
incorporation will become effective at the close of business on the date the
amendment to the certificate of incorporation is accepted for filing by the
Secretary of State of Delaware. It is presently contemplated that such filing
will be made in the third week of August 2006. A copy of the amendment to
our certificate of incorporation is attached to this information statement
as
Appendix A.
Reasons
for the Reverse Stock Split
Our
board
of directors seeks to adopt the one for seventy-four reverse
stock-split in order to improve our capitalization and to comply with the terms
of the agreement underlying our acquisition of all of the outstanding shares
of
American Southwest Music Distribution, Inc. (See “RECENT CHANGES—Change in
Control”). After giving effect to the acquisition without the reverse stock
split, the number of total shares outstanding on June 27, 2006 was 63,882,042
(including shares issuable upon conversion of the 23,980 shares of our series
A
preferred stock issued in connection therewith this number would be
approximately 663,382,042). Our board of directors believes that this number
of
outstanding shares, along with the low per share market price of our common
stock, impairs its marketability to and acceptance by institutional investors
and other members of the investing public and creates a negative impression
of
our company. In addition, we are only authorized to issue 100,000,000 shares
of
common stock, so in order to satisfy the conversion terms of the series A
preferred stock, we would either need to increase our authorized common stock
or
effectuate a reverse split. The holders of our series A preferred stock have
submitted irrevocable conversion notices pursuant to which they have agreed
to
fully convert their series A preferred stock into shares of common stock
immediately following consummation of the reverse split, which further enhances
our capital structure. The board of directors has determined that, for the
reasons set forth herein, the better choice is to effectuate the reverse
split.
Theoretically,
decreasing the number of shares of common stock outstanding should not, by
itself, affect the marketability of the shares, the type of investor who would
be interested in acquiring them, or our reputation in the financial community.
In practice, however, many investors and market makers consider low-priced
stocks as unduly speculative in nature and, as a matter of policy, avoid
investment and trading in such stocks. The presence of these negative
perceptions may be adversely affecting, and may continue to adversely affect,
not only the pricing of our common stock but also its trading liquidity. In
addition, these perceptions may affect our commercial business and our ability
to raise additional capital through the sale of stock or the cost of debt we
may
incur.
We
hope
that the decrease in the number of shares of our outstanding common stock
resulting from the reverse split, and the anticipated increase in the price
per
share, will encourage greater interest in our common stock among members of
the
financial community and the investing public and possibly create a more liquid
market for our stockholders with respect to those shares presently held by
them.
However, the possibility exists that stockholder liquidity may be adversely
affected by the reduced number of shares which would be outstanding if the
reverse split is effected, particularly if the price per share of our common
stock begins a declining trend after the reverse split is effected. Companies
which effectuate reverse stock splits often experience such a declining
trend.
It
is
possible that the reverse split will not achieve any of the desired results.
There also can be no assurance that the price per share of our common stock
immediately after the reverse split will increase proportionately with the
reverse split, or that any increase will be sustained for any period of
time.
We
are
not aware of any present efforts by anyone to accumulate our common stock,
and
the proposed reverse split is not intended to be an anti-takeover
device.
Possible
Disadvantages
Following
the reverse split (and conversion of the series A preferred stock), our capital
structure will be as follows:
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(i)
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8,964,622
shares of common stock outstanding;
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(ii)
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100,000,000
shares of common stock authorized, with 0 shares reserved for
issuance
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We
were
required to reserve a sufficient number of shares of common stock for issuance
upon conversion of the series A preferred. Without the reverse split, we would
have been required to increase our authorized common stock and reserve
approximately 600 million shares of our common stock.
Prior
to
effectiveness of the reverse split, we would have only been able to honor
conversion of approximately 1,440 shares of series A preferred stock, or 36
million shares. Accordingly, our principal officers and stockholders David
Michery and Kent Puckett would have held approximately 58.5 million (or 58.5%)
of the total authorized and outstanding common stock, with the right to receive
an additional 563 million shares upon conversion of their remaining series
A
preferred stock. After the reverse split, there will be sufficient common stock
available to honor full conversion of their series A preferred stock resulting
in their holding 93.8% of the outstanding common stock, while there will now
be
90 million shares of common stock available for issuance. These additional
available shares were not required for consummation of our recent acquisition
of
all of the equity of American Southwest Music Distribution, Inc. GL
Energy’s inability to honor full conversion of the series A preferred stock will
not give American Southwest’s shareholders a right to rescind or unwind the
transaction described above. (See
“RECENT CHANGES--Change in Control”). Even if we were unable to obtain
stockholder approval for the reverse split, Messrs. Michery and Puckett control
GL Energy due to their common stock combined with the voting rights contained
in
their series A preferred stock, regardless of conversion thereof. Specifically,
Messrs. Michery and Puckett hold 622,000,000 voting rights or approximately
94 %
of the votes available on a fully diluted basis thereby controlling GL Energy
(See “INFORMATION CONCERNING THE ACTION BY WRITTEN CONSENT—Shareholders Entitled
to Vote; --Consents Required”). Accordingly, if stockholder approval for the
reverse split is not obtained, we would only honor conversion of approximately
1,440 shares of series A preferred stock held by Messrs. Michery and Puckett
as
discussed above.
While
management is currently seeking attractive equity or debt financing
arrangements, there are currently no proposals or arrangements, written or
otherwise, to issue additional shares of our common stock at this time. However,
should we issue additional shares of stock in the future, this could have the
effect of diluting the earnings per share and book value per share of existing
shares of common stock.
Our
charter currently provides that preferred stock may be issued in one or more
series. Our board of directors is authorized to fix the number of shares of
any
series of preferred stock, to determine the designation of any such series
and
to determine the rights, preferences, privileges, qualifications and limitations
of such preferred stock. Depending upon the nature and terms of any such
designated and issued preferred stock, such issuance could make a takeover
of
our company more difficult and therefore, less likely. An issuance of any shares
of preferred stock could have the effect of diluting the earnings per share
and
book value per share of existing shares of common stock. The board of directors
has no present plans, understandings, or agreements to issue any preferred
stock. Other than our preferred stock as discussed above, there are no
provisions of our articles, bylaws, employment agreements or credit agreements
that have material antitakeover consequence.
Stock
Certificates and Fractional Shares
We
will
not issue any certificates representing fractional shares of our common stock
in
the transaction, while retaining the current par value of $0.001. We will not
be
paying any cash to stockholders for any fractional shares resulting from the
reverse split; rather, any resulting fractional shares shall be rounded up
to
the nearest whole number.
Our
transfer agent is Continental
Stock Transfer & Trust Company, 17 Battery Place, New York, New York
10004.
We
will
not issue any certificates representing fractional shares of our common stock
in
the transaction, while retaining the current par value of $0.001. Any resulting
fractional shares shall be rounded up to the nearest whole number. Upon
surrender to the transfer agent of the share certificate(s) representing shares
of pre-split common stock, the holder will receive a share certificate
representing the appropriate number of shares of our common stock.
Federal
Income Tax Consequences
PROPOSAL
2
AMENDMENT
TO OUR CERTIFICATE OF
INCORPORATION
TO CHANGE OUR NAME TO
AMERICAN
SOUTHWEST MUSIC DISTRIBUTION, INC.
Introduction
On
March
10, 2006, our board of directors unanimously adopted a resolution declaring
it
advisable to amend our certificate of incorporation to change our name to
“American Southwest Music Distribution, Inc.” Our board of directors further
directed that this amendment to our certificate of incorporation be submitted
for consideration by our stockholders. On July 7, 2006, the holders of our
voting stock approved the amendment of our certificate of incorporation to
change our name to “American Southwest Music Distribution, Inc.” A copy of the
amendment to our certificate of incorporation is attached to this information
statement as Appendix A.
Effective
Time of the Name Change
We
intend
to file, as soon as practicable on or after the twentieth (20th)
day
after this information statement is sent to our shareholders, an amendment
to
our certificate of incorporation effectuating the name change with the Secretary
of State of Delaware. This amendment to our certificate of incorporation will
become effective at the close of business on the date the amendment to the
certificate of incorporation is accepted for filing by the Secretary of State
of
Delaware. It is presently contemplated that such filing will be made in
the third week of August 2006.
Reasons
for the Name Change
Our
board
of directors feels that this name change is in our best interest. In light
of
American Southwest Music Distribution, Inc. becoming our sole operating
subsidiary, the name “GL Energy & Exploration, Inc.” no longer accurately
reflects the company’s operations and interests.
You
are not required to exchange your certificate(s) of GL Energy & Exploration,
Inc. for new stock certificates reflecting our new name of American Southwest
Music Distribution, Inc., although you may do so if you
wish.
RECENT
CHANGES
On
March
13, 2006, we entered into an agreement (the “Exchange Agreement”) pursuant to
which we acquired all of the equity of American Southwest Music Distribution,
Inc., a Texas corporation (“American”). Pursuant to the Exchange Agreement, we
issued 22,500,000 shares of our common stock and 23,980 shares of our series
A
convertible preferred stock to David Michery and Kent Puckett, the owners of
American. Messrs. Michery and Puckett were our officers and directors at the
time of the Exchange Agreement, positions they held since October 2004 in
connection with our entry into a merger agreement with American in October
2004.
This merger agreement was never consummated and was terminated. The consummation
of the Exchange Agreement resulted in a change of control.
As
a
result of the Exchange Agreement, the former shareholders of American control
GL
Energy & Exploration, Inc., holding approximately 93.8% of the outstanding
shares of voting stock of GL Energy.
For
a
full description of the Exchange Agreement and the transactions relating
thereto, please refer to our Current Report on Form 8-K dated March 10,
2006.
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By
Order of the Board of Directors
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David
Michery
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President
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July
26,
2006
Hollywood,
CA
APPENDIX
A
CERTIFICATE
OF AMENDMENT
OF
CERTIFICATE
OF INCORPORATION
OF
GL
Energy & exploration, INC.
GL
Energy
& Exploration, Inc., a corporation duly organized and existing under the
General Corporation Law of the State of Delaware (the “Corporation”), does
hereby certify the following:
I. The
amendment to the Corporation’s Certificate of Incorporation set forth below was
duly adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware and thereafter was duly adopted by
the
consent of the holders of a majority of the outstanding voting stock of the
corporation in accordance with the provisions of Sections 228 and 242 of the
General Corporation Law of the State of Delaware.
II. Article
FIRST of the Corporation’s Certificate of Incorporation is amended to read in
its entirety as follows:
“FIRST:
The
name of the Corporation is American Southwest Distribution, Inc.”
III. Article
FOURTH of the Corporation’s Certificate of Incorporation is amended by deleting
the first sentence thereto and inserting the following in lieu thereof to read
as follows:
“FOURTH:
The
total number of shares of capital stock of all classes which the Corporation
shall have authority to issue is 105,000,000 shares, of which 5,000,000 shares
shall be Preferred Stock, par value $.001 per share, and 100,000,000 shares
shall be Common Stock, par value $.001 per share.
IN
WITNESS WHEREOF, the undersigned hereby duly executes this Certificate of
Amendment hereby declaring and certifying under penalty of perjury that this
is
the act and deed of the Corporation and the facts herein stated are true, this
____ day of August, 2006.
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GL
ENERGY & EXPLORATION, INC.
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By:_________________________________
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