EXCERPT FROM 8K FILING
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act 1934
Date of Report (date of earliest event reported): March 2, 2007
Shea Development Corp.
(Exact name of registrant as specified in charter)
(State or other jurisdiction of incorporation)
333-130011 (Commission File Number)
20-8514961 (IRS Employer Identification No.)
1351 Dividend Drive, Suite G, Marietta, GA (Address of principal executive offices)
30067 (Zip Code)
(Issuer’s Telephone Number)
730 West Randolph, Suite 600, Chicago, IL 60661 (Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
As more fully described in Item 2.01 below, Shea Development acquired Information Intellect, Inc. a Georgia based hardware and software products company in accordance with a Merger Agreement dated March 2, 2007 (“Merger Agreement”) by and among SHEA Development Corp., a Nevada corporation (SHEA), SHEA Development Acquisition Corp. a Nevada Corporation and Information Intellect. On March 2, 2007 (the “Closing Date”), pursuant to the terms of the Merger Agreement, SHEA acquired all of the outstanding capital stock and ownership interests of Information Intellect (the “Interests”) from the shareholders of Information Intellect. The Information Intellect shareholders transferred and contributed all of their Interests to SHEA in exchange, we issued to the Information Intellect shareholders 18,900,000 shares of SHEA common stock. The material terms of the Merger Agreement are described more fully in Item 2.01 of this Current Report on Form 8-K. The information therein is hereby incorporated in this Item 1.01 by reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Closing of Merger Agreement
As described in Item 1.01 above, on March 2, 2007, we acquired Information Intellect, a Georgia based hardware and software developer in accordance with the Merger Agreement. On the Closing Date, pursuant to the terms of the Merger Agreement, we acquired all of the outstanding capital stock and ownership interests of Information Intellect from the Information Intellect Shareholders; and the Information Intellect shareholders transferred and contributed all of their Interests to us. In exchange, we issued to the Information Intellect Shareholders 18,900,000 shares of common stock, or approximately 87% of the combined company’s outstanding shares of common stock the “Information Intellect Common Shares”. On the Closing Date, Information Intellect became a wholly owned subsidiary of the Registrant.
The 10,351,560 Information Intellect Common Shares outstanding on March 2, 2007 (excluding any Dissenting Shares) were converted into the right to receive an aggregate of 18,900,000 shares of SHEA’s Common Stock. The 18,900,000 shares of SHEA Common Stock delivered at the Effective Time were unregistered, restricted stock bearing a restrictive legend, and subject to piggyback registration rights on a pro rata basis with the registration rights being granted to the investors purchasing shares of Shea Series A Preferred Stock, par value $0.001 per share on or about the date of this Agreement. All such shares of SHEA Series A Preferred Stock are referred to collectively herein as the “SHEA Preferred Shares.”
The consummation of the Merger was completed in conjunction with a company financing with certain accredited and institutional investors (“Investors”) for the purchase of SHEA’s Series A Preferred Shares simultaneous with the closing of the Merger under terms and conditions approved by our board of directors simultaneous with the Merger (“Financing”).
Upon Closing, we received gross proceeds of approximately $2,800,000 in connection with the Financing from the Investors. Pursuant to Preferred Stock Purchase Agreements entered into with these Investors, we sold 2.8 million shares of our Series A Preferred Stock (the “Preferred Shares”), and issued Warrants to purchase 1.4 million shares of our Common Stock at an exercise price of $1.15 per share (the “Warrants”). The holders of Preferred Shares may convert the Preferred Shares into shares of our Common Stock at any time at a conversion rate of $1.00 per share. We are required to register the shares of Common Stock and the shares underlying the Warrants issued in the Financing with the Securities and Exchange Commission for resale by the Investors pursuant to Registration Rights Agreements entered into with the Investors (see “Registration Rights” below). After commissions and expenses, we received net proceeds of approximately $2.2 million from the Financing.
Upon completion of the Merger, and after giving effect to the Financing, the Information Intellect Shareholders own 18,900,000 shares of Shea Common Stock, and the Investors in the Financing own 2,800,000 SHEA Preferred Shares and warrants to purchase 1,400,000 shares of Common Stock. In addition, 1,575,000 shares of the combined company’s common stock were issued to certain Investors, officers, directors and other promoters of the merger transaction (collectively the “Promoters”). The Information Intellect Shareholders, Investors and Promoters will own, in the aggregate, 94% of our issued and outstanding shares of common stock.
As of February 21, 2007, Shea Development entered into Registration Rights Agreements, with the following investors: Premier Renn US Emerging Growth Fund Limited, Austin Lewis/Lewis Asset MGT., and Saama Technologies, Inc. The Registration Rights Agreement provides in part that Shea Development shall prepare and file within 120 days following the Merger a Registration Statement under the Securities Act of 1933 covering the shares of Shea’s Common Stock issuable to the Investors upon conversion of the Series A Preferred Stock and exercise of the Warrants. See the form of Registration Rights Agreement, attached as Exhibit 4.3 for additional information. These Agreements became effective on March 2, 2007, upon consummation of the Financing.
Liberty Company Financial, LLC and Securities Research Associates, Inc. served as placement agents for the Financing and received 5% of the gross proceeds from the Financing in cash and 5% of the amount they each raised in the form of a warrant on the same terms as the Investors in the Financing.
Description of the Registrant
The Registrant was incorporated in the State of Nevada on February 18, 2005. Until the Effective Time of the Merger SHEA described its business operations as follows: SHEA was an exploration stage company in the business of the acquisition and exploration of mining properties and intended to be in the business of mineral property exploration. SHEA did not conduct any exploration on any mineral claims. Prior to the year ended August 31, 2006, management decided to drop two of the claims held by SHEA and now holds only one claim. The remaining claim is currently held by Mr. Iqbal Boga, a director of the Company for the benefit of the Company and will expire on July 21, 2007. Management determined that the lack of capital and a lack funding sources to fund operations would not allow SHEA to execute its business in a viable fashion. Management decided not to proceed with a mineral exploration program on the remaining claim and explored any and all options for the sale of the business or finding a partner for a merger or acquisition.
Description of Information Intellect
Information Intellect develops markets and licenses a line of enterprise asset management solutions through effectively integrating their software and metering applications and the services of their knowledgeable consultants. Information Intellect was incorporated in 1997 by way of a management led spin-off from the Utilities Division of Electronic Data Systems (EDS). EDS created its Utilities Division in 1992, when it acquired Energy Management Associates (EMA), a leading provider of utility software since 1975.
In September 2005, Information Intellect merged with Energy Technology Group (“ETG”), located in Ft. Worth Texas. Prior to the merger Information Intellect had been working with ETG as a distributor in several states within the United States. ETG was formed in 2002, with the principal founders having experience in technology creation and delivery to the electrical industry for over 15 years. ETG developed Dynamic Virtual Metering™ (DVM™) which is a radio frequency based automated meter reading (AMR) technology applicable to electric, gas, water and steam meters.
The merger with ETG allowed Information Intellect the ability to incorporate cost of service and utility pricing technology together with the AMR technology provided from ETG. The ability to effectively use meter reading data for operational, service and pricing considerations is believed to be vital for utilities in the very near future. Information Intellect provides the software integration capabilities and utility industry knowledge that is believed to be instrumental to the success of DVM™. Management expects that the combination of rising energy prices and the impact of the 2005 Energy Bill, will position DVM™ to help utilities meet the changing needs of the industry.