Using Mosfet with seperate Logic Converter and Arduino
The LM7937 is a linear voltage regulator.  That means that it operates by reducing the voltage on it's VIN pin.  The best you'll ever get on its output is about 100mV less than the voltage on its input.

You need some sort of a charge pump or boost regulator to generate 12V from 5V, or you need to use your (presumably 40V) motor supply to drive your gate.