Chattown.com Network, Inc.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
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INFORMATION STATEMENT PURSUANT TO SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14f-1 PROMULGATED THEREUNDER
NOTICE OF CHANGE IN THE MAJORITY OF THE BOARD OF DIRECTORS
March 30, 2000
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NO VOTE OR OTHER ACTION OF THE SECURITY HOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT. NO PROXIES ARE BEING
SOLICITED AND YOU ARE REQUESTED NOT TO SEND THE COMPANY A PROXY
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INTRODUCTION
This Information Statement is being mailed on or about March 30, 2000 to holders
of record on March 29, 2000 of the shares of Common Stock, par value $.001 per
share (the "Common Stock"), of Chattown.com Network, Inc., a Delaware
corporation (the "Company"). It is being furnished in connection with a Stock
Purchase Agreement (the "Stock Purchase Agreement") between the Company and
Thomas Clay and Mark Schellenberger, ("Shareholders of VPM") that will result in
the 100% purchase of the common stock of Value Plus Marketing, Inc., a Florida
corporation ("VPM") in exchange for Twenty Four Million (24,000,000) shares of
the Company's Common Stock. Pursuant to the Stock Purchase Agreement, the
Company will accept the resignations of Richard Surber and BonnieJean C.
Tippetts, two of the members of the Board of Directors, and Thomas Clay and Mark
Schellenberger will be appointed as new directors to fill the vacancies created
by the resignations. Richard Surber, a current director, may remain on the board
after the closing of the Stock Purchase Agreement until the Company's Form 10KSB
for the year ended December 31, 1999 is completed and filed with Securities &
Exchange Commission. The closing will not occur, and the new directors will not
begin their term, until after the expiration of the ten-day period beginning on
the later of the date of the filing of this Information Statement with the
Securities and Exchange Commission (the "SEC") pursuant to Rule 14f- 1 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the date of
mailing of this Information Statement to the Company's stockholders.
Because of the change in the composition of the Board, there will be a change in
control of the Company on the date the new directors referred to above take
office.
As of March 29, 2000, the Company had 10,943,565 shares of $.001 par value
Common Stock issued and outstanding, the Company's only class of voting
securities that would be entitled to vote for directors at a stockholder meeting
if one were to be held, each share being entitled to one vote.
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Please read this Information Statement carefully. It describes the terms of the
Stock Purchase Agreement and contains certain biographical and other information
concerning the executive officers and directors after the closing of the
transactions contemplated by the Stock Purchase Agreement. Additional
information about the Company is contained the Company's report on Form 8-K
which is expected to be filed with the SEC. The Form 8-K and the accompanying
exhibits may be inspected without charge at the public reference section of the
SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. Copies of
this material also may be obtained from the SEC at prescribed rates. The SEC
also maintains a website that contains reports, proxy and information statements
and other information regarding public companies that file reports with the SEC.
Copies of the Form 8-K may be obtained from the SEC's website at
http://www.sec.gov after it is filed.
INFORMATION WITH RESPECT TO THE COMPANY;
BACKGROUND OF THE ASSET STOCK PURCHASE AGREEMENT;
CHANGE OF CONTROL
On February 17, 2000, the Company entered into a Stock Purchase Agreement
("Stock Purchase Agreement") with Shareholders of VPM. Pursuant to the Stock
Purchase Agreement, at closing, the Company shall acquire 100% of the common
stock of VPM in exchange for 24,000,000 shares of the Company's Common Stock.
The Company is presently authorized to issue 200,000,000 shares of Common Stock
with a par value of $.001 of which, 10,943,565 shares are presently issued and
outstanding. The Stock Purchase Agreement contemplates that, after the closing,
there will be approximately 35,243,565 shares(1) of the Company's Common Stock
issued and outstanding.
The Stock Purchase Agreement contemplates that all of the current directors of
the Company will resign and that new directors, designated by Thomas Clay and
Mark Schellenberger, will be appointed by the current Board of Directors prior
to the resignations, to take office upon the effective date of such resignations
to serve until their respective successors are elected and qualify.
As a result of the actions described above, and described under the caption
"Introduction", designees of Thomas Clay and Mark Schellenberger will constitute
a majority of the Board of Directors. However, as of the date of this
Information Statement, there has been no change in control of the registrant.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock beneficially
owned (a) as of the date of this Information Statement and (b) after the closing
of the transactions contemplated by the Stock Purchase Agreement by: (i) those
persons or groups known to the Company who will beneficially own more than 5% of
the Company's Common Stock; (ii) each director and director nominee; (iii) each
executive officer whose compensation exceeded $100,000 in the year ended
December 31, 1999; (iv) each executive officer of the Company to assume office
after the closing; and, (v) all directors and executive officers as a group. The
information is determined in accordance with Rule 13d-3 promulgated under the
Exchange Act based upon information furnished by persons listed or contained in
filings made by them with the SEC. Except as indicated below, the stockholders
listed possess sole voting and investment power with respect to their shares.
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(1)This number reflects the issuance of 500,000 shares to Richard Surber (see
Summary Compensation Table, page 6) and the anticipated cancellation of 200,000
shares by A-Z Professional Consultants, Inc. pursuant to and agreement with the
Company.
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AS OF THE DATE OF THIS AS OF THE CLOSING OF THE
INFORMATION STATEMENT(2) STOCK PURCHASE AGREEMENT(3)
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AMOUNT AND AMOUNT AND
NAME OF BENEFICIAL NATURE OF PERCENT NATURE OF PERCENT
OWNER BENEFICIAL OWNER OF CLASS BENEFICIAL OWNER OF CLASS
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<S> <C> <C> <C> <C>
A-Z Professional Consultants, Inc.
268 West 400 South Suite 300 9,625,000 87.9% 9,425,000 26.7%
Salt Lake City, Utah 84101
Richard D. Surber(4)
268 West 400 South, Suite 302 500,000 4.3% 500,000 1.4%
Salt Lake City, Utah 84101
BonnieJean C. Tippetts(5)
268 West 400 South, Suite 300 9,625,000 87.9% 9,425,000 26.7%
Salt Lake City, Utah 84101
Allen Z. Wolfson(5)
268 West 400 South, Suite 300 9,625,000 87.9% 9,425,000 26.7%
Salt Lake City, Utah 84101
Thomas Clay
3607 E. Bay Drive 0 0% 12,000,000 34%
Bradenton Beach, Florida 34217
Mark Schellenberger
166 A Radio Road 0 0% 12,000,000 34%
Tuckerton, New Jersey 08087
All Executive Officers and 10,125,000 88.4% 24,000,000 68%
Directors as a group(2 persons)
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(2)Based on shares outstanding as of the date of this Information Statement.
(3)These percentages are based upon the total outstanding shares totaling
35,243,565 shares of common stock after the issuance of 24,000,000 shares,
pursuant to the Stock Purchase Agreement and closing, and cancellation of
200,000 shares presently owned by A-Z Professional Consultants, Inc. at closing
and including 500,000 shares to be issued to Richard D. Surber pursuant to a
Compensation Agreement with the Company.
(4)Richard D. Surber has the right, pursuant to a written Compensation Agreement
with the Company, to receive 500,000 shares of the Company's common stock for
services he rendered to the Company while serving as its president for the
period September 17, 1999 to March 17, 2000.
(5)The shares owned by A-Z Professional Consultants, Inc. are attributed to
BonnieJean C. Tippetts as president of the A-Z Professional Consultants, Inc.,
and Allen Z. Wolfson, 100% owner of A-Z Professional Consultants, Inc.
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DIRECTORS AND EXECUTIVE OFFICERS
The Stock Purchase Agreement provides, in part, that effective as of the closing
of the transactions contemplated thereby, Richard Surber and BonnieJean C.
Tippetts will resign as directors of the Company, and that Thomas Clay and Mark
Schellenberger will be appointed as new directors to fill the vacancies created
by the resignations. The following table sets forth information regarding the
Company's current executive officers and directors and the proposed executive
officers and directors of the Company after the closing. If any proposed
director listed in the table below should become unavailable for any reason,
which is not anticipated by any of the parties to the Stock Purchase Agreement,
the directors of the Board will vote for any substitute nominee or nominees who
may be selected by Thomas Clay and Mark Schellenberger prior to the closing. The
Stock Purchase Agreement provides that Thomas Clay and Mark Schellenberger be
selected as designees to fill the vacancies of the Board of Directors upon
closing. The information below, regarding Mr. Clay and Mr. Schellenberger, is
based on information in the Stock Purchase Agreement and otherwise based on
information supplied to the Company by Thomas Clay and Mark Schellenberger,
including their names, ages, principal occupations for the past five years, and
their directorships with other corporations.
Current Executive Officers and Directors
NAME AGE POSITION
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Richard D. Surber 27 President and Director
BonnieJean C. Tippetts 58 Vice President and Director
Proposed Executive Officers and Directors after the Closing
NAME AGE POSITION
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Thomas Clay 35 President and Director
Mark Schellenberger 35 Vice President, Secretary and Director
Richard D. Surber, 27, graduated from the University of Utah with a Bachelor of
Science degree in Finance and then with a Juris Doctorate with an emphasis in
corporate law; including securities, taxation, and bankruptcy. He has been an
officer and director of several public companies which include: CyberAmerica
Corporation, (OTCBB:CYAA) (president and director from 1992 to the present).
CyberAmerica Corporation is a holding company whose subsidiaries invest in real
estate and provide financial consulting services; Kelly's Coffee, Group, Inc.,
is a shell company whose plan is to acquire an unidentified company (president
and director from May, 1999 to the present). Innovative Property Development
Corporation ("IPDC"), N.K.A. China Mall USA.com., Inc. was a former subsidiary
of CyberAmerica Corporation, it currently is a non reporting Chinese Internet
company (president and director 1992 to June, 1999). Eurotronics Corporation,
F.K.A. Hamilton Exploration, Inc., was a shell company, (president and director
1994-1996), its current operations if any are not known. Area Investment
Development Company, which was a shell company (president and director
1994-1996), has recently acquired an Internet company whose content revolves
around religious events. Youthline USA, Inc., F.K.A. Ult-i-Med Health Centers,
Inc., a reporting shell company that acquired an educational company which
distributes education newspapers to children in grades K-12 (secretary and
director from April 6, 1999 to July 29,1999). Premier Brands, Inc., was and
remains a shell company (president and director April, 1998 - September, 1998)
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and Golden Opportunity Development Corporation, a wholly owned subsidiary of
CyberAmerica Corporation, (president and director from September, 1999 to
present). Its operations consist of operating a 324 room hotel in Baton Rouge,
Louisiana. Mr. Surber is also the President and a Director of several private
shell companies that intend to become fully reporting public companies. Mr.
Surber began his term as the Company's President and a Director on September 17,
1999.
BonnieJean C. Tippetts, 58, was appointed a Vice President, Secretary and
Director of the Company on November 17, 1999. Since 1991, Ms. Tippetts has been
employed by Canton Financial Services Corporation, a business and consulting
firm and a sibling corporation to CyberAmerica Corporation. Ms. Tippetts has
over 30 years of experience in the business field. Her corporate experience
includes starting, purchasing, operating and selling various businesses. She has
been President or Director of more than a dozen corporations over the past 30
years. She is currently the President of A-Z Professional Consultants, Inc., a
management and corporate consulting firm. Ms. Tippetts earned a Bachelor of Arts
degree from Lewis & Clark College in Portland, Oregon in 1960; obtained a
Bachelor of Science degree from Brigham Young University in Provo, Utah in 1965;
and was awarded a Master of Arts degree from the University of Northern Colorado
in Greeley, Colorado in 1970.
Thomas Clay, 35, founded Alternative Publishing in 1989. In 1992 he co-founded
Mega900 Communications. In 1994 he started PowerNet Internet Publishing to be an
Internet-only publishing company. From 1994 to 1999 the PowerNet company has
created well over 40 web sites. In 1999 he co-founded and developed Value Plus
Marketing to be an exclusive Internet holding company. Some of the Value Plus
Marketing, Inc.'s holdings include the Chattown.com Network as well as another
25 websites.
Mark Schellenberger, 35, has a background in visual communications and
marketing. In 1990 he co-founded Value Plus Marketing Co., a marketing and
advertising company. In 1994 he joined Thomas Clay to form the basis of the
PowerNet Internet Publishing company. In 1999 he co-founded and developed Value
Plus Marketing to be an exclusive Internet holding company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities ("ten-percent
stockholders") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. Officers, directors and ten- percent stockholders also are
required to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on its review of the copies of
such forms furnished to it, the Company believes that all Section 16(a)
reporting requirements were complied with by the Company's officers and
directors during the year ended December 31, 1999.
EXECUTIVE COMPENSATION
No compensation in excess of $100,000 was awarded to, earned by, or paid to any
executive officer of the Company during the year 1999. The following table and
the accompanying notes provide summary information for each of the last three
fiscal years concerning cash and non-cash compensation paid or accrued by the
Company's chief executive officer(s) for the past three years and each of the
four other most highly compensated executive officers of the Company whose total
salary and bonus exceeded $100,000.
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SUMMARY COMPENSATION TABLE
Name and Year Annual Compensation Long Term Compensation
Awards Payouts
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Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Compensation Award(s) Options/ payouts Compensation
Position ($) ($) ($) ($) SARs(#) ($) ($)
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Richard 1999 - - - - - - 500,000 shares(6)
Surber, 1998 - - - - - - -
President 1997 - - - - - - -
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Mark J. 1999 $ 24,167 - - - - - $ 100,000(7)
Newman, 1998 $140,000 - - - 500,000 - $ 5,000(8)
Former 1997 $129,500 $13,000 - - - - $ 4,750(8)
President and
CEO
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Mark W. 1999 - - - - - - -
Reynolds, 1998 $101,000 $25,000 - - - - $ 5,000(9)
Former CFO 1997 $ 94,000 $12,500 - - - - $ 4,750(9)
and Secretary
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Paul J. Wilson, 1999 - - - - - - -
Former 1998 $207,750 - - - - - $ 4,815(8)
President and 1997 $214,000 - - - - - $ 4,750(8)
CEO
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STANDING AUDIT, NOMINATING AND COMPENSATION COMMITTEES
At present, the Board of Directors has no standing audit, nominating or
compensation committees or committees performing similar functions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 17, 2000, the Company entered into a Compensation Agreement with
Richard Surber under which Mr. Surber would be compensated with five hundred
thousand (500,000) shares of the Company's common stock. Such compensation is
paid in return for services rendered during Mr. Surber's term as president of
the Company.
On June 2, 1999, A-Z Professional Consultants, Inc., a Utah corporation ("A-Z"),
entered into a Stock Acquisition Agreement ("Agreement") with CytRx . Pursuant
to the Agreement A-Z purchased Nine Million Six Hundred Twenty-Five Thousand
(9,625,000) shares of the common stock of the Company from CytRx for two Hundred
fifty Thousand Dollars ($250,000) plus a cash payment equal to Eight-Seven point
Five percent (87.5%) of the net liquid assets of the Company as reflected on its
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(6)On March 17, 2000 the Company agreed to issue 500,000 shares of the Company's
common stock to Richard D. Surber for services rendered to the Company during
the period September 17, 1999 to March 17, 2000. The 500,000 shares listed are
total compensation paid for the said six month period.
(7)Represents monies paid as part of a severance package upon sale of the
Company by CytRx.
(8)Vaxcel's matching contribution to CytRx's 401(k) Plan during the period
Vaxcel was a wholly owned subsidiary of CytRx. Vaxcel did not have a 401(k)
Plan, but employees of Vaxcel were eligible to participate in CytRx's 401(k)
Plan.
(9)CytRx's matching contribution to its 401(k) Plan
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financial statement as of June 2, 1999. A-Z used funds from its working capital
to purchase the 9,625,000 shares of the Company's common stock and a loan from
the Company in the amount of $68,646. The 9,625,000 shares of the Company's
common stock is equivalent to approximately 87.5% of the Company's issued and
outstanding shares of its common stock. Consequently, A-Z has a majority
interest in the Company's shares of common stock. By virtue of A-Z's purchase of
the 9,625,000 shares of the Company's common stock, A-Z has effective control of
the Company. The purchase of the majority interest in the Company was
consummated on September 9, 1999.
In the last quarter of 1999, the Company forgave the $68,646 in exchange for
services rendered in connection with A-Z's efforts in searching for a merger or
acquisition candidate.
Upon the close of the Stock Purchase Agreement, Thomas Clay and Mark
Schellenberger will each be issued 12,000,000 shares of the Company's Common
Stock. Thomas Clay will be the president and a director of the Company and Mark
Schellenberger will be the Vice President, Secretary, and a Director at closing.
LEGAL PROCEEDINGS
The company is not a party to any pending or to the best of its knowledge, any
threatened legal proceedings. No director, officer or affiliate of the Company,
or owner of record or of more than five percent (5%) of the securities of the
Company, or any associate of any such director, officer or security holder is a
party adverse to the Company or has a material interest adverse to the Company
in reference to pending litigation.
SUBMITTED BY THE BOARD OF DIRECTORS
Richard D. Suber
BonnieJean Tippetts
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