SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 14f
NOTICE OF ARRANGEMENT REGARDING ELECTION OF DIRECTORS
WITHOUT A MEETING
Pursuant to Section 14(f) of the Securities Exchange Act of 1934
Date of Designation: 10 days after the date of filing of this
Notice and transmittal thereof to the Registrant's shareholders.
Commission File number: 0-114244
WATCHOUT! INC.
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(Exact name of registrant as specified in its charter)
Utah 84-0959153
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State or Other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification
Number)
1900 N.W. Corp. Blvd. - Suite 400 E, Boca Raton, FL 33431
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(Address of principal Executive Offices Zip Code)
Registrant's telephone number, including area code: (954) 803-7480
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Shares Outstanding
As of October 20, 1999, there were 15,030,245 voting shares of the Registrant's
$.001 par value common stock outstanding, its only class of voting securities,
each share entitling the holder thereof to one vote.
Security Ownership of Certain Beneficial Owners and Management
As of October 20, 1999, the following persons were known by the Registrant to
own or control beneficially more than five percent of its outstanding $.001 par
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value common stock, its only class of voting stock. The table below also sets
forth the total number of shares of the Registrant's outstanding voting stock
owned by its officers and directors and by persons designated to become
directors:
<TABLE>
<CAPTION>
Number of Percent of Percent of
Shares Owned Class Before Class After
Name and Address of Beneficially Purchase Purchase
Beneficial Owner and of Record Transaction Transaction
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<S> <C> <C> <C>
David Galoob 3,505,461 (1) 23% .8%
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Robert Galoob 3,505,461 (1) 23% .8%
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Mark G. Hollo 1,820,000 (1) 12%
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Martin S. Sands 910,000 (1) 6%
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Steven S. Sands 910,000 (1) 6%
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Archangel Holding Company LLC 1,580,000 (1) 10.5% .3%
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Innovative Cybersystems Corp. *6,376,922 (2) 0 42.4%
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John J. Russell 6,376,922 (2)(3) 0 42.4
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Kevin Waltzer 6,376,922(2)(3) 0 42.4
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Michelle Long 0(2) 0
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</TABLE>
* Not including options to purchase 1,750,000 shares of common stock from David
Galoob and Robert Galoob, which if exercised would comprise 54% of Registrant.
(1) Pre-transaction
(2) Post Transaction (after completion of shares Purchase described herein
below)
(3) Principal Shareholders of Innovative Cybersystems Corporation
(1) Director designee
Changes in Control of Registrant
On October 2, 1999, Robert Galoob, David Galoob, and Archangel Holding
Company, LLC. entered into an agreement to sell to Innovative Cybersystems Corp.
6,376,922 common shares of Registrant, and options for an additional 1,750,00
shares. If the options are exercised, Innovative Cybersystems Corp. will own
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8,126,922 common shares or 54% of Registrant. The agreement is pending and is
expected to be fully consummated upon the satisfaction of debt and liability
negotiation.
DIRECTORS AND EXECUTIVE OFFICERS
The current Directors and Executive officers of Registrant are:
John J. Russell Director CEO/CFO
Robert Galoob Director Vice President
David Galoob Director
Kevin Waltzer President
Legal Proceedings
No current director or future director, officer, or affiliate of the
Registrant, five percent holder of any class of voting securities of the
Registrant, nor any associate of the above, is a party adverse to the Registrant
or has a material interest adverse to the Registrant, except that Kevin Waltzer
and John J. Russell are officers and major shareholders of Innovative
Cybersystems Corporation which has a material interest and which will own
6,376,922 shares after the change of control has occurred, by purchase, and
Innovative Cybersystems Corporation will have options to purchase an additional
1,750,000 common shares from Robert Galoob and David Galoob.
MANAGEMENT
Identification of Directors to be appointed without shareholder meeting
Upon consummation of the Share Purchase transactions, but in no event
sooner than ten days after the filing of this Form and mailing of this Notice to
Shareholders, two of the present Directors of the Company, David Galoob and
Robert Galoob, will resign.
The persons nominated to be directors of the Registrant, and their
ages, are as follows:
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Name Age
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Kevin Waltzer 32
Michelle Long 45
Kevin Waltzer has been appointed as President of the Registrant as of
October 9, 1999. John J. Russell has been appointed as Director, CEO, and CFO
effective October 9, 1999 as part of the Agreement for the Share Purchase
Transaction.
Business Experience
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The following is a brief account of the business experience during at
least the past five years of the persons designated to be new directors of the
Registrant, including recently appointed John J. Russell, indicating the
principal occupation and employment during that period by each, and the name and
principal business of the organizations by which they were employed.
No appointee for a director position has been subject of any civil
regulatory proceeding or any criminal proceeding in the past five years.
Kevin Waltzer, President and Proposed Director
Kevin graduated from Boston University with an undergraduate degree in
Political Science in 1990. He has been an equities trader for the past seven
years, using proprietary market trend systems. He has founded two companies in
different technological fields. He served as a Director for and consultant to
The Humanworks, Inc. September - December 1998. Mr. Waltzer was a founding
partner, director, and executive of Eco-Aire Company, Inc., a company holding
multiple patents for evolutionary air and water purification techniques from
1996 to 1998. He was the founding partner and an original investor in
Tradescape.com, a Manhattan based securities trading firm 1996. He sold his
interest in 1999. He formed Innovative Cybersystems, Inc. in October 199 and is
President, a Director, and principal shareholder.
John J. Russell, Director
John (Jack) Russell graduated from Drexel University with a BS in
accounting. He has accomplished advanced studies at American College, Bryn Mawr,
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PA. He received a CHFC designation in 1990 and a CLU designation in 1993. He is
a Charter member of the Professional Achievement in Continuing Education
Program. Mr. Russell is involved with the American Institute of Certified Public
Accountants where he is a member of the Tax Division and the Personal Financial
Planning Division. He has recently worked as a financial planner/business
consultant for Glen Mills Financial Services, Inc. where he specialized in
financial planning, person and corporate tax returns, corporate financing, and
management systems. From 1994 to 1995, he headed an 18-month project to turn
around a manufacturing company located in the Mid-West. As CEO of Glas-Kraft,
Inc. from 1982 to 1983, he orchestrated a business turn around, and he
successfully negotiated sale of the company. As a CEO of Eastern Coated Papers,
Ltd. from 1983 to 1988, he arranged acquisition and working capital needs with a
combination of Canadian and U.S. banks. The company was returned to a
substantial positive cash flow and afterward he negotiated the sale of the
company. When he was CFO of Gentech, Inc. (1978 to 1982), he established a
sophisticated direct costing system. He helped Gentech, Inc. acquire a
significant subsidiary through a cash tender offer. At Titan Industries, Inc.
rom 1972 to 1978, he handled all aspects of the Annual Report and SEC reporting.
Mr. Russell also established consolidation and reporting controls for over 91
subsidiaries. In order to improve the state of the company, he assisted in the
sell-off of several unprofitable and/or incompatible subsidiaries. When he was
CFO of SmithKline Laboratories - Branson Instruments Division from 1969 to 1972,
he served on a five man executive committee responsible for strategic direction
of the company. Mr. Russell is a Director and principal shareholder of
Innovative Cybersystems, Inc. founded in September 1999.
Michelle Long, Proposed Director
Michelle brings 17 years of Financial Service Industry experience to the
Board. She studied Mathematics at the University of Helsinki, Finland; obtained
her undergraduate degree in Finance from the University of Cincinnati in 1978
and holds an MBA in Finance from Xavier University. Ms. Long holds LUTCF, RHU,
ChFC, and CFP designations. Ms. Long is registered with NASD as an Investment
Advisor and General Securities Principal. She currently heads Quest Financial
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Group, the Greater Cincinnati Branch of United Planners' Financial Services of
America.
Transactions with Management and Others
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There were no transactions or series of transactions during the
Registrant's last fiscal year or the current fiscal year, or any currently
proposed transactions or series of transactions of the remainder of the fiscal
year, in which the amount involved exceeds $60,000 and in which to the knowledge
of the Registrant, any director, executive officer, nominee, future director,
five percent shareholder, or any member of the immediate family of the foregoing
persons, have or will have a direct or indirect material interest except as set
forth below. In addition, none of the foregoing persons have been indebted to
the Registrant during such periods in an amount exceeding $60,000.
Committees of the Board of Directors
The Registrant has no standing audit, nominating and compensation
committees of the Board of Directors, or committees performing similar
functions, nor does it propose to have the same following the appointment of the
new directors.
Meetings of the Board of Directors
There were irregular meetings of the Registrant's Board of Directors
during the current fiscal year and during the past fiscal year, as necessary.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
During the Registrant's past fiscal year, and the current fiscal year,
no executive officer of the Registrant received cash compensation other than
reimbursement for expenses incurred on behalf of the Registrant, no compensation
was paid pursuant to a plan, no other type of compensation was paid, no director
received compensation, and no termination of employment and change of control
arrangements were implemented other than those set forth herein.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Notice to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: October 22, 1999 WATCHOUT! INC.
/s/ Kevin Waltzer
by: ----------------------------------------
Kevin Waltzer, President
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