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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-3
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
September 14, 2000
Date of Report
(Date of Earliest Event Reported)
Commission File No. 2-97869-D
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CRAFTCLICK.COM, INC.
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(Name of Small Business Issuer in its Charter)
Utah 2-97869-D 87-0419571
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
432 Culver Blvd.
Playa Del Rey, California 90293
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (310) 827-3500
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Item 1. Changes in Control of Registrant.
On September 14, 2000, the Registrant and Russell T. Murray executed a
Binding Memorandum of Understanding (the "Murray Agreement") that was
approved by the Board of Directors. Pursuant to the Murray Agreement, Mr.
Murray agreed to: (i) provide a two year commitment to maintain an online arts
and crafts web site for the Registrant and to ship customer orders, if
applicable; (ii) maintain the Registrant's "public company" status and fulfill
the filing requirements with the Securities and Exchange Commission for a
minimum of two years; and satisfy the Registrant's ongoing obligations, and
maintain the Registrant as a "going concern" for a minimum of two years.
Mr. Murray's obligations were an effort to ensure that the Registrant could
meet its legitimate obligations on a timely manner during the next two years.
There was never any agreement to satisfy all obligations of the Registrant by
the Murray Agreement.
In consideration of the foregoing, the Registrant agreed to amend its
Articles of Incorporation to provide for a class of Series B Preferred Stock
convertible into common stock on a one for one basis and requiring this Series
to be voted with the common stock, on a basis of 20 votes per each share (see
Item 5), and to initially issue Mr. Murray 1,500,000 shares of this Series.
For each additional six months that the Registrant continued in business
operations as a result of Mr. Murray fulfilling his obligations under the
Murray Agreement during the next two years, he was to be issued 1,000,000
additional shares of this Series, up to a total, including the initial
1,500,000 shares of this Series, of 5,500,000 shares.
If the Registrant was acquired at any time in any transaction pursuant to
which it is not the surviving entity, all unissued and unearned Series B
Preferred Stock due to Mr. Murray under the Murray Agreement would have been
issued on the date of any such transaction.
The Murray Agreement also provided for a realignment of the Board of
Directors and executive officers, as outlined in Item 6.
Prior to the completion of the Murray Agreement, Mr. Murray was the
Vice President of Internet Operations and an employee of the Registrant.
Funds required by Mr. Murray to fulfill his obligations were to come from
capital funding to be raised on behalf of the Registrant.
Subsequent to the amendment to the Registrant's Articles of Incorporation
creating the class of Series B Preferred Stock, 1,500,000 shares of this class
was issued to Mr. Murray and delivered to the Registrant's offices, and Mr.
Murray was elected to serve as Chairman of the Board of Directors of the
Registrant.
A copy of the Murray Agreement was attached to the initial 8-K Current
Report of the Registrant dated September 14, 2000, and is incorporated
herein by reference. See Item 7.
Mr. Murray claims that there were unresolved issues as to the condition
of the Registrant at the time he executed the Murray Agreement, and he claims
(i) the Registrant's financial condition was not as represented to him at the
time of the execution and delivery of the Murray Agreement; (ii) the
Registrant's funds were non existent to complete the anticipated 60 day period
of fund raising necessary to implement his two year commitment and he was
unable to prepare a revised pro forma balance sheet to create a marketable
plan for the Registrant within a reasonable time frame; (iii) the current
operation of the Registrant are at a stand still, with certain suppliers
withholding services and demanding payment in advance; and based upon this an
numberous other irregularities and misrepresentations by Registrant, the
Murray Agreement was incapable of being fulfilled, now and in the future, is
therefore void or voidable; and accordingly, Mr. Murray is resigning as a
director of the Registrant, and furthermore, as its Chairman. Mr. Murray has
not received any shares of Series B Preferred Stock and the issue is in any
event mute.
Item 5. Other Events.
On September 27, 2000, the Articles of Incorporation of the Registrant
were amended by resolution of the Board of Directors in accordance with the
Utah Revised Business Corporations Act to create a class of Series B Preferred
Stock, of which 4,900,000 shares are currently authorized, with the following
rights, privileges and preferences: (i) Voting: Will be together as a single
class with holders of common stock, with each share of preferred stock being
entitled to cast 20 votes per share; and (ii) Optional Conversion: The
preferred stock is convertible at any time at the option of the holders
thereof, at the rate of one (1) share of common stock for each share of
preferred stock. This amendment was made to facilitate the "change of
control" transaction outlined in Item 1.
On September 28, 2000, Articles of Correction were filed to correct the
number of shares of Series A and Series B Preferred Stock authorized from
100,000 and 4,900,000 shares, respectively, to 139,000 and 4,861,000 shares,
respectively.
The total number of shares of Series B Preferred Stock that would have
been required to be issued under the Murray Agreement was 5,500,000 shares;
accordingly, the Articles of Incorporation would have needed to be amended in
the future to increase the present authorized capital by increasing the number
of authorized preferred stock from the present authorization of 5,000,000
shares. Any such amendment would have required the vote of persons owning a
majority of the outstanding voting securities of the Registrant, and Mr.
Murray's ownership of Series B Preferred Stock under the Murray Agreement
would have given him sufficient voting control so that no other votes will be
required or necessary to effect this amendment. The amendment is only
necessary now to reflect the proper number of shares of this class. See Item
1.
A copy of the Articles of Amendment was attached to the initial 8-K
Current Report of the Registrant dated September 14, 2000, and is incorporated
herein by reference. See Item 7. A copy of the Articles of Correction was
attached to the 8-KA-2 Current Report of the Registrant dated September 14,
2000, and is also incorporated herein by reference. See Item 7.
Item 6. Resignations of Registrant's Directors.
In connection with the "change of control" outlined in Item 1, the
following persons resigned as directors and/or executive officers of the
Registrant: Peter A. Yollin, Director, Chairman and Chief Executive Officer;
Edgar E. Cayce, Director, Vice President and Chief Technology Officer; Leslie
Linsley, Director; and Sanjay Sabnani, Director. The then current directors
and executive officers of the Registrant were: Sandip Seth, Director,
President and COO; Maninder Singh, Director, CFO and Secretary; Russell T.
Murray, Director and Chairman; Amy Murray, Director; and Stephen C. Wolfe,II,
Director.
On October 13, 2000, Sandip Seth, director and President, tendered his
resignation as a director to Mr. Murray, because of differences concerning the
circumstances surrounding the status of the Registrant, and the Murray
Agreement, and Mr. Murray's performance thereunder. Maninder Singh, Director,
CFO and Secretary, also resigned for similar reasons. Both, however continue
to serve in their respective capacities as Mr. Seth, President and Mr. Singh,
CFO and Secretary.
Prior to the resignation of Mr. Murray on October 20, 2000, Messrs. Seth
and Singh rescinded their resignations, prior to their acceptance by the
Registrant.
On October 15, 2000, Amy Murray and Stephen Charles Wolfe II resigned
from the Board of Directors.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
None, not applicable.
(b) Pro Forma Financial Information.
None, not applicable.
(c) Exhibits.
Description of Exhibit Exhibit Number
Articles of Amendment regarding 3.1*
new class of preferred stock
Articles of Correction correcting 3.2*
authorized Series A and Series B
preferred stock
Binding Memorandum of Understanding 10*
with Russell T. Murray
* Incorporated by reference from initial and/or amended filing.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
CRAFTCLICK.COM, INC.
Date: 10/20/00 By /s/ Russell T. Murray
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Russell T. Murray, Director
Chairman
