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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported) March 30, 2000
through June 30, 2000
E-PAWN.COM, INC
(Exact Name of Registrant as Specified in Its Charter,
Referred to herein as "Company")
NEVADA 87-0435741 33-2533-LA
(State or Other Commission File I.R.S. Employer
Jurisdiction of Number Identification No.
Incorporation)
Merrill Lynch Tower
2855 University Drive, Suite 200
Coral Springs, Florida 33065
Tel. 954-575-7296
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(Address of Principal Executive Offices and Telephone)
WASATCH INTERNATIONAL CORP.
1301 N. Congress Avenue, Suite 135, Boynton Beach, Florida 33426
(Former Name and Address)
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The Private Securities Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. Certain information included in this Form 8-K (as
well as information included in the Exhibits) contains statements that are
forward looking, such as those relating to consummation of the transaction,
anticipated future revenue of the companies and success of current product
offerings. Such forward looking information involves important risks and
uncertainties that could significantly affect anticipated results in the
future and, accordingly, such results may differ materially from those
expressed in any forward looking statements.
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
A principal shareholder, Swiss Arctic Traders, Ltd.("SAT"), a Turks and
Caicos Islands company, the holder of 50,000,000 shares of the Class A
Preferred Stock of the Company, advised the Company that SAT entered into a
Partnership Agreement dated February 13, 2000, with Asset Investment
Management 1984, S.A. ("AIM") of Nyon, Switzerland to contribute its
Preferred Stock into the partnership with AIM and to allow a pledge of such
shares to AIM for the purpose of arranging a credit line to fund the
partnership's business. Due to the failure of AIM to arrange the credit line
in a timely manner, the Partnership Agreement was rescinded and terminated by
mutual agreement of the parties. The stock certificate representing the 50
million shares of Class A Preferred Stock were issued with a restrictive
legend thereon by the Company's transfer agent in the name of AIM on March
30, 2000, however AIM has agreed with SAT to return these
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shares to SAT inasmuch as the Partnership Agreement has been terminated. The
Class A Preferred Stock has no economic interest except for a liquidation
preference, but the stock is entitled to vote the equivalent of 100 shares of
Common Stock for each share of Class A Preferred Stock on any matter
requiring a vote of shares of Common Stock. Therefore, the Class A Preferred
Shares owned by SAT represent a control block, which in the aggregate is
approximately 49% of the voting control of the Company. SAT is an affiliate
of LaSalle Group Limited, a Cayman Island corporation, both companies which
are 100% owned and controlled by Anne M.E. Greyling, a British citizen
residing in Kent, United Kingdom.
On June 30, 2000, the Company entered into an agreement to acquire the
50,000,000 shares of Class A Preferred Stock held by SAT. The Company agreed
to redeem the stock in consideration for a promissory note in the principal
amount of $1,000,000 and bearing interest at 10% per annum payable interest
only monthly and the principal and any accrued and unpaid interest due in
five years. The Class A Preferred Stock will secure the payment of the
promissory note and the certificates will be held in escrow, but the voting
rights tied to the Class A Preferred Stock will be held by a proxy designated
by the Board of Directors of the Company. The other holder of the Preferred
Stock is Fortuna Holdings, Ltd., a Bahamian company, that is controlled by
the Bazsuly Family L.P. A copy of the Agreement between SAT and the Company
is attached as Exhibit A.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 14, 2000, the Company received a notice that Shopper's Online,
Inc. and Freebees, Inc. intended to cancel the agreements between the Company
and each company. The Company had entered into an agreement to acquire 19% of
the outstanding shares of Shopper's Online, Inc and Freebees, Inc. In
addition, the two companies had engaged E-Pawn.com, Inc. to manage certain
Internet functions for a fee of $10,000 per month. The Company has given
notice that it must have full restitution before it would consider releasing
any party. If acceptable restitution is not forthcoming, the Company will
demand specific performance on all agreements.
The Company has withdrawn the offers which had been made to acquire
Hi-Tech Printing Systems, Inc. of Deerfield Beach, Florida and Interactive
Marketing Technology, Inc. of Hollywood, California. The transactions were
not completed, and the shares that were authorized were never delivered. The
Board directed its registrar and transfer agent to cancel the 8,300,000
shares that had been authorized for issuance to complete the two transactions.
On May 9, 2000, the Company entered into an agreement with David McKenna
of Dublin, Ireland, the controlling shareholder of Marlborough International
Plc. ("Marlborough"), to acquire 13,990,731 ordinary shares of Marlborough in
exchange for shares of common stock of the Company equivalent to
US$83,944,386 based on the bid price for the Company's stock on May 10, 2000,
which was US$1.2812. According to the pricing formula, the Company authorized
the issuance and delivery of over 65 million shares for the shares of
Marlborough held by McKenna. In addition, the agreement
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provided that the Company would enter into a five year Contract of Employment
with Mr. McKenna which would include a US$ 1 million signing bonus, payable
in the Company's stock, and annual compensation of US$ 4 million for each of
the five years. This compensation is also payable in stock of the Company.
Representatives of the Company were in Dublin for the closing, and the
Company representatives had in their possession the shares necessary to
close. The Company has not received the shares from Mr. McKenna, but the
Company intends to demand specific performance, and by that action it will
acquire a controlling position in Marlborough. A copy of the Agreement is
attached as Exhibit B.
On April 4, 2000, the Company had announced that it had arranged for the
exchange of 1,000,000 shares of the Company's common stock for 1,000,000 of
CeleXx Corporation common. The completion of this transaction created for the
Company the option to exchange $50 million of its common stock for $50
million of the common stock of CeleXx Corporation. The Company and CeleXx
Corporation agreed on April 12, 2000 to effect the first exchange transaction
by exchanging 10 million shares of the Company's common stock for 12 million
shares of CeleXx Corporation common stock. Pursuant to the agreement, either
company may request that the issuing company file a registration statement
for the shares of common stock transferred, and the issuer is obliged to file
a registration statement at its expense. The original agreement of March 10,
2000 granted the Company the right to duplicate the original investment by
purchasing 1,000,000 shares of CeleXx Corporation at the market bid price on
the date of election followed by the option to exchange $50 million at the
market value of the Company's stock for $50
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million market value CeleXx Corporation stock. Copies of the Agreements are
attached as Exhibit C.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS
On June 14, 2000, the Securities and Exchange Commission ("Commission")
announced (Release No. 42938) the temporary suspension of trading of the
securities of the Company, terminating at 11:59 p.m. on June 27, 2000. The
Commission temporarily suspended trading because of questions about the
accuracy and adequacy of publicly disseminated information concerning, among
other things, the identity of the persons in control of the operations and
management of the Company, and because the recent market activity in the
Company's securities may be the result of manipulative conduct or other
illegal activity. The Company believes that the publicly disclosed
information concerning the identity of the persons in control of the
operations and management of the Company has been accurate and adequate, and
the Company disputes the allegations contained in the Commission's Release.
Further, the Company is unaware and has no knowledge of any manipulative
conduct or other illegal activity regarding the recent market activity in the
Company's securities. The Company notes the expanded disclosures contained in
a Schedule 13D filing by Fortuna Holdings, Ltd., which is the other control
person (other than Swiss Arctic Traders, Ltd.) that has been disclosed
heretofore.
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The Securities & Exchange Commission has requested information
concerning the transaction whereby the Company acquired E-Pawn, Inc. and
additional information on its management and shareholders and its business
activities and public announcements. The Company through its counsel will
cooperate by providing the information requested.
The Securities & Exchange Commission and the United States Attorney for
the Southern District of New York announced on June 14, 2000 a "Major Attack
Against Microcap Fraud" and cited that "Those Charged Include Alleged Members
of Organized Crime." Among the indictments announced was an indictment of Eli
Leibowitz, the President, CFO and a director of the Company. Although the
Company was not charged, and the Company had no association whatsoever with
the persons involved in the criminal conduct highlighted by the federal
authorities, the inclusion of the trading suspension in the same release and
the reference to manipulation of internet stock by those charged, caused
almost all of the media from around the world to associate the Company with
organized crime, which is absolutely false. Only a few news sources
accurately reported that the trading suspension had nothing to do with the
story concerning Microcap Fraud involving organized crime. As a result of the
confusion and the misleading headlines, the Company and its management have
been subjected to numerous inaccurate and erroneous rumors and stories in the
financial press, news press, by financial commentators and on the Internet
message boards.
The Board has directed the legal counsel of the Company to review the
causes of action and remedies which the Company may pursue against those
persons who damaged and disparaged the Company and its management by illegal
actions either
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purposely or negligently. The Company has reason to believe that it has been
damaged by fraud, fraud on the market, breach of fiduciary duty,, negligence,
civil RICO , and conspiracy to commit these illegal acts among other things
by persons who engaged in the actions including, but not limited to, Jeffrey
Pokross, DMN Capital Investments, Inc., Crabbe Capital, the NASD, and major
member firms.
On May 17, 2000, the Company and Marlborough International Plc announced
that they had entered into a marketing agreement. The Company's subsidiary,
Ubuynetwork.com, Inc. and Ubuynetwork.co.uk PLC were designated to market
certain of Marlborough's online employment services, including its
"FILLTHEJOBS.com" service through the Ubuyjobs.com website. The Company and
Marlborough declared that the companies would look for other avenues of
cooperation and synergistic business opportunities. On or about June 15,
2000, Mr. Niall Welch, Chairman of Marlborough, and Mr. David McKenna, its
managing director, unilaterally and without notice to the Company announced
to the public that Marlborough was cancelling its marketing agreement with
the Company. The Company has asked its legal counsel to advise it on a
response to Marlborough's action, as well as the action of David McKenna in
failing to deliver his shares under the May 9, 2000 agreement as reported in
Item 2 above.
These events have caused certain transactions which the Company was
pursuing to be suspended and certain transactions to be withdrawn. The
financing transaction, which the Company had previously announced was
withdrawn. The uncertainty related to the current and future funding of
existing commitments, operations, and future expansion may adversely and
materially affect the ability of the Company to
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honor its present agreements and to carry out growth and expansion provided
in the business plan.
ITEM 6. CHANGE IN DIRECTORS AND OFFICERS.
On June 14, 2000, the Board of Directors accepted the resignation of
Clinton Greyling as an officer and director of the Company and its subsidiaries,
and it asked for the resignation of Eli Leibowitz as an officer and director of
the Company and its subsidiaries, pending a resolution of the matters raised by
his indictment in the Southern District of New York..
On June 14, 2000, the remaining directors elected Ray Winter as
President of the Company. In addition, it elected David H. Kinnon of London,
United Kingdom, as Chief Financial Officer and Director. Mr. Kinnon accepted
the positions, provided a suitable compensation package could be arranged.
Mr. Kinnon is a director and consultant with HLB Kidsons in the
Reconstruction and Reorganization Services division located in London. He has
been an advisor and consultant to the Loyalty Card program acquired by the
Company, and he was instrumental in its development.
Mr. Douglas H. Forde has notified the Board that he will resign his
position as Chairman effective on June 30, 2000, in order to allow for the
appointment of a full time Chairman and CEO. Mr. Forde intends to continue as
a director of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
Not applicable.
ITEM 8: CHANGE IN FISCAL YEAR.
Not Applicable.
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EXHIBITS
Exhibit A: Agreement date June 30, 2000 between the Company and Swiss
Arctic Traders, Ltd.
Exhibit B: Agreement dated May 9, 2000 between the Company and David
McKenna.
Exhibit C: Agreement dated March 10, 2000 and Addendum to Agreement dated
April 12, 2000 between the Company and CeleXx Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June30, 2000
E-PAWN.COM, INC.
By: /s/ Ray E. Winter
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Ray E. Winter, President
and Director
