<PAGE>
Zeros & Ones, Inc.
39 East Walnut Street
Pasadena, CA 91603
August 9, 1999
TO OUR SHAREHOLDERS:
We are pleased to provide the enclosed Information Statement to the
holders of record of the common stock of Zeros & Ones, Inc. (the "Company")
as of August 9, 1999 in connection with the plans of reorganization, asset
purchase and exchange agreements (collectively, the "Agreements") that the
Company has entered into with Quantum Acts, a California corporation, Zeros &
Ones, Inc. a Delaware corporation, EKO Corporation, a Delaware corporation,
Polygonal Research Corporation, a Delaware corporation, Kidvision, Inc., a
Delaware corporation, Wood Ranch Technology Group, Inc., a Delaware
corporation, and the shareholders of those companies and of Pillar West
Entertainment, Inc., a California corporation (collectively, the "Acquired
Companies"). The Agreements provided in part that, subject to the
satisfaction or waiver of certain conditions, Edward L. Torres will resign as
the sole director of the Company and that Robert Holtz, Steve Schklair and
Charles Overton will be appointed to serve as directors. If this change in
the Board occurs as contemplated, the Board of Directors of the Company will
consist of Messrs. Holtz, Schklair and Overton.
The Agreements resulted from many weeks of analysis and review of the
business plans of the Acquired Companies, and negotiation of the terms and
conditions of the eventual business combination of the Company and the
Acquired Companies. On July 7, 1999, effective as of July 1, 1999, the
Company and the Acquired Companies executed and closed revised Agreements
pursuant to which the Company acquired 100% of the Acquired Companies. The
Agreements provide for the existing management of the Acquired Companies to
assume the management control of and responsibility for the Company. Messrs.
Holtz, Schklair and Overton have already been appointed as the executive
offices of the Company and are managing it on a day to day basis.
After careful consideration of these and other factors, the Board of
Directors determined that the Agreements and the change in the Company's
Board of Directors contemplated by the Agreements were in the best interests
of the Company and its shareholders.
<PAGE>
The enclosed Information Statement describes the Agreements in more
detail and contains other important information, including information about
the current Board of Directors and the new designees. This Information
Statement is being provided to you pursuant to Rule 14f-1 under the
Securities Exchange Act of 1934. Please read it carefully. HOWEVER,
SHAREHOLDERS ARE NOT BEING ASKED TO VOTE ON ANY MATTER AT THIS TIME AND NO
PROXIES ARE BEING SOLICITED.
We would like to take this opportunity to thank our shareholders and
other constituents for their support and patience during the past year. We
wish the new members of the Board and management well in their efforts to
enhance the value of your Company.
ZEROS & ONES, INC.
BY: THE BOARD OF DIRECTORS
/s/ EDWARD L. TORRES
-----------------------------
Edward L. Torres, Chairman
August 9, 1999
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<PAGE>
Zeros & Ones, Inc.
39 East Walnut Street
Pasadena, California 91103
______________
INFORMATION STATEMENT PURSUANT TO SECTION 14(f)
OF THE SECURITIES EXCHANGE ACT OF 1934
NOTICE OF CHANGE IN THE MAJORITY OF DIRECTORS
August 9, 1999
______________
This Information Statement is being mailed on or about August 9, 1999 to
the holders of record of the Common Stock, par value $.001 per share, of
Zeros & Ones, Inc., a Nevada corporation (the "Company") as of the close of
business on August 9, 1999. This Information Statement is being furnished in
contemplation of a change in a majority of the members of the Company's Board
of Directors pursuant to a series of agreements (collectively, the
"Agreements") entered into as of July 1, 1999, by and among the Company,
Quantum Acts, Inc., EKO Corporation, Polyganol Research Corporation,
Kidvision, Inc., Wood Ranch Technology Group, Inc., Zeros & Ones, Inc. (a
Delaware corporation), and the shareholders of those corporations and of
Pillar West Entertainment, Inc. (collectively, the "Acquired Companies") as
well as Edward L. Torres, the current sole director of the Company ("Mr.
Torres" or the "Current Board"), and Mark J. Richardson, a prior principal
shareholder of the Company.
This Information Statement is required by Section 14(f) of the
Securities Exchange Act of 1934, as amended, and Rule 14f-1 thereunder. You
are urged to read this Information Statement carefully. You are not,
however, required to take any action in connection with the Information
Statement. SHAREHOLDERS ARE NOT BEING ASKED TO VOTE ON ANY MATTERS AT THIS
TIME AND NO PROXIES ARE BEING SOLICITED BY THIS NOTICE.
The information contained in this Information Statement was prepared by
the Company except for information concerning the New Directors (as defined
below) which was furnished to the Company by the New Directors. The New
Directors assume no responsibility for the accuracy or completeness of the
information prepared by the Company.
THE AGREEMENTS
ACQUISITION AGREEMENTS. On July 7, 1999, effective as of July 1, 1999,
Commercial Labor Management, Inc., a Nevada corporation (now named Zeros &
Ones, Inc.), entered into a Plan of Reorganization and Asset Purchase
Agreement with Zeros & Ones, Inc., a Delaware corporation ("ZOI"), Robert
Holtz, Mark J. Richardson, and Edward L. Torres, and revised Plans of
Reorganization and Exchange Agreements with ZOI and (1) Quantum Arts, Inc., a
California corporation ("Quantum") and Steve Schklair, (2) EKO Corporation, a
Delaware corporation ("EKO"), and Robert Holtz, (3) Polyganol Research
Corporation, a Delaware corporation ("Polyganol"), Robert Holtz and Bernie
Butler-Smith, (4) KidVision, Inc., a Delaware corporation ("KidVision"), and
Charles Overton, and (5) Wood Ranch Technology Group, Inc., a Delaware
corporation ("Wood Ranch"), Robert Holtz, and William Burnsed. The Plans of
Reorganization are collectively referred to herein as the "Acquisition
Agreements." Quantum, EKO, Polyganol, KidVision and Wood Ranch are
collectively referred to herein as the "Subsidiaries." The Acquisition
Agreements, as well as the change of the Company's name from Commercial Labor
Management, Inc. to Zeros & Ones, Inc., were approved by the Current Board
and the Company's shareholders holding approximately 94.2% of the total
issued and outstanding stock of the Company. Copies of the Acquisition
Agreements are attached to this Information Statement as Exhibit A.
Pursuant to the Acquisition Agreements, the Company acquired 100% of the
assets of ZOI and 100% of the total issued and outstanding capital stock of
Quantum, EKO, Polyganol, KidVision and Wood Ranch, in exchange for the
issuance by the Company of a total of 3,050,000 new shares of the Company's
Common Stock to Robert Holtz (900,000 shares), Steve Schklair (850,000),
William Burnsed (500,000 shares), Charles Overton (500,000 shares) and Bernie
Butler Smith (300,000 shares). As part of the overall reorganization, the
Company has also agreed to and is making an exchange offer to the
shareholders of Pillar West Entertainment, Inc. ("PWE") pursuant to which the
Company seeks to acquire 100% of the total issued and outstanding capital
stock of PWE in consideration for the issuance to the shareholders of PWE of
(a) approximately 1,745,000 new shares of the Company's Common Stock, and (b)
approximately 320,000 warrants (the "Warrants") to purchase approximately
320,000 additional shares of the Company's Common Stock for a purchase price
of $3.00 per share, exercisable at any time until July 1, 2002. In
connection with the Acquisition Agreements and the overall reorganization of
the Company with ZOI, Quantum, EKO, Polyganol, KidVision, Wood Ranch and PWE,
the Company has the right, effective July 1, 1999, to issue up to an
additional 1,317,059 shares of the Company's Common Stock, resulting in a
total of 7,000,000 shares of the Company's Common Stock and approximately
320,000 Warrants outstanding upon the completion of the transaction.
Pursuant to the Acquisition Agreements, Mark J. Richardson and Edward L.
Torres, two principal shareholders of the Company, each agreed to surrender
to the Company for cancellation 1,850,000 shares of the Company's Common
Stock. Effective July 1, 1999, Edward L. Torres resigned as the President,
Chief Financial Officer and Secretary of the Company, and appointed Robert
Holtz as the Chief Executive Officer, Steve Schklair as the President and
Chief Financial Officer, and Charles Overton as the Secretary of the Company.
As soon as permitted under Section 14(f) of the Securities Exchange Act of
1934, as amended, Edward L. Torres will resign as the sole director of the
Company and has agreed to appoint Robert Holtz as Chairman of the Board of
Directors, and Steve Schklair and Charles Overton as additional directors of
the Company (collectively, the "New Directors"). The Company may add William
Burnsed and Bernie Butler Smith as directors of the Company at a later date.
Robert Holtz is indemnifying the Company against any liabilities of ZOI,
and the Company is not assuming any of ZOI's liabilities. Each of Quantum,
EKO, Polyganol, KidVision and Wood Ranch will continue to operate as separate
100% owned subsidiaries of the Company, while the Company plans to dissolve
PWE and acquire its assets after it completes the exchange offer for PWE's
outstanding capital stock. While the Company believes that it will achieve
exchanges for virtually all of the outstanding capital stock of PWE, there is
no assurance regarding the actual number of outstanding shares of PWE that
will be tendered to the Company in exchange for the Company's Common Stock.
Until July 1, 1999, Mr. Torres and Mr. Richardson, as co-plaintiffs with
the Company in the lawsuit against CNG Communications, Inc. and Paul Biship,
the sole shareholder of CNG Communications, Inc., for breach of contract and
fraud, have borne the expenses of the lawsuit. The lawsuit is being handled
by legal counsel for Mr. Torres, Mr. Richardson and the Company on a
contingent fee basis (i.e. generally one third of the recovery), plus
out-of-pocket expenses. Under the Acquisition Agreements, the Company has
agreed to begin bearing the out-of-pocket expenses of the lawsuit. The net
proceeds payable to the plaintiffs from the lawsuit, if any, will be
allocated 50% to the Company, 25% to Mr. Torres and 25% to Mr. Richardson.
There is no assurance that the Company will prevail in the lawsuit or receive
any recovery or award from the lawsuit.
Under the Acquisition Agreements, the Company has agreed to pay to Mr.
Richardson and Mr. Torres a total of $87,500 in cash, paid by issuance of a
promissory note in the principal amount of $87,500, dated July 1, 1999,
bearing simple interest at the rate of 10% per annum and payable principal
and accrued interest in full on or before July 31, 1999.
BUSINESS. The Company is engaged in the business of providing technical
consulting services to major technology developers, conducting e-commerce on
the the Internet, developing quality Websites, and creating core technologies
that other software and hardware developers can integrate into their own
products. Through its newly acquired wholly owned Subsidiaries, the Company
is also engaged in CD-ROM programming production and development, and
research and development of proprietary products for digital image
compression and three dimensional high definition television technology. In
1996, ZOI established a division called Studio Subzero to design and develop
Websites and multimedia content. In mid 1997, ZOI commenced licensing
Websuites-TM Technologies, and in 1998, it opened its FineItems.COM Website for
the sale of upscale products on the Internet. An agreement with Amazon.com,
Inc. in early 1999 is expected to enhance the e-commerce business of
FineItems.COM in the future.
Quantum is a media consulting and production company located in
Pasadena, California. Quantum specializes in digital asset development and
production for information and entertainment purposes. Quantum also has a
research and development program for three dimensional high definition
("3dHD") television technology. EKO is developing an Internet based
commerce oriented online service and virtual community for entertainment
professionals. KidVision plans to market the Kids Education Network
("K.E.N"), a portal Website, and to be a distributor of educational products
through its own mail order catalog. KidVision also plans to operate an
e-commerce catalog on the Kids Educational Network through which it will
distribute its educational products. Wood Ranch provides consulting services
for the building of television facilities and has designed the Company's
planned Advanced Media Production Center. Polygonal is the developer of an
image compression technology call Dynamic Polygonal Compression ("DPC").
Polygonal plans to manufacture products that utilize the DPC engine. The
Company is also currently in the process of entering into exchange agreements
with the shareholders of PWE. If successful, the Company will dissolve PWE
and absorb its assets. PWE is an independent production company that
develops and produces educational and entertaining children's programming for
the Internet and for television, including the Kids Educational Network. The
Company believes that by consolidating the technical experts of all these
companies, the Company will be in a unique position to create core
technologies and advance media services.
The executive offices of the Company are located at 39 East Walnut
Street, Pasadena, California 91103, and its telephone number is (626)
584-4040.
The Agreements resulted from many weeks of discussions with the
shareholders and management of the Acquired Companies. The Current Board
evaluated the business plans of the Acquired Companies and conducted due
diligence of their business and management.
After careful consideration of these and other factors, the Current
Board determined that the Agreements and the Board change were in the best
interests of the Company and its shareholders.
OUTSTANDING SHARES AND VOTING RIGHTS
As of August 9, 1999, the Company had outstanding 7,000,000 shares of
Common Stock. Each share entitles the holder to one vote. The holders of
Common Stock do not have cumulative voting rights under the laws of the State
of Nevada, which means that the holders of a majority of the outstanding
shares can elect all of the directors of the Company. There are no
outstanding shares of Preferred Stock.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of August 9, 1999
including each person known by the Company to be the beneficial owner of more
than 5% of any class of the Company's capital stock as of August 9, 1999. In
addition, the number of shares of the Company's Common Stock beneficially
owned by the current director and by each executive officer of the Company,
and the number of shares beneficially owned by the current director and
executive officers of the Company as a group, as of August 9, 1999, are
disclosed below in the table. The information was furnished to the Company
by the identified individuals in public reports. Except as indicated, each
person listed below has sole voting and investment power with respect to the
shares set forth opposite such person's name.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Common
of Beneficial Owner of Beneficial Ownership Stock Outstanding (6)
- ------------------- ----------------------- ---------------------
<S> <C> <C>
Robert Holtz (1) 900,000 12.9%
39 East Walnut Street
Pasadena, California 91436
Steve Schklair (2) 850,000 12.1%
39 East Walnut Street
Pasadena, California 91103
William Burnsed (3) 500,000 7.1%
39 East Walnut Street
Pasadena, California 91436
Bernie Butler-Smith (4) 300,000 4.3%
2530 Calcite Circle
Newbury Park, California 91320
Charles Overton (5) 500,000 7.1%
16861 Ventura Boulevard, Suite 300
Encino, California 91436
</TABLE>
_____________________________________________________________________________
(1) Robert Holtz is the Chief Executive Officer of the Company and has
overall supervisory responsibility for the Company. Mr. Holtz is
expected to become the Chairman of the Board of Directors of the
Company in August 1999 as a New Director.
(2) Steve Schklair is the President and Chief Financial Officer of the
Company, and is expected to become a New Director of the Company in
August 1999. Mr. Schklair is also the Chairman of the Board of
Directors and Chief Executive Officer of Quantum Arts, Inc.
(3) William Burnsed is the Chairman of the Board and Chief Executive
Officer of Wood Ranch Technology Group, Inc.
(4) Bernie Butler-Smith is the Chairman of the Board of Directors and
Chief Executive Officer of Polygonal Research Corporation.
(5) Charles Overton is the Secretary of the Company and is expected to
become a New Director in August 1999. He is also the Chairman of the
Board of Directors and Chief Executive Officer of KidVision, Inc.
and Pillar West Entertainment, Inc.
(6) Based on 7,000,000 shares of Common Stock issued and outstanding.
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<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
Percent of Shares of
Name of Amount and Nature Common Stock
Beneficial Owner of Beneficial Ownership Outstanding (3)
- ---------------- ----------------------- ---------------------
<S> <C> <C>
Edward L. Torres 250,000 (1) 3.57%
Robert Holtz 900,000 (2) 12.86%
Steve Schklair 850,000 (2) 12.14%
Charles Overton 500,000 (2) 7.14%
All directors and
officers as a
group (4 persons) 2,500,000 35.7%
</TABLE>
- ------------------------------
(1) After Mr. Torres tendered 1,850,000 shares to the Company for
cancellation pursuant to the Agreements, he owns 250,000 shares of the
Company's Common Stock.
(2) Issued to these individuals effective July 1, 1999 pursuant to the
Agreements.
(3) Based on 7,000,000 shares issued and outstanding.
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<PAGE>
Following completion of the Board change contemplated by the Agreements,
the relative shareholdings of the Current Board and the proposed New
Directors will remain unchanged.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
CURRENT DIRECTORS AND EXECUTIVE OFFICERS
The Company's Board of Directors prior to the Board change contemplated
by the Agreements consists of one member, with four vacancies. The Board is
authorized to establish the number of directors in a range of three to seven.
As part of the Board change contemplated by the Agreements, the number of
members of the new Board after the Board change is expected to be three,
although the new Board has the ability to appoint additional Board members
within the current authorized range of three to seven members. After the
Board change, the new Board is expected to amend the Bylaws to conform to the
actual number of directors on the new Board who will be appointed following
the Board change.
Listed below are the current director and current and prospective
executive officers of the Company prior to the Board change contemplated by
the Agreements, followed by their business experience:
EDWARD L. TORRES has been the Chairman of the Board of Directors of the
Company since July 1, 1995 and was the President, Chief Financial Officer and
Secretary of the Company from July 30, 1995 until July 1, 1999, when the
proposed New Directors were appointed as the executive officers of the Company
pursuant to the Agreements. Mr. Torres will resign as the director of the
Company upon the appointment of the New Directors. Mr. Torres has also been a
marketing consultant for employee leasing companies. Mr. Torres has a Bachelors
in Business Administration from South Bay University.
ROBERT HOLTZ has been the Chief Executive Officer of the Company
effective since July 1, 1999, and President of Zeros & Ones, Inc., a Delaware
corporation ("ZOI") since its inception in April 1994. From October 1991 until
founding ZOI in April 1994, Mr. Holtz was the Director of Special Projects for
Action Video, Inc., a promotion post-production facility. At Action Video, Inc.,
Mr. Holtz developed several new tools such as "Sally," a software based product
that enables a specialized animation/edit system to be used as a final assembly
point by giving it the intelligence to understand EDLS (a worldwide standard
protocol for storing and transmitting Edit Decisions from one system to
another). He also developed a system called "Pipeline," a precursor to HTTP that
connects multiple unlike devices. From January 1989 until October 1991, Mr.
Holtz headed a small business that created custom hardware and software
solutions. Mr. Holtz' projects included the creation of a completely automated
credit card clearing and merchant protection service center, the creation of an
Emergency Response Locator system which locates physicians and specialists by
geographical proximity for emergency response, and the creation of the first
fully automated credit card commerce system for the nationwide sale of movie
theater admission tickets. Mr. Holtz has worked on the design of several
international products lines such as Microsoft Visual C++, Microsoft Windows 95,
Studio Venice, and Hurricane from Gentris Images of France. Mr. Holtz also
participated in Microsoft's Win32J Group. Mr. Holtz is an active member of the
Society of Motion Picture and Television Engineers, the Institute of Electrical
and Electronic Engineers, the Society of Television Engineers, the Association
of Computing Machinery, and the International Multimedia Association (Charter
Member).
STEVE SCHKLAIR has been the President and Chief Financial Officer of
the Company since the acquisition by the Company of Quantum Arts, Inc. effective
July 1, 1999, and is expected to become a New Director of the Company in August
1999. Mr. Schklair has also been the owner, Chairman of the Board of Directors,
Chief Executive Officer, and President of Quantum Arts, Inc., a Subsidiary of
the Company, since the inception of its predecessor-in-interest in December
1997. From 1995 to 1997, Mr. Schklair was the Vice President and General Manager
of New Media for Digital Domain, a special effects company in Venice,
California. His responsibilities at Digital Domain included co-managing the
facility, streamlining development and production processes, overseeing asset
development and management, staffing key positions, managing contract
negotiations, managing marketing and public relations, and managing client,
partner, and publisher relationships. At Digital Domain, Mr. Schklair negotiated
a joint venture with Mattel to create CD-ROM titles based on Mattel's licensed
properties. The first title, BARBIE FASHION DESIGNER, has already sold over
2,000,000 units. From 1993 to 1995, Mr. Schklair was an Executive Producer and
Creative Director at R/Greenberg Associates, a commercial production company
with offices in Los Angeles, California and New York, New York. He joined
R/Greenberg as a visual effects and process consultant providing creative
direction on TERMINATOR II 3D for Universal Studios. At R/Greenberg, he designed
and produced interactive projects for clients such as AT&T, FCB, Levis, Silicon
Graphics, Activation, Phillips, IBM, Universal Studios, and Princess Cruises.
From 1990 to 1993, Mr. Schklair was an Executive Producer and Project Manager
for Synapse Technologies, a computer graphics company in Los Angeles,
California. At Synapse Technologies, he developed and produced several
interactive multimedia titles, including COLUMBUS: ENCOUNTER, DISCOVERY AND
BEYOND, EVOLUTION AND REVOLUTION, and AIR POWER. In 1981, Mr. Schklair
co-founded Infinity Filmworks. During his ten year tenure as President of
Infinity Filmworks, he produced and photographed several films, music videos,
and commercials, including the award winning SENSORIUM for Six Flags Power Plant
in Baltimore, Maryland and the award winning TO DREAM OF ROSES, created for the
1990 Osaka World Exposition. Mr. Schklair received a Bachelor of Fine Arts from
California State University in 1979 and a Master in Fine Arts from the
University of Southern California School of Cinema/Television in 1982.
BERNIE BUTLER-SMITH is expected to become the Vice President of Imaging
Technology and possibly a director of the Company in August 1999. Mr.
Butler-Smith has also been the Chairman and Chief Executive Officer of Polygonal
Research Corporation, a Subsidiary of the Company, since its inception in August
1998. For the past twelve years Mr. Butler-Smith has designed real-time image
processing products for various applications. In May 1998, Mr. Butler-Smith
formed a research and development company called ICU Security. Prior to
co-founding Polygonal Research Corporation, he was the Vice President of
Engineering at Digi-Spec Corporation for eleven years. At Digi-Spec Corporation
he designed 35 image processing products, including pixel level video motion
detectors, time lapse recorders, and digital switching and routing equipment. In
an independent study conducted by Sandia National Labs and commissioned by the
U.S. Department of Energy, Mr. Butler-Smith's motion detector products received
the highest ranking. Mr. Butler-Smith has also done research in several
disciplines of mathematics and high performance digital pipelining structures.
Among the companies that currently use his designs are Microsoft for external
security, Pheizer Pharmaceutical for security, the U.S. Department of Defense
for strategic applications, the U.S. Navy for strategic applications, the
Hoosier Dome for security, Boeing for employee safety, the Environmental
Protection Agency for detecting pollution leakage, and the Federal Aviation
Agency for detection functions at airports.
WILLIAM BURNSED is expected to become the Vice President of Advanced
Media Group and possibly a director of the Company in August 1999. Mr. Burnsed
has also been the Chairman and Chief Executive Officer of Wood Ranch Technology
Group, Inc., a Subsidiary of the Company, since its inception in 1998. In 1995,
Mr. Burnsed founded Digital Video Engineering, a sole proprietorship engaged in
computer systems design and installation for television and film special
effects. Digital Video Engineering has been combined with Wood Ranch Technology
Group, Inc. From January 1996 until July 1996, Mr. Burnsed was the Director of
New Business Development for Discreet Logic Systems in North and South America.
While with Discreet Logic Systems and Digital Video Engineering, Mr. Burnsed
built online random access edit rooms for the Fox Network and high level
telecine for Advanced Digital. In August 1991 he founded Hollywood Digital, a
television post production company which Mr. Burnsed operated through 1994. In
February 1982, Mr. Burnsed founded B&B Systems, Inc., an equipment manufacturing
and turn key television systems engineering and construction contracting
company. During his eleven year tenure as President of B&B, B&B designed and
built several large facilities, including the J.C. Penny World Headquarters, 525
Post Production, the Financial News Network, Lorimar Studios, Post Pro Video,
Multimedia Services, the Shop Television Network, and the California State
Assembly Television Network. From May 1979 to February 1982, Mr. Burnsed was the
Director of Engineering for Editel where he was responsible for the design and
construction of five online edit bays, three rank telecines, one audio mixing
room, and one insert stage. From 1976 to 1979, he was the Engineering Supervisor
for TAV/Merv Griffin Productions where he supervised a department of engineers
who were responsible for the installation and maintenance of television
equipment used for videotaping the Merv Griffin Show. From 1973 to 1976, Mr.
Burnsed was the General Manager of Shelter Vision Mobile Video where he was
responsible for the video systems operation of a television mobile truck which
traveled to various cities videotaping musical shows. From 1971 to 1973, he was
the Director of Studio Operations for Transworld Communications, a division of
Columbia Pictures. At Transworld, Mr. Burnsed was responsible for the design,
installation, and operation of seven custom studios in cities from Honolulu to
London.
CHARLES OVERTON has been the Secretary of the Company since the
acquisition of Kidvision, Inc. by the Company effective July 1, 1999, and is
expected to become a New Director of the Company in August 1999. Mr. Overton
has also been the Chief Executive Officer and President of Kidvision, Inc., a
Subsidiary of the Company, since its inception in 1998, and of Pillar West
Entertainment, Inc. since its inception in 1996. In 1995, Mr. Overton
co-founded Randall-Overton Productions where he contributed to the concept of
the Kids Educational Network. From 1996 to 1997, he was the Executive
Producer and co-owner of the syndicated television series GOTTA SWEAT. In
1991, he joined G.C.O Pictures as the Executive Producer of SEASON OF FEAR, a
full length feature film distributed domestically by MGM/UA staring Ray Wise
and Clancy Brown. In 1991, Mr. Overton and other individuals founded Paragon
Arts International, a feature film production company that released
WITCHBOARD. WITCHBOARD is one of the top hundred highest grossing independent
films of all time. Mr. Overton began his career in production working on such
films as THIEF starring James Caan, and THE BLUES BROTHERS staring John
Belushi and Dan Ackroyd. Mr. Overton is a graduate of the Goodman School of
Drama at DePaul University in Chicago.
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<PAGE>
THE NEW DIRECTORS
The information concerning the New Directors was provided by the
New Directors and the Company assumes no responsibility for the accuracy or
completeness of such information. The New Directors will take their
positions as soon as permitted under Section 14(f) of the Securities Exchange
Act of 1934, as amended.
Each of the New Directors is a United States citizen. Each of the New
Directors has consented to be a director of the Company. The proposed New
Directors are Robert Holtz, Steve Schklair and Charles Overton. They have
been executive officers of the Company since July 1, 1999 pursuant to the
Agreements. Accordingly, information regarding the New Directors is included
under "DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY" in this Information
Statement.
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<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD
During the fiscal year ended December 31, 1998, the Board of Directors
held no regular formal meetings. The Board of Directors does not have any
Committees, although it is expected that the New Directors will form Audit
and Compensation Committees in the future. All resolutions of the Board of
Directors during the fiscal year ending December 31, 1998 were adopted by
unanimous written consent. The current director does not receive cash
compensation or stock options for attending Board meetings. The current
Director has been reimbursed for his expenses incurred in connection with
conducting the business of the Board.
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<PAGE>
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 directors, executive officers, and persons who own
more than ten percent of a registered class of the Company's equity
securities, to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission. Based on copies of
such reports furnished to the Company, there were no reportable untimely
filings under Forms 3, 4 or 5 by persons subject to Section 16(a) of the
Securities Exchange Act of 1934, as amended, during the last fiscal year.
EXECUTIVE COMPENSATION
The following summary compensation tables set forth the annual cash and
stock option compensation for the Company's Chief Executive Officer and its
other four most highly compensated executive officers serving as of December
31, 1998, and the compensation paid to them by the Company for each of the
last three completed fiscal years.
SUMMARY CASH COMPENSATION
<TABLE>
<CAPTION>
Name of Individual Position 1998 1997 1996
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Edward L. Torres (1) President, Chief $0 $0 $0
Financial Officer,
Secretary
Robert Holtz (2) Chief Executive Officer $__ $__ $__
Steve Schkliar (2) President, Chief $__ $__ $__
Financial Officer
Charles Overton (2) Secretary $__ $__ $__
- -------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
(1) Pursuant to the Agreements, Mr. Torres resigned as the President, Chief
Financial Officer and Secretary of the Company effective July 1, 1999.
(2) Pursuant to the Agreements, these individuals were appointed to their
respective executive officer positions with the Company by the Current
Board, effective July 1, 1999.
SUMMARY STOCK OPTION COMPENSATION
No stock options were granted by the Company in the fiscal years ending
December 31, 1997 or December 31, 1998, nor during the seven months ended
July 31, 1999. There are no stock options outstanding. The Company plans to
propose and adopt a management incentive stock option plan for the directors,
executive officers, key consultants and employees of the Company in the near
future. No executive officers, directors or key consultants of the Company
held unexercised options to purchase the Common Stock of the Company on
December 31, 1998 or on July 31, 1999. The Company does not have any other
long-term incentive plans or pension plans for its executives officers and
directors, and no repricing of stock options previously granted to the
Company's executive officers, directors or key consultants occurred during
the fiscal year ending December 31, 1998 or the seven months ending July 31,
1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Board of Directors has not yet formed a Compensation
Committee and there has been no executive compensation to recommend or
approve during the fiscal year ending December 31, 1998, or since July 1,
1995.
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors has not yet formed a Compensation
Committee and there has been no executive compensation to recommend or
approve since July 1, 1995.
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<PAGE>
PERFORMANCE GRAPH
The Company's Common Stock is traded on the OTC Bulletin Board under the
trading symbol ZOZO. The Company was a public reporting shell corporation
from July 1, 1995 until July 1, 1999, with no significant assets or
liabilities. Accordingly, no performance graph relating to the market price
of the Company's stock over the past five years in relation to other
companies in the same industry is included in this Information Statement
because the Company only recently combined with operating companies with
Internet and media related businesses.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The agreements among the Company, its principal shareholders, the
Acquired Companies, and the prior shareholders of the Acquired Companies, who
are assuming management control of and responsibility for the Company, are
described in detail under "THE AGREEMENTS" in this Information Statement.
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<PAGE>
EXHIBITS
Copies of the Agreements are included as Exhibit A to this
Information Statement.
By Order of the Board of Directors
/s/ CHARLES OVERTON
-------------------------
Charles Overton
Corporate Secretary
August 9, 1999
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<PAGE>
EXHIBIT A
PLANS OF REORGANIZATION,
ASSET PURCHASE AND EXCHANGE AGREEMENTS
COMMERCIAL LABOR MANAGEMENT, INC., A NEVADA CORPORATION
(NOW ZEROS & ONES, INC.),
QUANTUM ARTS, INC., A CALIFORNIA CORPORATION,
ZEROS & ONES, INC., A DELAWARE CORPORATION,
POLYGANOL RESEARCH CORPORATION, A DELAWARE CORPORATION,
WOOD RANCH TECHNOLOGY GROUP, INC., A DELAWARE CORPORATION,
EKO CORPORATION, A DELAWARE CORPORATION,
KIDVISION, INC., A DELAWARE CORPORATION,
ROBERT HOLTZ, AN INDIVIDUAL,
STEVE SCHKLAIR, AN INDIVIDUAL,
CHARLES OVERTON, AN INDIVIDUAL,
MARK J. RICHARDSON, AN INDIVIDUAL,
EDWARD L. TORRES, AN INDIVIDUAL,
WILLIAM BURNSED, AN INDIVIDUAL,
AND
BERNIE BUTLER SMITH, AN INDIVIDUAL.
EFFECTIVE
JULY 1, 1999
