<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/X/ Definitive Information Statement
ZEROS & ONES, INC.
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(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
ZEROS & ONES, INC.
39 EAST WALNUT STREET
PASADENA, CALIFORNIA 91103
NOTICE OF ACTION TO BE TAKEN BY
THE SHAREHOLDERS
FEBRUARY 8, 2000
To The Shareholders of Zeros & Ones, Inc.
Steve Schklair, Robert Holtz, Bernie Butler-Smith, William Burnsed, Mark
J. Richardson, Charles Overton, and Pro-Active Business Services Retirement
Trust (collectively, the "Majority Shareholders"), are the holders of a total
of 3,121,640 shares or approximately 54% of the issued and outstanding
stock of Zeros & Ones, Inc., a Nevada corporation (the
"Company"). The Majority Shareholders intend to adopt the following
resolutions by written consent in lieu of a meeting pursuant to Section
242(a)(1) of the General Corporation Law of the State of Nevada.
1. Ratify the amendment to the Company's Articles of Incorporation which
authorizes 100,000,000 shares of common stock, par value $.001 per
share.
2. Authorize a forward split of the outstanding common stock of the
Company so that after the effective date of the stock split, there
will be three shares of common stock outstanding for every one share of
common stock outstanding prior to the effective date of the forward
stock split.
The Company will file the Certificate of Amendment to its Articles of
Incorporation reflecting the increase in the authorized common stock 20 calendar
days after the mailing of this Information Statement.
Steve Schklair, Secretary
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WE ARE NOT ASKING YOU FOR A CONSENT OR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
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<PAGE>
ZEROS & ONES, INC.
39 EAST WALNUT STREET
PASADENA, CALIFORNIA 91103
FEBRUARY 8, 2000
SHAREHOLDERS ACTION
The Majority Shareholders will submit their consents to the shareholder
resolutions described in this Information Statement on or after February 8,
2000, to be effective for shareholders of record on February 8, 2000. As of
February 8, 2000, the Majority Shareholders held of record 3,121,640 shares
of the Company's common stock, par value $.001 per share, or approximately
54% of the issued and outstanding common stock of the Company. The remaining
outstanding shares of common stock are held by several hundred other
shareholders.
The Majority Shareholders consist of Steve Schklair, Chief Executive
Officer and a director of the Company, Robert Holtz, President and Chairman
of the Board of Directors of the Company, William Burnsed, a director and
Executive Vice-President of the Company, Bernie Butler-Smith, a director and
Executive Vice-President of the Company, Pro-Active Business Retirement
Trust, an unaffiliated shareholder, Mark J. Richardson, an unaffiliated
shareholder, and Charles Overton, a prior executive officer and director of the
Company who is the President and Chairman of the Board of Directors of
Kidvision, Inc., a 100% owned subsidiary of the Company. See "SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS."
RECORD DATE AND VOTING RIGHTS
Holders of the common stock of record as of February 8, 2000 are entitled
to submit their consent to the shareholder resolutions described in this
Information Statement, although no shareholder consents other than that of
the Majority Shareholders are required to be submitted in order for the
resolution to be adopted. The Company is not soliciting consents or proxies
and shareholders have no obligation to submit either of them. Whether or not
shareholders submit consents should not affect their rights as shareholders
or the prospects of the proposed shareholder resolutions being adopted. The
Majority Shareholders will consent to all of the shareholder resolutions
described in this Information Statement. Other shareholders who desire to
submit their consents must do so by February 25, 2000 and once submitted will
not be revocable. The affirmative vote of the holders of a majority of the
outstanding common stock of the Company is required to adopt the resolutions
described in this Information Statement. Nevada law does not require that
the proposed transaction be approved by a majority of the disinterested
shareholders. A total of approximately 5,792,000 shares of common stock will
be entitled to vote on the Company's proposed transactions described in this
Information Statement.
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<PAGE>
THE COMPANY AND THE TRANSACTION
The Company has its executive offices at 39 East Walnut Street,
Pasadena, California 91103, and its telephone number is (626) 584-4040. As
described in the accompanying NOTICE OF ACTION TO BE TAKEN BY THE
SHAREHOLDERS, the Company proposes (a) to approve the amendment to its
Articles of Incorporation to be recorded which provides for an
authorized number of shares of common stock, par value $.001 per share, equal
to 100,000,000, and (b) to implement a three for one forward split of the
outstanding shares of the Company's common stock. After the forward split of
the common stock is effective, there will be a total of 17,376,000 shares of
common stock issued and outstanding, 9,364,920 of which will be owned by the
Majority Shareholders, as compared to 5,792,000 shares of common stock
currently issued and outstanding, 3,121,640 of which are presently owned by
the Majority Shareholders. There are no shares of the Company's preferred
stock currently issued or outstanding. In the forward stock split,
fractional shares will be rounded to the nearest whole share.
The Board of Directors of the Company voted unanimously to approve the
amendment to the Company's Articles of Incorporation and the forward split of
its issued and outstanding common stock. The Board of Directors believe that
the amendment to the Articles of Incorporation and the forward split of the
issued and outstanding common stock are fair to all shareholders and affect
them on a pro rata equivalent basis. The transactions are being implemented
to better position the Company to raise capital and make business
acquisitions in the future by having more authorized shares available, if
necessary, to be issued in connection with such an acquisition or
capitalization.
The amendment and forward split will not result in the realization of
taxable income or loss to the Company or to its shareholders. The Company has
no dividends in arrears and is not in default on any of its securities. The
transactions will not affect the amount of assets or liabilities of the Company,
nor will it affect the Company's statement of operations. Accordingly, the
transactions will not effect the revenues, expenses, absence of dividends or
operating costs of the Company, other than the expenses incurred by the Company
in connection with this Information Statement, which are estimated to be
approximately $10,000. The book value per share and earnings or loss per share
of the Company will be affected to the extent that there will be more shares of
the Company's common stock issued and outstanding after the forward stock split.
The Company and the Majority Shareholders need not comply with any federal or
state regulatory requirements in connection with consummating the proposed
transactions, other than recording the Amendment to the Articles of
Incorporation with the Nevada Secretary of State.
Additional information regarding the Company, its business, its stock, and
its financial condition are included in the Company's Form 10-K annual reports
and its Form 10-Q quarterly reports. Copies of the Company's Form 10-K for its
fiscal year ending December 31, 1998 and its quarterly report on the Form 10-Q
for the quarter ending September 30, 1999 are included with this Information
Statement, and the information in said reports is incorporated by reference into
this Information Statement.
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<PAGE>
MANAGEMENT
The following table lists the names and ages of the executive officers
and directors of the Company. The directors were appointed on August 24,
1999 and will continue to serve until the next annual shareholders meeting or
until their successors are elected and qualified. All officers serve at the
discretion of the Board of Directors.
Name Age Position
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Steve Schklair 45 Director and Chief Executive
Officer, Chief Financial
Officer and Secretary
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Robert Holtz 29 Chairman of the Board of
Directors and President
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William Burnsed 53 Director and Executive Vice-
President
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Bernie Butler-Smith 45 Director and Executive Vice-
President
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STEVE SCHKLAIR is the Chief Executive Officer and Chief Financial
Officer of the Company and has been a director of the Company since August
27, 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.
ROBERT HOLTZ is the President and Chairman of the Board of Directors of
the Company. Mr. Holtz has also been the Chairman of the Board of Directors
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. During that time, Mr. Holtz developed
several key techniques and technologies utilized by the entertainment
industry to digitize and share video clips in collaborative projects. 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).
WILLIAM BURNSED has been a director and Executive Vice President of the
Company since August 24, 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.
BERNIE BUTLER-SMITH has been a director and Executive Vice President of
the Company since August 24, 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.
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<PAGE>
Under Nevada Corporation Law and the Company's Articles of Incorporation,
the Company's directors will have no personal liability to the Company or its
stockholders for monetary damages incurred as the result of the breach or
alleged breach by a director of his "duty of care." This provision does not
apply to the directors' (i) breach of their duty of loyalty, (ii) acts or
omissions not in good faith or involving intentional violations of law, (iii)
illegal payment of dividends, stock repurchases, or stock redemptions, and (iv)
approval of any transaction from which a director derives an improper personal
benefit. Directors may be responsible to the Company's shareholders for damages
suffered by the Company or its shareholders as a result of a breach of their
fiduciary duty.
Insofar as an indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted for directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission each
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
EXECUTIVE OFFICERS' COMPENSATION
The following table sets forth cash compensation paid for services rendered
to the Company by the Company's executive officers during its last fiscal year
ended December 31, 1999. During the last fiscal year no executive officer
received cash compensation from the Company that exceeded $100,000. No cash
bonuses were paid by the Company nor was any such compensation deferred during
the last fiscal year.
Name Position Cash Compensation
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Steve Schklair(1) Chief Executive Officer,
Chief Financial Officer, $ 84,500(3)
Secretary
Robert Holtz(2) President $ 84,500(3)
All executive officers $169,000(3)
as a group (4 persons).
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(1) In connection with the Company's business combination with its wholly
owned subsidiaries in July 1999, Mr. Schklair was issued 850,000 shares
of the Company's common stock and a noninterest bearing promissory note
in the principal amount of $300,000, $60,000 of which has been paid and the
balance of which is due in installments in 2000.
(2) In connection with the Company's business combination with its wholly
owned subsidiaries in July 1999, Mr. Holtz was issued 900,000 shares of the
Company's common stock, 50,000 of which he conveyed to Charles Overton in
January 2000.
(3) This amount covers the period from July 1, 1999 to December 31, 1999 and
includes $45,500 deferred salary payable to Robert Holtz and $36,000
deferred salary payable to Steve Schklair.
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<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the names and addresses of the executive
officers and directors of the Company and all persons known by the Company to
beneficially own 5% or more of the issued and outstanding common stock of the
Company.
<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING
NUMBER OF SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY
NAME & ADDRESS OF SHAREHOLDER BEFORE REVERSE SPLIT AFTER STOCK SPLIT OWNED(5)
- ----------------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C>
Steve Schklair(1)
39 East Walnut Street
Pasadena, California 91103 850,000 2,550,000 14.7%
Robert Holtz(2)
39 East Walnut Street
Pasadena, California 91103 850,000 2,550,000 14.7%
William Burnsed(3)
39 East Walnut Street
Pasadena, California 91103 500,000 1,500,000 8.6%
Bernie Butler-Smith(4)
39 East Walnut Street
Pasadena, California 91103 300,000 900,000 5.2%
All officers and directors
as a group (4 persons)
39 East Walnut Street
Pasadena, California 91103 2,500,000 7,500,000 43.2%
</TABLE>
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<PAGE>
(1) Mr. Schklair is the Chief Executive Officer, Chief Financial Officer,
Secretary and a director of the Company.
(2) Mr. Holtz is the Chairman of the Board of Directors and President of the
Company.
(3) Mr. Burnsed is a director and Executive Vice-President of the Company.
(4) Mr. Butler-Smith is a director and Executive Vice-President of the Company.
(5) The Company currently has a total of approximately 5,792,000 shares issued
and outstanding prior to the three for one forward stock split, and will
have a total of approximately 17,376,000 shares issued and outstanding after
the effective date of the forward stock split.
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<PAGE>
INDEPENDENT AUDITORS
The Board of Directors appointed Stonefield Josephson, Inc., independent
certified public accountant, as auditor of the Company's financial statements
for the fiscal year ending December 31, 1999.
SHAREHOLDER PROPOSALS AND NOMINATING PROCEDURES
Any proposal that a shareholder intends to present at the Company's 2000
Annual Meeting (tentatively scheduled for June 30, 2000) must be received at the
Company's principal executive office not later than February 25, 2000. Any such
proposal must comply with Rule 14a-8 of Regulation 14A of the proxy rules of
the Securities and Exchange Commission. Shareholder proposals should be
addressed to the Secretary of the Company.
Nominations for directors to be elected at the 2000 Annual Meeting, other
than those made by the Board of Directors, must be submitted to the Secretary
of the Company no later than February 25, 2000. The nomination should
include the full name of the nominee and a description of the nominee's
background in compliance with Regulation S-K of the reporting rules of the
Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors of the Company is not aware that any matter other
than those described in this Information Statement is to be presented for the
consent of the shareholders.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO STEVE SCHKLAIR, SECRETARY OF
THE COMPANY, AT ZEROS & ONES, INC., 39 EAST WALNUT STREET, PASADENA,
CALIFORNIA, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE
PROVIDED WITHOUT CHARGE.
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