UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 FOR 15(D)
of the
SECURITIES EXCHANGE ACT OF 1934
Date of Event Requiring Report: February 25, 1997
CYBERAMERICA CORPORATION
(Exact Name of Registrant as Specified on its Charter)
I-9418 87-0509512
(Commission File Number) (IRS Employer Identification Number)
NEVADA
(State or Other Jurisdiction of Incorporation or Organization)
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(Address of Principal Executive Offices)
(801) 575-8073
(Registrant's Telephone Number, Including Area Code)
ITEM 5. OTHER EVENTS
On February 25, 1997, CyberMalls, Inc. (CyberMalls), a Nevada
corporation and consolidated subsidiary of CyberAmerica Corporation, (the
"Company") began discontinuing operations. CyberMalls was incorporated during
1996 to prepare, develop and sell virtual shopping malls on the Internet. A
virtual mall is a central address on the Internet used to market the goods and
services of vendors, which consists of the inter-linked home pages of several
different business entities. CyberMalls' business plan consisted of soliciting
entities interested in owning, managing and marketing one or more Internet
virtual malls with a specific theme or industry niche. CyberMalls would develop
ideas for the Internet marketing of products or services with a common theme.
CyberMalls would then transfer to its customers a corporation owning a name and
Uniform Resource Locator Number (more commonly known as an Internet address)
indicating the theme mall the purchaser was to develop. CyberMalls would also
transfer to the purchaser a contract binding CyberMalls to provide the ongoing
support and maintenance necessary for the purchaser to establish a viable
Internet virtual mall, including the use of CyberMalls' computer programmers,
graphic artists, and writers. The purchaser of the mall was responsible for
marketing and leasing the space on the Internet virtual mall to the providers of
retail products and services.
CyberMalls also planned to develop a search engine on the Internet and
related proprietary software known as WebSafariTM WebSafariTM, which was to be
used in connection with the development and marketing of the Company's Internet
virtual malls, was designed to be a search engine specifically limited to
databases involving the sale of products or services over the Internet.
CyberMalls intended to market WebSafariTM to purchasers and potential purchasers
of its Internet virtual malls.
Since CyberMalls was a start-up venture with limited capitalization,
the Company advanced most of the expenses necessary to commence CyberMalls'
operations.
During the 1996 fiscal year, CyberMalls sold five Internet virtual
malls to purchasers involved in industries such as sports, music, health and
travel. The consideration for the sale of each Internet virtual mall involved
some combination of the following: proceeds of equity financing to be
subsequently obtained by the purchaser; a fixed percentage of the revenues
ultimately generated by the purchaser's Internet virtual mall; shares of the
purchaser's common stock; and unsecured promissory notes.
As of the fourth fiscal quarter of 1996, none of the purchasers of the
Company's Internet virtual malls had taken material steps toward obtaining
equity financing or developing the malls as viable entities. Accordingly,
CyberMalls had been unable to realize any cash from its sale of Internet virtual
malls. Accordingly, CyberMalls was in need of an immediate cash infusion to
sustain its operations and continue to provide services to the purchasers of its
malls. At the same time, the Company was experiencing its own cash flow
shortfalls resulting from the Company's inability to raise sufficient capital
through private equity offerings. This impaired the Company's ability to advance
further funds to CyberMalls. In late October 1996, CyberMalls began downsizing
its staff as a cost reducing measure.
On February 25, 1997, the Company's management decided to permanently
discontinue the operations of CyberMalls. The Company's management made this
decision based on its belief that the expenditures necessary to continue
competing in the highly competitive market of Internet commerce would earn a
higher rate of return if invested in other segments of the Company's business.
The Company is attempting to liquidate CyberMalls' assets in an attempt to
mitigate losses incurred as a result of advancements made to CyberMalls. This
includes selling proprietary information related to the development of
WebSafariTM and equipment or software purchased by CyberMalls. The Company is
currently leasing some of the equipment previously purchased by CyberMalls to
another corporation.
The Company is in the process of terminating the contracts pursuant to
which it sold Internet virtual mall purchase agreements based on non-performance
by the respective purchasers. The Company is currently investigating whether or
not it has any rights against those individuals for breaching the payment terms
of the various contracts. The Company will pursue any such claims to the extent
its management determines that such action is in the Company's best interest.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK
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.
Dated: March 12, 1997
CyberAmerica Corporation
By:/s/Richard D. Surber
-----------------------
Richard D. Surber, President