SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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INFORMATION STATEMENT PURSUANT TO
RULE 14f-1 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
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TRANSAXIS, INC.
(Name of Subject Company)
Common Stock, par value $.0001 per share
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(Title of Class of Securities)
253838106
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(CUSIP Number of Class of Securities)
Paul Egan
President and Chief Executive Officer, TransAxis, Inc.
c/o Free Star Technology Corporation
Calle Fantino Falco
J.A. Baez Building, 2nd Floor
Santo Domingo, Dominican Republic
(809) 503-5911
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(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
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With a copy to:
Spencer G. Feldman, Esq.
Greenberg Traurig, LLP
MetLife Building
200 Park Avenue, 15th Floor
New York, New York 10166
(212) 801-9200
TRANSAXIS, INC.
348 East 6400 South
Suite 220
Salt Lake City, Utah 84107
Information Statement Pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and
Securities and Exchange Commission Rule 14f-1
Notice of Change in the
Majority of the Board of Directors
November 26, 2003
INTRODUCTION
The information contained herein is being furnished to stockholders of
TransAxis, Inc. ("TransAxis") pursuant to the requirements of Section 14(f) of
the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"),
and Rule 14f-1 under that act in order to effect a change in majority control of
TransAxis' Board of Directors other than by a meeting of stockholders.
NO VOTE OR OTHER ACTION BY TRANSAXIS' STOCKHOLDERS IS REQUIRED IN RESPONSE TO
THIS INFORMATION STATEMENT. PROXIES ARE NOT BEING SOLICITED.
On October 14, 2003, FreeStar Technology Corporation ("FreeStar")
purchased 338,769 shares of TransAxis' common stock, par value $.0001 per share
(the "Common Stock"), from two selling stockholders (the "Sellers"). In the same
transaction, FreeStar also acquired from one of the Sellers the right to convert
a note (the "Convertible Note") into Common Stock as a price per share equal to
the prevailing market price of the Common Stock. As of the date of the
transaction, the Convertible Note would have been convertible into approximately
2,916,533 shares of Common Stock. FreeStar will also purchase an additional
12,151 shares of Common Stock upon the delivery by a Seller of the stock
certificate representing those shares. The 3,267,453 aggregate shares of Common
Stock acquired by FreeStar (giving effect to the conversion of the Convertible
Note and the acquisition by FreeStar of the additional 12,151 shares of Common
Stock) (the "Acquired Shares") represent 87.8% of TransAxis' outstanding shares
of Common Stock. Pursuant to a Stock Purchase Agreement, dated as of September
24, 2003, and amended on October 8, 2003, between FreeStar and each of the
Sellers, the Sellers will receive an aggregate of 25,277,415 shares of
FreeStar's common stock, par value $.001 per share, in consideration for the
sale of the Acquired Shares to FreeStar.
As a result of purchasing these shares in TransAxis, control of
TransAxis passed from Don Marshall, who was the beneficial owner of the Acquired
Shares prior to the Closing, to FreeStar. On October 13, 2003, Lee Britton,
Craig Darling and Don Marshall resigned as directors of TransAxis, with these
resignations to take effect only upon compliance by TransAxis with the
provisions of Section 14(f) of the Securities Exchange Act and Rule 14f-1 under
that act. On October 14, 2003, in accordance with TransAxis' by-laws for filling
newly-created board vacancies, FreeStar, as majority stockholder, appointed Paul
Egan, Ciaran Egan and Fionn Stakelum to serve as directors of TransAxis, with
the appointments of such directors to take effect only upon compliance by
TransAxis with the provisions of Section 14(f) of the Securities Exchange Act
and Rule 14f-1 under that act.
In addition, on October 14, 2003, Paul Egan was named President and
Chief Executive Officer, and Ciaran Egan was named Chief Financial Officer, of
TransAxis.
At October 14, 2003, TransAxis had 805,000 shares of Common Stock
outstanding (without giving effect to the conversion of the Convertible Note).
The Common Stock is the only class of capital stock of TransAxis entitled to
vote. Each share of Common Stock is entitled to one vote. Stockholders of
TransAxis will have the opportunity to vote with respect to the election of
directors at the next annual meeting of TransAxis' stockholders.
VOTING CONTROL AND
MANAGEMENT OF TRANSAXIS
The following table sets forth the positions and offices presently held
with TransAxis for each Director and Director Nominee, and each executive
officer or proposed executive officer, that person's age as of October 14, 2003,
and the number of shares of common stock beneficially owned by each individual.
The number of shares of common stock listed as beneficially owned in the table
below includes shares owned by any person who is known by TransAxis to
beneficially own five percent or more of the common stock of TransAxis.
Shares of Common Stock
Beneficially Owned
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Positions Held Director Number of Shares % of Class
Name and Address Age With TransAxis Since
- ---------------- --- -------------- -----
Lee Britton 34 Director July 2002 5,000(1) *
c/o TransAxis Inc.
348 East 6400 South, Suite 220
Salt Lake City, Utah 84107
Craig R. Darling 51 Director July 2002 5,035(1) *
c/o TransAxis Inc.
348 East 6400 South, Suite 220
Salt Lake City, Utah 84107
Ciaran Egan 37 Chief Financial (2) 3,267,453(3) 87.8%
c/o FreeStar Technology Corporation Officer and
Calle Fantino Falco Director Nominee
J.A. Baez Building, 2nd Floor
Santo Domingo, Dominican Republic
Paul Egan 38 President, Chief (2) 3,267,453(4) 87.8%
c/o FreeStar Technology Corporation Executive Officer
Calle Fantino Falco and Director
J.A. Baez Building, 2nd Floor Nominee
Santo Domingo, Dominican Republic
Don Marshall 45 Former Chief Nov. 2002 18,000(5) *
c/o TransAxis Inc. Executive Officer
348 East 6400 South, Suite 220 and Director
Salt Lake City, Utah 84107
Fionn Stakelum 33 Director Nominee (2) 3,267,453(6) 87.8%
c/o FreeStar Technology Corporation
Calle Fantino Falco
J.A. Baez Building, 2nd Floor
Santo Domingo, Dominican Republic
All directors, nominees and executive -- -- -- 3,299,949 88.0%
officers as a group (6 persons)
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* Less than 1% of outstanding shares
(1) Includes options to purchase 5,000 shares of Common Stock.
(2) The election of Paul Egan, Ciaran Egan and Mr. Stakelum as directors will
become effective on the eleventh day after mailing of this Information
Statement in accordance with Section 14(f) of the Securities Exchange Act
and Rule 14f-1 under that act.
(3) Ciaran Egan may be deemed to beneficially own all of such shares by
reason of his being the Chief Financial Officer and a director of
FreeStar. The amount of shares gives effect to the conversion of the
Convertible Note.
(4) Paul Egan may be deemed to beneficially own all of such shares by reason
of his being the President, Chief Executive Officer and a director of
FreeStar. The amount of shares gives effect to the conversion of the
Convertible Note.
(5) Don Marshall sold 3,255,302 shares of Common Stock beneficially owned by
him (giving effect to the conversion of the Convertible Note) to FreeStar
on October 14, 2003. Under a proxy from Amathus Holdings, Ltd., Mr.
Marshall (and Nautilus Management, Ltd. through its relationship with Mr.
Marshall) continues to retain sole power to vote (but not to dispose) of
a total of 18,000 shares of Common Stock.
(6) Fionn Stakelum may be deemed to beneficially own all of such shares by
reason of his being a director of FreeStar. The amount of shares gives
effect to the conversion of the Convertible Note.
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Lee Britton has worked as a Management Consultant for a variety of
clients throughout the United Kingdom, including Oxford University, and more
recently, the United States. Previously he was Director of Business Development
for DCTI Europe. He was also seconded to the role of Director of Business
Development for North America until July 2000. Mr. Britton launched a UK
software company, Data by Design, and in 1988 formed his own Management
Consultancy company, advising corporations on borrowing strategies, capital
development programs, mergers and acquisitions and Information Systems.
Craig Darling is a Canadian lawyer and mediator with a background in
small business development, government relations and public policy dispute
resolution. Over the past 15 years, Mr. Darling has been employed in private
practice and has worked with many federal, provincial and local government
agencies managing large, multiparty negotiations involving a spectrum of private
and public sector interests. He also advises governments on the development of
dispute resolution systems that integrate processes for preventing and resolving
public disputes. Mr. Darling is a graduate of the University of Victoria in
Economics (1975) and Law (1978) and was called to the Bar of British Columbia in
1979.
Paul Egan founded ePayLatina S.A., which developed the PaySafeNow
system and was acquired by FreeStar in August 2001. Before founding ePayLatina,
Mr. Egan was the Vice President of Inter-Leisure, S.A. Paul Egan also worked
with the South African firm ENGEN to oversee the new project division after
their acquisition of Mobil Oil South Africa and to implement the new company's
construction projects and corporate identity. Paul Egan studied construction
management in Birmingham, England and worked for Trafalger House Construction
Division on major projects in London's Banking Districts. Mr. Egan attended
Terenure College in Dublin, Ireland. Paul Egan and Ciaran Egan are brothers.
Ciaran Egan joined ePayLatina S.A. in May 2001, and served as Vice
President. Previously, he was employed by Medipro International Recruitment
based in Johannesburg, South Africa, which he joined in 1994 as managing
director, with the central focus on establishing new markets in the Middle East,
the United Kingdom and Ireland. He was successful in obtaining and completing
contracts with the Ministry of Defense and Aviation in Saudi Arabia and the
United Arab Emirates. He also implemented contracts with National Health
Services in the United Kingdom, as well as several private institutions in
Ireland. Prior to Medipro, Ciaran Egan was the National Sales Director for
Sellrange Ltd. (Ireland). Ciaran Egan graduated from Terenure College in Dublin,
Ireland in 1982. Ciaran Egan and Paul Egan are brothers.
Don Marshall is a Canadian engineer and businessman, who was the
founder of DataBank International, with a background in engineering design and
software development. Over the past 15 years, Mr. Marshall has started and run
various engineering design and small software development enterprises. He sold
his software company to the Company in October of 1999, and worked as President
and Director until his resignation in January 2001. He subsequently acted as
Director, Chairman and Chief Executive Officer of the Company from October 2002
until October 2003.
Fionn Stakelum was appointed to the Board of Directors of FreeStar in
October 2002. Mr. Stakelum's technology background includes a position as a
technical support engineer for the Corel Corporation, which he held from 1994 to
1996. Mr. Stakelum's experience also includes the position of localization
software engineer, also for the Corel Corporation, from 1996 to 1997. He moved
to Lotus Inc. in 1997 and remained there until 1999, when he joined Microsoft
Inc. as a lead software development engineer (a position he held until late
2001). Since November 2001, Mr. Stakelum has functioned as an independent
consultant. He was previously involved in the localization of MSOffice 2000 and
XP in more than 20 languages. Mr. Stakelum holds a Bachelor of Commerce Degree
(Hons.) with a major in Systems Analysis obtained from University College
Galway, Ireland in 1990.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held two meetings during the fiscal year ended
June 30, 2003.
COMPENSATION OF DIRECTORS
The directors of TransAxis are not currently compensated for their
services as directors. TransAxis has in the past issued stock options to its
directors, but no formal plan is in place.
COMMITTEES OF THE BOARD OF DIRECTORS
TransAxis currently does not have standing audit, nominating or
compensation committees.
INDEBTEDNESS OF MANAGEMENT
No director, director nominee, executive officer or any member of an
individual's immediate family or any corporation or organization with whom any
such person is an affiliate is or has been indebted to TransAxis since the
beginning of TransAxis' last fiscal year.
LEGAL PROCEEDINGS
As of the date of this Information Statement, there is no material
proceeding to which any director, officer, affiliate or stockholder of TransAxis
is a party adverse to TransAxis.
FAMILY RELATIONSHIPS
Paul Egan and Ciaran Egan are brothers. There are no other family
relationships among the directors, director nominees or officers.
EXECUTIVE COMPENSATION AND CERTAIN OTHER TRANSACTIONS
CASH COMPENSATION
The following table sets forth the annual compensation paid by
TransAxis for services rendered during the last three fiscal years to TransAxis'
Chief Executive Officer, and to each of TransAxis' other executive officers
serving as of June 30, 2003, whose annual salary and bonus exceeded $100,000.
LONG-TERM COMPENSATION AWARDS
ANNUAL SECURITIES
YEAR ENDED COMPENSATION UNDERLYING
JUNE 30 SALARY ($) OPTIONS (#)
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NAME AND PRINCIPAL POSITION
Don Marshall(1) 2003 __ __
Former Chief Executive Officer 2002 __ __
2001 __ __
Stephen T. Cannon(2) 2003 47,852 __
Former President and Chief Technology Officer 2002 189,063 __
2001 187,500 300,000
Lynn J. Langford(3) 2003 120,000 __
Former Chief Financial Officer 2002 115,792 __
2001 41,250 60,000
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(1) Mr. Marshall was appointed as Chief Executive Officer of TransAxis on
October 24, 2002 and was not compensated for his services. He resigned from
the Company on October 14, 2003.
(2) Mr. Cannon resigned from the Company in October 2002.
(3) Mr. Langford joined the Company in February 2001 as Controller. He was
appointed Chief Financial Officer on June 28, 2002 and interim Chief
Executive Officer on October 8, 2002. Mr. Marshall replaced Mr. Langford as
Chief Executive Officer on October 24, 2002, with Mr.
Langford remaining Chief Financial Officer. Mr. Langford resigned from the
Company on August 20, 2003.
In February 2001, the Board of Directors repriced all employee options
granted in October 2000 to the then current market price of $49 (reverse
split-adjusted). In October 2001, the Board of Directors repriced all
outstanding options to the then current market price of $9.60 (reverse
split-adjusted).
No option grants were made in the fiscal year ended June 30, 2003.
EMPLOYMENT AND CONSULTING AGREEMENTS
Neither TransAxis' current executive officers nor Messrs. Marshall,
Cannon or Langford have entered into an employment, consulting or similar
services agreement with TransAxis.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Securities Exchange Act, TransAxis'
directors and executive officers and beneficial owners of more than 10% of the
shares of Common Stock are required to file certain reports, within specified
time periods, indicating their holdings of and transactions in the shares of
Common Stock. Based solely on a review of such reports provided to TransAxis and
written representations from such persons regarding the necessity to file such
reports, TransAxis is not aware of any failures to file reports or report
transactions in a timely manner during its fiscal year ended June 30, 2003.
ADDITIONAL AVAILABLE INFORMATION
TransAxis is subject to the information and reporting requirements of
the Securities Exchange Act and, in accordance with that act, files periodic
reports, documents and other information with the Securities and Exchange
Commission relating to its business, financial statements and other matters.
These reports and other information may be inspected and are available for
copying at the offices of the Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549 and are available on the SEC's website at
"www.sec.gov."