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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) November 8, 2000
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SALES ONLINE DIRECT, INC.
(Exact name of Registrant as specified in Charter)
Delaware 000-28720 73-1479833
(State or other Jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4 Brussels Street, Worcester, MA 01610
(Address of Principal Executive Offices/Zip Code)
Registrant's telephone number, including area code: (508) 791-6710
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On November 8, 2000, Sales Online Direct, Inc. ("the Registrant")
purchased a substantial portion of the assets of Channel Space Entertainment,
Inc., a Virginia corporation ("CSEI"), and Discribe, Ltd. ("Discribe"), a
Canadian corporation wholly owned by CSEI ("Assets") as more fully described in
the press release attached as Exhibit 99.1. The purchase (the "Transaction") was
pursuant to an Asset Purchase Agreement ("Asset Purchase Agreement") dated
November 8, 2000 among the Registrant, CSEI and Discribe. Pursuant to the Asset
Purchase Agreement, the consideration payable by the Registrant for the Assets
is 7,530,000 unregistered shares of the Registrant's common stock, plus $300,000
worth of the Registrant's common stock which is to be registered. The
unregistered shares will be held in escrow for the purposes of complying with
the Rule 144 holding period and securing certain indemnity obligations made by
CSEI in the Asset Purchase Agreement and related documents. The escrow shares
are subject to additional lock-up restrictions.
The Assets acquired by the Registrant, more particularly described in
the attached Asset Purchase Agreement, include:
o All of CSEI's right, title and interest in and to a number of
websites, including CollectingChannel.com and CelticChannel.com, as well as any
other tangible or intangible assets of CSEI and Discribe used or useful in their
business but excluding certain assets listed in the Asset Purchase Agreement.
o Certain fixed assets and equipment, as well as any and all permits,
licenses, consents and approvals held by CSEI. All such fixed assets and
equipment, which CSEI had used in its operation as a converged internet content
provider and producer of affinity portals, shall be used in a similar manner by
the Registrant.
o All of CSEI's lists of registered users of certain websites.
o CSEI's rights under certain contracts identified in the Asset
Purchase Agreement.
o Options for shares of GavelNet, Inc., Copernicus, Worldwinner.com and
RealMedia, Inc.
o The issued and outstanding capital stock of Discribe if the
Registrant in its sole discretion determines to acquire such stock.
o Two perpetual, royalty-free, non-exclusive licenses to use the
electronic content management system ("eCMS") software, one each in connection
with the Registrant's collecting-related and furniture-related online
businesses.
Prior to the consummation of the Transaction, no relationship existed
between the Registrant and its officers, directors or other affiliates and CSEI
and its officers, directors or other affiliates except for a content agreement
between the parties dated September 9, 1999. The number of shares of the
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Registrant's common stock received by CSEI as a result of the Transaction was
determined by arms-length negotiations between the persons then serving as
officers and directors of CSEI and the persons then serving as officers and
directors of the Registrant.
Former CSEI co-founders and co-chairmen Steve Sanford and Barry
Friedman will be employed by SOLD as Chief Operating Officer and Chief of
Strategy, respectively. The Transaction did not otherwise result in a change in
the Registrant's directors and officers.
CAUTIONARY DISCLOSURE RELATING TO FORWARD LOOKING STATEMENTS
Statements made in this document include forward looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 that are based upon current expectations
or beliefs, as well as a number of assumptions about future events. Statements
that are not historical in nature, including the words "anticipate," "estimate,"
"should," "expect," "believe," "intend," and similar expressions, are intended
to identify forward looking statements. Although the Registrant believes that
the expectations reflected in the forward-looking statements and the assumptions
upon which they are based are reasonable, it can give no assurance that such
expectations and assumptions will prove to have been correct. The reader is
cautioned not to put undue reliance on these forward-looking statements, as
these statements are subject to numerous factors and uncertainties, including
without limitation, successful implementation of the Registrant's business
strategy and competition, any of which may cause actual results to differ
materially from those described in the statements.
Factors which could impact future operations and results include (among
other things) competition from other companies with greater financial and other
resources than the Registrant, the ability of the Registrant to attract or
continue to attract sufficient numbers of sellers and "hits" by buyers and other
users to the Registrant's websites, the Registrant's ability to maintain
sufficient access lines to adequately handle the internet traffic, keeping up
with changes in technology, general economic conditions, and similar
considerations. In addition, other factors that could cause actual results to
differ materially are discussed in the Registrant's most recent Form 10-QSB and
Form 10-KSB filings with the Securities and Exchange Commission. The Registrant
disclaims any obligation to publicly update or revise any forward looking
statement, whether as a result of new information, future events or otherwise.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. Financial statements of the
businesses acquired are not being filed with this Form 8-K; such
financial statements will be filed by amendment to this Form 8-K
within 60 days after the required filing of this report.
(b) Pro Forma Financial Information. Required pro forma financial
information is not being filed with this Form 8-K; such information
will be filed by amendment to this Form 8-K within 60 days after the
required filing of this report.
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(c) Exhibits.
2.1 Asset Purchase Agreement dated November 8, 2000 among the
Registrant, CSEI and Discribe.
10.1 Software License Agreements dated November 8, 2000 between
the Registrant and CSEI (filed herewith as Exhibit 1 to the
Asset Purchase Agreement filed as Exhibit 2.1).
10.2 Escrow Agreement dated November 8, 2000 among the
Registrant, CSEI, and the escrow agent Olde Monmouth Stock
Transfer Co., Inc. (filed herewith as Exhibit 3 to the Asset
Purchase Agreement filed as Exhibit 2.1).
10.3 Registration Rights Agreement dated November 8, 2000 between
Registrant and CSEI (filed herewith as Exhibit 4 to the
Asset Purchase Agreement filed as Exhibit 2.1).
99.1 Press release dated November 9, 2000 announcing the
Transaction.
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.
SALES ONLINE DIRECT, INC.
Date: November 22, 2000 By: /s/Gregory Rotman
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Gregory Rotman,
Chief Executive Officer
and President
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
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2.1 Asset Purchase Agreement dated November 8, 2000 among the
Registrant, CSEI and Discribe.
10.1 Software License Agreements dated November 8, 2000 between the
Registrant and CSEI (filed herewith as Exhibit 1 to the Asset
Purchase Agreement filed as Exhibit 2.1).
10.2 Escrow Agreement dated November 8, 2000 among the Registrant,
CSEI, and the escrow agent Olde Monmouth Stock Transfer Co., Inc.
(filed herewith as Exhibit 3 to the Asset Purchase Agreement filed
as Exhibit 2.1).
10.3 Registration Rights Agreement dated November 8, 2000 between
Registrant and CSEI (filed herewith as Exhibit 4 to the Asset
Purchase Agreement filed as Exhibit 2.1).
99.1 Press release dated November 9, 2000 announcing the Transaction.
