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): August 4, 2000
GlobalMedia.com
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(Exact Name of Registrant as Specified in Its Charter)
Nevada
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(State or Other Jurisdiction of Incorporation)
0-23491 91-1842480
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(Commission File Number) (IRS Employer Identification No.)
400 Robson Street, Vancouver, BC Canada V6B 2B4
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(Address of Principal Executive Offices) (Zip Code)
(604) 688-9994
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(Registrant's Telephone Number, Including Area Code)
Global Media Corp.
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
On August 3, 2000 the Registrant entered in to and closed an Asset Purchase
Agreement with Magnitude Network, Inc., a Delaware corporation ("Magnitude"),
located in Chicago, Illinois. The assets acquired were assets used by the Online
Media and Streaming Solutions business of Magnitude (the "Business"). These
assets include:
(i) all computer software programs developed and/or used by Magnitude in
connection with the Business (the "Software");
(ii) all registered and unregistered trademarks, service marks, trade names
and design marks used by the Magnitude in association with the
Business;
(iii)all third-party Internet domain names which are registered in the
name of Magnitude and/or which are registered by other persons for the
benefit of Magnitude (the "Domain Names");
(iv) all Internet web sites developed , maintained and/or used by Magnitude
in connection with the Business, (the "Web Sites") including the
rights of the Magnitude in the literary, artistic, musical and
dramatic works used in the development of such web sites and/or
accessible to viewers of such Web Sites;
(v) all databases of information compiled from the operation of such Web
Sites and all Software used to develop, operate, support, maintain and
modify such web sites, all inventions, methods and processes, whether
patentable or not, and all discoveries, ideas, concepts, know-how,
trade secrets and other confidential information of Magnitude in
connection with the Software, the Web Sites and the Business and all
other intangible intellectual property assets of Magnitude used in
connection with the Business not otherwise specified above;
(vi) all world-wide patent, copyright, trademark, trade secret, mask work
and other industrial and intellectual property rights in connection
with the Magnitude intellectual property (the "Intellectual Property
Rights");
(vii)all rights, permits, licenses, orders ratings and approvals of
Magnitude, to the extent assignable, under certain contracts,
agreements or instruments of Magnitude in connection with the
Business;
(viii) all federal, state or local governmental or regulatory authorities
that are held by the Magnitude and relate to the Business, to the
extent the same are transferable; and
(x) certain equipment consisting primarily of computers.
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Pursuant to the Agreement the Registrant entered into a License Agreement
with Magnitude whereby the Registrant granted Magnitude, a worldwide,
royalty-free, sub-licensable right and license to use, modify, distribute,
exploit and copy the Software and Intellectual Property Rights obtained in the
Agreement with Magnitude.
Pursuant to the Agreement the Registrant and iCast Corporation., a Delaware
corporation ("ICast") entered into a Non-Solicitation Agreement whereby ICast
agreed that it will not, without the prior written consent of the Registrant,
during the period of one (1) year, from the date of the Agreement, directly or
indirectly, solicit or aid in the solicitation of any Magnitude customers for
the purpose of providing goods or services to such customers that are similar to
or competitive with the goods and services that were previously provided to such
customers as part of Magnitude's Business. ICast further agreed that it will
not, without the prior written consent of the Registrant, during the period of
one (1) year from the date of the Agreement directly or indirectly, (a) solicit
for employment any person who is, at the time of such solicitation, employed by
the Registrant, provided, however, that this shall exclude any general
solicitation which ICast may make through advertising or third party recruiting
companies; (b) induce any person to leave his employment with the Registrant; or
(c) employ any person who was an employee of the Registrant at any time during
such one (1) year period.
Pursuant to the Agreement the Registrant assumed certain liabilities in
connection with the assigned contracts and took an assignment of Magnitude's
lease on its offices in Chicago, Illinois through December 31, 2000.
Pursuant to the Agreement the Registrant received a cash payment of
$238,715 from Magnitude and gave the following consideration to Magnitude:
(i) 1,665,944 Shares of restricted common stock;
(ii) 416,485 Shares of restricted common stock which are subject to an
Escrow Agreement whereby the shares are to be held for twelve months
against any claims for indemnification for unpaid liabilities of
Magnitude;
(iii)A Common Stock Purchase Warrant to acquire 2,000,000 shares of common
stock at $3.60 per share.
The shares of common stock and the common stock underlying the Warrant
carry certain registration rights which require the Registrant to file a
registration statement allowing the public resale of the shares by Magnitude. In
the event the Registrant is unable to obtain the effectiveness of the
registration within 150 days of closing (January 4, 2001), Magnitude will be
issued additional shares of common stock in an amount equal to the result
obtained by dividing $120,000 by the average of the last reported sales price
per share over the five consecutive trading days ending January 4, 2001.
The transaction is valued at approximately $6 million based upon the
1,665,944 shares plus the 416,485 shares of common stock held in escrow and
determined by dividing $6 million by the average of the last reported sales
price per share of the Registrant's Common Stock on the Nasdaq National Market
over the five (5) consecutive trading days ending on the trading day that was
four trading days prior to but not including the Closing Date, which was $2.88
per share.
The transaction is to be accounted for as a purchase.
The Registrant intends to use the assets in substantially the same manner
as Magnitude.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Magnitude Networks, Inc.
As of the date of filing this Current Report on Form 8-K, it is impractical
for the Registrant to provide the financial statements required by this Item
7(a). In accordance with Item 7(a)(4) of Form 8-K, such financial statements
shall be filed by amendment to this Form 8-K no later than October 17, 2000.
(b) Pro Forma Financial Statements giving effect to the Acquisition
As of the date of filing this Current Report on Form 8-K, it is impractical
for the Registrant to provide the financial statements required by this Item
7(b). In accordance with Item 7(b) of Form 8-K, such financial statements shall
be filed by amendment to this Form 8-K no later than October 17, 2000.
(c) Exhibits
99.6 Asset Purchase Agreement
99.7 License Agreement
99.8 Non-Solicitation Agreement
99.9 Escrow Agreement
99.10 Common Stock Purchase Warrant
99.11 Press Release
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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.
GlobalMedia.com
(Registrant)
Date: August 17, 2000 By: /s/ Michael Metcalfe
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Michael Metcalfe
Chairman of the Board
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