SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): April 27, 2000
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JVWEB, INC.
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(Exact name of registrant as specified in its Charter)
Delaware 000-24001 76-0552098
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(State or other (Commission File (IRS Employer
jurisdiction of Incorporation) Number) Identification Number)
5444 Westheimer, Suite 2080, Houston, Texas 77056
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (713) 622-9287
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N/A
(Former address if changed since last report)
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The Registrant hereby amends its Report on Form 8-K filed with the
Securities and Exchange Commission on May 12, 2000.
ITEM 5.
ACQUISITION OR DISPOSITION OF ASSETS
On April 27, 2000, National Sweepstakes Show, Inc. ("Buyer"), a
Delaware corporation and a majority owned subsidiary of JVWeb, Inc., a Delaware
corporation (the "Company"), acquired from Sweepstakes Entertainment Corporation
("Seller"), a Delaware corporation, substantially all of Seller's assets
(collectively, the "Assets"), pursuant to an Asset Purchase Agreement (the
"Agreement"). The Company owns approximately 57.3% of the outstanding capital
stock in Buyer. Lawrence F. Curtin ("Curtin") owns all of the outstanding
capital stock in Seller. The acquisition will be accounted for effective April
27, 2000 using the purchase method of accounting.
The Assets include intellectual property and other rights pertaining to
a radio talk-show format called "The National Sweepstakes Show" (the "Radio
Show"), prior episodes of the Radio Show, a national monthly newspaper
supplement called "Sweepstakes News" (the "Supplement"), rights to a book
entitled "History of Sweepstakes" (the "Book") and related distribution
agreements with Ingram Books and Baker and Taylor, and World Wide Web domain
names connected by a common branding theme, including
"www.nationalsweepstakesshow.com," "www.sweepstakesnews.com" and others. At the
time of their purchase by Buyer, the Assets were not being actively utilized in
any business endeavor. However, Seller and Mr. Curtin have represented that the
Radio Show previously appeared on over 130 radio stations and the Supplement had
a circulation to over 1.2 million homes.
Buyer intends to revitalize the Supplement and the Radio Show and to
develop a related site on the World Wide Web (the "Website"). Buyer is in the
process of preparing a sample edition of the Supplement to be used in connection
with marketing efforts. Buyer expects to complete this sample within the next
two to three weeks. Once completed, Buyer intends to commence marketing efforts
to procure newspapers to include the Supplement with their publications, as well
as advertisers for the Supplement who will be the source of the Supplement's
revenues. Initially, 10,000 newspapers will be targeted. Buyer expects a
full-scale launch of the Supplement will occur in the autumn of year 2000.
Buyer intends to produce the Radio Show initially as two-minute
vignettes to be broadcasted over a number of radio stations. Buyer has prepared
a demo of a Radio Show vignette to be used in connection with marketing efforts,
and this demo may be heard at "www.nationalsweepstakesshow.com." In the near
future, Buyer intends to commence marketing efforts directed at over 300 initial
radio stations. Buyer expects that the Radio Show will generate revenues from
advertisers who will purchase a 30-second advertising spot comprising a portion
of each vignette. Buyer expects a full-scale broadcast launch of the Radio Show
will occur in the late spring of year 2000.
Buyer intends to develop the Website to provide visitors with
electronic versions of the Supplement and Internet access to recorded past
editions of the Radio Show, as a package on a subscriber basis. The Website will
also allow visitors to enter free of charge (without even the cost of postage)
many of the estimated 500 new sweepstakes promotions initiated monthly in the
United States by various sponsors. Buyer expects that the Website will generate
revenues from advertisers and the fairly nominal subscription fees that Buyer
intends to charge for access to the Website. Buyer expects the Website to become
operational during the summer of year 2000.
Overall, all of the Assets will be used to provide listeners, readers
and visitors with information regarding the free entry into many sweepstakes
promotions and with forums for discussion and discovery within the sweepstakes
community in an entertaining environment. Buyer intends to use the Book to
attract listeners, readers and visitors to the Radio Show, the Supplement and
the Website, and in this connection, Buyer may distribute the Book free of
charge to prospective listeners, readers and visitors.
The purchase price of the Assets consisted of (i) 650,000 registered
shares of the Company's common stock delivered to or on behalf of Seller
outright, (ii) an additional 800,000 registered shares of the Company's common
stock (the "Escrowed Shares") delivered into escrow and to be released to or on
behalf of Seller upon the satisfaction of certain performance criteria, and
(iii) 1,000,000 shares of Buyer's common stock representing a total of
approximately 28.7% of the outstanding shares of Buyer's common stock. The
Escrowed Shares will be released from escrow in accordance with the following:
(1) 250,000 Escrowed Shares will be released whenever the Website
and the Radio Show become fully functional, operational and
capable of generating revenues and whenever all trademark,
copyright and patent filings and registrations relating to the
Assets have been made and declared effective.
(2) 300,000 Escrowed Shares will be released whenever the
business of the Assets achieves $1,000,000 in annualized
revenues for one full calendar quarter.
(3) 250,000 Escrowed Shares will be released whenever the
business of the Assets achieves $2,000,000 in annualized
revenues for one full calendar quarter.
Four hundred thousand (400,000) of the shares of Buyer's common stock paid to
Seller have also been deposited into escrow to secure certain indemnification
obligations of Seller and Curtin. These 400,000 shares of Buyer's common stock
will be released from escrow provided that no claim for indemnification against
these shares has been brought within two years after the closing of the sale and
purchase of the Assets.
The amount of the purchase price paid by the Company and Buyer resulted
from arms-length negotiations between the Company and Buyer, on the one hand,
and Seller and Mr. Curtin, on the other hand. The factors addressed by the
Company and Buyer in negotiating the purchase price included the past
distribution levels of the Radio Show, the Supplement and the Book; the future
prospects for distributing the Radio Show, the Supplement and the Book, and the
prospects for revenues and earnings therefrom; and anticipated expansion
opportunities for use of the Assets in new mediums such as the Internet, World
Wide Web and e-commerce.
The Agreement contains a non-competition agreement, prohibiting Seller
and Mr. Curtin from competing with Buyer. This non-competition agreement lasts
for a period commencing on the closing of the sale and purchase of the Assets
and ending on the later to occur of five years or the time at which Seller or
Mr. Curtin ceases to be, directly or indirectly, a shareholder of Buyer. The
Agreement also contains fairly customary representations, warranties and
indemnifications, as well as other general terms and conditions typically
governing asset sales and purchases.
In connection with the closing of the sale and purchase of the Assets,
Seller, Buyer and the Company entered into a Shareholders Agreement regarding
the shares of Buyer's common stock owned by Seller. This Shareholders Agreement
contains a fairly customary right of first refusal in favor of the Company and
Buyer regarding proposed sales of shares of the Buyer's common stock owned by
Seller, permitting the Company primarily and Buyer secondarily to purchase any
such shares proposed to be sold, at the purchase price and upon the terms of the
proposed sale. The Shareholders Agreement also contains certain options in favor
of the Company to purchase shares of the Buyer's common stock owned by Seller.
One of these options permits the Company to purchase 400,000 shares of the
Buyer's common stock owned by Seller at an aggregate purchase price of $500,000
(if the option is exercised within one year after date of the Shareholders
Agreement [approximately the date of the closing of the purchase and sale of the
Assets]) or at an aggregate purchase price of $1,000,000 (if the option is
exercised more than one year but less than two years after date of the
Shareholders Agreement). The $500,000 purchase price must be paid in cash, but
the $1,000,000 purchase price may, at the option of the Company, be paid either
in cash or in restricted shares of the Company's common stock, computed at a 20%
discount from the 30-day average of the trading price of such stock. If not
previously exercised, this option lapses two years after date of the
Shareholders Agreement. The Shareholders Agreement also contains an option to
purchase the remaining 600,000 shares of the Buyer's common stock owned by
Seller at an aggregate purchase price agreed upon by Seller and the Company or
(in the absence of such agreement) at an aggregate purchase price determined by
appointed appraisers. The purchase price for these 600,000 shares must be paid
in restricted shares of the Company's common stock, computed at a 20% discount
from the 30-day average of the trading price of such stock.
Prior to Buyer's acquisition of the Assets, there was no material
relationship between Seller and Curtin, on the one hand, and Buyer or the
Company or any of the Company's affiliates, any director or officer of the
Company, or any associate of any director or officer of the Company, on the
other hand.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Because the Assets were not being actively utilized in any business
endeavor at the time of their acquisition and the prior two years, the
Company believes that financial statements regarding the Assets are
not required to be filed as an exhibit to this filing.
(b) Pro Forma Financial Information
Because the Assets were not being actively utilized in any business
endeavor at the time of their acquisition and the prior two years, the
Company believes that pro forma financial information reflecting the
Registrant's acquisition is not required to be filed as an exhibit to
this filing.
(c) Exhibits
10.1 Asset Purchase Agreement dated April 26, 2000 by and among
National Sweepstakes Show, Inc. (as buyer), on the one hand,
and Sweepstakes Entertainment Corporation (as seller) and
Lawrence F. Curtin, on the other hand.
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.
JVWEB, INC.
(Registrant)
Date: July 11, 2000 By: /s/ Greg J. Micek
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Greg J. Micek, President
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EXHIBIT INDEX
10.1 Asset Purchase Agreement dated April 26, 2000 by and among
National Sweepstakes Show, Inc. (as buyer), on the one hand,
and Sweepstakes Entertainment Corporation (as seller) and
Lawrence F. Curtin, on the other hand.*
* Previously filed.
