UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 20, 2000
Gateway Distributors, Ltd.
--------------------------
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
000-27879 65-0683539
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(Commission File Number) (IRS Employer Identification Number)
500 East Cheyenne Avenue
North Las Vegas, Nevada 89030
(Address of principal executive offices)
(702) 399-4328
(Registrant's telephone number, including area code)
(Former name or address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 12, 2000,Gateway Distributors, Ltd. (the "Company")
entered into an Acquisition Agreement ("Agreement") with
Professional Wrestling Alliance Corporation ("PWA"), a
Delaware Corporation ("Gateway") wherein the Company agreed to
sell the bulk of its assets and its operating business, in
exchange for shares of PWA stock equaling approximately 85% of
the issued and outstanding shares of PWA.
The Company is a network marketing company that does business
under the name "The Right Solution." The Company sells
nutritional , health and dietary supplements and products
throughout North America and Japan. See the Company's Form
10-SB filed December 15, 1999. The Agreement contemplates the
transfer to PWA of the Company's business and goodwill, which
consists of existing inventory and an existing networking
distribution business. The Agreement Provides for PWA to
acquire all of the assets and network marketing business of
the Company, which business will then be operated by PWA.
Following the transaction, PWA will be an 85% owned Subsidiary
of the Company.
The Closing of the Asset Purchase Agreement is scheduled to
occur within 120 days of the October 12, 2000 signing of the
Agreement (on or before February 9, 2001), and the closing is
contingent upon the happening of a number of events which are
set out in detail in paragraph 7 of the Agreement (Exhibit
"A"). In brief, the requirements are that the Agreement must
be approved by a majority of the shareholders of the
respective corporations; Agreement upon a specific list of
assets to be transferred to PWA; That Rick Bailey, the current
president of the Company, be appointed as president of PWA;
that PWA raise a minimum of $350,000 in equity capital; and
that the Judgments against PWA in the cases entitled Koken,
Insurance Commissioner v. Jutland Enterprises, Inc.,
Pennsylvania Commonwealth Court No. 294 M.D. 1994 and Maleski,
Insurance Commissioner v. Jutland Enterprises, inc., New
Jersey Superior Court No. SOM-L-871-95 be paid in full or
otherwise resolved. The above description of the terms of the
Agreement is qualified in its entirety by the Agreement
attached hereto as Exhibit "A."
A definitive list of the specific assets being sold to PWA by
the Company will be provided and agreed upon at the closing.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
Financial statements required by Item 7(a)(1) will be filed by
amendment to this filing within sixty days of the date of this filing.
The following exhibit is included:
(a). Acquisition Agreement dated October 12, 2000
Pursuant to the requirement of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 20, 2000
Gateway Distributors, Ltd.,
A Nevada Corporation
By: /s/ Rick Bailey
-----------------------------------
Name: Rick Bailey
Title: President
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EXHIBIT "A"
ACQUISITION AGREEMENT
BETWEEN
PROFESSIONAL WRESTLING
ALLIANCE CORPORATION
AND
GATEWAY DISTRIBUTORS, LTD.
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ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale..............................................................2
Purchase Price.................................................................2
Warranties and Representations of Gateway .....................................2
Warranties and Representations of PWA..........................................3
Term...........................................................................5
The PWA Shares.................................................................5
Conditions Precedent to Closing................................................6
Termination....................................................................7
Exhibits.......................................................................7
Miscellaneous Provisions.......................................................7
Closing........................................................................7
Effective Date ................................................................8
8
Governing Law..................................................................8
Counterparts...................................................................8
Index to Exhibits ............................................................9
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated October 12, 2000, by, between and among
Professional Wrestling Alliance Corporation, a Delaware corporation ("PWA"), and
Gateway Distributors, Ltd., a Nevada corporation, ("Gateway").
WHEREAS, Gateway is the owner of those certain assets described and set
forth on Exhibit "A" attached hereto ("Assets"); and
WHEREAS, Gateway desires to sell and PWA desires to purchase the Assets;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
I. Purchase and Sale. Gateway hereby agrees to sell, transfer, assign and
convey to PWA and PWA hereby agrees to purchase and acquire the Assets, as
set forth in Exhibit "A", from Gateway.
II. Purchase Price. The aggregate purchase price to be paid by PWA for the
Assets shall be thirteen million four hundred eighty eight million six
hundred sixty shares (post 1 for 20 reverse split shares) of PWA common
voting stock (the "PWA Purchase Shares") which will equal approximately
eighty five percent (85%) of the issued and outstanding shares of PWA.
III. Warranties and Representations of Gateway. In order to induce PWA to enter
into the Agreement and to complete the transaction contemplated hereby,
Gateway warrants and represents to PWA that:
A. Organization and Standing. Gateway is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Nevada, is qualified to do business as a foreign
corporation in every other state or jurisdiction in which it
operates to the extent required by the laws of such states and
jurisdictions, and has full power and authority to carry on its
business as now conducted and to own and operate its assets,
properties and business. No changes thereto will be made in any
of the said documents before the Closing.
B. Ownership of the Assets. As of the Date hereof, Gateway is the
sole owner of the Assets, free and clear of all liens,
encumbrances and restrictions of any nature whatsoever.
C. Ownership of Assets. Gateway has good, marketable title, without
any liens or encumbrances of any nature whatever, to all of the
Assets.
D. No Misleading Statements or Omissions. Neither the Agreement nor
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any financial statement, exhibit, schedule or document attached
hereto or presented to PWA in connection herewith, contains any
materially misleading statement, or omits any fact or statement
necessary to make the other statements or facts therein set forth
not materially misleading.
E. Validity of the Agreement. All corporate and other proceedings
required to be taken by Gateway in order to enter into and to
carry out the Agreement have been duly and properly taken. The
Agreement has been duly executed by Gateway, and constitutes the
valid and binding obligation of Gateway, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or affecting generally the
enforcement of creditors rights. The execution and delivery of
the Agreement and the carrying out of its purposes will not
result in the breach of any of the terms or conditions of, or
constitute a default under or violate Gateway's Certificate of
Incorporation or document of undertaking, oral or written, to
which Gateway is a party or is bound or may be affected, nor will
such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule or regulation of any court,
regulatory agency or other governmental body.
F. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by PWA according to their terms, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or affecting generally the
enforcement of creditors rights and that at the time of such
execution and delivery, PWA will have acquired title in and to
the Assets free and clear of all claims, liens and encumbrances.
IV. Warranties and Representations of PWA. In order to induce Gateway to enter
into the Agreement and to complete the transaction contemplated hereby, PWA
warrants and represents to Gateway that:
A. Organization and Standing. PWA is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, is qualified to do business as a foreign corporation
in every other state in which it operates to the extent required
by the laws of such states, and has full PWA and authority to
carry on its business as now conducted and to own and operate its
assets, properties and business.
B. Capitalization PWA's entire authorized equity capital consists of
shares of voting common stock, $.001 par value and shares of
preferred stock $.001 par value. As of the Closing, PWA will have
200,000,000 shares Common Stock, $.001 par value, authorized, of
which 48,606,832 shares of voting common stock of PWA will be
issued and outstanding, which does not include the shares being
issued to Gateway hereunder pursuant to Section 4(2) of the '33
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Act, at closing. As of the Closing, PWA will have 5,000,000
shares Preferred Stock, $.001 par value, authorized, of which
zero (0) shares of Preferred Stock of PWA will be issued and
outstanding Upon issuance, all of the PWA Common Stock will be
validly issued fully paid and non-assessable. The relative rights
and preferences of PWA's equity securities are set forth in the
Articles of Incorporation, as amended and PWA's By-Laws. Except
as set forth above, there are no voting or equity securities
convertible into voting stock, and no outstanding subscriptions,
warrants, calls, options, rights, commitments or agreements by
which PWA is bound, calling for the issuance of any additional
shares of common stock or any other voting or equity security.
The By-Laws of PWA provide that a simple majority of the shares
voting at a stockholders' meeting at which a quorum is present
may elect all of the directors of PWA. Cumulative voting is not
provided for by the By-Laws or Articles of Incorporation of PWA.
Accordingly, as of the Closing the shares being issued to and
acquired by Gateway will constitute approximately 85% of the
Common Shares of PWA which will then be issued and outstanding,
which includes inter alia, that same percentage of PWA's voting
power, right to receive dividends, when, as and if declared and
paid, and the right to receive the proceeds of liquidation
attributable to common stock, if any.
C. Ownership of Shares. By PWA's issuance of the PWA Shares to
Gateway pursuant to the Agreement, PWA will thereby acquire good
absolute marketable title thereto, free and clear of all liens,
encumbrances and restrictions of any nature whatsoever, except by
reason of the fact that such PWA shares will not have been
registered under the '33 Act.
D. Taxes. PWA has filed all federal, state and local income or other
tax returns and reports that it is required to file with all
governmental agencies, wherever situate. All of such returns are
true and complete.
E. No Pending Actions. Except as may be disclosed in the Form
10-KSB/A filed by PWA on April 18, 2000, a copy of which is
attached as exhibit "B," or in the Form 10-QSB filed by PWA on
August 18, 2000, a copy of which is attached hereto as exhibit
"C," There are no legal actions, lawsuits, proceedings or
investigations, either administrative or judicial, pending or
threatened, against or affecting PWA, or against any of PWA's
officers or directors and arising out of their operation of PWA.
PWA has been in compliance with, and has not received notice of
violation of any law, ordinance or regulation of any kind
whatever, including, but not limited to, the '33 Act, the '34
Act, the Rules and Regulations of the SEC or the Securities Laws
and Regulations of any state. PWA is not now and never has been
required to file reports under the '33 Act or the '34 Act.
F. Corporate Records. All of PWA's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation.
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G. No Misleading Statements or Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule or document attached
hereto or presented to Gateway in connection herewith contains
any materially misleading statement, or omits any fact or
statement necessary to make the other statements of facts therein
set forth not materially misleading.
H. Validity of the Agreement. All corporate action and proceedings
required to be taken by PWA in order to enter into and to carry
out the Agreement have been duly and properly taken. The
Agreement has been duly executed by PWA, and constitutes a valid
and binding obligation of PWA. The execution and delivery of the
Agreement and the carrying out of its purposes will not result in
the breach of any of the terms or conditions of, or constitute a
default under or violate, PWA's Certificate of Incorporation or
By- Laws, or any agreement, lease, mortgage, bond, indenture,
license or other document or undertaking, oral or written, to
which PWA is a party or is bound or may be affected, nor will
such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule or regulation of any court
regulatory agency or other governmental body.
I. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by Gateway according to their terms, and that at the
time of such execution and delivery, Gateway will have acquired
good, marketable title in and to the PWA Common Shares acquired
pursuant hereto, free and clear of all liens and encumbrances.
J. Access to Books and Records. Gateway will have full and free
access to PWA's books and records during the course of this
transaction prior to and at the Closing.
K. PWA Financial Condition. The financial condition of PWA is set
forth in the financial statements contained in PWA's Forms
10-KSB/A, attached hereto as Exhibit "B" and 10-QSB attached
hereto as exhibit "C."
V. Term. All representations, warranties, covenants and agreements made herein
and in the exhibits attached hereto shall survive the execution and
delivery of the Agreement and payment pursuant thereto.
VI. The PWA Shares. All of the PWA Common Shares shall be validly issued,
fully-paid and non- assessable shares of PWA Common Stock, with full voting
rights, dividend rights, and the right to receive the proceeds of
liquidation, if any, as set forth in the respective Articles of
Incorporation.
VII. Conditions Precedent to Closing.
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A. The obligations of Gateway under the Agreement, including the
obligation to close the Agreement, shall be and are subject to
fulfillment, prior to or at the Closing of each of the following
conditions:
1. That PWA and its management's representations and warranties
contained herein shall be true and correct at the time of
closing as if such representations and warranties were made
at such time;
2. That PWA and its management shall have performed or complied
with all agreements, terms and conditions required by the
Agreement to be performed or complied with by them prior to
or at the time of Closing;
3. That PWA's stockholders, by proper and sufficient vote,
shall have properly approved all of the matters described in
Section VII(B)(1) herein, if required to do so under
Delaware Corporate Law; and
B. The obligations of PWA under the Agreement, including the
obligation to close the agreement, shall be and are subject to
fulfillment, prior to or at the Closing of each of the following
conditions:
1. That PWA stockholders, if necessary by proper and sufficient
vote of its stockholders, shall have approved the Agreement
and the transactions contemplated hereby and will have
approved such other changes as are consistent with the
Agreement for submission to PWA stockholders, if required to
do so under Delaware Corporate Law;
2. That Gateway's representations and warranties contained
herein shall be true and correct at the time of Closing as
if such representations and warranties were made at such
time; and
3. That Gateway shall have performed or complied with all
agreements, terms and conditions required by the Agreement
to be performed or complied with by it prior to or at the
time of Closing.
4. That Rick Bailey, the current president of Gateway, shall
have been appointed as president and CEO of PWA;
5. That Rick Bailey shall have caused three hundred fifty
thousand dollars ($350,000) to be raised on behalf of PWA;
6. That any monies raised from investors prior to the closing
be held in escrow until sufficient monies have been raised
in the offering to make all payments due and owing to Hudson
Consulting Group and World Alliance Group by PWA, Gateway or
Rick Bailey.
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7. That no shares of PWA will be delivered to investors in a
capital raising venture until at least three hundred fifty
thousand dollars ($350,000) has been raised.
8. The liability of PWA to the State of Pennsylvania shall have
been paid in full or otherwise settled and resolved at a
cost to PWA not to exceed $50,000;
9. All amounts due and owing to Hudson Consulting Group and
World Alliance Group by PWA, Gateway or Rick Bailey shall
have been paid in full, which amounts are identified as (1)
$150,000 payable to World Alliance Group, (2) $150,000
payable to Hudson Consulting Services, and (3) all invoices
as of the closing date from Hudson Consulting Group to PWA
for consulting services;
10. That the parties jointly and severally indemnify and hold
harmless PWA's former officers, directors, agents and
affiliates against any claims or liabilities, including
reasonable attorney's fees and other reasonable defense
costs incurred defending such claims or liabilities, which
may result from any claims or liabilities asserted against
them as to any material misrepresentation or omission in the
Agreement made by any party hereto.
11. That the final asset list prepared by Gateway (a draft of
which list is attached hereto as Exhibit "A") shall contain
assets acceptable at closing to PWA.
12. That the closing occur within one hundred twenty days of the
signing of this agreement
VIII. Termination. The Agreement may be terminated at any time before or at
Closing, by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to or benefitting
a party shall be materially untrue or fail to be
accomplished.
2. Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses that each party has incurred and no party shall be liable to the
other.
IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in their entirety.
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X. Miscellaneous Provisions. This Agreement is the entire agreement between
the parties in respect of the subject matter hereof, and there are no other
agreements, written or oral, nor may the Agreement be modified except in
writing and executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or conditions of
the Agreement shall not be deemed a waiver or relinquishment of such right
or power at any other time or times.
XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") shall take place at 268 West 400 South, Suite 300, Salt Lake
City, Utah 84101 on or before 120 days from the date of this agreement, if
shareholder approval is not required or can be obtained subsequent to
closing by shareholder ratification. If a shareholder's meeting is
required, the closing shall take place either within 120 days of the date
of this agreement or within fifteen days of the ratification of the
agreement by shareholders. The Closing shall occur at the offices of
Richard D. Surber, located at 268 West 400 South, Suite 300, Salt Lake
City, Utah 84101. At the Closing, all of the documents and items referred
to herein shall be exchanged.
XII. Effective Date. The effective date of this agreement shall be October 6,
2000.
XIII.Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah. The validity,
interpretation, and performance of this Agreement shall be governed by the
laws of the State of Utah, without regard to its law on the conflict of
laws. Any dispute arising out of this Agreement shall be brought in a court
of competent jurisdiction in Salt Lake County, State of Utah. The parties
waive and exclude any and all statutes, laws and treaties which would allow
or require any dispute to be decided in another forum or by other rules of
decision than provided in this Agreement.
XIV. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together shall
constitute one and the same binding Agreement, with one counterpart being
delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the date and year above first written.
Gateway Distributors, Ltd., a Nevada Corporation
By: /s/ Flo Ternes
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Flo Ternes
Its: Chief Financial Officer
Professional Wrestling Alliance Corporation
By: /s/ Rick Bailey
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Rick Bailey,
Its: President
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