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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 30, 2000 (August 15,
2000)
iPARTY CORP.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-25507 13-4012236
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
130 West 30th Street, 10th Floor, New York, New York 10001
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 609-4300
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Not applicable
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(Former Name or Former Address, if Changes Since Last Report)
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Item 2. Acquisition or Disposition of Assets
On August 15, 2000, iParty Corp. (the "Company"), through its wholly-owned
subsidiary, iParty Retail Stores Corp. ("iParty Retail"), pursuant to an Asset
Purchase Agreement, acquired certain assets from The Big Party Corporation ("The
Big Party"). The Company acquired inventory, fixed assets and the leases of 33
retail stores from The Big Party in consideration of cash and assumption of
certain liabilities, as described in the Asset Purchase Agreement. The Big Party
filed for bankruptcy protection during the second quarter of 2000 and the
acquisition was approved by the United States Bankruptcy Court, District of
Delaware. A copy of the Asset Purchase Agreement and amendments thereto are
filed as Exhibit 2.1, 2.2 and 2.3 hereto, and such documents are incorporated by
reference herein.
The acquisition was financed in part by a private placement as described
in Item 5.
Item 5. Other Events
On August 11, 2000, the Company completed a private placement of Series E
Convertible Preferred Stock, raising $2,000,000. The proceeds from the sale of
the Series E Convertible Preferred Stock were used to finance the acquisition of
certain assets of The Big Party. The financing comprised of 533,333 shares of
Series E Convertible Preferred Stock convertible into an aggregate of 5,333,333
shares of the Company's common stock at a conversion price of $.375 per share.
The Series E Preferred Stock is convertible at anytime into a number of shares
equal to $3.75 divided by the conversion price in effect at the time of
conversion. The initial conversion price is $.375 per share, reflecting an
initial conversion ratio of 1:10. The Series E Convertible Preferred Stock will
have such rights as described in the Certificate of Designation.
This Series E Convertible Preferred Stock financing triggered certain
anti-dilution provisions in Series B, C and D Convertible Preferred Stock and
redeemable common stock purchase warrants attached thereto. The effect of these
anti-dilution provisions were (1) the issuance of 3,731,118 additional shares of
Series B Convertible Preferred Stock and an adjustment to the conversion price
for all outstanding shares of Series B Convertible Preferred Stock to $1.47, (2)
the issuance of 357,061 additional shares of Series C Convertible Preferred
Stock and an adjustment to the conversion price for all outstanding shares of
Series C Convertible Preferred Stock to $1.47, (3) the issuance of 892,653
additional shares of Series D Convertible Preferred Stock and an adjustment to
the conversion price for all outstanding shares of Series D Convertible
Preferred Stock to $1.47, (4) the issuance of 1,993,504 additional redeemable
common stock warrants attached to Series B Convertible Preferred Stock and an
adjustment to the exercise price for all outstanding redeemable common stock
warrants attached to Series B Convertible Preferred Stock to $1.35, (5) the
issuance of 190,774 additional redeemable common stock warrants attached to
Series C Convertible Preferred Stock and an adjustment to the exercise price for
all outstanding redeemable common stock warrants attached to Series C
Convertible Preferred Stock to $1.35, (6) the issuance of 446,327 additional
redeemable common stock warrants attached to Series D Convertible Preferred
Stock and an adjustment to the exercise price for all outstanding redeemable
common stock warrants attached to Series D Convertible Preferred Stock to $1.47,
and (7) the issuance of 354,814 additional redeemable common stock warrants
issued
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to the placement agent in the Series B and C preferred stock financing and an
adjustment to the exercise price to $1.35.
A copy of the Certificate of Designation is filed as Exhibit 4.1 hereto
and such document is incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statement of Business Acquired
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for the Company 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 60 days after the date this Current Report is filed.
(b) Pro Forma Financial Information
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for the Company to provide the pro forma financial
information required by this Item 7(b). In accordance with Item 7(b)(2) of
Form 8-K, such financial statements shall be filed by amendment to this
Form 8-K no later than 60 days after the date this Current Report is
filed.
(c) Exhibits
2.1 Asset Purchase Agreement by and among iParty Retail Stores Corp.
and The Big Party Corporation.
2.2 Amendment No. 1 to Asset Purchase Agreement by and between iParty
Retail Stores Corp. and The Big Party Corporation.
2.3 Amendment No. 2 to Asset Purchase Agreement by and between iParty
Retail Stores Corp. and The Big Party Corporation.
2.4 Stock Purchase Agreement by and among iParty Corp., Ajmal Khan and
Robert H. Lessin.
4.1 Certificate of Designation of Series E Preferred Stock of iParty
Corp.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.
iPARTY CORP.
By: /s/ Sal Perisano
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Sal Perisano
Chief Executive Officer
By: /s/ Patrick Farrell
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Patrick Farrell
Chief Financial Officer
Date: August 30, 2000
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Asset Purchase Agreement
2.2 Amendment No. 1 to Asset Purchase Agreement by
and among iParty Retail Stores Corp. and The
Big Party Corporation.
2.3 Amendment No. 2 to Asset Purchase Agreement by
and between iParty Retail Stores Corp. and The
Big Party Corporation.
2.4 Stock Purchase Agreement by and among iParty
Corp., Ajmal Khan and Robert H. Lessin.
4.1 Certificate of Designation of Series E Preferred
Stock of iParty Corp.
