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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 (Date of earliest event reported):
January 31, 2000
Bikers Dream, Inc.
(Exact name of issuer as specified in its charter)
California
(State or other jurisdiction of incorporation)
0-15501 33-0140149
(Commission File Number) (IRS Employer Identification No.)
3810 Wacker Drive, Mira Loma, CA 91752
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (909) 360-2500
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11631 Sterling Avenue, Riverside CA 92503
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 31, 2000, Bikers Dream, Inc. ("Bikers Dream") sold to V-Twin
Holdings, Inc. ("V-Twin") the assets related to the operation of Bikers Dream's
retail stores division ("Retail Division"). The Retail Division (i) sells and
services motorcycles at five Superstores in Santa Ana, Sacramento and San Diego,
California, Dallas, Texas, and Conover, North Carolina, (ii) licenses Bikers
Dream's intellectual property and use of its business model and operating
manuals to independently owned Bikers Dream Superstores pursuant to certain
license agreements, and (iii) operates an e-commerce site for the sale of
motorcycle parts, accessories and apparel. The assets ("Assets") sold include
all fixed assets, inventory and equipment used in the Retail Division, the right
to operate the Retail Division under the assumed name "Bikers Dream", all
intellectual property assets relating to the Retail Division, the right to use
the domain name "bikers-dream.com", all rights under license agreements with
independently owned Bikers Dream Superstores, and rights under real property
leases and equipment leases.
The final adjusted purchase price for the Assets was $3,000,000 (the
"Purchase Price"), which will be paid as follows: (i) a $1,000,000 promissory
note payable over five years which pays interest at the rate of five (5) per
cent per annum (the "Note"), (ii) 83,333 shares of common stock of V-Twin valued
at a price of six (6) dollars per share, and (iii) assumption by V-Twin of
certain liabilities relating to the operation of the Retail Division, including
Bikers Dream's obligations to repay a $1.5 million credit line from Cycle
Capital Corporation, an affiliate of V-Twin. The Note is secured in favor of
Bikers Dream by a first priority security interest in the Assets, subject
however, to the security interests in new motorcycles granted by V-Twin to Cycle
Capital Corporation and any other provider of floor plan financing to V-Twin.
Bikers Dream has the right to nominate one member of the Board of Directors
of V-Twin as long as the Note remains outstanding or for so long as Bikers Dream
continues to hold at least 20,000 shares of V-Twin common stock. Bikers Dream
has appointed Herm Rosenman, President and CEO of Bikers Dream, to fill such
Board seat.
The amount of consideration received by Bikers Dream was based on Bikers
Dream's evaluation of the Assets being sold and the book value of the Assets.
This value was arrived at by negotiations between Bikers Dream and V-Twin.
ITEM 5. OTHER EVENTS
In connection with a lawsuit brought against Bikers Dream and two former
members of its management by a former franchise, verdicts were recently rendered
against the defendants. There are several post-trial motions that are pending,
including one seeking a new trial. Until these motions are decided by the Court,
no judgment will be entered against the defendants.
Rulings favorable to Bikers Dream on these motions would result in payment
by the Company of approximately $70,000, which it will not dispute. If the
motions are not decided in favor of Bikers Dream, it will appeal the remainder
of the judgment, which may total approximately $600,000. Bikers Dream believes
it has a sound basis for appeal, although no assurances can be given.
Any judgment that may be entered may not be enforced prior to the end of
April 2000, at which time Bikers Dream may post an appeal bond to stay
enforcement until the appeal process is concluded, although the company's
ability to do so is currently uncertain. It is also uncertain what effect the
unsatisfied portion of any judgment may have on the company. Negotiations
intended to settle this matter are pending.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) The following exhibit is provided in accordance with the
provisions of Item 601 of Regulation S-B:
1. Asset Purchase Agreement(1)
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(1) Previously filed as an exhibit to Bikers Dream's report on Form 8-K
filed on January 26, 2000.
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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.
BIKERS DREAM, INC.
(Registrant)
By: /s/ Herm Rosenman
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Herm Rosenman
President and Chief Executive Officer
Dated: February 15, 2000
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EXHIBIT 1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") made and entered into
this 18th day of January 2000, by and between BIKERS DREAM, INC. ("Seller"), and
V-TWIN HOLDINGS, INC., a District of Columbia corporation ("Purchaser").
WHEREAS, Seller's retail stores division: (i) is engaged in the sale and
servicing of motorcycles to the general public at five Company-owned Bikers
Dream Superstores in Santa Ana, Sacramento and San Diego, California, Dallas,
Texas, and Conover, North Carolina (collectively, the "Company Superstores");
(ii) licenses the Seller's Intellectual Property (as defined below) and use of
its business model and operating manuals to its independently owned Bikers Dream
Superstores pursuant to the license agreements described in Schedule 1.1.9
hereto (collectively, the "License Agreements"); and (iii) operates an
e-commerce site under the domain name "bikers-dream.com" (the "Domain Name") for
the sale to the public of motorcycle parts, accessories and apparel (the
businesses referred to in clauses (i), (ii) and (iii) above are hereafter
collectively referred to as the "Retail Business"); and
WHEREAS, pursuant to the terms and subject to the conditions set forth
herein, Seller desires to sell to Purchaser, and Purchaser hereby desires to
acquire from Seller, certain assets relating to the operation of the Retail
Business, and Purchaser desires to assume certain liabilities in connection
therewith (including, without limitation, the assignment by Seller to Purchaser
of Seller's rights under the License Agreements and Seller's leases for the
Company Superstores, and the assumption by Purchaser of Seller's obligations
under said agreements); and
WHEREAS, pursuant to the terms and conditions set forth herein, after
the Settlement Date, Purchaser desires to continue to operate the Company
Superstores at the five locations described above and in connection therewith,
to enter into a Master Dealer Agreement with Seller relating to the distribution
of Seller's Ultra Brand of motorcyles.
NOW, THEREFORE, in consideration of the terms, covenants and conditions
contained herein, the parties agree as follows:
1. GENERAL TERMS OF SALE
1.1 Contract to Sell. Subject to the terms and conditions set
forth herein, Seller hereby agrees to sell, assign, transfer and deliver to
Purchaser, and Purchaser hereby agrees to purchase from Seller, the following
assets and properties (collectively, the "Assets"):
1.1.1 All goods, supplies, equipment and fixtures
(including trade fixtures, office machinery and equipment), used primarily in
the operation of the Company Superstores
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