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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): May 15, 2000
eCONTENT, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 133-16736 23-2442288
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
105 SOUTH NARCISSUS AVENUE
WEST PALM BEACH, FLORIDA 33401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 835-0094
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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 May 31, 2000, pursuant to a Stock Purchase Agreement dated May 30, 2000
with MPI Productions, Inc., a New York corporation, ("MPI") and Robert Marty,
the sole stockholder of MPI ("Marty"), the Company acquired MPI Productions. The
aggregate purchase price was $3,950,000 in cash and 1,350,000 shares of the
Company's Common Stock (the "ETNT Common Stock"). At the closing, $1,000,000 of
cash and the ETNT Common Stock was delivered. The remaining cash is payable as
follows: $150,000 by July 1, 2000, $250,000 on or before August 1, 2000,
$250,000 on or before November 1, 2000 and the remainder on or before April 1,
2000. Until such time as the full cash payments are made, a portion of the MPI
stock purchased is being held in escrow and will be delivered pro-rata as the
cash payments are made.
The Company has executed a voting proxy that provides that at such time as
the Company has voting control over in excess of 49% of the MPI stock, Marty
would be granted a proxy to vote all shares over 49% held by the Company.
The Company is required to provide a working capital infusion to MPI of up
to $550,000. Marty also has registration rights with respect to his shares.
No later than the date that the final cash payments described above are
made, Marty will enter into an employment agreement with the Company on
substantially the same terms as the agreement with John Sgarlat, the Company's
president, as in effect at such time. At any time, Marty has the right to be
appointed to the Company's board of directors.
Until full payment of the purchase price, Marty shall remain as president
of MPI and have day-to-day control over all operating decisions, including but
not limited to personnel, leases, human resources and project expenditures. Upon
such payment in full, Marty shall remain president of MPI, but the Company shall
have the right to exercise such controls as it desires.
At any time on or prior to December 15, 2000, Marty shall be entitled to
send a notice (a "Loan Request") to the Company, requesting a loan from Company
of up to $175,000, to assist Marty in satisfying any tax liability Marty may
have associated with the receipt of the ETNT Common Stock. If the Company is
able to make such loan to Marty for the full amount requested in the Loan
Request, then such loan will: (i) be made in cash in full in immediately
available funds by Company to Marty on or before December 31, 2000, (ii) be
secured by a pledge to Company by Marty of the ETNT Common Stock still owned by
Marty at that time, if any, (iii) bear interest at the prime rate, and (iv) be
subject to repayment when and as Marty is able to orderly liquidate such ETNT
Common Stock still owned by Marty at that time, if any, in the public market. If
the Company is unable to make such loan to Marty for the full amount requested
in the Loan Request, then Marty shall be entitled to send a Notice of
Non-Performance and the provisions of the following paragraph shall apply.
If the Company fails to timely satisfy each of the payment conditions
within 45 days of the respective dates provided for in the purchase agreement ,
Marty shall be entitled to send a Notice of Non-Performance. In the event that
Marty sends a Notice of Non-Performance to Company, then: (i) the Company and
MPI shall enter into good faith negotiations with respect to executing a
production services and media resources agreement, the economics of which shall
reflect the long-standing relationship between the Company, MPI, Marty and the
principals of the Company, to the mutual benefit of the Company and MPI, and
shall take into account the working capital contributed to MPI by Company, which
negotiations shall conclude within 60 days of commencement thereof, (ii) the
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Escrow Agent shall return to Marty certain shares of MPI stock within 10 days,
(iii) Marty shall return to the Company the ETNT Common Stock still owned by
Marty at that time, if any, within 10 days, (iv) the Company shall return to
Marty all MPI Stock previously delivered to it pursuant to this Agreement within
10 days, (v) Marty shall be entitled to retain the cash that has been paid by
the Company to Marty, (vi) MPI will be entitled to retain any working capital
provided to it by Company, and (vii) any and all MPI stock still held in escrow
by the Escrow Agreement shall be delivered to Marty, and all ownership and
voting rights with respect to such MPI stock shall immediately vest in Marty
upon receipt thereof.
Founded in 1986 by award-winning producer and director Marty, MPI has
produced well-known shows for PBS, CBS, BBC, A&E and the Discovery Health
Channel. Marty began his career creating Sesame Street characters for Jim
Henson's Children Television Workshop from which he advanced into television
production and formed MPI. In recent years, MPI has established itself as a
successful producer of Public Television Pledge Drive Specials. MPI programs
have been viewed by an estimated 150 million people.
In March 2000, MPI released three new public television specials including
Eating Well for Optimum Health with Dr. Andrew Weil, A Salute to British Comedy,
and Frank Patterson GOD BLESS AMERICA! In addition, ten other MPI programs were
being used by public television stations during the March 2000 fundraising drive
including Bobby Darin, Beyond the Song, John Tesh, One World three specials
featuring health expert Gary Null, two Frank Patterson specials, Balance Your
Body, Balance Your Life with Dr. Edward Taub, SPIRIT A Journey in Dance, Drums
and Song.
Currently in production for MPI is a four-hour series called Don't Sweat
The Future with Richard Carlson. Carlson is the best-selling author of Don't
Sweat the Small Stuff, Marty was the consulting producer of the PBS special of
the same name. MPI has recently negotiated a deal with Pocket Books for
publication of Soul Prints by Marc Gafni which will become a major public
television special in March 2001, Gafni, an internationally renowned radio
personality, has emerged as one of the most important and sought after new
voices in religion and spirituality; MPI has an exclusive arrangement with Gafni
for all products and services; production commences on WEI WEI China In Song on
August 10 in Shanghai, China; Wei Wei is the biggest selling Chinese vocalist in
history with over 100 million records sold. MPI has the exclusive rights to her
recordings and concerts worldwide. There are nine other programs currently in
development for public television distribution.
One of Marty's most recent programs, Gilda's Club: A Legacy For Life, a
tribute to the life and legacy of multi-talented comedienne Gilda Radner,
recently aired on Discovery Health Channel. MPI also provides full video
production and post- production services to prominent members of the broadcast
entertainment industry including MTV Networks, NFL FILMS, Time Life Video and
Andrew Lloyd Webber.
On May 31, 2000 the Company also closed on $1 million of a private
placement consisting of 1,400,000 shares of common stock and 1,400,000 warrants
to purchase common stock at $1.50 per share. An additional closing of up to
$500,000 is scheduled for mid-June.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
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The required audited financial statements of Innovonics, Inc. will be filed
within the required time period.
(b)Pro Forma Financial Information.
The required pro forma financial statements will be filed with the audited
financial statements.
(c) Exhibits.
2(c) Stock Purchase Agreement dated as of May 25, 2000, by and among
eContent, Inc., MPI Productions, Inc. and Robert Marty
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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.
eCONTENT, INC.
Date: June 13, 2000 By:/S/ JOHN SGARLAT
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John Sgarlat, President
