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
Securities Exchange Act of 1934
Date of Report April 12, 1999
Commission file number 0-17981
Alchemy Holdings, Inc.
(Exact Name of Registrant as specified in its charter)
Florida 59-1886450
(State of Incorporation) (IRS Identification No.)
3025 N.E., 188th Street
Aventura, Florida 33180
305/931-4564
(Registrant's Address, including ZIP Code and telephone number)
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Item 5. Other Events
On or about October 25, 1997, Alchemy Holdings, Inc. (the "Company") and
Cigarette Racing Team, Inc. (individually, "Cigarette" and collectively, the
"Companies") entered into a letter of intent to merge the Company into Cigarette
via a reverse acquisition (the "Merger").
The Merger was subject to the requisite approvals of the Boards of
Directors' and shareholders' of both Companies and also required the
effectiveness of a registration statement/ prospectus/proxy statement on Form
S-4, initially filed with the Securities and Exchange Commission (the
"Commission") on May 6, 1998 (the "Form S-4 Registration Statement"). At the
time the Form S-4 Registration Statement was first filed, both Companies'
management expected and anticipated that the Merger would be effective by the
end of the Companies' 1998 fiscal years (September 30th).
The Companies began to integrate their operations in anticipation of the
Merger's effectiveness and in consideration of the fact that: (i) Cigarette,
through direct and indirect means, was responsible for more than 90% of the
Company's revenue; (ii) the Company's employees were in essence becoming
Cigarette's employees as Cigarette had informally leased them from the Company
to perform boat manufacturing services as a result of increased sales and a
limited available work-force; (iii) the Company was unable to maintain its own
market share due to decreasing sales; (iv) scales of economy would substantially
reduce the Company's expenses in the short-term and stabilize the Company's
revenues in the long-term; and (v) the majority shareholders and directors of
both Cigarette and the Company, respectively, had approved the merger in
principal.
On June 25, 1998, the Company filed a registration statement on Form S-8
(the "June 25th Form S-8 Registration Statement") with the Commission which
registered 200,000 shares of the Company's common stock, par value $.001 per
share (the "Shares"), which were issued to the Company's employees pursuant to
an Employees Stock Payment Plan (the "Plan") adopted by the Company's Board of
Directors on January 2, 1998. The June 25th Form S-8 Registration Statement
registered the Shares which upon effectiveness were issued in the Plan's name.
The terms of the Plan contemplated that the Company's employees could authorize
the Company to serve as their agent to facilitate the sale of the Shares on
behalf of the employees.
Immediately after the June 25th Form S-8 Registration Statement's
effectiveness, the Company as agent for and on behalf of the employees, sold the
Shares at a price of $2.00 per share, or a total of $400,000 (the "Proceeds").
The Proceeds were then placed into a segregated Company bank account for
the purpose of satisfying payroll obligations of the Companies.
Although the Merger did not become effective by September 30, 1998, the
distinctions between the Company and Cigarette had become blurred and the
Companies had been acting as one on a "de facto" basis, which due to common
management was accomplished without formal documentation.
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The following table sets forth the dates and amounts of proceeds
transferred by the Company to Cigarette in order to facilitate the payment of
payroll by Cigarette. After each of such transfers, Cigarette paid the net
payroll due the Companies' employees, in full satisfaction of their net wages
earned to that date, after deduction for amounts withheld to satisfy all federal
and state tax requirements:
June 16,1998 $32,985.05
June 23,1998 33,556.39
June 30,1998 42,210.78
July 10,1998 30,282.13
July 13,1998 27,161.34
July 21,1998 30,294.91
July 28,1998 34,178.33
August 6,1998 30,488.55
August 11,1998 31,321.49
August 18,1998 31,029.72
In addition, on August 24, 1998, the Company transferred $25,000.00 from
the Proceeds to Cigarette in order to facilitate the payment of a portion of the
Companies payroll by Cigarette. Immediately thereafter, Cigarette paid
$28,628.60, $25,000.00 of which was from the Proceeds, minus any funds withheld
to satisfy all federal and state tax requirements, to the Companies' employees
in full satisfaction of their net wages earned to that date.
As of September 30, 1998, the remaining portion of the Proceeds, after the
above transfers were completed, was used to purchase a certificate of deposit
equal to approximately $51,000.00. Such certificate of deposit was then
deposited in the Company's segregated bank account for future payroll expenses
which have not yet been incurred.
On October 15, 1998, the Company filed a registration statement on Form S-8
(the "October 15th Form S-8 Registration Statement") with the Commission which
registered 265,000 shares of the Company's common stock (the "October S-8
Shares"). Collectively, the June 25th and October 15th Form S-8 Registration
Statements shall be referred to herein as the "Registration Statements". 25,000
shares of the October S-8 Shares were issued to the Company's attorneys as
payment for services rendered. The remaining 240,000 shares of the October S-8
Shares were issued to the Company's employees pursuant to the Plan. On two
occasions a total of 130,000 shares of the October S-8 Shares were sold at a
price of $2.00 per share. The proceeds from the sale of those shares were
subsequently transferred to Cigarette and used solely to satisfy the Companies'
payroll as such expenses became due. The remaining balance of 110,000 shares
have not been sold.
As a result of the substantial integration of operations between the
Companies on or about April 12, 1999, the Company determined that the Plan
should be amended to clearly include Cigarette's employees as Employees Who May
Participate In The Plan (as defined in the Plan) and that an amendment to the
Registration Statements be filed reflecting such change in the Plan.
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On April 13, 1999, the Company filed an amendment to the Registration
Statements with the amended definition of Employees Who May Participate In The
Plan. Such amendment was intended to be retroactive to January 2, 1998, the date
that the Plan was adopted.
The Company has been advised that the sale of common stock registered in
the Registration Statements may constitute a violation of the registration
requirements under the Securities Act of 1933, as amended and furthermore, the
use of the resulting proceeds may have represented an improper application of
employee benefit funds. Management of the Company, as concurred by counsel, does
not believe that the Company has violated any applicable requirements or
otherwise acted improperly; however, there can be no assurance in this regard.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Alchemy Holdings, Inc.
(Registrant)
By: \s\ Craig N. Barrie
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Craig N. Barrie
Chairman of the Board and
President
Date: April 12, 1999
