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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): November 5, 1999
MORROW SNOWBOARDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OREGON 0-27002 93-1011046
(STATE OR OTHER JURISDICTION OF (COMMISSION (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NUMBER)
2600 PRINGLE ROAD, S.E.
SALEM, OR 97302
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(503) 375-9300
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Morrow Snowboards, Inc.'s ("Company") wholly-owned subsidiary, Westbeach
Canada ULC, a Nova Scotia unlimited liability company ("Westbeach"), on
November 12, 1999, sold substantially all its assets, including its remaining
two retail stores in Vancouver and Whistler, British Columbia, and its
apparel line, together with the Westbeach trademarks, to Westbeach Sports,
Inc., a British Columbia corporation, not affiliated with either the Company
or Westbeach. The purchase price for the assets was $2,450,000 (US$). The
sale was pursuant to an Asset Purchase Agreement that contained certain
representations and warranties by Westbeach to the buyer and indemnification
of the Buyer by Westbeach in certain events for certain liabilities or any
inaccuracies in such representations and warranties. The sale price is
subject to adjustment, based on the final inventory and accounts receivable
counts, and there was a $100,000 holdback to fund certain adjustments. As
previously reported, Westbeach's Bellevue, Washington store has been sold.
Additional information regarding this transaction will be included in a
future Form 8-K or other filing with the Securities and Exchange Commission.
Following the sale, Westbeach will no longer continue in the apparel
business, including the winter sports apparel business. The Company's and
Morrow's Boards of Directors are reviewing the reinvestment of any excess
funds, after providing for payment of the Company's liabilities, litigation
funding costs for the remaining pending litigation reported in the Company's
Form 10-Q for the third quarter ended September 25, l999, operating expenses
and other reasonably anticipated expenses.
ITEM 5. OTHER EVENTS.
On November 5, l999, the Company purchased 250,000 shares at $1.00 each
($250,000) of Series A Participating Convertible Preferred Stock of
Globalgate e-Commerce, Inc. ("Globalgate"), a recently formed company, whose
business purpose is to build a dominant scalable e-commerce platform for
merchants selling to businesses and consumers. To accomplish that goal,
Globalgate has acquired control of www.yellowpages.com, an underdeveloped
directory site with a well-known brand name and subsequently made four
additional strategic investments in companies involved in internet or
e-commerce related business lines or products. Globalgate is not publicly
traded and there is limited public information available about that Company.
The Company does not hold a significant ownership interest in Globalgate or
have any ability to influence or control that company. The Globalgate shares
are "restricted" securities under federal and state securities and,
therefore, not freely tradable. There is no assurance that the Company will
recover its investment or realize a profit from such investment.
Page 2-FORM 8-K
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Salem, State of Oregon, on November 15, 1999.
MORROW SNOWBOARDS, INC.
By: /s/ P. Blair Mullin
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P. Blair Mullin
PRESIDENT AND CHIEF FINANCIAL OFFICER
(PRINCIPAL EXECUTIVE, FINANCIAL AND
ACCOUNTING OFFICER)
Page 3-FORM 8-K
