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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) April 19, 1999
LAS VEGAS ENTERTAINMENT NETWORK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-21270 94-3123854
(Commission File Number) (IRS Employer Identification No.)
1801 Century Park East, 23rd Floor, Los Angeles, California 90067
(Address of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310)551-0011
Item 5. Other Events.
Expiration of Rights in El Rancho Property
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On July 2, 1998, Las Vegas Entertainment Network, Inc. ("LVEN" or the
"Company") and certain of its subsidiaries, Countryland Properties, Inc.,
Casino-Co Corporation, and Las Vegas Communications Corporation, entered into a
Stipulation and Agreement of Compromise, Settlement and Release (the
"Stipulation and Agreement") by and among the Company and such subsidiaries, on
the one hand, and International Thoroughbred Breeders, Inc. ("ITB"), ITB's
Directors, certain ITB shareholders and various related parties, on the other
hand, to resolve the pending stockholder derivative litigation brought in the
name of ITB in the Delaware Court of Chancery.
Pursuant to the Stipulation and Agreement, the Company obtained various
exclusive and non-exclusive rights for the period ending on April 19, 1999, (the
"Escrow Period") to effect a sale or refinancing of ITB's non-operating El
Rancho Hotel and Casino property in Las Vegas, Nevada (the "El Rancho
Property"), under the terms and conditions set forth in the Stipulation and
Agreement, including the right of LVEN to receive certain excess sales proceeds.
On April 19, 1999, the Escrow Period terminated without the Company having
exercised its Disposition Rights, which Disposition Right thereby lapsed and
expired. This may result in the Company writing off its investment in the El
Rancho property from its balance sheet in the approximate amount of $3,000,000
if a sale is not completed. As a result of this write-off, the Company may no
longer meet the minimum net worth standards imposed by NASDAQ. The Company has
been advised that funds have been made available for the purchase of the El
Rancho property by a third party from ITB and that the Company can expect a fee
from such closing. However, there is no assurance that such closing or fee has
been finalized.
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Potential Acquisition
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On April 27, 1999, Casino Co. Ltda. ("CCL"), a wholly-owned subsidiary of
the Company, as buyer, and the principal shareholder (the "Seller") of Sulmatic
("Sulmatic") entered into a document entitled Sales Contract (the "Sales
Contract"), pursuant to which CCL agreed to purchase from the Seller the
Seller's one-half interest in Sulmatic for a purchase price of Five Million Five
Hundred Thousand Dollars ($5,500,000). The remaining one-half interest in
Sulmatic, subject to financing, would be owned by L. G. Cirsa, a manufacturer of
gaming equipment.
Sulmatic is a Brazilian corporation which currently operates approximately
500 electronic gaming machines throughout Brazil, and has stated that it intends
to install an additional 500 machines by June 1, 1999. Under the terms of the
Sales Contract, CCL is required to pay Three Million Dollars ($3,000,000) forty
five days from the date of a definitive agreement, which obligation has been
secured by the pledge of a Gold Certificate for 10,601 Troy Ounces .9999 pure
(the "Gold Certificate") issued by a Nevada Real Estate Trust (the "REIT") and
Five Hundred Thousand Dollars ($500,000) per month thereafter until the entire
purchase price has been paid. The closing of the Sulmatic acquisition is
subject to, among other things, the completion of due diligence, the negotiation
and execution of definitive documentation and the obtaining of any required
regulatory approvals, and financing.
In consideration of the pledge by the REIT of the Gold Certificate, and the
assignment by REIT to the Company of certain bank guarantees in the aggregate
face amount of Three Hundred Million Dollars ($300,000,000), the Company has
agreed to issue 500,000 shares of the Company's restricted common stock to six
third party trusts, subject to stockholder approval.
Issuance of Stock Pursuant to Form S-8
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On February 14, 1999, the Company caused to be registered 2,000,085 shares
of its common stock under the Securities Act of 1933, as amended, pursuant to
Form S-8. These shares were registered and available to be issued to officers,
directors, employees and consultants, pursuant to the Company's 1999 Stock
Compensation Plan (the "Plan"). Since adoption of the Plan, through
approximately April 30, 1999, the Company issued approximately 899,500 shares of
common stock pursuant to the Plan. As of January 31, 1999, the Company had
1,831,167 shares of common stock outstanding. Based on the large number of
shares issued under the Plan, such issuance could have a material adverse effect
on the trading price of the common stock of the Company.
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(c) Exhibits
10.1 Sulmatic Agreement dated April 27, 1999. (To be filed with confidential
treatment)
SIGNATURES
Pursuant to the requirements of the Securities Exchanges Act of 1934, t he
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
By:/s/ Carl A. Sambus
Carl A. Sambus
Chief Financial Officer
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