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: June 16, 1998
(Date of earliest reported event)
VIRTUAL GAMING ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
INTERBET, INC.
(Former name of registrant)
Nevada 33-55254-43 87-0485308
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
2580 Seascape Glen
Escondido, CA 92026
(Address of Principal Executive Offices) (Zip Code)
Suite 110, 1777 Botelho Drive
Walnut Creek, California 94596
(Former address and Zip Code)
Registrant's telephone number, including area code: (619) 581-6832
<PAGE>
Item 1. Changes in Control of Registrant.
Pursuant to a Stock Exchange Agreement and Plan of Reorganization closed on June
16, 1998, the sole stockholder of Virtual Gaming Enterprises, Inc. ("Virtual")
acquired twelve million (12,000,000) shares of the Registrant's authorized and
unissued common stock in a merger of Virtual into the Registrant. The merger
followed an exchange of stock between Virtual and the Registrant which resulted
in each corporation owning the majority of the other corporation's issued and
outstanding common stock between the closing date and the date of the merger,
which was completed on June 24, 1998 by filing of Articles of Merger with the
Nevada Secretary of State. Both corporations are and were incorporated in
Nevada. The Registrant has been renamed Virtual Gaming Enterprises, Inc.
The exchange of stock and the merger of Virtual into the Registrant has resulted
in (i) the issue to Virtual's sole stockholder of shares representing
approximately fifty-one percent (51%) of the Registrant's issued and outstanding
common stock at the completion of the transaction, (ii) the resignation, in
connection with the exchange, of the Registrant's incumbent directors and
officers and (iii) the election of Virtual's management, as the Registrant's
directors and officers. Except as described above with respect to the merger,
Virtual's sole stockholder does not own, directly or indirectly, any other
common stock of the Registrant.
As a result of the merger, the Registrant now has a total of 23,863,461 shares
of common stock issued and outstanding, 11,863,461 constituting previously
issued and outstanding shares and 12,000,000 constituting shares converted from
Virtual's previously issued and outstanding shares.
The persons who were directors and the officers of Virtual prior to the merger
are now the directors and officers of the Registrant. These persons and their
securities ownership are as follows:
Number of
Name Age Position Shares Percent
- ------------------ ------- ------------ ------------ ------------
Joseph M. Williams 26 CEO/COB 500,000 2.10%
Brenda J. Williams 49 Secretary/ 200,000 .80%
Treasurer
As a Group 700,000 2.90%
A Computer Aided Design Software Reseller employed Mr. Williams for the last
year. Prior to working in the technology industry, Mr. Williams was a NASD
Registered Representative for several firms. The final 2 1/2 years were spent as
a manager for Olde Discount Stockbrokers.
Mrs. Williams has served as Secretary/Treasurer for several private corporations
over the past 18 years. Mrs. Williams is very involved in the community and has
served as President of "Friends of the Library" and "Great Books Foundation" as
well as an instructor for "Read 2000 Literacy Training Programs" for adults.
The Registrant's executive offices have been relocated to Escondido, California.
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Prior to the transaction described under Item 1, above, Virtual did not own or
lease any assets and was not engaged in any business. Virtual was incorporated
on June 1, 1998 for the sole purpose of entering into the transaction described
in Item 1, above. The Registrant's new management intends to carry out the
business plan developed by the Registrant. The Registrant's ability to carry out
the business plan depends upon the ability of the Registrant's new management to
secure financing for working capital and for payment of the Registrant's
outstanding obligations, including the remaining obligation to Random Games,
Inc. for development of gaming operations software for the Registrant's planned
Internet gaming operation.
Item 5. Other Events
The Registrant expects to be able to amend in late July 1998 its annual report
on Form 10-K for the year ended December 31, 1997 to include audited annual
financial statements and promptly thereafter to file its quarterly report on
Form 10-Q for the quarter ended March 31, 1998.
Item 7. Financial Statements and Exhibits
Exhibits
2. Stock Exchange Agreement and Plan of Reorganization between Interbet, Inc.
and Virtual Gaming Enterprises, Inc.
3. Articles of Merger
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Interbet
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Virtual Gaming Enterprises, Inc.
Joseph M. Williams, CEO/COB July 1, 1998
Exhibit Index
Description of Document
Exhibit 2. STOCK EXCHANGE AGREEMENT and PLAN of REORGANIZATION between the
Registrant and Virtual Gaming Enterprises, Inc., a Nevada
corporation.
Exhibit 3. Article of Merger of Virtual Gaming Enterprises, Inc. into the
Registrant.
<PAGE>
EXHIBIT 2
STOCK EXCHANGE AGREEMENT
AND
PLAN OF REORGANIZATION
- --------------------------------------------------------------------------------
This Agreement made and entered into as of June 11, 1998, by and
between Virtual Gaming Enterprises, Inc., (hereafter, "Virtual"), a Nevada
corporation, and Interbet, Inc., (hereafter, "Interbet"), a Nevada corporation.
The plan of reorganization following the exchange of stock herein
provided shall be a reorganization within the meaning of the applicable
provisions of the Internal Revenue Code of 1986, as amended. Virtual, as the
owner of a majority of the issued and outstanding common stock of Interbet
following the exchange of stock, shall be merged into Interbet pursuant to
Nevada law and Interbet shall be the surviving corporation, changing its name to
Virtual Gaming Enterprises. It is understood and agreed by the parties that the
transaction contemplated herein is termed a reverse merger/acquisition, the
purpose of which is to provide a public trading market for the shares of the
surviving corporation once the merger transaction is completed.
In order to consummate the exchange of stock and plan of reorganization
and in consideration of the mutual benefits to be derived therefrom and the
mutual agreements hereinafter contained, Interbet and Virtual, by their
respective boards of directors approve and adopt this Agreement effective the
closing date of June 16, 1998, and mutually covenant and agree with each other
as follows:
Shares to be Issued and Exchanged
On the closing date Virtual shall issue 13,000,000 shares of its
authorized and unissued common stock ("Virtual stock") and deliver the Virtual
Stock to Interbet in exchange for 13,136,539 shares of Interbet's authorized and
unissued common stock ("Interbet Stock"); and, Interbet shall issue and deliver
the Interbet Stock to Virtual in exchange for the Virtual Stock. The Virtual
Stock and the Interbet Stock shall bear a restrictive legend pursuant to the
requirements of Regulation D under the Securities Act of 1933, as amended.
Following the exchange of stock contemplated by this Agreement the Virtual Stock
shall represent 52 percent of Virtual's then issued and outstanding common stock
and the Interbet Stock shall represent 52.55 percent of Interbet's then issued
and outstanding common stock. On the closing date and subject to the exchange of
stock (i) all of Interbet's directors and officers shall tender their respective
resignations ("Retiring Management") and Diablo Associates, individually and
collectively, shall tender their resignations; (ii) Virtual, as the majority
stockholder of Interbet, shall elect directors to fill vacancies on Interbet's
board of directors so created and Interbet's board of directors, then
constituted, shall elect Interbet's officers; (iii) Retiring Management shall
deliver all of Interbet's books and records to the newly elected officers of
Interbet; and, (iv) Interbet's bank accounts shall be blocked from withdrawals
and checks by the Retiring Management with telephone confirmation thereof, and
confirmation of the account balances made to the newly elected officers.
As soon as practicable following the exchange of stock contemplated by
this Agreement, the respective boards of directors and a majority of the
stockholders of Interbet and of Virtual shall approve Articles of Merger,
including a Plan of Merger, and such Articles shall be filed with the Secretary
of State of the State of Nevada in accordance with the laws thereof. The Plan of
Merger shall provide for the conversion of 12,000,000 issued and outstanding
shares of Virtual common stock held by persons other than Interbet into
12,000,000 shares of common stock of the surviving corporation, for conversion
of 11,863,461 issued and outstanding shares of Interbet common stock
<PAGE>
held by persons other than Virtual into 11,863,461 shares of common stock of the
surviving corporation, and for the cancellation and retirement of the Virtual
Stock and the Interbet Stock, (with written notice of such cancellation being
given to the respective transfer agents), with the result that the surviving
corporation shall have a total of 23,863,461 shares of common stock issued and
outstanding immediately following the effective date of the merger contemplated
by this Agreement. Immediately following acceptance of the Articles of Merger by
the Secretary of State of Nevada, the surviving corporation, with the approval
of stockholders upon the recommendation of the board of directors, shall file
Articles of Amendment to its Articles of Incorporation changing the name of the
surviving corporation, to Virtual Gaming Enterprises.
Representations and Warranties of Virtual
To the best knowledge of Virtual, no representations or warranty by
Virtual in this Agreement, nor any statement, certification, schedule or exhibit
hereto furnished or to be furnished by or on behalf of Virtual pursuant to this
Agreement, nor any document or certification delivered to Interbet pursuant to
this Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement or material fact or omits or shall omit a
material fact necessary to make the statement contained therein not misleading.
Virtual acknowledges and represents it is aware of the risks of being a
public company and understands the regulatory requirements.
Virtual understands and agrees that Interbet is without substantial
assets or liabilities.
There are no legal, administrative or other proceedings, or other
claims, judgments, injunctions, either threatened, pending or outstanding
against or involving Virtual or which it knows or has reasonable grounds to know
may be a basis for any such proceedings, or claims, judgments, injunctions or
restrictions, except as attached hereto as Exhibit A and made a part of this
Agreement or otherwise disclosed herein, and none thereof will prevent or
adversely affect the transactions contemplated by this Agreement.
Virtual understands and agrees that once the merger is completed, it,
as a constituent part of the surviving corporation, will be a public company
subject to the extensive, complex state, federal, and NASD securities
regulations applicable to public companies. In particular, the parties
understand and agree that a Form 8-K must be filed with the United States
Securities and Exchange Commission within fifteen (15) days after closing which
filing requires that audited financial statements for Virtual as required by
Regulation S-X under the federal securities laws be filed with sixty days after
the filing of the 8-K and that such responsibility shall not be the
responsibility of Retiring Management, but the sole responsibility of the new
officers and directors of Interbet.
Virtual acknowledges that it has carefully evaluated its financial
resources and investment position and the risks associated with this transaction
and acknowledges that it is able to bear the economic risks and financial
requirements of, related to and resulting from this transaction.
Virtual represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada and that the execution and performance of the Agreement and the issuance
of stock contemplated hereby (which is authorized and unissued) has been duly
and validly approved by the board of directors of Virtual. The Virtual stock to
be delivered pursuant to this Agreement, when so delivered, will have been duly
and validly authorized and issued by Virtual and will be fully-paid and
nonassessable.
<PAGE>
Virtual hereby further acknowledges and agrees that no representations
or warranties have been made by Interbet as to the benefits to be derived by
Virtual in completing the transactions contemplated by this Agreement. It is
expressly understood and agreed that neither Interbet nor Retiring Management
have made any warranty or agreement, expressed or implied, as to the tax or
securities consequences of the transactions contemplated by this agreement or
the tax or securities consequences of any action pursuant to or growing out of
this agreement.
Virtual acknowledges receipt of a copy of Interbet's filings and
reports pursuant to the Securities Exchange Act of 1934, as amended.
Virtual covenants and warrants that the Interbet Stock is being
acquired for Virtual's own account and for investment in connection with the
merger and not with the present view toward the sale or distribution in the
United States thereof and will not be disposed of except in cancellation
pursuant to the plan of merger. In order to effectuate the covenant of this
paragraph, an appropriate endorsement will be placed on the certificates for the
Interbet Stock delivered to Virtual pursuant to this Agreement and stop transfer
instructions shall be placed with the transfer agent for the securities.
While the parties believe there will be no federal income tax
consequences to the stockholders of Interbet, Virtual and the surviving
corporation, Virtual is aware that there can be no assurance regarding the
individual tax consequences of this transaction, nor can there be any assurance
that the Internal Revenue Code or the regulations promulgated thereunder will
not be amended in such manner as to impose federal income taxes on the surviving
corporation, on Virtual or on its stockholders. Virtual is relying upon the
advice of their personal tax advisor with respect to the tax aspects of this
transaction.
Virtual acknowledges that it is its responsibility to comply with the
appropriate state and federal securities laws, as well as NASD rules and
regulations, particularly secondary trading requirements. Virtual agrees that
the surviving corporation shall be listed in either Moody's Investor Services or
Standard and Poor's, exempting secondary trading of the surviving corporation's
stock in those states providing for such secondary trading exemption.
Representations and Warranties of Interbet
To the best knowledge of Interbet, no representations or
warranty by Interbet in this Agreement, nor any statement, certification,
schedule or exhibit hereto furnished or to be furnished by or on behalf of
Interbet pursuant to this Agreement, nor any document or certification delivered
to Virtual pursuant to this Agreement or in connection with actions contemplated
hereby, contains or shall contain any untrue statement or material fact or omits
or shall omit a material fact necessary to make the statement contained therein
not misleading.
Interbet is current in filing any reports required to be filed pursuant
to the Exchange Act, to the best knowledge of Interbet, such filings, as amended
and supplemented, contain all the information required to be contained therein
(except audited financial statements at and for the year ended December 31, 1997
which are required to be included in the annual report on Form 10-K for December
31, 1997, which are to be filed by amendment) and do not contain any untrue
statement of material fact or omit any material fact or any fact necessary to
make the statements contained therein not misleading. None of such filings and
reports are, to the best knowledge of Interbet, the subject of comments by the
Commission staff which have not been satisfied, nor the subject of any stop
order, trading suspension, or other administrative proceeding.
<PAGE>
To the knowledge of Retiring Management, Interbet is not party to nor
bound by any agreement, deed, lease, power of attorney or other instrument other
than which is disclosed. Interbet has executed Agreements with National Stock
Transfer, Inc. for stock transfer services, with Smith & Company for Certified
Accounting services, and with Renissance Galleries, Inc. for sales and marketing
services. A copy of these agreements have been made available for inspection by
Virtual.
There are no legal administrative or other proceedings, or other
claims, judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving Interbet or which it knows or has reasonable
grounds to know, may be a basis for any such proceedings, or other claims,
judgments, injunctions or restrictions, except as disclosed, and none thereof
will prevent or adversely affect the transactions contemplated by this
agreement.
Interbet represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada and that the execution and performance of this Agreement and the issuance
of stock contemplated hereby (which is authorized and unissued) has been duly
and validly approved by the board of directors of Interbet. The Interbet Stock
to be delivered pursuant to this agreement, when so delivered, will have been
duly and validly authorized and issued by Interbet and will be fully-paid and
nonassessable.
Interbet hereby further acknowledges and agrees that no representations
or warranties have been made by Virtual as to the benefits to be derived by
Interbet in completing this transaction. It is expressly understood and agreed
that neither Virtual nor its officers or agents have made any warranty or
agreement, expressed or implied, as to the tax or securities consequences of the
transactions contemplated by this Agreement or the tax or securities
consequences of any action pursuant to or growing out of this Agreement.
Interbet covenants and warrants that the Virtual Stock is being
acquired for Interbet's own account and for investment in connection with the
merger and not with the present view toward the sale or distribution in the
United States thereof and will not be disposed of except in cancellation
pursuant to the plan of merger. In order to effectuate the covenants of this
paragraph, an appropriate endorsement will be placed on the certificates for the
Virtual Stock delivered to Interbet pursuant to this Agreement and stop transfer
instructions shall be placed with the transfer agent for the securities.
Interbet is aware that the Virtual Stock will not have been registered pursuant
to the Securities Act of 1933, as amended.
Interbet is aware that there can be no assurance regarding the
individual tax consequences of this transaction, nor can there be any assurance
that the Internal Revenue Code or the regulation promulgated thereunder will not
be amended in such manner as to impose federal income taxes on the surviving
corporation, on Interbet or its stockholders, deprive Interbet or its
stockholders of any benefit that might otherwise be received. Interbet is
relying upon the advice of its own personal tax advisor with respect to the tax
aspects of this transaction.
Actions Prior To, At, and After Closing
Virtual and Interbet, respectively, shall duly comply with all
applicable laws as may be required for the valid and effective merger
contemplated by this Agreement.
The representations and warranties made by the respective parties in
the Agreement or given on its behalf hereunder shall be accurate in all material
respects on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the closing
date.
<PAGE>
Virtual and Interbet, respectively, shall perform and comply with all
its obligations under this Agreement which are to be performed and complied with
by it prior to or on the closing date including the delivery of its documents
specified herein and after the closing.
Law Governing
It is understood and agreed that both parties are Nevada corporations.
This agreement may not be modified or terminated orally, and shall be construed
and interpreted according to the laws of the State of Nevada and enforced in its
courts.
Arbitration
Any and all disputes and controversies of every kind and nature between
the parties hereto arising out of or relating to this Agreement relating to the
existence, construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation, breach, continuance or termination
thereof shall be subject to an arbitration mutually agreeable to the parties or,
in the absence of such mutual agreement, then subject to arbitration in
accordance with the rules of the American Arbitration Association. It is the
intent of the parties hereto and the purpose of this provision to make the
submission to arbitration of any dispute or controversy arising hereunder an
express condition precedent to any legal or equitable action or preceding of any
nature whatsoever.
Assignment, Amendment and Modification
This agreement shall not be assigned by any party without the written
consent of the other. The parties may amend, modify, and supplement this
agreement in such manner as may be agreed upon by them in writing.
Termination and Abandonment
This Agreement may be terminated and the transactions provided for by
the Agreement may be abandoned without liability on the part of any party to any
other, at any time before the closing date by mutual consent of the parties. In
the event of termination and abandonment by any party as herein provided,
written notice shall forthwith be given to the other party, and each party shall
pay its own expenses incident to preparation for the consummation of this
agreement and the transactions contemplated hereunder. In the event that this
Agreement has not been completed by the closing date or within thirty (30) days
thereafter, this Agreement and the transactions contemplated hereby shall be
deemed to have been abandoned and neither party shall be under any further
obligation to the other.
Notices. All notices, requests, demands, and other communications
hereunder shall be deemed to have been duly given, if delivered by hand or
mailed, certified or registered mail with postage prepaid:
If to Interbet 1777 Botelho Drive
Suite 110
Los Angeles, CA 94596
If to Virtual 2580 Seascape Glen
Escondido, CA 92026
<PAGE>
Entire Agreement
This instrument embodies the entire agreement between the parties
hereto with respect to the transaction contemplated herein, and there have been
and are no agreements, representations or warranties between the parties other
than those set forth or provided for herein. Any announcements, amendments or
modifications shall be set forth in writing and approved by the parties hereto.
This agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Further Documents
The parties agree to execute any and all other documents and to take
such other action or corporate proceedings as may be necessary or desirable to
carry out the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed all as of the day and year first above written.
(Seal) Interbet, Inc.
Attest:
By:
S. T. Deck, Jr.
(Seal) Virtual Gaming Enterprises, Inc.
Attest:
By:
Joe M. Williams
<PAGE>
EXHIBIT 3
ARTICLES OF MERGER
Pursuant to the provisions of NRS 78.458, the Domestic and Foreign
Corporation Laws, the undersigned constituent corporations hereby adopt the
following Articles of Merger for the purpose of merging into one corporation.
1. The names of the constituent corporations which are parties to the
merger are: Interbet, Inc., a Nevada corporation, the surviving corporation, and
Virtual Gaming Enterprises, Inc., a Nevada corporation, the absorbed
corporation.
2. The Plan of Merger is as follows:
Virtual Gaming Enterprises, Inc. shall be merged into Interbet, Inc.,
and shall cease upon the effective date of the merger to exist as a separate
corporation. The issued and outstanding shares of Interbet, Inc. common stock
owned by persons other than Virtual Gaming Enterprises, Inc. shall remain
unchanged, the issued and outstanding shares of Virtual Gaming Enterprise's
common stock owned by persons other than Interbet, Inc. shall be converted into
and become shares of common stock of Interbet, Inc. on a share for share basis
and the issued and outstanding shares of common stock of each constituent
corporation owned by the other constituent corporation shall be void, canceled,
and with respect to the shares of Interbet, Inc.'s common stock shall be
restored to authorized but unissued common stock. The merger shall be accounted
for as a reverse merger.
3. The merger shall be effective on the date the Articles of Merger are
filed with the Secretary of State of Nevada.
4. The Plan of Merger was approved on June 11, 1998 by the respective
boards of directors of the constituent corporations in the manner prescribed by
the Nevada Domestic and Foreign Corporation Laws.
5. The Plan of Merger was submitted to the respective holders of the
issued and outstanding common stock of the constituent corporations, being the
only class of stock entitled to vote on the Plan and there being no shares
entitled to vote as a separate class. With respect to each of the constituent
corporations, the number of shares of common stock outstanding and the number of
undisputed votes cast for the Plan, such number of votes being sufficient in the
case of each corporation for approval of the Plan, is as follows:
Total Issued Total Votes
Name of Corporation and Outstanding for Approval
Interbet, Inc. 25,000,000 13,136,539
Virtual Gaming Enterprises, Inc. 25,000,000 13,000,000
<PAGE>
6. Article I of the Articles of Incorporation, as originally filed, be,
and it hereby is amended to change the name of the Corporation to Virtual Gaming
Enterprises, Inc.
IN WITNESS WHEREOF, the undersigned Presidents, with the attestations
of the Secretaries, of the respective constituent corporations, duly authorized
hereunto, have executed the within Articles of Merger on June 16, 1998.
(Corporate Seal) Virtual Gaming Enterprises, Inc.
Attest:
By:
Joe M. Williams
(Corporate Seal) Interbet, Inc.
Attest:
By:
S.T. Deck, Jr.
