UNITED STATES
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: April 11, 2001
CYBERGATE, INC.
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(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
0-31417 88-0356047
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(Commission File Number) (IRS Employer Identification Number)
c/o Sandra Jorgensen, President
3809 South West Temple, Suite 1B, Salt Lake City, Utah 84101
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(Address of principal executive offices)
(801) 994-0385
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(Registrant's telephone number, including area code)
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ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On April 11, 2001 the Corporation signed and closed on a Stock Purchase
Agreement with Sandra Jorgensen, the President of the Corporation, for the
purchase of 100% ownership of Home Mortgage and Loan, Inc. a Utah corporation.
In exchange for the transfer of complete ownership of this business and its
operations the Corporation has agreed to issue to Ms. Jorgensen 16,500,000
shares of its common stock. It is estimated that this will represent in excess
of 80% of the issued and outstanding shares of the common stock of the
Corporation as of the closing of this transaction.
Home Mortgage and Loan, Inc. will operate as a subsidiary of the Corporation.
Home Mortgage and Loan, Inc. was formed in December 18, 1998 for the purpose of
retail origination and funding of residential mortgages. The Company can be
characterized as an independent mortgage company engaged in originating,
processing, and funding mortgage loans on single and multiple family residences.
The goal of Home Mortgage and Loan, Inc. is to cater to clients needs and
provide them with the most suitable product available to meet their needs. The
company will sell products only if the product and service will benefit the
client.
The Company also provides an innovative client service, the Home Equity Program
that saves clients thousands of dollars by helping them make additional
principal payments on their current mortgage. It also helps clients in reducing
their mortgage term by 5 to 12 years without refinancing.
The Company has further added in office "state of the art" equipment and
software technology along with the development of a world wide website
(www.homemortgageandloan.com) to its operation center which enables the loan
officers and processing staff to go from handling 20 or so loans per month by
each person the traditional way of doing business, to handling 30-45 loans per
month by each person with the use of the Company's technologically advanced
operation and marketing system.
Home Mortgage and Loan, Inc. is presently in the final stages of design and
development of its worldwide website that is testing now, with final completion
expected in July 2001. This website will not only display introductions of all
present mortgage products and client services, but it will also inform website
visitors of the ever changing daily mortgage interest rates. Clients will be
able to apply and receive preapproval for a mortgage loan right on the site. The
site has a full seven (7) stage internet security system enabling clients to
have complete security when leaving their social security numbers and other
private information on the website.
ITEM 7. Financial Statements and Exhibits
The following exhibit is included:
A. Copy of the Stock Purchase Agreement of April 11, 2001.
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The updated financial information required to be filed with this form shall be
submitted within sixty days following the submission of this form 8-K.
Pursuant to the requirement of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Cybergate, Inc.
Signature Date
By: /s/ Sandra Jorgensen April 11, 2001
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Name: Sandra Jorgensen
Title: President
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STOCK ACQUISITION AGREEMENT
BETWEEN
Cybergate, Inc.
AND
Sandra Jorgensen
Sole Shareholder
of
Home Mortgage and Loan, Inc.
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ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale...........................................................2
Purchase Price..............................................................2
Warranties and Representations of Shareholder...............................2
Warranties and Representations of Cybergate.................................5
Term........................................................................6
The Common Shares...........................................................6
Conditions Precedent to Closing.............................................6
Termination.................................................................7
Exhibits....................................................................7
Miscellaneous Provisions....................................................7
Closing.....................................................................8
Governing Law...............................................................8
Counterparts................................................................8
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STOCK ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated April, 2001, by, between and among
Cybergate, Inc., a Nevada Corporation ("Cybergate"), and Sandra Jorgensen, sole
shareholder of Home Mortgage and Loan, Inc., ("Shareholder").
WHEREAS, Shareholder holds one hundred percent ownership interest in Home
Mortgage and Loan, Inc. ("Home") through her holdings in the common stock of
such corporation; and
WHEREAS, Shareholder desire to sell and Cybergate desires to purchase one
hundred percent ownership of Home Mortgage and Loan, Inc.;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties herein contained, the parties hereby agree as
follows:
I. Purchase and Sale. Shareholder hereby agree to sell, transfer, assign, and
convey to Cybergate, and Cybergate hereby agrees to purchase and acquire
from Shareholder, one hundred percent of the ownership interest in Home
Mortgage and Loan, Inc., (the "Transfer Shares").
II. Purchase Price. The aggregate purchase price to be paid to Shareholder for
the Home Transfer Shares shall be Sixteen Million Five Hundred Thousand
(16,500,000) shares of the common stock of Cybergate, which shall be
transferred to the Shareholder.
III. Warranties and Representations of Shareholder. In order to induce Cybergate
to enter into the Agreement and to complete the transaction contemplated
hereby, Shareholder warrant and represent to Cybergate that:
A. Organization and Standing. Home Mortgage and Loan, Inc. is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Utah, is qualified to do
business as a foreign corporation in every other state or
jurisdiction in which it operates to the extent required by the
laws of such states and jurisdictions, and have full power and
authority to carry on its business as now conducted and to own
and operate its assets, properties, and business No changes to
Home's Certificate of Incorporation, amendments thereto and By
laws of Home will be made before the Closing.
B. Capitalization. As of April 1, 2001, the Home shares constitute
one hundred (100%) percent of the equity capital of Shareholder
in Home, which includes, inter alia, one hundred (100%) percent
of Home's voting power, right to receive dividends, when, as and
if declared and paid, and the right to receive the proceeds of
liquidation attributable to the common stock, if any.
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C. Ownership of the Transfer Shares. As of the Date hereof,
Shareholder is the sole owner of the Shares of common stock of
Home, free and clear of all liens, encumbrances and restrictions
of any nature whatsoever, except by reason of the fact that the
Transfer Shares will not have been registered under the "33 Act,
or any applicable State Securities laws.
D. Taxes. Home has filed all federal, state, and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate, and has paid or
accrued for payment all taxes as shown on such returns, such that
a failure to file, pay, or accrue will not have a material
adverse effect on Home.
E. Pending Actions. There are no material legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending or to the knowledge of Shareholder threatened, against or
affecting Home. Home is not in violation of any law, material
ordinance, or regulation of any kind whatever, including, but not
limited to laws, rules and regulations governing the sale of its
products, the '33 Act, the Securities Exchange Act of 1934, as
amended (the "34 Act") the Rules and Regulations of the U.S.
Securities and Exchange Commission ("SEC"), or the Securities
Laws and Regulations of any state.
F. Governmental Regulation. Home holds the licenses and
registrations set forth on Exhibit "E" hereto from the
jurisdictions set forth therein, which licenses and registrations
are all of the licenses and registrations necessary to permit the
Corporation to conduct its current business. All of such licenses
and registrations are in full force and effect, and there are no
proceedings, hearings, or other actions pending that may affect
the validity or continuation of any of them. No approval of any
other trade or professional association or agency of government
other than as set forth on Exhibit "E" is required for any of the
transactions effected by this Agreement, and the completion of
the transactions contemplated by the Agreement will not, in and
of themselves, affect or jeopardize the validity or continuation
of any of them.
G. Ownership of Assets. Shareholder have a good, marketable title,
without any liens or encumbrances of any nature whatever, to the
Transfer Shares to be transferred to Cybergate, which shares
represent not less than One Hundred (100%) percent ownership of
Home.
H. No Debt Owed by Home to Shareholder. Home does not owe any money,
securities, or property to either the Shareholder of Home or any
member of the family or to any company controlled by such a
person, directly or indirectly.
I. Corporate Records. All of Home's books and records, including,
without limitation, 3 its books of account, corporate records,
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minute book, stock certificate books and other records of Home
are up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its date
of incorporation.
J. No Misleading Statements or Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule or document attached
hereto or presented to Cybergate in connection herewith, contains
any materially misleading statement, or omits any fact or
statement necessary to make the other statements or facts therein
set forth not materially misleading.
K. Validity of the Agreement. All corporate and other proceedings
required to be taken by Home in order to enter into and to carry
out the Agreement have been duly and properly taken. No corporate
or other action on the part of Home is required in connection
with this Agreement, or the transaction contemplated herein. The
Agreement has been duly executed by Shareholder, and constitutes
the valid and binding obligation of Shareholder, except to the
extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium, or other laws relating to or affecting
generally the enforcement of creditors rights. The execution and
delivery of the Agreement, and the carrying out of its purposes,
will not result in the breach of any of the terms or conditions
of, or constitute a default under or violate Home's Certificate
of Incorporation or document of undertaking, oral or written, to
which Home is a party or is bound or may be affected, nor will
such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule, or regulation of any court,
regulatory agency or other governmental body; and the business
now conducted by Home can continue to be so conducted after
completion of the transaction contemplated hereby.
L. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein, and made a part hereof, are legal, valid,
and enforceable by Cybergate and Shareholder according to their
terms, except to the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws relating to
or affecting generally the enforcement of creditors rights and
that at the time of such execution and delivery, Cybergate will
have acquired title in and to the Transfer Shares free and clear
of all claims, liens, and encumbrances.
M. Access to Books and Records. Cybergate has been granted full and
free access to the books of Home during the course of this
transaction prior to Closing.
O. Home's Financial Statements. Home's Balance Sheet and Profit and
Loss statement for the year, attached hereto as Exhibit "H",
accurately describe Home's financial position as of the dates
thereof, in accordance with applicable legal and accounting
requirements.
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IV. Warranties and Representations of Cybergate. In order to induce Shareholder
to enter into the Agreement and to complete the transaction contemplated
hereby, Cybergate warrants and represents to Shareholder that:
A. Organization and Standing. Cybergate is a corporation duly
organized, validly existing and in good standing under the laws
of the state of Nevada, is qualified to do business as a foreign
corporation in every other state in which it operates to the
extent required by the laws of such states, and has full power
and authority to carry on its business as now conducted and to
own and operate its assets, properties, and business.
B. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending or threatened, against or affecting Cybergate, or against
any of Cybergate's officers or directors and arising out of their
operation of Cybergate, except as set forth in its audited
financial statements as attached hereto. Cybergate has been in
compliance with, and has not received notice of violation of any
law, ordinance, or regulation of any kind whatever, including,
but not limited to, the '33 Act, the '34 Act, the Rules and
Regulations of the SEC or the Securities Laws and Regulations of
any state.
C. Corporate Records. All of Cybergate's books and records,
including without limitation, its book of account, corporate
records, minute book, stock certificate books and other records
are up-to-date, complete, and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation.
D. No Misleading Statements or Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule, or document attached
hereto or presented to Shareholder in connection herewith
contains any materially misleading statement, or omits any fact
or statement necessary to make the other statements of facts
therein set forth not materially misleading.
E. Validity of the Agreement. All corporate action and proceedings
required to be taken by Cybergate in order to enter into and to
carry out the Agreement have been duly and properly taken. The
Agreement has been duly executed by Cybergate, and constitutes a
valid and binding obligation of Cybergate. The execution and
delivery of the Agreement and the carrying out of its purposes
will not result in the breach of any of the terms or conditions
of, or constitute a default under or violate, Cybergate's
Certificate of Incorporation or By-Laws, or any agreement, lease,
mortgage, bond, indenture, license or other document or
undertaking, oral or written, to which Cybergate is a party or is
bound or may be affected, nor will such execution, delivery and
carrying out violate any order, writ, injunction, decree, law,
rule or regulation of any court regulatory agency or other
governmental body.
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F. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by Shareholder according to their terms, and that at
the time of such execution and delivery, Cybergate will have
acquired good, marketable title in and to the Transfer Shares
acquired pursuant hereto, free and clear of all liens and
encumbrances
V. Term. All representations, warranties, covenants and agreements made herein
and in the exhibits attached hereto shall survive the execution and
delivery of the Agreement and payment pursuant thereto.
VI. The Common Shares. All of the Cybergate Common Shares shall be validly
issued, fully- paid and non-assessable shares of Cybergate Common Stock,
with full voting rights, dividend rights, and the right to receive the
proceeds of liquidation, if any, as set forth in Cybergate's Articles of
Incorporation. All of the Home Common Shares shall be validly issued,
fully-paid and non-assessable shares of Home Common Stock, with full voting
rights, dividend rights, and the right to receive the proceeds of
liquidation, if any, set forth in Home's Articles of Incorporation. All of
the parties agree and covenant that they will not vote their shares of
Cybergate Common Stock in favor of any plan for a reverse split of the
common stock or other plan or proposal to reduce the number of shares held
by the parties hereto for a period of thirty six months from the execution
hereof.
VII. Conditions Precedent to Closing.
A. The obligations of Shareholder under the Agreement shall be and
are subject to fulfillment, prior to or at the Closing of each of
the following conditions:
1. That Cybergate and it's management's representations and
warranties contained herein shall be true and correct at the
time of closing date as if such representations and
warranties were made at such time;
2. That Cybergate and its management shall have performed or
complied with all agreements, terms and conditions required
by the Agreement to be performed or complied with by them
prior to or at the time of Closing;
B. The obligations of Cybergate under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent to
the Closing of each of the following conditions:
1. That Shareholder's representations and warranties contained
herein shall be true and correct at the time of Closing as
if such representations and warranties were made at such
time; and
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2. That Shareholder shall have performed or complied with all
agreements, terms and conditions required by the Agreement
to be performed or complied with by it prior to or at the
time of Closing.
3. That the parties jointly and severally indemnify and hold
harmless Cybergate's former officers, directors, agents and
affiliates against any claims or liabilities, including
reasonable attorney's fees and other reasonable defense
costs incurred in defending such claims or liabilities,
resulting from any claims or liabilities asserted against
them as to any material misrepresentation or omissions in
the Agreement made by any party hereto.
VIII.Termination. The Agreement may be terminated at any time before or; at
Closing, by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to a party shall
be materially untrue or fail to be accomplished.
2. Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses as each party has incurred and no party shall be liable to the
other.
IX Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in their entirety.
X Miscellaneous Provisions. This Agreement is the entire agreement between
the parties in respect of the subject matter hereof, and there are no other
agreements, written or oral, nor may the Agreement be modified except in
writing and executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or conditions of
the Agreement shall not be deemed a waiver or relinquishment of such right
or power at any other time or times.
XI Closing. The closing of the transactions contemplated by the Agreement
shall take place on or before 5:00 P.M. on April 9, 2001. The Closing shall
occur at the offices of Hudson Consulting Group, Inc. located at 268 West
400 South, Salt Lake City, Utah 84101 or such other date and place as the
parties hereto shall agree upon. At the Closing, all of the documents and
items referred to herein shall be exchanged.
XII Governing Law. The Agreement shall be governed by and construed in
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accordance with the internal laws of the State of Utah.
XIII Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together shall
constitute one and the same binding Agreement, with one counterpart being
delivered to each party hereto. IN WITNESS WHEREOF, the parties hereto have
set their hands and seals as of the date and year above first written.
Cybergate, Inc. Home - Shareholder:
By: /s/ Darby DeBellis /s/ Sandra Jorgensen
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rby DeBellis, its Vice-President Sandra Jorgensen
Home Mortgage and Loan, Inc.
By: /s/ Sandra Jorgensen
----------------------------------------------
Sandra Jorgensen, its President
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