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): October 13, 2005
eGames, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-27102 23-2694937
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2000 Cabot Blvd. West, Suite 110, Langhorne, PA 19047-1833
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 750-6606
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On October 13, 2005, eGames, Inc. (the "Company") completed the purchase of
substantially all of the assets of Cinemaware, Inc. ("Cinemaware") pursuant to
an Asset Purchase Agreement (the "Agreement") between the Company and Cinemaware
dated October 6, 2005. The assets acquired principally consist of intellectual
property, contract rights and goodwill. Pursuant to the Agreement, the Company
issued 817,439 shares of its common stock to Cinemaware, 272,480 of which are
being held in escrow pursuant to an Escrow Agreement dated October 13, 2005
between the Company, Cinemaware and Hudson United Bank (the "Escrow Agreement")
for one year for the Company's indemnification claims under the Agreement. The
Company also issued to Cinemaware a warrant to purchase 150,000 shares of the
Company's common stock at an exercise price of $.50 per share, and a warrant to
purchase 150,000 shares of the Company's common stock at an exercise price of
$.75 per share (collectively, the "Warrants"). The Warrants each have a term of
five years.
As part of the transaction, Lars Fuhrken-Batista, Cinemaware's President, has
joined the Company as its new Vice President of Development. As part of Mr.
Batista's employment, he received a stock option to purchase 150,000 shares of
the Company's common stock with an exercise price of $0.43 per share. The option
is not part of any stock option plan and vests and becomes exercisable over five
years in equal annual installments. The option has a term of six years. Also as
part of the transaction, Cinemaware and Mr. Batista each entered into
Non-Competition and Confidentiality Agreements with the Company (collectively,
the "Non-Competition Agreements").
The amount and type of consideration was determined on the basis of arm's length
negotiations between the Company and Cinemaware. Neither the Company nor any of
its affiliates has any material relationship to Cinemaware or any of its
shareholders, other than as related to the Agreement and the transactions
contemplated thereby.
The foregoing description of the Warrants, the Escrow Agreement and the
Non-Competition Agreements and the transactions contemplated thereby are
qualified in their entirety by reference to the Warrants, the Escrow Agreement
and the Non-Competition Agreements filed as Exhibits 2.1, 2.2, 2.3, 2.4 and 2.5
to this Form 8-K.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 is hereby incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements.
The Company is not required to file financial statements in connection with the
acquisition described in Items 1.01 and 2.01.
(b) Pro Forma financial information.
The Company is not required to file pro forma financial information in
connection with the acquisition described in Items 1.01 and 2.01.
(c) Exhibits. The following documents are filed as exhibits to this report.
2.1 Warrant for the Purchase of 150,000 shares of Common Stock of eGames, Inc.
exercisable at $0.75 per share
2.2 Warrant for the Purchase of 150,000 shares of Common Stock of eGames, Inc.
exercisable at $0.50 per share
2.3 Escrow Agreement dated October 13, 2005 between and among eGames, Inc.,
Cinemaware, Inc. and Hudson United Bank
2.4 Non-Competition and Confidentiality Agreement dated October 13, 2005
between Lars Fuhrken-Batista and eGames, Inc.
2.5 Non-Competition and Confidentiality Agreement dated October 13, 2005
between Cinemaware, Inc. and eGames, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
eGames, Inc.
By:/s/ Thomas W. Murphy
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Thomas W. Murphy, Vice President and
Chief Financial Officer
Dated: October 19, 2005