UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 reported)
February 10, 2000
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Virtual Communities, Inc.
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(Exact name of registrant as specified in its chapter)
Delaware
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(State or other jurisdiction of incorporation)
01-12637
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(Commission File Number)
95-4491750
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(IRS Employer Identification No.)
589 Eighth Avenue
New York, New York 10018
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(Address of principal executive offices)
10018
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(Zip Code)
(212) 931 8600
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On February 10, 2000, Virtual Communities, Inc. ("VCI") entered into a Share
Purchase Agreement ("SPA") with Cortext Ltd. ("Cortext"), a corporation
registered under the laws of the State of Israel, and the principal shareholders
of Cortext, to acquire a majority interest in the equity of Cortext. Cortext was
established in 1996 and is engaged in the development and licensing of content
management software for web publishers. VCI currently utilizes Cortext's
Magazine Software pursuant to a License Agreement with Cortext dated July 18,
1999 to manage content on several of the ethnic communities published by VCI and
as a central component of its Community Management Solution (CMS) turnkey
solution which it markets and licenses to third party web publishers.
Pursuant to the terms of the SPA, VCI was issued shares of Cortext so that it
holds approximately 54% of the outstanding shares of Cortext following the
payment of certain funds to and on behalf of Cortext. Depending upon Cortext's
completion of certain software development milestones set forth in the SPA and
additional payments by VCI, up to 60% of the equity of Cortext could be acquired
by VCI by August 2000. Pursuant to the SPA, the total amount of payments to be
made by VCI to and on behalf of Cortext (see below) for the full purchase of up
to 60% of equity in Cortext, including repayment of certain Cortext loans, is
expected in the aggregate to be $760,000 for the entire transaction.
Simultaneously with execution of the SPA, VCI and Cortext entered into an
Assignment Agreement with Planet Communications Ltd. ("Planet"), an Israel-based
unaffiliated third party holder of 50% of the rights in Cortext's Magazine
Software whereby Planet agreed to irrevocably assign all of its rights, title
and interest in the Magazine Software to Cortext in consideration of VCI's
payment of a portion of the transaction consideration on behalf of Cortext and
subject to such third party's retaining the right to sell up to ten Magazine
Software End User licenses. Cortext agreed to provide Planet with certain
upgrades and technical support services in connection with such End User
licenses if and when the same are granted. The majority of the payments to
Planet have been made and its assignment of its rights to the Magazine Software
has been effectuated. A portion of the payments to such third party are to be
paid in installments over a period of six months period from the date of the
Assignment Agreement and the SPA. Following the assignment of the rights by
Planet, Cortext holds 100% of the rights in and to the Magazine Software.
Concurrently with the execution of the SPA, Cortext also entered into long-term
employment agreements with its C.E.O. and C.T.O. and amended its By Laws.
Pursuant to the SPA, VCI has the right to name two members to Cortext's Board
and to name a majority of the Board upon the completion of its payments and
acquisition of shares in August 2000.
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Item 7. Financial Statements and Exhibits.
Pursuant to paragraph (4) of Item 7(a), the Registrant hereby omits the
financial statements required under Item 7 required to be filed herewith and
hereby undertakes to file an amendment hereto containing such financial
statements not later than 60 days from the required filing date of this Form
8-K.
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Exhibits.
Exhibit No. Description of document
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10(9) Software License Agreement between Cortext Ltd. and Planet
Communications Ltd., on the one hand, and Virtual
Communities, Inc., on the other hand, dated July 16, 1999, as
filed with the Commission as Exhibit 10(7) to Heuristic
Development Group's Registration Statement on Form S-4 on
September 17, 1999 (File No. 333-87373), incorporated herein
by reference thereto.
10(40) Share Purchase Agreement between Virtual Communities, Inc.
and Cortext, Ltd. dated February 10, 2000
10(41) Assignment Agreement between Cortext Ltd., Planet Communications
Ltd. and Virtual Communities, Inc. dated February 7, 2000
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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.
VIRTUAL COMMUNITIES, INC.
Date: February 18, 2000 By: /s/ Avi Moskowitz
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Avi Moskowitz,
President and Chief
Executive Officer
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