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)
April 3, 2000
___________________________________
Virtual Communities, Inc.
____________________________________________________________________
(Exact name of registrant as specified in its chapter)
Delaware
_________________________
(State or other jurisdiction of incorporation)
01-12637
_________________________
(Commission File Number)
95-4491750
___________________
(IRS Employer Identification No.)
589 Eighth Avenue
New York, New York 10018
_____________________________
(Address of principal executive offices)
10018
______________________________
(Zip Code)
(212) 931 8600
_________________
(Registrant's telephone number, including area code)
__________________________________________________________
(Former name or former address, if changed since last report)
Item 5. Other Events
Company Financing
On April 6, 2000, Virtual Communities Inc. (the "Company" and "VCIX") and
Intercoastal Financial Services Corp ("Intercoastal"), a California based NASD
member firm, announced the completion of a financing package for VCIX.
Pursuant to a Common Stock and Warrants Purchase Agreement entered into by
the parties as of April 3, 2000, VCIX sold 517,800 shares of its Common Stock
for proceeds of $3,000,000 to four institutional investors. The investors are
Magellan International, Ltd., Aspen International Ltd., Acqua Wellington Value
Fund Ltd. and Cuttyhunk Fund Limited. VCIX also issued the investors a four-
month warrant exercisable for an aggregate 500,000 shares of Common Stock at
$14.875 per share and a three-year warrant exercisable for 129,450 shares at
$7.4375 per share.
In consideration for its efforts in arranging the financing, the Company
issued to Intercoastal a one-year, callable warrant exercisable for two million
shares of Common Stock at purchase prices between $18 and $29 per
share, depending upon the date of exercise. VCIX may call a portion of the
warrant up to one million shares at any time following the effectiveness of a
registration statement filed with the Securities and Exchange Commission with
respect to the first one million shares and the remaining portion of the warrant
any time 90 days after the effectiveness of such registration statement at a
call price of 93% of the average price of the Company's Common Stock for the
five day period following the call notice. The Company may also redeem the
callable warrant and the investors' three year warrant at $.75 per share
underlying the warrant which price decreases to $.50 per share underlying the
warrant after three months and thereafter by $.05 per month to a minimum of
$.25.
The Company will pay Josephthal & Company, members of the New York Stock
Exchange who served as VCIX's investment bankers, a commission equal to 7% of
the amount raised and warrants representing 7% of the number of shares issued to
the investors, at an exercise price of $5.80 per share.
Certain statements in this Form 8-K regarding the Company's expectations,
estimates, present view of circumstances or events, and statements containing
words
such as estimates, anticipates, intends, and expects, or words of similar
import, constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements indicate uncertainty
and the Company can give no assurance with regard to actual outcomes. Specific
risk factors may include, without limitation, the Company's inability to meet
the terms and conditions necessary to call and obtain the proceeds from the
adjustable warrants issued by the Company which are discussed above, volatility
of stock market conditions and the Company's stock price which may make it
economically unfeasible to call the adjustable warrants and as a result the
Company may under certain circumstances not receive proceeds from the call of
the adjustable warrants. Additional risk factors include, without limitation,
uncertainty of the continuation of working relationships with strategic business
partners, possible downturns in business conditions; increased competition; loss
of significant customers; availability of qualified personnel, adequate capital
financing and timely deployment of Company resources.
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: April 6, 2000 By: /s/ Avi Moskowitz
----------------- ----------------------
Avi Moskowitz,
President and Chief
Executive Officer