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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): September 10, 1998
ENHANCED SERVICES COMPANY, INC.
(Exact Name of Registrant as Specified in Charter)
Colorado 0-24256 76-0462973
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3415 South Sepulveda Boulevard, Suite 500 Los Angeles, California 90034
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (310) 397-3003
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to the terms of a Securities Acquisition and Reorganization
Agreement ("Reorganization Agreement") dated as of September 9, 1998, in
transactions implemented between September 10, 1998 and September 16, 1998,
Enhanced Services Company, Inc. ("Enhanced" or the "Company") and Zulu-tek, Inc.
("Zulu-tek") have undertaken a series of transactions (the "Reorganization") in
which Enhanced acquired all of the assets and liabilities of Zulu-tek, including
but not limited to all of Zulu-tek's physical, tangible and intangible assets,
and all of the issued and outstanding capital stock of Echomedia Technologies,
Inc, and Mediabank, Inc. which in turn holds approximately 75% of the issued and
outstanding shares of Zulu Media, Inc. (formerly Softbank Interactive
Marketing, Inc.). The Reorganization was approved by the Board of Directors of
Enhanced and by the Board of Directors and by written consent of a majority of
the stockholders of Zulu-tek. The Reorganization Agreement and the Press Release
dated September 10, 1998, are filed as Exhibits 1 and 2 respectively.
In exchange therefor, Enhanced (i) issued to Zulu-tek 520,000 shares of
1998(B) Preferred Stock , (ii) agreed to issue up to 10,209 shares of 1998(C)
Preferred Stock to replace the Series C Preferred Stock held by Softbank
Holdings, Inc., OzEmail Limited and certain other former shareholders of Zulu
Media, Inc. (formerly Softbank Interactive Marketing, Inc.), and (iii) agreed to
provide up to $374,800 for Zulu-tek to fund the repurchase of some or all of
Zulu-tek's outstanding Series(A) Preferred Stock.
Under the terms of the Reorganization Agreement, the Company has agreed
to take all reasonable and appropriate actions to maintain its NASDAQ stock
exchange listing and Zulu-tek has agreed to take all actions as may be required
to assist the Company in maintaining its NASDAQ listing. In addition, the
Reorganization Agreement provides that if the conversion of the 1998(B)
Preferred Stock is not approved by the stockholders of the Company prior to
December 30, 1998, either party shall have the right to terminate the
transaction. In accordance with the provisions of the Reorganization Agreement,
certain of the Reorganization matters, including arrangements with respect to
the 1998(C) Preferred Stock, are to be completed as post-closing matters and, if
all of such matters are not completed, the parties have a right to terminate the
Reorganization and to return the parties to their status prior to closing on or
before December 30, 1998.
The 1998(B) Preferred Stock is convertible into 5.2 million shares of
the Company's Common Stock, but only after such conversion is approved the
stockholders of the Company, at
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an Annual Meeting currently expected to be scheduled for November 20, 1998. The
1998(B) Preferred Stock is not entitled to vote. The Company is obligated, if
the conversion has been approved by its stockholders, to register the Common
Stock underlying the 1998(B) Preferred Stock for resale and to have the
registration statement effective no later than January 31, 1999.
In connection with the Reorganization, the Board of Directors of
Zulu-tek is adopting a plan of liquidation, contingent upon the approval of the
conversion of the 1998(B) Preferred Stock which, as currently contemplated,
would require Zulu-tek to distribute its assets, including the 5.2 million
shares of Common Stock underlying the 1998(B) Preferred Stock, to the Zulu-tek
stockholders and to liquidate no later than February 28, 1999. Since the Company
currently holds 12 million shares (23%) of the approximately 52 million shares
of outstanding Zulu-tek Common Stock, Zulu-tek stockholders, other than the
Company, will be entitled to receive 4 million shares (77%) of the 5.2 million
shares of Company Common Stock distributed in the liquidation of Zulu-tek in
exchange for the Common Stock of Zulu-tek currently held by them.
The Reorganization is intended to constitute a tax free reorganization
to Zulu-tek, the stockholders of Zulu-tek and to Enhanced under Sections 354 and
368(a)(1)(D) of the Internal Revenue Code of 1986.
Item 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
Item 5. OTHER EVENTS.
Not applicable.
Item 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) and (b) The financial statements and pro forma financial
information required by this item to give effect to the Reorganization will be
filed in accordance with Item 7(a)(4) within 60 days of the date of the
Reorganization.
(c) Exhibits
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1. Securities Acquisition and Reorganization Agreement dated
as of September 9, 1998.
2. Press Release dated September 10, 1998.
Item 8. CHANGE IN FISCAL YEAR.
Not applicable.
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.
Enhanced Services Company, Inc.
Registrant
Date: September 25, 1998 By: /s/ Robert C. Smith
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Robert C. Smith, Treasurer (Chief
Financial Officer and Authorized
Signatory)