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)....April 17, 2001
TSET, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 000-30191 87-0440410
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(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation or organization) identification
number)
333 South State Street, PMB 111, Lake Oswego, Oregon 97034
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (503) 598-1900
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(former, name, address and former fiscal year, if changed since
last report)
Item 2. Acquisition or Disposition of Assets
Transfer of Ownership of Atomic Soccer USA, Ltd. Pursuant
to a Letter Agreement dated as of April 11, 2001 (the "Letter
Agreement"), the Registrant transferred ownership of 100% of the
issued and outstanding shares of common stock (the "Shares") of
Atomic Soccer USA, Ltd. ("Atomic") to a new ownership group
comprised of Atomic's current and former management. The new
ownership group consists of Timothy G. Belinger, Todd P.
Ragsdale, and James Eric Anderson. Messrs. Beglinger, Ragsdale,
and Anderson are currently members of Atomic's board of
directors; none of these individuals are officers, directors,
employees, or affiliates of the Registrant. Erik W. Black,
Atomic's chairman of the board of directors, is also an officer
of the Registrant. Mr. Black resigned from Atomic's board of
directors immediately following execution of the Letter
Agreement, and is not a member of Atomic's new ownership group.
Atomic, with headquarters in Madison, Wisconsin, makes and
distributes soccer uniforms under the "A" label, and basketball,
volleyball, lacrosse, and hockey uniforms under the "BAHR" label.
Atomic's sports apparel is sold to catalog companies, team
sporting goods dealers, and screen printers, which in turn sell
such apparel primarily to schools and recreational athletes. A
majority of Atomic's product line is sold through independent
sales representatives. Close relationships with these
representatives and customers, as well as control over its sewing
operations, enables Atomic to keep abreast of trends and
opportunities in the sports apparel market. Atomic's assets
consist primarily of sports apparel inventory, accounts
receivable, sewing machines and tables, computers, and office
furnishings.
The Letter Agreement contains, among other things, a
complete release of the Registrant from any and all liabilities
and obligations to Atomic and its former stockholders. The
Shares were transferred for cash consideration of $1,000.00 and a
profits participation interest equal to 15% of Atomic's "adjusted
profits" (as defined in the Letter Agreement) for seven years in
which Atomic's profits are $50,000.00 or greater (the "Profits
Participation Interest"). In addition, and without prejudice to
or diminution of its rights thereto, the Registrant may elect to
defer to a future year receipt of the Profits Participation
Interest in any year in which Atomic's adjusted profits do not
exceed $100,000. If Atomic fails to pay the Profits
Participation Interest in any year in which such is due, Atomic
will issue to the Registrant that number of new shares of
Atomic's common stock as will equal 5% of Atomic's then-issued
and outstanding capital stock. Atomic's obligation to pay to the
Registrant the Profits Participation Interest is in the nature of
a covenant associated with Atomic and its business and continues
in full force and effect, notwithstanding any merger,
consolidation, or subsequent sale of Atomic (in any case, a
"Transaction"), until the Registrant receives the full benefit
thereof. Atomic is required to ensure that the terms and
conditions of any Transaction include an assumption of and
agreement to timely comply with the obligation to pay the Profits
Participation Interest to the Registrant, and, to protect the
Registrant's rights thereto, no documents relating to a
Transaction may be signed by Atomic without the Registrant's
prior written consent.
The Registrant's management determined that continued
financial and other support of Atomic was not consistent with the
Registrant's long-term strategic plan of concentrating and
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consolidating financial and management resources on business
opportunities having greater potential value to the Registrant
and its stockholders. The Registrant's management believed that
the cash and Profits Participation Interest, together with the
release of the Registrant from further financial, contractual,
and other obligations and liabilities to Atomic, constituted fair
and reasonable consideration for the transaction.
Prior to the negotiation of the transaction described in the
Letter Agreement, the Registrant had agreed with Paul Hix and
David M. Ragsdale that certain indebtedness owed to them by
Atomic would be forgiven and deemed satisfied and discharged
through the issuance of restricted shares of the Registrant's
common stock (the "Indebtedness Shares"); however, issuance of
the Indebtedness Shares had not been effected as of the date of
the Letter Agreement. Accordingly, Mr. Hix will receive 57,429
Indebtedness Shares, and Mr. Ragsdale will receive 39,591
Indebtedness Shares. Neither Mr. Hix nor Mr. Ragsdale are
officers, directors, employees, or affiliates of the Registrant.
The issuance of the Indebtedness Shares is mentioned in paragraph
9 of the Letter Agreement simply to indicate that such issuance
is to be completed in connection therewith. The Indebtedness
Shares did not constitute any part of the consideration for the
transaction described in the Letter Agreement.
Item 7(b). Pro Forma Financial Information
Pro forma financial information will be provided within 60
days of the date of this Current Report.
Item 7(c). Exhibits
The following exhibits are filed as part of this report in
accordance with
the provisions of Item 601 of Regulation S-K:
Exhibit Name of Exhibit
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2.0 Letter Agreement
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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 thereunto duly authorized.
Dated: April 17, 2001 TSET, Inc.
By: /s/Jeffrey D. Wilson
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Jeffrey D. Wilson
(Chairman and Chief Executive Officer)
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