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): November 19, 2004
SBS Interactive, Co.
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(Exact name of Registrant as specified in charter)
Florida 0-28363 65-0705830
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
4211 Yonge Street, Suite 235
Toronto, Ontario M2P 2A9
Canada
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(Address of principal executive offices)
(416) 223-9293
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(Issuer Telephone Number)
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))
This Form 8-K and other reports filed by the Registrant from time to time
with the Securities and Exchange Commission (collectively the "Filings") contain
forward looking statements and information that are based upon beliefs of, and
information currently available to, the Registrant's management as well as
estimates and assumptions made by the Registrant's management. When used in the
Filings the words "anticipate", "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar expressions as they
relate to the Registrant or the Registrant's management identify forward looking
statements. Such statements reflect the current view of the Registrant with
respect to future events and are subject to risks, uncertainties, assumptions
and other factors relating to the Registrant's industry, operations and results
of operations and any businesses that may be acquired by the Registrant. Should
one or more of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may differ significantly
from those anticipated, believed, estimated, expected, intended or planned.
Although the Registrant believes that the expectations reflected in the
forward looking statements are reasonable, the Registrant cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
the Registrant does not intend to update any of the forward-looking statements
to conform these statements to actual results.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 19, 2004 the Registrant entered into a series of agreements
with Trilogy Capital Partners, Inc., referred to herein as "Trilogy". The
agreements include the following:
LETTER OF ENGAGEMENT. According to the Letter of Engagement, Trilogy will
perform certain services for the Registrant, including investor relations
services and services designed to heighten awareness of the Registrant's
technology in the financial community. The term of the Letter of Engagement is
six months and may continue after that period until terminated by either party
on 30 days notice. Trilogy will be paid $7,500 per month. Trilogy will also
receive warrants to purchase 450,000 shares of the Registrant's common stock.
The terms of the warrants are described below. By signing the Letter of
Engagement, Trilogy agrees that it will advance, on behalf of the Registrant, up
to $50,000 toward marketing expenses incurred on the Registrant's behalf. In
accordance with the Letter of Engagement, the Registrant has signed a promissory
note and has secured the amount to be advanced by its assets and those of its
subsidiary, SBS Interactive, Inc.
SECURED PROMISSORY NOTE. Pursuant to the terms of the Secured Promissory
Note, the Registrant and its wholly-owned subsidiary, SBS Interactive, Inc.,
promise to pay any amount advanced by Trilogy, up to the amount of $50,000, on
the Maturity Date, which is defined as the earliest to occur of: (A) February
19, 2005; (B) the date of the closing of (i) the Registrant's first sale and
issuance, following November 19, 2004, of shares of its capital stock, or
securities convertible into or exchangeable for its capital stock, in a
transaction in which the gross cash proceeds to the Registrant equal or exceed
$100,000 in the aggregate, (ii) the merger or consolidation of the Registrant
with or into another person (defined as any individual, partnership,
corporation, trust, association or other entity), or (iii) the sale, transfer or
assignment of all or substantially all of the assets of the Registrant to
another person; or (C) upon acceleration of the Maturity Date as provided in the
Secured Promissory Note. Funds loaned to the Registrant by Arthur Cohn and
evidenced by an instrument convertible into or exchangeable for the Registrant's
capital stock, any conversion of indebtedness to Arthur Cohn into the
Registrant's capital stock, and any repayment by the Registrant of outstanding
indebtedness to Arthur Cohn in the form of shares of the Registrant's capital
stock or securities convertible into or exchangeable for the Registrant's
capital stock, shall not be deemed a transaction for this purpose. Interest
accrues on the unpaid principal of the Secured Promissory Note at the rate of
10% per annum.
WARRANTS. The warrant agreement permits Trilogy to purchase 450,000 shares
of the Registrant's common stock at an exercise price of $0.01 per share. The
warrants expire on November 19, 2007. The warrants vest and become exercisable
as follows: (a) 225,000 warrants vest and become exercisable at such time as the
market price of the Registrant's common stock on any day is not less than $0.75
per share; and (b) the remaining 225,000 warrants shall vest and become
exercisable at such time as the market price of the Registrant's common stock on
any day is not less than $1.00 per share. The market price on any day shall be
the average of the closing prices of the common stock, as reported by Yahoo!
Finance, for the ten consecutive trading days preceding such day.
ESCROW AGREEMENT. Pursuant to the Escrow Agreement, Richardson & Patel LLP
agrees to hold the certificates representing the common stock to be received by
Trilogy upon exercise of the Warrants.
SUBORDINATION AGREEMENT. Pursuant to the Subordination Agreement, which has
been executed by the Registrant, its wholly-owned subsidiary, SBS Interactive,
Inc., Trilogy and Arthur Cohn, Arthur Cohn agrees to subordinate certain
security interests he has in the Registrant's assets to the lien created in
favor of Trilogy under the Secured Promissory Note. The subordination continues
until the Secured Promissory Note is paid in full.
EXHIBITS
Exhibit 10.1 - Letter of Engagement between Trilogy Capital Partners, Inc.
and the Registrant.
Exhibit 10.2 - Secured Promissory Note in the amount of $50,000 signed by
the Registrant and SBS Interactive, Inc. in favor of Trilogy Capital Partners,
Inc.
Exhibit 10.3 - Warrants
Exhibit 10.4 - Escrow Agreement among Trilogy Capital Partners, Inc., SBS
Interactive, Co. and Richardson & Patel LLP.
Exhibit 10.5 - Subordination Agreement among Trilogy Capital Partners,
Inc., Arthur Cohn, SBS Interactive, Inc. and the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 22, 2004
SBS INTERACTIVE, CO.
By: /s/ Todd Gotlieb
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Todd Gotlieb, President