UNITED STATES
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): March 13, 2000
Galaxy Enterprises, Inc.
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(Exact Name of Registrant as Specified in Charter)
Nevada 000-25055 88-0315212
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
754 East Technology Avenue Orem UT 84097
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (801) 227-0004
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On March 13, 2000, Galaxy Enterprises, Inc. and Netgateway, Inc., a
Delaware corporation, issued a press release concerning the execution of a
Merger Agreement between the parties and a wholly-owned subsidiary of
Netgateway, pursuant to which the subsidiary would be merged with and into
Galaxy, with Galaxy remaining as the surviving corporation in the merger and a
subsidiary of Netgateway. Upon consummation of the merger, Netgateway will
acquire Galaxy for approximately 3.9 million shares of Netgateway common stock,
or approximately six tenths of one share of Netgateway common stock for each
share of Galaxy common stock. In addition, Netgateway has agreed to assume all
outstanding options under Galaxy's 1997 Stock Option Plan. Assuming that all
such options granted as of the date of the Merger Agreement are outstanding on
the date of the merger such assumed options will, following the merger, be
exercisable for approximately 1.1 million shares of Netgateway common stock.
Consummation of the merger is subject to certain terms, conditions and
termination rights specified in the Merger Agreement, including approval of both
companies' stockholders. A copy of the press release is filed as an exhibit to
this current report.
In connection with the execution of the Merger Agreement, Netgateway
and John J. Poelman, the Chief Executive Officer of Galaxy, entered into a
voting agreement pursuant to which, among other things, Mr. Poelman agreed to
vote in favor of approval and adoption of the merger. In addition, in connection
with the Merger Agreement, Netgateway and Sue Ann Cochran entered into a voting
agreement pursuant to which, among other things, Ms. Cochran agreed to vote in
favor of approval and adoption of the merger. Mr. Poelman and Ms. Cochran
together own approximately 19% of the total outstanding shares of Galaxy.
In connection with the execution of the Merger Agreement, Netgateway
and Mr. Poelman entered into an option agreement, pursuant to which, among other
things, Mr. Poelman granted to Netgateway an option to purchase his shares of
Galaxy common stock, representing approximately 16% of the total outstanding
shares of Galaxy common stock.
In December 1999, the Company announced that it had signed a letter of
intent to be acquired by Netgateway. On January 7, 2000, Galaxy obtained
$300,000 in bridge financing from Netgateway for working capital purposes and
for the payment of certain professional fees incurred by Galaxy in connection
with the proposed merger. On February 4, 2000, Netgateway advanced an additional
$150,000 to Galaxy for working capital purposes and for the payment of certain
professional fees incurred by Galaxy in connection with the proposed merger.
Each loan is secured by a pledge of Galaxy common stock by John J. Poelman, the
chief executive officer and largest shareholder of Galaxy. The notes bear
interest at 9.5% and are due and payable on the earlier of June 1, 2000 or the
consummation date of the merger. In the Merger Agreement Netgateway has agreed
to cause Galaxy to repay the loans following the merger.
Copies of the, merger agreement, voting agreements, option agreement,
promissory notes and pledge agreements are filed as exhibits to this current
report. The foregoing description is qualified in its entirety by reference to
the full text of such exhibits.
Item 7. Financial Statements and Exhibits.
Exhibit No. Description
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2.1 Agreement and Plan of Merger dated as of March 10, 2000 by
and among Netgateway, Inc., Galaxy Acquisition Corp., and
Galaxy Enterprises, Inc.
10.1 Promissory Note dated January 7, 2000 in the principal amount
of $300,000 made by Galaxy Enterprises, Inc. and payable to
Netgateway, Inc.
10.2 Promissory Note dated February 4, 2000 in the principal
amount of $150,000 made by Galaxy Enterprises, Inc. and
payable to Netgateway, Inc.
99.1 Voting Agreement dated as of March 10, 2000, by and among
Netgateway, Inc., Galaxy Acquisition Corp., and John J.
Poelman.
99.2 Voting Agreement dated as of March 10, 2000, by and among
Netgateway, Inc., Galaxy Acquisition Corp., and Sue Ann
Cochran.
99.3 Stock Option Agreement dated as of March 10, 2000, by and
among Netgateway, Inc. and John J. Poelman.
99.4 Pledge Agreement, dated as of January 7, 2000, between John
J. Poelman and Netgateway, Inc.
99.5 Pledge Agreement, dated as of February 4, 2000, between John
J. Poelman and Netgateway, Inc.
99.6 Press Release dated March 13, 2000.
SIGNATURE
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.
GALAXY ENTERPRISES, INC.
Dated: March 22, 2000 By: /s/
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Name: Frank C. Heyman
Title: Chief Financial Officer and
Vice President of Finance
INDEX TO EXHIBITS
Exhibit No. Description
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2.1 Agreement and Plan of Merger dated as of March 10, 2000 by
and among Netgateway, Inc., Galaxy Acquisition Corp., and
Galaxy Enterprises, Inc.
10.1 Promissory Note dated January 7, 2000 in the principal amount
of $300,000 made by Galaxy Enterprises, Inc. and payable to
Netgateway, Inc.
10.2 Promissory Note dated February 4, 2000 in the principal
amount of $150,000 made by Galaxy Enterprises, Inc. and
payable to Netgateway, Inc.
99.1 Voting Agreement dated as of March 10, 2000, by and among
Netgateway, Inc., Galaxy Acquisition Corp., and John J.
Poelman.
99.2 Voting Agreement dated as of March 10, 2000, by and among
Netgateway, Inc., Galaxy Acquisition Corp., and Sue Ann
Cochran.
99.3 Stock Option Agreement dated as of March 10, 2000, by and
among Netgateway, Inc. and John J. Poelman.
99.4 Pledge Agreement, dated as of January 7, 2000, between John
J. Poelman and Netgateway, Inc.
99.5 Pledge Agreement, dated as of February 4, 2000, between John
J. Poelman and Netgateway, Inc.
99.6 Press Release dated March 13, 2000.