SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT Pursuant
to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 11, 2001
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Netgateway, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State of Other Jurisdiction of Incorporation)
000-27941 87-0591719
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(Commission File Number (IRS Employer Identification No.)
754 East Technology Avenue, Orem, Utah 84097
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(Address of Principal Executive Offices) (Zip Code)
801.227.0004
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(Registrant's Telephone Number, Including Area Code)
300 Oceangate, 5th Floor, Long Beach, California 90802
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(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
On January 11, 2001, Galaxy Enterprises, Inc., a wholly-owned subsidiary of
Netgateway, Inc. (the "Company"), entered into agreements with Capistrano
Capital, LLC ("Capistrano"), pursuant to which the Company sold to Capistrano
all of the capital stock of IMI, Inc. ("IMI"), a wholly-owned subsidiary of the
Company engaged in the design, manufacture and marketing of multimedia brochure
kits, shaped compact discs and similar products and services intended to
facilitate conducting business over the Internet. In connection with the sale,
the parties also entered into a Support Services Agreement pursuant to which the
Company has agreed to provide, on a fee basis, certain administrative services
to IMI for a period of sixty days following the closing of the transaction.
In consideration of the sale of the capital stock of IMI, Capistrano paid the
Company three hundred thousand dollars ($300,000) in cash. In addition, in
connection with the transaction, IMI issued a promissory note to the Company in
the amount of one million three hundred thirty-one thousand five hundred
eighty-nine dollars ($1,331,589), evidencing inter-company advances made by the
Company and its affiliates to IMI, which bears interest at 8% per annum. The
note matures in ten years. Interest and principal will be repaid at the rate of
two cents ($0.02) per compact disk shipped by IMI and paid for by its customers.
The note is secured by the personal property of IMI.
Item 5. Other Items.
On January 10, 2001, the Company announced in a press release that it withdrew
its appeal of the Nasdaq Staff's decision to delist its common stock, and its
common stock was delisted from The Nasdaq National Market effective with the
opening of business on January 10, 2001. The Company had previously announced
that it would appeal the Nasdaq staff's decision to delist its securities from
The Nasdaq National Market System as a result of its inability to meet Nasdaq's
continued listing requirements. The Company's new management determined that
such an appeal would be fruitless, distract management from other pressing
matters and result in significant incremental expenditures by the Company.
Accordingly, the Company informed Nasdaq that it did not expect to be able to
propose an acceptable compliance plan and withdrew its appeal, which had been
set for January 11, 2001. The common stock of the Company has traded on the
over-the-counter electronic bulletin board sponsored by Nasdaq since January 10,
2001.
As a result of the delisting, the Private Equity Credit Agreement that the
Company entered into on August 2, 2000 may be terminated by the provider thereof
on 30 days notice. The delisting constitutes an additional basis upon which the
related convertible debenture could be declared to be in default. The Company is
currently in discussions with the provider of these facilities with regard to
their status.
The press release issued on January 10, 2001, by Netgateway, Inc. is attached
hereto as Exhibit 99.1 and incorporated herein by this reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements. Not Applicable.
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(b) Pro Forma Financial Information. Not Applicable.
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(c) Exhibits. Each of the exhibits listed below were filed exhibits
to the registrant's Form 8-K, dated January 16, 2001, and are
hereby incorporated herein by this reference.
10.82 Stock Purchase Agreement by and between Galaxy
Enterprises, Inc. and Capistrano Capital, LLC, dated
January 11, 2001.
10.83 Note issued to Galaxy Enterprises, Inc. by IMI, Inc.,
dated January 11, 2001.
10.83 Security Agreement by and among Galaxy Enterprises,
Inc., Galaxy Mall, Inc., Netgateway, Inc., and IMI,
Inc., dated January 11, 2001.
99.1 Netgateway, Inc. press release, dated January 10, 2001.
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.
Netgateway, Inc.
Date: March 8, 2001 By: /s/ Frank C. Heyman
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Frank C. Heyman, Chief Financial Officer