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) September 8, 2005
AMERICAN LEISURE HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Nevada 333-48312 75-2877111
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Park 80 Plaza East, Saddle Brook, NJ 07663
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (800) 546-9676 ext. 2076
N/A
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(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K 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))
ITEM 7.01 REGULATION FD DISCLOSURE
On September 8, 2005, the Registrant executed a non-binding term sheet to
acquire 100% of the membership interests of Vici Marketing Group, LLC solely in
exchange for the Registrant's common stock. The Registrant will issue 235,000
shares of its common stock to the members of Vici Marketing Group, LLC at
closing and up to an additional 2,000,000 shares to the management of Vici
Marketing Group, Inc. pursuant to a formula described in greater detail below.
The parties will use their good faith efforts to close the transaction as
expeditiously as possible. The parties currently expect to close the transaction
by October 30, 2005. Other material terms of the proposed acquisition are listed
below:
- The Registrant will form Vici Marketing Group, Inc., as a
wholly-owned subsidiary to consummate the acquisition.
- The Registrant will own 81% of Vici Marketing Group, Inc and the
current managers of Vici Marketing Group, LLC. (the "Managers") will
own the balance of 19%.
- For five full years following the closing of the acquisition (the
"5-Year Period"), the Managers will be entitled as a group to 19%, and
the Registrant will be entitled to 81%, of the pre-tax profits of Vici
Marketing Group, Inc. paid in cash, which will be loaned back by the
Registrant and Managers in proportion to their ownership interest to
provide Vici Marketing Group, Inc. with sufficient cash flow.
- The Registrant may curtail the 19% pre-tax profits payment
anytime after the end of the 5-Year Period by paying an amount of the
Registrant's restricted common stock or cash, as determined by the
Registrant in its sole discretion, equal to the average of the sum of
the 19% pre-tax profits payments less hypothetical corporate tax
payments for each of the years during the 5-Year Period multiplied by
30% of the Registrant's price-earning ratio, which ratio will be
determined by averaging the high and low ratios for the 6-month period
preceding the date of curtailment. If the Registrant chooses to pay
this in restricted shares, then the price per share will be determined
as the average price per share of the Registrant's common stock for
the 30-day trading period immediately preceding the buyout with a
minimum price per share of $5.00.
- At closing, the Registrant will issue 25,000 shares of its Series
E preferred stock, having a liquidation value of $2,500,000, to
Stanford Venture Capital Holdings, Inc. in consideration for the debt
that Vici Marketing Group, LLC owes to Stanford. Stanford is a
principal owner of Vici Marketing Group, LLC and a major shareholder
of the Registrant.
- After an audit of Vici Marketing Group, Inc. of each year during
the 5-Year Period, the Registrant will issue the members of Vici
Marketing Group, LLC an aggregate of one restricted share of its
common stock, up to 2,000,000 shares, for each increment of $15 of
after tax income reported by Vici Marketing Group, Inc. and delivered
to the Registrant during the 5-Year Period.
- The Registrant will offer Scott Roix of Vici Marketing Group, LLC
a seat on the Registrant's board of directors, which will be preceded
by his appointment to the Registrant's advisory board for a term of
nine months or shorter if the acquisition is unwound, in which case
his appointment will automatically terminate.
- Mr. Roix, expected Chairman and an executive officer of Vici
Marketing Group, Inc., and other senior officers will have operational
discretion to enter into certain employment contracts with former
employees of Vici Marketing Group, LLC in a form prescribed by the
Registrant for total compensation that is no greater than the
annualized compensation received by each of such persons during the
six month period immediately preceding the acquisition, and to
establish an equitable performance based commission plan based on net
income attributable to performance and consistent with such plan in
effect at Vici Marketing Group, LLC six months prior to the date of
the term sheet.
- Vici Marketing Group, LLC, at its own expense, will provide
audited financial statements for the fiscal years ended December 31,
2003, December 31, 2004, the nine month period ended September 30,
2005, and, if the transaction does not close until 2006, December 31,
2005.
- In the event that the audited balance sheet of Vici Marketing
Group, LLC as of September 30, 2005, does not show $2,000,000 in net
tangible assets (taking into account such intangible assets as any and
all contract opportunities to market real estate properties or
products for third parties) as of such date according to US GAAP, the
Registrant shall deduct one share of the 235,000 shares to be paid at
closing for every $8.51 that the net tangible assets are less than
$2,000,000, and, in the event that the net tangible assets as of such
date are negative, the Registrant may terminate the transaction or
reduce the additional 2,000,000 shares to be paid during the 5-Year
Period on a similar basis.
- Express conditions of the acquisition are that Vici Marketing
Group, LLC will disclose all contracts, all liabilities and all
contingent liabilities and that all of its IRS filings are current and
fully paid. In addition, all of the contracts, leases and liabilities
of Vici Marketing Group, LLC shall be paid or retired pursuant to
their terms and Vici Marketing Group, LLC will indemnify the
Registrant from any and all cost for exposure for any of Vici
Marketing Group, LLC's liabilities.
- The board of directors of Vici Marketing Group, Inc. will consist
of five members, three of which will be elected by the Registrant and
two of which will be executive board members elected by the former
members of Vici Marketing Group, LLC. The board members will not
receive compensation for the first year; however, they will
subsequently receive compensation pursuant to standards endorsed by
the Registrant.
- In the event that the Registrant accepts an offer to sell
substantially all of its assets, the assets of Vici Marketing Group,
Inc. or a controlling interest in Vici Marketing Group, Inc. or there
is a change in control of the Registrant, Scott Roix or, if Mr. Roix
is no longer with Vici Marketing Group, Inc., the former members of
Vici Marketing Group, LLC then with Vici Marketing Group, Inc., will
have the right to negotiate directly with the offeror if they do not
agree with the value of the 19% interest that the Managers will own in
Vici Marketing Group, Inc., but in no event will they have the power
to veto any of the transactions contemplated by such offers.
- Vici Marketing Group, LLC will use its best efforts to secure
transition financing from Stanford Venture Capital Holdings, Inc. on
terms acceptable to the Registrant.
In addition, the Registrant will grant Vici Marketing Group, Inc. a
contract to market the Registrant's real estate products. The contract will
include a 13% commission on sales proceeds on all units in inventories covered
by the contract less any amounts due to existing or new brokers engaged by the
Registrant or its affiliated entities and any of the Registrant's in-house
commission or incentive obligations. Vici Marketing Group, Inc. will be
obligated to pay the costs of all in-house sales and all marketing costs
including agreed staffing costs attributable to sales and will agree to meet a
sales target of 100 sales per month for the first year of the contract. The
Registrant will increase the sales target for subsequent years subject to
available inventory. If the sales target is not reached for two consecutive
months in any year, the Registrant will have the right to terminate the
contract. Vici Marketing Group, Inc. will also have a right of first refusal to
sell those products that will be subject to a management agreement of one of the
Registrant's subsidiaries or those products developed by an affiliate of the
Registrant, subject to performance targets and arm's length pricing.
The matters discussed herein are not binding and are qualified in all
respects by the terms of any definitive agreement(s) regarding these matters.
In accordance with General Instruction B.2. of Form 8-K, the information
presented under this Item 7.01, shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that Section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act except as expressly set forth by specific
reference in such a filing.
ITEM 8.01 OTHER EVENTS
On September 8, 2005, the Registrant executed a term sheet to acquire 100%
of the membership interests of Vici Marketing Group, LLC solely in exchange for
the Registrant's common stock. The details regarding the term sheet are
disclosed in "Item 7.01. Regulation FD Disclosure," above. The Registrant will
issue 235,000 shares of its common stock to the members of Vici Marketing Group,
LLC at closing and up to an additional 2,000,000 shares pursuant to a formula
described in greater detail above. The parties will use their good faith
efforts to close the transaction as expeditiously as possible. The parties
currently expect to close the transaction by October 30, 2005.
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.
AMERICAN LEISURE HOLDINGS, INC.
By: /s/ Malcolm J. Wright
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Malcolm J. Wright
Chief Executive Officer
Dated: September 21, 2005