PacificNet Inc.
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 1934
Date
of
Report (date of earliest event reported): November 20, 2006
PacificNet
Inc.
(Exact
name of registrant as specified in charter)
Delaware
(State
or
other jurisdiction of incorporation)
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000-24985
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91-2118007
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(Commission
File Number)
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(IRS
Employer Identification No.)
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c/o
PacificNet Inc.
23/F,
Tower A, TimeCourt, No.6 Shuguang Xili,
Chaoyang
District, Beijing, China 100028
(Address
of principal executive offices and zip code)
(Registrant's
telephone number including area code)
601
New Bright Building, 11 Sheung Yuet Road,
Kowloon
Bay, Kowloon, Hong Kong
(Registrant's
former name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[
]
Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12(b))
[
]
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
2.01 Completion
of Acquisition or Disposition of Assets
In
a
Current Report on Form 8-K previously filed by the Registrant on December 20,
2005, the Registrant announced the execution by its wholly-owned subsidiary,
PacificNet Strategic Investment Holdings Limited ("PacificNet Holdings”), of an
Agreement for the Sale and Purchase of 51% of Lion Zone Holdings Limited (the
“Sale and Purchase Agreement”). Pursuant to the terms of the Sale and Purchase
Agreement, PacificNet Holdings acquired a 51% interest in Lion Zone Holdings
Limited ("Lion Zone"), which holds a 51% interest in Shenzhen GuHaiGuanChao
Investment Consultant Co., Ltd. ("ChinaGoHi"), a wholly-owned foreign enterprise
(WOFE) registered in China and a provider of DRTV infomercial marketing company
for financial advisory services in China.
On
November 20, 2006 PacificNet Holdings executed an agreement to terminate (the
“Termination Agreement”), the Sale and Purchase Agreement with Lion Zone,
ChinaGoHi and Mr. Wang Wenming (collectively, the “Sellers”). The Termination
Agreement was effective as of November 1, 2006. As a result of the Termination
Agreement, Mr. Wang Wenming and Lion Zone agreed to return to PacificNet
Holdings, (1) HKD$3,000,000, (2) USD$100,000 in cash, and (3) 275,000 in
restricted shares of the Registrant, and PacificNet Holdings returned its 51%
interest in Lion Zone to Mr. Wang. Additionally, the Sellers agreed to waive
PacificNet Holding’s obligation during the term of the Sale and Purchase
Agreement to issue restricted shares of the Registrant and to provide certain
loans to the Sellers. PacificNet Holdings reserved its right to re-purchase
the
51% interest within 2 years of the date of signing the Termination Agreement
for
a purchase price of 5 times net profit based on U.S. GAAP audited financial
for
a period of 12 months after signing. All of the parties to the Termination
Agreement agreed to waive any liabilities of each party which may result from
the Termination Agreement.
The
decision to terminate the Sale and Purchase Agreement was due to ChinaGoHi’s
inability to obtain the approval of, and get the necessary license to operate
from the China Securities Regulatory Commission (“CSRC”). The Chinese
Broadcasting Bureau along with the CSRC banned the TV membership sales model,
which was the model ChinaGo Hi employed in its business. The Sale and Purchase
Agreement provided that if ChinaGoHi or Lion Zone was banned or in any way
restricted from conducting business under the existing or new PRC laws or
legislation during the period from signing the Sale and Purchase Agreement
to
July 1, 2006, and ChinaGoHi failed to change its business model in good faith
to
adapt to the new regulations, and such failure resulted in any shortcoming
of
the accumulated net profit, ChinaGoHi and Lion Zone would return to PacificNet
Holdings all the cash and shares of the Registrant they obtained under the
Agreement.
A
copy of
the Termination Agreement is attached hereto as Exhibit 10.21.
Item
9.01 Financial
Statements and Exhibits.
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Exhibit
No.
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Description
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10.21
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Agreement
among PacificNet Strategic Investment Holdings Limited, Shenzhen
GuHaiGuanChao Investment Consultant Co., Ltd., Lion Zone Holdings
Limited
and Mr. Wang Wenming for the termination of “the Agreement of Sale and
Purchase 51% Shares of Lion Zone Holdings
Limited”.
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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 hereunto
duly authorized.
PACIFICNET,
INC.
By:
/s/
Victor Tong
Name:
Victor
Tong
Title:
President
Dated:
November 27, 2006
Exhibit
Index
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Exhibit
No.
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Description
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10.21
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Agreement
among PacificNet Strategic Investment Holdings Limited, Shenzhen
GuHaiGuanChao Investment Consultant Co., Ltd., Lion Zone Holdings
Limited
and Mr. Wang Wenming for the termination of “the Agreement of Sale and
Purchase 51% Shares of Lion Zone Holdings
Limited”.
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