International Heritage Inc – ‘8-K’ for 3/6/98

As of:  Tuesday, 3/10/98   ·   For:  3/6/98   ·   Accession #:  1010412-98-39   ·   File #:  2-97690-D

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Current Report   —   Form 8-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         8±    40K 
 2: EX-3        Articles of Incorporation/Organization or By-Laws      1      7K 
 3: EX-19.1     Report Furnished to Security Holders                  70±   284K 
 4: EX-19.2     Report Furnished to Security Holders                   1      8K 
 5: EX-19.3     Report Furnished to Security Holders                  44±   230K 
 6: EX-99.1     Miscellaneous Exhibit                                  1      9K 
 7: EX-99.2     Miscellaneous Exhibit                                  2±    11K 

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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                  

March 6, 1998             
Date of Report          
(Date of Earliest Event Reported)           

INTERNATIONAL HERITAGE, INCORPORATED            
(Exact Name of Registrant as Specified in its Charter)            

Nevada                002-97690-D             87-0421191                
(State or other     (Commission File No.)   (IRS Employer I.D. No.)             
Jurisdiction)                                                                   

Carolina Place        
2626 Glenwood Ave. Suite #200         
Raleigh, North Carolina 27608         
(Address of Principal Executive Offices)      

(919)571-4646     
Registrant's Telephone Number     

55 West 200 North     
Provo, Utah  84601    
(Former Name or Former Address if changed Since Last Report)    

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Item 1.   Changes in Control of Registrant.                                     

 (a)  Pursuant to an Agreement and Plan of Reorganization (the
"Plan") dated March 6, 1998, between the Registrant; International Heritage,    
Inc., a North Carolina corporation ("IHI"), certain stockholders and  option    
holders of IHI who were "accredited investors" and up to 35 non-accredited      
persons who, by reason of a "purchaser representative," education, business     
acumen, past experience or other factors, were believed to be capable of        
evaluating the risks and merits of the proposed exchange(the "IHI               
Stockholders" and "IHI Option Holders"), the IHI Stockholders became the        
controlling stockholders of the Registrant in a transaction viewed as a         
reverse acquisition, and IHI became a majority-owned subsidiary of the          
Registrant.  The Plan was treated as a recapitalization of IHI for accounting   
purposes.                                                                       

     The Plan was adopted, ratified and approved by the Consent of the
sole member of the Board of Directors of the Registrant.                        

As of the Closing, the former principal stockholders of the 
Registrant and their percentage of ownership of the outstanding voting          
securities of the Registrant prior to the completion of the Plan were: David    
N. Nemelka, Jr., 87.7%, and Summer Ventures, Inc., 5.7%.  See the first table   
below entitled "Former Controlling Stockholders."                               

   The source of the consideration used by the IHI Stockholders to
acquire their controlling interest in the Registrant was the exchange of        
97.73% (7,379,493 shares equaling 22,138,479 of the Registrant under the Plan)  
of the outstanding common stock of IHI pursuant to the Plan.                    

The basis of the "control" by the IHI Stockholders is stock 
ownership.  See the table below under Paragraph (b) of this Item.               

Pursuant to the Plan, the Registrant was required that:     

      1.   The IHI Stockholders who were "accredited investors" agree to
exchange with the Registrant at the closing (the "Closing") not less than 80%   
of the outstanding common stock of IHI, in exchange for the $0.001 par value    
"unregistered" and "restricted" shares of common voting stock of the            
Registrant (which will be limited to public resale under Rule 144 of the        
Securities and Exchange Commission following satisfaction of the minimum one    
year holding period thereunder and other requirements of the Rule), amounting   
to three shares of the Registrant for each outstanding share IHI common stock.  
Assuming 100% of IHI is eventually acquired, the Registrant would be required   
to issue 22,652,268 shares under the Plan, and taking into account the          
pre-Plan  outstanding shares of the Registrant amounting to 4,559,761 shares,   
there would then be 27,212,029 outstanding shares of the Registrant's common    
stock. The Plan provides for the reservation of sufficient shares of the        
Registrant's common stock for a period of two years to allow all IHI            
Stockholders listed in Exhibit A of the Plan to participate in the Plan on the  
same terms and conditions;                                                      

2.   Certain IHI Option Holders have also agreed to exchange
8,341,428 options to acquire shares of common stock of IHI for similar options  
to acquired "unregistered" and "restricted" shares of common stock of the       
Registrant, on like terms, on a one for one basis.  The Plan provides for the   
reservation of sufficient shares of the Registrant's common stock for a period  
of two years to allow all IHI Option Holders listed in Exhibit A-1 of the Plan  
to participate in the Plan on the same terms and conditions;                    

  3.   Following resignations, in seriatim, of the directors and
executive officers of the Registrant, the designation and election, in          
seriatim, of the persons listed in Exhibit 99.2 hereof, which is entitled       
"Newly Elected Directors and Executive Officers," as directors and executive    
officers of the Registrant, to serve until the next annual meetings  of the     
stockholders and the Board of Directors, respectively, and until their          
respective successors are elected and qualified or until their respective       
prior resignations or terminations.  These persons served in these same         
capacities for IHI prior to the completion of the Plan.  See Item 7 of this     
Report; and                                                                     

 4.   The name of the Registrant was changed to "International
Heritage, Incorporated," and the authorized capital of the Registrant was       
increased to 100,000,000 shares of common stock, par value $0.001 per share.    

A copy of the Plan, including exhibits and related          
instruments, accompanies this Report, which, by this reference, is              
incorporated herein; the foregoing summary is modified in its entirety by such  
reference.  See Item 7 of this Report.                                          

Former Controlling Stockholders                                                 

                 Number of
                Shares
                            Beneficially     Percent
Name and Address                             Owned        of Class              

David N. Nemelka, Jr.                       4,004,000       87.7%               
897 South Artistic Cr.                                                          
Springville, UT 84663                                                           

*Summer Ventures, Inc.                        184,600         4%                
1310 East 1600 South                                                            
Mapleton, UT 84664                                                              

        (b)  The following table entitled "Current Controlling Stockholders"
contains information regarding share holdings of the Registrant's directors     
and executive officers and those persons or entities who beneficially own more  
than 5% of the Registrant's common stock, after taking into account the         
Closing of the Plan:                                                            

Current Controlling Stockholders              

                                      Amount and Nature*  Percent*
                                     Beneficial         of
Name                 Title               Stock Ownership     Class    

Barry Ackel              Director                 379,375(1)        1.4%        
1239 Heyman Lane                                                                
Alexandria, LA 71303                                                            

John Brothers       COO                            82,500(2)         .3%        
9416 Koupela Drive                                                              
Raleigh, NC 27615                                                               

John W. Hemmer      Director                          -0-           -0-         
88 Meadow Road                                                                  
Briarcliff Manor, NY 10510                                                      

Jimmie D. Knowles        Director                 497,925(3)        1.9%        
105 Beechtree Lane                                                              
Apex, NC 27502                                                                  

Harry B. Mains      Director                          -0-           -0-         
2210 South Front Street                                                         
Melbourne, FL 32901                                                             

Franco P. Merlo          Director                     -0-           -0-         
P. O. Box 6831 CH-8023                                                          
Zurich, Switzerland                                                             

Georgina Marie Mollick,  VP Legal Affairs             -0-           -0-         
Esq.                Asst. Corporate Sec.                                        
2626 Glenwood Ave. #200                                                         
Raleigh, NC 20678                                                               

Christopher A. Ried VP Compliance                     -0-           -0-         
2626 Glenwood Ave. #200                                                         
Raleigh, NC 20678                                                               

Derrick L. Rodgers  Director                      419,250(4)         1.6%       
409 Jackson Park Road                                                           
Kannapolis, NC 28083                                                            

Kenneth Rudd, III        Director                     -0-           -0-         
7992 Bradwick Way                                                               
Melbourne, FL 32940                                                             

Claude Savage       Director                      597,750            2.2%       
106 Benbow Lane                                                                 
Charlotte, NC 28214                                                             

Larry G. Smith      Director                      686,250(5)         2.5%       
2435 E. North Street                                                            
Suite #354                                                                      
Greenville, SC 29615                                                            

Angie C. Stewart         Corporate Sec.               -0-            -0-        
2626 Glenwood Ave. #200                                                         
Raleigh, NC 20678                                                               

Stanley H. Van Etten     President, CEO,          275,808            1.0%       
10504 Tredwood Drive     Chairman of the Board                                  
Raleigh, NC 27615        Director                                               

David N. Nemelka, Jr.   Stockholder             4,004,000           15.0%       
897 South Artistic Cr.                                                          
Springville, UT 84663                                                           

All executive officers and directors                                            
as a group (14)                                  6,942,858          26.0%       

*    Does not include the following options exchanged under 
the Plan on a one for one basis by the following persons listed in the          
foregoing table, nor the shares of common stock of IHI underlying options       
granted to IHI employees and consultants under IHI's 1996 Stock Option Plan     
(the "Stock Option Plan"), which is anticipated to be canceled and converted    
to similar options to acquire the same number of shares of common stock of the  
Registrant on similar terms and conditions, to-wit: Claude Savage has           
1,350,000 options exchanged under the Plan exercisable at $2.00; Larry G.       
Smith has 1,350,000 options exchanged under the Plan exercisable at $2.00;      
Stanley H. Van Etten has 5,256,800 options exchanged under the Plan             
exercisable at $2.00; and John D. Brothers has been granted 315,000 options     
under the Stock Option Plan, exercisable at $1.33 with 5,000 of those options   
exercisable at $2.00; Georgina Mollick, Esq. has been granted 152,500 options   
under the Stock Option Plan, exercisable at $1.33 with 10,000 of those options  
exercisable at $2.00; Christopher A. Ried has been granted 35,000 options       
under the Stock Option Plan, exercisable at $1.33 with 10,000 of those options  
exercisable at $2.00; Angie C. Stewart has been granted 46,000 options under    
the Stock Option Plan, exercisable at $1.33 with 10,000 of those options        
exercisable at $2.00; and, Stanley H. Van Etten has been granted 285,000        
options under the Stock Option Plan, exercisable at $1.33 with 10,000 of those  
options exercisable at $2.00.                                                   

(1)   Owned in the name of Acme Holdings.                     

(2)   Owned in the name of To the Top We Go, Inc.             

(3)   Owned jointly with Portia G. Knowles                    

(4)   Owned in the name of Capital Dynamics Financial Group   

(5)   Owned in the name of Imperial Management Fund           

Item 2.  Acquisition or Disposition of Assets.                                  

    (a)  See Item 1 of this Report.  The consideration exchanged under
the Plan was negotiated at "arms length" between the directors and executive    
officers of the Registrant, the Board of Directors of IHI, the IHI              
Stockholders, and the IHI Option Holders and the Board of Directors of the      
Registrant used criteria used in similar proposals involving the Registrant in  
the past, including the relative value of the assets of the Registrant; its     
present and past business operations; future potential of IHI; its management;  
and the potential benefit to the stockholders of the Registrant. The members    
of the Board of Directors determined in their good faith that the               
consideration for the exchange was reasonable, under these circumstances.       

     No director, executive officer or person who may be deemed to be an
affiliate of the Registrant had any direct or indirect interest in IHI prior    
to the completion of the Plan.                                                  

 (b)  The Registrant intends to continue the business operations
formerly conducted by IHI, which are described in Exhibit 19.1, which is        
entitled "Proxy Statement of International Heritage, Inc. dated February 27,    
1998," Exhibit B thereunder.  See Item 7 of this Report.                        

    For additional information on Management, see Exhibit 99.2, which is
entitled "Newly Elected Directors and Executive Officers."  See Item 7 of this  
Report.                                                                         

    For additional information on "Risk Factors" relating to IHI and the
reorganized Registrant, see Exhibit 19.1, which is entitled "Proxy Statement    
of International Heritage, Inc. dated February 27, 1998."  See Item 7 of this   
Report.                                                                         

Item 3.  Bankruptcy or Receivership.                                            

None; not applicable.                                         

Item 4.  Changes in Registrant's Certifying Accountant.                         

None; not applicable.                                         

Item 5.  Other Events.                                                          

     Effective March 3, 1998, the Registrant's Articles of Incorporation
were amended to increase its authorized capital from 50,000,000 shares to       
100,000,000 shares of $0.001 par value common stock and to change the name of   
the Registrant to "International Heritage, Incorporated." A copy of these       
Articles of Amendment is attached hereto and is incorporated herein by          
reference.  See Item 7.                                                         

Item 6.  Resignations of Directors and Executive Officers.                      

   Effective March 6, 1998, David N. Nemelka, Jr., the sole director
and executive officer of the Registrant resigned, and the directors and         
executive officers of IHI were designated to serve as directors and executive   
officers of the Registrant, in the same capacities in which they respectively   
served as directors and executive officers of IHI.  See Exhibit 99.2, which is  
entitled "Newly Elected Directors and Executive Officers."  See Item 7 of this  
Report.                                                                         

Item 7.  Financial Statements and Exhibits.                                     

(a)  Financial Statements of Businesses Acquired.             

Copies of the Unaudited Consolidated Balance Sheet            
and Income Statement of International Heritage, Inc. for the                    
period ended December 31, 1997, and its Audited Consolidated Financial          
Statements for the years ended December 31, 1996 and 1995 were attached         
to its Proxy Statement, which is attached hereto as Exhibit 19.1.               

   Audited Financial Statements of IHI for the year ended December 31,
1997, will be filed as soon as available, but within 75 days of the date of     
this Report.                                                                    

(b)  Pro Forma Financial Information.                         

       Pro Forma Financial Statements, taking into account the completion of
the Plan, will be filed as soon as available, but within 75 days of the date    
of this Report.                                                                 

(c)  Exhibits.                                                

                                         Exhibit
Description of Exhibit*                                   Number                

Articles of Amendment to the Articles of                      
Incorporation of the Registrant reflecting a name                               
change and an increase in authorized capital                 3                  

Proxy Statement of International                              
Heritage, Inc. dated February 27, 1998                      19.1                

Exhibit A: 10-KSB Annual Report of the            
Registrant for the fiscal year ended              
December 31, 1997**                               

Exhibit B: Description of Business of             
International Heritage, Inc.                      

Unaudited Consolidated Balance Sheet and          
Income Statement of International Heritage,       
Inc. for the period ended December 31, 1997       

Audited Consolidated Financial Statements of      
International Heritage, Inc. for the years ended  
December 31, 1996 and 1995                        

Exhibit C: Article 13 of the North Carolina       
Business Corporation Act respecting Dissenters'   
Rights                                            

Exhibit D: Demand for Payment                     

Proxy Form                                        

Confidential Accredited Investor Questionnaire    

Letter of the Registrant to its Stockholders dated            
February 17, 1998 (which included a copy the IHI Proxy Statement                
dated February 27, 1998, and the material exhibits thereto,                     
which are referred to above)                                19.2                

Letter of Proposal to certain "accredited investors"            
who were IHI Stockholders and IHI Option Holders respecting the                 
Plan                                                        19.3                

Agreement and Plan of Reorganization                          
Exhibit A:  IHI Stockholders            
Exhibit A1: IHI Option Holders          
     Exhibit B:  Registrant Financial Statements**
Exhibit C:  Exceptions                  
        Exhibit D:  IHI Financial Statements (see above)
Exhibit E:  Exceptions                  
Exhibit F:  Investment Letter           
     Exhibit G:  Registrant Compliance Certificate
Exhibit H:  IHI Compliance Certificate  

News Release dated March 9, 1998                 99.1         

Newly Elected Directors and Executive Officers    99.2        

*    Summaries of any exhibit are modified in their                     
entirety by this reference to each exhibit.                   

**   Incorporated by Reference.                                         

Item 8.  Change in Fiscal Year.                                                 

None; not applicable.                                         

Item 9.  Sales of Equity Securities Pursuant to Regulation S.                   

None; not applicable.                                         

SIGNATURES      

    Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by  
the undersigned hereunto duly authorized.                                       

      INTERNATIONAL HERITAGE, INCORPORATED

Date: 3/9/98.                By  /s/ Stanley H. Van Etten                       
       ---------------------
             President, CEO and Director

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