SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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):
November 9, 2005 (November 3, 2005)
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CNE Group, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-9224 56-2346563
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
255 West 36th Street, Suite 800
New York, New York 10018
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(Address of Principal Executive Offices) (Zip Code)
212-300-2112
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Registrant's telephone number, including area code
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(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 the registrant under any of the
following provisions (see General Instruction A.2. below):
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[_] 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))
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Item 2.01 Completion of Acquisition or Disposition of Assets.
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On November 3, 2005, the Company entered into an agreement with Gary L.
Eichsteadt, one of its former directors, Thomas L. Sullivan and David B. Batzer
pursuant to which it sold SRC Technologies, Inc., its wholly-owned subsidiary,
and SRC-ECI, Inc., SRC's wholly-owned subsidiary, and a patent associated with
these businesses, to Messrs. Eichsteadt and Sullivan. The consideration for this
sale included the cancellation of debt in the aggregate amount of $50,000 the
Company owed to Messrs. Eichsteadt and Sullivan, the cancellation of debt in the
aggregate amount of approximately $150,000 SRC owed to Mr. Eichstead, the
cancellation of debt in the aggregate amount of approximately $300,000 SRC owed
to Mr. Batzer. Additionally, as part of this agreement Messrs. Eichsteadt and
Sullivan returned to the Company an aggregate of 1,000,000 shares of the
Company's Series AA Preferred Stock and 4,867,938 shares of the Company's Series
C Preferred Stock. Messrs. Eichsteadt, Sullivan and Batzer also returned options
and warrants to purchase an aggregate of 486,000 shares of the Company's common
stock. All inter company debt was cancelled prior to closing. Mr. Sullivan is
the President of SRC. As part of this transaction Mr. Eichsteadt resigned as a
director. The principle used to determine the consideration for SRC was that
Messrs. Eichsteadt and Sullivan, in addition to forgiving certain debt and
returning options to purchase shares of the Company's stock, returned the equity
securities they received when they sold SRC and the related patent to the
Company in April 2003.
On November 3, 2005, the Company entered into an agreement with Thomas Leyen
pursuant to which it sold to Mr. Leyen U.S. Commlink, Ltd., its wholly-owned
subsidiary, along with two patents associated with this business. As part of
this agreement the Company is also paying certain of Commlink's tax obligations
not to exceed $75,000 in consideration for Mr. Leyen canceling options currently
held by him to purchase an aggregate of 300,000 shares of the Company's Common
Stock. All inter company debt was cancelled prior to closing. Mr. Leyen is the
President of Commlink. The Company determined that it would require substantial
financing to continue supporting Commlink's business, which has historically
operated at a loss with a negative cash flow. The Company has no commitment for
this financing.
Item 9.01 Financial Statements and Exhibits.
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Any financial statements that may be required will be filed in a subsequent
amended Form 8-K.
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 thereunto duly authorized.
CNE GROUP, INC.
Date: November 9, 2005 By: /S/George W. Benoit
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George W. Benoit,
Chairman and Chief Executive Officer
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