content: 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 17, 1998  (September 9, 1998)
  
                                    X-ceed, Inc.
               (Exact name of registrant as specified in its charter)
  
                                      Delaware
                   (State or Other Jurisdiction of Incorporation)
  
         0-13049                                       13-3006788
  (Commission File Number)                    (I.R.S. Employer Identification No.)
  
                    488 Madison Avenue, New York, New York 10022
                (Address and zip code of principal executive offices)
  
                                    212-753-5511
                           (Registrant's telephone Number)
  
  
  
  <PAGE>
  
  
  
  Item 2.           ACQUISITION OR DISPOSITION OF ASSETS
  
                    On September 9, 1998, X-ceed, Inc. (the "Company" or "X-ceed")
  finalized a Plan of Merger with Mercury  Seven,  Inc.  ("Mercury"),  a privately
  held  Delaware  corporation   specializing  in  development  of  Internet  based
  businesses.
  
                    Under the Plan of  Merger,  Mercury  was  merged  into a newly
  created Delaware  subsidiary of the Company,  X-ceed Merger Inc. Upon completion
  of the merger, X-ceed Merger Inc.'s name was changed to Mercury Seven, Inc., and
  as such,  Mercury Seven,  Inc. will operate as a wholly owned  subsidiary of the
  Company.  The Plan of  Merger  was  structured  as a  reorganization  under  the
  provisions of Section 368 of the Internal Revenue Code of 1986, as Amended.
  
                    As   consideration   for  the   transaction,   the   principal
  shareholders  of Mercury  received in  exchange  for their  stock  ownership  of
  Mercury in the aggregate  1,073,333 shares of restricted  common stock of X-ceed
  having  a  market  value  of  approximately   $8,050,000,   together  with  cash
  consideration of $1,500,000. Pursuant to employment agreements with the Company,
  the principal  shareholders of Mercury will continue to direct the daily affairs
  of Mercury.
  
                    Mercury is engaged in the  business  of  Internet  consulting,
  marketing  and  development  in creating  Internet-based  businesses.  Among its
  clients are Madison Square Garden, the New York Rangers,  Arthur Anderson & Co.,
  Radio  City  Music Hall and the Hearst  Corporation.  Through  its  ChannelSeven
  division, it offers  cross-marketing  navigational  technologies and centralized
  media  advertising  management to connect  Internet  professional  with valuable
  resources and services. Its clients include Netscape, Doubleclick, GTE Superpage
  and the @Home Network.
  
                    On September 14, 1998, the Company  completed a Plan of Merger
  with  Zabit  and  Associates,  Inc.  ("Zabit"),  a  privately  owned  California
  corporation engaged in corporate communications.  It is intended that the Merger
  qualify as a tax-free  reorganization  with the meaning of Section 368(a) of the
  Internal Revenue Code of 1986, as amended (the "Code").
  
                    The Company paid a total  consideration in exchange for all of
  the issued and outstanding  Zabit common stock consisting of 2,258,724 shares of
  restricted common stock of X-ceed and the issuance of notes to the two principal
  shareholders  of Zabit:  (i) two notes  totaling $4.8 million due March 15, 1999
  together with  interest at the Prime Rate per annum and (ii) two notes  totaling
  $1,930,208 due on or before  September 14, 2002 together with interest at 7% per
  annum. In a separate  transaction,  the Company  purchased all of the issued and
  outstanding  common stock of Water Street Design Group,  Inc., a company engaged
  in design and production and affiliated with Zabit,  for $2 million in cash. The
  Company  purchased in a separate  transaction  the trade names and  trademark of
  Zabit for $3.2 million in cash. The total  consideration paid in connection with
  all of the foregoing transactions amounted to approximately $29.5 million.
  
                    Zabit was founded by William N. Zabit and Joyce  Wesolowski in
  1993. Since that time, Zabit has been engaged in providing creative solutions to
  corporate  communications,  both  internally  and  externally.  Zabit,  which is
  headquartered in Sausalito, California, presently employs
  
                                          2
  
  <PAGE>
  
  
  
  approximately 70 employees and maintains regional centers in Sausalito,  Chicago
  and New York. Zabit will operate as a separate division of X-ceed.
  
                    Zabit's present clients include Aetna Life Insurance  Company,
  Advanced Micro Devices,  Inc., Cirrus Logic Inc., Dell Computer Inc., Electronic
  Data Systems,  Inc., Fidelity Investments  Institutional Services Company, Inc.,
  Fireman's Fund Insurance Company and numerous other major corporate clients.
  
                    As part of the  transaction,  William N. Zabit  entered into a
  four-year employment agreement with X-ceed. Under the agreement,  Mr. Zabit, who
  will receive a base salary of $400,000  annually,  has now been named  president
  and chief  operating  officer of X-ceed and has been appointed a director of the
  Company until the Company's next annual meeting.  Mr. Bradley K. Nelson has also
  entered  into a four-year  employment  agreement  with X-ceed.  Mr.  Nelson will
  receive a base salary of $300,000  per year and has been named  president of the
  Zabit division.
  
                    As a condition  to closing  both the  Mercury  Seven and Zabit
  mergers,  the Board of Directors  obtained  from an  independent  advisory  firm
  fairness  opinions  concluding that both transactions were fair from a financial
  point of view to the stockholders of X-ceed and X-ceed.
  
  
  
  
  
                                          3
  
  <PAGE>
  
  
  
                                     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.
  
  
                                          X-ceed, Inc.
                                          (Registrant)
  
                                          By: /s/ Werner Haase
                                              Werner Haase, President
  
  
  DATED:  September 17, 1998
  
  
  
                                          4
  
  <PAGE>
  
  
                                      EXHIBITS
  
  2(e)     Agreement and Plan of Merger by and among X-ceed,  Inc.,  X-ceed Merger
           Inc., Mercury Seven, Inc., and the Shareholders of Mercury Seven, Inc.
  
  2(f)     Certificate of Merger of Mercury Seven, Inc. into X-ceed Merger Inc.
  
  2(g)     Agreement  and Plan of Merger among X-ceed,  Inc.  Zabit & Associates,
           Inc. and the Shareholders Named Therein
  
  2(h)     Certificate of Merger of Zabit and Associates, Inc. into X-ceed, Inc.
  
  10(j)    Stock Purchase Agreement among X-ceed, Inc., William N. Zabit and Joyce
           M. Wesolowski
  
  10(k)    Purchase Agreement by and among X-ceed, Inc., William N. Zabit and 
           Joyce M. Wesolowski
  
  
  
                                          5
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metadata_filer: {"company-data": {"conformed-name": "X CEED INC", "cik": "0000721176", "assigned-sic": "3842", "irs-number": "133006788", "state-of-incorporation": "DE", "fiscal-year-end": "0831"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-13049", "film-number": "98710950"}, "business-address": {"street1": "488 MADISON AVENUE", "city": "NEW YORK", "state": "NY", "zip": "10022", "phone": "2127535511"}, "mail-address": {"street1": "488 MADISON AVENUE", "city": "NEW YORK", "state": "NY", "zip": "10022"}, "former-company": [{"former-conformed-name": "WATER JEL TECHNOLOGIES INC", "date-changed": "19950425"}, {"former-conformed-name": "TRILLING MEDICAL TECHNOLOGIES INC", "date-changed": "19910715"}, {"former-conformed-name": "TRILLING RESOURCES LTD", "date-changed": "19871025"}]}
text: 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 17, 1998  (September 9, 1998)
  
                                    X-ceed, Inc.
               (Exact name of registrant as specified in its charter)
  
                                      Delaware
                   (State or Other Jurisdiction of Incorporation)
  
         0-13049                                       13-3006788
  (Commission File Number)                    (I.R.S. Employer Identification No.)
  
                    488 Madison Avenue, New York, New York 10022
                (Address and zip code of principal executive offices)
  
                                    212-753-5511
                           (Registrant's telephone Number)
  Item 2.           ACQUISITION OR DISPOSITION OF ASSETS
  
                    On September 9, 1998, X-ceed, Inc. (the "Company" or "X-ceed")
  finalized a Plan of Merger with Mercury  Seven,  Inc.  ("Mercury"),  a privately
  held  Delaware  corporation   specializing  in  development  of  Internet  based
  businesses.
  
                    Under the Plan of  Merger,  Mercury  was  merged  into a newly
  created Delaware  subsidiary of the Company,  X-ceed Merger Inc. Upon completion
  of the merger, X-ceed Merger Inc.'s name was changed to Mercury Seven, Inc., and
  as such,  Mercury Seven,  Inc. will operate as a wholly owned  subsidiary of the
  Company.  The Plan of  Merger  was  structured  as a  reorganization  under  the
  provisions of Section 368 of the Internal Revenue Code of 1986, as Amended.
  
                    As   consideration   for  the   transaction,   the   principal
  shareholders  of Mercury  received in  exchange  for their  stock  ownership  of
  Mercury in the aggregate  1,073,333 shares of restricted  common stock of X-ceed
  having  a  market  value  of  approximately   $8,050,000,   together  with  cash
  consideration of $1,500,000. Pursuant to employment agreements with the Company,
  the principal  shareholders of Mercury will continue to direct the daily affairs
  of Mercury.
  
                    Mercury is engaged in the  business  of  Internet  consulting,
  marketing  and  development  in creating  Internet-based  businesses.  Among its
  clients are Madison Square Garden, the New York Rangers,  Arthur Anderson & Co.,
  Radio  City  Music Hall and the Hearst  Corporation.  Through  its  ChannelSeven
  division, it offers  cross-marketing  navigational  technologies and centralized
  media  advertising  management to connect  Internet  professional  with valuable
  resources and services. Its clients include Netscape, Doubleclick, GTE Superpage
  and the @Home Network.
  
                    On September 14, 1998, the Company  completed a Plan of Merger
  with  Zabit  and  Associates,  Inc.  ("Zabit"),  a  privately  owned  California
  corporation engaged in corporate communications.  It is intended that the Merger
  qualify as a tax-free  reorganization  with the meaning of Section 368(a) of the
  Internal Revenue Code of 1986, as amended (the "Code").
  
                    The Company paid a total  consideration in exchange for all of
  the issued and outstanding  Zabit common stock consisting of 2,258,724 shares of
  restricted common stock of X-ceed and the issuance of notes to the two principal
  shareholders  of Zabit:  (i) two notes  totaling $4.8 million due March 15, 1999
  together with  interest at the Prime Rate per annum and (ii) two notes  totaling
  $1,930,208 due on or before  September 14, 2002 together with interest at 7% per
  annum. In a separate  transaction,  the Company  purchased all of the issued and
  outstanding  common stock of Water Street Design Group,  Inc., a company engaged
  in design and production and affiliated with Zabit,  for $2 million in cash. The
  Company  purchased in a separate  transaction  the trade names and  trademark of
  Zabit for $3.2 million in cash. The total  consideration paid in connection with
  all of the foregoing transactions amounted to approximately $29.5 million.
  
                    Zabit was founded by William N. Zabit and Joyce  Wesolowski in
  1993. Since that time, Zabit has been engaged in providing creative solutions to
  corporate  communications,  both  internally  and  externally.  Zabit,  which is
  headquartered in Sausalito, California, presently employs
  
                                          2
  approximately 70 employees and maintains regional centers in Sausalito,  Chicago
  and New York. Zabit will operate as a separate division of X-ceed.
  
                    Zabit's present clients include Aetna Life Insurance  Company,
  Advanced Micro Devices,  Inc., Cirrus Logic Inc., Dell Computer Inc., Electronic
  Data Systems,  Inc., Fidelity Investments  Institutional Services Company, Inc.,
  Fireman's Fund Insurance Company and numerous other major corporate clients.
  
                    As part of the  transaction,  William N. Zabit  entered into a
  four-year employment agreement with X-ceed. Under the agreement,  Mr. Zabit, who
  will receive a base salary of $400,000  annually,  has now been named  president
  and chief  operating  officer of X-ceed and has been appointed a director of the
  Company until the Company's next annual meeting.  Mr. Bradley K. Nelson has also
  entered  into a four-year  employment  agreement  with X-ceed.  Mr.  Nelson will
  receive a base salary of $300,000  per year and has been named  president of the
  Zabit division.
  
                    As a condition  to closing  both the  Mercury  Seven and Zabit
  mergers,  the Board of Directors  obtained  from an  independent  advisory  firm
  fairness  opinions  concluding that both transactions were fair from a financial
  point of view to the stockholders of X-ceed and X-ceed.
  
                                          3
  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.
  
                                          X-ceed, Inc.
                                          (Registrant)
  
                                          By: /s/ Werner Haase
                                              Werner Haase, President
  
  DATED:  September 17, 1998
  
                                          4
  EXHIBITS
  
  2(e)     Agreement and Plan of Merger by and among X-ceed,  Inc.,  X-ceed Merger
           Inc., Mercury Seven, Inc., and the Shareholders of Mercury Seven, Inc.
  
  2(f)     Certificate of Merger of Mercury Seven, Inc. into X-ceed Merger Inc.
  
  2(g)     Agreement  and Plan of Merger among X-ceed,  Inc.  Zabit & Associates,
           Inc. and the Shareholders Named Therein
  
  2(h)     Certificate of Merger of Zabit and Associates, Inc. into X-ceed, Inc.
  
  10(j)    Stock Purchase Agreement among X-ceed, Inc., William N. Zabit and Joyce
           M. Wesolowski
  
  10(k)    Purchase Agreement by and among X-ceed, Inc., William N. Zabit and 
           Joyce M. Wesolowski
  
                                          5