Item 1.01 Entry into a Material Definitive Agreement.

Asset Sale Transaction

On August 11, 2008 and subsequently amended on August 15, 2008, Phantom Entertainment, Inc. (the "Company") entered into an asset purchase agreement with Phantom Game Service, Inc., a Delaware corporation, pursuant to which Phantom Game Service, Inc. will acquire from the Company, the assets comprising the Phantom Game Service (a video game delivery system designed to allow consumers to search, preview and play a large selection of video games on demand via a broadband Internet connection) if no bids, deemed better than Phantom Game Service, Inc.'s bid, to purchase the Phantom Game Service are received from other potential purchasers within thirty days of August 15, 2008 ("bid period"). If a bid deemed better than Phantom Game Service, Inc.'s bid is received from another potential purchaser within the bid period, that potential purchaser will have sixty days from August 15, 2008 to close on the transaction.

The agreement with Phantom Game Service, Inc. provides for the payment in cash of a base purchase price of $65,000; the Company to be issued 49% of the authorized shares of Phantom Game Service, Inc.; the Company to receive 7% of the annual gross revenue from Phantom Game Service, Inc.'s online game sales through the Phantom Game Service software and, on the third anniversary date of the agreement, Phantom Game Service, Inc. shall pay $100,000 to license certain trademarks for a term of 99 years.

Item 8.01 Other Events.

On August 18, 2008, the Company and Phantom Games Service Inc., issued a joint press release announcing the execution of the asset purchase agreement. A copy of the joint press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.