8-K 1 0001.txt 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 October 31, 2000 Date of Report (Date of Earliest Event Reported) LOGIO, INC. (Exact Name of Registrant as Specified in its Charter) 405 East 12450 South, Suite B Draper, Utah 84020 (Address of principal executive offices) (801) 816-9904 Registrant's telephone number NEVADA 000-24753 84-1370590 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification No.) incorporation) In this report references to "Logio," "we," "us," and "our" refer to Logio, Inc. FORWARD LOOKING STATEMENTS This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate," or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within Logio's control. These factors include but are not limited to economic conditions generally and in the industries in which Logio may participate; competition within Logio's chosen industry, including competition from much larger competitors; technological advances and failure by Logio to successfully develop business relationships. ITEM 1: CHANGES IN CONTROL OF LOGIO Pursuant to the Agreement described below, Logio will become a wholly-owned subsidiary of Pacific WebWorks, Inc., a Nevada corporation, upon completion of a stock-for-stock exchange. Pacific WebWorks intends to issue 2.8 million of its authorized but unissued common stock to acquire 100% of our issued and outstanding shares. The agreement does not require a change in our Board of Directors and any future changes will require stockholder approval from a majority of Pacific WebWorks stockholder. ITEM 2: ACQUISITION AND DISPOSITION OF ASSETS On October 31, 2000, our board of directors approved signing of an Agreement and Plan of Reorganization to participate in a stock for stock exchange with Pacific WebWorks. Pursuant to the agreement, Pacific WebWorks's will issue 2,800,000 shares, par value $0.001, in exchange for 18,425,830 outstanding common shares of Logio. About Pacific WebWorks Pacific WebWorks develops business software technologies for Internet merchants. Its premier product, Visual WebTools , allows small to medium sized business owners to expand their business onto the Internet. Pacific WebWorks' product lets a business create, manage, maintain and edit its own web site. Pacific WebWorks' wholly-owned subsidiary, IntelliPay, Inc., provides online, secure, and real-time payment processing. Summary of Terms (1) Pacific WebWorks intends to acquire 100% of the 18,425,830 shares of Logio common stock which is issued and outstanding stock as of October 31, 2000. (2) Pacific WebWorks will exchange 2.8 million shares of its common stock for the Logio common stock, or an exchange ratio of approximately 6.6 Logio shares for one Pacific WebWorks share. (3) The acquisition is contingent upon stockholder approval by a majority Page 2 of Logio's stockholders and we expect to obtain stockholder approval at a special meeting of our stockholders to be held December 22, 2000. (4) The acquisition is contingent upon registration of the 2.8 million Pacific WebWorks shares. Pacific WebWorks expects to file a registration statement on Form S-4 to register the shares to be exchanged under the Securities Act of 1933. The SEC must review that registration statement and declare it effective before the exchange can occur. (5) Pacific WebWorks plans to structure the acquisition as a tax-free, stock-for-stock transaction which complies with the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. (6) Termination of the agreement may occur if either party fails to comply in any material respect with the covenants and agreements outlined in the agreement or if any representations or warranties in the acquisition agreement are materially inaccurate. The parties may terminate the agreement by mutual consent. (7) Upon completion of the exchange, Logio's stockholders will hold approximately 15.8% of the 17,658,342 then issued and outstanding shares of Pacific WebWorks. In August 2000 our management met with members of Pacific WebWorks to discuss sales and marketing ideas for our technology. As a result of this meeting Pacific WebWorks' management realized that Logio's technology would lend itself to the additional products they had outlined in their business plan. Later that month Pacific WebWorks' management returned to Logio to evaluate our technology in more detail. During the next several weeks the companies held meetings which culminated in the letter of intent in September for the acquisition of Logio by Pacific WebWorks. Except as described in this report, neither we, nor to the best of our knowledge, any of our directors, executive officers or other affiliates had any contract, arrangement, understanding or relationship with any other person with respect to any Pacific WebWorks shares. Except as described in this report, there have been no contacts, negotiations or transactions within the last two years between us or any of our directors, executive officers or their affiliates, on the one hand, and Pacific WebWorks or its affiliates, on the other hand, regarding the merger, consolidation, acquisition of shares or election of directors. The consideration exchanged in the acquisition was negotiated at "arms length" and the source of consideration we intend to use to complete the acquisition is our 18,425,830 outstanding common shares. The 6.6 to 1 exchange rate was based upon an evaluation of our assets, technology, management, business operations and future potential of Logio coupled with the trading history of both companies' shares on the OTC Bulletin Board over the 30 days prior to the letter of intent. Our board of directors determined that the consideration for the exchange was reasonable based upon these factors. At September 30, 2000, we had $1,755,093 in total assets. The majority of our assets, 84.4%, are fixed assets, which have a net book value of $1,480,493. Our fixed assets consist mostly of computer equipment, which was acquired to run our Internet application. The computers are mostly SunTM Mircrosystems servers and workstations. Along with the Sun equipment, we had load balancing and firewall equipment, which improve upon and protect the accessibility to our application. Cash is the next Page 3 most significant asset at $171,226, or 9.8%, of total assets. The balance of our assets are primarily prepaid assets mostly for service contracts on our computer equipment, and are being amortized over our contract period. ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements. None (b) Pro Forma Financial Information. The pro forma consolidated financial statements of Pacific WebWorks for the period ended September 30, 2000 and December 31, 1999 are attached. The pro forma consolidated statements of operation assumes that the entities were together as of January 1, 1999. The pro forma consolidated balance sheet assumes elimination of intercompany payables and receivables, the issuance of 2,800,000 shares of common stock and the amortization of good will. (c) Exhibits. Exhibit No. Exhibit ----------- ------- 2.1 Agreement and Plan of Reorganization between Pacific WebWorks and Logio, dated October 31, 2000 . Page 4 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. Logio, Inc. /s/ Ken Bell 11/10/00 By: ______________________________________ Date: ________________________ Ken Bell, President, CEO and Director Page 5 PROFORMA - CONSOLIDATED BALANCE SHEETS
Pacific Logio, Inc Webworks, Inc. Before Adjustments September 30, September 30, Adjustments -------------------------- Proforma 2000 2000 NewCo DR CR NewCo ------------- ------------- ------------- ------------ ------------- ------------- (Unaudited) (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 171,226 $ 72,044 $ 243,270 $ 243,270 Short term investments - - - - Accounts receivable 28,815 232,483 261,298 261,298 Employee receivables - 3,924 3,924 3,924 Note receivable - - - - Prepaid assets 68,748 362,350 431,098 431,098 ------------- ------------- ------------- ------------ ------------- ------------- Total current assets 268,789 670,801 939,590 939,590 ------------- ------------- ------------- ------------ ------------- ------------- PROPERTY & EQUIPMENT, net 1,480,493 443,826 1,924,319 1,924,319 OTHER ASSETS 5,811 4,631,723 4,637,534 1,999,442 299,916 6,337,060 ------------- ------------- ------------- ------------ ------------- ------------- $ 1,755,093 $ 5,746,350 $ 7,501,443 $ 9,200,969 ============= ============= ============= ============ ============= ============ CURRENT LIABILITIES Current portion of long-term capital lease obligations $ 312,880 $ - $ 312,880 312,880 Accounts payable 99,866 473,599 573,465 573,465 Accrued expenses 57,091 271,485 328,576 328,576 Deferred Revenues - 2,967,088 2,967,088 2,967,088 Notes Payable-Related Parties - 216,580 216,580 216,580 Notes Payable - Vendors 96,116 - 96,116 96,116 ------------- ------------- ------------- ------------ ------------- ------------ Total current liabilities 565,953 3,928,752 4,494,705 4,494,705 CAPITAL LEASE OBLIGATIONS, less current maturities 38,582 - 38,582 38,582 STOCKHOLDERS' EQUITY (Notes 3, 5 and 6) Preferred stock - - - - Common stock 17,271 14,858 32,129 17,271 (2,800) 17,658 Additional paid-in capital 18,371,258 9,763,603 28,134,860 18,371,258 (3,147,200) 12,910,803 Accumulated deficit (17,237,971) (7,960,863) (25,198,834) 299,916 (17,237,971) (8,260,779) ------------- ------------- ------------- ------------ ------------- ------------ Total stockholders' equity 1,150,558 1,817,598 2,968,156 4,667,682 ------------- ------------- ------------- ------------ ------------- ------------ $ 1,755,092 $ 5,746,350 $ 7,501,442 $ 9,200,969 ============= ============= ============= ============ ============= ============
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PROFORMA - CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Pacific Logio, Inc. Webworks, Inc. Nine Months Nine Months Ended Ended Before Adjustments September 30, September 30, Adjustments -------------------------- Proforma 2000 2000 NewCo DR CR NewCo ------------- ------------- ------------- ------------ ------------- ------------- Revenues Advertising $ 2,180 $ - 2,180 $ 2,180 Product - 3,273,508 3,273,508 3,273,508 ------------- ------------- ------------- ------------ ------------- ------------- 2,180 3,273,508 3,275,688 3,275,688 Cost of sales 440,907 212,597 653,504 653,504 ------------- ------------- ------------- ------------ ------------- ------------- Gross profit (loss) (438,727) 3,060,911 2,622,184 2,622,184 ------------- ------------- ------------- ------------ ------------- ------------- Research and development 1,672,316 645,372 2,317,688 2,317,688 Selling expenses 658,034 4,503,581 5,161,615 5,161,615 General and administrative 976,183 2,255,464 3,231,647 3,231,647 Depreciation and amortization 606,141 730,052 1,336,193 299,916 1,636,109 Compensation expense for stock options 631,242 - 631,242 631,242 ------------- ------------- ------------- ------------ ------------- ------------- Total operating expenses 4,543,916 8,134,469 12,678,385 299,916 12,978,301 ------------- ------------- ------------- ------------ ------------- ------------- Loss from operations (4,982,643) (5,073,558) (10,056,201) (299,916) (10,356,117) Other income (expense) Interest income 55,002 - 55,002 55,002 Financing charges (133,703) - (133,703) (133,703) Loss on disposal of equipment (2,215) - (2,215) (2,215) Interest expense (96,422) (100,553) (196,975) (196,975) ------------- ------------- ------------- ------------ ------------- ------------- (177,338) (100,553) (277,891) (277,891) ------------- ------------- ------------- ------------ ------------- ------------- Net loss before extraordinary item (5,159,981) (5,174,111) (10,334,092) (299,916) (10,634,008) Extraordinary gain 204,238 - 204,238 204,238 ------------- ------------- ------------- ------------ ------------- ------------- NET LOSS (4,955,743) (5,174,111) (10,129,854) (299,916) (10,429,770) Deduction for dividends and accretion (64,360) - (64,360) (64,360) ------------- ------------- ------------- ------------ ------------- ------------- Net loss attributable to common stockholders $ (5,020,103) $ (5,174,111) $(10,194,214) $ (299,916) $ - $(10,494,130) ============= ============= ============= ============ ============= ============= Net loss per common share - basic and diluted Before extraordinary item and deduction for dividends and accretion (0.38) (0.41) Extraordinary gain 0.020 - Deduction for dividends and accretion (0.01) - ------------- ------------- ------------- $ (0.37) $ (0.41) $ (0.69) ============= ============= ============= Weighted-average number of shares outstanding - basic and diluted 13,509,126 12,504,532 15,304,532 ============= ============= =============
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PROFORMA - CONSOLIDATED STATEMENTS OF OPERATIONS Pacific Logio, Inc. Webworks, Inc. Year Year Ended Ended Before Adjustments December 31, December 31, Adjustments -------------------------- Proforma 1999 1999 NewCo DR CR NewCo ------------- ------------- ------------- ------------ ------------- ------------- (Unaudited) (Unaudited) Revenues Advertising $ - $ - $ - Product 23,355 305,628 328,983 328,983 ------------- ------------- ------------- ------------ ------------- ------------- 23,355 305,628 328,983 328,983 Cost of sales 15,071 42,874 57,945 57,945 ------------- ------------- ------------- ------------ ------------- ------------- Gross profit (loss) 8,284 262,754 271,038 271,038 ------------- ------------- ------------- ------------ ------------- ------------- Research and development 1,198,546 320,479 1,519,025 1,519,025 Selling expenses 953,708 406,917 1,360,625 1,360,625 General and administrative 1,340,486 773,283 2,113,769 2,113,769 Depreciation and amortization 179,169 44,029 223,198 399,888 623,086 Compensation expense for stock options and warrants 1,452,610 1,242,584 2,695,194 2,695,194 ------------- ------------- ------------- ------------ ------------- ------------- Total operating expenses 5,124,519 2,787,292 7,911,811 399,888 8,311,699 ------------- ------------- ------------- ------------ ------------- ------------- Loss from operations (5,116,235) (2,524,538) (7,640,773) (399,888) (8,040,661) Other income (expense) Interest income 196,310 1,246 197,556 197,556 Loss on Investment (25,000) (25,000) (25,000) Interest expense (9,955) (19,243) (29,198) (29,198) ------------- ------------- ------------- ------------ ------------- ------------- 186,355 (42,997) 143,358 143,358 ------------- ------------- ------------- ------------ ------------- ------------- NET LOSS (4,929,880) (2,567,535) (7,497,415) (399,888) (7,897,303) Deduction for dividends and accretion (6,469,861) - (6,469,861) (6,469,861) ------------- ------------- ------------- ------------ ------------- ------------- Net loss attributable to common stockholders (11,399,741) (2,567,535) (13,967,276) (399,888) (14,367,164) ============= ============= ============= ============ ============= ============= Net loss per common share - basic and diluted (Note 4) $ (0.96) $ (0.27) $ (1.16) ============= ============= ============= Weighted-average number of shares outstanding - basic and diluted 11,879,919 9,632,500 12,432,500 ============= ============= ============= 8