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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 OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) SEPTEMBER 22, 2000
NETLOJIX COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-27580 87-0378021
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
501 BATH STREET, SANTA BARBARA, CALIFORNIA 93101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(805) 884-6300
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 22, 2000, NetLojix Communications, Inc. (the "Registrant" or
"NetLojix") acquired CW Electronic Enterprises, Inc., an Illinois corporation
doing business as "CWE(2) Network Systems" ("CWE(2)"). The acquisition of CWE(2)
(the "Acquisition") was accomplished by means of the reverse triangular merger
of NetLojix's wholly-owned subsidiary, CWE Acquisition Corporation
("Mergersub"), with and into CWE(2). As a result of the Acquisition, CWE(2) is
now a wholly-owned subsidiary of NetLojix.
The Acquisition was accomplished pursuant to an Agreement and Plan of
Reorganization dated as of September 19, 2000 (the "Agreement and Plan of
Reorganization"), among NetLojix, CWE(2), Mergersub and Duane E. Werth and Karen
L. Werth (the "Werths"). The Werths owned approximately 90% of the outstanding
capital stock of CWE(2). The remaining 10% of CWE(2)'s capital stock was owned
by 15 individuals, substantially all of whom are employed by CWE(2).
In connection with the Acquisition, the outstanding shares of CWE(2) capital
stock were exchanged for a total of (i) 499,999 newly-issued shares of NetLojix
common stock and (ii) $150,002 in cash. The Acquisition consideration is subject
to a post-closing reduction if the net book value of CWE(2) on the date of
closing is less than an agreed amount. Of the NetLojix shares received by the
Werths in the Acquisition, 100,000 shares are being held in an escrow for one
year to provide protection for NetLojix. NetLojix funded the cash portion of the
Acquisition consideration from working capital.
The shares of NetLojix common stock issued in the Acquisition were not
registered under federal or state securities laws. No underwriters were used in
this transaction and none of such shares were issued publicly. NetLojix relied
on the exemptions from registration provided by Sections 4(2) and 4(6) of the
Securities Act and Rule 506 of Regulation D promulgated thereunder. The persons
receiving shares were the 17 shareholders of CWE(2). These persons are believed
by NetLojix to possess the requisite level of financial sophistication and
experience in order to qualify for such exemptions. NetLojix made available to
the recipients of such common stock all material information with respect to
NetLojix. Each such person signed an agreement containing appropriate investment
representations and covenants.
The value of the Acquisition consideration on the date of closing of the
transaction was approximately $1.1 million, including NetLojix's costs of the
Acquisition. This amounts to slightly more than 10% of NetLojix's total assets
as of December 31, 1999. The transaction does not meet the standards for
significance set forth in Rule 3-05(b) or Rule 11-01(b) of Regulation S-X.
Accordingly, NetLojix is not required to file historical financial statements or
pro forma financial information with respect to CWE(2).
CWE(2) is a systems integration, technical support and web development company
for mid-sized businesses in the Midwest. CWE(2) has 200 active customers,
including ABN-AMRO Bank N.A.
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CWE(2)'s most recent fiscal year ended September 30, 1999. On that date,
CWE(2) had total assets of approximately $800,000. CWE(2)'s principal offices
are located in Arlington Heights, Illinois.
The parties intend that the Acquisition will constitute a "tax-free"
reorganization pursuant to Section 368 of the Internal Revenue Code of 1986, as
amended. NetLojix will account for the Acquisition using the purchase method,
and NetLojix will record the results of operations of CWE(2) from the date of
the Acquisition forward.
Attached as Exhibit 99.1 is NetLojix's press release regarding the Acquisition.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
No financial statements are required by Rule 3-05(b) of Regulation S-X.
(b) PRO FORMA FINANCIAL INFORMATION.
No pro forma financial information is required by Article 11 of
Regulation S-X.
(c) EXHIBITS.
2.1 Agreement and Plan of Reorganization dated as of September 19, 2000,
among the Registrant, CW Electronic Enterprises, Inc., CWE Acquisition
Corporation and Duane E. Werth and Karen L. Werth.
99.1 Press Release, dated September 26, 2000, of the Registrant.
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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.
NETLOJIX COMMUNICATIONS, INC.
Dated: October 5, 2000 By: /s/ ANTHONY E. PAPA
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Anthony E. Papa
Chairman and Chief Executive
Officer
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