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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.
Decmeber 8, 1998
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Date of Report
(Date of Earliest Event Reported)
eSoft, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 00-23527 84-0938960
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(State or other jurisdiction of Commission I.R.S. Employer I. D
incorporation or organization) File Number Number
5335 Sterling Dr., Suite C Boulder, Colorado 80301
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (303) 444-1600
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ITEM 5. OTHER EVENTS AND SALE OF EQUITY SECURITIES.
On November 24, 1998 the Company issued the Press Release which is
filed as Exhibit 10.1 hereto, and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits. The following exhibit is filed with this Report:
10.1 Press Release dated November 24, 1998
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
eSoft, Inc.
Date: December 8, 1998 By: /s/ Thomas Tennessen
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Thomas Tennessen
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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10.1 Press Release dated November 24, 1998
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FOR IMMEDIATE RELEASE EXHIBIT 10.1
CONTACTS:
Barbara Archer Thomas Tennessen Nina Piccinini
Metzger Associates eSoft Inc. Apexx Technology, Inc.
303-786-7000 x211 303-444-1600 208-336-9400 x3130
[email protected] [email protected] [email protected]
ESOFT EXECUTES LETTER OF INTENT TO ACQUIRE APEXX TECHNOLOGY INC.;
MERGER TO CREATE LARGEST INSTALLED BASE OF ALL-IN-ONE INTERNET
APPLIANCES
Combination Creates Market Leader in Internet Solutions for
Small-to-Medium Size Businesses
BOULDER, Colo., November 24, 1998 -- eSoft Inc. (NASDAQ: ESFT) today announced
the signing of a letter of intent agreement to acquire Apexx Technology Inc., a
private company headquartered in Boise, Idaho. eSoft will exchange approximately
2.95 million shares of eSoft's common stock for all of the shares of Apexx.
Additionally, eSoft will extend to Apexx a working capital line of credit of up
to $500,000, secured by all the assets of Apexx. Apexx, with 35 employees, is
anticipating revenues of approximately $4 million in 1998. According to company
officials, this transaction creates the technology and market leader in the
fast-emerging market for Internet thin servers, and results in the combined
company having the largest installed base of all-in-one Internet appliances in
the world.
The companies intend for the acquisition to be a tax-free exchange accounted for
as a pooling of interests. The completion of the transaction is subject to
several conditions, including execution of a definitive purchase agreement and
approval of the agreement by both companies' boards of directors and
shareholders. The anticipated completion date for the transaction is March 31,
1999.
"In Apexx, I found a company that has the same `customer first' outlook as
eSoft," said Phil Becker, chairman and founder of eSoft. "The synergies in
personnel, channels and product that will result from this combination will
create an immediate dominant position in this emerging marketplace. "
"These two companies make a great combination for a number of reasons that we
believe will provide excellent value for customers and shareholders of both
organizations," said Jeff Finn, the president and CEO of eSoft. "Apexx's
award-winning TEAM Internet products provide eSoft with a turnkey solution for
the small business customer and strategically complement the IPAD family. We can
now target customers with anywhere from two to over a thousand employees with
our Internet access solutions."
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Finn continued, "The company's respective distribution networks match up very
nicely -- Apexx has a proven sell-through track record with strengths in North
America, Europe and the reseller channels, while eSoft has established
significant North American, Latin American and Asian distribution networks.
Additionally, the acquisition of Apexx provides considerable R&D depth and
experience to eSoft. With this transaction, eSoft will become the market leader
in terms of both units shipped and revenues in the exciting and fast-growing
Internet appliance/thin-server market segment."
"Given a market segment expected to be over half a billion dollars in the year
2000, market leadership is everything," said Tom Loutzenheiser, president and
CEO of Apexx Technology, Inc. "This merger creates the clear product and market
leader in Internet thin-servers. Our combined teams cover all the core
competencies needed to deliver powerful solutions that help customers make the
most of the Internet. With a full product line and significantly more resources
to deliver new and enhanced Internet thin-servers, our customers are the
ultimate winners in this merger."
ABOUT ESOFT INC.
Founded in 1984 and based in Boulder, Colo., eSoft Inc. develops and markets the
IPAD (Internet Protocol ADapter) family of products. The IPAD integrates the
hardware and software an organization needs to connect its local area network
(LAN) to the Internet. The IPAD defines a new product category -- the all-in-one
Internet box. Key features include: firewall protection, e-mail, Web browsing
and Web publishing capabilities. With an IPAD, a company benefits from
dramatically lower product and installation costs than those costs associated
with traditional Internet connectivity solutions. eSoft is publicly traded on
NASDAQ under the symbol ESFT. For additional information, contact Jeff Finn or
Tom Tennessen of eSoft at 5335 Sterling Drive, Boulder, Colo. 80301 USA; phone
(303) 444-1600; fax (303) 444-1640, e-mail [email protected] or www.esoft.com.
ABOUT APEXX TECHNOLOGY INC.
Founded in 1992, Apexx Technology, Inc. is a private corporation that provides
complete Internet access and productivity solutions. Apexx's award-winning TEAM
Internet family of products targets small-to-medium size businesses, providing a
turnkey Internet/Intranet solution that gives the customer a powerful,
affordable and easy to manage Internet presence. Key features include: Internet
connectivity/routing, firewall protection, e-mail server, Web browsing, Web
publishing capabilities and Web filtering applications. TEAM Internet has won
many industry awards, including "Best of LAN Times," Internet Magazine "Net
Best" product, PC Computing MVP Finalist, and Internet World "Best of Show"
Finalist. With thousands of units shipped and installed, Apexx products are sold
through an international network of distributors, Value Added Resellers and
retail outlets. For additional information, contact Tom Loutzenheiser or Nina
Piccinini, press relations, at 506 South 11th Street Boise ID 83702 USA; phone:
1-800-767-4858 or (208) 336-9400; fax: (208) 366-9445; e-mail:
[email protected] or www.apexxtech.com
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Statements made in this Press Release that are not historical or current facts
are "forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1993("The ACT") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use of terms such as "may," "will," "expect," "believes," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. The Company
intends that such forward-looking statements be subject to the safe harbors for
such statements. The Company wishes to caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date
made. Any forward-looking statements represent management's best judgment as to
what may occur in the future. However, forward-looking statements are subject to
risks, uncertainties and important factors beyond the control of the Company
that could cause actual results and
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events to differ materially from historical results of operations and events and
those presently anticipated or projected. These factors include adverse economic
conditions, entry of new and stronger competitors, inadequate capital,
unexpected costs, and failure to gain product approval in foreign countries and
failure to capitalize upon access to new markets. Additional risks and
uncertainties which may affect forward-looking statements about the Company's
IPAD business and prospects include the possibility that a competitor will
develop a more comprehensive or less expensive IPAD solution, delays in market
awareness of eSoft and its products, possible delays in eSoft's marketing
strategy, which could have an immediate and material adverse effect by placing
eSoft behind its competitors. The Company disclaims any obligation subsequently
to revise any forward-looking statements to reflect events or circumstances
after the date of such statement or to reflect the occurrence of anticipated or
unanticipated events. These factors and others are discussed in the
"Management's Discussion and Analysis" section of the Company's Reports on Form
10-KSB for the fiscal year ended December 31, 1997 and Form 10-QSB for the
quarter ended September 30, 1998, to which reference should be made. TEAM
Internet is a registered trademark of Apexx Technology, Inc.
