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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): December 15, 1999
PACIFIC SOFTWORKS, INC.
(Exact name of registrant as specified in its charter)
California 333-75137 77-0390628
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
No.)
703 Rancho Conejo Blvd., Newbury Park, California 75081
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805)499-7722
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On October 25, 1999 the Company and Financial Services Provider Network, Inc
("FSPN") signed a Letter of Intent to enter into discussions with the intent
of entering a strategic relationship to jointly develop certain Internet
applications with financial institutions. The Company indicated that subject
to entering into a definitive agreement it would invest up to $1,000,000 in
FSPN and under certain conditions up to an additional $2,000,000. On October
25, 1999 the Company loaned FSPN $250,000 through a promissory note bearing
interest at ten (10%) percent due in ninety days. The loan was for general
corporate purposes.
On December 3, 1999 the Company converted the $ 250,000 October 25, 1999
note and loaned FSPN an additional $ 750,000 pursuant to a convertible
promissory note. The $1,000,000 convertible promissory note is unsecured,
carries interest at 10% per annum and is due 12 months from issuance unless
previously converted into capital stock of FSPN. The convertible note will
automatically convert into shares equivalent to no less than 5% of the
outstanding capital stock of FSPN concurrent with FSPN's closing of its next
equity financing. If converted, the accrued interest on the convertible note
will revert to a 6% rate for purposes of calculating the number of shares of
FSPN issuable.
Item 5. Other Events
On December 1, 1999 the Board of Directors approved a management reorganization
in order to provide Glenn Russell, CEO and Chairman of the Board, the resources
necessary to enhance the Company's positioning in the rapidly growing market for
internetworking technology and to improve the utilization of its assets and
competencies. In support of this initiative, the Board of Directors has
appointed William E. Sliney, Pacific's Chief Financial Officer, as interim
President and Chief Operating Officer. With Sliney assuming operating
responsibility for Pacific, Russell will focus on the Company's strategic
interests. Sliney remains Pacific's Chief Financial Officer. Sliney joined
Pacific Softworks in April of 1999. Prior to that, he was the Chief Financial
Officer of Legacy Software, Inc., from 1995 to 1999, and from 1993 to 1994
was Chief Executive Officer for Gumps.
In conjunction with the management reorganization, on December 1,1999 the
Board of Directors approved and the Company issued warrants to acquire
1,500,000 shares of the Company's common stock to a team of strategy
consultants led by Kaz Hashimoto, formerly CEO of Cygnus Solutions
(www.cygnus.com). The warrants provide for the purchase of Pacific Softworks
common stock at $5.75 per share (the fair market value at the date of issuance)
for a period of five years and are exercisable only if the closing price of the
Company's common stock averages $10.00 per share or more for 15 consecutive
days. As additional consideration to the team of strategy consultants, the
Company agreed to pay a fee equal to 10% of the profit realized on its
investment in FSPN.
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c) Exhibits
The following documents are filed as exhibits to this report.
The exhibit numbers in the exhibit list correspond to the numbers
assigned to such exhibits in the Exhibit Table of Item 601 of
Regulation S-K.
99.1 Text of Press Release dated December 1, 1999 issued by
Pacific Softworks, Inc.
99.2 Text of Press Release dated December 15, 1999 issued by
Pacific Softworks, Inc.
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.
Pacific Softworks, Inc.
(Registrant)
Date: December 15, 1999 /s/ WILLIAM E. SLINEY
William E. Sliney
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and Accounting
Officer)
Exhibit 99.1
PACIFIC SOFTWORKS STRATEGICALLY ALIGNS MANAGEMENT
NEWBURY PARK, CA December 1, 1999 Pacific Softworks, Inc. (NASDAQ: PASW)
today announced a management reorganization to enhance the Company's positioning
in the rapidly growing market for internetworking technology and to improve the
utilization of its assets and competencies. Glenn Russell, Chairman of the
Board of Pacific Softworks, will spearhead the strategic effort.
"Pacific has always been an innovator of embedded internetworking technologies,
said Russell. "Dramatic changes in the embedded and Internet marketplace, such
as Red Hat's recent entry into our embedded market with the Open Source business
model, are now driving us to rethink our strategic options in not only our
technologies and competencies, but also in our business models."
In support of this initiative, the Board of Directors has appointed William E.
Sliney, Pacific's Chief Financial Officer, as interim President and Chief
Operating Officer. With Sliney assuming operating responsibility for Pacific,
Russell will focus on the Company's strategic interests. Sliney joined Pacific
Softworks in April of 1999. Prior to that, he was the Chief Financial Officer
of Legacy Software, Inc., from 1995 to 1999, and from 1993 to 1994, he was Chief
Executive Officer for Gumps.
In addition, the Board of Directors approved the allocation of up to 1.5
million performance warrants as incentive to strategic advisors to support
Russell's efforts. Tied to results, these warrants are to vest only if
Pacific's common stock trades at $10.00 or better.
Pacific Softworks, Inc.
Pacific Softworks, Inc. is a leader in the embedded software market. Pacific
Softworks develops and licenses Internet and Web related software and software
development tools. The Company's products enable Internet and Web based
connectivity in embedded displays, and "Information Appliances". The Company's
products are used throughout the Internet, in information appliances, which are
Internet-connected versions of everyday products, such as telephones, vending
machines, in-store displays, set-top boxes and other digitally based devices.
Pacific Softworks is headquartered in Newbury Park, California.
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Except for the historical information contained herein, this news release
contains forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those contemplated herein,
including but not limited to timely development, acceptance and pricing of new
products, the impact of competitive products and pricing, and other risk factors
detailed in the Company's periodic filings with the Securities and Exchange
Commission. The Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Pacific Softworks, Inc. Georgette W. Pagano
Investor Relations
[email protected]
805-499-7722
Financial Public Relations: Kevin Spencer
Excel Financial Services
[email protected]
561-997-5828
Exhibit 99.2 PACIFIC SOFTWORKS ANNOUNCES INVESTMENT AND STRATEGIC ALLIANCE WITH
FINANCIAL SERVICES PROVIDER NETWORK
NEWBURY PARK, CA _ December 16, 1999 _ Pacific Softworks, Inc. (NASDAQ:
PASW), a leading developer of embedded Internet and Web-related software for
the Information Appliances market, today announced that it has formed a
strategic alliance and has made an equity investment in Financial Services
Provider Network, Inc. ("FSPN"), a private firm, making a significant
contribution as a developer of software for the banking industry.
FSPN will begin to market its proprietary software program to the banking
industry in the first quarter of 2000. FSPN's software is being developed to
be compatible with both Red Hat Linux and Microsoft Windows.
Pacific Softworks has invested $1,000,000 to date, and has the right to
invest up to an additional $2,000,000. The two companies will endeavor to
develop areas of common interest.
Glenn Russell, Chairman of the board of Pacific Softworks said, "Our strategic
relationship with FSPN enables access to new vertical markets for Pacific.
Given the breadth of opportunities in financial applications enabled by the
Internet, we believe that our competencies are complementary."
William Sliney, President of Pacific Softworks, said, "We believe that our
new relationship with FSPN will prove to be a significant investment opportunity
and yield solid strategic benefits." Pacific Softworks core technologies may
be sold to banking customers. These services could include low cost embedded
kiosk technology, based around Pacific Softworks'embedded micro browser and
network management software. This capability could enable bank customers to
access and transact their financial activities from low cost and strategically
located kiosks, a major market thrust of Pacific Softworks.
Pacific Softworks, Inc.
Pacific Softworks, Inc. is a leader in the embedded software and Internet
appliance market. Pacific Softworks develops and licenses Internet and Web
related software and software development tools. The company's products
enable Internet and Web based connectivity in embedded displays. The Company's
products are used throughout the Internet and in information appliances, which
are Internet-connected versions of everyday products, such as vending machines,
in-store displays, set-top boxes and other digitally-based devices.
Pacific Softworks is headquartered in Newbury Park, California.
Except for the historical information contained herein, this news release
contains forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those contemplated herein,
including but not limited to timely development, acceptance and pricing of new
products, the impact of competitive products and pricing, the ability of FSPN,
a newly formed development stage company to implement its business plan, and
other risk factors detailed in the company's periodic filings with the
Securities and Exchange Commission. The Company undertakes no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Pacific Softworks, Inc. Georgette W. Pagano
Investor Relations
[email protected]
www.pacificsw.com
805-499-7722
Financial Public Relations: Kevin Spencer
Excel Financial Services
[email protected]
561-997-5828
