UNITED STATES
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): August 31, 2000
PASW, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 333-75137 77-0390628
(State or other (Commission (IRS Employer
jurisdiction of File Number) identification No.)
incorporation)
703 Rancho Conejo Boulevard, Newbury Park, CA 91320
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 499-7722
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 31, 2000 PASW, Inc. ("PASW") and NETsilicon, Inc.
("NSIL") entered into an agreement whereby PASW sold the assets of its
PSI Softworks Technology subsidiary to NSIL. The assets primarily
consist of PSI's Internet and Web software. The purchase price for the
assets was 90,000 shares of NSIL's common stock. In addition NSIL has
agreed to grant a non-exclusive, royalty-free license for the acquired
technology, to PASW and its affiliates, subject to certain limitations.
NSIL is expected to retain substantially all of PSI's personnel as part
of a newly formed operating group. The sale is being accounted for as
discontinued operations for financial reporting purposes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. PAGE NO.
(a) Not Applicable.
(b) Unaudited Proforma Consolidated Condensed
Financial Information
Headnote to Unaudited Proforma Consolidated
Condensed Financial Statements F-1
Unaudited Proforma Consolidated Condensed Balance
Sheet as of June 30, 2000 F-2
Footnotes to Unaudited Proforma Consolidated
Condensed Balance Sheet F-3
Unaudited Consolidated Statement of
Operations for the Six Months ended
June 30, 2000 F-4
Unaudited Proforma Consolidated Condensed
Statement of Operations for the Year
Ended December 31, 1999 F-5
Exhibits.
1.1 Asset Purchase Agreement dated August 31, 2000
NETsilicon, Inc., PASW, Inc., and PSI Softworks Technology, Inc.
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PASW, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
The following Unaudited Proforma Consolidated Condensed Balance
Sheet as of June 30, 2000 and Unaudited Proforma Consolidated
Statements of Operations for the Six Months ended June 30, 2000 and
1999 and the Year Ended December 31, 1999, give effect to the sale of
the assets of PASW's PSI Softworks Technology subsidiary.
The Unaudited Proforma Consolidated Condensed Balance sheet of
PASW hasbeen prepared based on its historical unaudited consolidated
balance sheet as of June 30, 2000. The adjustments shown reflect the
sale of substantially all of the assets as if the sale had been
completed prior to June 30, 2000.
The proforma statements of operations may not be indicative of the
results that would have actually occurred if the sale of assets had
been discontinued effective as of the beginning of the respective
periods shown. The proforma financial statements should be read in
conjunction with the Company's: 1)audited consolidated financial
statements and notes thereto included in the Form 10-KSB and Annual
Report for the fiscal year ended December 31, 1999; 2) Form 10-QSB for
the quarters ended March 31, 2000 and June 30, 2000; and 3) Schedule
14A - Preliminary Proxy Statement dated April 15, 2000.
F-1
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PASW, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED CONDENSED BALANCE SHEET
AS OF JUNE 30, 2000
Historical Proforma
Consolidated Proforma Consolidated
June 30, 2000 Adjustments June 30, 000
Current assets
Cash and cash equivalents $ 717,156 $ $ 717,156
Accounts receivable, net of
allowance for bad debts 102,301 (91,497)(1) 10,804
Prepaid expenses 53,688 _________ 53,688
Total current assets 873,145 (91,497) 781,648
Fixed assets, net of
depreciation 318,032 (129,042)(1) 188,990
Investments 1,000,000 1,000,000
Marketable securities 2,328,750 (2) 2,328,750
Other assets 19,038 ___________ 19,038
Total assets $2,210,215 $2,108,211 $4,318,426
Current liabilities
Accounts payable and
accrued expenses $ 310,758 $ 377,500(3)$ 688,258
Total current liabilities 310,758 377,500 688,258
Deferred revenues 143,164 (143,164)(4)
Minority interest 1,400 1,400
Stockholders' equity
Common stock 4,501 4,501
Additional paid in
capital 5,939,750 5,939,750
Accumulated deficit (4,293,866) 1,873,875 (2,419,991)
Cumulative adjustment for
currency translation 104,508 __________ 104,508
Total stockholders'
equity 1,754,893 1,873,875 3,628,768
$2,210,215 $2,108,211 $4,318,426
F-2
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PASW, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PROFORMA CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
1. To record the sale of accounts receivable and fixed assets of the
PSI Softworks, Inc. subsidiary.
2. To record the receipt of 90,000 shares of NSIL common stock at $25
7/8 the closing price of the stock on August 31, 2000.
3. To record additional accrued expenses related to vacations, options
and other expenses associated with the sale.
4. To record the elimination of deferred revenue resulting from the
inclusion of service and maintenance plans in the sale.
F-3
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PASW INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 2000
The following unaudited Statement of Operations for the Six Months
Ended June 30, 2000 is shown as reported in the Company's Form 10-QSB
for the quarter then ended.
Six Months Ended June 30, 2000
Historical Proforma Proforma
Consolidated Adjustments Consolidated
Net revenue
Sales $ 927,920 $ 829,468 $ 98,452
Royalties and others 235,000 31,231 203,769
Total 1,162,920 860,699 302,221
Cost of revenue
Purchases and royalty
fees 48,648 10,738 37,910
Gross profit 1,114,272 849,961 264,311
Expenses
Selling, general and
administrative 1,759,660 581,205 1,178,455
Research and development 1,155,153 775,566 379,587
Depreciation and
amortization 47,710 44,337 3,373
Total 2,962,523 1,401,108 1,561,415
Net loss $(1,848,251) $ (551,147) $(1,297,104)
Net loss per common share
Basic and diluted $ (0.40) $ (0.28)
Weighted average common
stock shares outstanding
Basic and diluted 4,606,345 4,606,345
F-4
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PASW, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TWELVE
MONTHS ENDED DECEMBER 31, 1999
The following unaudited Statement of Operations for the Twelve
Months Ended December 31, 1999 is shown as reported in the Company's
Form 10-KSB for the fiscal year then ended.
Twelve Months Ended December 31, 1999
Historical Proforma Proforma
Consolidated Adjustments Consolidated
Net revenue
Sales $ 1,817,654 $ 1,372,024 $ 445,631
Royalties and others 424,890 189,601 235,288
Total 2,242,544 1,561,625 680,919
Cost of revenue
Purchases and royalty
fees 167,486 91,490 75,996
Gross profit 2,075,058 1,470,135 604,923
Expenses
Selling, general and
administrative 2,578,555 1,848,703 729,852
Research and development 1,625,599 1,253,168 372,401
Depreciation and
amortization 77,828 58,000 19,828
Former officers consulting
and administrative expense 257,143 0 257,143
Total 4,539,125 3,159,871 1,379,224
Net loss $(2,464,067) $(1,689,736) $ (774,301)
Net loss per common share
Basic and diluted $ (0.62) $ (0.20)
Weighted average common
stock shares outstanding
Basic and diluted 3,946,392 3,946,392
F-5
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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 officer.
Date: September 13, 2000
PASW, INC.
By: /s/ William E. Sliney
William E. Sliney
President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)