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)
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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
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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
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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 .
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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.
Logio, Inc.
/s/ Ken Bell 11/10/00
By: ______________________________________ Date: ________________________
Ken Bell, President, CEO and Director
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PROFORMA - CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Pacific
Logio, Inc Webworks, Inc. Before Adjustments
September 30, September 30, Adjustments -------------------------- Proforma
2000 2000 NewCo DR CR NewCo
------------- ------------- ------------- ------------ ------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
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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<TABLE>
<CAPTION>
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
------------- ------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
============= ============= =============
</TABLE>
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<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C> <C> <C>
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
============= ============= =============
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