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): June 8, 2000
PHOTOLOFT.COM
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(Exact name of registrant as specified in its charter)
000-26693
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(Commission File Number)
Nevada 87-0431036
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
300 Orchard City Drive, Suite 142, Campbell, CA 95008
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(Address of Principal Executive Offices Including Zip Code)
Registrant's telephone number, including area code: (408) 364-8777
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On June 8, 2000, pursuant to a Stock Purchase Agreement dated as of April
18, 2000 (the "Agreement"), we issued and sold 900 shares of our Series B
Convertible Preferred Stock (the "Series B Preferred Stock") to Intellect
Capital Group, LLC, a Delaware limited liability company ("ICG"). ICG is a Los
Angeles-based firm that provides investment and intellectual capital to
developmental and emerging growth stage technology companies and takes an active
role to assist them to realize their full potential.
The consideration for the Series B Preferred Stock consisted of $9,000 in
cash. In conjunction with the Agreement, ICG will become an active shareholder,
and will assist us in the creation and and execution of our strategic plan,
building a management team and Board of Directors, identifying and consummating
strategic relationships, and advising on merger and acquisition activities, our
capital formation process and corporate finance and corporate communications.
The Series B Preferred Stock is convertible, on or before July 7, 2000, into 50%
of our then-outstanding common stock following the conversion (on a fully-
diluted basis). As of June 8, 2000, we had 28,716,392 shares of common stock
outstanding on a fully-diluted basis, and therefore, if ICG had converted all of
the Series B Preferred Stock on that date, it would own and control 50% of our
fully-diluted common stock and 61.4% of our outstanding common stock calculated
pursuant to Rule 13d-3(d)(1)(B) of the Securities Exchange Act of 1934.
Pursuant to the Agreement, we elected Terren S. Peizer, the ICG Chairman and
Chief Executive Officer, as our Chairman and a member of our Board of Directors.
In connection with the Agreement, we entered into a Registration Rights
Agreement, dated June 8, 2000, which requires us to register, at our expense,
the common stock into which the Series B Preferred Stock is convertible upon the
demand of ICG; provided, however, that no such demand can be made prior to
December 8, 2000. The Registration Rights Agreement also provides unlimited
piggyback registration rights. Certain of our shareholders also entered into an
Agreement anibg Shareholders and Company with ICG and us Pursuant to which those
shareholders agreed to vote to elect to the Board a candidate to be designated
by future investors and a Lock-Up Agreement restricting their transfer of our
common stock.
Prior to entering into the Agreement, ICG loaned us $275,000 pursuant to
a Loan and Security Agreement dated May 18, 2000. The loan is evidenced by a
Promissory Note, and secured by all of our assets. On May 22, 2000, we also
entered into a side letter with ICG in which we agreed to (i) file a consent
solicitation statement with the Securities Exchange Commission to solicit
consents for the purpose of increasing our authorized common stock to
200,000,000 shares and (ii) enter into Shareholder Agreements with certain of
our major shareholders in which those shareholders agreed to consent to the
increase in our authorized common stock. The side letter provides for financial
penalties in the event that we fail to file the consent solicitation statement
and obtain approval of the increase by specified dates. Previously on March
24, 2000, we had sold and issued to an entity related to ICG a warrant to
purchase 400,000 shares of our common stock at an exercise price of $0.10 per
share.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired: N/A
(b) Pro Forma Financial Information: N/A
(c) Exhibits:
The following exhibits are filed with this Form 8-K:
Exhibit Number Description of Exhibit
3.5 Certificate of Designations, Preferences and Rights of Series B
Convertible Preferred Stock
4.3 Form of Voting Agreement Among Shareholders and Company, dated
as of June 8, 2000, by and between the Registrant and certain
shareholders
10.31 Stock Purchase Agreement, dated as of April 18, 2000, by and
between the Registrant and Intellect Capital Group, LLC (without
exhibits)
10.32 Registration Rights Agreement, dated June 8, 2000, by and
between the Registrant and Intellect Capital Group, LLC
10.33 Loan and Security Agreement, dated May 18, 2000, by and
between the Registrant and Intellect Capital Group, LLC
10.34 Promissory Note, dated May 18, 2000, by the Registrant in favor
of Intellect Capital Group, LLC
10.35 Side letter, dated May 22, 2000, by and between the Registrant
and Intellect Capital Group, LLC
10.36 Form of Lock-Up Agreement, dated May 22, 2000, by and
among the Registrant and certain shareholders
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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.
PHOTOLOFT.COM
Date: June 23, 2000 By: /s/ JACK MARSHALL
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Jack Marshall,
Chief Executive Officer
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