As filed with the Securities and Exchange Commission January 5, 2001
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 21, 2000
SOFTLOCK.COM, INC.
(Exact Name of Registrant as Specified in its Charter)
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<S> <C> <C>
Delaware 1-13611 04-3153168
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification Number)
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Five Clock Tower Place, Ste. 440
Maynard, MA 01754
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (978) 461-5940
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Item 5. Other Events
On December 21, 2000, Softlock.com, Inc. (the "Company") entered into a
Series C Preferred Stock and Warrant Purchase Agreement (the "Purchase
Agreement") with nine purchasers (the "Purchasers") pursuant to which the
Company (a) sold 36,649 shares of Series C Preferred Stock at a purchase price
of $191 per share and an aggregate purchase price of approximately $7,000,000 to
the Purchasers and (b) issued warrants to purchase an additional 9,162 shares of
Series C Preferred Stock at an initial exercise price of $191 per share to the
Purchasers. Additionally, the Company issued to the Purchasers contingent
warrants to purchase 244,339 shares of common stock at a purchase price of $1.91
per share that may become exercisable on August 1, 2001 and contingent warrants
to purchase 244,339 shares of common stock at a purchase price of $1.91 per
share which may become exercisable on October 15, 2001. The contingent warrants
will not become exercisable if the Company has filed a Registration Statement
covering certain securities with the SEC and such Registration Statement has
become effective by the dates such warrants would otherwise become exercisable.
In connection with the transactions contemplated by the Purchase Agreement, the
Company and certain of its shareholders also entered into an Amended and
Restated Shareholders' and Rights Agreement.
THE SUMMARY OF THE SERIES C PREFERRED STOCK AND WARRANT PURCHASE
AGREEMENT, THE AMENDED AND RESTATED SHAREHOLDERS' AND RIGHTS AGREEMENT AND THE
WARRANTS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE SERIES C PREFERRED
STOCK AND WARRANT PURCHASE AGREEMENT, THE AMENDED AND RESTATED SHAREHOLDERS' AND
RIGHTS AGREEMENT AND THE FORMS OF WARRANT EXECUTED BY THE COMPANY IN CONNECTION
WITH THIS TRANSACTION. THESE DOCUMENTS ARE FILED AS EXHIBITS TO THIS FORM 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated balance sheet
(the "Pro Forma Consolidated Balance Sheet") is based on the historical
September 30, 2000 consolidated balance sheet of the Registrant and has been
prepared to illustrate the effects of the sale of 36,649 shares of Series C
Preferred Stock (the "Series C") which was completed on December 21, 2000.
The unaudited pro forma condensed consolidated balance sheet as of
September 30, 2000 gives effect to the sale of the Series C Preferred Stock as
if the transaction had been completed as of that date. The unaudited pro forma
condensed consolidated statements of income for the year ended December 31, 1999
and the nine-months ended September 30, 2000 have not been presented as the sale
of the Series C Preferred Stock would not have had an effect on such statements.
At November 30, 2000, before receiving the proceeds from the sale of
the Series C, the Company had a cash balance of $1,736,057 and an accumulated
deficit of $21,344,950.
The Pro Forma Consolidated Balance Sheet does not purport to present
the actual financial position that would have occurred had the transactions and
events reflected therein in fact occurred on September 30, 2000, nor does it
purport to be indicative of the financial condition that may be achieved in the
future. The Pro Forma Consolidated Balance Sheet is based on certain assumptions
and adjustments described in the note hereto and should be read in conjunction
therewith.
[See Next Page]
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Softlock.com, Inc. d/b/a Digital Goods
Consolidated Balance Sheet (unaudited)
September 30, 2000
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<CAPTION>
September 30, Pro forma September 30,
2000 adjustments 2000
-------------------------------------------------------
(unaudited) (as adjusted)
<S> <C> <C> <C>
Assets
Current Assets
Cash $ 3,713,647 $ 7,000,000 (a) $ 10,713,647
Accounts receivable, net 177,998 177,998
Prepaid expenses and other current assets 603,405 603,405
---------- ----------
Total current assets 4,495,050 11,495,050
Property and equipment, net 1,365,805 1,365,805
Website and product development costs, net 1,287,927 1,287,927
Security deposits 55,777 55,777
Prepaid royalties 65,579 65,579
Goodwill, net 1,683,756 1,683,756
---------- ---------
Total Assets $ 8,953,894 $ 15,953,894
============= =============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 428,964 $ 428,964
Accrued expenses 1,501,985 70,000 (a) 1,571,985
Current portion of obligations under capital leases 321,339 321,339
-------- -------
Total current liabilities 2,252,288 2,322,288
Obligations under capital leases, less current portion 636,383 636,383
Other long-term liabilities 150,897 150,897
Commitments and contingencies
Redeemable convertible Series A preferred stock
(Aggregate liquidation preference of $5,643,769 at
September 30, 2000) 5,178,571 5,178,571
Stockholders' Equity
Common Stock, $0.01 par value; 50,000,000 shares authorized;
13,071,736 shares issued and outstanding at September 30, 2000 130,717 130,717
Preferred stock, $0.01 par value; 5,000,000 shares authorized;
46,876 shares issued (83,525 as adjusted) and outstanding at
September 30, 2000 469 367 (a) 836
Deferred compensation (62,805) (62,805)
Deferred royalties (539,274) (539,274)
Additional paid-in capital 20,386,282 6,929,633 (a) 27,315,915
Accumulated deficit (18,910,754) (18,910,754)
Notes receivable from officer and directors (268,880) (268,880)
--------- ---------
Total stockholders' equity 735,755 7,665,755
-------- ---------
Total liabilities and stockholders' equity $ 8,953,894 $ 15,953,894
============= =============
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Note
(a) Reflects the sale of 36,649 shares of Series C Preferred Stock (the "Series
C") at a price of $191 per share, resulting in $7,000,000 in proceeds to the
Company. As part of the transaction, the Company also issued to the purchasers
of the Series C, warrants to purchase 9,162 shares of Series C Preferred Stock
at a price of $191. As required by generally accepted accounting principles, the
Company allocated a portion of the proceeds from the Series C to the warrants.
The fair market value of the warrants was calculated using the Black-Scholes
method.
(c) Exhibits
10.1 Series C Preferred Stock and Warrant Purchase Agreement dated December
21, 2000 by and among Softlock.com, Inc., Softlock Services, Inc. and
the Purchasers listed on Schedule 1 thereto.
10.2 Amended and Restated Shareholders' and Rights Agreement dated December
21, 2000 by and among Softlock.com, Inc. and the Shareholders named
therein.
10.3 Form of Preferred Stock Purchase Warrant dated December 21, 2000.
10.4 Form of Common Stock Purchase Warrant dated December 21, 2000.
10.5 Form of Common Stock Purchase Warrant dated December 21, 2000.
99.1 Press Release dated December 22, 2000.
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S-1
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.
SOFTLOCK.COM, INC.
Date: January 4, 2001 By: /s/Michael Dziczkowski
Michael Dziczkowski
Controller
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Exhibit Index
10.1 Series C Preferred Stock and Warrant Purchase Agreement dated December
21, 2000 by and among Softlock.com, Inc., Softlock Services, Inc. and
the Purchasers listed on Schedule 1 thereto.
10.2 Amended and Restated Shareholders' and Rights Agreement dated December
21, 2000 by and among Softlock.com, Inc. and the Shareholders named
therein.
10.3 Form of Preferred Stock Purchase Warrant dated December 21, 2000.
10.4 Form of Common Stock Purchase Warrant dated December 21, 2000.
10.5 Form of Common Stock Purchase Warrant dated December 21, 2000.
99.1 Press Release dated December 22, 2000.
