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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 3, 1999
PopMail.com, inc.
(Exact name of registrant as specified in its charter)
Minnesota 0-23243 31-1487885
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4801 West 81st Street, Suite 112, Bloomington, MN 55437
(Address of principal executive offices) (Zip Code)
(Former Name or Former Address, if Changed Since Last Report)
Registrant's telephone number, including area code: (612) 837-9917
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Item 2. Acquisition of Disposition of Assets.
1. CONSUMMATION OF ASSET ACQUISITION. On December 3, 1999, ROI
Acquisition Corporation, a Texas corporation and wholly owned subsidiary ("Sub")
of PopMail.com, Inc. (the "Parent"), acquired, effective as of November 30,
1999, substantially all of the assets and assumed substantially all of the
liabilities of ROI Interactive, LLC, a Texas limited liability company (the
"Company"), solely in exchange for 2,750,000 shares of the voting common stock,
$.01 par value, of Parent (the "Parent Exchange Shares") in accordance with the
terms and provisions of a definitive Agreement and Plan of Reorganization, dated
July 19, 1999, as amended by that certain First Amendment to Agreement and Plan
of Reorganization, dated November 12, 1999 (as amended, the "Reorganization
Agreement"), by and among Parent, Sub, the Company, and the holders of
membership interests of the Company (the "Members"). ROI provides exclusive
email service and permission-based, opt-in marketing services to television
stations and major league sports franchises.
2. CLASSIFICATION OF PARENT EXCHANGE SHARES. Of the 2,750,000 Parent
Exchange Shares, 1,402,500 shares are Restricted Parent Exchange Shares,
1,225,000 shares are Unrestricted Parent Exchange Shares and 122,500 shares are
Additional Unrestricted Parent Exchange Shares. All stock certificates
representing the Parent Exchange Shares must contain the legend set forth in
Section 2.28 of the Reorganization Agreement which basically provides that the
shares may not be transferred unless the shares are either registered under the
Securities Act or Parent has received an opinion of counsel that such shares may
be transferred without first being registered under the Securities Act. In
addition, the shares issued to the Controlling Members (Gary W. Schneider and
John M. Palms, Jr. who collectively own approximately 70% of the Company) are
subject to a one year lock-up agreement in accordance with the provisions of
Section 2.29 of the Reorganization Agreement.
3. SALE OF UNRESTRICTED PARENT EXCHANGE SHARES. Section 7.11 of the
Reorganization Agreement provided that as a condition of the Company and the
Members to the Closing, the Members shall have found an independent third party
who is neither (i) acting on behalf of or as an agent of the Parent, Sub or the
Company, nor (ii) otherwise a Related Person with respect to Parent, Sub or the
Company (a "Third Party Purchaser") to purchase the Unrestricted Parent Exchange
Shares at a purchase price that would result in the Members receiving aggregate
gross proceeds of $2,450,000 from such sale or sales prior to income tax but
after applicable broker commissions on such sale or sales. Pursuant to the
provisions of Section 7.11 of the Reorganization Agreement, on November 29, 1999
the Members entered into a Stock Purchase Agreement with an affiliate of Stephen
D. King, the Chief Executive Officer and a director of Parent ("Purchaser"),
whereby the Purchaser purchased the 1,225,000 shares of the Unrestricted Parent
Exchange Shares at an aggregate cash purchase price of $2,450,000, such purchase
and sale being consummated on December 3, 1999. The funds for this purchase was
obtained from a loan by Parent.
4. OPTION TO SELL ADDITIONAL UNRESTRICTED PARENT EXCHANGE SHARES.
Pursuant to Section 6.17 of the Reorganization Agreement, the Members have the
option to sell the Additional Unrestricted Parent Exchange Shares on or before
March 30, 2000 to a Third Party Purchaser at a purchase price that would result
in the Members receiving aggregate gross proceeds of $245,000 from such sale or
sales prior to income tax but after applicable broker commissions on such sale
or sales. If the Members desire to exercise such option, the Members (acting by
and through Gary W. Schneider or John M. Palms, Jr. as their authorized
attorney-in-fact) are required to give notice to Parent of their intent to
engage in such a sale during the month of February 2000.
5. ADJUSTMENT OF RESTRICTED PARENT EXCHANGE SHARES. Pursuant to the
provisions of Section 6.13 of the Reorganization Agreement, if and only if the
aggregate value of the Restricted Parent Exchange Shares is less than $2,805,000
on the first anniversary of the Closing Date based upon the average of the
closing sales price of a share of the Parent Common Stock as reported on a
national securities exchange or quotation system for each trading day in the
60-calendar day period ending on the day before the day that is the first
anniversary of the Closing Date (the "60-Day Average Adjusted Price"), then
Parent shall issue the Additional Restricted Parent Exchange Shares to the
Members within 10 days after the first anniversary of the Closing Date. The term
"Additional Restricted Parent Exchange Shares" means shares of Parent Common
Stock equal in the aggregate to the lesser of (i) the minimum number of shares
of the Parent Common Stock required to be issued to the Members so that the
aggregate value of the Restricted Parent Exchange Shares as determined in
accordance with the provisions of Section 6.13 of the Reorganization Agreement
and such additional shares valued at the 60-Day Average Adjusted Price equals
$2,805,000, or (ii) the aggregate number of Restricted Parent Exchange Shares
issued at the Closing (said number being 1,402,500).
6. MISCELLANEOUS MATTERS. The terms of the acquisition were the result
of arms-length, good faith negotiations between the parties to the
Reorganization Agreement. All shares of common stock issued in the transaction
were issued (and will be issued, if Additional Restricted Parent Exchange Shares
are required to be issued) out of Parent's authorized but unissued common stock.
The Parent Exchange Shares issued were issued pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as amended, provided by
Section 4(2) thereof.
The terms of the merger are more fully described in the Agreement and
Plan of Merger and the First Amendment to Agreement and Plan of Merger by and
among the parties which are filed herewith as Exhibits 2.0 and 2.1,
respectively, and incorporated herein by reference.
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Item 5. OTHER EVENTS
A. SALE OF KENWOOD RESTAURANT
The Company recently entered into an agreement to sell the assets used in the
operation of its Hotel Discovery restaurant in Cincinnati, Ohio to Wethgreen,
LLC, an Ohio limited liability company. The purchase price was $3,750,000 in the
form of a promissory note in that amount. The note required an immediate $25,000
payment; $100,000 per year during years 2 and 3; $125,000 per year during year
4; $150,000 per year during years 5-10; $200,000 per year during years 11-15 and
$250,000 per year during years 16 to 21. The note is secured by all inventory,
accounts receivables, equipment and other general intangible property of
Wethgreen, as well as a leasehold mortgage in the restaurant lease. The Company
is awaiting additional closing documentation from the landlord, which is a
condition to closing.
B. CONVERSION OF SERIES B CONVERTIBLE PREFERRED STOCK.
On November 24, 1999, the remaining holders of the Company's Series B
Convertible Preferred Stock (the "Series B") agreed with the Company to convert
their Series B into 8,533,498 shares of the Company's Common Stock. In exchange
for this conversion, the Company agreed to amend the Warrants held by the Series
B holders (which are exercisable for an aggregate of 4,407,098 shares of the
Company's Common Stock, subject to adjustment, and represent the economic
equivalent of certain of the options, warrants and other securities convertible
into, or exchangeable for, Common Stock of the Company that were outstanding on
May 3, 1999) to change the exercise price of the Warrants from various exercise
prices ranging from $0.75 to $6.50 per share of Common Stock (and having a
weighted average exercise price of approximately $1.51) to a single exercise
price of $0.75 per share of Common Stock. In addition, the Company and the
holders of the Series B agreed that if any of the outstanding warrants of the
Company, other than the warrants held by the Series B holders, are exercised for
an exercise price per share of less than $0.75, then the Series B holders will
be issued by the Company one share of Common Stock for every such warrant so
exercised. Currently, none of such warrants are exercisable for less than $0.75
per share. James L. Anderson, the Chairman of the Board of Directors of the
Company, was a holder of Series B prior to the conversion and serves as trustee
of a trust that also held Series B prior to the conversion.
In connection with the conversion of the Series B, in exchange for the
surrender and cancellation of the 900,000 warrants to purchase Common Stock of
the Company held by LegacyMaker, Inc. and all other warrants and rights to
purchase securities of the Company held by LegacyMaker (including
LegacyMakers's right to purchase from the Company shares of preferred stock
having substantially similar terms to the shares of Series A 8% Convertible
Preferred Stock and Series C 8% Convertible Preferred Stock of the Company for
the same consideration as the Series A and Seris C Preferred Shares were
originally issued by the Company), the Company agreed to issue to LegacyMaker
900,000 shares of Common Stock of the Company. This exchange is to occur
simultaneously with the Company's payment in full of its $550,000 promissory
note due to LegacyMaker and the satisfaction of certain other obligations of the
Company, but not before January 5, 2000. The Company has agreed to register the
900,000 shares of Common Stock with the Securities and Exchange Commission on
behalf of LegacyMaker.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial Statements of Businesses Acquired. Pursuant to Item 7(a)(4),
financial statements required by this item will be filed before
February 14, 2000.
b. Pro Forma Financial Information. Pursuant to Item 7(b)(2), financial
statements required by this item will be filed before February 14,
2000.
(c) Exhibits
2.0 Agreement and Plan of Reorganization among ROI InterActive,
LLC, Cafe Odyssey, Inc. and ROI Acquisition Corporation
2.1 First Amendment to Agreement and Plan of Reorganization,
dated November 12, 1999 by and among Parent, Sub, the
Company, and the Members.
SIGNATURE
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 thereunto duly authorized.
POPMAIL.COM, INC.
Date: December 16, 1999 By: s/Thomas W. Orr
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Name: Thomas W. Orr
Title: Chief Financial Officer
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