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
July 8, 2002
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Date of Report
(Date of Earliest Event Reported)
WHOLE LIVING, INC.
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(Exact name of registrant as specified in its charter)
Nevada 000-26973 87-0621709
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(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
629 East 730 South, Suite 201
American Fork, Utah 84003
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(Address of principal executive offices)
(801) 772-3300
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Registrant's telephone number
ITEM 2: ACQUISITION AND DISPOSITION OF ASSETS
On July 8, 2002, Whole Living, Inc., Vestrio Corporation, a Utah
corporation, and Simple Online Solutions, LLC, a Utah limited liability
company, entered into an Agreement and Plan of Reorganization by which Whole
Living would acquire Vestrio and Simple Online Solutions through a
stock-for-stock exchange intended to qualify as a tax-free exchange. Vestrio
is located in American Fork, Utah, and sells its products and services to the
public using a network marketing model for distribution. Simple Online
Solutions owns certain proprietary products and markets those products and
services through licensing agreements. Simple Online Solutions, L.L.C., is
owned by Vestrio.
Our management expects this acquisition to broaden our product offerings
and improve growth in our customer-direct business. The acquisition agreement
was approved by our board of directors and management expects to complete the
acquisition within the next 60 days. As a result of the share exchange,
Vestrio and Simple Online Solutions will become our wholly-owned subsidiaries
and we will acquire the business assets and operations of both companies.
Terms of The Agreement
The Agreement and Plan of Reorganization provides that we will acquire
100% of Vestrio's common shares through a stock-for-stock exchange. We issued
an aggregate of six million common shares to the six stockholders of Vestrio
in exchange for 100,000 shares of Vestrio common stock. We will issue
3,000,000 Whole Living common shares to the Vestrio shareholders upon closing,
then the remaining 3,000,000 shares will be held in escrow until Vestrio meets
certain performance projections. Each Vestrio stockholder will make an
investment decision whether to exchange his/her/its shares for the Whole
Living shares.
The acquisition agreement contains customary representations and
warranties relating to each company's corporate status, corporate authority to
complete the acquisition, capital structure and corporate conduct prior to the
closing. Each company has agreed to use its best efforts to maintain and
preserve its business organization, employee relationships and keep its good
will intact until the acquisition is complete. Also, each company provided
corporate documentation to the other for due diligence purposes. Each company
has agreed to carry on their respective businesses in the usual and ordinary
course and each will bear its own operating expenses until completion of the
acquisition.
The agreement provides that termination of the agreement may occur if we
or Vestrio fail to comply in any material respect with the covenants or
agreements included in the acquisition agreement. The acquisition agreement
may also be terminated by mutual consent, which must be expressed by action of
our board of directors and by Vestrio's stockholders. In the event that the
parties terminate the agreement, both have agreed to pay their own costs
incurred.
The exchange of stock is intended to qualify as a tax-free exchange in
accordance with Section 368(a)(1)(B) of the Internal Revenue Code, as amended.
The acquisition will be accounted for under the purchase method of accounting
using generally accepted accounting principles. This means that Vestrio's
results of operation will be included with Whole Living's from the closing
date and its consolidated assets and liabilities will be recorded at their
fair values at the same date. It is anticipated that (i) Whole Living and
Vestrio or their respective stockholders will not recognize gain or loss as a
result of the acquisition, and (ii) the tax basis of the Whole Living ommon
stock received by Vestrio stockholders will be the same as the tax basis of
the Vestrio common stock surrendered. Whole Living and Vestrio have not
sought nor do they intend to seek an attorney's opinion or tax revenue ruling
from the Internal Revenue Service as to the Federal income tax consequences of
the share exchange.
We agreed to grant "piggy back" registration rights to the Vestrio
shareholders. If we file a registration statement under the Securities Act of
1933 within one year of the agreement date and that registration statement
registers a minimum of 2,500,000 common shares, then the Vestrio shareholders
may register a minimum of ten percent of the Whole Living common stock that
was issued in the share exchange.
Prior Relationships - Our management became aware of Vestrio as a result
of a personal relationship between a Whole Living shareholder, Mark Comer, and
Roger Taylor, a founder of Vestrio. Our President, Ronald K. Williams, met
with Vestrio's management in April of 2002. During the next several weeks the
companies held meetings which culminated in the letter of intent in May 2002
for the acquisition of Vestrio by Whole Living.
Consideration for the Acquisition - The consideration exchanged in the
acquisition was negotiated at "arms length" and our management relied on
factors used in similar proposals, including the relative value of the assets
of Vestrio, Vestrio's present and past business operations, the future
potential of Vestrio, the management of Vestrio and the potential benefit of
the acquisition to the stockholders of Whole Living. The source of the
consideration used to acquire our interest in Vestrio was six million
authorized but unissued common shares. In addition, Whole Living loaned
Vestrio and Simple Online Solutions an aggregate of $1,250,000 and issued
150,000 Whole Living common shares to satisfy outstanding obligations of those
companies.
The consideration used by the Vestrio stockholders to acquire their
interest in Whole Living was the 100,000 shares of the issued and outstanding
common stock of Vestrio which they held. Our board of directors determined
that the consideration for the exchange was reasonable based upon the factors
listed above. Our board did not seek a third party fairness opinion or any
valuation or appraisal of the share exchange. Thus, stockholders will not
have the benefit of a third party opinion that the exchange of shares is fair
from a financial point of view.
Interests of Certain Persons - Except as set forth 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 Vestrio shares. Except
as described in this report, there have been no contacts, negotiations or
transactions within the last two years between Whole Living or any of our
directors, executive officers or their affiliates, on the one hand, and
Vestrio or its affiliates, on the other hand, regarding the acquisition,
consolidation, or acquisition of shares, or election of directors.
Business Operations of Vestrio and Simple Online Solutions
Simple Online Solutions was formed as a Utah limited liability company on
May 2, 2000. Simple Online Solutions offers services, products, datafeeds,
programming, product research and development, copyrights, and training.
Vestrio holds license agreements for the marketing of some of Simple Online
Solution's products and services. Vestrio was incorporated in the state of
Utah on August 31, 2001, as Online Investor Network, Inc. It changed its name
to Vestrio Corporation in March 2002. Vestrio offers products and training to
help investors learn how to control their investments in the stock market.
Vestrio has 25 employees while Simple Online Solutions has five employees.
Vestrio's goal is to provide four vital elements to each investor to
increase investment success. These elements are training, tools, confidence
and capital. The Vestrio products and services include an extensive one or
two day training, conference calls, chat rooms, online training, community
based training, videos, workbooks, regular newsletters, and a simple blend of
fundamental and technical analysis. Vestrio markets its products through a
network marketing structure. Each client is encouraged to create trading
teams of three to six other people to foster the exchange of ideas. These
trading teams function as a support group in making decisions for investing in
stocks, as well as act as a referral program for Vestrio's products and
services. Clients also have the opportunity to receive monetary compensation
from the creation of these trading teams and the client may use these funds
for further investments in the stock market.
Vestrio's main product is the Investrio(TM) Quick Start Mentor Center(TM)
financial educational package, which provides the client with facts and
information to help set reasonable investing goals. This product also
includes a suite of proprietary stock analysis software products, screening
tools which provide searching capability using criteria determined by the
user, customizable stock charts, personal ticker tape, portfolio management
and research tools, real-time stock tracking, proprietary fundamental
analysis, automatic stock screening, integrated desktop portfolio tracking
that may be customized by the user to include alerts, and integrated stock
specific news. This product is marketed on a monthly subscription basis, after
payment of an initial set-up fee.
Vestrio's competitors include: Trade Secrets, Investools, Wizetrade,
Stock Market Institute of Learning (Wade Cook) and Online Trading Academy.
These companies offer one to two day online investor programs which range in
price from $2,000 to $6,000. None of these competitors imitate Vestrio's
network marketing model of distribution. Many of these competitors have much
greater name recognition and financial resources. Vestrio competes with these
companies by offering similar products for less money.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements.
At the date of this filing, it is impracticable for Whole Living to
provide the audited financial statements of Vestrio which are required by this
Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, such audited
financial statements shall be filed by amendment to this Form 8-K no later
than 60 days from the filing date of this Form 8-K.
(b) Pro Forma Financial Information.
At the date of this filing, it is impracticable for Whole Living to
provide the pro forma financial information required by this Item 7(b). In
accordance with Item 7(b) of Form 8-K, such pro forma financial information
shall be filed by amendment to this Form 8-K no later than 60 days from the
filing date of this Form 8-K.
(c) Exhibits.
2.1 Agreement and Plan of Reorganization between Whole Living and
Vestrio, dated July 8, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
who is duly authorized.
Whole Living, Inc.
Date: July 11, 2002 By: /s/ Ronald K. Williams
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Ronald K. Williams
President, CEO and Director