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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 15, 1999
PACIFIC SOFTWORKS, INC.
(Exact name of registrant as specified in its charter)
California 333-75137 77-0390628
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
No.)
703 Rancho Conejo Blvd., Newbury Park, California 75081
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805)499-7722
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On October 25, 1999 the Company and Financial Services Provider Network, Inc
("FSPN") signed a Letter of Intent to enter into discussions with the intent
of entering a strategic relationship to jointly develop certain Internet
applications with financial institutions. The Company indicated that subject
to entering into a definitive agreement it would invest up to $1,000,000 in
FSPN and under certain conditions up to an additional $2,000,000. On October
25, 1999 the Company loaned FSPN $250,000 through a promissory note bearing
interest at ten (10%) percent due in ninety days. The loan was for general
corporate purposes.
On December 3, 1999 the Company converted the $ 250,000 October 25, 1999
note and loaned FSPN an additional $ 750,000 pursuant to a convertible
promissory note. The $1,000,000 convertible promissory note is unsecured,
carries interest at 10% per annum and is due 12 months from issuance unless
previously converted into capital stock of FSPN. The convertible note will
automatically convert into shares equivalent to no less than 5% of the
outstanding capital stock of FSPN concurrent with FSPN's closing of its next
equity financing. If converted, the accrued interest on the convertible note
will revert to a 6% rate for purposes of calculating the number of shares of
FSPN issuable.
Item 5. Other Events
On December 1, 1999 the Board of Directors approved a management reorganization
in order to provide Glenn Russell, CEO and Chairman of the Board, the resources
necessary to enhance the Company's positioning in the rapidly growing market for
internetworking technology and to improve the utilization of its assets and
competencies. In support of this initiative, the Board of Directors has
appointed William E. Sliney, Pacific's Chief Financial Officer, as interim
President and Chief Operating Officer. With Sliney assuming operating
responsibility for Pacific, Russell will focus on the Company's strategic
interests. Sliney remains Pacific's Chief Financial Officer. Sliney joined
Pacific Softworks in April of 1999. Prior to that, he was the Chief Financial
Officer of Legacy Software, Inc., from 1995 to 1999, and from 1993 to 1994
was Chief Executive Officer for Gumps.
In conjunction with the management reorganization, on December 1,1999 the
Board of Directors approved and the Company issued warrants to acquire
1,500,000 shares of the Company's common stock to a team of strategy
consultants led by Kaz Hashimoto, formerly CEO of Cygnus Solutions
(www.cygnus.com). The warrants provide for the purchase of Pacific Softworks
common stock at $5.75 per share (the fair market value at the date of issuance)
for a period of five years and are exercisable only if the closing price of the
Company's common stock averages $10.00 per share or more for 15 consecutive
days. As additional consideration to the team of strategy consultants, the
Company agreed to pay a fee equal to 10% of the profit realized on its
investment in FSPN.
c) Exhibits
The following documents are filed as exhibits to this report.
The exhibit numbers in the exhibit list correspond to the numbers
assigned to such exhibits in the Exhibit Table of Item 601 of
Regulation S-K.
99.1 Text of Press Release dated December 1, 1999 issued by
Pacific Softworks, Inc.
99.2 Text of Press Release dated December 15, 1999 issued by
Pacific Softworks, Inc.
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.
Pacific Softworks, Inc.
(Registrant)
Date: December 15, 1999 /s/ WILLIAM E. SLINEY
William E. Sliney
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and Accounting
Officer)