Current Report — Form 8-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize 1: 8-K 8-K Announcement of Merger HTML 29K
2: EX-2.01 Agreement and Plan of Merger HTML 119K
3: EX-10.1 Hoffer Severance Agreement HTML 11K
4: EX-99.1 Miscellaneous Exhibit -- pressrelease HTML 23K
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2.
below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 – Registrant’s Business and Operations
Item
1.01 Entry
into a Material Definitive Agreement
On August28, 2008, Prescient Applied Intelligence, Inc. (the “Company,”“we” or “us”)
entered into an Agreement and Plan of Merger (the “Agreement”) with Park City
Group, Inc., a Delaware corporation (“Park City”), PAII Transitory Sub, Inc.
(the “Sub”), a Delaware corporation and wholly owned subsidiary of Park City,
and Randy Fields (“Fields”), an individual who serves as the Chairman and CEO of
Park City. The Agreement contemplates a merger (the “Merger”) of Sub
with and into the Company pursuant to which we will become a wholly owned
subsidiary of Park City.
Pursuant
to the Agreement, at the effective time (the “Effective Time”) of the Merger,
(i) holders of shares of our common stock, $.001 par value per share (the
“Common Stock “), other than shares held by Park City or for which holders have
perfected appraisal rights under applicable Delaware law, will receive cash
payment of $.055 per share, (ii) holders of shares of our Series G Convertible
Preferred Stock, $.001 par value per share (the “Series G Stock”), other than
shares held by Park City or for which holders have perfected appraisal rights
under applicable Delaware law, will receive cash payment of $1,136.36 per share,
and (iii) holders of shares of our Series E Convertible Preferred Stock, $.001
par value per share (the “Series E Stock”), other than shares held by Park City
or for which holders have perfected appraisal rights, will receive cash payment
of $4,098 per share. At the Effective Time, all of our officers and
directors will resign and our Common Stock will no longer be registered under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
eligible for trading on the OTCBB.
The
Merger Agreement provides for the appointment of Fields to serve as our Chief
Executive Officer. Until the Effective Time, the Agreement prohibits
Fields from (i) executing any checks (except as a co-signor) or authorizing any
transfer of any funds of the Company; (ii) causing us to make, offer or agree to
make any loan to any person; (iii) causing us to incur or agree to incur any
debt except for trade debt in the ordinary course of business consistent with
past practice; (iv) selling or offering or agreeing to sell any of our assets
except in the ordinary course of business consistent with past practice; or (v)
causing us to enter into any agreement with Park City.
The
Merger must be approved by our stockholders. The Agreement requires
Park City to place into escrow $2,500,000 prior to the date we mail a definitive
proxy statement to our stockholders and the balance of the funds necessary to
complete the Merger (approximately $2,300,000) at least one day prior to the
date of our stockholders meeting to approve the Merger.
Closing
is conditioned upon approval of the Merger by our stockholders, there being no
preliminary or permanent injunction or other court order that prohibits the
consummation of the Merger, and Park City’s and Fields’ compliance in all
material respects all obligations required to be performed by them under the
Agreement.
-2-
We may
terminate the Agreement if Park City or Fields breaches any provision of the
Agreement, after an opportunity to cure in some cases, in which event:
(i) all amounts placed into escrow will be transferred to us and
become our property; and (ii) we will be able to purchase from Park City at a
purchase price of $.001 per share, 100% of the Privately Purchased Shares, as
defined below, if $2,500,000 has been placed into escrow or 50% of the
Privately Purchased Shares if the full escrow amount has been placed into
escrow. We may also terminate the Agreement in the event we withdraw
our recommendation that the Merger be approved by our stockholders as a result
of an alternative acquisition proposal or otherwise in which event we will be
obligated to pay Park City $250,000. The Agreement may also be
terminated by mutual consent of us and Park City or in the event that the
closing shall not have occurred by March 31, 2009.
Concurrent
with the execution of the Agreement, Park City entered into separate securities
purchase agreements with certain principal shareholders of the Company pursuant
to which it purchased an aggregate of 715.96 shares of Series E Stock, and
intends to purchase an additional 382.536 shares of Series E Stock
(collectively, the “Privately Purchased Shares”) at a purchase price of
$3,865.00 per share. The Privately Purchased Shares constitute 66% of
the issued and outstanding shares of Series E Stock. Park City
intends to purchase all shares of Series G Stock and Common Stock
held by such persons at or prior to the Effective Time at per share purchase
prices of $1,136.36 and $0.05, respectively. In connection with the
forgoing, these holders entered into voting agreements with Park City pursuant
to which each has agreed to vote all shares beneficially owned by them in favor
of the Merger. The forgoing covers 458.68 shares of Series G Stock,
representing 96% of the issued and outstanding shares of Series G Stock, and
12,176,700 shares of Common Stock, representing 37% of the issued and
outstanding shares of Common Stock. The voting agreement terminates
in the event that the Agreement is terminated.
The
foregoing description of the Merger Agreement is qualified in its entirety by
reference to the complete text of such Agreement, a copy of which is attached
hereto as Exhibit 2.1.
Section
5 – Corporate Governance and Management
Item
5.02 Departure
of Directors and Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On August 28, 2008, we
appointed Randy Fields to serve as our Chief Executive
Officer. Concurrent with his appointment, Jane F. Hoffer was
appointed to serve as our Chief Operating Officer. Fields is a party
to the Agreement. The Agreement prohibits Field from taking certain
actions without approval of our Board of Directors. These limitation
are more fully described in Section 1 Item 1.01 above. Fields is
serving without compensation and we have not entered into any employment or
other agreement with him. Under our bylaws, Fields may be removed as
our Chief Executive Officer at anytime for any reason by our Board of
Directors.
-3-
Randy K. Fields, 60, currently serves
as the Chief Executive Officer, and Chairman of the Board of Directors of Park
City, positions he has held since June, 2001. Mr. Fields founded Park
City, a software development company based in Park City, Utah, in 1990 and has
been its President, Chief Executive Officer, and Chairman of the Board since
that time. Mr. Fields has been responsible for the strategic
direction of Park City since its inception. Mr. Fields co-founded
Mrs. Fields Cookies with his then wife, Debbi Fields. He served as
Chairman of the Board of Mrs. Fields Cookies from 1978 to 1990. In
the early 1970's, Mr. Fields established Fields Investment Group, a financial
and economic consulting firm. Mr. Fields received a Bachelor of Arts
degree in 1968 and a Masters of Arts degree in 1970 from Stanford University,
where he was Phi Beta Kappa, Danforth Fellow and National Science Foundation
Fellow.
In connection with the Agreement, we
entered into a severance agreement with Ms. Hoffer to provide for payment to her
in the event the Merger is consummated. If (i) Ms. Hoffer’s
employment is terminated without cause following the Merger, or (ii) on January15, 2009, assuming consummation of the Merger, she elects to voluntarily
terminate her employment, she shall be entitled to one year’s
severance. The severance will initially be paid in monthly
installments. On the six month anniversary of her termination, all
remaining amounts due Ms. Hoffer will be paid in full.
Section
9 – Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits.
Exhibit
No.
Description of
Exhibit
2.1
Agreement
and Plan of Merger by and among the Registrant, Park City Group, Inc.,
PAII Transitory Sub, Inc. and Randy Fields
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.
