FWIW: PALWEB CORP amends securities on Form 10.
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Excerpted from 10SB12G/A filed on 11/17 by PALWEB CORP:
PALWEB CORP amends securities on Form 10.
Item 2, Legal Proceedings of PalWeb's Form 10-SB/A, Amendment No. 6, filed on
September 7, 2000.
ACQUISITION OF PACECO FINANCIAL
On April 3, 2000, PalWeb acquired Paceco Financial Services, Inc.
("PFS") by means of a merger of PFS's parent company, Pace Holding, Inc., into
a wholly owned subsidiary of PalWeb, PP Financial, Inc. In the acquisition,
PalWeb issued 50 million shares of its Common Stock in exchange for all the
outstanding stock of Pace Holding, Inc. and PFS became an indirect wholly
owned subsidiary of PalWeb. All of the outstanding stock of Pace Holding, Inc.
was owned by Paul Kruger, the Chairman and Chief Executive Officer of PalWeb.
Mr. Kruger acquired Pace Holding, Inc. for $81,250 in cash. Mr. Kruger
subsequently contributed approximately $150,000 in cash and $150,000 in
preferred stock of PFS to Pace Holding, Inc. PFS, in addition to its other
assets, owned 43.5 million shares of PalWeb Common Stock, which by virtue of
the acquisition, are treated as treasury stock on PalWeb's records and,
accordingly, the acquisition resulted in the issuance of an additional 6.5
million shares of PalWeb Common Stock.
The 50 million shares of PalWeb's Common Stock that PalWeb exchanged
for all of the outstanding stock of Pace Holding, Inc. was authorized and
approved by the members of the board of directors of PalWeb other than Mr.
Kruger, Mark Kidd and Lyle Miller. At the time of the acquisition of Pace
Holding, Inc., Mr. Kidd was the President of PFS and an officer, director and
minority owner of Foresight, Inc., an entity controlled by Mr. Kruger; and
Messrs. Kidd and Miller were an officer and director, respectively, of Precis
Smart Card Systems, Inc., an entity that was in the process acquiring
Foresight, Inc. from Messrs. Kidd and Kruger. The 6.5 million incremental
shares of PalWeb's Common Stock that were issued in the acquisition of Pace
Holding, Inc. represented the value attributable to PFS's business, other than
the ownership of PalWeb Common Stock. The 6.5 million incremental shares
reflected the subjective business judgement of the parties relating to the
value of PFS in excess of the 43.5 million shares of PalWeb acquired in the
transaction. There was no fairness opinion obtained and the number of
incremental shares issued was not based on any objective or precise valuation
criteria.
(End of item excerpt.)
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