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) November 1, 2002
----------------
eSynch Corporation, Inc.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-26700 87-0461856
------------------------- --------------- ----------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Technology Drive Building H - ESYN, Irvine, CA 92618
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (949) 753-0590
--------------
1 Technology Drive
Building H-ESYN
Irvine, CA 92618
949-753-0590
------------------------
(Former Name or former address, if changed, since last report)
Item 2. Acquisition or Disposition of Assets
Acquisition of Nacio Systems, Inc.
---------------------------------
The Registrant, eSynch Corporation, a Delaware corporation, signed, but
has not consummated, an agreement to acquire all of the outstanding capital
stock of Nacio Systems, Inc. ("NSI"), a California corporation. The acquisition
was to be pursuant to an exchange of stock between holders of NSI stock and the
Registrant conducted in accordance with the original Plan of Reorganization of
NSI under Chapter 11 of the U.S. Bankruptcy Code. NSI amended the Plan on April
25, 2003 which was approved by the Bankruptcy Court's on May 22, 2003 which
ordered that the Registrant undo the previous acquisition of NSI capital stock
and undo the stock issuance previously consummated by the Registrant and the
common and preferred shareholders of NSI. The Registrant is appealing that
decision of the Bankruptcy Court but will only hope to receive monetary damages.
The previous Exchange Ratio was calculated based on the issuance under
the Plan of .5858 share of the Registrant's authorized and previously unissued
common shares in exchange for one (1) whole share of common stock of NSI and
1.8841 of the Registrant authorized and previously unissued common shares in
exchange for one (1) whole share of the Series A and Series B preferred stock of
NSI. Registrant therefore paid NSI a total of 30 million shares of the
Registrant common shares for all the common and preferred shares of NSI
representing a total value of $1, 200,000 in shares of the Registrant's
authorized and unissued Common Stock (valued at $0.04 per Registrant's share)
plus an investment in NSI's working capital of $500,000.
The Registrant intended to continue to operate business of NSI as a
stand-alone subsidiary. There may be some uncertainty concerning making an
estimate of the value of NSI; however, the Registrant estimated the value of the
long-lived assets at approximately $8 million.
Former director and President of the Registrant, David Lyons,
personally benefited from the amendment of the Plan. He timed his resignation on
April 22, 2003, from the Registrant's Board and from the office of President to
coincide with his revealing that he was joining the new Nacio investors group to
take the opportunity from the Registrant. He was trying to do away with, by his
own admission, any and all of his fiduciary duties to the Registrant and its
stockholders.
The Registrant considers all of the capital stock of the Registrant
that had been issued in exchange for shares of NSI to have been forfeited by the
NSI holders due to the amendment of the Plan. The Registrant is endeavoring to
recover all of the stock certificates that have been thus voided.
The Registrant considers David Lyons to have intentionally breached his
fiduciary duties, knowing that his conduct would not be in the best interests of
the Registrant and its stockholders. Stockholders have begun to sue Mr. Lyons to
recover alleged damages.
The Registrant endeavors to dispose of its operating subsidiaries for
the best prices available.
February 1, 2003, the assets of Kiss Software Corporation where
disposed of to James Budd for balance of all moneys due Mr. Budd. The assets of
Kiss Software Corporation were of minimal value. We at present do not believe
that we will be required to file under Item 7 hereof any audited or pro forma
financial information on account of this disposition of assets.
The Registrant has identified two companies, River Corporation and
Redwood Financial, LLC, that desire to acquire Oxford Media and Kiss Software
Corporation, respectively. The Registrant is in negotiations with the potential
acquirers. The closing of these acquisitions is subject to negotiating the
definitive contracts and many other potential conditions.
Item 5. Other Information and Regulation FD Disclosure
The Registrant moved its headquarters to 1 Technology Drive, Building
H-ESYN, Irvine, CA 92618, November 1, 2002.
The Registrant has not filed their annual report on Form 10-K for the
year ended December 31, 2002 and the Form 10-Q for quarter March 31, 2003. As a
result, the Registrant has been delisted from the OTCBB to the Pink Sheets.
The Registrant is having its independent auditors audit its financial
statements. It plans to prepare and file as soon as possible its delinquent SEC
reports under the Securities Exchange Act of 1934. The Registrant was without
financial resources to pay the costs until short-term loans were recently
received by the Registrant from Thomas C. Hemingway, CEO and Director of the
Registrant.
Aside from the resignation of David Lyons, Robert Orbach resigned for
personal reasons from the Registrant's Board, which presently consists of three
remaining individuals: Thomas C. Hemingway, T. Richard Hutt, and James H. Budd.
At a meeting of its Board of Directors on April 29th 2003, a resolution
was duly adopted setting for the approval of a stock combination (reverse split)
of the Common Stock in an exchange ration ranging from one newly issued share
for each two outstanding shares of Common Stock to one newly issued share for
each forty outstanding shares of Common Stock and the approval of a name change
for the Company form eSynch Corporation to Mergence Corporation
The Board approved, and recommended that the shareholders of the
Corporation approve, an amendment to the Corporation's Certificate of
Incorporation, as theretofore amended, to a stock combination (reverse split) of
the Common Stock in an exchange ratio ranging from one newly issued share for
each two outstanding shares of Common Stock, to one newly issued share for each
forty outstanding shares of Corporation Stock. The stockholders approved the
reverse stock split on July 28, 2003. Subsequently we distributed a Schedule 14C
Information Statement reporting that stockholder approval. The reverse stock
split has not as yet been consummated. The Board has discretion to effect the
reverse stock split at a time and date selected by the Board.
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.
ESYNCH CORPORATION
(Registrant)
Date: July 29, 2003 By: /s/ THOMAS HEMINGWAY
-------------------------------
Thomas Hemingway,
Chief Executive Officer
ESYNCH CORPORATION
INDEX TO EXHIBITS
EX. NO. DESCRIPTION
------- -----------
2.1 Plan of Reorganization of NSI dated January 17, 2003.
2.2 Amendment of Plan of Reorganization of NSI dated April, 2003.