Axiologix, Inc. (OTCPK:AXLX) entered into a definitive agreement to acquire Velocity Networks, Inc. for $9 million on June 17, 2013. The purchase consideration includes a cash payment of $2 million and 0.4 million shares of Axiologix's Series D Convertible Preferred Stock. A potential additional payment of $1.5 million in cash and 0.15 million shares of Series D Convertible preferred stock will be issued if Velocity meets or exceeds the gross margin target of $2.8 million during those 12 months following the closing date. The Series D Convertible Preferred Stock has a $10 per share value. From the period between completion of agreement and closing Axiologix will provide bridge payments to Velocity in six tranches of $50,000 each. In the event that Axiologix fails to pay timely any 2 of the bridge payments or if the closing does not occur by September 23, 2013, transaction shall terminate. In case of termination of the agreement, all advance payment made will be fortified by Velocity Networks.

The transaction is subject to obtaining bridge financing of minimum $3 million, no material adverse changes to Velocity Networks' business, cancellation or assumption of personal guarantees on certain existing Velocity debt, consummation of due diligence, approval by atleast 95% shareholders of Velocity and approval from regulatory authorities. The majority of the shareholders of Velocity have approved the transaction. The deal is expected to close during the third quarter of 2013. Mark Hiraide of Petillon, Hiraide & Loomis acted as legal advisor and Brian Wygle of Lazarus Resources Group, LLP acted as financial advisor to Velocity Networks, Inc.