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): January 25, 2002
ConSil Corp
(Exact Name of Registrant as Specified in Its Charter)
Idaho
(State of Other Jurisdiction of Incorporation)
0-4846-3 82-0288840
(Commission File Number) (IRS Employer Identification No.)
4766 South Holladay Boulevard
Holladay, Utah 84117
(Address of Principal Executive Offices) (Zip Code)
801.256.9600
(Registrant's Telephone Number, Including Zip Code)
(Former Name or Former Address, if Changed Since Last Report)
Item 1. Change of Control
In January 2002, ConSil Corp. (the "Company") completed a private
placement of 12,500,000 shares of its common stock with three (3) accredited
investors. The total purchase price for the shares was $500,000. The private
placement is described in greater detail in Item 5 below.
After the issuance of the shares in the private placement, the Company
has 21,949,707 shares of common stock outstanding. The shares acquired by the
investors in the private placement represent approximately 56.9% of the
Company's currently outstanding shares of common stock, and, accordingly, if the
investors in the private placement acted in concert, they would be able to
exercise significant control over the Company's business and operations,
including the election of its board of directors. Each of the investors in the
private placement has represented to the Company that he or it disclaims
beneficial ownership of the shares acquired by the other investors in the
private placement, and that the investors do not constitute a "group" for
purposes of Rule 13d promulgated under the Securities Exchange Act of 1934, as
amended, and intends to timely file a Schedule 13D with respect to the private
placement.
The following table sets forth certain information regarding beneficial
ownership of the shares of the Company's common stock by (i) each person known
by the Company to own more than 5% of the Company's outstanding common stock,
(ii) each of the Company's directors, and (iii) all of the Company's executive
officers and directors as a group. Except as noted, each person has sole voting
and sole investment or dispositive power with respect to the shares shown. The
information presented is based on 21,949,707 outstanding shares of common stock.
The information set forth below reflects only the consummation of the private
placement described in Item 5 below, and not the other transactions described in
that Item. The inclusion of any shares of common stock as "beneficially owned"
does not constitute an admission of actual beneficial ownership (which is a
broad definition under the securities laws) of those shares. Unless otherwise
indicated, each person is deemed to beneficially own any shares issuable on
exercise of stock options or warrants held by that person that are currently
exercisable or become exercisable within 60 days after the record date:
Total Percent of
----- ----------
Name and Address of Number of Number of Beneficial Shares
---------------------- ------------ --------- ---------- ------
Beneficial Owner Shares Owned Options Ownership Outstanding
---------------- ------------ ------- --------- -----------
Lincoln Properties LTD LC 7,418,300 - 0 - 7,418,300 33.8%
1380 Devonshire Drive
Salt Lake City, UT 84108
Brighton Opportunity Fund* 6,250,000 - 0 - 6,250,000 28.5%
1801 Century Park East, Suite 1235
Los Angeles, CA 90067
Trevor Crow* 3,125,000 - 0 - 3,125,000 14.2%
3467 Western Springs Road
Olivenhain, CA 92024
Richard Keys* 3,125,000 - 0 - 3,125,000 14.2%
1136 Loma Avenue, Suite 203
Coranado, CA 92118
James Anderson
President and Director - 0 - - 0 - - 0 - - 0 -
6975 South Union Park Center, Suite 600,
Salt Lake City, Utah
All of the directors and executive - 0 - - 0 - - 0 - - 0 -
officers as a group (1 person)
-----------------------------------
*Prive Placement Investor
Item 5. Other Events
Agreement and Plan of Merger. On January 25, 2002, the Company entered
into an Agreement and Plan of Merger (the "Merger Agreement") with LumaLite,
Inc., a California corporation ("LumaLite"), ConSil Merger Corp., a Nevada
corporation and a wholly-owned subsidiary of ConSil ("ConSil Sub"), and certain
shareholders of LumaLite. Subject to the terms and conditions of the Merger
Agreement, ConSil Sub will merge with and into LumaLite, with LumaLite to
survive the merger and become a wholly-owned subsidiary of the Company. LumaLite
is in the business of developing, manufacturing and selling medical devices and
ancillary services for the dental industry. The Company currently has no active
business operations, and it is anticipated that the Company's post-merger
business operations will consist of the operations conducted by and through
LumaLite.
A copy of the Merger Agreement is attached to this report as an
exhibit. The descriptions of the Merger Agreement set forth in this report are
qualified in their entirety by reference to the actual terms of the Merger
Agreement. The merger is intended to qualify as a tax-free reorganization under
the provisions of Section 368 of the Internal Revenue Code of 1986, as amended,
and will be treated as a purchase for accounting purposes.
The consummation of the merger is subject to a number of conditions,
including (i) the approval of the Merger Agreement by the stockholders of
LumaLite and (ii) the completion of certain ancillary transactions, including
the approval by the Company's stockholders of a 1-for-25 reverse split of the
Company's common stock (the "Reverse Split"). The principal ancillary
transactions, including the Reverse Split, are described below. The Company's
shareholders are not required to approve the merger under the terms of the
Merger Agreement, Idaho law or the Company's Articles of Incorporation or
Bylaws, and the Company does not intend to seek any such approval.
Once the merger is effective, all of the issued and outstanding shares
of common stock of LumaLite will be cancelled and converted into and become a
right to receive, in the aggregate, 17,800,000 post-Reverse Split shares of the
Company's common stock. In connection with the merger, the Company will assume
all then outstanding options (whether vested or unvested) to purchase LumaLite's
common stock and will reserve for issuance an aggregate of 98,298 post-Reverse
Split shares of its common stock in respect of such options. Assuming the
consummation of the merger and the transactions described below, the 17,800,000
post-Reverse Split shares of common stock issuable to the LumaLite stockholders
would collectively represent approximately 62.46% of the Company's voting stock.
As a result, the LumaLite stockholders would, if they acted in concert, have
significant control over the Company's business and operations, including the
right to elect it board of directors.
Upon the effectiveness of the merger, the Company's sole director will
appoint four nominees of LumaLite to fill the existing vacancies on the
Company's board of directors and will then resign as a member of the Company's
board. The four nominees of LumaLite will constitute the Company's board of
directors until the appointment of additional persons to fill vacancies in the
board, the four nominees' election to the board at the next election of
directors, or until the four nominees' earlier resignation or removal. LumaLite
has not yet designated the four nominees.
Ancillary Transactions. In connection with the merger, and as
contemplated by the Merger Agreement, the transactions that the Company has
effected or will effect include the following:
Reverse Split. The Company intends to seek approval from its
shareholders of the Reverse Split. If the Reverse Split is approved, the
21,949,707 shares of the Company's common stock currently outstanding (including
the 12,500,000 shares issued in connection with the private placement described
in the point below) will be exchanged for 877,988 post-Reverse Split shares of
common stock.
Private Placement. As described in Item 1, in January 2002,
the Company completed a private placement with three accredited investors of
12,500,000 shares of its common stock for an aggregate purchase price of
$500,000. The Company believes the placement qualifies for the exemption from
registration provided under ss. 4(2) of the Securities Act of 1933, as amended.
The Company intends to use the proceeds from the placement for working capital
purposes.
The proceeds from the placement and the 12,500,000 shares of
common stock are being held in escrow. Under the terms of the escrow, $100,000
was released to the Company on the execution of the escrow agreement, which
occurred on January 7, 2002, and the balance of the escrow funds will be
released to the Company once the Company has effected the Reverse Split and
consummated the Merger Agreement. If those two conditions are not satisfied by
March 1, 2002, the funds remaining in the escrow will be returned to the
purchasers (with the exception of $15,000 that will be used to reimburse
LumaLite for certain expenses it has incurred in connection with the Merger
Agreement) and all of the shares of the common stock will be returned to the
Company. During the term of the escrow, the purchasers will generally have all
of the rights associated with the ownership of the shares, including the right
to vote them.
Pending the consummation of Merger Agreement and the Reverse
Split, the purchasers in the private placement will collectively hold
approximately 56.9% of the Company's issued and outstanding common stock and,
therefore, will be entitled (if they act in concert) to exercise significant
control over the Company's management and operations. If the Merger Agreement is
consummated (and the LumaLite stockholders receive post-Reverse Split shares of
the Company's common stock as described in the Merger Agreement) and the parties
perform under the terms of the Debt Conversion Agreement described in the
following point, the purchasers in the private placement would collectively hold
approximately 1.75% of the Company's issued and outstanding post-Reverse Split
shares of common stock, and the other current stockholders (who now hold
9,449,700 shares of common stock and would hold 377,988 shares of post-Reverse
Split common stock) would collectively hold approximately 1.33% of the Company's
issued and outstanding post-Reverse Split common stock.
Debt Conversion. The Company is currently indebted to REA LLC in the principal
amount of $725,000. The Company originally incurred the debt under the terms of
a loan agreement dated June 28, 1996, as amended, between the Company and Hecla
Mining Company, the Company's former principal shareholder. In July 2001, Hecla
assigned its interest in the loan agreement to REA LLC. The Company and REA LLC
have agreed to convert the principal amount of the debt, plus accrued interest,
into 10,118,744 post-Reverse Split shares of the Company's common stock.
Assuming the consummation of the Merger Agreement and the ancillary transactions
described in this report, REA LLC would hold approximately 34.45% of the
Company's common stock.
Contribution of Shares. Upon and subject to the consummation of the merger,
Lincoln Properties Ltd L.C. has agreed to contribute its shares of common stock
to the Company. Lincoln holds a total of 7,418,300 shares of common stock
(which, upon the approval of the Reverse Split would be exchanged for 296,732
post Reverse-Split shares of the Company's common stock.)
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
--------
2.1 Agreement and Plan of Merger, dated January 25,2002,
among the Company, LumaLite and other parties.
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.
ConSil Corp.
Date: January 25, 2002 By: /s/ James Anderson
---------------------------- -------------------------
James Anderson, President