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:
January 7, 2002
Corniche Group Incorporated
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(Exact name of registrant as specified in charter)
Delaware 0-10909 22-2343568
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
610 South Industrial Boulevard, Suite 220
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Euless, Texas 76040
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
817-283-4250
Not Applicable
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(Former Address, if changed since Last Report) (Zip Code)
Item 5. Other Events and Regulation FD Disclosure
On January 7, 2002, Corniche Group Incorporated (the "Company") entered
into a Stock Contribution Exchange Agreement and a Supplemental Disclosure
Agreement (collectively referred to as the "Agreements") with Strandtek
International, Inc., a Delaware corporation ("Strandtek"), certain of
Strandtek's principal shareholders and certain non-shareholder loan holders of
Strandtek. Strandtek is a high-tech manufacturer with proprietary technology
producing melt-blown polypropylene for acoustical and thermal insulation
applications. After the consummation of the transactions contemplated by the
Agreements, Strandtek will become a majority owned subsidiary of the Company and
the former shareholders of Strandtek will control the Company.
Pursuant to the terms of the Agreements, the Company will acquire
approximately 178,000,000 shares or approximately 98% of the common stock,
$.0001 par value per share, of Strandtek from certain principal shareholders of
Strandtek. Such principal shareholders will exchange their shares of Strandtek
common stock for approximately 35,200,000 shares of the Company's common stock,
par value $.001 per share (the "Common Stock") and approximately 626,000 shares
of the Company's Series D Convertible Preferred Stock, subject to further
adjustment as set forth in the Agreements. In addition, such principal
shareholders and certain non-shareholder loan holders have agreed to exchange
certain of their outstanding loans due from Strandtek, in the amount of $22
million in the aggregate, and the Company will issue 220,000 shares of its
Series C 7% Convertible Preferred Stock. Upon the consummation of the
transaction contemplated by the Agreements, the principal shareholders and the
non-shareholder loan holders will own more than a majority of the outstanding
shares and voting power of the Company.
In addition, the Company advanced to Strandtek a loan of $1 million on an
unsecured basis, which is personally guaranteed by certain of the principal
shareholders of Strandtek.
Although not part of the Agreements, upon the closing of the transaction,
Jerome Bauman, President of Strandtek, will be appointed Chairman and Chief
Executive Officer of the Company and William Buckles, Chief Financial Officer of
Strandtek, will be appointed Chief Financial Officer of the Company.
The transaction is expected to close during January 2002 and is contingent
upon certain closing conditions, including, obtaining financing and a number of
other financial, legal and business conditions. There can be no assurance given
at this time that the financing can be satisfied on terms reasonably acceptable
to the parties or that the other financial, legal and business conditions can be
met or that a transaction can be consummated.
The following summarizes the terms of the Series C 7% Convertible Preferred
Stock. The Series C Preferred Stock shall rank senior to the Company's Series D
Preferred Stock and Common Stock with respect to the payment of dividends and to
the distribution of assets upon liquidation, dissolution or winding up.
Commencing July 1, 2002, the holders of shares of Series C Preferred Stock shall
be entitled to receive, when and as declared by the Board of Directors of the
Company, cumulative dividends at the rate of 7% per annum on each share of
Series C Preferred Stock, subject to appropriate adjustment. The holder of any
share of Series C Preferred Stock shall have the right, at such holder's option,
to convert each share of the Series C Preferred Stock into one hundred shares of
the Company's Common Stock, plus additional shares for accrued and unpaid
dividends, subject to certain adjustments.
The following summarizes the terms of the Series D Preferred Stock. The
Series D Preferred Stock shall rank junior to the Company's Series C 7%
Convertible Preferred Stock with respect to the payment of dividends and to the
distribution of assets upon liquidation, dissolution or winding up, and pari
passu with the Common Stock. So long as any shares of the Series D Preferred
Stock are outstanding, no dividend shall be declared or paid upon the Common
Stock or upon any other stock ranking junior to, or on a parity with, the Series
D Preferred Stock, unless, in the case of Common Stock, the conversion rate,
which is $1.00 per share, subject to adjustment, times such dividend per share
is declared or paid on each outstanding share of the Series D Preferred Stock.
The holder of any share of Series D Preferred Stock shall have the right, at
such holder's option, to convert each share of the Series D Preferred Stock into
one hundred shares of the Company's Common Stock, subject to certain
adjustments. The holders of shares of the Series C Preferred Stock and Series D
Preferred Stock shall have the same voting rights as the holder of that number
of shares of Common Stock into which a share of Series C or Series D Preferred
Stock could be converted.
The Company and Strandtek anticipate that the contribution and exchange of
stock and cash for capital stock of the Company shall constitute a nontaxable
transfer of property and the transaction is contingent upon Strandtek receiving
a tax opinion to that effect.
The securities being exchanged in the transaction have not been registered
under the Securities Act of 1933 and may not be offered or sold in the United
States without the effectiveness of a resale registration statement or an
applicable exemption from the registration requirements. The principal
shareholders and the non-shareholder loan holders shall be entitled to demand
registration rights for the Common Stock issued to them and the Common Stock
issuable upon the conversion of the Series C and Series D Preferred Stock.
This contains forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements represent management's judgment regarding future
events including the closing of the transaction. Although management believes
that the expectations reflected in such statements are reasonable, they give no
assurance that such expectations will prove to be correct and you should be
aware that actual results could differ materially from those contained in the
forward-looking statements due to a number of factors. These factors include the
risks detailed in the Company's reports filed with the Securities and Exchange
Commission. Corniche undertakes no obligation to update or revise the
information contained in this release whether as a result of new information,
future events or circumstances or otherwise.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1: Press Release
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.
CORNICHE GROUP INCORPORATED
By: /s/James Fyfe
Name: James Fyfe
Title: Chairman
Dated: January 11, 2002
Exhibit 99.1: Press Release
For Immediate Release
Corniche Group Incorporated Announces Acquisition of StrandTek International,
Inc.
EULESS, Texas, Jan. 8 /PRNewswire/ -- Corniche Group Incorporated (OTC Bulletin
Board: CNGI - news; the "Company") today announced that it has entered into an
agreement to acquire StrandTek International, Inc., a Delaware corporation
("StrandTek"). StrandTek is a high-tech manufacturer with proprietary technology
producing melt-blown polypropylene for acoustical and thermal insulation
applications. After the consummation of the transaction StrandTek will become a
majority owned subsidiary of the Company, and the former shareholders of
StrandTek will control the Company.
About StrandTek International, Inc.
StrandTek produces on a commercial scale, through a patented process, a lofted
thermal insulation wadding material as a replacement for cotton shoddy and
fibreglass used for acoustical and insulation applications. StrandTek believes
that its material is technically superior to existing materials, 100%
recyclable, lighter, easier to use and handle in commercial applications and
provides significant cost savings over cotton shoddy and fibreglass for
engineered parts.
The main applications for the material are in the automotive, appliance, home
and office building markets. StrandTek has achieved acceptance for its product
with a number of Fortune 100 companies, who are already switching from
traditional materials to the StrandTek product. Following extensive evaluation
and testing by several potential major customers StrandTek now supplies
companies such as GE, Maytag and Daimler Chrysler. Additionally, GM has approved
a specification for the StrandTek product and the company is in discussions with
several other major OEM's within these industries. Given the global nature of
the industries and companies StrandTek is supplying, management are also
actively evaluating the potential for a European plant to meet demand of
possible customers in their European manufacturing facilities.
StrandTek currently has a plant in excess of 200,000 sq ft based in Chicago,
with four manufacturing lines and two die-cutting lines and is in the process of
building one new line. Plans are well in hand for additional lines to meet the
anticipated increase in demand for its product.
About the Deal
The Company is acquiring StrandTek pursuant to a Stock Contribution Exchange
Agreement with StrandTek, certain of StrandTek's principal shareholders and
certain non-shareholder loan holders of StrandTek. Under the terms of the
Agreement, the Company will acquire approximately 98% of the common stock of
StrandTek from the principal shareholders of StrandTek and the balance of
approximately 2% in due course. The principal shareholders of StrandTek will
exchange their shares of StrandTek common stock for approximately 35,200,000
shares of the Company's common stock and 625,920 shares of the Company's Series
D Convertible Preferred Stock, subject to adjustment as set forth in the
Agreement. In addition, the principal shareholders and certain non-shareholder
loan holders have agreed to exchange their outstanding loans due from StrandTek,
in the amount of $22 million in the aggregate, for 220,000 shares of the
Company's Series C 7% Convertible Preferred Stock, with an effective conversion
price of $1.00 per share of the Company's common stock. As a result of the
foregoing, the former shareholders of StrandTek and certain non-shareholder loan
holders of StrandTek that are a party to this transaction will own more than a
majority of the outstanding shares and voting power of the Company upon
consummation of the transaction. Prior to closing, the Company will advance to
StrandTek a loan of $1 million on an unsecured basis, which will be personally
guaranteed by certain of the principal shareholders of StrandTek.
The transaction is expected to close during January 2002 and is contingent upon
certain closing conditions, including, obtaining financing and a number of other
financial, legal and business conditions. There can be no assurance given at
this time that the financing can be satisfied on terms reasonably acceptable to
the parties or that the other financial, legal and business conditions can be
met or that a transaction can be consummated.
Each share of the Series C 7% Convertible Preferred Stock is convertible into
one hundred shares of the Company's Common Stock, plus additional shares for
accrued and unpaid dividends, subject to certain adjustments. The holders of
shares of Series C Preferred Stock are entitled to receive, when and as declared
by the Board of Directors of the Company, cumulative dividends at the rate of
7.0% per annum.
The Series D Preferred Stock ranks junior to the Company's Series C 7%
Convertible Preferred Stock with respect to the payment of dividends and to the
distribution of assets upon liquidation and pari passu with the Company's common
stock. Each share of the Series D Preferred Stock is convertible into one
hundred shares of the Company's common stock, subject to certain adjustments.
The holders of shares of the Series C Preferred Stock and Series D Preferred
Stock have the same voting rights as the holder of that number of shares of the
Company's common stock into which they can be converted.
Upon closing of the transaction Jerome Bauman, President of StrandTek will be
appointed Chairman and CEO of the Company and William Buckles CFO of StrandTek
will be appointed CFO.
The securities being exchanged in the transaction have not been registered under
the Securities Act of 1933 and may not be offered or sold in the United States
without the effectiveness of a resale registration statement or an applicable
exemption from the registration requirements.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
To the extent that this news release makes statements about the future, such
statements are forward looking and subject to a number of risks and
uncertainties, including, but not limited to, the impact of competitive
products, product demand and market acceptance risks, reliance on key strategic
alliances, fluctuations in operating results and other risks detailed from time
to time in the Company's filings with the Securities and Exchange Commission.
These risks could cause the Company's actual results for the current fiscal year
and beyond to differ materially from those expressed in any forward looking
statements made by, or on behalf of, the Company.