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
July 13, 2000
Date of Report
(Date of Earliest Event Reported)
CCM MANUFACTURING TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
15635 Vision Drive
Pflugerville, Texas 78660-3203
(Address of principal executive offices)
512/251-3484
(Registrant's telephone number)
Delaware 0-28681 52-2201514
(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification No.)
MAYFORD ACQUISITION CORPORATION
15635 Vision Drive
Pflugerville, Texas 78660-3203
(Former Name or Former Address, if Changed Since Last Report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On July 13, 2000, pursuant to an Agreement
and Plan of Reorganization ("Acquisition Agreement")
between Mayford, Syntec Acquisition Corporation
("Syntec") and the owners of the outstanding shares of
Syntec, Mayford acquired 99.9% of the outstanding
shares of Syntec from the shareholders thereof in an
exchange of stock at a ratio of one share of Syntec
stock for 2.5 shares of identical class of shares of
Mayford, for an aggregate issuance of 16,208,333 shares
of Class A common stock of Mayford and 2,972,504 shares
of the Series A preferred stock of Mayford. The
outstanding warrants and options of Syntec and other
outstanding rights to purchase shares of common stock
of Syntec represent the right to purchase the
equivalent number of shares of common stock of Mayford
(subject to the adjustment provisions therein).
On July 14, 2000, pursuant to an Agreement and
Plan of Merger (the "Merger Agreement"), between
Mayford and its subsidiary, Syntec, Syntec was merged
with and into Mayford. In connection with the merger,
Mayford changed its name to "CCM Manufacturing
Technologies, Inc." ("CCM").
Copies of the Acquisition Agreement and Merger
Agreement are filed as exhibits to this Current Report
and are incorporated in their entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information
regarding the shareholdings of CCM's current directors
and executive officers and those persons or entities
who beneficially own more than 5% of its common stock
(giving effect to the exercise of any options and
warrants held by each such person or entity exercisable
within 60 days of the date hereof):
Number of Shares of Percent of Common
Common Stock Beneficially Stock Beneficially
Name Owned (1)(2) Owned (1)(2)
Jose G. Chavez 8,608,333 (3) 43.7%
Chief Executive Officer,
Chairman and Director
88021 Bottlebrush
Austin, Texas 78750
Jaime J. Munoz 2,453,125 (4) 12.6%
President and Director
15635 Vision Drive
Pflugerville, Texas 78660
Gustavo A. Cardenas 2,434,375 (5) 12.5%
Chief Financial Officer
and Director
6801 Terra Oak Circle
Austin, Texas 78749
Lynn K. Bishop 2,875,000 (6) 14.8%
Vice President of
Business Development
3280-85C South Shore Drive
Punta Gorda, Florida 33955
All executive officers and 16,370,833 80.1%
directors as a group
(4 persons)
(1) Based upon 19,180,837 shares of the Company's
common stock issued and outstanding, assuming
the conversion of the Company's Series A
preferred stock into shares of the Company's
Class A common stock on a one for one share basis.
(2) Includes options which are exercisable within
60 days of the date hereof.
(3) Includes 500,000 shares of common stock
underlying options immediately exercisable
at an exercise price of $1.50 per share.
(4) Includes 250,000 shares of common stock
underlying options immediately exercisable
at an exercise price of $1.50 per share.
(5) Includes 250,000 shares of common stock
underlying options immediately exercisable
at an exercise price of $1.50 per share.
(6) Includes 250,000 shares of common stock
underlying options immediately exercisable
at an exercise price of $1.50 per share.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the
Acquisition Agreement was negotiated between Mayford
and Syntec. In evaluating the Acquisition, Mayford used
criteria such as the value of the assets of Syntec,
Syntec's ability to compete in the electronics
manufacturing market place, Syntec's current and
anticipated business operations, and Syntec
management's experience and business objectives.
Mayford had no assets or liabilities and in evaluating
Mayford, Syntec placed a primary emphasis on Mayford's
status as a reporting company under Section 12(g) of
the Securities and Exchange Act of 1934, as amended,
and the facilitation of Syntec's becoming a reporting
company under the Act.
(b) The Company intends to continue the business
development and strategy of Syntec by providing
integrated electronics manufacturing services.
BUSINESS
The Company, through its wholly-owned
subsidiaries, Syntec Holding Group, Inc. and Syntec
Corporation, is an independent provider of customized
integrated electronics manufacturing services ("EMS")
to original equipment manufacturers ("OEMs") in the
electronics industry. The Company's integrated
services consist of the manufacturing of complex
printed circuit board assemblies ("PCB") using surface
mount and pin-through whole interconnection
technologies and the manufacture of custom design
assemblies. PCBs are printed circuit boards on which
various electronic components such as integrated
circuits, microprocessors and resistors are mounted.
These assemblies are key functional elements of
numerous types of electronic products. In addition to
the Company's manufacturing services, the Company
provides its customers assistance with new product
designs, testing developments, engineering services,
the procurement of raw materials, end-of-life
servicing, packaging and distribution.
STRATEGY
The Company offers its customers a broad range
of integrated electronics services including, but not
limited to, purchasing materials, initial design,
product manufacturing, circuit testing, inventory
management, product servicing, packaging, distribution
and technical support. The Company's objective is to
offer high-quality electronics manufacturing and
related services so as to assist its customers in all
aspects of the production cycle. In order to meet this
objective, the Company emphasizes the following
significant factors:
Quality. The Company believes that product
quality is a critical success factor in the electronics
manufacturing market. As such, the Company has adopted
a number of quality measurement techniques to monitor
and continuously improve its services and technical
performance. The Company's manufacturing facilities
are certified by the International Standards
Organization ("ISO") to meet ISO 9002 standards which
are international quality standards for design,
manufacturing and distribution management systems.
There are a total of twenty requirements, including
management responsibility, quality systems and process
control. The ISO certification process involves
periodically subjecting production processes and
quality management systems to stringent third-party
review and verification. To ensure certification
requirements, the Company has developed a quality
systems manual and an internal system of quality
controls. The Company believes that its customers
often look to an ISO certification as a threshold
indication of quality control standards.
In addition to ISO 9002 certification, the
Company is Underwriter's Laboratories ("UL") compliant.
These qualifications establish standards for quality,
manufacturing process control and manufacturing
documentation. Several OEMs in the electronics
manufacturing industry require their service providers
to comply with UL standards. On November 1, 1999, the
Company was presented a commitment award from the
Greater Austin Quality Council, a division of the
Austin Chamber of Commerce, recognizing the Company's
commitment to promoting quality and service.
Turnkey Capabilities. The Company strives to
provide a complete range of manufacturing management
and value-added services. The Company believes that as
manufacturing technologies become more complex and as
product life-cycles shorten, OEMs will increasingly
contract for manufacturing on a turnkey basis as they
seek to reduce their products' time-to-market, capital
assets and inventory costs. The Company believes that
its ability to manage and service large turnkey
projects of leading OEMs is a critical success factor.
Advanced Manufacturing Process Technology. The
Company intends to continue to offer its customers
advanced manufacturing process technologies, including
surface mount technology and through-hole (axial and
radial) assembly, as well as testing and refurbishing
of interconnect technologies. The Company's PCBs
consist primarily of metallic interconnecting paths on
nonconductive material, typically laminated epoxy
glass. Holes drilled in the laminate and
plated-through with conductive material from one
surface to another, called plated-through holes, are
used to receive component leads and to interconnect the
circuit in layers. PCBs are used in large quantities
in the electronics industry to mount and interconnect
integrated circuits, microprocessors and other
electronic components. The Company intends to focus
its operations so as to further take advantage of the
increasing need for electronic components with higher
speed, higher performance and increased density and
complexity.
In order to achieve excellence in
manufacturing, the Company combines advanced
manufacturing technology, such as computer-aided
manufacturing and testing, with manufacturing
techniques including just-in-time manufacturing, total
quality management, statistical process control and
continuous flow manufacturing. Just-in-time
manufacturing is a production technique which minimizes
work-in-process inventory and manufacturing cycle time
while enabling the Company to deliver its products to
customers in the quantities and time frame required.
Electronics Assembly and Other Services. The
Company's electronics assembly activities consist
primarily of the placement and attachment of electronic
and mechanical components on PCBs. The Company
assembles higher-level sub-systems and systems
incorporating printed circuit boards and complex
electro mechanical components. Other services include
the following:
* In conjunction with its assembly activities,
the Company provides computer-aided testing of
PCBs, sub-systems and systems, which
contributes significantly to the Company's
ability to deliver high quality products on a
consistent basis. The Company has developed
specific strategies and routines to test board
and system level assemblies. In addition, the
Company offers environmental stress tests of
the board or system assembly.
* The Company offers its customers procurement
and materials management consisting of the
planning, purchasing, expediting, warehousing,
preparing and financing of the components and
materials required to assemble a PCB or
electronic system. The Company believes that
its inventory management expertise and
procurement capabilities contribute to cost
reductions and reduces product turnaround time.
* The Company also assists its customers
in evaluating board designs for
manufacturability. The Company
evaluates the board design for ease
and quality of manufacture and, when
appropriate, recommends design
changes to reduce manufacturing costs
or lead times or to increase the
quality of finished assemblies. Board
design services consist of the
engineering and design associated with
the arrangement and interconnection of
specified components on PCBs to
achieve an OEM's specified level of
functionality.
* An important element of the Company's strategy
is to establish partnerships with major and
emerging OEM leaders in diverse segments of the
electronics industry. The Company's current
customer base includes industry segments such
as personal computers, semiconductor equipment,
telecommunications, and computer peripherals.
The Company can assist its customers in
prototype services which include design and
layout, concurrent engineering, test
development and engineering. The Company also
provides solutions in manufacturing and
distribution including just-in-time delivery on
low- to medium-volume turnkey, price-sensitive
and high-volume production, logistics and parts
management and projects that require more
value-added services. Additionally, the
Company serves OEMs that need end-of-life
services such as product repair and warranty
services.
* The Company is certified by the National
Minority Suppliers Development Council as a
"minority owned business". A minority owned
business is a for-profit enterprise, physically
located in the United States or its trust
territories, which, in the case of a
publicly-owned business, has at least 51% of
the stock owned by one or more minority group
members and management and daily operations of
the business are conducted by these minority
group members. The Company is also certified
by the General Services Commission of the State
of Texas as compliant with the Historically
Underutilized Business Program ("HUB"), and the
Company is recognized as a HUB.
COMPETITION
The electronic manufacturing service industry
is comprised of a large number of companies, several of
which have achieved significant market share. Certain
of the Company's competitors may have greater
manufacturing, financial, research and development and
marketing resources than the Company. Major in-house
printed circuit board producers are also considered the
Company's competitors. There is a risk that the
Company's customers will make greater use of their own
facilities rather than utilize the Company's
manufacturing services. The Company believes that the
principal competitive factors in the EMS industry are
technological capabilities, responsiveness, cost,
product and service quality and value added services.
CUSTOMERS
As of July 10, 2000, the Company had
approximately seven active customers including small to
large-size companies which represent a cross-section of
the electronics equipment industry. The Company's
customers are typically OEMs and include International
Business Machines (IBM), High End Systems, Horton
Automatics, XEL Communications, Elo Touch Systems,
American Dental and Kasper Wireworks.
THE COMPANY'S PERCENTAGE SALES DISTRIBUTION PER CUSTOMER
High End Systems 25.9%
Horton Automatics 22.2%
IBM 16.6%
XEL Communications 13.0%
Elo Touch Systems 9.3%
Kasper Wireworks 9.3%
American Dental 3.7%
SALES AND MARKETING
The Company intends to use its status as a
minority-owned and operated company together with its
ISO 9002 standard of quality and certification to gain
visibility and to secure business opportunities with
those companies which are OEMs. The Company intends to
target companies whose primary success has been in
engineering and research and development and have
decided to exit the manufacturing business and
outsource production.
The Company intends to distinguish its
marketing efforts by focusing on the regulated segment
of the industry and intends to target the smaller
sized OEMs that do not receive their desired level of
service from larger EMS.
EMPLOYEES
As of July, 2000, the Company had approximately
50 employees. The Company's success depends to a large
extent upon the continued services of its key
managerial and technical employees. The loss of such
personnel could have a material adverse effect on the
Company's business and its results of operations. See
"Risk Factors".
PROPERTY
The Company's administrative offices, executive
offices and manufacturing facility are located at 5635
Vision Drive, Pflugerville, Texas 78660-3203,
consisting of approximately 38,604 square feet of
manufacturing space. The Company leases its
manufacturing facility at a rate of $16,700 per month.
The Company's lease term is for 15 years with an
option to renew such terms for an additional term of
two years. The lease term commenced on May 22, 1998.
The Company believes that its leased properties are
adequate for its current and immediately foreseeable
operating needs.
The Company's mailing address is 15635 Vision
Drive, Pflugerville, Texas 78660-3203. The Company's
telephone number is (512) 251-3484 and its facsimile
number is (512) 251-8238. The Company's e-mail address
is [email protected]. The Company maintains an
Internet Web site at http://www.synteccorp.com/about.html.
LEGAL PROCEEDINGS
There is no current outstanding litigation in
which the Company is involved other than routine
litigation incidental to ongoing business.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue
60,000,000 shares of Class A common stock, par value
$.0001 per share (the "Class A Common Stock"),
10,000,000 shares of Class B common stock, par value
$.0001 (the "Class B Common Stock") and 30,000,000
shares of preferred stock, par value $.0001 per share
(the "Preferred Stock"). Of the Company's 30,000,000
authorized shares of preferred stock, 3,000,000 shares
have been designated as "Series A Preferred Stock" and
1,500,000 shares have been designated as "Series B
Preferred Stock". The Company has 25,500,000 shares of
undesignated preferred stock of which the Company has
not issued any shares.
CLASS A COMMON STOCK
The Company is currently authorized to
issue 60,000,000 shares of Class A Common Stock of
which 16,208,333 shares were issued and outstanding as
of July 10, 2000. The holders of the Class A Common
Stock are entitled to one vote per share for the
election of directors and with respect to all other
matters on which shareholders are entitled to vote. The
holders of more than fifty percent of the shares voting
for the election of the Company's directors can elect
all of the directors if they choose to do so and, in
such event, the holders of the remaining shares will
not be able to elect any person to the board of
directors.
In the event that the Company is
liquidated, dissolved or wound up, the holders of the
Class A Common Stock are entitled to share ratably in
all of the Company's assets remaining available for
distribution to them after payment of the Company's
liabilities and after provision has been made for each
class of the stock having preference over the Class A
Common Stock. Holders of the Company's Class A Common
Stock do not have preemptive rights to purchase
additional shares of its common stock or other
subscription rights.
CLASS B COMMON STOCK
The Company is currently authorized to
issue 10,000,000 shares of Class B Common Stock of
which no shares have been issued as of July 10, 2000.
Holders of the Class B Common Stock shall have
identical rights to those holders of the Class A Common
Stock, except that holders of the Class B Common Stock
shall have no voting rights except as otherwise
required by law.
Shares of the Class B Common Stock shall
automatically be converted into shares of the Class A
Common Stock on a share for share basis upon the
occurrence of a closing of a sale by the Company of the
Class A Common Stock pursuant to an effective
registration under the Securities Act of 1933, as
amended.
All the Company's outstanding shares of
Class A Common Stock are validly authorized and issued,
fully paid and non-assessable. The Company's board of
directors is authorized to issue additional shares of
common stock, not to exceed the amount authorized by
the Company's Certificate of Incorporation, and to
issue options for the purchase of such shares, on such
terms and conditions and for such consideration as the
Board may deem appropriate without further shareholder
action.
PREFERRED STOCK
The Company is currently authorized to issue
30,000,000 shares of preferred stock, of which
2,972,504 shares of the Company's Series A Preferred
Stock were issued and outstanding as of July 10, 2000.
The Company's Board of Directors is authorized
to provide for the issuance of additional shares of
preferred stock in series and, by filing a certificate
pursuant to the applicable laws of Delaware, to
establish from time to time the number of shares to be
included in each such series, and to fix the
designation, powers, preferences and rights of the
shares of each such series and the qualifications,
limitations or restrictions thereof without any further
vote or action by the shareholders. Any shares of the
Company's preferred stock so issued would have priority
over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred
stock may have the effect of delaying, deferring or
preventing a change in control of the Company without
further action by the Company's shareholders and may
adversely affect the voting and other rights of the
holders of common stock.
SERIES A PREFERRED STOCK
As of July 10, 2000, there were 2,972,504
shares of the Company's Series A Preferred Stock issued
and outstanding.
Rank. The Series A Preferred Stock, with
respect to the payment of dividends, redemption
payments and liquidation rights, shall rank senior to
the Common Stock. The Company's board of directors may
designate other series of preferred stock ranking
senior, pari passu or junior to the Series A Preferred
Stock.
Voting. The holders of the Series A Preferred
Stock are not entitled to vote on matters submitted for
approval by the holders of the common stock.
Conversion. At the holder's election, each
share of the Class A Preferred Stock is convertible, at
any time after the date of issuance of such share, into
one fully paid and non-assessable shares of the Class B
Common Stock.
Liquidation Preference. In the event of the
Company's liquidation or dissolution as a result of
which the Company's assets are to be distributed to its
shareholders, the holders of the Series A Preferred
Stock shall be entitled to receive, prior and in
preference to the holders of the common stock or any
other capital stock of which the Series A Preferred
Stock ranks higher, an amount equal to $1.50 per share
(the "Liquidation Preference"), plus an amount equal to
all unpaid dividends for each share of Series A
Preferred Stock held by them.
Dividends. Each share of the Company's Series
A Preferred Stock earns quarterly dividends for each
share of the Series A Preferred Stock that is
outstanding at a rate of eight percent (8%) per annum
of the Liquidation Preference of such share.
SERIES B PREFERRED STOCK
As of July 10, 2000, there were no shares of
the Company's Series B Preferred Stock outstanding.
Rank. The Series B Preferred Stock, with
respect to the payment of dividends, redemption
payments and liquidation rights, shall rank senior to
the common stock and pari passu with the Series A
Preferred Stock. The Company's board of directors may
designate any other series of preferred stock ranking
senior, pari passu or junior to the Series B Preferred
Stock.
Voting. The holders of the Series B Preferred
Stock are not entitled to vote on matters submitted for
approval by the holders of the common stock.
Conversion. At the holder's election, each
share of the Series B Preferred Stock is convertible,
beginning six months after the date of issuance of such
share, into two fully paid and non-assessable shares
of the Company's Class A Common Stock.
Liquidation Preference. In the event of the
Company's liquidation or dissolution as a result of
which its assets are to be distributed to its
shareholders, the holders of the Series B Preferred
Stock shall be entitled to receive, prior and in
preference to the holders of the common stock or any
other capital stock of which the Series B Preferred
Stock ranks higher, an amount equal to $4.00 per share
(the "Liquidation Preference"), plus an amount equal to
all accrued and unpaid dividends for each share of
Series B Preferred Stock held by them.
Dividends. Each share of the Series B
Preferred Stock earns quarterly dividends for each
share of the Series B Preferred Stock that is
outstanding at a rate of five percent (5%) per annum of
the Liquidation Preference of such shares. Any payment
of dividends in the form of Series B Preferred Stock
shall be deemed to have a value equal to four dollars
($4.00) per share.
WARRANTS
The Company has 928,038 (post-merger) warrants
issued and outstanding. All of such outstanding
warrants are immediately exercisable at an exercise
price of $1.50 per share with an exercise term expiring
on December 31, 2004.
OPTIONS
In June 1999, the Company adopted a Long-Term
Stock Incentive Plan (the "Stock Plan"). The Company's
Stock Plan is administered by Jose G. Chavez, Jaime J.
Munoz and Gustavo A. Cardenas (collectively the
"Committee") who determine the persons to whom awards
will be granted, the number of awards granted and the
specific terms of each grant, subject to the provisions
of the Stock Plan.
TRANSFER AGENT
The Company's transfer agent is Pacific Stock
Transfer Company, Las Vegas, Nevada.
MARKET FOR THE COMPANY'S SECURITIES
There is currently no established trading
market for the Company's securities and the Company
does not have a market maker for its securities. The
Company intends to file a registration statement on
Form SB-2, or such other form as may be required, to
register certain of the securities held by its
shareholders and such other securities as it may deem
advisable.
A market maker sponsoring a company's
securities is required for listing securities on any
public trading market, including the NASD OTC Bulletin
Board. If the Company is able to obtain a market maker
for its securities, the Company intends to apply for
admission to quotation of its securities on the NASD
OTC Bulletin Board and intends to apply for listing on
the Nasdaq SmallCap Market when, and if, it qualifies.
There can be no assurance that the Company will qualify
for quotation of its securities on the NASD OTC
Bulletin Board or the Nasdaq SmallCap Market.
MANAGEMENT
The following table sets forth certain
information regarding the members of the Company's
board of directors and its executive officers:
Name Age Position
Jose G. Chavez 49 Chief Executive Office and Chairman of
the Board
Jaime J. Munoz 39 President and Director
Gustavo A. Cardenas 47 Chief Financial Officer, Treasurer
Secretary and Director
Lynn K. Bishop 61 Vice President of Business Development
All the Company's directors hold office until
the next annual meeting of its shareholders or until
their successors are duly elected and qualified.
Officers serve at the pleasure of the Board of
Directors. Set forth below is a summary description of
the business experience of each director and executive
officer of the Company.
JOSE G. CHAVEZ serves as the Company's
Chief Executive Officer and Chairman of its Board of
Directors. Since June 1999, Mr. Chavez has served as
the Chief Executive officer and Chairman of the Board
of the Company's wholly-owned subsidiary, Syntec
Corporation. In 1993, Mr. Chavez, with over 25 years
experience in manufacturing, engineering, system design
and development, energy engineering, and computer
technology management, co-founded Micro-Media
Solutions, Inc. ("MSI"), a computer service and
consulting company in Austin, Texas. From 1993 to
1999, Mr. Chavez served as Chief Executive Officer and
Chairman of the Board of Directors of MSI. Prior to
1993, Mr. Chavez served as a Plant Manager for Hart
Graphic Distribution, Inc., served as Plant
Manufacturing Manager for CompuAdd Corporation, a
personal computer manufacturer and was section head at
Hughes Aircraft. In 1981, Mr. Chavez obtained a Master
of Administrative Management from the University of
Redlands Business School and in 1975 received a
Bachelor of Science in Electrical Engineering from the
University of Texas at El Paso.
JAIME J. MUNOZ serves as the Company's
President and a director. Mr. Munoz has 15 years of
experience related to all aspects of project
management, implementation and daily business
operations. Mr. Munoz served as Vice President of
Operations for Micro-Media Solutions, Inc. ("MSI"), a
computer service company. Mr Munoz's responsibilities
for MSI included managing finances, investor relations,
public company compliance, human resources, purchasing,
inventory control, liaison for related legal matters,
and company administration. From 1987 to 1997, Mr.
Munoz served as Vice President and Chief Marketing
Officer for Infrastructure Services, Inc., a company
located in Houston, Texas. Mr. Munoz received a
Bachelor of Science Degree from the University of Texas
at El Paso.
GUSTAVO A. CARDENAS serves as the
Company's Chief Financial Officer, Secretary, Treasurer
and a director. Since June, 1999, Mr. Cardenas has
served as the Chief Financial Officer, Secretary,
Treasurer and a director of the Company's wholly-owned
subsidiary, Syntec Corporation. From March 1997 to
June 1999, Mr. Cardenas served as Vice President of
Exceptional Resource Services, a company located in
Texas. Prior to 1997, Mr. Cardenas held various
banking positions with First State Bank and Del Rio
National Bank including Vice President of Mortgage
Lending Division, Vice President of Commercial Lending
and Vice President of International Banking. From 1992
to 1995, Mr. Cardenas founded and served as the Chief
Executive Officer of SFI Group, which provided
financial consulting to small and medium size
companies. Mr. Cardenas received an Associate's of Arts
degree from Southwest Texas Junior College in 1974, a
Bachelor of Business Administration degree in Business
Management from University of Texas in 1976 and a
Banking Management certificate from Texas Technical
University in 1980, and a Banking Management
certificate from Southern Methodist University in 1982.
LYNN K. BISHOP serves as the Company's Vice
President of Business Development. Since 1998, Mr.
Bishop has served as the Chairman of the Board and Vice
President of Business Development of the Company's
wholly-owned subsidiary, Syntec Corporation. Mr.
Bishop has over thirty years of experience with
computer industry companies such as Texas Instruments
(Director of Authorized Distribution Program for
Computer and Peripheral Products) and Hall-Mark
Electronics (Vice President and General Manager of
Computer Systems Business Segment). From 1996 to 1998,
Mr. Bishop served as a Director of Marketing for XEL
Communications, Inc., a telecommunications equipment
manufacturer. Prior to 1996, Mr. Bishop served as the
Director of Marketing and as Vice President for Memotec
Communications, Inc. and Racal Datacom, Inc., both
telecommunications companies. Mr. Bishop received a
Bachelor of Science Degree in Psychology from Baylor
University in 1961 and a Masters Degree in Theology
from Southwest Baptist Theological Seminary in 1963,
and in 1968 completed all residence requirements for a
PHD in Ethics.
RELATED TRANSACTIONS
At December 31, 1999, the Company had an
unsecured note payable due to Jose Chavez, a majority
shareholder, Chief Executive Officer and a director,
totaling $500,000. Such note has been repaid in full
in exchange for shares of stock of the Company.
The Company has an unsecured note payable to
several of its shareholders, including Jose G. Chavez,
Jaime J. Munoz, Lynn K. Bishop and Gustavo A. Cardenas
totaling $500,000. The note bears interest at the rate
of 11% per annum and payments are made as the Company's
cash flow permits . The principal balance due as of
September 21, 2000 is $500,000.
The Company has two additional unsecured notes
payable to two shareholders. Lynn K. Bishop and Jose G.
Chavez totaling $92,955 and $97,283 as of June 30,
1999, respectively. The notes bear interest at the rate
of 18% per annum and do not have specific maturity
dates but are repaid as the Company's cash flow
permits.
On June 30, 1999, Syntec acquired all of the
outstanding stock (1,875 shares) of Syntec Holding
Group, Inc. ("Holding") from eight selling shareholders
( the "Selling Shareholders"). One of the Selling
Shareholders was Lynn K. Bishop who is the Executive
Vice President of Syntec Corporation and who is
currently a beneficial owner of more than 5% of the
Company's common stock. Syntec purchased all the
outstanding shares of Holding for the purchase price of
$1,000,000 consisting of a $500,000 promissory note and
a cash payment of $500,000 subject to reductions as set
forth in the purchase agreement. The promissory note
has been repaid in full.
On June 30, 1999, Syntec entered into a
shareholder agreement ("Shareholder Agreement") with
its then current shareholders (the "Shareholders")
whereby if at any time the Shareholders proposed to
transfer their shares of the Company's Class A or Class
B common stock, the offeror shall, before such
transfer, provide Mr. Jose G. Chavez the right to
purchase some or all of such offered shares. If there
are any offered shares that are not purchased by Mr.
Chavez, such shares shall then be offered to the
Company. Such Shareholder Agreement also grants to Lynn
Bishop, so long as Mr. Bishop is a 5% owner of the
fully diluted stock, the right of first refusal to
purchase those securities which Syntec may propose to
issue which would have a sales, exercise or conversion
price per share of less than fourteen cents.
On September 30, 1999, Syntec entered into an
agreement with the holders of its Series A Preferred
Stock (the "Holders"). The Holders agreed that prior to
September 30, 2003, if, in the judgement of the
Company's management, having the Series A Preferred
Stock outstanding would jeopardize the Company's status
as a HUB, the Holders would tender their shares of the
Series A Preferred Stock to the Company in exchange for
the Company's Class A common stock on the same basis
that the Series A Preferred Stock is then convertible
into the Company's Class B common stock.
EXECUTIVE COMPENSATION
None of the executive officers received cash
compensation from the Company in 1999. No executive
officers of the Company earned more than $100,000 a
year during any of the last three fiscal years.
EMPLOYMENT AGREEMENTS
The Company has entered into 3-year employment
agreements with Jaime Munoz to serve as President at an
annual base salary of $150,000, Jose Chavez to serve as
Chief Executive Officer at an annual base salary of
$180,000, Gustavo Cardenas to serve as Chief Financial
Officer at an annual base salary of $135,000, and Lynn
Bishop to serve as Vice President of Business
Development at an annual base salary of $12,000.
Pursuant to their employment agreements, each of these
officers has received options to purchase common stock
of the Company at an exercise price of $1.50 per share
in the amounts of 750,000 shares, 1,250,000 shares,
750,000 shares and 750,000 shares, respectively.
SUMMARY OF UNAUDITED FINANCIAL INFORMATION
Syntec incurred net losses for the years 1999
and 1998 on sales of approximately $3,900,000 and
$2,975,000, respectively. As of June 30, 2000,
revenues were approximately $1,550,000 which are lower
than expected primarily resulting from raw materials
shortages existent throughout the industry. The
Company's backlog has increased to over $1,600,000 as
of June 30, 2000. The Company anticipates to increase
its credit lines that will assist with the materials
shortages once it enters into certain expected
agreements with key suppliers. However, if losses
continue, the Company may need to raise additional
capital through the placement of its securities or from
debt or equity financing. If the Company is not able
to raise such financing or obtain alternative sources
of funding, management may be required to curtail
operations. The figures given in this paragraph have
not been audited. The Company is required to file
audited financial statements within 75 days following
the Acquisition, and reference should be made to those
financial statements when filed.
RISK FACTORS
THE COMPANY MAY NEED TO RAISE ADDITIONAL FUNDS
IN THE FUTURE FOR ITS OPERATIONS AND IF THE COMPANY IS
UNABLE TO SECURE SUCH FINANCING, THE COMPANY MAY NOT BE
ABLE TO SUPPORT ITS OPERATIONS. Future events,
including the problems, delays, expenses and
difficulties frequently encountered by companies, may
lead to cost increases that could make the Company's
funds insufficient to support its operations. The
Company may seek additional capital, including an
offering of its equity securities, an offering of debt
securities or obtaining financing through a bank or
other entity. The Company has not established a limit
as to the amount of debt it may incur nor has the
Company adopted a ratio of its equity to debt
allowance. If the Company needs to obtain additional
financing, there is no assurance that financing will be
available from any source, that it will be available on
terms acceptable to the Company, or that any future
offering of securities will be successful. If
additional funds are raised through the issuance of
equity securities, there may be a significant dilution
in the value of the Company's outstanding common stock
The Company could suffer adverse consequences if it is
unable to obtain additional capital when needed.
THERE IS NO CURRENT TRADING MARKET FOR THE
COMPANY'S SECURITIES. There is currently no
established public trading market for the Company's
securities. The Company can give no assurance that an
active trading market in the Company's securities will
develop or, if developed, that it will be sustained.
Following the registration of its securities, the
Company intends to apply for admission to quotation of
its securities on the NASD OTC Bulletin Board and, if
and when qualified, it intends to apply for admission
to quotation on the Nasdaq SmallCap Market. If for any
reason the Company's common stock is not listed on the
NASD OTC Bulletin Board or a public trading market does
not otherwise develop, shareholders may have difficulty
selling their common stock should they desire to do so.
Various factors, such as the Company's operating
results, changes in laws, rules or regulations, general
market fluctuations, changes in financial estimates by
securities analysts and other factors may have a
significant impact on the market price of the Company's
securities.
THE VARIABILITY OF CUSTOMER REQUIREMENTS IN THE
ELECTRONICS INDUSTRY COULD ADVERSELY AFFECT THE
COMPANY'S RESULTS OF OPERATIONS. Electronic
manufacturing service providers must provide
increasingly rapid product turnaround time for OEMs.
The Company generally does not obtain firm, long-term
purchase commitments from its customers, and has
experienced reduced lead-times in customer orders. The
Company's customers may cancel their orders, change
production quantities or delay design and production
for several factors. Cancellations, reductions or
delays by a significant customer or group of customers
could adversely affect the Company's results of
operations. Additional factors that affect the
electronics industry and that could have a material
adverse effect on the Company include the inability of
its customers to adapt to rapidly changing technology
and evolving industry standards and the inability of
its customers to develop and market their products. If
the Company's customers' products become obsolete or
fail to gain commercial acceptance, the Company's
results of operations may be materially and adversely
affected.
CURRENT CASH SHORTAGE. The Company is
currently experiencing a cash flow problem which is
effecting its ability to timely fill production orders.
The Company may need to raise additional capital
through the placement of its securities or from debt or
equity financing. If the Company is not able to raise
such financing or obtain alternative sources of
funding, management may be required to curtail
operations.
THE LIMITED AVAILABILITY OF ELECTRONIC
COMPONENTS COULD ADVERSELY AFFECT THE COMPANY'S ABILITY
TO PROVIDE ASSEMBLED PRODUCTS TO ITS CUSTOMERS. A
substantial portion of the Company's net sales are
derived from turnkey manufacturing in which the Company
is responsible for procuring materials, which typically
results in the Company bearing the risk of component
price increases. At various times, there have been
shortages of certain electronic components. Component
shortages could result in manufacturing and shipping
delays or higher prices, which could have a material
adverse effect on the Company's business and its
results of operations.
THE COMPANY'S FAILURE TO COMPLY WITH
ENVIRONMENTAL REGULATIONS COULD PROHIBIT THE COMPANY
FROM CONDUCTING ITS BUSINESS OPERATIONS. Proper waste
disposal is a major consideration for printed circuit
board manufacturers because metals and chemicals are
used in the manufacturing process. The Company is
subject to a variety of environmental regulations
relating to the use, storage, discharge and disposal of
hazardous chemicals. For example, water used in the
printed circuit board manufacturing process must be
treated to remove metal particles and other
contaminants before it can be discharged into the
municipal sanitary sewer system. Although the Company
believes that its facility is currently in material
compliance with applicable environmental laws, there
can be no assurance that violations will not occur.
Furthermore, environmental laws could become more
stringent over time. The costs and penalties that could
result from a violation of environmental laws cold
materially and adversely affect on the Company's
business operations.
THE LOSS OF THE COMPANY'S KEY EMPLOYEES MAY ADVERSELY
AFFECT ITS GROWTH OBJECTIVES. The Company's success in
achieving its growth objectives depends upon the
efforts of its top management team including the
efforts of Jaime J. Munoz, the Company's President,
Jose Chavez, the Company's Chief Executive Officer and
Chairman of the Board of Directors, and Gustavo
Cardenas, the Company's Chief Financial Officer, as
well as other management members. Although the
Company has employment contracts with these
individuals, the loss of the services of any of these
individuals may have a material adverse effect on the
Company's business, financial condition and results of
operations. The Company can give no assurance that it
will be able to maintain and achieve its growth
objectives should the Company lose any or all of these
individuals' services. The Company maintains a key
man insurance policy on Jose Chavez in the amount of
$1,000,000.
THE COMPANY'S SUCCESS DEPENDS ON ITS ABILITY TO ATTRACT
AND/OR RETAIN QUALIFIED PERSONNEL. A change in labor
market conditions that either further reduces the
availability of employees or increases significantly
the cost of labor could have a material adverse effect
on the Company's business, financial condition and
results of operations. The Company's business is
dependent upon its ability to attract and retain highly
sophisticated research and development personnel, sales
personnel, business administrators and corporate
management. The Company can give no assurance that it
will be able to employ a sufficient number of such
personnel in order to accomplish its growth objectives.
MANY OF THE COMPANY'S COMPETITORS ARE
LARGER AND HAVE GREATER FINANCIAL AND OTHER RESOURCES
THAN THE COMPANY DOES AND THOSE ADVANTAGES COULD MAKE
IT DIFFICULT FOR THE COMPANY TO COMPETE WITH THEM. The
electronics manufacturing services industry is
extremely competitive and includes several companies
which have achieved substantially greater market shares
than the Company has, and have substantially greater
manufacturing, financial, research and development and
marketing resources than the Company has. If overall
demand for electronics manufacturing services should
decrease, this increased capacity could result in
significant pricing competition, which could adversely
affect the Company's operating results.
THE COMPANY MAY, IN THE FUTURE, ISSUE ADDITIONAL
SHARES OF ITS COMMON STOCK WHICH WOULD REDUCE
SHAREHOLDERS PERCENT OF OWNERSHIP AND MAY DILUTE THE
COMPANY'S PER SHARE VALUE. The Company's Certificate
of Incorporation authorizes the issuance of 70,000,000
shares of common stock, par value $.0001 per share, and
30,000,000 shares of preferred stock, par value $.0001
per share. The future issuance of all or part of the
remaining authorized common stock may result in
substantial dilution in the percentage of the Company's
common stock held by its then existing shareholders.
The Company may value any common or preferred stock
issued in the future on an arbitrary basis. The
issuance of the Company's common stock for future
services or acquisitions or other corporate actions may
have the effect of diluting the value of the shares
held by its investors, and might have an adverse effect
on any trading market for its common stock should a
trading market develop for the Company's securities.
SHARES AVAILABLE FOR FUTURE SALE MAY
AFFECT THE MARKET PRICE OF THE COMPANY'S COMMON STOCK.
The market price of the Company's common stock could
drop, assuming a trading market for the Company's
shares is established, if substantial amounts of
shares are sold in the public market or if the market
perceives that such sales could occur. A drop in the
market price could adversely affect holders of the
stock and could also harm the Company's ability to
raise additional capital by selling equity securities.
THE CONCENTRATION OF OWNERSHIP OF THE
SHARES OF THE COMPANY'S COMMON STOCK MAY DISCOURAGE
PURCHASES OF THE COMMON STOCK BY PERSONS WHO MIGHT
OTHERWISE SEEK TO GAIN CONTROL OF THE COMPANY.
Because the Company's executive officers and directors,
together with entities affiliated with them,
beneficially own in excess of 50% of the outstanding
common stock, they are able to exercise a controlling
influence over the election of the Company's directors
and other matters requiring stockholder approval,
including change of control transactions. The effect of
such management control could be to delay or prevent
any change of the Company's management control.
THE APPLICATION OF THE "PENNY STOCK REGULATION" COULD
ADVERSELY AFFECT THE MARKET PRICE OF THE COMPANY'S
COMMON STOCK. Upon commencement of trading in the
Company's common stock, if such occurs (of which there
can be no assurance) the Company's common stock may be
deemed a penny stock. Penny stocks generally are
equity securities with a price of less than $5.00 per
share other than securities registered on certain
national securities exchanges or quoted on the Nasdaq
Stock Market, provided that current price and volume
information with respect to transactions in such
securities is provided by the exchange or system. The
Company's securities may be subject to "penny stock
rules" that impose additional sales practice
requirements on broker-dealers who sell such securities
to persons other than established customers and
accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer
must make a special suitability determination for the
purchase of such securities and have received the
purchaser's written consent to the transaction prior to
the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the "penny
stock rules" require the delivery, prior to the
transaction, of a disclosure schedule prescribed by the
Commission relating to the penny stock market. The
broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered
representative and current quotations for the
securities. Finally, monthly statements must be sent
disclosing recent price information on the limited
market in penny stocks. Consequently, the "penny stock
rules" may restrict the ability of broker-dealers to
sell the Company's securities and may have the effect
of reducing the level of trading activity of the
Company's common stock in the secondary market. The
foregoing required penny stock restrictions will not
apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can
be no assurance that the price of the Company's common
stock will reach or maintain such a level.
IN THE FUTURE, THE AUTHORIZATION OF THE
COMPANY'S PREFERRED STOCK MAY HAVE AN ADVERSE EFFECT ON
THE RIGHTS OF HOLDERS OF THE COMPANY'S COMMON STOCK.
The Company may, without further action or vote by its
shareholders, designate and issue additional shares of
its preferred stock. The terms of any series of
preferred stock, which may include priority claims to
assets and dividends and special voting rights, could
adversely affect the rights of holders of the common
stock and thereby reduce the value of the Company's
common stock. The designation and issuance of preferred
stock favorable to current management or shareholders
could make a possible takeover of the Company or the
removal of its management more difficult and discharge
hostile bids for control of the Company which bids
might have provided shareholders with premiums for
their shares.
THE COMPANY'S INDEPENDENT CERTIFIED
ACCOUNTANTS HAVE NOT COMPLETED THEIR AUDIT OF THE
COMPANY. Although the Company is required to file
audited financial statements no later than 60 days from
the date that this Current Report is required to be
filed, such audit is not available for inspection as of
the date hereof. Consequently, there can be no
assurance that any representation as to the financial
condition or assets of the Company are as stated
herein.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable
ITEM 5. OTHER EVENTS
Not applicable
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed herewith.
The Registrant shall file the financial statements by
amendment hereto not later than 60 days after the date
that this Current Report on Form 8-K must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable
EXHIBITS
2.1. Certificate of Amendment to the Certificate of
Incorporation of Mayford Acquisition Corporation
2.2 Designation of Preferences for Series A
Convertible Preferred Stock
2.3 Designation of Preferences for Series B
Convertible Preferred Stock
10.1 Agreement and Plan of Reorganization among
Mayford Acquisition Corporation, Syntec
Acquisition Corporation and the shareholder of
Syntec.
10.2 Agreement and Plan of Merger between Mayford
Acquisition Corporation and Syntec Acquisition
Corporation.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused
this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
CCM MANUFACTURING TECHNOLOGIES, INC.
By: /s/ Jose G. Chavez
Chief Executive Officer
July 17, 2000
