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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 12, 1998
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Colorado 0-21821 93-0962072
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State or Other Jurisdiction Commission IRS Employer
Of Incorporation or Organization File Number Identification No.
410 17th Street, Suite 400 Denver, Colorado 80202
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Address of Principal Executive Offices and Zip Code
Registrant's telephone number, including area code (888) 313-8051
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Item 2. Acquisition or Disposition of Assets
On January 12, 1998, Consolidated Capital of North America, Inc. (the "Company")
through its wholly owned subsidiary, Angeles Acquisition Corp. ("Angeles"),
purchased substantially all of the assets of Capitol Metals Co., Inc.
("Capitol"), a privately held steel processing and service center headquartered
in Torrance, California.
Capitol is one of the largest flat-rolled steel service facilities in Southern
California. Capitol sells and processes flat rolled carbon steel products.
Capitol's services include pickling, slitting and leveling steel coils of
various sizes into steel sheets, slit coils and pickled and coiled whole coils.
Capitol occupies 14 acres with a 320,000 square foot storage and manufacturing
facility and a 20,000 square foot office facility which the Company has leased
on a long term basis with an option to purchase. The facility is situated near
major freeway arteries and the ports of Long Beach and Los Angeles. There are
four bays that have 10 and 15 ton overhead cranes for convenient material
handling and a rail spur to service incoming and outgoing shipments.
Capitol owns three slitting lines, four cut-to-length lines and one banding line
for slit coil packaging. Capitol owns the only toll coil pickling line capable
of handling 40,000 pound coils on the West Coast. The line processes over 14,000
tons per month. The core equipment is supplemented by material handling
equipment, plant equipment, boilers, fixtures and vehicles.
Capitol filed for protection under Chapter 11 of the Bankruptcy Code on October
7, 1997. On November 26, 1997, the Bankruptcy Court entered an order
establishing the procedures for the sale of substantially all of the Capitol
assets pursuant to the Asset Purchase Agreement dated December 1, 1997 between
Capitol and the Company. Exhibits 10.41 - 10.50 hereto are incorporated herein
by reference. (See Item 7 hereof.)
The total consideration for the purchase of Capitol was approximately $9.2
million and consisted of $336,000 in cash, $1.5 million in promissory notes,
$300,000 of Common Shares of the Company, the assumption of an outstanding note
of $600,000 and the assumption of the obligations of Capitol under Capitol's
then existing loan agreement with Congress Financial Corporation (Western) which
was refinanced through a new facility entered into between Congress and the
Company. This new facility provides to Angeles and the Company's Angeles Metal
Trim Co. subsidiary a maximum facility of $20 million consisting of revolving
credit facilities, based on eligible accounts receivable and inventory, term
loans, letter of credit facilities and equipment facilities.
In connection with the acquisition of Capitol and the transactions with
Congress, Paul Bagley, the Chairman of the Board of the Company, loaned $1.5
million to the Company. The loan is evidenced by a convertible promissory note
of the Company in the aggregate amount of $1,750,000, with a 12% annual interest
rate payable quarterly in arrears. The promissory note is due in one year or
sooner in the event of a $25 million equity issuance by the Company and is
secured by a subordinate security interest in all of the assets of the Company
and its subsidiaries. The promissory note is convertible into 1,750,000 Common
Shares of the Company. As additional consideration of the loan, Mr. Bagley is
being issued 1,500,000 shares of Common Stock of the Company. Exhibits 10.51 -
10.52 hereto are incorporated herein by reference. (See Item 7 hereof.)
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The shares issued to Mr. Bagley and the shares issued in connection with the
purchase of Capitol are to be covered by a registration statement to be filed
with the Securities and Exchange Commission by April 10, 1998.
Item 7. Financial Statements and Exhibits
(a) and (b) Financial Statements and Pro Forma Financial
Information will be filed in the Form 10-KSB of the Company within sixty (60)
days of the date hereof.
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(c) Exhibit 10.41 Asset Purchase Agreement, dated as of December 1, 1997, between the Company and
Capitol Metals Co., Inc. (Exhibits and Schedules omitted.) [To be filed by
Amendment]
Exhibit 10.42 First Amendment to Asset Purchase Agreement, dated as of January 8, 1998, among
Binhad, Inc. (formerly known as Capitol Metals Co., Inc.), the Company and Angeles
Acquisition Corp. [To be filed by Amendment]
Exhibit 10.43 Assignment and Bill of Sale, dated January 9, 1998, from Binhad, Inc. (formerly
known as Capitol Metals Co., Inc.) to Angeles Acquisition Corp. [To be filed by
Amendment]
Exhibit 10.44 Secured Promissory Note, dated January 12, 1998, in the principal amount of
$1,200,000, from the Company and Angeles Acquisition Corp. to Binhad, Inc.
(formerly known as Capitol Metals Co., Inc.). [To be filed by Amendment]
Exhibit 10.45 Secured Promissory Note, dated January 12, 1998, in the principal amount of
$300,000, from the Company and Angeles Acquisition Corp. to Binhad, Inc. (formerly
known as Capitol Metals Co., Inc.) [To be filed by Amendment]
Exhibit 10.46 Security Agreement, dated January 8, 1998, between Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.) and Angeles Acquisition Corp. [To be filed by Amendment]
Exhibit 10.47 Registration Agreement, dated as of January 6, 1998, between Binhad, Inc.
(formerly known as Capitol Metals Co., Inc.) and the Company. [To be filed by
Amendment]
Exhibit 10.48 Assignment and Assumption Agreement, dated as of January 8, 1998, among the
Company, Binhad, Inc. (formerly known as Capitol Metals Co., Inc.) and Angeles
Acquisition Corp. [To be filed by Amendment]
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Exhibit 10.49 Note Secured by Collateral Security Agreement, dated January 12, 1998, by and
between the Company and Angeles Acquisition Corp., and Nat and Evelyn Handel,
Trustees of the Nat and Evelyn Handel Family Trust. [To be filed by Amendment]
Exhibit 10.50 Collateral Security Agreement, dated January 12, 1998, by and between Angeles
Acquisition Corp. and Nat and Evelyn Handel, Trustees of the Nat and Evelyn Handel
Family Trust. [To be filed by Amendment]
Exhibit 10.51 Promissory Note, dated as of January 12, 1998, in the principal amount of
$1,750,000 from the Company to Paul Bagley. [To be filed by Amendment]
Exhibit 10.52 Security Agreement, dated as of January 12, 1998, between the Company and Paul
Bagley. [To be filed by Amendment]
Exhibit 20.1 Press Release issued by the Company on January 22, 1998. [To be filed by Amendment]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
By: /s/ Donald R. Jackson
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Donald R. Jackson
Chief Financial Officer,
Treasurer and Secretary
Date: January 27, 1998
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