U.S. 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: March 24, 1997
COMSTOCK TAILINGS COMPANY, INCORPORATED
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation)
0-23208 84-1251553
(Commission File No.) (IRS Employer
Identification No.)
2692 Juniper
Boulder, Colorado 80304
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 541-9342
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Item 2. Acquisition and Disposition of Assets.
Effective March 11, 1997, Comstock Tailings Company, Incorpoated (the
"Company") entered into a letter of intent with Iron Holdings Corp.
("IHC"), a privately held New York corporation, whereby the Company
has agreed in principle to acquire all of the issued and
outstanding shares of IHC, in exchange for issuance by the Company
of previously unissued "restricted" common stock. IHC is a holding
company for 2 wholly owned subsidiary companies which are engaged
in the business of acquisition and development of real estate
holdings.
The relevant terms of the proposed transaction require the
Company to issue to the IHC shareholders an aggregate of 4,500,000
"restricted" common shares, representing 90% of the Company's then
outstanding common stock, in exchange for all of the issued and
outstanding shares of IHC.
The proposed share exchange is subject to satisfaction of
certain conditions, including completion of due diligence
activities, the approval of the transaction by the Company's and
IHC shareholders and confirmation of the financial condition of IHC
by presentation of IHC audited financial statements. The proposed
transaction is expected to close immediately after these conditions
have been satisfied. When the proposed transaction with IHC is
consummated, the present officers and directors of the Company are
expected to resign their respective positions with the Company, to
be replaced by the present management of IHC, or their designees.
A copy of the letter of intent between the Company and IHC is
attached hereto as Exhibit 2.0 and incorporated herein as if set
forth.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
2.0 Letter of Intent between the Company and Iron Holdings
Corp.
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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.
COMSTOCK TAILINGS COMPANY, INCORPORATED
By: s/Joel Feinberg
Joel Feinberg,
President
Dated: March 24, 1997
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COMSTOCK TAILINGS COMPANY, INCORPORATED
EXHIBIT 2.0
LETTER OF INTENT BETWEEN
THE COMPANY AND
IRON HOLDINGS CORP.
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COMSTOCK TAILINGS COMPANY,
INCORPORATED
2770 Industrial Way
Broomfield, Colorado 80020
March 10, 1997
Board of Directors
Iron Holdings Corp.
88-09 103rd Avenue
Ozone Park, NY 11417
Attention: Anthony E. Gurino, President
Re: Proposed Plan of Reorganization Between
Comstock Tailings Company, Incorporated
and Iron Holdings, Inc.
Dear Mr. Gurino:
This letter is intended to express the general terms of the Plan of
Share Exchange and Reorganization to be formalized between Comstock
Tailings Company, Incorporated, a Nevada corporation ("CTC") and
Iron Holdings Corp., a New York corporation ("IHC"). The objective
of our discussions has been the execution and consummation of
applicable formal agreement(s) between CTC and IHC (the "Exchange
Agreements") which, among other things, would provide for the
various matters set forth below.
1. Plan of Share Exchange and Reorganization of the
Companies. The board of directors of CTC and IHC have completed an
initial evaluation of the business plan, financial statements and
other relevant corporate documents of the other and have concluded
that an exchange of all of the issued and outstanding securities of
IHC for shares of CTC common stock equal to ownership of 90% of
CTC's outstanding shares would be in the best interest of both
companies. It is the intent of the parties hereto that the proposed
share exchange of IHC and CTC be effected as a tax-free reverse
merger pursuant to Section 368 of the Internal Revenue Code of
1986, as amended.
2. Terms of Share Exchange.
(A) CTC's Capitalization. CTC's total authorized
capital stock consists of 500,000,000 shares of Common Stock, par
value $0.001 per share. No Preferred Shares are authorized. As of
the date hereof there are 500,000 common shares of CTC issued and
outstanding.
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Board of Directors
Iron Holdings Corp.
March 10, 1997
Page 2
(B) IHC's Capitalization. IHC's total authorized
capital consists of 50,000,000 Common Shares, $0.01 par value per
share, and 5,000,000 Preferred Shares, $0.01 par value per share.
As of the date hereof, IHC has 3,500,000 common shares issued and
outstanding. As of the date hereof, no shares of Preferred Stock
are issued and outstanding.
(C) Special Board and Shareholder Meetings.
(i) Prior to Closing, the Board of Directors of CTC
will either obtain the consent of a minimum of
those CTC shareholders constituting a majority of
the issued and outstanding common stock of CTC or
otherwise call a special meeting of the CTC
shareholders for the purposes of: (a) ratifying the
transaction proposed herein; (b) amending the CTC
Articles of Incorporation, to change the name of
CTC to "Iron Holdings Corp.", or such other name as
may be available and acceptable to the present IHC
Board of Directors; (c) providing applicable
dissenter's rights afforded to the CTC Shareholders
pursuant to the laws of the State of Nevada; and
(d) undertaking any additional amendments to the
CTC Articles of Incorporation reasonably requested
by the IHC Board of Directors and acceptable to the
CTC Board of Directors.
(ii) Prior to Closing, the Board of Directors of IHC
will, if required or deemed advisable by IHC, (a)
call a special meeting of the IHC shareholders for
the purposes of ratifying the transaction proposed
herein, including providing applicable dissenter's
rights afforded to the IHC Shareholders pursuant to
the laws of the State of New York; and (b) take all
additional action necessary to cause the intent of
this letter to be adopted and ratified.
(D) Share Exchange. Subject to the approval of the
terms and conditions contained herein by a lawful number of the CTC
and IHC shareholders, IHC shall consummate a share exchange with
CTC with CTC emerging as the surviving entity by the IHC
shareholder exchanging all of the issued and outstanding IHC Stock
owned by them for 4,500,000 "restricted" Common Shares of CTC (the
"Closing" or "Closing Date").
(E) Officers and Directors. At Closing, the present
officers and directors of CTC shall deliver to IHC their respective
letters of resignation, along with certified
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Board of Directors
Iron Holdings Corp.
March 10, 1997
Page 3
minutes of the CTC Board of Directors accepting such resignation
and appointing to the CTC Board those persons designated by IHC to
be officers and directors of the surviving entity herein.
3. Financial Condition of CTC. Except as provided herein,
as of the Closing Date, CTC's balance sheet will reflect no assets
or liabilities.
4. Financial Condition of IHC. IHC has provided to CTC its
unaudited balance sheet for the period ended
, which indicates total assets of $
and shareholders' equity of $ . Upon execution
hereof, IHC shall undertake and complete an independent audit in
accordance with Paragraph 5(B), below, which shall demonstrate
total assets and shareholders' equity consistent with the unaudited
financial statements provided to CTC herein. For purposes herein,
any negative deviation of 10% or more shall be deemed to be
inconsistent with the unaudited financial statements.
5. Conditions to Closing.
(A) Closing. The Closing of the transaction proposed
herein shall take place as soon as practical after the respective
shareholders of CTC and IHC approve the terms included herein. The
Closing shall take place in Aurora, Colorado at the offices of
legal counsel for CTC, Andrew I. Telsey, P.C., 2851 S. Parker Road,
Suite 720, Aurora, Colorado 80014, or such other location as the
parties may so agree. At the discretion of the parties hereto,
Closing may also occur via telephonic means.
(B) To Be Provided by IHC. At or prior to Closing, IHC
shall provide to the present Board of Directors of CTC the
following:
(i) a financial audit of it's books as of
and unaudited financial statements for those
interim periods and applicable proforma financial
statements as required to be provided the SEC under
Regulation SB, promulgated under the Securities Act
of 1933, as amended, which shall be prepared in
accordance with Generally Accepted Accounting
Principles and provided by an independent, SEC
Certified Public Accountant and such audit shall
demonstrate balance sheet information consistent
with the financial information provided to CTC by
IHC prior to Closing; and
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Board of Directors
Iron Holdings Corp.
March 10, 1997
Page 4
(ii) an investment letter in a form acceptable to
counsel to CTC, duly executed by each IHC
shareholder, acknowledging that each such
shareholder is exchanging their respective
securities of IHC for their pro rata applicable
number of CTC common shares, that such shares to be
acquired by each IHC shareholder are solely for
their account and for investment and they have no
plan, intention, contract, understanding, agreement
or arrangement with any person to sell, assign,
pledge, hypothecate or otherwise transfer to any
person such shares, or any portion thereof.
(C) Non-Delivery. Failure by IHC to provide those items
described hereinabove, or failure of said audit to confirm the
financial condition of IHC as represented herein, shall render this
proposed transaction voidable at the discretion of the present
Board of Directors of CTC. For purposes herein, any deviation in
excess of 10% shall be construed as conforming with the financial
condition of IHC represented herein.
(D) Representations of CTC. CTC hereby represents that,
as of the Closing date, it shall be current in all filings required
to be tendered to the Securities and Exchange Commission ("SEC")
pursuant to the Securities Exchange Act of 1934, as amended,
including but not limited to, filings on Forms 10-K, 10-KSB, 10-Q
and/or 10-QSB.
(E) Private Sale of CTC Common Stock. Subsequent to
Closing, some of the current inside shareholders of CTC may sell
some or all of their CTC Common Shares owned by them, subject to
the exemptions, restrictions, terms and limitations applicable to
such sales under state and federal securities laws. No sales of
any of the issued and outstanding securities of CTC shall be made
prior to Closing.
6. Preparation of Information Statement. In the event CTC
shareholder approval is obtained by consent, management of IHC, as
successor management to CTC's present Board of Directors, shall
cause to be prepared and disseminated to any non-voting CTC
shareholder an Information Statement prepared in accordance with
the Securities Act of 1933, as amended, and the relevant proxy
rules contained therein.
7. Default. In the event IHC fails to perform pursuant to
Paragraphs 4 or 5, above, or close the transaction without the
fault of CTC, IHC shall be responsible for payment of all
reasonable costs incurred by CTC, including but not limited to
attorneys fees, due diligence costs, costs related to proxy
solicitation and such other costs as may be incurred directly
relating to this proposed transaction. Otherwise, each party
hereto
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Board of Directors
Iron Holdings Corp.
March 10, 1997
Page 5
shall be responsible for payment of their own legal, accounting and
any other out-of-pocket expenses reasonably incurred in connection
with this transaction, whether or not this transaction is
consummated, except as provided in Paragraph 9, hereinbelow.
8. Confidentiality. Upon the signing of this Letter of
Intent, CTC and IHC will provide to each other full access to their
books and records and will furnish financial and operating data and
such other information with respect to their business and assets as
may reasonably be requested from time to time. If the proposed
transaction is not consummated, all parties shall keep confidential
any information (unless ascertainable from public filings or
published information), obtained concerning the other's operations,
assets and business.
9. Retainer of Counsel. As a material condition hereto,
upon execution hereof by IHC, IHC shall tender a non-refundable fee
of $25,000 to Andrew I. Telsey, P.C., counsel to CTC, in order to
allow such counsel to commence preparation of all SEC filings and
other related documentation necessary to allow CTC to comply with
the rules and regulations necessary to consummate the transaction
proposed herein. The fee referenced herein, shall constitute the
sole financial obligation of IHC to CTC through the Closing Date of
the transaction described herein.
10. Finders Fees. It is hereby acknowledged that each party
hereto may be responsible for payment of certain finders fees
relating to the transaction proposed herein and that as a further
condition to Closing, as defined herein, each party shall warrant
in such Closing documents that such finders fees have been paid and
further, shall indemnify and hold harmless the other party from
such obligation.
11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
12. Jurisdiction. It is the intention of the parties that
the laws of the State of Colorado govern the determination of the
validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties.
13. Notices. Any notice relevant herein shall be deemed to
have been sufficiently served for all purposes if delivered
personally to the party to whom the same is directed, or, if sent,
by deposit with the United States mail, certified mail, return
receipt requested, postage prepaid, at such party's address listed
hereinabove, or to such other
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Board of Directors
Iron Holdings Corp.
March 10, 1997
Page 6
address as shall be furnished in writing by any party to the other.
Any such notice shall be deemed to be given three (3) days after
deposit in the U.S. mail.
14. Further Action. Each party shall execute and deliver
such papers, documents and instruments, and perform such acts as
are necessary or appropriate to implement the terms hereof and the
intent of the parties hereto.
15. Amendments. This Agreement may only be amended by the
mutual consent of all the parties hereto which Amendment shall be
in writing, duly executed by the parties.
Except for the agreements set forth in Paragraphs 6, 7, 8 and 9 hereof, this
letter is not intended as a contract or to create any enforceable rights or
obligations whatsoever on the part of either party. No obligation on the part
of either party with respect to the matters covered hereby (other than as set
forth in Paragraphs 6, 7, 8 and 9 hereof) shall exist unless and until a
written agreement, satisfactory in form and substance to both parties, has
been approved by their respective boards of directors and shareholders and
executed by officers specifically authorized to do so.
If the foregoing accurately reflects your understanding of the
terms and conditions of our agreement please so indicate by signing
below as designated.
Yours truly,
COMSTOCK TAILINGS COMPANY, INCORPORATED
By: s/Joel Feinberg
Joel Feinberg, President
APPROVED AND ACCEPTED this 11th day of March, 1997.
IRON HOLDINGS CORP.
By: s/Anthony E. Gurino
Anthony E. Gurino, President
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