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): May 17, 2000
AURIC METALS CORPORATION
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(Exact name of Registrant as specified in its Charter)
NEVADA 0-6334 87-0281240
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(State or other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File No.) Identification No.)
1475 East Terminal Way, Suite E
Reno, Nevada 89502
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number including Area Code: (770) 239-7447
Not applicable.
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Former name, former address and former fiscal year, if
changed since last report.
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Item 1. Changes in Control of Registrant.
On April 11, 2000, Auric Metals Corporation (the "Company" or the
"Registrant") entered into a Consulting Agreement (the "Consulting Agreement")
with Marc J. Schwartz, an independent third party, under the terms of which Mr.
Schwartz was retained as a consultant to explore a possible new business
direction of the Company. Pursuant to the terms of the Consulting Agreement, the
Registrant agreed to pay Mr. Schwartz the sum of $120,000, and grant options to
acquire shares of its common stock as follows:
a) 100,000 shares exercisable at $1.125 per share;
b) 100,000 shares exercisable at $1.125 per share when the stock
price of the Registrant reaches and maintains for 10 days a price of $3.00 per
share; and
c) 100,000 shares exercisable at $1.125 per share when the stock price
of the Registrant reaches and maintains for 10 days a price of $5.00 per share.
In connection with Mr. Schwartz' engagement, the Registrant decided to
change its business direction from a company principally engaged in the
acquisition, exploration and development of interests in various natural
resource properties, to one engaged principally in investing in, and operating,
technology companies. As a result of this decision, the Registrant determined it
would cause its wholly-owned subsidiary, Auric Minerals Corporation, to sell its
interest in Corporacion de La Fonda, a closely-held New Mexico corporation, as
described under "Item 2. Acquisition or Disposition of Assets," below.
As a result of the decision to change the business direction of the
Registrant, described above, on May 17, 2000, the Registrant effected a change
in management. The Registrant's board of directors, consisting of James F.
Fouts, Chairman, Elizabeth White, and Dan Ligino, resigned, seriatum, and Marc
Schwartz and Donald Ratajczak, were elected as the new members of the board of
directors of the Registrant. In addition, James F. Fouts and Betty Fouts, his
wife, resigned as President and Secretary, respectively, and Donald Ratajczak
was appointed as the President and Chairman of the Board, and Marc Schwartz was
appointed as the Vice President and Secretary/Treasurer, of the Company.
Set forth below is a brief biographical description of Messrs.
Ratajczak and Schwartz:
Donald Ratajczak has occupied the position of Director of the Economic
Forecasting Center, College of Business Administration, Georgia State University
since 1973. Prior to his current position, he was Director of Research, Director
of Forecasting Models and Associate Director University of California at Los
Angeles ("UCLA") Forecasting Project during 1973, 1969 to 1970 and 1969 to 1973,
respectively. Dr. Ratajczak was also Assistant Professor at UCLA Graduate School
of Management, from 1969 to 1973. From 1966 to 1968, he was an Instructor at
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Massachusetts Institute of Technology, and from 1966 to 1967, he was an
Economist, Office of Postmaster General of the United States in Washington, D.C.
Dr. Ratajczak graduated in 1972 with a Ph.D. degree in Economics from
Massachusetts Institute of Technology. As President and Chairman of the Board,
Mr. Ratajczak will be responsible for the administration of Company matters.
Marc J. Schwartz is a licensed security broker and has been the Vice
President of Dunwoody Brokerage Services Capital Group, a subsidiary of Dunwoody
Brokerage Services, Inc., since 1998. From 1992-1998, Mr. Schwartz was a retail
securities broker with Robinson Humphrey, Solomon Smith Barney and Morgan
Stanley Dean Witter. As Vice President and Secretary/Treasurer, Mr. Schwartz
will be responsible for directing Company strategy.
Prior to becoming officers and directors of the Registrant, Messrs.
Schwartz and Ratajczak, along with a number of other individuals, acquired stock
of the Registrant in private transactions, as reflected on a Schedule 13D filing
dated April 17, 2000.
Dunwoody Brokerage Services, Inc., a broker-dealer firm with which Mr.
Schwartz is affiliated, has agreed to assist James Fouts and members of his
family, in selling, in private transactions, shares of common stock of the
Company held by them, in exchange for which these sellers have agreed to pay a
fee of $0.07 per share.
In April, 2000, in anticipation of the changes described above, the
board of directors authorized the grant of options to Mr. Ratajczak, entitling
him to purchase a total of 150,000 shares of the Company's common stock, at a
price of $3.00 per share. The Company has also authorized the grant of options
for up to an additional 100,000, to prospective employees, advisors and others,
at prices of between $3.00 and $5.00 per share.
Item 2. Acquisition or Disposition of Assets.
The Registrant's wholly-owned subsidiary, Auric Minerals Corporation
("Auric Minerals"), has held a minority interest in Corporacion de La Fonda, a
closely-held New Mexico corporation. La Fonda's principal asset is the Hotel de
La Fonda, a hotel and retail operation in Santa Fe, New Mexico. Auric Minerals
owns a total of 9,200 shares of common stock of La Fonda, or approximately 8.5%
of the total issued and outstanding shares of common stock of La Fonda. James F.
Fouts, then President of the Registrant and Auric Minerals, also owns 705
shares, or approximately .6% of the issued and outstanding common stock of La
Fonda, which he has owned for over fifteen (15) years.
In order to facilitate the change in the Company's business direction
described in Item 1 above, the board of directors determined that it was in the
best interest of the Company, to dispose of Auric Mineral's ownership interest
(9,200 shares) in La Fonda, on the best terms available. Auric Minerals
considered a number of different alternatives for the sale of the shares of La
Fonda (the "La Fonda Shares"), at "fair market value" or the best price
available, including offering the La Fonda Shares to other La Fonda
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shareholders. Recently, La Fonda indicated an interest in purchasing the La
Fonda Shares, at what it considers to be the reasonable or "fair" value for such
shares, which has resulted in a stock purchase agreement between the
Registrant's subsidiary and La Fonda (the "Stock Purchase Agreement"). Under the
terms of the Stock Purchase Agreement, La Fonda has agreed to purchase the La
Fonda Shares at a price of $141.69 per share, together with additional
consideration with a value of approximately $100,000, for a total purchase price
of approximately $1,404,548. La Fonda has recently purchased shares of La Fonda
stock from an existing shareholder at a price of $141.69 per share, and
authorized the issuance of 5 year stock options at a price of $149 per share.
All previous private purchases of La Fonda shares have been at lower prices.
Therefore, given these circumstances, and the fact that La Fonda is a
closely-held corporation with small annual dividends and very limited liquidity
in its stock, the board of directors believe the terms of purchase of the La
Fonda shares are fair and reasonable. Pursuant to the Stock Purchase Agreement,
La Fonda has paid the sum of $104,548, and agreed to pay the balance of the cash
purchase price, of $1,200,000, within thirty (30) days, or on or before June 15,
2000. In addition to the cash consideration, La Fonda has agreed to provide to
the Registrant the use of a minimum of two rooms for 30 nights per year, at the
La Fonda Hotel, for a period of ten (10) years, having an estimated present
value of $100,0000.
In connection with the transaction, James F. Fouts and other members of
the Fouts family have indicated that they are willing to loan to La Fonda all or
a portion of the funds necessary for La Fonda to complete the purchase of the La
Fonda stock, on terms to be negotiated.
As a result of this transaction, the Registrant will have a total of
$1,304,548 in cash, and the other consideration described above.
Item 6. Resignations of Registrant's Directors.
As described under "Item 1. Change in Control," on May 17, 2000, James
F. Fouts, Elizabeth White and Dan Ligino, resigned as directors of the Company,
and Marc Schwartz and Donald Ratajczak were elected as new directors of the
Registrant.
Item 7. Financial Statements and Exhibits
The following exhibits are filed as part of this report:
Exhibit No. SEC Ref. No. Description/Title of Document
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* 10 Consulting Agreement with Marc J. Schwartz
1 10 Agreement between Auric Minerals Corporation and
Corporacion de La Fonda
*This exhibit was previously filed as an exhibit to the Schedule 13D filed on or
about April 17, 2000, and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized.
REGISTRANT:
AURIC METALS CORPORATION
Date: May 17, 2000 By: /s/ Donald Ratajczak
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Donald Ratajczak, President
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