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
December 31, 2001
Date of Report
(Date of Earliest Event Reported)
LMC Capital Corp.
(Exact name of Registrant as Specified in its Charter)
Suite 2602 - 1111 Beach Ave Vancouver, BC Canada V6E 1T9
(Address of Principal Executive Offices)
604-608-4226
(Registrant's Telephone Number)
Not Applicable
(Former name and former address)
Nevada 000-31639 88-0436364
------ --------- ----------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Share Purchase Agreement with K-Tronik Int'l Corporation.
The Registrant has closed its purchase of all of the issued and outstanding
shares of K-Tronik Int'l Corporation.
The Registrant had agreed, pursuant to a share purchase agreement executed
November 29, 2001 (the K-Tronik Agreement"), to purchase all of the issued and
outstanding shares of K-Tronik Int'l Corporation ("K-Tronik") from the two
holders of these shares: Mr. Robert Kim (47%) and ETIFF Holdings, LLC (a wholly
owned subsidiary of Eiger Technologies Inc., a Toronto Stock Exchange listed
company)(53%) by way of the issuance of 6,714,286 common shares to Robert Kim
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and 7,571,428 common shares to ETIFF Holdings, LLC ("ETIFF"). The Registrant's
common shares issued to purchase the K-Tronik shares to be issued at a deemed
price of $0.70 for a total purchase price of $10,000,000. These common shares
were issued on December 24, 2001.
As a condition of closing the K-Tronik Agreement, the Registrant settled the
debts of K-Tronik to its parent, ETIFF, in the amount of $4,071,000 by way of
the issuance to ETIFF of 4,071,000 common shares of the Registrant at a deemed
price of one common share per $1.00 of outstanding debt principal. However,
subsequent to closing (and in connection with the preparation of ETIFF's and
K-Tronik's December 2001 financial statements) it was found that the debt of
K-Tronik to ETIFF was not $4,071,000 but rather $3,788,172. As a result,
282,828 common shares were returned to treasury by ETIFF and a new certificate
representing 3,788,172 common shares of the Registrant was issued to ETIFF.
As a condition of closing, ETIFF was granted the option (and exercised the
option) to purchase a total of 3,000,000 common shares of the Registrant from
existing shareholders of the Registrant . Prior to closing, there were
4,500,000 common shares of the Registrant issued and outstanding.
The K-Tronik Agreement, the debt settlement with ETIFF and the transfer of the
3,000,000 shares of common stock were all approved by unanimous directors'
resolutions dated effective December 12, 2001.
Under the terms of the K-Tronik Agreement, the directors and officers of the
Registrant resigned upon closing. The Directors were replaced by Mr. Keith Attoe
(also Director and CFO of Eiger Technologies Inc.), Mr. Gerry Racicot (also
Director and President of Eiger Technologies Inc.) and Mr. Robert Kim (also
Director and President of K-Tronik). Mr. Robert Kim was appointed as President
of the Registrant, Mr. Keith Attoe as Treasurer and Mr. J.K. Lee (also
controller of K-Tronik) as Secretary of the Registrant.
A copy of the K-Tronik Agreement was filed with the report on Form 8K dated
December 16, 2001 on the EDGAR system.
Share Purchase Agreement with Mr. T.W. Chung to purchase Dae Gyung Corp.
Effective on December 31, 2001, the Registrant closed its acquisition of Dae
Gyung Corp., a manufacturer of electronic transformers and a supplier of these
transformers to K-Tronik with operations based in Korea and in the People's
Republic of China.
The Registrant had agreed, pursuant to a share purchase agreement executed
November 29, 2001 (the "Dae Gyung Agreement") to purchase all of the issued
and outstanding shares of Dae Gyung Corp. ("Dae Gyung"), a Korean corporation,
from Mr. T.W. Chung by way of issuance to Mr. Chung of 5,714,285 common shares
at a deemed price of $0.70 per common share (a deemed purchase price of
$4,000,000). The Dae Gyung Agreement was approved by unanimous vote of the
Board of Directors of the Registrant effective December 12, 2001 and the
5,714,285 shares were issued effective December 31, 2001.
As a result of the closing of the Dae Gyung Agreement, Mr. T.W. Chung, who was
concurrently appointed as a director of the Registrant, acquired a total of
5,714,285 shares of common stock of the Registrant. This represents 20.20% of
the 28,288,171 issued and outstanding shares of common stock.
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Upon closing of the Dae Gyung Agreement, Mr. T.W. Chung was appointed to the
Board of Directors of the Registrant. Mr. T.W. Chung was President and Director
of Dae Gyung prior to closing and remains as President and Director now that
closing of the Dae Gyung Agreement has occurred.
A copy of the Dae Gyung Agreement was filed as an exhibit to the report on Form
8-K dated December 16, 2001 and filed on the EDGAR system.
Control of LMC Capital Corp.:
On December 31, 2001, LMC Capital Corp. had 28,288,171 shares of common stock
issued and outstanding. The following table sets forth certain information
regarding the beneficial ownership of the common stock of LMC Capital Corp. as
of December 31, 2001 of (1) each person who is known to LMC Capital Corp. to own
beneficially more than 5% of its outstanding common stock, (2) each of its
directors and officers, and (3) all of its directors and officers as a group:
- --------------------------------------------------------------------------------
Name and Address Position Amount of Stock Percentage of Class
Beneficially Owned
- --------------------------------------------------------------------------------
ETIFF Holdings Inc. 5% shareholder 14,359,600 50.76%
(Eiger Technology,
Inc. subsidiary)
- --------------------------------------------------------------------------------
Robert Kim Director and President, 6,714,286 23.74%
5% shareholder
- --------------------------------------------------------------------------------
T.W. Chung Director, 5,714,285 20.20%
5% shareholder
- --------------------------------------------------------------------------------
Gerry Racicot Director (1) (1)
- --------------------------------------------------------------------------------
Keith Attoe Director and Treasurer (2) (2)
- --------------------------------------------------------------------------------
J.K. Lee Corporate Secretary 0 0%
- --------------------------------------------------------------------------------
Directors, Officers and 26,788,171 94.70%
5% stockholders in
total (6 Persons)
- --------------------------------------------------------------------------------
1. Mr. Gerry Racicot does not personally own any common stock. However, as
well as being a director of LMC Capital Corp., he is a Director and
President of Eiger Technology Inc. which, through its wholly owned
subsidiary ETIFF Holdings Inc., owns 14,359,600 shares of common stock of
LMC Capital Corp. As stated in the table above, ETIFF holds a total of
50.76% of the issued and outstanding stock of the Company
2. Mr. Keith Attoe does not personally own any common stock. However, as well
as being a director of LMC Capital Corp., he is a Director and President of
Eiger Technology Inc. which, through its wholly owned subsidiary ETIFF
Holdings Inc., owns 14,359,600 shares of common stock of LMC Capital Corp.
As stated in the table above, ETIFF holds a total of 50.76% of the issued
and outstanding stock of the Company. Mr. Keith Attoe is also a Director
and Officer of ETIFF.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As used in this current report, the terms "we", "us", "our", "our company", "the
Company" and "the Registrant" mean, as the context requires, LMC Capital Corp.
and its wholly owned subsidiaries, K-Tronik Int'l Corporation ("K-Tronik"), a
Nevada corporation, Dae Gyung Corp. ("Dae Gyung"), a Korean corporation and
K-Tronik Asia Corp. ("K-Tronik Asia"), a Korean corporation in which K-Tronik
holds an 86.66% interest.
(a) Acquisition of K-Tronik and Dae Gyung:
The terms of both the K-Tronik Agreement (whereby the Company acquired K-Tronik)
and the Dae Gyung Agreement (whereby the Company acquired Dae Gyung) are
described in detail in Item 1 of this report on Form 8K. Both the K-Tronik
Agreement and the Dae Gyung Agreement are attached to the Company's report on
Form 8K dated December 16, 2001 and filed on the EDGAR system.
(b) Corporate History of LMC, K-Tronik and Dae Gyung:
LMC Capital Corp. was incorporated in the State of Nevada on September 2, 1999,
under the name of "LMC Capital Corp.". Inc."
At its meeting of stockholders dated November 13, 2001, the stockholders of LMC
approved a name change of the corporation to "K-Tronik International Corp.".
The necessary documents (including directors' resolutions) have been filed with
the Secretary of State of Nevada to effect this name change but this name change
has not been processed as of the date of this report on Form 8K.
K-Tronik was incorporated in the State of Nevada on March 17, 1998 under the
name of "K-Tronicks, Inc.". Its name was changed to "K-Tronik Int'l
Corporation" on August 7, 1998. K-Tronik was formed by its former parent, Eiger
Technology, Inc. and a predecessor company, K-Tronicks Industries Inc. (a New
Jersey corporation incorporated in 1995) as a joint venture. Shares in K-Tronik
were issued to the two (at that time) shareholders, Mr. Robert Kim (in exchange
for vending in the assets of K-Tronicks Industries, Inc.) and Eiger Technology,
Inc. (in exchange for financing the company). K-Tronik has one subsidiary,
K-Tronik (Asia) Corp., a Korean corporation incorporated on May 31, 1998, of
which it owns 86.66%.
Dae Gyung was incorporated under the laws of the Republic of Korea on July 31,
1998. On November 10, 1991 Dae Gyung established its operating subsidiary,
Qingdao Haidong Production Co. Ltd. in Qindao, China under the laws of the
People's Republic of China.
(c) K-Tronik's Products and Technology
K-Tronik is an energy efficiency lighting company. K-Tronik has been in the
business of designing and manufacturing electronic ballasts for the last five
(5) years and brings with it key personnel who have lighting ballast
manufacturing experience of over ten (10) years. K-Tronik is a leading North
American, electronic ballast manufacturer. K-Tronik ballasts have recently been
installed in JFK Airport, J.F. Kennedy Center, Ford Motor Corporation, Chase
Page 5
Manhattan Bank, Citibank, Florida Department of Transportation as well as
numerous schools and hospitals throughout United States. K-Tronik currently
manufactures ballasts for the US, Canadian, Asian, Latin-American and European
markets although past sales have focussed on the United States.
K-Tronik is particularly active with supplying ESCOs (Energy Services Companies)
ballast products used in generating energy savings for customers' commercial and
industrial buildings.
A "ballast" is a device in lighting systems that operates fluorescent lights.
The ballast provides the necessary starting voltages, frequency and wattage to a
fluorescent lights while limiting and regulating the current during the light's
operation. Without a ballast, a fluorescent light would be destroyed
immediately when voltages were applied by switching it on. Many people
recognize ballasts as the "black boxes" in their fluorescent light fixtures at
home that are visible when they replace the fluorescent tubes.
Electronic ballasts use semi-conductor components to increase the frequency of
fluorescent light operation. The smaller inductive components provide the
light's current control. Fluorescent system efficiency is increased due to high
frequency light operation. Electronic ballasts, when used with T-8 fluorescent
light systems, result in about a 30% savings of electricity when compared to
conventional T-12 40watt light systems (or bulbs).
K-Tronik's main sales target is the niche market which other, larger
manufacturers find too small to accommodate and the design and custom
manufacture of specialty ballasts has been key to K-Tronik's acceptance in the
lighting industry.
K-Tronik has a number of product lines including its new "MVP" product line
which is designed to cater to growing market demand for multi voltage electronic
ballast products.
(d) Dae Gyung's Products and Technology:
Dae Gyung is a small electronic transformer manufacturer that began operations
in 1988. Dae Gyung has been supplying electronic transformers, a key component
of electronic ballasts, to K-Tronik since early 2000. Dae Gyung also produces
AC/DC adaptors (its largest growth sales item), power transformers and small
items such as choke coils and EMI filters.
(e) Key Employees
The key employees of K-Tronik include the following:
Mr. Robert Kim, President:
Robert Kim has a number of years of experience in the ballast industry in sales
and management roles.
Page 6
Mr. John Andrews, Director of Sales and Operations of K-Tronik:
John Andrews joined K-Tronik in June of 1999. His responsibilities include
managing national sales, inventory management, credit and collection and
corporate marketing. John Andrews was employed by LG Industrial Systems USA (a
small ballast manufacturer) from 1996 to 1999 as Director of Sales and
Operations.
K-Tronik, on occasion, utilizes the services of engineering and design
consultants where its internal expertise is insufficient or otherwise committed
to other projects.
K-Tronik has a total of 6 employees and K-Tronik (Asia) has a total of 40
employees. The majority of K-Tronik (Asia)'s employees (25) are involved in
production / manufacturing positions. A total of 5 employees (2 in K-Tronik and
3 in K-Tronik (Asia)) are involved in Research and Development and Engineering
positions.
K-Tronik, through hirings from industry competitors, has attempted to build
service, distribution and sales capability. Hirings have come from Motorola
(which ceased ballast production operations in 1999) and from Magnetek.
(f) Key employees of Dae Gyung:
Dae Gyung has a total of 37 employees (15 in management and 22 in labour) in
Korea and 310 employees in its subsidiary in China (10 in management and 300 in
production / manufacturing positions).
Mr. T.W. Chung, President of Dae Gyung and Director of LMC Capital Corp.
Its key employee is T.W. Chung, its founder and President who was appointed as a
Director of LMC Capital Corp. on December 31, 2001. T.W. Chung has extensive
experience in the electronic product manufacturing sector having operated Dae
Gyung for almost 14 years.
(g) Product Pricing
As electronic ballasts have become more of a commodity item in the lighting
industry over time, the prices for ballasts have dropped from $20.00 to $11.27
on average from 1993 to 2001.
Electronic components (such as those manufactured by Dae Gyung) have also become
more of a commodity over time and have also experienced price decreases.
The result has been increasingly difficult competition, mergers and closures in
the ballast industry and attempts by many major companies to find low labour
cost jurisdictions (such as China or Mexico) in which to manufacture product.
(h) Intellectual Property
K-Tronik has applied for US patents on its MVP product line and these patents
are pending.
The "K-Tronik" name has been trademarked in the United States but not in other
jurisdictions.
Page 7
Dae Gyung does not have any patents or trademarks due, in part, to the nature of
its business in the past of producing for other manufacturers (such as Magnetek)
and a past business focus on low cost production, not independent product
development.
(i) Research and Development
K-Tronik and its engineering team engage in ongoing research and development
relating mostly to product design and market requirements. The result has been
the introduction of a number of products in the last two years which are
designed to meet changing consumer demands, regulatory requirements and energy
saving goals.
Dae Gyung has a small engineering and product design / development staff which
has, in the past, focussed on the development of a broader range of electrical
products which Dae Gyung can produce (eg. The introduction of AC/DC adaptors to
its product line in February 2000 with final CE and U/L approval).
K-Tronik and Dae Gyung intend to merge their research and development /
engineering teams now that their merger with LMC Capital Corp. is complete. The
purpose of this merger of their teams is to allow them to focus on new product
development in the ballast industry, in particular the development of smaller
ballast products and better production systems which reduce production and
delivery time (reducing costs and increasing production reliability).
(j) Markets
The market for ballasts is essentially split in two parts: the market for
original installations (such as those in new buildings) where ballasts are
purchased by original equipment manufacturers ("OEM"s) and the market for
replacement of existing ballasts to install energy saving ballasts (the
"retrofit" market).
The market for electronic ballasts grew significantly in the 1990s (000s of
units) as exemplified by the following figures for 4' x 8' electronic ballasts:
Year OEM Retrofit
1989 713 713
1990 1,501 1,501
1991 4,172 4,172
1992 6,912 6,380
1993 13,103 10,721
1994 14,238 10,741
1995 15,334 11,065
1996 16,089 11,765
The OEM market growth has outpaced retrofit market growth.
(Source: US Census Bureau, 4' x 8' ballast models only.)
Page 8
Distribution in the OEM market is effected by a large number of distributors
which typically will carry a whole range of lighting and building products.
Distribution in the retrofit market is effected by energy saving companies
("ESCO"s) which will often be involved in the analysis of a buildings or
institution's potential cost savings from a retrofit and which are often owned
or operated by energy utilities.
There are two main types of ballast products: those which rely on magnetic
technology ("magnetic ballasts") to carry and regulate current in lighting and
those which rely on electronic transformers ("electronic ballasts") to carry out
the same functions.
There are many different types of magnetic and electronic ballasts, each suiting
individual customer needs which may vary according to customer tolerance for
energy consumption, EMI emissions and multi voltage needs.
Estimating the size of the ballast market overall is difficult and it varies
from year to year with general economic growth, commercial and residential real
estate markets and other factors (including some "shocks" to the market such as
the Department of Energy's requirement for magnetic ballasts to be phased out by
April 1, 2005 or the energy difficulties of California in 2000-2001 which saw
demand for electronic ballasts increase).
In the year 2000, a total of 101,676,000 ballast were sold in the United States.
Of these ballasts sold, 55,118,000 were magnetic ballasts and 46,558,000 were
electronic ballasts (Source: US Census Bureau). The market is likely to further
shift to electronic ballasts in the future because of changing regulatory
requirements regarding magnetic ballasts' EMI emissions, reliability of
electronic ballasts, decreasing costs of electronic ballasts over time and
electronic ballasts' relative versatility. The number of electronic ballasts
sold has been increasing over time at a much greater growth rate than the
overall number of ballasts sold, which has been essentially flat and has not
shown significant growth as a industry (Source: US Census Bureau).
The market for ballasts is experiencing significant changes which K-Tronik hopes
to exploit. The United States Federal Department of Energy has mandated the
elimination of magnetic ballasts n the commercial and industrial new
construction or renovation industry (because of perceived EMI emissions problems
and because of energy efficiency concerns, Department of Energy news release
dated October 15, 1999 at www.energy.gov/HQPress) by April 1, 2005. As a
result, electronic ballasts such as those manufactured by K-Tronik will capture
the entire ballast market and competitors which have typically manufactured
magnetic ballasts (such as Magnetek) will be forced to introduce new products or
lose most of their market share.
At this time, electronic ballasts account for only 46% of ballast sales despite
their perceived advantages in terms of versatility, multi voltage capacity,
reduced EMI emissions and other factors.
K-Tronik manufactures and distributes only electonic ballasts.
Page 9
(k) Marketing Strategy:
K-Tronik's marketing strategy is characterized by the following:
Delivering niche products to customer groups: As a small manufacturer, K-Tronik
can deliver niche or specialty products which it is uneconomical or unattractive
for its larger competitors to deliver.
Exploiting market changes: As a manufacturer of electronic ballasts, K-Tronik
is likely to experience sales growth due to the banning of magnetic ballasts by
the US Department of Energy in 2005 in commercial and industrial installations.
Building brand name recognition: With sales expanding in the five years since
its founding, K-Tronik is becoming more recognized in this industry where brand
name recognition is important to overall acceptance of your products by
customers.
Focussing on ballasts with energy efficiency advantages: K-Tronik's ballasts
(because they are electronic) are less susceptible to variations in power grid
currents ("brownouts") which have occurred in the United States and South
America in recent years. K-Tronik hopes to continue developing products which
have some superiority in this area and to exploit markets where this competitive
factor is key (eg. California, the Northeastern United States, South America).
Focussing on relationships with ESCOs: the retrofit market has a higher margin
than the OEM market and, as a result, relationships with ESCOs are crucial in
building profitability.
(l) Competitors in the ballast industry:
The chief competitors in the ballast industry are Advance (a division of
Philips), Magnetek and Osram (a division of Sylvania). Motorola was also a
competitor until 1999 when it sold its ballast manufacturing, distribution and
sales division to Osram (Sylvania).
Advance (Philips) had approximately 25% of the ballast market, Magnetek had
approximately 22.5% of the ballast market and Osram (Sylvania) had approximately
16.5% of the ballast market. (US Census Bureau). SLI (a division of Valmont
Industries Inc.) had approximately 13% of the market. ESI (a division of Energy
Savings Inc.) is also a competitor with 10% of the market in 2001.
K-Tronik and two other small competitors combined had only 13% of the ballast
market.
It is possible but unlikely (because of the existing low margins and highly
competitive atmosphere) that additional competitors will enter the ballast
market.
(m) Competitive Factors in the Market:
K-Tronik has a number of strengths and some weaknesses relating to the
competitive factors in the ballast manufacturing industry.
Page 10
The main competitive factors in the ballast market are as follows:
- -brand name recognition (credibility)
- -low cost production
- -quality and length of customer relationships
- -distribution (warehousing and shipping) capabilities
- -new product development capability
- -quality (reliability) of ballast products
- -relationships with ESCO (Energy Saving Companies) for industrial and commercial
energy savings retrofits
- -increasingly, ability to produce electronic rather than magnetic ballasts
Each of its competitors has strengths and weaknesses. Magnetek is a
manufacturer of magnetic ballasts only. ESI (Energy Savings) has only "plug in"
ballast models that fit a minority of fixtures (most fixtures require lead
wires, especially in industrial and commercial fixtures). Advance does not have
low cost overseas production at this time (although it is in the process of
developing such production).
K-Tronik hopes to take advantage of low cost production (particularly with the
closing of the Dae Gyung Agreement) in China. In a highly competitive industry,
this low cost production could be key to its long term profitability and
survival.
K-Tronik has begun to sell direct to consumers while its largest competitors
(because of established intercorporate relationships) must often sell through
distributors. This gives K-Tronik a chance to capture the profits normally
realized by those distributors.
K-Tronik and K-Tronik (Asia) have an experienced Korean and American engineering
team to allow it to develop mew products in response to changes in the ballast
market (such as those which are periodically created by regulatory changes or
initiatives).
K-Tronik, through its hiring of many former employees of competitors, has long
term relationships with many customers and has itself (through its own sales)
built its long term relationships. K-Tronik is building name recognition
through advertising (trade magazines and shows) in addition to its sales.
K-Tronik has a well run warehousing and shipping department which, because it
ships only ballasts, is focussed on delivering ballasts on a timely basis unlike
large competitors with a wide range of products.
K-Tronik is able to market directly to customers because it does not have
distribution divisions (such as its larger competitors, Osram (Sylvania) and
Advance (Philips)) for which ballasts may be a small item or a low priority.
K-Tronik is actively attempting to expand its sales in ESCO (Energy Saving
Company) and South American markets, growing segments which its major
Page 11
competitors have not seemed to target. The ESCO (Energy Saving Company) market
is particularly important. ESCOs perform engergy usage audits and evaluations
to large companies, the US government, hospitals, school systems and other
groups. Most ESCOs are owned by large utility companies. They typically will
recommend upgrade of existing ballasts to bring cost savings to their customers.
These ESCO companies continue to gain ballast market share annually and have
become a key base for ballast purchases. Approximately 50% of buildings and
institutions in the US have not yet retrofitted to energy saving electronic
ballasts (Market Studies Inc., North Carolina).
However, K-Tronik is still a minor player in the ballast industry. It does not
have the brand name recognition that Sylvania or Motorola have. It does not
have the strategic business relationships with distributors (or ownership of
them) that its major competitors have. It does not have access to the same
financial resources that its largest competitors may have through their parent
companies.
Risk Factors Associated with our Business:
The following risks should be considered carefully. Our business, financial
condition and results of operations could be materially and adversely affected
by any of the following risks:
- - We may be unable to attract or retain customers;
- - We may be unable to anticipate changes in the ballast market or in our
customers' needs;
- - Our infrastructure may fail (including production and distribution) to
efficiently handle the volumes they are required to handle;
- - We haven't paid dividends and don't know if or when we will be able to;
- - Changes in laws (especially laws relating to energy saving devices and
regulatory requirements or specifications) could potentially hurt our
business if we are unable to develop new products or redesign existing
products;
- - If we succeed in increasing our sales, we might not be able to handle a
rapidly expanding operation and various problems associated with this (such
as installations, timing and amount of capital expenditures, limits to
production capacity in the K-Tronik (Asia) and Dae Gyung plants and other
problems);
- - We rely on our Korean and Chinese manufacturing operations (through our
subsidiaries K-Tronik (Asia) and Dae Gyung. As a result, we are vulnerable
to significant downturns in these countries' economies, currency
instability, political instability and other potential risks.
- - We will have to rely on future equity financing (which could dilute
existing shareholders) because we do not have sufficient revenue to fund
ongoing operations right now and are not profitable;
- - We may not be able to obtain future equity or debt financing, especially
if economic or securities market conditions deteriorate further;
- - We are very dependent on our key personnel and management and if they
leave, they make some of our customers with them;
- - General economic conditions may affect funding for energy retrofit
initiatives through federal, state and provincial budget cuts and we are
particularly vulnerable to this because many of our customers are government
institutions or hospitals and schools;
- - We believe that our profitability in the future will depend on our ability
to build relationships and in some cases acquire ESCOs. There is no
certainty that we will be able to build these relationships or that we will
have the funds necessary to acquire ESCOs.
Page 12
(n) Forward Looking Statements
This report includes `Forward Looking Statements' within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act.
Any statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or phrases such as
"expects" or "does not expect", "is expected", "anticipates" or "does not
anticipate", "plans", "estimates" or "intends", or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be taken, occur or
be achieved) are not statements of historical fact and may be "forward looking
statements". Such statements are included in many places in this Form 8K
including in "Future Plan of Operations" and in discussions of the market for
SchoolWeb's products and its size. Forward-Looking Statements are based on
expectations, estimates and projections at the time the statements are being
made that involve a number of risks and uncertainties which could cause actual
results or events to differ materially from those presently anticipated. See
"Risk Factors Associated with North Pacific and Its Business" herein. Although
we believe that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct.
(o) Description Of Property
LMC Capital Corp. currently does not have any physical property.
K-Tronik (Asia) and K-Tronik do not have any physical property other than their
production and office equipment. K-Tronik(Asia)'s plant in Korea is leased (as
is the office and warehousing space of K-Tronik in New Jersey). K-Tronik
(Asia)'s plant has a production capacity of 100,000 ballast pieces per month.
Dae Gyung is the owner of 4,700metres squared of land in Qingdae City in the
Province of Shandong in China and the building on this land where its production
takes place. The production capacity of its plant in this building is 500,000
transformers per month, 300,000 ac/dc adapters per month and 500,000 line
filters / coils per month.
(p) LMC Capital Corp.'s Directors, Executive Officers, Promoters and Control
Persons
The following persons are the directors, executive officers, promoters and
control persons of North Pacific:
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Name Position Term of Office*1*2
- --------------------------------------------------------------------------------
Robert Kim President and Director Expires November 12, 2002
- --------------------------------------------------------------------------------
Gerry Racicot Director Expires November 12, 2002
- --------------------------------------------------------------------------------
Keith Attoe Director and Treasurer Expires November 12, 2002
- --------------------------------------------------------------------------------
T.W. Chung Director Expires November 12, 2002
- --------------------------------------------------------------------------------
J.K. Lee Corporate Secretary *2
- --------------------------------------------------------------------------------
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1. Directors, whether appointed at a meeting of stockholders or by the
remaining directors, are appointed until the next annual meeting of
stockholders. As LMC Capital Corp. had its annual meeting of stockholders
on November 12, 2001 (and its annual meeting of stockholders is held
approximately every twelve months), all of the directors' terms expire on
or around November 12, 2002.
2. The President, Secretary and Treasurer do not have a set term of office.
They serve at the pleasure of the Directors and can be removed at any time
by the Directors.
Robert Kim, President and Director
Robert Kim, in addition to being President of LMC Capital Corp., is President
and CEO of K-Tronik Int'l Corp. Mr. Kim began work in the lighting and energy
management industry in 1990. He was the founding President of Daewoo America's
subsidiary, King Tech, which in its first year produced sales exceeding $15
million. Mr. Kim also worked with GoldStar Electronic Ballast Corporation from
1993 until he founded K-Tronicks Industries, Inc. (a predecessor company of
K-Tronik) in 1995.
Gerry Racicot, Director
Gerry Racicot, in addition to being a director of LMC Capital Corp., is director
and President of Eiger Technology, Inc. Eiger Technology, Inc., of which
K-Tronik was an operating division until the closing of the K-Tronik Agreement,
is a diverse manufacturer and distributor of a number of products in the
technology and commercial lighting industries. Eiger Technology Inc. is listed
for trading on the Toronto Stock Exchange and its shares are also posted for
trading through the facilities of the NASD's OTCBB. Gerry Racicot was, from 1988
to 2001, President of ADH Custom Metal Fabricators Inc. and Vision Unlimited
Equipment Inc., companies which manufacture and distribute various lighting and
other products.
Keith Attoe, Treasurer and Director
Keith Attoe, in addition to being a director and Treasurer of LMC Capital Corp.,
is director and CFO of Eiger Technology, Inc. A chartered accountant by
background, Keith Attoe has been with Eiger Technology, Inc. since 1996.
T.W. Chung, Director
T.W. Chung is the founder and still President of Dae Gyung and has operated Dae
Gyung for approximately 14 years. As a result, he has accumulated significant
knowledge of low cost production techniques and the manufacture, distribution
and sale of electronic products including electronic ballasts.
J.K. Lee, Corporate Secretary
J.K Lee, in addition to being Corporate Secretary of LMC Capital Corp., is the
controller of K-Tronik.
Page 14
Each officer and director generally serves until the next annual meeting of
stockholders or until such time as he or she resigns. The officers of the
Company are appointed at the pleasure of the board of directors and may be
removed at any time (subject to labour laws and other constraints).
(q) Executive Compensation
Summary Compensation Table
- ---------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-term compensation
------------------------------------------------------------------------------------------
Awards Payouts
------------------------------------------
Name and Year Salary Bonus Other Restricted Securities LTIP All other
principal ($) ($) annual stock underlying payouts compen-
position compen- award(s) options/ ($) sation
sation ($) SARs ($)
($) (#)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ---------------------------------------------------------------------------------------------------------------------------------
Robert Kim(2) 2000 $150,000 -- -- -- -- -- --
President & 0 -- -- -- -- -- --
Director 2001 $172,000 -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Keith Attoe 2000 -- -- -- -- -- -- --
Treasurer & 2001 -- -- -- -- -- -- --
Director
- ---------------------------------------------------------------------------------------------------------------------------------
Gerry Racicot 2000 -- -- -- -- -- -- --
Director 2001 -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
T.W. Chung 2000 (3) -- -- -- -- -- --
Director 2001 (3) -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
J.K Lee(1) 2000 -- -- -- -- -- -- --
Corporate 2001 $11,000 -- -- -- -- -- --
Secretary
- ---------------------------------------------------------------------------------------------------------------------------------
(1) J.K. Lee is paid by LMC Capital Corp.'s subsidiary, K-Tronik. As J.K.
Lee only joined K-Tronik in September of 2001, his salary figure does not
reflect his annual salary of $33,000.
(2) Robert Kim is paid by LMC Capital Corp.'s subsidiary, K-Tronik.
(3) The Company is awaiting receipt of audited financial figures from Dae
Gyung to determine these figures.
LMC Capital Corp., at its annual meeting of stockholders held on November 13,
2001, approved a stockholders' resolution to adopt a Stock Option Plan. As a
result, some or all of the persons named above may be granted options in the
future. To date, no options have been granted or are contemplated to be
granted.
Other than as stated below, there is no known relationship between any of the
Directors and Control persons with major clients or providers of essential
products and technology, nor are there any known related transactions.
Page 15
(r) Description Of Securities.
LMC Capital Corp. is authorized to issue 100,000,000 shares of the common stock
of which 28,288,171 shares of common stock were issued and outstanding as of
December 31, 2001. Each outstanding share of the common stock entitles the
holder to one vote, either in person or by proxy, on all matters that may be
voted upon by the owners thereof at meetings of the stockholders.
The holders of the common stock (i) have equal rights to dividends from funds
legally available therefore, when, and if, declared by our the Board of
Directors; (ii) are entitled to share ratably in all of our assets available for
distribution to the holders of the common stock upon liquidation, dissolution or
winding up of our affairs; (iii) do not have preemptive, subscription or
conversion rights; and (iv) are entitled to one non-cumulative vote per share on
all matters on which stockholders may vote at all meetings of stockholders.
The holders of the common stock do not have cumulative voting rights, which
means that the holders of more than 50% of such outstanding shares of common
stock, voting for the election of directors, can elect all directors of LMC
Capital Corp. if they so choose and, in such event, the holders of the remaining
shares of common stock will not be able to elect any of the directors.
(s) Litigation
LMC Capital Corp. and its subsidiaries are not party to any litigation and have
no knowledge of any threatened or pending litigation against them.
(t) Market For LMC Capital Corp.'s Securities
Currently LMC Capital Corp.'s common stock does not trade on any exchange or
quotation system including the NASD's OTCBB.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election
Upon closing of the Share Purchase Agreement on September 10, 2001, pursuant to
Rule 12g-3(a) of the General Rules and Regulations of the Securities and
Exchange Commission, LMC Capital Corp. elects, should that election be
Page 16
necessary, to remain an issuer for reporting purposes under the Securities
Exchange Act of 1934 (the "Exchange Act") and will continue to report under the
Exchange Act.
ITEM 6. RESIGNATION OF DIRECTORS AND EXECUTIVE OFFICERS
Upon closing of the K-Tronik Agreement, William J. Little, Philip Cassis and
Christopher D. Farber resigned as directors and officers of LMC Capital Corp.
Upon closing of the K-Tronik Agreement, Gerry Racicot, Keith Attoe and Robert
Kim were appointed as directors and officers of LMC Capital Corp. Upon closing
of the Dae Gyung Agreement, T.W. Chung was appointed a director of LMC Capital
Corp.
ITEM 7. FINANCIAL STATEMENTS
The Company anticipates filing an 8K/A on or before March 2002 which will
include pro-forma financial statements for the Company including the past
operations of K-Tronik and Dae Gyung.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
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.
LMC Capital Corp.
By: /s/ Robert Kim
-------------------------------
Robert Kim, Director and President
Dated: January 11, 2002