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
July 17, 2002
Date of Report
(Date of Earliest Event Reported)
CAPITOL COMMUNITIES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada 0-23450 88-0361144
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
900 N. Federal Highway, Suite 410, Boca Raton, FL 33432
(Address of Principal Executive Offices)
Registrant's Telephone Number:561-237-0776
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On July 17, 2002, Boca First Capital, LLLP ("Boca First"), a Florida
limited liability limited partnership acquired control of Capitol Communities
Corporation (the "Company") in an exchange of 16 million shares of Common Stock
of the Company held by Michael G. Todd, the Company's president, and Prescott
Investments, L.P. ("Prescott"), a Nevada limited partnership beneficially owned
by Mr. Todd for a combined 33% interest in Boca First. Boca First is controlled
by its general partner, Addison Capital Group LLC ("Addison"), a Nevada limited
liability company. The manger/members of Addison are Howard Bloom, an individual
residing in the State of Florida, Kenneth Richardson, an individual residing in
the State of Florida and Michael G. Todd, an individual residing in the State of
California ("Addison Managers"). The Addison Managers, except for Mr. Bloom
who's beneficial interest in Boca First is held by MB 2002 LLC, a Florida
limited liability company, are limited partners of Boca First, as is Prescott
Investments L.P., and control Boca First, which now owns 64.6% of the Company's
issued shares ("Boca First" and collectively "Addison," "MB 2002 LLC," "Bloom,"
"Richardson," "Todd" and "Prescott" the "Reporting Persons").
By reason of the exchange of securities, the general partner of Boca
First, Addison, may be deemed to have voting power and/or dispositive power with
respect to the 16,000,000 shares of Common Stock owned by Boca First. There are
no arrangements or understandings among the members of the former and new
control groups and their associates with respect to the election of directors;
except that Boca First anticipates voting its interest to increase the board
from three to five members, and voting for the board to be consisted of at least
three outside directors. To the knowledge of the Company, there are no
arrangements by the Reporting Persons to pledge the acquired securities that
would by operation result in a subsequent change of control of the Company.
ITEM 5. OTHER EVENTS.
The Company, effective July 22, 2002 has relocated its principal place
of business to 900 North Federal Highway, Suite 410, Boca Raton, Florida 33432.
On July 17, 2002, the Company agreed to exchange $4,241,544 in debt,
including principal and interest, with a group of existing promissory note
security holders ("Note Holders") for 4,241,544 shares of Convertible Preferred
Stock, Series A (the "Series A Preferred Stock"), par value $0.01 per share.
Each share of Series A Preferred Stock bears a cumulative dividend rate of 5.25%
per annum. Commencing 60 days from the date of issuance, but not sooner than
August 15, 2002, each Series A Preferred Stock shall have a mandatory
conversion, at the Company's sole option, to convert into one share of Common
Stock for each share of Series A Preferred Share held by Investor, predicated
upon certain events ("Triggered Events"). The Triggered Event shall occur, when
and if, the Company's stock, based on the average of the high and low prices of
the Common Shares for a consecutive period of ten (10) trading days, as reported
by the National Quotation Bureau, Inc. ("NQB"), and reflect inter-dealer prices
as reported on the NASDAQ electronic bulletin board, reaches a price of $1.50
per share of Common Stock. However, in the event the Company elects such option,
it will use its best efforts to register such common shares for resale within
180 days from the date of conversion. Commencing 90 days after issuance (the
"Conversion Date"), and any time thereafter, the Series A Preferred is
convertible, at the option of the holder, into one share of the Company's Common
Stock. All or any number of Series A Preferred Stock may be converted by the
holder thereof from time to time on or after the Conversion Date. However, such
optional conversion is limited by the Triggered Events. The Series A Preferred
Stock is restricted stock.
The Series A Preferred Stock is non-voting, except as otherwise
provided under Nevada law. The Series A Preferred Stock, in the event of any
liquidation, dissolution or winding up of the Company, is senior to the holders
of Common Stock. Series A Preferred Stock holders are entitled to receive a
liquidation preference of $1.00 per share, plus accrued and unpaid dividends to
the payment date.
Simultaneously to the exchange, the Company negotiated a settlement of
existing promissory note debt in the amount of $1,576,872.28 for a cash
settlement of $449,872.75 with certain existing Note Holders.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: July 26, 2002 CAPITOL COMMUNITIES CORPORATION
BY: /s/ Michael G. Todd
----------------------------
Michael G. Todd
President and Chairman of
the Board