fm8k-0609ea.htm
UNITED
STATES
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): June 26, 2009
PACIFIC
ALLIANCE CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware
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000-51777
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87-044584-9
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|
(State
or other jurisdiction of incorporation)
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|
(Commission
File Number)
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|
(IRS
Employer Identification No.)
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1661
Lakeview Circle
Ogden,
Utah 84403
(Address
of principal executive offices) (Zip Code)
801-399-3632
(Registrant’s
telephone number, including area code)
___________________
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
£ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June
26, 2009, Pacific Alliance Corporation, a Delaware corporation “Pacific,”
entered into an Exchange Agreement (the “Exchange Agreement”) with Superior
Filtration Products, LLC, a Florida limited liability Company
(“Superior”), and the members of Superior (“Superior
Members”). A copy of the Exchange Agreement is attached hereto as Exhibit
2.1.
Superior
is in the business of manufacturing and marketing air filtration products.
Superior offers a broad line of air filtration products and related equipment
and hardware. These products are marketed through both big box retail
and independent distributor networks to the end users. Superior began
operations in January of 2008. Superior designs, manufactures and
markets a broad range of air filtration products, including (i) high-end High
Efficiency Particulate Air (HEPA) filters, with at least 99.97% efficiency, and
Absolute Isolation Barriers for the creation of synthesized atmospheres to
control manufacturing environments and for the absolute control and containment
of contaminants and toxic gases in certain manufacturing processes: (ii)
mid-range filters for individual and commercial use, which fall under
specifications which are categorized by efficiency ratings established by the
American Society of Heating Refrigeration and Air Conditioning Engineers
("ASHRAE"); and (iii) standard-grade, low cost filters typically off-the-shelf
for standard residential and commercial furnace and air conditioning
applications. Superior’s headquarters are located in Ogden,
Utah.
Pursuant
to, and subject to, the terms and conditions of the Exchange Agreement, Pacific
intends to acquire all of the issued and outstanding Superior membership
interests in exchange for 1,000,000 shares of Pacific Series A Preferred Stock
(the “Acquisition”). If the Acquisition is closed, of which
there can be no assurance, Superior will be a wholly-owned subsidiary of Pacific
and the Superior Members will be controlling stockholders of Pacific. The
1,000,000 Shares of Pacific Series A Preferred Stock to be issued in the
Acquisition, will be convertible into 606,600,000 shares of Pacific common stock
subject to adjustment for any future reverse stock split. The shares
of Series A Preferred Stock may not be converted into common stock until Pacific
either completes a reverse stock split or increases its authorized capital or
both. Pacific anticipates that in the future Pacific will seek
stockholder approval to effect a 1-for-20 reverse stock split. If
such reverse stock split were to occur, of which there can be no assurance, the
606,600,000 shares of Pacific common stock issuable upon the conversion of the
Series A Preferred Stock into Pacific common stock, would be reduced to
30,330,000 shares of Pacific common Stock.
Pacific
anticipates that it will attempt to raise additional cash capital from the sale
of its securities in order to repay debt and to be used for working capital in
Superior’s operations. Pacific is also discussing the conversion of
some of its outstanding debt into shares of its common stock. The
exact terms of such debt conversion, the amount of debt to be converted and the
number of shares of Pacific common stock to be issued in connection with the
debt conversion, has not been determined.
Pacific
anticipates that if it is able to convert a portion of its outstanding debt into
equity and raise additional cash from the sale of is securities, and assuming
the Exchange Agreement is closed, the Superior Members will own more than 80% of
Pacific’s issued and outstanding shares of common stock assuming they convert
their Series A Preferred Stock into common stock.
The
closing of the Exchange Agreement is subject to numerous conditions and there
can be no assurance that the Acquisition will be completed.
The
Exchange Agreement provides that if the Acquisition is closed, the three current
directors of Pacific will remain as directors of Pacific and two additional
directors designated by Superior’s Members will appointed as directors of
Pacific. If the Acquisition is closed, we anticipate that the current
President, Vice President and Treasurer of Pacific will resigned from their
position and that Steven Clark will be appointed as our CEO, President and
Treasurer. Pacific’s current Secretary, David Knudson, is expected to
remain as our corporate secretary.
Sycamore
Ventures, LLC, Series 1 (“Sycamore”), an affiliate of Pacific’s current
president, Mark Scharmann, and Pacific's current Secretary/Treasurer, David
Knudson has agreed to loan Superior $250,000 for Superior’s use as working
capital prior to the closing of the Exchange Agreement. Such loan is
to be secured by the receivables, general intangibles and chattel paper of
Superior. In exchange for Sycamore agreeing to make such loan to
Superior, Pacific has agreed to issue Sycamore warrants to purchase 500,000
shares of Pacific’s common stock at a price of $0.05 per share. Such
warrants will be exercisable for a term of five years. If Pacific
completes a 1-for-20 reverse stock split, the Warrant will entitle Sycamore to
purchase 25,000 shares of Pacific common stock at a price of $1.00 per
share.
The
Exchange Agreement contains customary representations and warranties,
pre-closing covenants, and closing conditions, including approval of the
Exchange and related transactions.
The
foregoing description of the Exchange Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of the
Exchange Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein
by reference. Also attached hereto as exhibits are (i) a form
of Certificate of Designation of Series A Convertible Preferred Stock; and (ii)
the Warrant to be issued to Sycamore.
As of the
date of the Exchange Agreement and currently, there were no material
relationships between Pacific, or its affiliates, and Superior, other than as
contemplated by the Exchange Agreement or the loan with Sycamore described
above.
Item 9.01 Financial
Statements and Exhibits
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Exhibit
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Description
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Exchange
Agreement dated June 26, 2009.
Certificate
of Designation of Series A Convertible Preferred Stock
Warrant
Agreement
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SIGNATURE
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.
PACIFIC
ALLIANCE CORPORATION
(Registrant)
Date: June
26, 2009
By: /s/ Mark A.
Scharmann
Mark A.
Scharmann,
President