Attached files
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): December 31, 2009
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JK ACQUISITION CORP.
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(Exact name of registrant as specified in its Charter)
Delaware 001-32574 87-0745202
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification Number)
Incorporation)
855 Bordeaux Way, Suite 200, Napa, California 94558
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (707) 254-8880
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4265 San Felipe, Suite 1100, Houston, Texas 77027
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(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 (see General Instruction A.2. below):
[_] 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))
EXPLANATORY NOTE
On January 5, 2010, JK Acquisition Corp. (the "Company") filed a Current
Report on Form 8-K (the "Initial 8-K") reporting on a change in control of the
Company. The Initial 8-K alluded to a business opportunity that the Company
intended to pursue. This Amendment No. 1 to Current Report on Form 8-K
supplements and amends the Initial 8-K by describing in more detail the
foregoing business opportunity. Such description is intended to provide "Form
10 information" as such term is used in Rule 144 under the Securities Act of
1933, as amended. Moreover, a new Item 5.06 captioned "Change in Shell Company
Status" is being added to the Initial 8-K.
ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT.
BACKGROUND
EARLY COMPANY HISTORY
The Company has historically been a blank check company. It was formed in
2005 to serve as a vehicle for the acquisition, through a merger, capital stock
exchange, asset acquisition or other similar business combination with a then
unidentified operating business. On April 11, 2006, the Company completed its
initial public offering (the "IPO") of equity securities, raising net proceeds
of $76,632,404. On September 6, 2006, the Company, Multi-Shot, LLC
("Multi-Shot") and various other parties entered into the Agreement and Plan of
Merger ("Merger Agreement") and related agreements. Over the course of this
transaction, the parties twice amended the terms of the Merger Agreement and
twice extended the transaction. On January 31, 2008, the Company announced that
the special meeting of its stockholders to vote on the proposed merger with
Multi-Shot had been cancelled. The Company determined and informed Multi-Shot
that the proposed merger would not receive the votes of its stockholders
required for approval. The Merger Agreement expired on January 31, 2008, and
the proposed merger with Multi-Shot was abandoned. As a result, the Company's
Board of Directors determined it would be in the best interests of the
stockholders to distribute to stockholders holding shares of Common Stock issued
in the IPO all amounts held in a trust fund (net of applicable taxes)
established by the Company at the consummation of the IPO into which a certain
amount of the net proceeds from the IPO had been deposited.
Because the Company did not consummate a qualifying business combination,
the Company's Board of Directors contemplated alternatives for preserving value
for stockholders. Ultimately, the Board of Director proposed to amend the
Company's certificate of incorporation to permit the continuance of the Company
as a corporation beyond the time currently specified in the Company's
certificate of incorporation. The Company's stockholders approved this
amendment to the Company's certificate of incorporation. After such approval,
the Board of Director began seeking a company or companies that the Company
could acquire or with which it could merge.
RECENT CHANGE IN CONTROL
Before any acquisition or merger of the type described in the preceding
paragraph occurred, a change in control of the Company occurred on December 31,
2009 when Golden Gate Homes, Inc., a privately held Delaware corporation
("Golden Gate"), acquired from James P. Wilson and Keith D. Spickelmier,
respectively, 67,738,379 and 55,472,309 shares of the Company's common stock
theretofore owned by them separately, for an aggregate of 123,210,688 shares of
common stock, representing approximately 96.5% of the outstanding shares of the
Company's common stock and the controlling interest in the Company. The
purchase prices paid for these shares were $171,875 to Mr. Wilson and $140,625
to Mr. Spickelmier. Steven Gidumal and Brandon Birtcher each own one-third of
Golden Gate, and two trusts of which Tim Wilkens is the trustee, The Wilkens
2000 Trust and The Wilkens 2003 Trust (the "Wilkens Trusts"), own the remaining
one-third of Golden Gate. Biographical information about Messrs. Gidumal,
Wilkens and Birtcher is contained below. The funds for the purchase of the
shares came personally from Messrs. Gidumal and Birtcher, and from the accounts
of the Wilkens Trusts. Golden Gate purchased the shares to pursue a business
opportunity through the Company. For more information about this business
opportunity, see "Company's New Business" below. Messrs. Wilson and
Spickelmier, on the one hand, and Golden Gate, on the other hand, have not
entered into any arrangements or understandings with respect to the election of
directors or other similar matters, other than for Mr. Spickelmier's agreement
to continue to serve as a Company director until the Company complies with
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Rule 14f-1 thereunder for any subsequently elected Company directors.
In connection with the transaction described in the preceding paragraph,
the following events occurred:
* James P. Wilson resigned from the Company's Board of Directors, and Steven
Gidumal was elected to the Board to fill the newly created vacancy, to
serve along with Keith D. Spickelmier, who remains as the second director.
For more information about the new director, see "ITEM 5.02. DEPARTURE
OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS"
below.
* All of the Company's then serving officers resigned, and the Company
elected the following persons
OFFICER OFFICES
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Steven Gidumal Chairman of the Board &
Chief Financial Officer
Tim Wilkens Chief Executive Officer
Brandon Birtcher President
Basil N. Argerson Senior Vice President, Treasurer & Secretary
For more information about the new officers, see "ITEM 5.02. DEPARTURE
OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN
OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS" below.
* The Company has proposed to change its corporate name to "Golden Gate
Homes, Inc." and to effect a 1-for 35 reverse split of the
Company's common stock to improve the Company's capital structure.
Further information about these matters is included in a definitive
written consent solicitation statement filed by the Company with
the U.S. Securities and Exchange Commission (the "SEC") on January
25, 2010. Moreover, the Company is considering adding additional
members to its Board of Directors. One additional director now being
considered is Tim Wilkens. Information with respect to this
proposed addition is included in an Information Statement
pursuant to Section 14(f) of the Exchange and Rule 14f-1
thereunder that the Company filed with the SEC on January 25,
2010.
COMPANY'S NEW BUSINESS
GENERAL
As a result of the change in control of the Company described above, the
Company is adopting a significant change in its corporate direction. The
Company has decided to focus its initial efforts on a plan of operation that
would focus on marketing high-quality, distressed residential properties in
exclusive US markets (with an initial focus on California) to international
buyers (primarily from China and other parts of Asia) through exclusive selling
agreements or consignment arrangements. In the event that the Company is
successful in completing a major capital raising transaction, it will also
consider purchasing similar assets for resale to the same target market.
INDUSTRY BACKGROUND
The Company's management believes that the recession in the United States
economy that began in December 2007 has created opportunities in the real estate
market. CNNMoney.com has reported that this recession, which is frequently
referred to as "the Great Recession," is generally regarded as "the worst
economic downturn since the Great Depression." Huliq News has reported that
total residential foreclosures in the United States for the two years and nine
months ending with the third quarter of 2009 numbered 7,827,219, with the
possibility of the total number of foreclosures reaching 25 million before the
housing crisis ends. These adverse developments in the United States
residential market have had a devastating effect on housing prices. On
September 29, 2009, SEATTLEPI.COM reported that the S&P/Case-Shiller Home Price
Index released on that date indicated that home prices in 20 metropolitan areas
in the United States were down about 33% from a mid-2006 peak.
Due to the current economic decline and the more restrictive lending
conditions in the country, the demand for real estate is, and therefore the
prices real estate command are, currently low relative to recent levels. This
is reflective in the higher capitalization rates (indicating lower prices) that
real estate buyers are asking and real estate sellers are willing to accept for
the sale of their properties. The lower prices, in conjunction with the
continuing low interest rates available in the market, makes this an attractive
period to market U.S. real estate to foreign buyers, either through exclusive
sales agreements or consignment transactions, or if financing can also be
obtained, through acquisition and resale of properties.
With the gradual resurgence of the United States economy and easing of
capital restraints, the Company believes that properties acquired during this
period should experience a natural appreciation in value as demand improves.
The Company feels that the forward looking U.S. stock market and the recent
upward movement of the S&P/Case-Shiller Home Prices Index indicate the real
estate market may have bottomed and a gradual climb into a stronger market cycle
may be expected, although there can be no assurance of this. Tim Wilkens, the
Company's Chief Executive Officer, is a veteran of the Houston real estate
market that went sour in the mid 1980's as oil prices crashed. During the
1980's, Mr. Wilkens led the acquisition of over 600 properties in Houston. Mr.
Wilkens believes that an opportune time has arisen in many U.S. real estate
markets akin to the real estate market that emerged in Houston during the late
1980's.
The Company's management believes that real estate developers, as well as
banks and lending institutions, are now reluctant owners and forced sellers of
properties. Banks are facing situations where state and local approvals have
expired, documentation for projects are lost or non-existent, and permits have
expired or need to be secured. The inventory of foreclosed REO ("real estate
owned" by banks) town homes and condominiums in California (the Company's
primary target areas) numbers approximately 37,000 properties that need
resolution.
STRATEGY
The Company's strategy is to distinguish itself and create a unique value
proposition. Key components of the Company's strategy include:
* Use the extensive background of the Company's new management in real
estate and distressed situations to grow the Company's new business
rapidly.
* Take advantage of the significant downturn in the residential property
markets in selected areas of the United States to capture large
discounts on properties to provide a strong value proposition to its
overseas buyers. In situations where the Company seeks to control or
acquire properties for resale, it will strive to do so at significant
discounts to appraised value. Where projects or specific properties have
stalled or become unsellable for various reasons related to the lack or
expiration of governmental approvals, lack of adequate documentation, the
bankruptcy of the developer or cross-collateralization problems, or
other similar issues, the Company's new management has ample background
to resolve such complex situations and add value for the benefit of all
parties involved.
* Use a rigid selection and, where applicable, acquisition criteria
regarding properties to be marketed.
* Leverage a proprietary property database that the Company is developing to
facilitate finding properties to market, which includes many properties
that are not up for public sale.
* Establish a growing list of sellers who want to access the Company's
unique overseas distribution network, to facilitate their domestic
sales process.
* Use a unique, exclusive sales and marketing distribution network within
China for properties to be marketed and sold through the Company's
marketing agreement with Premier Capital, Ltd. ("Premier Capital"),
a real estate brokerage firm based in Hong Kong that is one of
the largest sellers of international properties in China. The Company
believes that this approach will attract new buyers (particularly land-
ownership desirous Chinese citizens) for United States properties to
compensate in part for the lack of buyers currently in the market for
these properties.
* Provide property management expertise to support an expanding number of
units sold or owned over time.
* Provide one-stop acquisition and management services to Chinese and other
international buyers, including facilitating their access to US-Chinese
lenders.
* Rapidly turn over inventories of properties to Chinese and other
international buyers. The Company will strive to sell entire projects
within two to six months of their initial consignment or acquisition, as
the case may be. Rapid turnover of properties should lead to an
efficient use of capital.
PROPERTY SELECTION
The Company's management will make all decisions in identifying and
selecting prospective target properties. The Company will use a rigorous
selection process to bring value to its buyer-clients. In searching for and
evaluating prospective target properties, the Company intends to use the
following practices:
* A focus on residential properties, which in many instances may be suitable
to being rented by their overseas owners to third-parties;
* Identification of foreclosed and REO properties by working directly with
banks and leading brokers;
* Focus on well-built, new construction near major cities;
* Monitoring of market forecasts to determine which real estate markets will
recover/appreciate sooner while still appealing to the Company's
overseas clients;
* Evaluation of macro factors such as comparable sales, rental demand,
interest rates, location, occupancy, county and regional population
and job growth factors;
* Pre-approval of properties (where possible) by property lenders so
approvals of financing for buyers move more quickly;
* Confirmation of projects' marketability with Premier Capital; and
* Use of the Company's ability to close quickly, when appropriate, to secure
the lowest consignment or acquisition price, as the case may be.
The Company has established general attributes and criteria for prospective
target properties. In evaluating a prospective target property, the Company's
management will consider, among other factors, the following:
* The location, quality and perceived desirability and price/value of the
project;
* Management's understanding of re-sale and other conditions of the
particular location and market;
* Management's assessment of the attractiveness of the timing of the
consignment or acquisition;
* Management's assessment of the financial attractiveness of a
particular target relative to other available targets, and its
potential for upside appreciation and return on investment;
* For potential acquisition targets, capital requirements and
management's assessment of the ability to finance a particular
target;
* Macro-economic trends;
* Environmental risks;
* Physical condition of the target;
* Management's assessment of the ability to manage a particular target
and, for potential acquisitions, its ability to redevelop and
improve the target; and
* The overall profit expectation and the return on capital expectation of
the project or target.
When considering commercial properties in the future, the Company's management
will also consider the following:
* Occupancy in the target vs. surrounding market;
* Tenant profile; and
* Lease rollover.
These criteria are not intended to be exhaustive. Any evaluation relating
to the merits of a particular property will be based, to the extent relevant, on
the above factors as well as other considerations believed relevant by the
Company's management in effecting a consignment transaction or acquisition
consistent with the Company's business objective. In evaluating a prospective
target, the Company will conduct an extensive due diligence review that will
encompass, among other things, physical inspection of the property or assets, a
review of environmental, zoning, permitted use and title issues, and a review of
all relevant financial and other information that is made available to the
Company. This due diligence review will be conducted either by the Company's
management or by unaffiliated third parties the Company may engage.
The time and costs required to select and evaluate a target property and to
structure and complete the consignment or acquisition cannot presently be
ascertained with any degree of certainty. Any costs incurred with respect to
the identification and evaluation of a prospective target that is not ultimately
completed will result in a loss to the Company and reduce the amount of capital
available to otherwise complete other transactions.
To the extent the Company acquires financially poor assets or properties,
the Company may be affected by numerous risks inherent in the business and
operations of such properties or assets. Although the Company's management will
endeavor to evaluate the risks inherent in a particular property acquisition,
the Company can make no assurances that it will properly ascertain or assess all
significant risk factors.
MARKETING
As a communist (i.e., "communal") country, all land in China is property of
the State. Home residents lease their homes under land leases, but no Chinese
citizen "owns" his or her home. Among the expanding upper middle class to
wealthy class in China, home ownership had been unattainable under prior Chinese
law. However, the government is now allowing its citizens to invest overseas,
including purchasing overseas residential properties. Executives of more than
100,000 state-owned enterprises are being encouraged to travel internationally
to invest their capital. Previously, travel visas were unattainable. Despite
the changes in Chinese law to encourage overseas investment, to the best of
management's knowledge, no supplier of U.S. residential properties has stepped
in to fill this need. The Company plans on introducing Chinese buyers to U.S.
residential properties where they currently have no access. The Company plans
on providing "one-stop" shopping to the "retail" buyer that wants to own one or
more California properties. The Company expects that it will, as an assistance
to its overseas buyers: (i) perform the property due diligence, (ii) assist in
arranging the bank financing, (iii) manage the buyer's property (find tenants,
collect rents, pay bills from owner account, etc.) through a separate affiliated
property management firm, and (iv) send quarterly statements to the property
buyer/owner.
The Company will focus on marketing properties to residents of five leading
Asian cities: Hong Kong, Shanghai, Beijing, Guangzhou and Shenzhen, which have a
total population of almost 60 million people. The table below sets forth the
respective populations of these five cities.
CITY POPULATION
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Shanghai 18,900,000
Beijing 17,400,000
Shenzhen 8,600,000
Guangzhou 7,700,000
Hong Kong 7,000,000
The table set forth after this paragraph reflects the comparable
affordability of a California home to a Chinese citizen. The column "Yuan Index
to Buy Home" compares the purchase price that a Chinese national would have been
required to pay in 2005, the base year, for the average California home (based
on the then average price of such home and the then dollar/yuan exchange rate)
compared to what the Chinese citizen would have been required to pay in each of
the years listed in the table on a 100-point scale. The table reveals that by
2009, Chinese citizens would have been required to pay only 39% of the price
they would have been required to spend in order to buy the average California
home in 2005. Management believes that this development greatly increases the
attractiveness of California properties to Chinese citizens.
AFFORDABILITY OF CALIFORNIA HOME IN CHINESE YUAN
AVG. CA YUAN / AVG. CA YUAN INDEX TO
YEAR HOME PRICE($)(3) 1US$(2) HOME PRICE(YUAN) BUY HOME(1)
---- ------------- ---- ---------------- --------
2009* $248,000* 6.83 1,693,840 39.1
2008 $346,400 6.85 2,372,840 54.8
2007 $560,300 7.62 4,269,486 98.6
2006 $556,400 7.99 4,445,636 102.7
2005 $522,700 8.28 4,327,956 100.0
2004 $450,800 8.28 3,732,624 86.2
* Forecast from the California Realtors website
(1) Index uses 2005 as the base year = 100. Note 2005 was the last year before
the Yuan began to float.
(2) Exchange rate as of June of each year, per Bloomberg.
(3) Avg. CA Home Price from "California Realtors"' website
STRATEGIC PARTNER AND EXCLUSIVE MARKETING AGREEMENT
The Company has entered into an exclusive marketing agreement with Premier
Capital, which management believes is critical to the Company's success.
Management believes that Premier Capital is one of the most reputable
international real estate consulting firms in Asia and China, and is highly
regarded for selling international properties throughout China and other parts
of Asia. Premier Capital was founded in Hong Kong in 1988 and expanded into
China in 1997. It has Chinese offices in Hong Kong, Beijing, Shanghai,
Guangzhou and Shenzhen, the five Asian cities on which the Company will
initially focus. Premier Capital also has offices in Australia, Singapore and
New Zealand.
Under the exclusive marketing agreement, the Company has appointed Premier
Capital as the Company's exclusive agent for purposes of marketing properties
purchased by the Company and approved by Premier Capital ("Approved Properties")
in Hong Kong and mainland China. Premier Capital has agreed not to list, market
or sell any properties in California, Nevada or Arizona without the Company's
approval so long as the Company provides at least 250 Approved Properties per
year pursuant to the agreement. The Company will pay the bulk of the expenses
arising in connection with the marketing of Approved Properties in Hong Kong and
China, although Premier Capital will bear some of these expenses as well. For
its services, Premier Capital will be paid a customary brokerage fee for
Approved Properties sold in Hong Kong and China. The agreement is for a
two-year term ending in the middle of October 2011. The agreement is the result
of an almost 20-year personal relationship between Tim Wilkens, the Company's
Chief Executive Officer, and Philip Leung, the owner of Premier Capital.
Management believes that, so long as the Company performs satisfactorily under
the agreement, the agreement will be renewed. However, if the agreement were to
terminate for any reason, the Company would be forced to find an alternative
third party to market the Company's properties in China and other parts of Asia.
The Company has no assurance that it would be able to find such an alternative
third party, in which case the Company's business, prospects, financial
condition and results of operations would most likely be materially and
adversely affected.
PLAN OF OPERATION
GENERAL
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The Company intends to engage primarily in marketing high-quality,
distressed residential properties in exclusive US markets (with an initial focus
on California) to international buyers (primarily from China and other parts of
Asia) through exclusive selling agreements or consignment arrangements. In the
event that the Company is successful in completing a capital raising
transaction, it will also consider purchasing similar assets for resale to the
same target market.
PROPOSED INITIAL ACTIVITIES
-----------------------------
Thus far, the Company has been engaged in preliminary activities relating
to the launch of the Company's plan of operation. The Company expects to
commence its plan of operation in earnest by the spring of 2010. However, the
commencement of this plan of operation depends in part on the procurement of
consignment properties and necessary capital, as discussed in the subsection
captioned "Capital Requirements" below.
The Company's initial business objectives are to establish a meaningful
number of sales of residential properties to international buyers (primarily
from China and other parts of Asia) by obtaining exclusive rights to sell
specific U.S. properties (with an initial focus on California). These selling
rights may come in the form of exclusive selling agreements, consignment
agreements or outright ownership of certain properties. The use of each of
these various selling strategies will depend on the willingness of sellers to
engage with the Company on the exclusive sale of properties, the Company's
ability to complete such sales to its international buyer client base, and the
access and availability of capital to the Company. Management believes that an
adequate number of properties are available to be marketed overseas, such that
this will not be a limiting factor. The Company believes it will have adequate
capital to achieve its initial business objectives, particularly upon the
completion of the raising of its "seed" capital from its management and persons
working with the Company as described in the subsection captioned "Capital
Requirements" below. To the extent that the Company is able to complete larger
capital raising transactions, it will be able to pursue a more expansive plan of
operation.
CAPITAL REQUIREMENTS
---------------------
The Company expects to raise "seed" capital in the near future in the
aggregate amount of approximately $687,500 from its management and persons who
have a relationship with management. This capital is in addition to the
$312,500 raised by the Company's largest stockholder used to purchase shares to
acquire a controlling interest in the Company. The Company intends to use the
proceeds of this capital for working capital and general corporate purposes.
The Company expects that this raise will not be completed until after the
completion of a 1-for 35 reverse split of the Company's common stock, which the
Company is currently trying to achieve. The Company expects that the providers
of this "seed" capital will be issued an aggregate of approximately 1,926,000
post-split shares of Common Stock. Because these shares will not be registered
under the Securities Act of 1933, as amended (the "Act"), such shares will be
"restricted securities" (as defined in Rule 144 promulgated under the Act) and
accordingly, may not be sold or transferred unless such shares are registered
under the Act or are sold or transferred pursuant to an exemption therefrom.
The Company will also seek to raise additional funds to enable it to expand
its operations beyond exclusive selling agreements and consignment arrangements
to outright purchases of properties for resale. The scope of this aspect of the
Company's plan depends completely upon the Company's ability to secure
additional financing beyond the "seed" capital described above. The Company
currently does not have any binding commitments for, or readily available
sources of, additional financing, although the Company's largest stockholder has
entered into a "best efforts" placement agreement with a broker/dealer to raise
up to an additional $20 million through a future equity offering. This agreement
may be assigned to the Company, or the Company may enter into a similar
agreement with the same broker/dealer. However, no terms or conditions of any
placement have been set, and the Company has no letter of intent or agreement in
principal in effect (much less any definitive agreement) regarding any financing
by any investor. If the Company is successful in raising $20 million, the
Company expects that it would use most of this capital for property
acquisitions, and the rest of the funding for working capital, general corporate
purposes, reserves and the various fees and expenses incurred in connection with
the raise. If the capital raising transaction raises less than $20 million,
management will simply scale back in the near-term the amount or size of
properties acquired for resale, but expects that its plan to market properties
through exclusive selling agreements and consignment arrangements will be
unaffected.
In addition, if the planned $20 million capital raising transaction proves
to be less successful than desired, the Company may also undertake a smaller
capital raising transaction (without the assistance of a broker/dealer) focusing
on investors with whom management already has a pre-existing relationship. The
Company can make no assurances that any additional financing will be available
to it when needed or, if available, that it can be obtained on commercially
reasonable terms.
Management believes that, if the Company's operations progress as planned,
the Company will have positive cash flow to partially finance its business.
Moreover, management believes that, if sales of properties result in sufficient
positive cash flow, conventional bank financing will be available.
Nevertheless, the Company can make no assurances as to future cash flow or the
future availability of bank financing.
To conserve on the Company's capital requirements, the Company may issue
shares of its common stock to pay certain expenses.
EVENTUAL ACTIVITIES
--------------------
Beyond the Company's initial activities involving marketing California
residential properties to Chinese and other Asian citizens, the Company expects
to have eventual opportunities to market for sale commercial properties to
Chinese state-owned enterprises. Moreover, when U.S. homebuilders return to
their historical markets, the Company expects to seek marketing arrangements
with homebuilders and vice versa, in which the Company could pre-sell a
percentage of each new development. This would sustain growth in "hot markets"
when distressed opportunities are minimal. Partnering with U.S. homebuilders
would allow the Company to continue to grow under an "asset-light" model that
will be very efficient from capital and return-on-equity standpoints.
FORWARD-LOOKING STATEMENTS
The description of the Company's new business contained herein includes
forward-looking statements. The Company has based these forward-looking
statements largely on its current expectations and projections about future
events and financial trends affecting the financial condition of the business
that the Company will now undertake. The forward-looking statements are
generally accompanied by words such as "plan," "intend," "estimate," "expect,"
"believe," "should," "would," "could," "anticipate" or other words that convey
uncertainty of future events or outcomes. One should not place undue reliance
on these forward-looking statements, which apply only as of the date of this
Report. The Company's actual results could differ materially from those stated
or implied by these forward-looking statements due to risks and uncertainties
associated with the Company's business. The principal risks and uncertainties
associated with the Company's business will be described in the Company's next
Annual Report on Form 10-K due near the end of March 2010. The Company is under
no duty to update any of the forward-looking statements contained in this Report
after the date hereof to conform such statements to actual results.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
Effective December 31, 2009, James P. Wilson resigned from the Company's
Board of Directors, and Steven Gidumal was elected to the Board to fill the
newly created vacancy. Mr. Wilson's resignation was not a result of any
disagreement with the Company.
Effective December 31, 2009, all of the Company's then serving officers
(James P. Wilson and Keith D. Spickelmier) resigned from their respective
Company offices. None of their resignations was a result of any disagreement
with the Company. Moreover, the Company elected a new slate of officers as
indicated in the following table:
NAME AGE POSITIONS
---- --- ---------
Steven Gidumal 52 Chairman of the Board &
Chief Financial Officer
Tim Wilkens 49 Chief Executive Officer
Brandon Birtcher 56 President
Basil N. Argerson 49 Senior Vice President, Treasurer & Secretary
The following is the background of Messrs. Gidumal, Wilkens and Birtcher:
STEVEN GIDUMAL. Since 2004, Mr. Gidumal has served as the founder,
President and Portfolio Manager for Virtus Capital, a firm based in Orlando,
Florida that invests in the securities of companies in distressed and
restructuring situations, including a variety of real estate and financial
institutions. From August 2006 to August 2008, Mr. Gidumal also served as
Co-Portfolio Manager of Resurgence Asset Management, a distressed fund based in
New York City for which he co-ran a portfolio in excess of $400 million. Mr.
Gidumal earned a Bachelor of Science, Economics cum laude from the University of
Pennsylvania (Wharton Undergraduate program) and a Master of Business
Administration from Harvard Business School as a Baker Scholar (highest honors).
TIM WILKENS. For the past 11 years, Mr. Wilkens has served as President of
Great Western Holdings. Great Western Holdings is a business that is the
western United States development partner for Wyndham Worldwide, and in the past
has partnered or been approved as a partner for Fairmont Hotels, Marcus Hotels
and Shell Vacations. Mr. Wilkens has been involved in residential and
commercial property development since the early 1980s. He has developed
projects in the Lake Tahoe area, Napa County and Sonoma County. His projects
have included class A office developments, residential housing, multifamily
housing, hotels, resorts and fractional housing. Mr. Wilkens led several
successful ventures that purchased distressed real estate in Texas from 1987 to
1990. Mr. Wilkens has a University Teaching Credential issued by the State of
California and has studied at San Jose State University and also at the
University of California at Berkeley.
BRANDON BIRTCHER. Since 2004, Mr. Birtcher has been the President and sole
owner of Birtcher Development & Investments, a leading West Coast development
company founded by his great-grandfather in 1939. Mr. Birtcher began his real
estate career as property manager for the family firm in 1976. Mr. Birtcher was
the recipient of the Southern California Property Owner's Association's
"Developer of the Year" award in 1987, and the company was the National
Association of Industrial and Office Properties' (NAIOP) "Real Estate Developer
of the Year" in 1989. The firm was also named Orange County Business Journal's
"Family Business of the Year" in 2000. Mr. Birtcher holds a Bachelor's Degree
in Business/Economics from Claremont Men's College.
Mr. Gidumal is expected to serve initially on the Company's Nominating and
Governance Committee. The Company's Board of Directors has a standing Audit
Committee, but no member is currently serving on it. The Company's Board of
Directors has not established any standing Compensation Committee. The Board of
Directors as a whole will undertake the functions of this committee at the
appropriate time. The Board of Directors may establish a Compensation Committee
whenever it believes that doing so would benefit the Company.
The Company has not established standard compensation arrangements for its
directors, and the compensation, if any, payable to each individual for his or
her service on the Company's Board will be determined (for the foreseeable
future) from time to time by the Board of Directors based upon the amount of
time expended by each of the directors on the Company's behalf.
As of the date of this Report, the Company has not decided upon the
remuneration that it will pay to its newly elected officers. The Company does
not expect to pay any such remuneration (other than expense reimbursements)
until such time as it is able to generate sufficient revenues or complete a
significant capital raising event to permit it to do so. In either such event,
management expects that the Company will start to pay management salaries at
market levels, consistent with any restrictions on salaries imposed by investors
providing additional funds.
ITEM 5.06. CHANGE IN SHELL COMPANY STATUS
The information included in Item 5.01 of this Current Report on Form 8-K is
also incorporated by reference into this Item 5.06 of this Current Report on
Form 8-K.
Prior to the December 31, 2009 change in control transaction described
in Item 5.01 above, the Company was a "shell company," as such term is defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. As a
result of such transaction, the Company adopted a significant change in its
corporate direction involving the marketing of high-quality, distressed
residential properties in exclusive US markets, with an initial focus on
California, for resale to international buyers, primarily from China and other
parts of Asia. As of the date of the filing of this Amendment No. 1 to Current
Report on Form 8-K, the Company and its controlling stockholder have undertaken
the following activities:
* Raised "seed" capital in the amount of $212,500 for Company expenses;
* Entered into an exclusive marketing agreement with Premier Capital,
Ltd., a real estate brokerage firm based in Hong Kong that management
believes to be one of the largest sellers of international
properties in China;
* Assembled an extremely well-qualified management team with an extensive
background in real estate and distressed situations;
* Procured the services of an investment banking firm to assist the Company
with a major capital raising transaction; and
* Engaged five full-time acquisition brokers that are currently
identifying target properties for acquisition.
The Company believes that that this change in its corporate operations caused
the Company to cease being a shell company.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit
Number Exhibit Title
10.01 Marketing and Sales Partnership Agreement dated September 23, 2009 by
and between the Company and Premier Capital, Ltd.
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.
JK ACQUISITION CORP.
(Registrant)
Date: February 9, 2010 By: /s/Steven Gidumal
-------------------
Steven Gidumal,
Chief Financial Officer and
Chairma
