Finally News On ZIM.
Zim-Gold Resources Ltd -
Zim-Gold proposed change of business, financing
Zim-Gold Resources Ltd ZIM
Shares issued 3,971,530 1999-09-14 close $0.7
Friday Feb 4 2000
Mr. Michael Kinley reports
The company has released the following developments related to the proposed acquisition of Deco Creative Group Inc. pursuant to the company's news release dated Sept. 22, 1999.
The company's past/current business operations have been in the exploration of mineral resource properties. The company currently holds certain mineral claims in Indonesia and Canada which are being disposed of and have been written down to nominal value.
The company intends to change the focus of its business operations from mineral exploration to Internet-related business by acquiring Deco. Deco is a private B.C.-based company.
The company will acquire Deco for cash consideration in the amount of $750,000, payable one-third on the closing date, one-third 90 days after closing, and one-third 180 days after closing, which should occur within 10 business days from receipt of regulatory approval, and four million escrowed shares of the company to be issued to the shareholders of Deco. The agreement contemplates that the escrow provisions shall provide that the escrowed shares will only be released upon development of gross sales from the business over the next three years and generally on the basis of one share for each 70 Canadian cents of revenue. The matter of the escrow release provisions remain subject to approval of the Canadian Venture Exchange and the company will seek approval thereof contemporaneously with the approval of the transaction and related matters. In addition, a finder's fee will be paid within the parameters allowed by the CDNX in relation to the Deco acquisition.
Since its incorporation, Deco has been in business as a developer of new media products, design, animation, marketing and technology. Providing Internet services, Deco works directly with its clients to develop Internet strategies, rich media advertising content, improve business processes, and create marketing, communications and branding strategies, as well as interactive content, using Internet-based technologies. Deco provides Internet-based communication solutions which include intranets, extranets and Web sites. An intranet is an internal company network that uses various Internet protocols to allow employees access to corporate information and internal business applications only within that company. An extranet is a secure Internet protocol network environment that links the company with certain customers and suppliers and effectively integrates the stages involved in the delivery of the company's products or services. Web sites present an opportunity for electronic commerce, Internet-branding and the delivery of information and entertainment services.
The following information is summarized from Deco's audited financial statements for the period from July 9, 1999, the date of incorporation, to Aug. 31, 1999:
Total revenue $71,720
Net income $30,170
Total assets $62,279
Long term liabilities nil
The two key principals of Deco are:
Trevor Carr -- after receiving his degree in Economics from the University of British Columbia, Mr. Carr pursued a career in advertising and marketing at Gryphon Creative Services in Los Angeles. At Gryphon, Mr. Carr was responsible for the creation and implementation of the New Media Division, where he oversaw the implementation of corporate Web design and e-commerce solutions for a range of clients throughout the United States. As a co-founder of Deco, Mr. Carr has guided the company's business and marketing strategy into the new media design and digital content creation.
Richard Down -- Mr. Down was enrolled at DigiPen, the Vancouver Film School campus for 3-D animation. Immediately after graduating, Richard began his own company, Arcdezyn, where he gained experience in New Media design through 3-D modelling architectural projects and Web site design. He specializes in Macromedia Flash animation and visually interactive Java and HTML programming. As a co-founder of Deco, Mr. Down has been involved with Web-based animation using Flash software, resulting in two licensed products now being sold on-line.
Following the completion of the company's acquisition of Deco, the company's directors and officers are expected to be: Michael Kinley, president, chairman and director; Mr. Carr, director; Mr. Down, director; William MacPherson, director; Takala Hutasoit, director; and one local qualified director prior to closing.
The future development of Deco and its operations are expected to be primarily financed through the company's existing working capital, Deco's continuing operations, and a non-brokered private placement yielding net proceeds of approximately $500,000. These funds are expected to be allocated: 60 per cent to the cash consideration to the Deco shareholders, 12 per cent to Deco's near-term business objectives, 6 per cent to general administration, 13 per cent to the costs of the proposed transaction and 13 per cent to unallocated working capital.
Accordingly, the company has arranged a private placement of one million units at 70 cents. Each unit will consist of one share and a warrant. Two warrants will be required to purchase one additional share at $1.00 for two years.
Georgia Pacific Securities Corporation has agreed, subject to satisfactory completion of its due diligence reviews, to act as sponsor regarding the company's change of business.
Georgia Pacific has requested that the Canadian Venture Exchange reinstate trading in the company's common shares concurrently with the issuance of this news release. The company advises that there can be no assurance that the company's proposed acquisition of Deco will be completed.
The following discloses the company's current and proposed capital structure:
The company currently has 7,746,063 issued and outstanding shares;
A non-brokered private placement of 715,000 units at 70 cents per unit is estimated, although final pricing is subject to regulatory approval and future market conditions; and
Vend-in consideration of four million escrow shares is proposed.
The company is granting, subject to regulatory approval, 775,000 stock options to directors, officers, and employees at an exercise price of 70 cents per share for a period of two years as follows: Mr. Carr 200,000; Mr. Down 200,000; Mr. Kinley 275,0000; Abdul Janmohamed 50,000; and Jamil Kassam 50,000.
Prior to deciding to acquire Deco, the company's management conducted due diligence on Deco. This due diligence included, but was not limited to, the following: reviewing the current and proposed operations of Deco; reviewing the management of Deco; and estimating the value of Deco.
The company believes the acquisition of Deco will allow the company to participate in the developing Internet arena. However, the company recognizes Deco, as a start-up firm, will face intense competition from other Internet companies that are more established and that possess greater resources. As such, no assurances exist that Deco will either obtain its stated corporate objectives in the expected time frame or that attainment of such objectives will lead to corporate profitability. In addition, there can be no assurances that Deco will be able to obtain all required financing or recruit all needed staff in order to carry out its business plan.
Finally, the company's acquisition of Deco remains subject to all required regulatory approvals as well as confirmation of the Georgia Pacific sponsorship following completion of its due diligence reviews. Accordingly, the company cautions that no assurances exist that the acquisition of Deco and related change of business will occur under the terms contemplated, or at all.
The company has renewed its engagement of Investor Direct Consulting Group Ltd., Vancouver, B.C., to provide public relations and investor relations services pursuant to a one-year contract commencing Jan. 1, 2000. The terms of the contract provide for a fee of $5,000 per month.
Interested parties may obtain further information regarding the above matters by contacting the company at invest@Deco.com.
Zim-Gold Resources Ltd -
Zim-Gold to resume trading on Feb. 7
Zim-Gold Resources Ltd ZIM
Shares issued 3,971,530 1999-09-14 close $0.7
Friday Feb 4 2000
Effective at the opening, Feb. 7, 2000, trading will resume.
Further to the company's Sept. 22, 1999, news release announcing the proposed acquisition of Deco Creative Group Inc. (the transaction), Georgia Pacific Securities Corp. has agreed to act as the company's sponsor.
This resumption does not constitute approval of the transaction and there is a risk that the transaction will not be accepted or that the terms of the transaction may change substantially prior to acceptance. Should this occur, a trading halt may be reimposed. In addition, the company must submit all of the required documentation relating to the transaction within 60 days of the resumption of trading. If this documentation is not provided, or is insufficient, a trading halt may be reimposed.
Prior to the exchange granting final approval of the transaction, the company must satisfy the exchange's minimum listing requirements.
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