Cons Magna cancels private placement; hires marketing manager
Consolidated Magna Ventures Ltd CMV
Shares issued 21,484,464 Aug 16 close $0.09
Mon 16 Aug 99 News Release
Mr. Robert Archer reports
The agreement to amalgamate Magna and CoyoteNet Inc. has been modified so
that the previously announced $300,000 private placement financing in
Magna, at 15 cents per share, is no longer required and has therefore been
cancelled.
Instead, Magna now has the right to enter into an amalgamation with
CoyoteNet by arranging for a $500,000 placement of 1.25 million CoyoteNet
seed shares at 40 cents each. A minimum $250,000 is to be raised by Aug.
31, 1999, and an additional $250,000 by Sept. 15, 1999. Once the option to
amalgamate has been exercised, Magna will have the right to raise a further
$500,000 by Oct. 15, 1999, through the issuance of another tranche of 1.25
million seed shares of CoyoteNet at the same price.
As a result, Magna will have fewer shares outstanding and CoyoteNet will
have more shares issued prior to the amalgamation. The new simplified
terms, subject to final Vancouver Stock Exchange approval, are as follows:
For every 10 Magna shares, Magna shareholders will receive 1.345 shares of
new CoyoteNet (approximately a 7.4 to 1 ratio or 35 per cent of the
company), a 35-per-cent increase over the original terms, and 2.5 shares of
new Magna (approximately 65 per cent of the company).
For every 10 CoyoteNet shares, CoyoteNet shareholders will receive five
shares of new CoyoteNet (approximately 65 per cent of the company), and the
company will receive about 3.6 million shares of new Magna (approximately
35 per cent of the company).
As before, new CoyoteNet will be able to benefit from old Magna's
$8.5-million accumulated tax loss, in which case new Magna will also
receive up to one million new CoyoteNet shares to a total of $2-million,
plus warrants to purchase one million new CoyoteNet shares at $2 each over
a two-year period.
The mining properties currently held in Magna will still be transferred to
new Magna so the two companies should have the same value. Therefore, the
new CoyoteNet shares to be received by Magna shareholders and by new Magna
can be viewed as extra value for Magna shareholders. CoyoteNet's nearest
competitor in the Internet terminal business, Info Touch Technologies
Corp., has a $25-million market capitalization with 6.8 million shares
issued and outstanding.
CoyoteNet continues to grow rapidly on a monthly basis, having averaged
60-per-cent growth every three months since start-up last year. In order to
speed up the deployment of public Internet access terminals here in North
America, CoyoteNet has hired Jason Soper as the company's new marketing
representative. Mr. Soper has spent the last five years with Hostelling
International, North America's premier hostelling association, and is
keenly aware of the needs of the young traveller, one of CoyoteNet's
primary target demographics. Mr, Soper will play a key role in achieving
the company's immediate goal of having up to 100 terminals installed in
North America by the end of 1999.
To facilitate this rollout, the company has purchased 122 motherboards in
order to meet demand for the next three to six months. The new office and
manufacturing facility in Richmond now has the capacity to produce two
Internet terminals per day with ample room for additional expansion. |
