REPORT TO SHAREHOLDERS
On August 16, 1999 we met with the newly created Shareholder
Advisory Committee and presented our very preliminary assessment of IBI Corporation (the "Company") and our proposal for the engagement of Management Synergistics (Gary A Fitchett CA). This proposal received the
enthusiastic support of those in attendance, including their undertaking to endorse and assist with the financing requirements of the Company.
Formal Appointment
We have been formally appointed by the Board of Directors as
Chairman, President and CEO for a minimum one year period by resolution dated August 18, 1999.
We have taken control of the Company's records and furniture and have established a working office for the Company.
We have had the opportunity to meet with and/ or talk to a number of people with key relationships to the Company, and have generally established a positive rapport.
Co-operation
We want to specifically recognize that we have received good
co-operation from Edward Lai, Selvin Lee, and Tom Smeenk.
There has been considerable criticism of Tom Smeenk, but we
believe it is important to establish a clear perspective on this matter. Tom stepped into a Company with many problems and he made a serious attempt to introduce some discipline and forward direction to the Company. Unfortunately, a couple of matters led to a loss of confidence by the shareholders.
Status of Company
In five years of existence as IBI Corporation, the Company has floundered, searching for a focus. It has lacked appropriate discipline and leadership required of a public corporation. There has been a continual balancing act to reconcile incoming capital with the outflow
of funds - for excessive overheads and unsuccessful projects.
The corporate culture has been founded on deal-making, rather than corporate focus and discipline. The Company has not had suitable leadership to build a cohesive management team. The number of personnel which have passed through the doors of IBI in this short period, usually
at salaries excessive for the jobs at hand, is astounding.
IBI Corporation - Report to Shareholders
October 31, 1999 page 2
Notwithstanding the many negative matters, IBI Corporation has realistic prospects based on these factors:
a world-class mining project
public company status
extensive shareholder base
potential strong shareholder and investment community support
Key Priorities
1. Develop and implement a Financing and Restructuring Plan
2. Put Bukusu Agreement into good standing
3. Establish corporate focus and new image
4. Create a low-cost budget
5. Develop a Management Plan
6. Restore confidence of all stakeholders:
* shareholders
* creditors
* regulators
* corporate support team
In summary, there is a requirement for major and dramatic surgery.
IBI Corporation - Report to Shareholders
October 31, 1999 page 3
Realities
There are a number of fundamental realities which must be
recognized at this time:
1.The Board of Directors is the steward of the Company on
behalf of the shareholders, and it must accept ultimate accountability for the failures to date.
2.One cannot expect outside parties to put up new financing
until there are clear plans in place to put the house in order. Existing
shareholders must carry the initial burden.
3.Every stakeholder must share the pain -- for long-term gain!
4.Recognize that the value of existing shares is not "trading price" in the market.
5.A "quick fix" is nothing but a bandage -- not a cure.
Financing Plan
We have prepared a very preliminary cash budget, which should allow adequate resources to initiate the Uganda Bukusu project and to restore the corporate viability and credibility. The key components are:
Bukusu Project $1,000,000
Office and Management 300,000
Market Development 175,000
Governance 50,000
Interest 25,000
Account Payable 100,000
Total $1,650,000
The proposed financing program to support this budget throughout a period of one year is:
1.Seed capital to re-establish Company $ 75,000 @ $0.04
2. Exercise $0.06 warrants from Rights Offering
500,000 @ $0.06
3.Liquidate Memex investment
200,000
4. Informal proposal to creditors
75,000
5. Strategic investor
750,000 @ $0.10
Total
$1,650,000
IBI Corporation - Report to Shareholders
October 31, 1999 page 4
Restructuring Plan
1. Extend debt waivers to December 31, 2000, or such earlier date
based on a percentage of cash flow.
2. Revoke re-pricing of options in May/ June 1999 back to $0.07.
3. Escrow founders' shares (release based on performance [cash
flow] and share price).
4. Roll back (consolidate) shares.
5. List on a recognized exchange in Canada (and subsequently in
the USA).
6. Clean up Balance Sheet.
Management Plan
1. Renew D & O insurance.
2. New Board of Directors:
Gary A Fitchett
Edward Lai
Corporate Secretary (designate is an
experienced corporate lawyer)
Geologist/ Mining Engineer (designate is a
geologist/ mining engineer with 40+ years of international experience,
as well as extensive senior management junior company/ finance activity)
Businessman (designate is very
experienced in corporate development and finance)
3. Establish a credible Advisory Council to the Board of
Directors.
4. Appoint a Chief Financial Officer and a part-time
bookkeeper.
Communications Plan
1. Hold an AGM asap
2. Create Web Page with monthly updates by way of President's
Letter
3. Regular press releases
4. Investor Relations Kit
5. Interface with investment community
IBI CORPORATION
COMPREHENSIVE INFORMATION UPDATE
TORONTO, ONTARIO Friday, September 10, 1999
IBI Corporation (the "Company"), a junior mining company, (IBIC
CDN) provides this information update to outline its current status.
Financial Results
The Company has filed its unaudited interim financial report for
the six months ended June 30, 1999, reflecting a net loss for the period
of $209,212 ($0.XX per share) compared to a net loss of $908,224 ($0.XX
per share) for the year ended December 31, 1998. The net loss for the
six months was after reflecting a gain on forgiveness of shareholder
loan of $209,252.
The Company had cash on hand at June 30, 1999 of $60,681.
Issued Share Capital
Shares
$
Balance, December 31, 1998 181,838,445
11,022,692
Exercise of Rights
18,183,844 706,492
Exercise of Warrants from Rights Offering
Exercise of Stock Options
345,000
Balance, June 30, 1999 200,718,869
11,754,144
Exercise of Warrants from Rights Offering
Balance, September 10, 1999
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