For anyone interested, below is the NR. I, too, am worried about the 80% equity that FAII will get. That means the rest of us lose 80%. Not knowing what the new valuation will be, however, it may still be the 20% we get is substantial. Any thoughts on this Leigh?
Bomax Resource Corp.
3/27/00 - Executes Formal Plan and Agreement of Merger with FAII
BOMAX RESOURCE CORP. ("BXS-V") - Executes Formal Plan and Agreement of Merger with FAII
James J. Bond, President of Bomax Resource Corp. (the "Company"), is pleased to announce that, further to the Company's news release dated November 3, 1999, the Company has executed a formal Plan and Agreement of Merger dated March 9, 2000 (the "Merger Agreement") with Future Achievement International, Inc., an Indiana incorporated company ("FAII") and now hopes to proceed with its corporate reorganization.
FAII is, or will be after the acquisition by it of all of the assets of Future Achievement International, Inc., a California incorporated company ("FAIC"), a company which provides on-site corporate training services that specialize in personal leadership development and team building systems on a world-wide basis. Assets include published and unpublished books, audio tapes, videos, brochures, speeches and other educational and training materials, services, programs, seminars and workshops.
Under the terms of the Merger Agreement, both the Company and FAII have agreed to merge (the "Merger") and become one corporate entity ("Bomax Delaware"). It is proposed that Bomax Delaware will issue sufficient share capital such that the shareholders of FAII will control up to 80% of the Company upon completion of the Merger (the "Bomax Delaware Shares"). The Merger is subject to the following terms and conditions:
(a) the continuance (or change of domicile) of the Company from British Columbia to Delaware (the "Continuance");
(b) the acquisition by FAII of all of the assets of FAIC;
(c) approval by the respective shareholders of the Company and FAII;
(d) approval by the Regulatory Authorities;
(e) completion by August 31, 2000.
Prior to conclusion of the Merger, the Company may make one or more loans to FAII in an amount or amounts of not more than $100,000 in the aggregate (the "Funds") as an unsecured loan and/or convertible loans, which sum or sums shall be used as working capital by FAII. With each advance of Funds, FAII will execute and deliver a promissory note in favour of the Company with interest accruing at the rate of two percent (2%) over the prime lending rate of the Royal Bank of Canada. All principal and interest will be due and payable 18 months from the date of each advance.
A finder's fee will be payable in connection with this transaction upon its conclusion. The finder's fee will be in the maximum amount allowable by the Regulatory Authorities.
On or before April 15, 2000 FAII is to provide the Company with the following documents:
(a) agreement between FAII and FAIC, pursuant to which FAII will acquire all of the assets of FAIC;
(b) audited financial statements of FAII for the period ended December 31, 1999;
(c) unaudited financial statements of FAII prepared to the most recent month end;
(d) a business plan for the next 12 months;
(e) evidence that all of the assets of FAIC have been acquired by FAII and that the business and assets of FAII are in good standing;
(f) information sufficient to prepare pro-forma financial statements.
With the above documents in hand, the Company will then be in a position to engage the services of a sponsoring broker, in accordance with the policies of the Exchange and proceed with the reorganization. If the Company elects to proceed with the Merger, additional financing will be required to fund the operations of Bomax Delaware. If, as and when the need arises, the Company contemplates conducting further public and/or private offerings of its securities sufficient to ensure adequate working capital to fund operations.
Also further to the Company's November 3, 1999 news release, it is proceeding with a non-brokered private placement of 1,000,000 common shares of the Company at a price of $0.15 each. No finders' fees are payable with respect of this private placement. Proceeds from this private placement, being $150,000, will be used by the Company to reduce its working capital deficiency, to fund a portion of the Company's reorganization, as a reserve for FAII or FAIC and for general corporate purposes. The Company has prepared an offering memorandum for this private placement and it will be released by the Company shortly.
Although the proposed continuance will not affect the Company's financial position or the nature of its operations, the continuance will affect the Company and its shareholders in relation to income tax matters and United States securities and corporate law matters. Management of both the Company and FAII believe that a change of situs is appropriate for a variety of reasons. Management believes that the Company's access to the U.S. capital markets will be improved. In the experience of management, potential debt and equity capital sources in the U.S. are more comfortable dealing with a U.S. corporation rather than a foreign corporation. Management believes that this may be because U.S. entities are likely to be more familiar with U.S. standards of accounting, U.S. securities law disclosure requirements and U.S. legal principles applicable to the conduct of business. Delaware was chosen as the state into which to continue the Company since it permits the reciprocal continuance of corporations incorporated in British Columbia. The Company and FAII considered other U.S. jurisdictions for the continuance but ultimately settled on Delaware, which has a modern and flexible corporate code.
The Company is indebted to certain creditors and management proposes to negotiate the settlement of most of the Company's debt with such creditors by way of the issuance of the Company's common shares. Regrettably, as of the date hereof, settlement agreements have not been concluded and management is unable to determine the precise dollar amount of the debt to be settled or the exact number of shares to be issued in settlement of such debt.
The Company plans to call and hold its 2000 annual general meeting by the end of June, 2000. At that meeting, approval will be sought from shareholders for the following special business:
(a) the Merger;
(b) the Continuance
(c) the issuance of the Bomax Delaware Shares to the shareholders of FAII and the change of control resulting therefrom;
(d) the debt settlement; and
(e) any other business necessary to conclude the reorganization.
All of the above transactions are subject to regulatory approval.
Management of the Company will update the above as the need arises and otherwise in accordance with the rules and policies of the Canadian Venture Exchange. TEL: (604)669-5650
James J. Bond, President and Director FAX: (604) 685-6341 |
