The KTWO reverse merger has been delayed. The following is from the NT 10-K/A filed this afternoon:
freeedgar.com
The Registrant is seeking the extension due to the fact that the Registrant, which has effectively ceased operations, has limited resources with which to prepare and file the report.
As described in the Current Report on Form 8-K filed by the Registrant with the Commission on January 17, 2002, the Registrant has entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among First Step Distribution Network, Inc., a California corporation ("First Step") and its shareholders and First Step Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Registrant. As a condition to the merger, the Registrant is required to implement a 3 for 1 reverse split (the "Reverse Stock Split") of its common stock. The implementation of the Reverse Stock Split is subject to the approval of the shareholders of the Registrant.
The anticipated closing date for the merger has been postponed due to delays in First Step's ability to secure the financing for the transaction that is required pursuant to the terms and conditions of the Merger Agreement, as well as delays in the preparation and finalization of the requisite financial and other information about First Step that will be included in the Registrant's proxy statement being prepared in connection with the solicitation of shareholder approval for the Reverse Stock Split. The Registrant has been informed by representatives of First Step that First Step has made significant progress in securing the necessary financing and financial statements and that First Step expects to be able to consummate the merger during the second quarter of 2002, subject to the requisite shareholder approval, as described in the Form 8-K.
The Registrant anticipates entering into an agreement with First Step pursuant to which First Step will agree to assume the Registrant's costs associated with the preparation and filing of the Registrant's annual report on Form 10-KSB for the fiscal year ended December 31, 2001. Having thus a reasonable expectation of securing sufficient resources with which to prepare and file the Form 10-KSB, the Registrant requires the extension in order to have sufficient time to finalize the filing. |
