New news
Bishop Resources Inc - News Release
Bishop to purchase MECH rights from Solar Energy
Bishop Resources Inc BRI
Shares issued 23,054,943 Jan 24 2002 close $.090
Friday May 10 2002 News Release
Mr. Andrew Schwab reports
BISHOP TO PURCHASE NEW MOTOR TECHNOLOGY
Bishop Resources has reached agreement with Solar Energy Limited (SLRE), a public company listed on the OTC Bulletin Board to purchase certain exclusive rights to a unique design of engine referred to as MECH which stands for motor, expander, compressor, hydraulics.
MECH has been designed, patented and successfully tested by an engineering team lead by Dr. Melvin Prueitt, a research scientist known for his work at the Los Alamos U.S. National Laboratory in New Mexico. The MECH engine substitutes rolling friction for sliding friction in an air-driven motor and can be adapted to an internal combustion engine, gas expander, compressor, hydraulic pump or hydraulic motor.
The MECH engine has a potentially wide variety of applications from vehicles and propeller-driven aircraft to lawn mowers and chainsaws. About one-third of energy use in the world is for internal combustion engines in cars and trucks. Given the combustion temperatures in these engines, the theoretical efficiency is well over 50 per cent, but the actual efficiency of common present-day engines is only about 25 per cent. A large part of the energy loss is due to sliding friction of the pistons in the cylinders. Using rolling friction, it is projected that the efficiency of the MECH engine will be considerably higher than that of a standard engine. Besides having less friction, the MECH engine's geometry is theorized to provide three times the displacement (and hence three times the power) of a standard engine of the same size. By having a lighter engine, less fuel is consumed for the power generated.
MECH's design also provides for improved aerodynamics for the flushing of exhaust gases and the introduction of fresh intake gases. Modification of the valve system produces a lightweight, efficient compressor that could be used in refrigeration and air conditioning systems, including automobile air conditioners. Most of the power requirement for a refrigerator or air conditioner is used to drive the compressor that compresses the refrigeration gases. Increasing compressor efficiency means less energy consumption. It is believed that use of the MECH in a compressor application could significantly reduce energy consumption due to the designed efficiency of the MECH motor concept.
Under the terms of the agreement, SLRE will be forming a new private company (Newco) to be incorporated in the state of Nevada. SLRE will be the sole shareholder and SLRE will be conveying to Newco exclusive rights for the MECH patent for the development, manufacture and marketing of compressors and internal combustion engines, and non-exclusive rights for expanders, pumps and hydraulic units. SLRE shall retain the non-exclusive right to use MECH expanders and pumps in Solawatt electric power generation and in solar-powered irrigation pumps. Upon closing, Bishop is to acquire 100 per cent of the shares of Newco from SLRE.
Initial acceptance is subject to Bishop's review, before May 10, 2002, of the list of assets as prepared by SLRE, to be delivered free and clear of all liabilities except certain exclusive and non-exclusive rights. The assets include assignment of exclusive use of existing patents, all existing models, work in progress prototypes and related parts in exchange for a $50,000 (U.S.) cash loan to SLRE to be applied to patent payments, plus 2.5 million (postconsolidation) common shares of Bishop at an ascribed price of 20 cents per share and five million convertible preferred voting shares (CPV) of Bishop with an ascribed price of 80 U.S. cents per CPV share. The CPV shares are to bear simple interest at the rate of 6 per cent per year, such interest payable from net realizable cash flow from commercialization. In addition, the CPV shares will have a three-year term and will be convertible after the first anniversary of closing into shares of Bishop at a ratio of one (postconsolidation) Bishop share for every CPV share converted. The CPV shares will also have one-half vote per CPV share. Initial acceptance is subject to the approval of the terms of the offer to purchase by the directors of SLRE and Bishop.
A 1-per-cent gross revenue interest on sales of MECH units and parts will be paid to the inventors, of which 65-per-cent will be paid to Melvin Prueitt, 25-per-cent to Leslie Speir and 10-per-cent to Stanley Prueitt. If any of the intellectual property rights of MECH are transferred or sublicensed to another company, that company will be required to pay a 1-per-cent gross revenue interest to the inventors on all of its sales and parts.
It has been calculated that approximately $350,000 has been spent directly and indirectly by SLRE for design, machining, labour and overhead. Before closing, SLRE will submit to Bishop a valuation of the MECH assets at its own expense from an arm's-length qualified third party acceptable to the TSX Venture Exchange and Bishop (the valuation). Concurrent with closing, Bishop will be seeking to raise between $500,000 (U.S.) and $2-million (U.S.) through private placements to arm's-length parties to finance its business development program and to meet the minimum listing requirements of the TSX. The terms of these placements shall be subject to exchange and regulatory approval, and will be outlined in further press releases. The business plan and related budget underlying a two-year development program is being developed by Bishop and SLRE and must be preapproved by Bishop.
On closing, SLRE is to be permitted to nominate two members of the five-member board of Bishop and Bishop is to be permitted to nominate two members of the five-member board of Newco. Such nominations are to be effective for 12 months following closing.
Closing documents shall contain clawback or escrow arrangements for both SLRE and Bishop. Should Bishop not provide working capital sufficient to effectively commercialize the MECH technology, SLRE shall have the right on the first anniversary of closing to call for a reconveyance back to SLRE of the MECH technology in return for cancellation by Bishop of the Bishop preference shares. Additionally, should at the end of the first anniversary after closing, Bishop decide that the MECH technology is incapable of profitable commercialization, in Bishop's sole discretion, it may put back to SLRE the MECH technology in return for the cancellation of the Bishop preference shares. Adequate notice of either party's intent to put of call will be contained within closing documentation along with suitable arbitration procedures in the event of a dispute between the parties.
Closing is subject to and conditional upon the 2:1 consolidation of Bishop common shares. Bishop agrees and confirms that the stock issuance and conversion terms are to be based on Bishop's postconsolidation share structure. Both parties agree to modify the general terms of the agreement as may be required in order to comply with the regulatory requirements of the TSX. Additionally, both parties agree to modify the terms as may be required to minimize the tax consequences of this transaction.
This transaction is arm's length and will be considered a change of business pursuant to Policy 5.2 of the TSX and as such is subject to the approval of the shareholders of Bishop and the TSX. There can be no assurance that the transaction will be completed as proposed or at all. On April 5, 2001, Golden Capital Securities Ltd. of Vancouver, B.C., was engaged by Bishop to act as the sponsor of Bishop for the proposed change of business per exchange policy rules.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the transaction, any information released or received with respect to the merger may not be accurate or complete and should not be relied upon. Trading in the securities of Bishop should be considered highly speculative. Bishop has arranged a non-brokered private placement offering for proceeds of up to $250,000 through the issuance of a total of 2.5 million units of the corporation (preconsolidation) at a purchase price of 10 cents per unit. Each unit will consist of one common share and one common share purchase warrant. Each warrant may be exercised at a price of 15 cents for one common share within two years from the date of issuance. In conjunction with the non-brokered private placement, the corporation proposes to grant a total of 250,000 finder's fees warrants. Each finder's fees warrant may be exercised to purchase a common share at an exercise price of 10 cents per share for a period of one year from date of issuance.
Proceeds from the private placement will be used in connection with the proposed change of business of Bishop.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
(c) Copyright 2002 Canjex Publishing Ltd. canada-stockwatch.com |
