Kona Bay plans spinoff, earns $112,644 in Q1
2017-03-01 18:42 MT - News Release
Mr. Vincent Wong reports
KONA BAY TECHNOLOGIES ANNOUNCES EXECUTION OF ARRANGEMENT AGREEMENT
Kona Bay Technologies Inc. has entered into an arrangement agreement with its two wholly owned subsidiaries, Hapuna Ventures Inc. and Bexar Ventures Inc., as part of the company's plan to spin off the company's on-line advertising and software-as-a-service business units into two independent publicly traded companies. The proposed transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia).
Transaction summary
Under the arrangement agreement, each shareholder of the company will receive one share of Hapuna and one share of Bexar for each share of the company. The board of directors believes that spinning off Hapuna and Bexar will help attract an investor base for each entity's specific business and thereby maximize shareholder value.
Full details of the arrangement agreement will be included in a management information circular to be filed with applicable regulatory authorities and mailed to Kona Bay shareholders in accordance with applicable securities laws. The company expects to mail the management information circular in March, 2017. The company expects to complete the arrangement in the first half of 2017. The arrangement is subject to customary conditions, regulatory approvals and tax considerations.
Quarterly financial results
The company also announced its unaudited financial results for the quarter ended Dec. 31, 2016. Results are in Canadian dollars and were prepared in accordance with international financial reporting standards.
The company previously reported three operating segments, student marketing services, custom software development and internet applications. Pursuant to the arrangement, the student marketing services and custom software development businesses will be spun into Hapuna and Bexar, respectively. The company has elected to classify the assets of these businesses as held for sale and its operating results as discontinued operations. The operating results of the internet applications business unit are now reported as continuing operations.
Three months ended Three months ended Dec. 31, 2016 Dec. 31, 2015 Sales and other revenue from continuing operations $66,813 $85,491 Net income (loss) from continuing operations $112,644 $(115,708) Net income (loss) from discontinued operations $(17,680) $(23,338) Earnings (loss) per share from continuing operations $0.05 $(0.05) Earnings (loss) per share from discontinued operations $(0.01) $0.01
The unaudited consolidated financial statements and MD&A (management discussion and analysis) for the quarter ended Dec. 31, 2016, are available on SEDAR.
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