FreshXtend Technologies Corp. (TSX VENTURE: FXT) ("FreshXtend" or
"the Company") announces that, further to its news release dated
July 21, 2008 updating the status of the review of its core
businesses and ongoing operations announced on May 8, 2008, the
Company has entered into an Amalgamation Agreement (the
"Amalgamation Agreement") dated August 28, 2008, with 832124 BC
Ltd. and FreshXtend International Pty Ltd., both of which are
private companies associated with Gibsbourne Pty Ltd
("Gibsbourne"), the major shareholder of the Company.
The Amalgamation Agreement contemplates the amalgamation of the
Company with 832124 BC Ltd., a newly incorporated British Columbia
company ("Subco"), which will be wholly owned by FreshXtend
International Pty Ltd., a newly incorporated Australian company
("Newco"). Subco and FreshXtend will amalgamate to form an
amalgamated company under the laws of British Columbia ("Amalco"),
which will be wholly owned by Newco (the "Amalgamation").
Under the proposed Amalgamation, the existing shareholders of
FreshXtend holding less than 50,000 FreshXtend shares will receive
cash consideration of Cdn$0.03 per share (the "Cash
Consideration"). Existing shareholders of FreshXtend holding 50,000
or greater FreshXtend shares may elect to receive either the Cash
Consideration or one share of Newco for each 50 FreshXtend shares
(the "Share Consideration"). A FreshXtend shareholder who does not
make an election will be deemed to have elected to receive the Cash
Consideration. The Company's existing share purchase warrants and
incentive stock options, which are out-of-the-money, will be sought
to be cancelled.
The completion of the Amalgamation is subject to the completion
of the Private Placement referred to below, approval of the
Company's disinterested shareholders, and to applicable regulatory
and TSX Venture Exchange (the "Exchange") approval.
Newco and Subco are non-arm's length parties of the Company by
virtue of being associated with the major shareholder of the
Company. The Company will be relying upon an exemption from the
requirement to provide a valuation under Multilateral Instrument
61-504 entitled "Protection of Minority Security Holders in Special
Transactions".
The Board of Directors of the Company has established a
committee (the "Independent Committee") of the independent
directors to evaluate the Amalgamation and determine whether or not
to provide a recommendation to the Board of Directors that the
Board of Directors should approve the Amalgamation and recommend to
the shareholders to vote in favour of a special resolution
considering the Amalgamation.
A special meeting of the shareholders will be called to consider
and, if thought fit, approve, the Amalgamation. The Amalgamation is
subject to the approval of not less than two-thirds of the
shareholders and a majority of the minority shareholders voting at
the meeting. Further details will be set forth in a management
information circular and proxy material to be mailed to the
shareholders prior to the meeting.
The Company is also seeking to carry out a private placement to
raise up to $2,000,000 at a price of Cdn$0.08 per share in order to
reduce the number of existing FreshXtend noteholders and other
creditors (the "Private Placement"). This Private Placement is
subject to acceptance for filing by the Exchange.
Upon completion of the Amalgamation, Amalco will have no active
business and its primary assets will consist of the minority shares
in Nature Seal Inc. and AgriCoat Nature Seal Limited, now owned by
FreshXtend and pledged as security to an existing FreshXtend
noteholder. The FreshSpan technology owned by FreshXtend will also
be owned by Amalco. The liabilities of FreshXtend will continue as
obligations of Amalco, except to the extent that FreshXtend is able
to raise funds pursuant to the proposed Private Placement to
extinguish these obligations. There can be no assurance that
FreshXtend will be able to successfully do so.
It is anticipated that the majority of FreshXtend shareholders
will receive cash and that fewer than 50 existing FreshXtend
shareholders will elect to receive the Share Consideration. As a
result, if the Amalgamation is successfully concluded and all
required approvals obtained, the shares of the Company would be
delisted from the Exchange and the Company would seek to no longer
be a reporting issuer in British Columbia.
There can be no assurance that the Amalgamation will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular to be prepared in connection with
the Amalgamation, any information released or received with respect
to the Amalgamation may not be accurate or complete and should not
be relied upon.
The Company also announces financial results for the quarter
ended June 30, 2008 ("Q2-2008"). Highlights (which are all in US
Dollars unless stated otherwise) are as follows:
- Revenue in Q2-2008 was down to $45,220 compared to $445,620 in
Q2-2007. The significant decrease in revenue follows the transfer
of the Company's antioxidant business to Nature Seal Inc. and
AgriCoat Nature Seal Limited on March 31, 2008, as previously
announced. Antioxidant sales accounted for most of the Company's
operating revenues in periods up to March 31, 2008.
- Total operating expenses were $577,377 in Q2-2008, compared to
$659,692 in Q2-2007, as a result of the elimination of a number of
staff positions. Operating expenses are expected to decrease
further in subsequent quarters as additional positions are
eliminated.
- As a significant non-operating item, the Company recorded
investment income of $204,053 in Q2-2008 ($nil in Q2-2008), derived
from the Company's share of net earnings in the New Companies in
the period.
- The Company recorded a net loss of $316,976 or $0.01 per share
in Q2-2008, compared to a net loss of $248,370 or $0.01 per share
in Q2-2007.
- The Company's cash position at June 30, 2008 was $355,770. As
of the same date, the Company had a working capital deficiency of
$898,706.
The information in this news release should be read in
conjunction with the Company's Unaudited Consolidated Financial
Statements and Management Discussion and Analysis for the quarter
and six months ended June 30, 2008 and the Company's Audited
Consolidated Financial Statements and Management Discussion and
Analysis for the year ended December 31, 2007, which will be
available at the Company's website at www.freshxtend.com and at
www.sedar.com.
FreshXtend Technologies Corp.
Manual Listing S & P's Industrial & Int'l, 12g (3)b
Exemption: #82-2190
The statements in this news release may contain certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Exchange Act of 1934
and are subject to the safe harbour created by these sections.
Actual results may differ materially from the Company's
expectations.
The TSX Venture Exchange has neither approved nor disapproved
the contents of this news release.
Contacts: FreshXtend Technologies Corp. Roy Robinson Director
(604) 322-0759 (604) 322-0487 (FAX) Website: www.freshxtend.com
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