TORONTO, ONTARIO today announced that FPN has completed the
previously announced transaction to acquire certain media assets
which are synergistic with its online media business.
Under the transaction, Olympus Management Limited ("OML")
acquired control of FPN through a Reverse Take-Over by providing
cash and vending in certain assets. OML is a private Ontario
corporation, owned and operated by noted media entrepreneur Moses
Znaimer.
Mr. Znaimer is currently Chairman/Executive Producer of
Classical 96.3 FM and 101.3 FM radio, Toronto, and
President/Executive Producer of MZTV, a boutique television
production and distribution company in Toronto. He was co-founder,
President and Executive Producer of Citytv, MuchMusic, Bravo!,
Space and Canadian Learning Television, as well as many other local
stations and national specialty TV channels in Canada and around
the world.
The transaction has three components:
1. OML subscribed for and FPN issued to OML 30 million units at
a purchase price of $0.10 per unit for aggregate gross proceeds of
$3.0 million. Each unit consists of one common share and one share
purchase warrant, exercisable at $0.10 per common share for three
years. Proceeds of this private placement will be applied to growth
and improvement of operations, as well as new business
development.
2. OML transferred to FPN a 66.7% interest in Kemur Publishing
Co. Ltd., publishers of CARP Magazine, in consideration for the
issuance to OML by FPN of 30 million common shares of FPN, valued
at $0.10 per share, for a total value of $3.0 million. CARP
Magazine, produced on behalf of CARP, Canada's Association for the
Fifty-Plus, is published nine times a year and has a paid
circulation of approximately 190,000.
3. OML transferred to FPN certain marketing rights related to
the right, title and interest held by CARP in its business name,
trademarks and other intellectual property rights, in consideration
for the issuance to OML by FPN of 71 million common shares valued
at $0.10 per share for a total value of $7.1 million.
Coincident with the closing of this transaction, FPN also
acquired the remaining 33.3% interest in Kemur Publishing Co. Ltd.
from MRHD Holdings Ltd. ("MRHD"), controlled by the Morgenthau
family, founders of CARP, in consideration of the issuance by FPN
of 12.5 million common shares of FPN valued at $0.10 per share for
a total value of $1.25 million.
The effect of the transaction will be to consolidate under FPN
both the online and offline media currently associated with CARP
and published on behalf of CARP. These will be complemented by
FPN's other online publishing assets, including www.50plus.com and
five electronic newsletters.
As a result of the Reverse Take-Over, 131,000,000 common shares
and 30,000,000 common share purchase warrants ("Warrants") of FPN
were acquired by OML. For the purposes of National Instrument
62-103 early warning reporting, the address of OML is 15 Olympus
Avenue Toronto, Ontario M6S 1L2. Immediately before the Reverse
Take-Over, OML did not exercise control or direction over any
securities of FPN and the current issued and outstanding share
capital of FPN after completion of this transaction is 170,538,803
common shares on a non-diluted basis and 216,634,820 common shares
on a fully diluted basis. As a result of the Reverse Take-Over, OML
owns (a) 131,000,000 common shares on a non-diluted basis
representing 76.9% of the common shares on a non-diluted basis, and
(b) 161,000,000 common shares on a fully-diluted basis representing
74.5% of the common shares on a fully diluted basis. OML has
acquired these securities of FPN for investment purposes, and has
no current intention to increase the beneficial ownership of, or
control or direction over, securities of FPN.
As a result of the Reverse Take-Over, 12,500,000 common shares
of FPN were acquired by MRHD Holdings Limited ("MRHD"). For the
purposes of National Instrument 62-103 early warning reporting, the
address of MRHD is Third Floor, 272 Lawrence Avenue West, Toronto,
Ontario M5M 4M1. Immediately before the Reverse Take-Over, MRHD did
not exercise control or direction over any securities of FPN and
1068265 Ontario Limited, which is under joint direction and control
by the Morgenthau family (the "Morgenthau Group") as described
below, owned 9,200,000 common shares of FPN. As noted above, the
current issued and outstanding share capital of FPN after
completion of the Reverse Take-Over is 170,538,803 common shares on
a non-diluted basis and 216,634,820 common shares on a fully
diluted basis. As a result of the Reverse Take-Over, the Morgenthau
Group has control and direction over (a) 21,700,000 common shares
on a non-diluted basis representing 12.7% of the common shares on a
non-diluted basis, and (b) 21,700,000 common shares on a
fully-diluted basis representing 10.1% of the common shares on a
fully diluted basis. The Morgenthau Group has acquired these
securities of FPN for investment purposes, and has no current
intention to increase the beneficial ownership of, or control or
direction over, securities of FPN.
Certain components of the Reverse Take-Over constitute a
"related party transaction" for the purposes of Ontario Securities
Commission Rule 61-501 - Insider Bids, Issuer Bids, Business
Combinations and Related Party Transactions (the "OSC Rule"). MRHD
is controlled by members of the Morgenthau Group, who also control
1068265 Ontario Limited, the largest shareholder of FPN holding a
total of 9.2 million shares representing 34.0% of the issued and
outstanding shares of FPN immediately before the Reverse Take-Over.
In addition, the President and Chief Executive Officer of FPN at
the time of the Reverse Take-Over, Eric L. Vengroff, is related to
members of the Morgenthau family. Members of the Morgenthau family
own the 33 1/3% interest in Kemur sold to FPN as part of the
Reverse Take-Over, and an affiliate of MRHD is entitled to receive
a portion of the payments made with respect to certain deferred
payment obligations to other parties, incurred by OML in order to
acquire the royalty rights and to be assumed by FPN as part of the
Reverse Take-Over. Finally, a loan provided by Mr. Murray
Morgenthau of the Morgenthau family in the amount of $250,000 will
be repaid by FPN upon closing of the Reverse Take-Over. The
transaction is exempt from the related party valuation and minority
securityholder approval requirements of the OSC Rule on the basis
that no securities of FPN were listed or quoted on any specified
markets, such markets specified by the OSC Rule to be the Toronto
Stock Exchange, the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Stock Market, or a stock exchange outside of
Canada and the United States. The TSX Venture Exchange has made its
approval conditional on the approval of the transaction by
shareholders other than those related to the Morgenthau family, and
shareholder approval of the Reverse Take-Over was obtained on this
basis.
Upon completion of the transaction, Moses Znaimer was appointed
as President and CEO of FPN. Eric Vengroff and David Cravit were
appointed as Executive Vice Presidents and Gordon Poland was
appointed as Chief Financial Officer. The board of directors
consists of Moses Znaimer, Julia Johnston, George Grant, Jason
Tafler and Dr. David Morgenthau.
There are no securities of FPN which are currently subject to
escrow or pooling restrictions. Pursuant to TSX Venture Exchange
Policy 5.4, "Escrow, Vendor Consideration and Resale Restrictions",
certain parties to the Reverse Take-Over have entered into an
escrow agreement in the prescribed form. In addition, securities
held by certain parties to the Reverse Take-Over are subject to a
four month resale restriction pursuant to applicable securities
laws which expires on April 29, 2008. The following table
summarizes the terms of the escrow and resale restrictions in
connection with securities held by these parties.
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Holder Common Shares (%) Subject to Escrow(1)
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Olympus Management Limited 131,000,000 (76.8%) (2)(3)
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MRHD Holdings Ltd. 12,500,000 (7.3%)
---------------------------------------------------------------------------
1068265 Ontario Limited 9,200,000 (5.4%)
---------------------------------------------------------------------------
Seniority Plus Limited 2,800,000 (1.6%)
---------------------------------------------------------------------------
Eric L. Vengroff 185,000 (0.09%)
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David J. Cravit 42,000 (0.02%)
---------------------------------------------------------------------------
Jason L. Tafler 498,000 (0.3%)
---------------------------------------------------------------------------
Total 156,225,000 (91.6%)
---------------------------------------------------------------------------
Notes:
(1) Based on 170,538,803 common shares issued and outstanding after giving
effect to the Reverse Take-Over.
(2) OML also owns 30,000,000 common share purchase warrants (herein
referred to as, the "Warrants) all of which are escrowed on the terms
provided for herein.
(3) These shares are subject to a resale restriction pursuant to applicable
securities laws which expires on April 29, 2008.
A total of 156,225,000 common shares and 30,000,000 Warrants
have been deposited to the escrow agreement dated December 28,
2007, pursuant to which Computershare Investor Services Inc. is the
escrow agent. The common shares and Warrants under this escrow
agreement are automatically released as to 25% (39,056,250 common
shares and 7,500,000 Warrants) upon the date of the bulletin of the
TSXV confirming final approval of the Reverse Take-Over, and upon
every six months thereafter as to 25% (39,056,250 common shares and
7,500,000 Warrants), for a total escrow period of 18 months.
Investors are cautioned that, except as disclosed in the
management information circular distributed in connection with the
transaction, any information released or received with respect to
the transaction between FPN, OML and the Morgenthau family may not
be accurate or complete and should not be relied upon. Any trading
in the securities of FPN should be considered highly
speculative.
Trading in the shares of FPN has been halted by the TSX Venture
Exchange and trading will not resume until such time as FPN
completes certain customary filings with the TSX Venture Exchange.
Further announcements will be made as to when trading will
resume.
The TSX Venture Exchange has not passed on the merits of the
proposed transactions.
About Fifty-Plus.Net International Inc.
Fifty-Plus.Net International Inc. (FPN) operates as The 50Plus
Group, Canada's leading provider of online content targeting the
50+ age group. Altogether, the 50Plus Group's portfolio of web
sites and electronic newsletters delivers over 2 million pages
views per month. The key property is www.50plus.com, delivering a
wide range of information, entertainment, community (forums,
dating, blogs) and commerce together with four electronic
newsletters (health, money, travel, lifestyle), each of which has
over 120,000 opt-in subscribers.
The 50Plus Group also produces and manages www.carp.ca, the
online home of CARP, Canada's Association for the Fifty-Plus. With
almost 400,000 members, CARP is Canada's largest association for
the 50+. In addition, The 50Plus Group has recently launched
www.nomorewaiting.info, a web site focusing on CARP's advocacy
campaign, "No More Waiting," which aims to influence governments to
improve health care performance. The 50Plus Group also produces
CARP Action Online, an electronic newsletter for CARP members.
The 50Plus Group has a strategic alliance with Decima Research,
to develop original research on the 50+ market, its demographics,
psychographics and purchasing behavior.
Cautionary note on forward-looking statements
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein. Certain statements made in this release are
"forward-looking statements" which may include, without limitation,
any statement that may predict, forecast, indicate or imply future
results, performance or achievements, and may contain the words
'believe,' 'anticipate,' 'expect,' 'estimate,' 'project,' 'will
be,' 'will continue,' 'will likely result' or similar words or
phrases. Forward-looking statements involve risks and
uncertainties, which may cause actual results to differ materially
from the forward-looking statements. The risks and uncertainties
are detailed from time to time in filings by Fifty-Plus.Net
International Inc. with provincial securities commissions. New risk
factors emerge from time to time and it is not possible for
management to predict all such risk factors, nor can it assess the
impact of all such risk factors on the Company's business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: Fifty-Plus.Net International Inc. Eric Vengroff
Executive Vice President (416) 363-7063, ext. 235 Email:
e.vengroff@50plus.com Website: www.50plus.com
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