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Item 2.01
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Completion of Acquisition or Disposition of
Assets
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Acquisition of Aquos Media Limited
On October 23, 2007, ITonis Inc. (“we” or the “Company”)
completed the acquisition of all of the issued and outstanding shares of Aquos
Media Limited (“Aquos”), a wholly owned subsidiary of iOcean Media Limited
(“iOcean”), pursuant to a share purchase agreement (the “Share Purchase
Agreement”) among the Company, iOcean and Aquos dated September 8, 2007.
Pursuant to the terms of the Share Purchase Agreement, we have
acquired all of the issued and outstanding shares of Aquos in consideration for
the issuance to iOcean of 70,340,800 shares of our common stock such that iOcean
now owns 49% of our issued and outstanding shares. In addition, we have agreed
to issue 17,585,200 additional shares to iOcean (equal to 25% of the original
number of shares issued) on the date upon which the gaming portion of the
license and permits held by Aquos is live and selling lottery tickets, in
accordance with the terms of the Share Purchase Agreement. iOcean has entered
into a voting trust agreement with us pursuant to which it has agreed to vote
the shares of our common stock held by it as specified by our board of directors
for a period of one year following the date of closing. All shares issued or to
be issued to iOcean are “restricted securities” under the United States
Securities Act of 1933
, as amended (the “Securities Act”).
iOcean will continue to use its best efforts to ensure that the
licenses and permits required for the conduct of the planned television over the
Internet business, as specified in the Share Purchase Agreement, are secured by
Aquos. These licenses and permits are to be obtained no later than November 15,
2007. In the event that these licenses and permits are not secured by December
31, 2007, we have the right under an option agreement between us and iOcean to
repurchase the shares issued to iOcean by delivering notice of exercise of the
option together with an assignment of the shares of Aquos acquired by us to
iOcean anytime during the calendar month of January 2008. If we exercise this
option, all shares issued to iOcean will be deemed to be cancelled and we will
have no further interest in Aquos, in accordance with the terms of the Share
Purchase Agreement.
There is no assurance that Aquos will obtain the required
licenses and permits.
iOcean, through Aquos, has been engaged in the business of
assembling licenses and permits for Internet television broadcasting in China
and the resale of authorized Chinese lottery gaming products. As part of its
business efforts, iOcean has entered into a binding agreement with Pilot Media
Limited, a corporation incorporated under the laws of China which contemplates
the formation of a joint cooperation in China (and the preparation of a
definitive joint cooperation agreement) for the establishment of an online
television network platform in China. Under the proposed joint cooperation,
Pilot would be responsible for providing the television network platform and
operational management of the joint cooperation and iOcean would be responsible
for financing, business development and intellectual property. The internet
television platform will be used for internet television broadcasting and for
the delivery of Chinese lottery gaming products. iOcean will retain rights to
deliver Chinese lottery gaming products on the internet itself, and through
other means of distribution, such as mobile phones.
iOcean has assigned and transfered all of its right, title and
interest in and to the Pilot letter of intent to Aquos and will obtain the
written consent of Pilot to this assignment and transfer. All future agreements
with Pilot that are contemplated in the Pilot binding agreement will be
negotiated and executed by Aquos as a subsidiary of the Company. Further, iOcean
has agreed to use its best efforts to assist in these
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negotiations in good faith to ensure that the definitive
agreements contemplated in the Pilot binding agreement are achieved.
Pursuant to the terms of the Share Purchase Agreement, at
closing, iOcean nominated and we appointed Iain Fidlin to our board of
directors. Our board of directors now consists of three directors. In the event
the shares of our common stock issued to iOcean are repurchased pursuant to the
option agreement, Mr. Fidlin has agreed to resign from our board.