PAN AMERICAN FERTILIZER CORP. (Formerly Bastion Resources Ltd.) NOTES TO THE FINANCIAL STATEMENTS 18. SUBSEQUENT EVENTS On August 14, 2012, the Company entered into a Letter of Intent (“LOI”) with Pacific Potash Corporation (“PacificPotash) to acquire 100% of the issued and outstanding common shares of Pacific Potash (“Transaction”). At closing of the Transaction (the “Closing Date”), the Company will issue to the shareholders of Pacific Potash, on a pro rata basis, that number of common shares of Pan American such that, prior to the completion of the Concurrent Financing (as defined below) and on an undiluted basis, current shareholders of the Company will hold 62.5% of the issued and outstanding common shares of the Company and the former shareholders of Pacific Potash will hold 37.5% of the issued and outstanding common shares of the Company. In connection with the Transaction, the Company intends to complete a non-brokered private placement (the “Concurrent Financing”), by way of subscription receipts (each a “Subscription Receipt”) at a price of $0.40 per Subscription Receipt for minimum gross proceeds of $2,000,000 and maximum gross proceeds of $5,000,000. Each Subscription Receipt will be con vertedinto units (the “Units”) upon completion of the Transaction at no additional consideration. Each Unit will be comprised of one common share of the Company and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder to purchase one common share of the Company at a price of $0.60 for a period of two years from the Closing Date.
In July, the Company entered into a Letter of Intent (“LOI”) with Mamasu S.R.L. (“Mamasu”) to acquire all of theissued and outstanding share capital of Servicios y Fertilizantes Sudamericanos S.A. (“SFS”), a wholly owned subsidiary of Mamasu (“Transaction”). Pursuant to the terms of LOI, the Company will acquire 100% of the issued and outstanding shares of SFS in exchange for the Company paying a total of USD $3,000,000 in cash and issuing a total of 4,500,000 common shares of the Company at a deemed price of $1.00 per share for a total purchase price of up to USD $7,000,000 (the “Purchase Price”). The Purchase Price will be paid as follows: a)USD $50,000 upon signing the LOI (which has been pa id); b) USD $350,000 upon satisfactory completion of the following: 1) due diligence; and 2) financial audit of the financial statements of SFS and/or Mamasu by the Company’s auditor; b)USD $650,000 upon signing the definitive agreement (the “Definitive Agreement”); c)USD $2,000,000 to be paid as a percentage for each ton of product sold (on the basis of USD $5.00 per ton sold and collected); and e) 4,500,000 common shares of the Company to be issued upon achieving the sales and other milestones,at a deemed price of $1.00 per share, which will be finalized on the definitive agreement Under the terms of the LOI, upon closing of the Transaction, the Company will enter into an employment agreement with Sebastian Pivetta, President of Mamasu, to provide ongoing operational and management services to SFS; and pay commissions to SFS’s current sales staff basedon sales generated by them, to be calculated and payable monthly basis.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
