News from back on March 20:
Axia Group Inc. Agrees to Sell International Building Technologies Inc. Subsidiary for Cash, Stock and Royalties on China Contract
Axia Group, Inc. (OTC: AXGJ), announced today that it has signed a term sheet with a developer of the panel production system to sell the company's subsidiary, International Building Technologies, Inc. (IBT), in exchange for cash, common stock in the Buyer' public company, and a royalty on future revenues. The name of the Buyer is being withheld until the Final Agreement between the Parties is reached, which is expected next week.
Axia is a provider of a panel-based building technology for the rapid construction of homes and commercial buildings. Its subsidiary, IBT, recently signed a Memorandum of Understanding with the Chinese government to install and operate a panel factory to support the rebuilding of the city of Suijiang in the Yunnan Province in China. IBT was also involved in Letters Of Intent to establish operations in Central America and Dubai. Under the proposed term sheet with Axia, the Buyer will be free to pursue those business opportunities as well as freely use and exploit the IBT name.
Stated Jeffrey Flannery, "We have come to the realization that the project in China and our global expansion plans were simply too large in scope and too aggressive for Axia at this stage in its development. The China contract alone required us to come up with 20 million RMB (approximately $2.5 million USD). The Suijiang plant would cost another $4 million USD to build and operate. We cannot offer the type and level of financing that these projects require. At the same time, new and very profitable projects in Sri Lanka and nearby areas were not being developed aggressively enough. Our focus will be to take advantage of the opportunities we have earned in these areas, representing millions of dollars in business for Axia."
Added Flannery, "The exciting news is we have found a partner who is willing and able to finance these projects as well as allow us to benefit from all the work we have done. I feel we have negotiated a very fair deal with the Buyer of IBT which allows us, and particularly the shareholders of Axia, to benefit for the long term. The following are the basic terms of the proposed agreement, some of which are still being finalized:
* Up to $1,000,000 in cash, while payable over 5 years, will greatly reduce our need to raise money in the market for our operations. * Common Stock in the Buyer's public company. We plan to dividend out 100% of the stock Axia receives from the Buyer to the Axia Shareholders. In this way, Axia shareholders will have a chance to benefit from the Chinese developments. * Royalty payments from the gross profits from the Project in China for three years. * The Buyer is a developer and manufacturer of the panel system Axia uses and has agreed to supply Axia with the machinery, equipment and support to establish a panel factory in Sri Lanka, which will greatly improve Axia's profit margins and competitiveness in the local market place as well as be an exporter of panels to the region. * Finally, the Buyer has agreed to extend a license agreement to Axia for five years, with the first two years of license payments waived.
"We expect the transaction to be completed within 10 days, and final terms will be published at that time. In the meantime, we wanted the shareholders to be informed of this developing and, we believe, promising transaction."
More information on Axia Group, Inc. can be found on the company web site at www.axiagroup.info.
