FTEC - 8K 10/19/2007
On October 18, 2007, Fashion Tech International, Inc., a Nevada
corporation (the "Company"), entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement"), with Halter Financial Investments,
L.P., a Texas limited partnership ("Purchaser"), pursuant to which the
Company agreed to sell Purchaser 25,137,574 unregistered shares of the
Company's common stock for $400,000. The Stock Purchase Agreement
requires, as a condition to closing, the election and appointment of the
person or persons designated by Purchaser as the new officers and
director or directors of the Company;
The Stock Purchase Agreement also requires the Company's Board of
Directors to declare and pay a special cash dividend of $0.11 per share
to the current shareholders of the Company and that the Purchaser will
not participate in such dividend. The proposed dividend will be payable
to shareholders of record at the close of business on October 29, 2007,
with a payment date on October 31, 2007, which is subsequent to the date
the required payment from Purchaser under the Stock Purchase Agreement
has been received. The dividend will be payable to the Company's
current shareholders who hold 3,591,082 shares of its common stock which
will result in a total dividend distribution of $395,020.
The Stock Purchase Agreement contains covenants that require
Purchaser, in its capacity as controlling shareholder of the Company
following closing, to agree that it will not approve any additional
reverse stock splits without the prior consent of a majority of the
members of the Company's current Board of Directors as
representatives of the Company's current shareholders, that it will
ensure that the Company does not authorize the issuance of any
additional shares of common stock or securities convertible into
shares of common stock except for up to a 17.5 to 1 reverse split in
connection with a combination transaction with a corporation with
current business operations (a "Going Public Transaction"), and that
it will not allow the Company to enter into a Going Public
Transaction unless the Company, on a combined basis with the
operating entity with which it completes a Going Public Transaction,
satisfies the financial conditions for listing on the NASADAQ Stock
Market immediately following the closing of the Going Public
Transaction. The Stock Purchase Agreement also grants demand and
"piggy back" registration rights to Purchaser and, to the extent
required, to the current holders of the Company's restricted common
stock.
After giving effect to the stock sale, the Purchaser would hold
25,137,574 shares or approximately 87.5% of the 28,728,656 shares of the
Company's common stock to be outstanding following the completion of
such action. As such, the Stock Purchase Agreement will result in a
change of control of the Company and, following consummation of the
transactions contemplated by the Stock Purchase Agreement, the Purchaser
will be able to elect directors and control the policies and practices
of the Company. The Stock Purchase Agreement will not result in any
change in the status of the Company as a shell company and the Company
will continue its search for business opportunities for acquisition or
participation by the Company.
The foregoing summary of selected provisions of the Stock Purchase
Agreement does not purport to be complete and is qualified in its
entirety by reference to the Stock Purchase Agreement, a copy of
which is filed as an exhibit to this report.
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