K2 DIGITAL INC files Form 8-K, Current Report
Effective July 29, 2004 the Registrant signed a Merger Agreement with SunriseUSA, Inc. ("Sunrise"), a Delaware Corporation and K2 Acquisition Corporation ("Acquisition"), a Delaware Corporation. Pursuant to the Merger Agreement, the Registrant, Sunrise and Acquisition will consummate a merger wherein the shareholders of Sunrise will exchange all of the issued and outstanding common stock of Sunrise for newly issued shares of common and preferred stock of K2, Acquisition will merge with and into Sunrise, and Sunrise will become a wholly-owned subsidiary of K2. Post Merger, the current shareholders of the Registrant will own a minimum of 2.5% of the surviving entity, which percentage may be adjusted upward to 3.5% of the surviving entity if a minimum new equity funding has not been received by December 31, 2004. In addition, the percentage will be adjusted upward to 3.5% if the minimum valuation of shares owned by current shareholders of the Registrant after the Merger is complete and equity financing closed is not at least $533,000 based on the price per share to new shareholders in the equity financing. This equates to or approximately $.11 per share, based upon 4,982,699 currently issued and outstanding shares.
Sunrise is a privately held holding company that was founded with the objective of capitalizing on emerging opportunities within rural USA cable markets. Ultimately, the Company will provide bundled telecommunication and cable services that will represent a convenient alternative to the single product offerings of competing vendors.
The Merger is subject to a number of conditions, including private equity funding of not less than $3,000,000. In addition, Sunrise will be responsible for payment of all expenses related to the transaction.
The parties anticipate closing the transaction before the end of the year.
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