BEIJING, CHINA, May 30 /PRNewswire-FirstCall/ - Monarc Corporation, www.monacorporation.com (Pink Sheets: MONA), is pleased to announce a signed merger letter of intent (LOI) agreement with a Chinese based company. Mr Garr Winters, MONA current secretary, corporate advisor and the company's X CEO said, "This is a complete new direction for the company. The deal would see MONA split off all of its current operating entities' namely Brookor Inc, IFGX, Canden Financial Inc, Horescon and Syscon Systems (GroupCo) back to its former controlling holders in exchange for the common stock issued by MONA. The stock issued to the GroupCo is being held in escrow since the completed mergers with MONA.
Just to be clear, this is a completely separate, and a different Chinese based company, as the one MONA did business with last year. MONA re-sold that contract, including the then current assets of MONA to GLCC. For our new followers, and to recap, the sale between MONA and GLCC saw MONA shareholders receiving 1-1 share dividend of GLCC.
The new Chinese company is completely unrelated, and never introduced to the North American markets. The agreement also calls for a complete new Chinese based management, and 1 representative in North America to manage MONA filings and corporate affairs. The resolution for a split off agreement, and a merger with the Chinese based company was unanimously passed by MONA board of Directors 5-1, in favor. We wish we could elaborate further on who the targeted Chinese company is. All we can say is that they are in a technology based mass distribution industry. They are best described as a profitable, lean mean business machine with a product that is in top demand throughout Asia not just China.
We have a lot of work ahead of us. The only reason this agreement is classified as a LOI instead of a firm deal is under Chinese law a special purpose (SPC) company is required and in addition the above existing GroupCo must be split off, and the stock returned to MONA treasury, and then reissued to the SPC. Under normal circumstances this type of transaction would take anywhere from 10 to 12 weeks to complete. We believe we can complete this task within the next 4 to 6 weeks, because of our past experience with the Chinese companies. We are aiming for a closing date of no later than July 15, 2008.
It is unfortunate that the markets never really accepted the GroupCo business model. These are great companies with great potential. MONA stock just never seemed to be able to get any traction, and we are hopeful that with this new direction we will be able to make a complete 180-degree turn around. We believe the current MONA shareholders will be pleasantly surprised when the final announcement of the targeted merger company is made."
Safe Harbour Statement
Information in this press release may contain 'forward-looking statements.' Statements describing objectives or goals or the Company's future plans are also forward-looking statements and are subject to risks and uncertainties, including the financial performance of the Company and market valuations of its stock, which could cause actual results to differ materially from those anticipated. Forward-looking statements in this news release are made pursuant to the 'Safe Harbour' provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, risks relating to the ability to close transactions being contemplated, risks related to sales, acceptance of MONA Corporation products, increased levels of competition, technological changes, dependence on intellectual property rights and other risks detailed from time to time in MONA Corporation's periodic reports filed with the regulatory authorities.
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SOURCE MonArc Corporation (MONA)
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Public Companies Associated with this story: MONA
Knobias Subject Codes Associated with this story: Major Agreements Merger/Acquisition
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