In addition, the Company used approximately $82,765 of such proceeds to extinguish its liability to Asher Enterprises, Inc. pursuant to the Convertible Promissory Note in the principal amount $60,000 issued on May 25, 2012 otherwise due in December 2012. The $100,000 balance will be used for payment of the Company’s operating expenses and for working capital on, and after, the initial closing date.
The Company intends to effect a 1 for 20 reverse split and a concurrent increase to 400,000,000 in the authorized and unissued shares of Common Stock of the Company in the near future. The Buyers have agreed to buy 3,216,260 additional shares of Common Stock of the Company for an aggregate purchase price of $100,000 thereafter (such date of purchase, the “subsequent closing date”). After the sale and issuance of these additional shares, the Buyers will own approximately 85% of the Company’s Common Stock. The additional funds will be available for payment of the Company’s operating expenses and for working capital.
On the initial closing date, each of Charles V. Sage, Edwin J. Korhonen, Warren M. Dillard and Steven L. Vanechanos resigned as a director of the Company and E. Jamie Schloss resigned as Chairman of the Board, President and Chief Executive Officer of the Company. In addition, on the initial closing date, Clark Morton II became a director, Chairman of the Board and Chief Executive Officer, William E. Fitzgerald became President, William A. Fitzgerald became Senior Vice President and Carol A. Fitzgerald became Secretary of the Company. It is expected that William E. Fitzgerald and William A. Fitzgerald will become directors of the Company.
The parties agreed that the Company would contribute approximately 2,886,000 shares of common stock of Andora held by it to its wholly-owned subsidiary, Cold Flow Energy ULC, an Alberta corporation (“Cold Flow”), or a newly-formed wholly-owned subsidiary, Surge Holding Co., a Delaware corporation (either or both, the “Holding Company”). The Buyers and the Company have agreed that the Holding Company and the Andora Shares will not be disposed of by the Company for any purpose until the later of (i) April 30, 2014 or (ii) 180 days after the subsequent closing date (the “Distribution Date”). This restriction on the time period for the disposition of the Andora Shares or of the Holding Company may be waived in the event that the value of the total non-cash assets of the Company exceeds the value of the Andora Shares. Three of the Company’s current directors, Charles V. Sage, Edwin J. Korhonen and E. Jamie Schloss, were appointed directors of the Holding Company and Messrs. Sage and Schloss were appointed officers of the Holding Company. The Buyers and the Company have agreed that such persons shall remain in such roles through the Distribution Date.
On the Distribution Date, the Company will distribute the shares of the Holding Company (or the Andora Shares) or a liquidating dividend to the shareholders of the Company other than the Buyers and their affiliates and transferees and any other holders of the Common Stock issued subsequent to the closing dates (including any purchaser of Common Stock of the Company in any private placement subsequent to the closing dates but excluding holders who have obtained shares in the public markets); provided, however, that such a dividend can be paid pursuant to applicable corporate laws and in compliance with all securities laws. The mechanism for such distribution shall be agreed between the Company and the majority of the directors of the Holding Company.
The Buyers and the Company acknowledged and agreed that the Company and the Holding Company may use a portion of the Andora shares to pay any and all costs or legal fees associated with the distribution of the stock of the Holding Company (or the Andora Shares) as a dividend to the Company’s existing shareholders.
The parties agreed that if the Buyers transfer any purchased shares to a third party or if the Company issues shares of Common Stock in a private placement subsequent to the closing dates, the Company will obtain the written agreement of such transferees to waive their entitlement to the distribution of the stock of the Holding Company (or the Andora Shares) as a dividend to the Company’s shareholders.
News 
Market Data 
Discover 
AI
