The Board of Directors of Fifty-Plus.Net International Inc. (TSX VENTURE:FPN)
today announced that FPN has completed the previously announced transaction to
acquire certain media assets which are synergistic with its online media
business.
Under the transaction, Olympus Management Limited ("OML") acquired control of
FPN through a Reverse Take-Over by providing cash and vending in certain assets.
OML is a private Ontario corporation, owned and operated by noted media
entrepreneur Moses Znaimer.
Mr. Znaimer is currently Chairman/Executive Producer of Classical 96.3 FM and
101.3 FM radio, Toronto, and President/Executive Producer of MZTV, a boutique
television production and distribution company in Toronto. He was co-founder,
President and Executive Producer of Citytv, MuchMusic, Bravo!, Space and
Canadian Learning Television, as well as many other local stations and national
specialty TV channels in Canada and around the world.
The transaction has three components:
1. OML subscribed for and FPN issued to OML 30 million units at a purchase price
of $0.10 per unit for aggregate gross proceeds of $3.0 million. Each unit
consists of one common share and one share purchase warrant, exercisable at
$0.10 per common share for three years. Proceeds of this private placement will
be applied to growth and improvement of operations, as well as new business
development.
2. OML transferred to FPN a 66.7% interest in Kemur Publishing Co. Ltd.,
publishers of CARP Magazine, in consideration for the issuance to OML by FPN of
30 million common shares of FPN, valued at $0.10 per share, for a total value of
$3.0 million. CARP Magazine, produced on behalf of CARP, Canada's Association
for the Fifty-Plus, is published nine times a year and has a paid circulation of
approximately 190,000.
3. OML transferred to FPN certain marketing rights related to the right, title
and interest held by CARP in its business name, trademarks and other
intellectual property rights, in consideration for the issuance to OML by FPN of
71 million common shares valued at $0.10 per share for a total value of $7.1
million.
Coincident with the closing of this transaction, FPN also acquired the remaining
33.3% interest in Kemur Publishing Co. Ltd. from MRHD Holdings Ltd. ("MRHD"),
controlled by the Morgenthau family, founders of CARP, in consideration of the
issuance by FPN of 12.5 million common shares of FPN valued at $0.10 per share
for a total value of $1.25 million.
The effect of the transaction will be to consolidate under FPN both the online
and offline media currently associated with CARP and published on behalf of
CARP. These will be complemented by FPN's other online publishing assets,
including www.50plus.com and five electronic newsletters.
As a result of the Reverse Take-Over, 131,000,000 common shares and 30,000,000
common share purchase warrants ("Warrants") of FPN were acquired by OML. For the
purposes of National Instrument 62-103 early warning reporting, the address of
OML is 15 Olympus Avenue Toronto, Ontario M6S 1L2. Immediately before the
Reverse Take-Over, OML did not exercise control or direction over any securities
of FPN and the current issued and outstanding share capital of FPN after
completion of this transaction is 170,538,803 common shares on a non-diluted
basis and 216,634,820 common shares on a fully diluted basis. As a result of the
Reverse Take-Over, OML owns (a) 131,000,000 common shares on a non-diluted basis
representing 76.9% of the common shares on a non-diluted basis, and (b)
161,000,000 common shares on a fully-diluted basis representing 74.5% of the
common shares on a fully diluted basis. OML has acquired these securities of FPN
for investment purposes, and has no current intention to increase the beneficial
ownership of, or control or direction over, securities of FPN.
As a result of the Reverse Take-Over, 12,500,000 common shares of FPN were
acquired by MRHD Holdings Limited ("MRHD"). For the purposes of National
Instrument 62-103 early warning reporting, the address of MRHD is Third Floor,
272 Lawrence Avenue West, Toronto, Ontario M5M 4M1. Immediately before the
Reverse Take-Over, MRHD did not exercise control or direction over any
securities of FPN and 1068265 Ontario Limited, which is under joint direction
and control by the Morgenthau family (the "Morgenthau Group") as described
below, owned 9,200,000 common shares of FPN. As noted above, the current issued
and outstanding share capital of FPN after completion of the Reverse Take-Over
is 170,538,803 common shares on a non-diluted basis and 216,634,820 common
shares on a fully diluted basis. As a result of the Reverse Take-Over, the
Morgenthau Group has control and direction over (a) 21,700,000 common shares on
a non-diluted basis representing 12.7% of the common shares on a non-diluted
basis, and (b) 21,700,000 common shares on a fully-diluted basis representing
10.1% of the common shares on a fully diluted basis. The Morgenthau Group has
acquired these securities of FPN for investment purposes, and has no current
intention to increase the beneficial ownership of, or control or direction over,
securities of FPN.
Certain components of the Reverse Take-Over constitute a "related party
transaction" for the purposes of Ontario Securities Commission Rule 61-501 -
Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions
(the "OSC Rule"). MRHD is controlled by members of the Morgenthau Group, who
also control 1068265 Ontario Limited, the largest shareholder of FPN holding a
total of 9.2 million shares representing 34.0% of the issued and outstanding
shares of FPN immediately before the Reverse Take-Over. In addition, the
President and Chief Executive Officer of FPN at the time of the Reverse
Take-Over, Eric L. Vengroff, is related to members of the Morgenthau family.
Members of the Morgenthau family own the 33 1/3% interest in Kemur sold to FPN
as part of the Reverse Take-Over, and an affiliate of MRHD is entitled to
receive a portion of the payments made with respect to certain deferred payment
obligations to other parties, incurred by OML in order to acquire the royalty
rights and to be assumed by FPN as part of the Reverse Take-Over. Finally, a
loan provided by Mr. Murray Morgenthau of the Morgenthau family in the amount of
$250,000 will be repaid by FPN upon closing of the Reverse Take-Over. The
transaction is exempt from the related party valuation and minority
securityholder approval requirements of the OSC Rule on the basis that no
securities of FPN were listed or quoted on any specified markets, such markets
specified by the OSC Rule to be the Toronto Stock Exchange, the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock
exchange outside of Canada and the United States. The TSX Venture Exchange has
made its approval conditional on the approval of the transaction by shareholders
other than those related to the Morgenthau family, and shareholder approval of
the Reverse Take-Over was obtained on this basis.
Upon completion of the transaction, Moses Znaimer was appointed as President and
CEO of FPN. Eric Vengroff and David Cravit were appointed as Executive Vice
Presidents and Gordon Poland was appointed as Chief Financial Officer. The board
of directors consists of Moses Znaimer, Julia Johnston, George Grant, Jason
Tafler and Dr. David Morgenthau.
There are no securities of FPN which are currently subject to escrow or pooling
restrictions. Pursuant to TSX Venture Exchange Policy 5.4, "Escrow, Vendor
Consideration and Resale Restrictions", certain parties to the Reverse Take-Over
have entered into an escrow agreement in the prescribed form. In addition,
securities held by certain parties to the Reverse Take-Over are subject to a
four month resale restriction pursuant to applicable securities laws which
expires on April 29, 2008. The following table summarizes the terms of the
escrow and resale restrictions in connection with securities held by these
parties.
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Holder Common Shares (%) Subject to Escrow(1)
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Olympus Management Limited 131,000,000 (76.8%) (2)(3)
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MRHD Holdings Ltd. 12,500,000 (7.3%)
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1068265 Ontario Limited 9,200,000 (5.4%)
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Seniority Plus Limited 2,800,000 (1.6%)
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Eric L. Vengroff 185,000 (0.09%)
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David J. Cravit 42,000 (0.02%)
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Jason L. Tafler 498,000 (0.3%)
---------------------------------------------------------------------------
Total 156,225,000 (91.6%)
---------------------------------------------------------------------------
Notes:
(1) Based on 170,538,803 common shares issued and outstanding after giving
effect to the Reverse Take-Over.
(2) OML also owns 30,000,000 common share purchase warrants (herein
referred to as, the "Warrants) all of which are escrowed on the terms
provided for herein.
(3) These shares are subject to a resale restriction pursuant to applicable
securities laws which expires on April 29, 2008.
A total of 156,225,000 common shares and 30,000,000 Warrants have been deposited
to the escrow agreement dated December 28, 2007, pursuant to which Computershare
Investor Services Inc. is the escrow agent. The common shares and Warrants under
this escrow agreement are automatically released as to 25% (39,056,250 common
shares and 7,500,000 Warrants) upon the date of the bulletin of the TSXV
confirming final approval of the Reverse Take-Over, and upon every six months
thereafter as to 25% (39,056,250 common shares and 7,500,000 Warrants), for a
total escrow period of 18 months.
Investors are cautioned that, except as disclosed in the management information
circular distributed in connection with the transaction, any information
released or received with respect to the transaction between FPN, OML and the
Morgenthau family may not be accurate or complete and should not be relied upon.
Any trading in the securities of FPN should be considered highly speculative.
Trading in the shares of FPN has been halted by the TSX Venture Exchange and
trading will not resume until such time as FPN completes certain customary
filings with the TSX Venture Exchange. Further announcements will be made as to
when trading will resume.
The TSX Venture Exchange has not passed on the merits of the proposed transactions.
About Fifty-Plus.Net International Inc.
Fifty-Plus.Net International Inc. (FPN) operates as The 50Plus Group, Canada's
leading provider of online content targeting the 50+ age group. Altogether, the
50Plus Group's portfolio of web sites and electronic newsletters delivers over 2
million pages views per month. The key property is www.50plus.com, delivering a
wide range of information, entertainment, community (forums, dating, blogs) and
commerce together with four electronic newsletters (health, money, travel,
lifestyle), each of which has over 120,000 opt-in subscribers.
The 50Plus Group also produces and manages www.carp.ca, the online home of CARP,
Canada's Association for the Fifty-Plus. With almost 400,000 members, CARP is
Canada's largest association for the 50+. In addition, The 50Plus Group has
recently launched www.nomorewaiting.info, a web site focusing on CARP's advocacy
campaign, "No More Waiting," which aims to influence governments to improve
health care performance. The 50Plus Group also produces CARP Action Online, an
electronic newsletter for CARP members.
The 50Plus Group has a strategic alliance with Decima Research, to develop
original research on the 50+ market, its demographics, psychographics and
purchasing behavior.
Cautionary note on forward-looking statements
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein. Certain statements
made in this release are "forward-looking statements" which may include, without
limitation, any statement that may predict, forecast, indicate or imply future
results, performance or achievements, and may contain the words 'believe,'
'anticipate,' 'expect,' 'estimate,' 'project,' 'will be,' 'will continue,' 'will
likely result' or similar words or phrases. Forward-looking statements involve
risks and uncertainties, which may cause actual results to differ materially
from the forward-looking statements. The risks and uncertainties are detailed
from time to time in filings by Fifty-Plus.Net International Inc. with
provincial securities commissions. New risk factors emerge from time to time and
it is not possible for management to predict all such risk factors, nor can it
assess the impact of all such risk factors on the Company's business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.
Given these risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results.
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