Garmatex signs binding agreement with Oaxaca Resources
Canada's Garmatex Technologies, Inc. a revolutionary and disruptive fabric technology company has signed a binding and definitive arrangement agreement (the “Arrangement Agreement”) with Oaxaca Resources Corp., a mining company listed and posted for trading on the OTC Pink operated by the OTC Markets Group Inc.
Pending satisfaction of the closing conditions and the court and security holder approvals, Garmatex will become a wholly owned subsidiary of Oaxaca and the security holders of Garmatex will become security holders of Oaxaca, Garmatex said in a press release.
This transaction is commonly referred to as a reverse take-over (RTO) and effectively, upon closing, Garmatex shareholders will hold the majority of the post-closing outstanding shares of Oaxaca, not including the shares to be issued by Oaxaca as part of the concurrent Oaxaca financing. Upon closing of the Arrangement Agreement, Garmatex shareholders will receive one share in Oaxaca for each post-share consolidation Garmatex share (share consolidation will be on a one new share for five old shares basis).
The shares of Oaxaca received by the Garmatex shareholders will be “restricted securities” and will be subject to a 12-month hold period from the date that Oaxaca files “Form 10 information” with the SEC and Oaxaca is compliant with its reporting obligations with the SEC. The purposes of the Garmatex share consolidation are to assist with increasing the initial trading price of the stock and increasing the liquidity of Oaxaca's stock.
Pending certain approvals, it is expected that Oaxaca will change its name to “Garmatex Technologies, Inc.” or such other company name as Garmatex may determine prior to the closing of the Arrangement Agreement, as well as change its stock symbol to more closely represent the new name going forward.
Garmatex anticipates completing the RTO within the next 3 to 6 months.
Darren Berezowski, President and CEO of Garmatex said, “With the announcement of a binding agreement with Oaxaca, we are very pleased to reach an objective of being a public company with the advantages related to such as well as providing our shareholders with liquidity. We believe with the completion of the RTO will now better position us and make us more attractive for raising capital for our business over the course of the next 24 months as we work diligently to significantly surpass a cash flow breakeven point.”
Garmatex will continue in the coming weeks and months to update its shareholders with information about the RTO, progress with the concurrent Oaxaca financing, and updates with respect to Garamtex's business plan going forward. (SH)
Fibre2Fashion News Desk – India