IMC2 CORPORATION
TSX VENTURE : ICC.P

August 29, 2005 13:08 ET

IMC2 Provides Update On Qualifying Transaction

CALGARY, ALBERTA--(CCNMatthews - Aug. 29, 2005) -

Qualifying Transaction Update

IMC2 Corporation (TSX VENTURE:ICC.P) ("IMC2" or the "Corporation") announces that it has filed a Filing Statement on SEDAR on August 26, 2005, in connection with the Corporation's Qualifying Transaction pursuant to the TSX Venture Exchange Policy 2.4 - Capital Pool Companies. IMC2 previously announced it had executed a letter of intent dated June 7, 2005 to acquire all of the issued and outstanding shares of Aztek Energy Ltd. ("Aztek"), a private Alberta oil and gas company. The Corporation anticipates closing the transaction in the next few weeks.

The Corporation and Aztek executed an Acquisition Agreement dated August 3, 2005 (the "Agreement"). An offer to purchase dated August 3, 2005 was mailed by the Corporation to all of the shareholders of Aztek wherein the Corporation offered to purchase all of the outstanding shares of Aztek (the "Offer"). The Offer initially expired on August 19, 2005 but, due to the delay in filing the Filing Statement, has since been extended to expire on August 31, 2005 unless otherwise further extended by the Corporation.

Under the Agreement, the Corporation agreed to make the Offer to purchase all of the outstanding securities (being 7,297,377 Class A Shares assuming the exercise of all of the outstanding options to acquire up to 628,750 Class A Shares) of Aztek. Pursuant to the Agreement, the Corporation has made the Offer to purchase all the Class A Shares of Aztek for $1.1241 per Class A Share of Aztek (or aggregate consideration of $8,202,870 assuming the exercise of all of the aforementioned options to purchase Class A Shares of Aztek) which will be paid by the issuance of 2.5547 Common Shares of the Corporation for each Class A Share of Aztek (for an aggregate of 18,642,886 Common Shares of the Corporation assuming the exercise of all of the aforementioned options to purchase Class A Shares of Aztek) at a deemed value of $0.44 per Common Share of the Corporation.

Subsequent to the completion of the Qualifying Transaction, it is anticipated that the Corporation and Aztek will amalgamate by way of a short form vertical amalgamation pursuant to the provisions of the Business Corporations Act (Alberta) to form a new amalgamated corporation which will continue under the name "Aztek Energy Ltd." (the "Resulting Issuer").

Completion of the transaction is subject to a number of conditions, including but not limited to Exchange acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Proposed Private Placement

The Corporation, in conjunction with the completion of the Qualifying Transaction, intends to raise a minimum of $2,000,000 and a maximum of $5,000,000 through a private placement pursuant to the "accredited investor" exemption in applicable Canadian securities legislation, of up to 11,363,636 Common Shares, at a subscription price of $0.44 per Common Share, less the number of Flow Through Common Shares subscribed for under the Private Placement, to a maximum of 3,636,364 Flow Through Common Shares at a subscription price of $0.55 per Flow Through Common Share. Subscribers can subscribe for Flow Through Common Shares or a combination of Flow Through Common Shares and Common Shares. Pursuant to the terms of the Agreement, certain promoters, officers, directors, other insiders of the Corporation and associates or affiliates thereof are obligated to subscribe for a minimum of $775,000 in aggregate under the Private Placement.

The completion of the Private Placement is subject to certain conditions, including, without limitation, the completion of the Qualifying Transaction.

Grant of Stock Options

The Resulting Issuer will assume the stock option plan of the Corporation and the obligations thereunder. Since incorporation of the Corporation, options to purchase 800,000 common shares of the Corporation have been granted, all of which are outstanding as at the date hereof. Pursuant to the Agreement, the Corporation may issue up to 200,000 Common Shares following the Completion of the Qualifying Transaction upon the exercise of those options with the balance of such options to be cancelled. Upon completion of the Qualifying Transaction, it is anticipated that the Resulting Issuer will grant additional options to purchase 1,359,260 common shares under its stock option plan to the officers and employees of Aztek and to the outside directors of the Resulting Issuer, such options having an exercise price of $0.50 per Common Share and being exercisable until the fifth anniversary of the Qualifying Transaction.

Investors are cautioned that except as disclosed in the Filing Statement prepared in connection with the transaction any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange has in no way passed on the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • IMC2 Corporation
    David Calnan
    (403) 299-9606
    (403) 299-9601 (FAX)
    Email: dmc@snclaw.com