Vesta Capital Corp. (TSXV:VES.P) Announces the Signing of a Letter of Intent for Its Proposed Qualifying Transaction
TORONTO, ONTARIO--(Marketwire - Nov. 10, 2008) - Vesta Capital Corp. ("Vesta") (TSX VENTURE:VES.P) is pleased to announce that on October 30, 2008, it entered into a letter of intent ("LOI") with 3GSolar, Ltd. ("3G"). The LOI provides that Vesta will enter into a share exchange transaction with each of 3G's shareholders, which will result in 3G becoming a wholly-owned subsidiary of Vesta (the "Transaction"). The Transaction is intended to constitute Vesta's "qualifying transaction" under TSX Venture Exchange ("TSXV") policies. If the Transaction it successfully completed, it is believed that 3G would be the first Israel-based business listed on a Canadian stock exchange.
About 3G
3G (formerly, Orionsolar Photovoltaics Ltd.) is a developer of dye solar cell ("DSC") photovoltaic modules. DSC technology is a cost-effective alternative to silicon and thin film-based systems, providing a low-cost solar energy solution that produces electricity efficiently even in low light conditions. 3G focuses its efforts to develop DSC modules to serve off-grid markets, mainly in developing countries where in excess of two billion people live without electricity.
3G was incorporated June 24, 2004 under the laws of the State of Israel. Its business operations are conducted through its facility in Jerusalem, Israel. Upon completion of the Transaction, it is anticipated that the resulting issuer will be classified as a research and development issuer by the TSXV.
The issued shares of 3G are owned by thirty-four (34) shareholders. Dr. Jonathan Goldstein (of Jerusalem, Israel), 3G's founder, its president and a director, owns approximately 11% of 3G's shares (fully diluted). Seventeen (17) shareholders (including three 3G employees who own less that 3% of 3G's shares, fully diluted) are individual Israel residents or Israel corporations controlled by Israel residents, who collectively own approximately 22% of 3G's shares (fully diluted). The remaining sixteen (16) shareholders own approximately 66% of 3G's shares (fully diluted). Fifteen (15) of these remaining shareholders are limited liability companies formed under the laws of Delaware (U.S.A.) and controlled by U.S. residents, and one (1) shareholder is an Ontario corporation controlled by a resident of Ontario. Other than Dr. Goldstein, the only shareholder who holds in excess of 10% of 3G's shares is DG-OSP, LLC, a Delaware (U.S.A.) limited liability company, controlled by The Quercus Trust (Newport Beach, California) which owns approximately 17% of 3G's shares (fully diluted).
To date 3G has engaged in the research and development of DSC photovoltaic technology. 3G employs seventeen (17) professionals at its facility.
3G has provided Vesta with audited financial statements (prepared in accordance with Israel auditing standards) for the years ended December 31, 2007 and 2006, which financial statements have been reconciled to Canadian GAAP (both presented in United States dollars). 3G has also provided unaudited financial statements for the 6 month period ended June 30, 2008, which financial statements are also being reconciled to Canadian standards. As at December 31 2007, 3G had total assets of USD$1,514,175 and total liabilities of USD$202,330. For the year ended December 31, 2007, 3G had a net loss of USD$967,255 of which USD$741,079 represented R&D expenditures incurred during the period. As at June 30, 2008, 3G had total assets of USD$1,293,891 and total liabilities of USD$262,390. For the 6 month period ended June 30, 2008, 3G had a net loss of USD$655,726 of which USD$289,435 represented R&D expenditures incurred during the period.
Terms of the Transaction
Vesta is proposing to issue 25,000,00 common shares to holders of 3G shares pro rata (based on the number of 3G shares held) at a deemed price of $0.40 per share, in exchange for 100% of the issued shares of 3G. Upon completion of the Transaction, Vesta will own 100% of 3G. 3G's current business (as heretofore described) will become the business of the resulting issuer.
The Transaction is subject to a number of conditions including but not limited to: (i) both 3G and Vesta completing their mutual due diligence of one another, which due diligence is to be completed within 30 days of the date of the LOI, (ii) negotiation of acceptable definitive share exchange agreement(s) (or other suitable arrangements) between Vesta and each holder of 3G shares, (iii) receipt of all required regulatory approvals (including TSXV approval as noted below), and (iv) Vesta raising sufficient additional funds which, which combined with Vesta's existing funds, will allow it to meet the TSXV's minimum listing requirements upon completion of the Transaction.
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