Garmatex Technologies, Inc. entered into a letter of intent to acquire Oaxaca Resources Corp. in a reverse merger transaction.
The Board of Directors of surviving entity upon completion of the transaction is expected to consist of five Directors, four of whom shall be designated by Garmatex and the remaining one Director shall be designated by Oaxaca. The letter of intent, unless extended by mutual agreement, shall terminate on the earlier of April 15, 2016 if the arrangement agreement has not been executed by the parties by such date. The arrangement will be subject to completion of all legal, business and technical due diligence, obtaining of all necessary consents and regulatory approvals including, but not limited to, the relevant Securities Commissions and the Supreme Court of British Columbia, Board approval, shareholder and security holder approval (if necessary) of the arrangement to be obtained by each party, execution and delivery of the arrangement agreement, completion of the Garmatex debenture conversion, Garmatex debt settlement and Garmatex share consolidation, completion of the Oaxaca founder cancellation, concurrent Oaxaca financing, Oaxaca forward stock split, name change of Oaxaca, obtaining audited financial statements from Garmatex Technologies and the completion of any and all loans by Oaxaca to Garmatex.
As of August 10, 2016, Oaxaca Resources agreed to advance a loan of sum equal to the net proceeds derived from private placement of 12.5 million shares received prior to the completion of the arrangement to Garmatex. At the completion of the arrangement, it is expected that such loans will be treated as inter-company debt. As of August 15, 2016, Oaxaca Resources Corp changed its name to Garmatex Holdings Ltd. and effected forward-split. Garmatex Holdings Ltd will operate under the new symbol OXCRD. As of March 16, 2017, both the companies entered into a Master Sublicense Agreement under which Garmatex Holdings was granted various Intellectual Property Rights related to design, development and manufacturing of certain technologies. Additionally, a previous loan settlement of CAD 0.95 million was done. Closing of the transaction is anticipated to occur prior to July 31, 2016. As of March 8, 2017, the termination date has been extended to May 31, 2017. As of June 5, 2017, the parties have allowed the agreement to expire on the accounts of not fulfilling the conditions. Thomas Deutsch of McMillan LLP acted as legal advisor to Garmatex Technologies, Inc.