Each one in plain English, with the numbers worked through for a shareholder.
15 Aug 2006capital raising announcement● Neutral
The US$2,000,000 placement of 4,000,000 shares at US$0.50, due to complete on August 15, 2006, has had its settlement pushed back to August 31, 2006. The company also says drilling has started on its Northern Territory diamond tenements (Calvert Hills: Foelsche and Selby; Cox: Broadmere), the first drilling reported on the assets bought from Astro.
What it means for a shareholder
4.0m new shares at US$0.500 to raise about US$2.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
24 July 2006asset acquisition disposition● NeutralMajor
The company completed the purchase of the Astro diamond tenements (Calvert Hills and Cox) on July 21, 2006, finishing the March 2006 agreement. It also issued 31,880,035 restricted shares to Renika on a cashless exercise of 34,778,220 options, and announced a placement of 4,000,000 shares at US$0.50 (US$2,000,000) to fund diamond exploration and working capital, due to complete August 15, 2006. The share issues add to shares outstanding (inference: dilution of non-Renika holders).
The company agreed to buy diamond mining tenements in the Northern Territory (Calvert Hills and Cox projects) from Astro Diamond Mines N.L. for A$1.5 million, payable 90 days after Astro shareholders approve, with a meeting expected in April 2006. Gutnick is chairman and managing director of Astro, and director Dr D. S. Tyrwhitt is also an Astro director, so this is a deal with related parties; the price follows a valuation prepared for Astro. This is the first mining asset in the company's history.
The company issued 7,593,750 shares of common stock to Renika Pty Ltd, the Gutnick-linked controlling holder, on a cashless exercise of 9,000,000 options. No cash proceeds are reported, and the extra shares add to the number outstanding, which was 10,474,000 in late 2004 (inference: this raises Renika's stake and dilutes other holders).
Child, Sullivan & Company ended its role as auditor (letter dated February 18, 2005) without having certified any financial statements, and the company engaged PKF, Certified Public Accountants, for the audit of fiscal 2004. The filing reports no disagreements or reportable events; this is the company's fourth auditor change since early 2004.
An amended version of the change-of-control information statement adds that Renika paid $450,000 for the roughly 88% stake, from its working capital. It also says the option on 578,240 shares runs six months at $0.2594 per share, and that Gutnick, as an affiliate of the new controller, is not independent, so there is no separate nominating committee.
Control of the company changed: on November 17, 2004 Renika Pty Ltd, a trustee of a Gutnick family trust, bought 9,217,120 shares (about 88%) from founder Michael Tay and William Tay under an October 25, 2004 agreement, plus an option on 578,240 more. The Tays resigned and Joseph Gutnick, an Australian mining-company director, became president, treasurer and sole director; Renika's holding including the option is 93.5%, with 10,474,000 shares outstanding. This replaces the Tay-controlled era in the earlier history.
This amendment repeats the June 7 auditor-change report (Clyde Bailey out, Child, Sullivan & Company in) and adds Clyde Bailey's response letter dated June 9, 2004, as an exhibit. No new facts beyond the exhibit are given.
Clyde Bailey, appointed only in February 2004, ended its auditing relationship (letter dated May 17, 2004), and the company appointed Child, Sullivan & Company of Kaysville, UT. The change was not recommended or approved by the board, and Clyde Bailey's report on 2003 was modified for going-concern doubt; no disagreements are reported.
The company dismissed its auditor Stan J.H. Lee, C.P.A., after he said he had not registered with the PCAOB and was discontinuing his SEC practice, and appointed Clyde Bailey P.C. of San Antonio. The filing reports no disagreements, and notes the auditor's reports for the prior two years carried a going-concern doubt.
The company began a $1,000,000 private placement of 8% senior subordinated convertible debentures due March 31, 2004, convertible at $0.10 per share; so far only $100,000 has been raised, from the president and a family member. It also said a market maker intends to file to get its shares quoted on the OTC Bulletin Board, expected in the third quarter, with no assurance of approval.
