- 15 - in financing before April 30, 1997. To effectuate the transaction, MMI organized MTLM Merger, Inc. (MTLM), as a wholly owned subsidiary and capitalized the subsidiary with MMI common stock. MTLM was then to be merged into HouTex, with HouTex’s being the surviving corporation. On or about January 7, 1997,20 the acquisition closed, and MMI paid the following consideration in cash, promissory notes, and unregistered MMI common stock and warrants in exchange for all the outstanding shares in HouTex: MMI MMI Promissory Shareholder Cash stock warrants notes Moshe Melnik $435,000 1$168,381 2$93,960 $960,055 Zalman Melnik 315,000 3121,930 468,040 695,213 Clend -0- 51,058,690 6108,000 5,000,000 Total 750,000 1,349,001 270,000 6,655,268 159,289 shares of MMI at $2.84 per share 287,000 MMI warrants at $1.08 per warrant 342,933 shares of MMI at $2.84 per share 463,000 MMI warrants at $1.08 per warrant 5372,778 shares of MMI at $2.84 per share 6100,000 MMI warrants at $1.08 per warrant The total consideration that the HouTex shareholders received in exchange for their shares was $9,024,269.21 Individually, Clend, 20The parties stipulated that the acquisition closed on Jan. 7, 1997. However, various documents associated with the closing are dated Jan. 3, 1997. 21The values of the MMI shares and warrants that were used to report the transactions for Federal income tax reporting purposes were based on an appraisal by Howard Frazier Barker Elliott, Inc., as of Jan. 7, 1997.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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