Item 1.01 Entry into a Material Definitive Agreement.
On November 2, 2017, Freestone Resources, Inc., a Nevada corporation (the Company, we, us, our and words of similar import) entered into an Agreement and Plan of Merger (the Plan) with Freestone Dynamis Acquisition, LLC, an Idaho limited liability company and wholly owned subsidiary of the Company (Merger Sub), and Dynamis Energy, LLC, an Idaho limited liability company (Dynamis). Pursuant to the terms of the Plan, at the Effective Time (as defined in the Plan) thereof: (i) Merger Sub will be merged with and into Dynamis, with the separate existence of Merger Sub to cease and with Dynamis to continue as the surviving entity and as a wholly owned subsidiary of the Company; and (ii) all Units of Dynamis will be exchanged for shares of the Companys common stock to be paid in accordance with Article II of the Plan (the
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Merger). At the closing of the Merger, it is expected that the members and warrant holders of Dynamis will collectively own or have the right to purchase (through exercising a warrant to purchase Dynamis Units, which the Company will have the right to exchange shares of its common stock in exchange for such Dynamis Units) shares of the Companys common stock, representing approximately seventy five percent (75%) of the Companys issued and outstanding shares. The Merger contemplated by the Plan, together with the Rights Offering (as defined below), is intended to qualify as a nontaxable exchange pursuant to Section 351 of the Internal Revenue Code of 1986, as amended.
The closing of the Merger is subject to numerous conditions including, but not limited to, the following:
·
at or one week prior to the Effective Time, the Company shall have commenced a rights offering to its stockholders on the terms set forth in the Plan (the Rights Offering), which Rights Offering shall remain open for a period of 90 days;
·
the approval by the Companys stockholders and the filing with the Nevada Secretary of State of an amendment to the Companys Articles of Incorporation to increase the number of the Companys authorized shares of common stock in an amount sufficient to consummate the Merger, the Rights Offering, the Companys new equity incentive plan and the other transactions contemplated by the Plan;
·
the effectiveness of the Companys to-be-filed: (i) Registration Statement on Form S-3 relating to the registration under the Securities Act, of the shares of Company common stock to be issued in its Rights Offering; and (ii) Registration Statement on Form S-4 relating to the authorization and the registration under the Securities Act of the shares of Company common stock to be issued in the Merger;
·
Dynamis members, together with Company stockholders participating in the Rights Offering, shall collectively hold at least 80 percent of the total issued and outstanding shares of the Companys stock (other than stock subject to vesting restrictions); and
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the Companys stockholders shall have approved the Companys new equity incentive plan that is contemplated by the Plan.
In addition, either party may terminate the Plan at any time prior to closing on certain terms and conditions as set forth in Article VIII thereof.
The foregoing description of the Plan is only a summary and
does not purport to be complete, and is qualified in its entirety by reference to the full text of the Plan, a copy of which
is attached hereto as Exhibit 2.1 and incorporated by reference.
The Company is an oil and gas technology development company that is actively developing and marketing technologies and solvents designed to benefit various sectors in the oil and gas industry. The Company has re-launched its Petrozene
solvent after developing a new and improved formula. Petrozene
is primarily used to dissolve paraffin buildup and is primarily used for pipelines, oil storage tanks, oil sludge buildup, de-emulsification, well treatment, as a corrosion inhibitor and as a catalyst in opening up formations, thereby aiding in oil production.
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Dynamis is an Eagle, Idaho based technology development company focused on waste management and energy production from solid wastes to provide sustainable economic and environmental benefits, while turning such waste into usable products. As such, Dynamis provides technology to recycle municipal and other solid wastes to produce sustainable economic and environmental benefits, in the form of fixed and mobile waste-to-energy plants.
Dynamis has a network of agents worldwide to support the sale of its technology and products. Currently Dynamis has projects in various stages of development in Europe, Asia, South America, the Caribbean, and the US.