Graniz Mondal Inc. ("Graniz" or the "Corporation") (NEX: GRA.H)
today announced amended terms for the private placement financing
to be completed in connection with its previously announced
proposed reverse takeover reactivation transaction involving the
purchase of all of the issued and outstanding securities of Offset
Energy Corporation ("Offset"). Offset is a private company that was
formed to participate in oil and gas exploration and development
offshore in the Gulf of Mexico.
Terms of the Transaction
As previously announced on July 18, 2008, Graniz entered into a
letter agreement with Offset and the shareholders of Offset dated
July 4, 2008, which has been amended by an amending letter
agreement dated September 17, 2008 (collectively, the "Letter
Agreement"). Pursuant to the Letter Agreement, Graniz has agreed to
acquire, by way of acquisition or amalgamation, all of the issued
and outstanding securities of Offset in exchange for the issuance
of 16,320,000 common shares in the capital of Graniz (the "Graniz
Common Shares"), which will have a reduced deemed value of $0.20
per share, and 3,680,000 founders warrants of Graniz (the
"Replacement Founders Warrants"), each entitling the holder to
purchase one Graniz Common Share at a price of $0.05 per share for
a period of two years (the "Acquisition"). The Acquisition, when
completed, will constitute the Reactivation Transaction of the
Corporation pursuant to Policy 2.6 of TSX Venture Exchange Inc.
(the "TSX Venture") Corporate Finance Manual. The Acquisition will
also be a "reverse takeover" pursuant to Policy 5.2 of TSX
Venture.
Revised Terms of the Offset Private Placement
The Acquisition is to be completed after Offset has completed a
private placement to raise gross proceeds of up to $6,000,000 (the
"Offset Private Placement"). Due to the state of the international
financial markets, Offset has agreed to amend the terms of the
Offset Private Placement with its agent, Becher McMahon Capital
Markets Inc. (the "Agents"). The Offset Private Placement will now
consist of the private placement of up to 30,000,000 units of
Offset (the "Units") at a price of $0.20 per Unit. Each Unit will
consist of one Offset Common Share, one-half of one series A share
purchase warrant of Offset (the "Offset Series A Warrants") and
one-half of one series B share purchase warrant of Offset (the
"Offset Series B Warrants"). Each whole Offset Series A Warrant
will entitle the holder to acquire one Offset Common Share at a
price of $0.40 per share for a period of 18 months. Each whole
Offset Series B Warrant will entitle the holder to acquire one
Offset Common Share at a price of $0.60 per share for a period of
18 months. The agent's options (the "Offset Agent's Options") to be
granted to the Agent will be to purchase 10% of the number of Units
sold under the Offset Private Placement, with each Offset Agent's
Option entitling the holder to purchase one Unit at a price of
$0.20 per Unit for a period of 18 months from the closing of the
Offset Private Placement.
The closing of the Offset Private Placement is subject to the
receipt of minimum gross proceeds of $2,500,000.
The net proceeds of the Offset Private Placement will be used by
Offset to pay for oil and gas exploration, including the work
program on its assets as described below, as well as for general
working capital purposes.
Proposed Work Program on the Offset Properties
Over the next 12 months Offset intends to utilize the gross
proceeds from the maximum Private Placement together with the cash
assets of Graniz of approximately $350,000, as follows:
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Nature Expense Budget Net to Offset(i)
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Drill Well at WC 629 $14,000,000 $2,100,000
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Drill well at SMI 138 $6,000,000 $2,400,000
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Drill well at VK 79 $2,500,000 $1,000,000
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Commission and Costs of
Offset Private Placement N/A $500,000
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Cost of Completion of
the Acquisition N/A $130,000
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Unallocated Working Capital N/A $220,000
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Total $6,350,000
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Note: (i) Offset intends to spend its available funds as set forth above,
as well as for general working capital purposes. However, there
may be circumstances where, for sound business reasons, a
reallocation of its available funds may be necessary. The actual
amount that Offset spends in connection with each of the matters
described above may vary significantly from the amounts specified
above, and will depend on a number of factors.
In the event only the minimum Offset Private Placement is
completed, Offset will utilize the proceeds of the Offset Private
Placement and the existing cash assets of Graniz to pay the
commission and costs of the Offset Private Placement, the costs of
the Acquisition and the cost to drill the exploration well at WC
629.
Conditions to Completion of the Acquisition
The completion of the Acquisition is subject to the approval of
TSX Venture and all other necessary regulatory approval. The
completion of the Acquisition is also subject to additional
conditions precedent, including shareholder approval of the
Corporation, satisfactory completion by due diligence reviews by
the parties, board of directors approval of the Corporation and
Offset, the entering into of a formal agreement, the entering into
of employment agreements and non-competition agreements with
certain senior officers of Offset, completion of the change of name
of Graniz, as well as certain other usual conditions.
Other Matters
Graniz announces it has reserved a price of $0.20 per share for
the grant of stock options to acquire up to 10% of the number of
issued and outstanding Graniz Common Shares (the "Stock Options")
in the event the Acquisition and the Offset Private Placement are
completed. The grant of the Stock Options is subject to regulatory
approval. The Stock Options will be granted to directors, officers,
employees and consultants of Graniz on the closing of the
Acquisition, as determined by the Board of Directors of Graniz.
As indicated above, completion of the Acquisition is subject to
a number of conditions, including but not limited to, TSX Venture
acceptance and shareholder approval. The Acquisition cannot close
until the required shareholder approval is obtained. There can be
no assurance that the Acquisition will be completed as proposed or
at all.
Investors are cautioned that, except as disclosed in the
Information Circular of the Corporation to be prepared in
connection with the Acquisition, any information released or
received with respect to the Acquisition may not be accurate or
complete and should not be relied upon. Trading in the securities
of the Corporation should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the Acquisition and has neither approved nor disapproved
the contents of this press release.
Except for historical information contained herein, this news
release contains forward-looking statements that involve risks and
uncertainties. Actual results may differ materially. Neither Offset
nor Graniz will update these forward-looking statements to reflect
events or circumstances after the date hereof. More detailed
information about potential factors that could affect financial
results is included in the documents filed from time to time with
the Canadian securities regulatory authorities by Graniz and
Offset.
Contacts: Graniz Mondal Inc. Richard-Marc Lacasse President
418-564-8834 Offset Energy Corporation Peter G. Wilson President
604-649-0945