TULSA, Okla./DALLAS/CALGARY, Feb. 9, 2004 (PRIMEZONE) -- Icoworks Inc. ("Icoworks") is pleased to announce that the boards of directors of Icoworks and Icoworks Holdings Inc. ("Icoworks Holdings") have given their approval to proceed with the steps required to complete a merger between Icoworks and Icoworks Holdings (the "Merger"). Icoworks currently owns approximately 53% of the outstanding shares of Icoworks Holdings.
A formal merger Agreement is anticipated to be entered into after a number of pre-conditions affecting Icoworks have been met and a definitive merger agreement has been negotiated between Icoworks and Icoworks Holdings. The pre-conditions relate to business relations Icoworks has with third parties, including affiliates of Icoworks, which must be completed prior to merger of the two companies.
The Merger is anticipated to be completed by the issuance shares of Icoworks' common stock for shares of Icoworks Holdings' common stock, subject to a consolidation of Icoworks' common stock to be completed in connection of the Merger. The number of shares of Icoworks to be issued will also be contingent upon the number of shares issued in connection with the completion of the pre-conditions to the Merger, as described below, as well as other steps that may be undertaken by Icoworks as part of its restructuring activities. In addition, additional shares of Icoworks Holdings will be issued prior to completion of the Merger. Additional stock issuances by each of Icoworks and Icoworks Holdings will significantly dilute the interest that the current shareholders of Icoworks will have in Icoworks upon completion of the Merger. The Merger remains subject to approval by the shareholders of Icoworks and Icoworks Holdings. The shareholder meetings will be held once requisite regulatory documents have been prepared and filed.
The preconditions to Merger include completion of the following transactions:
a) Settlement of Liabilities
Icoworks will attempt to enter into agreements with certain of its creditors in order to settle liabilities amounting to approximately $1,300,000. The indebtedness would be satisfied by the issuance of shares of Icoworks' common stock on the basis of one share for each $0.35 of indebtedness. If all creditors accept Icoworks' proposal, Icoworks will issue an aggregate of 3,750,000 shares. Icoworks anticipates knowing which creditors will accept the settlement proposal, the aggregate amount of indebtedness to be settled and the aggregate number of shares to be issued by February 10, 2004.
b) Acquisition of minority interest
Icoworks has agreed to acquire a 25% interest in Icoworks Eastern from Mel Blackburn in consideration for the issue of 610,000 shares of Icoworks' common stock to Mr. Blackburn. In addition, Mr. Blackburn will enter into an employment agreement with Icoworks Holdings as a condition of the transaction. Icoworks Holdings is presently the owner of the remaining 75% interest in Icoworks Eastern.
c) Exchange of Icoworks Eastern with Icoworks Holdings
Upon completion of the acquisition of the 25% interest in Icoworks Eastern, Icoworks will transfer this 25% interest to Icoworks Holdings in consideration of the issue of 310,000 shares of Icoworks Holdings' common stock to Icoworks. Upon completion of this exchange, Icoworks Holdings will own 100% of Icoworks Eastern.
d) Conversion of Note
Icoworks Holdings has entered into an agreement with the holder (the "Holder") of the $500,000 note payable by Icoworks Holdings. This note is presently convertible into shares of Icoworks Holdings' common stock that would represent a 40% interest in Icoworks Holdings upon completion of the conversion. This note is payable on demand and bears no interest. The Holder has agreed that it will not make a demand during the pre-merger period and further that the holder will convert the note into shares of Icoworks Holdings' common stock immediately prior to the merger of Icoworks and Icoworks Holdings. This conversion will result in the Holder owning approximately 34% of Icoworks upon completion of the Merger.
If the pre-conditions to the Merger are satisfied and the Merger is completed on the basis approved by the boards of directors of Icoworks and Icoworks Holdings, the current shareholders of Icoworks will own approximately 40% of Icoworks upon completion of the Merger, provided that this ownership interest will vary depending on the number of shares of Icoworks and Icoworks Holdings issued prior to completion of the Merger.
The indebtedness in the amount of $2,000,000 that was incurred by Icoworks Holdings in order to complete the acquisition of the Premier business remains outstanding; payments are current to January 31, 2004. Additional financing, the note referred to in d) above, has been arranged which will ensure that payments of interest of $30,000 per month and profit sharing amounting to $30,000 per month will remain current through the pre merger period until June 30, 2004.
Icoworks Inc., named after the Latin word "ico" (meaning to strike a bargain), is an integrated commercial/industrial auction company focused on consolidating the industry. Through its subsidiaries, Icoworks offers a complete array of industrial, oilfield, commercial appraisal, liquidation and auction services. As a consolidator of the traditional industrial auction industry, Icoworks enhances bricks and mortar businesses by employing electronic information technologies to provide a trading environment that allows buyers and sellers of both mobile and stationary equipment to conduct transactions in a secure, convenient, geographically independent marketplace.
For Further Information Contact: Icoworks Investor Relations at 918 499 8900 Paul McAteer , Advisor to the Board of Directors 403 399 0067 Mike Dienning COO 403 291 0900
This Press Release may contain, in addition, to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management's expectations and beliefs, and involve risks and uncertainties. These statements may involve known and unknown risks and uncertainties and other factors that may cause the actual results to be materially different from the results implied herein. Key factors that could cause actual results to differ materially from those described in forward-looking statements are:
(i) the inability of Icoworks to complete the merger with Icoworks Holdings, of which there is no assurance; and
(ii) the inability of Icoworks to achieve the financing required to pursue its plan of operations, of which there is no assurance.
(iii) the inability of Icoworks to complete the conditions precedent to the Merger, of which there is no assurance; and
(iv) the inability to complete the refinancing of the $2,000,000 debt of Icoworks Holdings, of which there is no assurance.