RDS Acquisition Corp. has announced that the TSX Venture Exchange Inc. has conditionally accepted the acquisition of all of the issued and outstanding shares of Rapid Refill International Ink Corp. as the Corporation’s “qualifying transaction” within the meaning of that term in Policy 2.4 of the Exchange (the “Qualifying Transaction”).
The acquisition, which was previously announced on April 19, 2007, will be accomplished through the merger of Rapid Refill and MergeCo, Inc. (the “Merger”), a wholly-owned subsidiary of the Corporation, pursuant to a merger and reorganization agreement (the “Merger Agreement”) dated as of May 17, 2007 among RDS, Rapid Refill, MergeCo, Inc., Rapid Refill Corp., Michael Batt and Roger Block.
Michael Batt of Ft. Lauderdale, Florida, and Roger Block of Eden Prairie, Minnesota, are the principal shareholders of Rapid Refill and held 3,090,000 and 1,620,000, respectively, of the 7,015,000 outstanding common shares of Rapid Refill (the “Rapid Refill Common Shares”) as at May 16, 2007. Final approval of the Exchange is subject to the Corporation fulfilling all of the requirements of the Exchange on or before July 17, 2007. The Corporation expects to close the Qualifying Transaction on May 31, 2007.
On May 18, 2007, the Corporation filed on SEDAR a filing statement dated May 17, 2007 in connection with the Qualifying Transaction (the “Filing Statement”). The Filing Statement contains disclosure regarding the Qualifying Transaction and the business of Rapid Refill.
Rapid Refill is a Minnesota corporation that operates within the printer cartridge industry and sells franchises to operate (i) full service stores that can process and refill ink or toner cartridges for inkjet and laser printers, copy and fax machines and all-in-one machines, in addition to selling refilled, new compatible and original equipment manufacturer (“OEM”) inkjet and laser toner cartridges, and (ii) retail-only stores that do not maintain full inkjet and laser toner cartridge refilling equipment and supplies, but sell refilled, new compatible and OEM inkjet and laser toner cartridges.
Rapid Refill sells franchises in the growing market of refilled inkjet and laser toner cartridges to business owners. The stores (both full-service and retail-only) operated by franchisees are based upon a systematic and process-oriented franchise system that focuses on business principles, product quality, and franchisee success. Rapid Refill’s business is supported by a management team and board of directors with over 60 years of collective franchise management experience and a mandatory comprehensive training program for new franchisees. As of February 28, 2007, Rapid Refill was authorized to sell franchises in each state of the United States. Franchisees can choose to operate a full-service store or a retail-only store or any combination.
Full-service stores and retail-only stores share the same appearance and offer the same product line of refurbished and refilled inkjet and toner cartridges, new compatible cartridges, and OEM cartridges. Full-service stores, however, also maintain refilling equipment and additional space to accommodate on site cartridge refilling. Each franchised store operates under the mark “Rapid Refill Ink” and other trademarks, service marks, logos, and commercial symbols that are designated by Rapid Refill.
Under the terms of the Qualifying Transaction, RDS has agreed to acquire all of the issued and outstanding Rapid Refill Common Shares, including those to be issued upon a private placement by Rapid Refill to be completed before the Merger becomes effective (the