-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VMNUhUw43IERWOw/LSAc3kAz9whbbfdZl/LcfHV8GKuNb7lobjNC8nqXdhRKfuwO PyKwNG6JBZqvaZHqEeKXmQ== 0001012410-01-000033.txt : 20010416 0001012410-01-000033.hdr.sgml : 20010416 ACCESSION NUMBER: 0001012410-01-000033 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20010328 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICHOR CORP CENTRAL INDEX KEY: 0000927761 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 251741849 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25132 FILM NUMBER: 1601478 BUSINESS ADDRESS: STREET 1: 400 BURRARD STREET SUITE 1250 CITY: VANCOUVER BRITISH CO STATE: A1 ZIP: 15146 BUSINESS PHONE: 6046835767 MAIL ADDRESS: STREET 1: 300 OXFORD DR CITY: 400 BURRARD STREET S STATE: A1 ZIP: 15146 FORMER COMPANY: FORMER CONFORMED NAME: PDG REMEDIATION INC DATE OF NAME CHANGE: 19940801 8-K 1 0001.txt FORM 8-K ICHOR CORPORATION 1 ========================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 28, 2001 ICHOR CORPORATION (Exact name of Registrant as specified in its charter) Delaware (State of Incorporation) 000-25132 25-1741849 (Commission File Number) (I.R.S. Employer Identification No.) P.O.Box 10343, 1010 - 609 Granville Street Vancouver, British Columbia, Canada V7Y 1G5 (Address of principal executive offices, including postal code) (604) 646-2030 (Registrant's telephone number, including area code) 17 Dame Street, Dublin 2, Ireland (Former address, if changed since last report) ========================================================================== 2 -2- ITEMS 1 AND 2. CHANGES IN CONTROL OF REGISTRANT; ACQUISITION OF ASSETS. Effective March 28, 2001, ICHOR Corporation ("ICHOR") completed a share exchange (the "Transaction") with approximately 99.9% of the shareholders (the "Hippocampe Shareholders") of Hippocampe S.A. ("Hippocampe"), a societe anonyme organized under the laws of France, pursuant to two share exchange agreements dated for reference December 13, 2001. As a result, the Hippocampe Shareholders beneficially acquired, directly and indirectly, in aggregate approximately 66.3% of the shares of common stock of ICHOR on a diluted basis, after giving effect to the filing of an amendment to ICHOR's Certificate of Incorporation to increase its authorized number of shares of common stock. Pursuant to the Transaction, ICHOR issued to the Hippocampe Shareholders in aggregate approximately 33,311,398 of its shares of common stock and preferred shares (the "LuxCo Exchangeable Preferred Shares") of 6543 Luxembourg S.A., a new wholly-owned subsidiary of ICHOR established under the laws of Luxembourg, which will become exchangeable into shares of common stock of ICHOR upon the filing of an amendment to ICHOR's Certificate of Incorporation to increase its authorized number of shares of common stock from 30,000,000 to 80,000,000. The amendment will be filed with the Secretary of State of the State of Delaware on or about 20 days after the distribution of an Information Statement to ICHOR's stockholders. The Information Statement is currently being reviewed by the Securities and Exchange Commission and will be distributed upon completion of its review. In connection with the Transaction, ICHOR filed a Certificate of Designations with the Secretary of State of the State of Delaware to create a series of Special Voting Preferred Stock. The share of Special Voting Preferred Stock to be issued by ICHOR will enable the shareholders of Hippocampe that received LuxCo Exchangeable Preferred Shares to exercise voting rights in ICHOR. All of the shares of common stock and securities exchangeable into shares of common stock of ICHOR acquired by the Hippocampe Shareholders pursuant to the Transaction are subject to resale restrictions in accordance with United States federal and state securities laws. MFC Merchant Bank S.A. ("MFC Bank") had previously entered into an underwriting agreement (the "Underwriting Agreement") dated for reference July 24, 2000 with Hippocampe and was assisting Hippocampe in effecting a merger with a public U.S. registrant. MFC Bank identified ICHOR as a business combination partner and approached it in the fall of 2000. At the time, ICHOR did not have an operating business and was focusing on the identification of a particular business or industry within which it would seek an acquisition or merger. ICHOR, through MFC Bank, negotiated terms for ICHOR to acquire Hippocampe with existing shareholders of ICHOR retaining approximately 20% of the outstanding shares of common stock of ICHOR, without giving effect to any securities of ICHOR to be issued to MFC Bank in accordance with Underwriting Agreement. Hippocampe would become the surviving business with its shareholders acquiring approximately 80% of the outstanding shares of common stock of ICHOR. 3 -3- Pursuant to the Underwriting Agreement, MFC Bank acted as an advisor in the Transaction and received certain compensation in respect thereof, including 2,017,854 shares of common stock of ICHOR issued or issuable in connection with the Transaction. MFC Bank also previously provided a credit facility to Hippocampe in connection with which MFC Bank has received certain fees as well as share purchase warrants which entitle MFC Bank to purchase up to approximately 6,730,599 shares of common stock of ICHOR, subject to final adjustment, at an exercise price of approximately E0.2319 and for a period expiring on July 31, 2003. The following table sets forth certain information as at March 29, 2001 regarding the beneficial ownership of ICHOR's shares of common stock following the closing of the Transaction by: * each person known by ICHOR to be a beneficial owner of more than five percent of the outstanding shares of common stock of ICHOR; * each of the executive officers and directors of ICHOR; and * all executive officers and directors of ICHOR as a group. The following is based solely on statements filed with the SEC or other information ICHOR believes to be reliable.
Name and Address Amount and Nature of Beneficial of Beneficial Percent of Owner Ownership(1) Class(1) - ---------------- ----------------- ---------- Martine Reindle(2) CP 18 CH-1295 Mies, Switzerland 13,415,847(3) 30.8% Aralis Participations S.A.(2)(4) Les Avouillons 4 CH-1196 Gland VD, Switzerland 9,124,482 21.0% MFC Bancorp Ltd. 17 Dame Street Dublin 2, Ireland 12,315,833(5) 24.5% MFC Merchant Bank S.A. 6, Cours de Rive, 1211 Geneva 3, Switzerland 9,718,773(6) 19.4% Sutton Park International Ltd. P.O. Box 146, Road Town, Tortola, British Virgin Islands 2,597,060 6.0% Pierre-Francois Serres(2) Chief Executive Officer, President and Director 11,129,393(7) 25.6%
4 -4-
Name and Address Amount and Nature of Beneficial of Beneficial Percent of Owner Ownership(1) Class(1) - ---------------- ----------------- ---------- Eric Turcotte Chief Financial Officer, Secretary and Director - - Patrice Pactol(2) Director 2,137,151 4.9% All executive officers and directors of ICHOR as a group (3 persons) 13,266,544(7) 30.5%
- ------------ (1) Amounts and percentages give effect to securities issued or issuable in connection with the Transaction, including securities exchangeable into shares of common stock of ICHOR (i.e., LuxCo Exchangeable Preferred Shares) issued to certain shareholders of Hippocampe. (2) Former shareholders of Hippocampe. (3) Includes 9,124,482 shares of common stock of ICHOR owned by Aralis Participations S.A. Martine Reindle is the Chairperson and a member of the Board of Directors, and owns approximately 45% of the outstanding voting shares, of Aralis Participations S.A. (4) The outstanding shares of Aralis Participations S.A. are beneficially owned as follows: Martine Reindle 44.9%; Ernest Lubke - 32.3%; Karen Van Ness - 8.9%; Christian Rochet - 4.9%; Dr. Takashi Onouchi - 3.7%; Jean-Paul Royet - 3.0%; Jean-Daniel Noir - 1.3%; M. Masayoshi Watanabe - 0.9%; and Malin Noren - 0.1%. (5) Includes 2,597,060 shares of common stock of ICHOR indirectly owned through Sutton Park International Ltd. and 2,988,174 shares of common stock of ICHOR and 6,730,599 share purchase warrants indirectly owned through MFC Bank. Sutton Park International Ltd. and MFC Bank are wholly-owned subsidiaries of MFC Bancorp Ltd. (6) Includes 2,988,174 shares of common stock of ICHOR and 6,730,599 share purchase warrants, each of which entitles the holder to purchase one share of common stock of ICHOR. (7) Pierre-Francois Serres also has voting rights in 2,039,038 shares of common stock of ICHOR beneficially owned by Martine Reindle but held in usufrucht by Dr. Serres. Effective March 28, 2001, Patrice Pactol replaced Jin-Soo Choi as a Class I director of ICHOR for a term expiring in 2001, Eric Turcotte replaced Charles C.S. Pang as a Class II director of ICHOR for a term expiring in 2002 and Pierre-Francois Serres replaced Jae-Sun Lee as a Class III director of ICHOR for a term expiring in 2003. Dr. Serres has been appointed the Chief Executive Officer and President and Mr. Turcotte has been appointed the Chief Financial Officer and Secretary of ICHOR. Dr. Serres and Mr. Pactol are former shareholders of Hippocampe. Hippocampe is a biotechnology research and development company organized in 1990 under the laws of France, with research activities coordinated in Lyon, France. Hippocampe's focus is fundamental and applied research in human and veterinary biology and medicine, with a particular emphasis on humanitarian aspects of such research (i.e., retroviral pathogenesis, such as AIDS, oncogenesis and organ transplantation). Hippocampe's current objective is to develop vaccine and therapeutic compounds and specific therapies for certain retroviral diseases or diseases with a viral autoimmune content. The first products and applications target human and animal AIDS. 5 -5- The basic operational strategy of Hippocampe has been to divide its main areas of research into discrete modules, each with its own scientific interest. The research on these modules is outsourced under Hippocampe's supervision to specialized and complementary, public and private research teams. Hippocampe organizes the schedule and progress of the individual research teams to facilitate the overall development of its research goals. The research teams are authorized to co-publish their results at the appropriate time and in agreement with Hippocampe. However, Hippocampe retains all intellectual property rights on the combined research results and applies for patent protection of the research results whenever such protection is justified. Hippocampe has a limited operating history and its products are in an early stage of development. However, Hippocampe believes it has made a major finding with a new and precise molecular mimicry between a conserved part of GP41 (an HIV transmembrane protein) in a trimeric form and interleukine-2, the immune system's conductor protein. This discovery may explain that an HIV infection can trigger an immune response that turns against the immune system itself. This research indicates potential for a major link that may have a significant impact in developing animal and human AIDS vaccines and therapeutic molecules in the field of HIV and FIV infection. The key principal of Hippocampe is Dr. Pierre-Francois Serres. Dr. Serres began his career as a professor and researcher at the medical faculty of the University of Lyon in France. From 1975 and prior to starting Hippocampe, he held various teaching and research positions at French medical universities and biomedical institutes, among them the Institut Pasteur in Lyon, France. Dr. Serres founded Hippocampe in 1990. The closing of the Transaction was announced by a press release dated March 29, 2001 issued by ICHOR. For further information with respect to the Transaction, ICHOR and Hippocampe, and certain risk factors relating thereto, see ICHOR's Current Report on Form 8-K dated December 27, 2000 and Current Report on Form 8- K/A dated January 30, 2001, both of which are incorporated by reference herein, and ICHOR's latest Preliminary Information Statement on Schedule 14C dated April 2, 2001. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial statements of businesses acquired. Attached hereto as Exhibit 99.2 are the financial statements of Hippocampe as of December 31, 2000 and 1999 and for the years ended December 31, 2000, 1999 and 1998. (b) Pro forma financial information. Attached hereto as Exhibit 99.3 is unaudited pro forma condensed combined financial information which has been prepared based upon the historical financial statements and related notes of ICHOR and Hippocampe, respectively, giving effect to the Transaction. 6 -6- Hippocampe reports its results in Euros (E). Since the Transaction is accounted for as a reverse purchase, with the continuing entity being Hippocampe, the unaudited pro forma condensed combined financial information is reported in Euros. The accounting treatment applied in a reverse purchase differs from the legal form of the transaction and the continuing entity is Hippocampe. The unaudited pro forma condensed combined financial information does not purport to present the financial condition and results of operations of ICHOR and Hippocampe had the Transaction actually been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information is not necessarily indicative of the future results of operations and should be read in connection with the historical financial statements and related notes of ICHOR and Hippocampe, respectively. (c) Exhibits. Exhibit No. Description ----------- ----------- 4.1 Certificate of Designations dated March 19, 2001 of ICHOR Corporation. 10.1 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. Incorporated by reference from the Current Report on Form 8-K of ICHOR Corporation dated December 27, 2000. 10.2 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. Incorporated by reference from the Current Report on Form 8-K of ICHOR Corporation dated December 27, 2000. 10.3 Underwriting Agreement dated for reference July 24, 2000 between Hippocampe S.A. and MFC Merchant Bank S.A. Incorporated by reference from the Preliminary Information Statement on Schedule 14C of ICHOR Corporation dated April 2, 2001. 10.4 Credit Facility Agreement dated for reference July 27, 2000 between Hipocampe S.A. and MFC Merchant Bank S.A. Incorporated by reference from the Preliminary Information Statement on Schedule 14C of ICHOR Corporation dated April 2, 2001. 99.1 Press release dated December 14, 2000 of ICHOR Corporation. 7 -7- 99.2 Financial statements of Hippocampe S.A. 99.3 Unaudited pro forma condensed combined financial information. 8 -8- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ICHOR CORPORATION /s/ Eric Turcotte --------------------------- Eric Turcotte Chief Financial Officer and Secretary Date: April 10, 2001 9 ICHOR CORPORATION FORM 8-K Exhibit Number Description -------------- ----------- 4.1 Certificate of Designations dated March 19, 2001 of ICHOR Corporation. 10.1 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. Incorporated by reference from the Current Report on Form 8-K of ICHOR Corporation dated December 27, 2000. 10.2 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. Incorporated by reference from the Current Report on Form 8-K of ICHOR Corporation dated December 27, 2000. 10.3 Underwriting Agreement dated for reference July 24, 2000 between Hippocampe S.A. and MFC Merchant Bank S.A. Incorporated by reference from the Preliminary Information Statement on Schedule 14C of ICHOR Corporation dated April 2, 2001. 10.4 Credit Facility Agreement dated for reference July 27, 2000 between Hipocampe S.A. and MFC Merchant Bank S.A. Incorporated by reference from the Preliminary Information Statement on Schedule 14C of ICHOR Corporation dated April 2, 2001. 99.1 Press release dated December 14, 2000 of ICHOR Corporation. 99.2 Financial statements of Hippocampe S.A. 99.3 Unaudited pro forma condensed combined financial information.
EX-4.1 2 0002.txt 1 CERTIFICATE OF DESIGNATIONS ICHOR CORPORATION ICHOR Corporation, a Delaware corporation (the "Corporation"), desires to designate the rights and preferences of a series of preferred stock (the "Special Voting Preferred Stock") in accordance with the Corporation's Certificate of Incorporation and Section 151 of the Delaware General Corporation Law. Jin-Soo Choi, the President and a Director of the Corporation, hereby certifies the following: 1. This Certificate is the act and deed of Jin-Soo Choi, the President and a Director of the Corporation. The facts stated in this Certificate are true. 2. The resolutions attached as Exhibit A were duly adopted by the Board of Directors of the Corporation effective March 19, 2001. 3. The number of shares of Special Voting Preferred Stock to which the resolutions at Exhibit A apply is one (1) share. DATED March 19, 2001. /s/ Jin-Soo Choi --------------------------- Jin-Soo Choi President and Director 2 EXHIBIT A DIRECTORS' RESOLUTIONS ---------------------- BE IT RESOLVED THAT: 1. A series of Preferred Stock be and is hereby designated as "Special Voting Preferred Stock" (the "Special Voting Preferred Stock"). 2. The number of Special Voting Preferred Stock in the capital of the Corporation be and is hereby fixed at one (1). 3. The Special Voting Preferred Stock shall have attached thereto the special rights and restrictions, as a series, in substantially the form set out in Schedule "A" hereto, with such changes, additions and alterations thereto as any one director or officer of the Corporation may deem necessary or desirable, and that the constating documents of the Corporation be amended as necessary to incorporate same. 4. Any one director or officer of the Corporation be and is hereby authorized to execute and deliver the Certificate of Designations relating to the Special Voting Preferred Stock for and on behalf of the Corporation. 3 SCHEDULE "A" A series of Preferred Stock, designated Special Voting Preferred Stock (the "Special Voting Preferred Share") shall have attached thereto, in addition to the rights, privileges, restrictions, conditions and limitations attaching to the Preferred Stock as a class, the following rights, privileges, restrictions and conditions: 1. Number of Shares. There shall be one Special Voting Preferred Share. ----------------- 2. Dividends or Distributions. Neither the holder nor, if different, --------------------------- the owner of the Special Voting Preferred Share shall be entitled to receive dividends or distributions in its capacity as holder or owner thereof. 3. Voting Rights. Except as provided in section 4 below, the holder of -------------- the Special Voting Preferred Share shall have the following voting rights: (a) The holder of the Special Voting Preferred Share shall be entitled to vote on each matter on which holders of the shares (the "Common Shares") of common stock of ICHOR Corporation (the "Corporation"), $0.01 par value per share or stockholders generally are entitled to vote, and the holder of the Special Voting Preferred Share shall be entitled to cast on each such matter a number of votes equal to the number of exchangeable preferential non voting shares of class B of 6543 Luxembourg S.A. (the "Exchangeable Preferred Shares") then outstanding: (i) that are not owned by the Corporation or its affiliates; and (ii) as to which the holder of the Special Voting Preferred Share has duly and timely received voting instructions from the holders of such Exchangeable Preferred Shares in accordance with the terms of such Exchangeable Preferred Shares or any agreement governing the provision of voting instructions to the holder of the Special Voting Preferred Share, multiplied by 1,066.44, subject to adjustment as determined by the board of directors of LuxCo as a result of: (iii) the subdivision, redivision or change of the then outstanding Common Shares into a greater number of Common Shares; (iv) the reduction, combination or change of the then outstanding Common Shares into a lesser number of Common Shares; or (v) the reclassification or other change of the Common Shares or the effectuation of an amalgamation, merger, reorganization or other transaction affecting the Common Shares; and 4 (b) Except as otherwise provided herein or by applicable law, the holder of the Special Voting Preferred Share and the holders of Common Shares shall vote together as one class for the election of directors of the Corporation and on all other matters submitted to a vote of stockholders of the Corporation. 4. Liquidation Rights. In the event of voluntary or involuntary ------------------- liquidation, dissolution or winding up of the Corporation, the holder of the Special Voting Preferred Share shall be entitled to receive out of the assets of the Corporation available for distribution to the stockholders, an amount equal to $1.00 before any distribution is made on the Common Shares or any other stock ranking junior to the Special Voting Preferred Share as to distribution of assets upon voluntary or involuntary liquidation. After payment of the full amount of the liquidation preference of the Special Voting Preferred Share, the holder of the Special Voting Preferred Share shall not be entitled to any further participation in any distribution of assets of the Corporation. For the purposes of this section 4, neither the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Corporation nor the consolidation or merger of the Corporation with or into one or more other entities shall be deemed to be a voluntary or involuntary liquidation. 5. No Redemption; No Sinking Fund. The Special Voting Preferred Share ------------------------------- shall not be subject to redemption by the Corporation or at the option of its holder, except that at such time as no Exchangeable Preferred Shares (other than Exchangeable Preferred Shares owned by the Corporation or its affiliates) shall be outstanding, the Special Voting Preferred Share shall automatically be redeemed and cancelled, with an amount of $1.00 due and payable upon such redemption. The Special Voting Preferred Share shall not be subject to or entitled to the operation of a retirement or sinking fund. 6. Ranking. The Special Voting Preferred Share shall rank senior to all -------- series of Common Shares of the Corporation and junior to all series of Preferred Stock of the Corporation. 7. Restrictions. During the term of the Voting Agreement, no term of ------------- the Special Voting Preferred Share shall be amended, except upon approval of the holder of the Special Voting Preferred Share. EX-99.1 3 0003.txt 1 Thursday March 29, 2001 Press Release Ichor Corporation Completes Share Exchange with Hippocampe S.A. New Strategy for Human and Animal AIDS to be Initial Focus LYON, France, March 29--Ichor Corporation (OTC BB: ICHR.OB) announced today that it has closed its share exchange transaction with Hippocampe S.A. of Lyon, France. By virtue of this transaction, Ichor has become a biotechnology company with research activities coordinated in Lyon, France. Ichor's objective is to develop vaccine and therapeutic compounds for certain retroviral or viral autoimmune diseases, with human and animal AIDS being the initial target. "This transaction provides the operational and financial support to more rapidly advance the applications of Hippocampe's innovative scientific research," commented Eric Turcotte, CFO of Ichor. "We are encouraged by the pace of development and multiple product opportunities available to Ichor in this new and promising field." Ichor believes it has made a major finding with a precise molecular mimicry between a conserved part of GP41 (the HIV transmembrane protein) in a trimeric form and interleukine-2, the immune system's conductor protein. This discovery may explain that an HIV infection can trigger an immune response that turns against the immune system itself and may explain the major AIDS-associated disorders. These include a drop in peripheral IL-2, a decrease of non-infected helper T lymphocytes, lymphoproliferation disorders and beta 2 microglobulin increase and hypergammaglobulinemia. Ichor has also demonstrated that the mimicry exists in three mammal species known to develop AIDS: humans, monkeys and felines. The discovered host-virus autoimmune mimicry is therefore applicable to the known human and animal AIDS-associated retroviruses. Ichor has targeted four prototype products based on these findings: * Therapeutic molecules that could be administered to humans infected by HIV and felines infected by FIV in order to block the fusion between virus and host cell thus inhibiting replication of HIV and FIV. * Therapuetic vaccines that could be administered to humans infected by HIV and felines infected by FIV in order to direct the immune system to recognize the transmembrane glycoprotein (GP41 - GP36) of the virus and not the host's IL-2. * Human animal preventive vaccines that could be administered to healthy humans and felines to prevent infection by HIV or FIV. 2 * AIDS cartridge that could selectively remove the identified immunosuppressive antibodies present in the serum of AIDS patients, using agents such as peptides that have been tested for activity. Ichor is a biotechnology company focused on the development of human and animal vaccines and therapies in the field of retroviral and viral autoimmune diseases. Initially, the company is developing four vaccine and therapeutic products based on the same new molecular mimicry strategy in the field of HIV and FIV infections. These products utilize a major scientific breakthrough in molecular mimicry between the virus and host immune system. These discoveries were made by Dr. Pierre-Francois Serres, founder of Ichor's wholly owned subsidiary Hippocampe S.A. Statements about the company's future expectations and all other statements in this press release other than historical facts are "forward- looking statements" within the meaning of section 27A of the Securities Act of 1933, section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The company intends that such "forward-looking statements" be subject to the safe harbors created thereby. Since these statements involve certain risks and uncertainties and are subject to change at any time, the company's actual results may differ materially from expected results. EX-99.2 4 0004.txt 1 HIPPOCAMPE SA (A Development Stage Company) FINANCIAL REPORT DECEMBER 31, 2000 2 C O N T E N T S Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS Balance sheets 2 Statements of operations and retained deficit 3 Statements of cash flows 4 Notes to financial statements 5 - 10 3 INDEPENDENT AUDITORS' REPORT ---------------------------- To the Shareholders Hippocampe SA We have audited the accompanying balance sheets of Hippocampe SA (a development stage company) as of December 31, 2000 and 1999, and the related statements of operations and retained deficit, and cash flows for the years ended December 31, 2000, 1999 and 1998, and for the period from May 2, 1990 (inception) to December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hippocampe SA (a development stage company) as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years ended December 31, 2000, 1999 and 1998, and for the period from May 2, 1990 (inception) to December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. /s/ Peterson Sullivan P.L.L.C. Seattle, Washington March 15, 2001 1 4 HIPPOCAMPE SA (A Development Stage Company) BALANCE SHEETS December 31, 2000 and 1999 (In Euros)
U.S. Dollars (Information Only) 2000 2000 1999 ------------------ ---------- ---------- ASSETS Current Assets Cash $ 174,180 E 185,428 E 36,409 Short-term investments 140,337 149,400 27,440 Receivables 59,717 63,573 70,274 Loan fees 81,374 86,629 - Prepaid expenses 10,598 11,282 2,806 ---------- ---------- ---------- Total current assets 466,206 496,312 136,929 Patents and Other 121,010 128,825 9,238 ---------- ---------- ---------- $ 587,216 E 625,137 E 146,167 ========== ========== ==========
LIABILITIES
Current Liabilities Accounts payable $ 606,833 E 646,021 E 100,144 Taxes and social costs payable 102,621 109,248 54,143 Note payable 360,914 384,221 - Other 7,900 8,410 6,176 ---------- ---------- ---------- Total current liabilities 1,078,268 1,147,900 160,463 Payable to Shareholders 227,517 242,209 242,209 Shareholders' Equity Common stock, E15.24 par value; 7,820 shares authorized, issued and outstanding 111,983 119,215 119,215 Additional paid-in capital 756,695 805,559 - Deficit accumulated during the develop- ment stage (1,587,247) (1,689,746) (375,720) ---------- ---------- ---------- (718,569) (764,972) (256,505) ---------- ---------- ---------- $ 587,216 E 625,137 E 146,167 ========== ========== ==========
The accompanying notes are an integral part of these financial statements. 2 5 HIPPOCAMPE SA (A Development Stage Company) STATEMENTS OF OPERATIONS AND RETAINED DEFICIT For the Years Ended December 31, 2000, 1999, 1998, and the Period from May 2, 1990 (Inception) to December 31, 2000 (In Euros)
Total accumulated during development stage (May 2, U.S. Dollars 1990 to (Information Only) December 31, 2000 2000 1999 1998 2000) ----------- ----------- ---------- ---------- ------------ Revenues $ 12,273 E 13,066 E 46,631 E 41,597 E 224,181 Expenses Research and development 94,891 101,019 93,902 70,239 362,466 General and administrative 378,765 403,225 48,896 38,212 723,685 Bank fee 756,694 805,559 - - 805,559 Interest 15,525 16,527 - - 16,527 ----------- ----------- ---------- ---------- ----------- 1,245,875 1,326,330 142,798 108,451 1,908,237 ----------- ----------- ---------- ---------- ----------- Loss before income tax provision (1,233,602) (1,313,264) (96,167) (66,854) (1,684,056) Income tax provision 715 762 2,641 762 5,690 ----------- ----------- ---------- ---------- ----------- Net loss (1,234,317) (1,314,026) (98,808) (67,616) (1,689,746) Retained deficit, beginning (352,930) (375,720) (276,912) (209,296) - ----------- ----------- ---------- ---------- ----------- Retained deficit, ending $(1,587,247) E(1,689,746) E (375,720) E (276,912) E(1,689,746) =========== =========== ========== ========== =========== Basic and diluted loss per share $ (157.84) E (168.03) E (12.64) E (8.65) E (216.08) =========== =========== ========== ========== ===========
The accompanying notes are an integral part of these financial statements. 3 6 HIPPOCAMPE SA (A Development Stage Company) STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2000, 1999, 1998, and the Period from May 2, 1990 (Inception) to December 31, 2000 (In Euros)
Total accumulated during development stage (May 2, 1990 to December 31, 2000 1999 1998 2000) ----------- ---------- ---------- -------------- Cash Flows From Operating Activities Net loss E(1,314,026) E (98,808) E (67,616) E (1,689,746) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Amortization 52,070 11,612 9,391 104,583 Fee payable in common stock 805,559 - - 805,559 Decrease (increase) in receivables 6,701 (47,204) (7,021) (63,574) Increase in accounts payable 545,877 38,003 13,279 646,021 Increase in taxes and social costs payable 55,105 26,168 23,774 109,248 Other (6,242) 137 (5,228) (2,870) ----------- ---------- ---------- ------------ Net cash provided by (used in) operating activities 145,044 (70,092) (33,421) (90,779) Cash Flows From Investing Activities Patents and other (128,286) - (5,176) (190,037) Short-term investments (121,960) (27,440) - (149,400) ----------- ---------- ---------- ------------ Net cash used in investing activities (250,246) (27,440) (5,176) (339,437) Cash Flows From Financing Activities Proceeds from the issuance of common stock - - - 119,215 Borrowings from shareholders - 103,815 68,723 242,208 Increase in note payable and other short-term advances 384,221 - - 384,221 Loan fees (130,000) - - (130,000) ----------- ---------- ---------- ------------ Net cash provided by financing activities 254,221 103,815 68,723 615,644 ----------- ---------- ---------- ------------ Net increase in cash 149,019 6,283 30,126 185,428 Cash, beginning of period 36,409 30,126 - - ----------- ---------- ---------- ------------ Cash, end of period E 185,428 E 36,409 E 30,126 E 185,428 =========== ========== ========== ============
The accompanying notes are an integral part of these financial statements. 4 7 NOTES TO FINANCIAL STATEMENTS Note 1. The Company and Summary of Significant Accounting Policies Organization/Development Stage Company - -------------------------------------- Hippocampe SA ("the Company") was created in 1990 as a French company for the purpose of engaging in research and development of human health products. All of the Company's activities have been conducted in France. The Company's main research efforts have been concentrated in the prevention and treatment of the AIDS virus. The Company has established a network over the past ten years enabling it to work with education centers, research centers, pharmaceutical laboratories and biotechnology companies. These financial statements have been prepared treating the Company as a development stage company. As of December 31, 2000, the Company had not performed any clinical testing and a commercially viable product is not expected for several more years. As such, the Company has not generated significant revenues. Revenues reported by the Company consist of incidental serum by-products of the Company's research and development activities. For the purpose of these financial statements, the development stage started May 2, 1990, which is the date when the Company was originally organized in France. Effective December 13, 2000, Ichor Corporation ("Ichor") entered into an agreement to acquire 99.9% of the outstanding shares of the Company. Ichor is a United States company that has no significant operations. Ichor will exchange approximately 33 million of its common shares for the outstanding shares of the Company. The exchange is expected to be completed in early 2001 and will be accounted for as a reverse purchase, with the Company as the continuing entity. Foreign Currency - ---------------- Consistent with the location of its activities, beginning January 1, 1999, the Company adopted the euro as its corporate currency. Accordingly, the Company prepared its 2000 and 1999 financial statements in euros. The financial statements for prior years were prepared using French francs as the reporting currency and were restated in euros for each period presented using the Official Fixed Conversion Rate of E1 = FRF 6.55957. Therefore, the financial statements for prior years depict the same trends that would have been presented had they been presented in French francs. However, because they were originally prepared using French francs, they are not necessarily comparable to financial statements of a company which originally prepared its financial statements in a European currency other than the French francs and restated them in euros. All assets, liabilities, revenues and expenses have been reported using the above exchange rate, and no foreign exchange gains or losses have been recorded. There are no other potential elements for other comprehensive income so no statements of comprehensive income have been provided. 5 8 Note 1. (Continued) Short-Term Investments - ---------------------- Short-term investments consist of certificates of deposit stated at cost. The fair value approximates cost based on the length to maturity and interest rate. No interest was paid and income tax paid was not material during 2000, 1999 and 1998. Revenue Recognition - ------------------- The Company records the sale of products when the products are delivered and the Company has only a security interest in the products should a customer default on payment. Patents - ------- Patents represent fees paid to the French patent office. These fees are stated at historical cost and are amortized over five years. Research and Development - ------------------------ Research and development costs are expensed as incurred. Taxes on Income - --------------- The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax laws or rates. Earnings per Share - ------------------ Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding in the period which was 7,820 shares for each period. Diluted earnings per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities. The common shares and warrants due to MFC Bank, discussed in Note 4, have not been reflected as issued for the purposes of computing earnings or loss per share since issuance would be antidilutive. 6 9 Note 1. (Continued) Estimates - --------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. New Accounting Standards - ------------------------ Statement of Financial Accounting Standard No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133" defers the effective date of FASB No. 133 (as amended by Financial Accounting Standard No. 138). Because the Company does not engage in any derivative or hedging activities, there should be no impact on its consolidated financial statements. Statement of Financial Accounting Standard No. 140 is generally effective on a prospective basis for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. Management has not determined the effect this standard may have on future financial statements. Note 2. Receivables
2000 1999 ---------- ---------- Trade receivables E 36,886 E 36,886 Refunds due from suppliers 5,514 18,742 Value added tax 55,714 13,663 Other - 6,235 ---------- ---------- 98,114 75,526 Allowance for doubtful accounts (34,541) (5,252) ---------- ---------- E 63,573 E 70,274 ========== ==========
No collateral was required for the above receivables and they are expected to be collected in the normal course. 7 10 Note 3. Taxes and Social Costs Payable
2000 1999 ---------- ---------- Social security and other social benefits E 97,094 E 41,856 Income tax 1,882 1,117 Value added tax 7,672 5,447 Other 2,600 5,723 ---------- ---------- E 109,248 E 54,143 ========== ==========
Note 4. Shareholders' Equity The Company issued 7,820 shares of common stock in June 1990 for E119,215 in cash. There were no other transactions affecting shareholders' equity since inception except for results of operations and the transaction discussed in the following two paragraphs. As part of the reverse purchase discussed in the Organization section of Note 1, the Company agreed to pay a fee to MFC Merchant Bank SA ("MFC Bank") for locating Ichor and assisting with the reverse purchase. The parent of MFC Bank is an Ichor shareholder. MFC Bank's fee is payable in common stock which had not been issued by December 31, 2000. The number of shares of common stock was calculated in compliance with the agreement where MFC Bank assisted the Company in the Ichor transaction. This agreement requires that MFC Bank receive 4% of Ichor's issued and outstanding common shares on a fully diluted basis which was calculated to be 50,446,353 shares. The fair value of the shares payable to MFC Bank at the measurement date, amounting to E805,559, has been considered additional paid-in capital in the balance sheet. Part of the fair value of these shares will be reclassified to common stock when the shares are issued. In July 2000, the Company entered into a revolving term credit facility with MFC Bank. The facility allows the Company to borrow up to E1,300,000 at LIBOR plus 4% (approximately 8.9% at December 31, 2000) repayable on August 31, 2001, and is collateralized by all of the Company's assets plus any future patents. The Company borrowed E384,221 under this facility as of December 31, 2000. The fair value of this note approximates carrying value because the note is short-term and has a market rate of interest. MFC Bank had also advanced E400,000 to the Company under an open account to pay current expenses. The Company is to pay MFC Bank a E130,000 arrangement fee under the term credit facility and E10,000 per month for nine months as a retainer fee in addition to the common stock to be paid for assisting in the Ichor transaction. The arrangement fee is being amortized over the term of the loan and the retainer fee is expensed monthly beginning August 2000. 8 11 Note 4. (Continued) Under these agreements, the Company will issue warrants which entitle MFC Bank to purchase approximately 6,730,599 of the Company's common shares on a fully diluted basis. The warrants will entitle MFC Bank to convert an amount equal to the maximum of the credit facility including unpaid interest plus the arrangement and retainer fees. The warrants are exercisable within a three-year period beginning August 2000 at approximately E.2319 per common share. The warrants are to be granted when the reverse purchase is completed. The intrinsic value of any beneficial conversion feature will be calculated at the grant date using the Black- Scholes model. This amount, if any, will be recorded as paid-in capital and any amount allocated to the retainer fee will be expensed immediately with any remaining amount amortized over the remainder of the loan term on the interest method. Note 5. Transactions with Shareholders Sales to a shareholder were E9,376 in 2000, E28,679 in 1999 and E0 in 1998. Trade receivables include E22,677 and E20,467 from this shareholder at December 31, 2000 and 1999, respectively. The amounts payable to shareholders bear no interest, have no collateral, and are repayable upon the Company becoming profitable. Since the timing of the Company becoming profitable cannot be determined, the fair value of the amounts payable to shareholders cannot be determined. The Company is not expected to become profitable in the near-term, therefore, the amounts payable to shareholders have been classified as long-term. Note 6. Income Taxes The reconciliation of income tax on income computed at the federal statutory rates to income tax expense is as follows:
2000 1999 1998 ---------- ---------- ---------- U.S. Federal statutory rates on loss from operations E (446,769) E (20,867) E (11,924) Tax differential on foreign loss - (12,376) (12,702) Nondeductible fee to be paid in common stock 275,414 - - Change in valuation allowance 172,117 35,884 25,388 ---------- ---------- ---------- Income tax expense E 762 E 2,641 E 762 ========== ========== ==========
9 12 Note 6. (Continued) Deferred tax asset is composed of the following:
December 31, December 31, 2000 1999 ------------ ------------ Difference in book and tax basis of amounts payable to shareholder and payable to MFC Bank E 218,351 E 89,616 Legal and similar fees to be deducted for French tax purposes in 2001 43,382 - ------------ ------------- 261,733 89,616 Less valuation allowance for deferred tax asset (261,733) (89,616) ------------ ------------- Net deferred tax asset E - E - ============ =============
All of the Company's provision for income taxes was from French income. The Company had no net operating loss carryforwards as of December 31, 2000. Note 7. Commitments and Contingencies The Company leases property under noncancelable operating leases through January 2006. Future minimum lease payments under noncancelable operating leases are as follows:
2001 E 7,317 2002 7,317 2003 7,317 2004 7,317 2005 7,317
Total rent expense was E7,317, each for 2000, 1999 and 1998, respectively. The Company is involved in various matters of litigation arising in the ordinary course of business. In the opinion of management, the estimated outcome of such issues will not have a material effect on the Company's financial statements. 10
EX-99.3 5 0005.txt 1 Unaudited Pro Forma Condensed Combined Balance Sheet December 31, 2000 (E000s)
Pro Forma Combined U.S. Pro Pro Dollars ICHOR Hippocampe Forma Forma (Information Historical Historical Adjustments Combined Only) ---------- ---------- ----------- -------- ------------ ASSETS Current Assets Cash and short term investments E 213 E 334 E - E 547 $ 514 Accounts receivable, net 7 64 - 71 67 Other assets - 98 - 98 92 --------- -------- ------- -------- -------- Total current assets 220 496 - 716 673 Patents and Other - 129 - 129 121 --------- -------- ------- -------- -------- E 220 E 625 E - E 845 $ 794 ========= ======== ======= ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and other liabilities E 114 E 764 E - E 878 $ 825 Note payable - 384 - 384 360 --------- -------- ------- -------- -------- Total current liabilities 114 1,148 - 1,262 1,185 Payable to Shareholders - 242 - 242 228 Shareholders' Equity Common stock 10,258 925 (10,152) 1,031 968 Retained deficit (10,076) (1,690) 10,076 (1,690) (1,587) Treasury stock (76) - 76 - - --------- -------- ------- -------- -------- 106 (765) - (659) (619) --------- -------- ------- -------- -------- E 220 E 625 E - E 845 $ 794 ========= ======== ======= ======== ========
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements. 2 Unaudited Pro Forma Condensed Combined Statement of Operations For the Year Ended December 31, 2000 (E000s, except per share amounts)
Pro Forma Combined U.S. Pro Pro Pro Pro Dollars ICHOR Forma Forma Hippocampe Forma Forma (Information Historical Adjustments ICHOR Historical Adjustments Combined Only) ---------- ----------- ----- ---------- ----------- -------- ------------ Revenues Interest E 129 E - E 129 E 13 E (129) E 13 $ 12 Gain on disposal of an unconsolidated subsidiary 323 (323) - - - - - Other 51 - 51 - - 51 48 --------- -------- ------- -------- -------- -------- -------- 503 (323) 180 13 (129) 64 60 Costs and expenses General and administrative 795 - 795 403 - 1,198 1,125 Research and development - - - 101 - 101 95 Bank fee - - - 806 - 806 757 Interest - - - 17 - 17 16 Equity in loss of unconsolidated subsidiary 66 (66) - - - - - --------- -------- ------- -------- -------- -------- -------- 861 (66) 795 1,327 - 2,122 1,993 --------- -------- ------- -------- -------- -------- -------- Net loss E (358) E (257) E (615) E (1,314) E (129) E (2,058) $ (1,993) ========= ======== ======= ======== ======== ======== ======== Basic and diluted loss per common share E (0.08) E(168.03) E (0.05) $ (0.05) ========= ======== ======== ======== Weighted average number of shares outstanding 4,945,385 7,820 40,274,637 40,274,637 ========= ======== ========== ==========
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements. 3 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (1) Effective March 28, 2001, ICHOR (a United States company) and Hippocampe (a French company) combined their operations where Hippocampe stockholders exchanged their stock for the common stock of ICHOR. Because Hippocampe is the continuing entity, this combination is accounted for as a reverse purchase. During the years ended December 31, 2000 and 1999, ICHOR had no significant operations other than the disposal of an unconsolidated subsidiary. Hippocampe is a company in the development stage which is involved in the research and development of human health products. Hippocampe's main research efforts have been concentrated in the prevention and treatment of the AIDS virus. All of Hippocampe's activities have been conducted in France. The combined companies expect to continue the research and development activities. Consistent with the location of its activities, beginning January 1, 1999, Hippocampe adopted the Euro (E) as its corporate currency. Accordingly, Hippocampe prepared its 2000 and 1999 historical financial statements in Euros. Because Hippocampe is the continuing entity, these pro forma financial statements have been prepared using Euros. The financial statements of ICHOR have been restated from U.S. dollars to Euros for each period presented. For the balance sheet as of December 31, 2000, the rate of exchange for the conversion of US. Dollars into Euros was the rate in effect as of December 31, 2000, or E1 = U.S.$0.9393. For the statement of operations for the year ended December 31, 2000, the rate of exchange used was the average for the year then ended or E1 = U.S.$0.9226. The translation adjustments did not result in significant foreign currency gains or losses in the unaudited pro forma condensed combined statement of operations. (2) The unaudited pro forma condensed combined balance sheet as of December 31, 2000 and pro forma statement of operations for the year ended December 31, 2000, are based on historical financial statement of ICHOR and Hippocampe. The unaudited pro forma condensed combined balance sheet as of December 31, 2000, gives effect to the combination of ICHOR and Hippocampe as if it had occurred as of December 31, 2000. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2000, has been prepared to illustrate the effects of the combination of ICHOR and Hippocampe as if the combination occurred January 1, 2000. The pro forma condensed combined financial statements may not be indicative of the actual results of the acquisition. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable. The accompanying unaudited pro forma condensed combined financial statements should be read in connection with the historical financial statements of ICHOR and Hippocampe. 4 (3) Pro forma adjustments include the effect of the following: * Elimination of gain on disposal of an unconsolidated subsidiary and the equity in loss of unconsolidated subsidiary recorded through the date of disposal. * Elimination of interest earned on cash investments to give effect to the cash redemption of preferred shares as if it occurred on January 1, 2000. * Issuance of 33,311,398 shares of ICHOR common stock and shares convertible into shares of common stock of ICHOR to the shareholders of Hippocampe; and * Consolidating entry to record the reverse purchase transaction. (4) Pro forma loss per share is adjusted to give effect to the issuance of shares to affect the acquisition and the redemption and conversion of the preferred shares as if these transactions had occurred on January 1, 2000. Warrants and options are not included in the computation of diluted loss per share because the effect of the warrants and options would be anti-dilutive.
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