Mainland Resources has agreed with American Exploration to extend the Merger Agreement and Plan of Merger between the parties. As previously disclosed, the Merger Agreement contemplates a stock-for-stock merger between Mainland and American Exploration to be effected under the laws of Nevada, with Mainland as the surviving corporation. The extension is primarily intended to afford both companies additional time to complete various administrative and regulatory reporting matters related to the merger process.
The Merger Agreement is subject to termination by either party if certain conditions specified in the Merger Agreement are not satisfied at or before the "Termination Date," which was previously defined to mean September 30, 2010, or such later date as may be mutually agreed by the parties. Mainland and American Exploration have entered into an amending agreement dated September 7, 2010 which extends the Termination Date to December 31, 2010.
The merger remains subject to various conditions, including, without limitation, the approval of the respective stockholders of each of Mainland and American Exploration, and other customary conditions.
The Merger Agreement also formerly provided that not more than 15,000,000 shares of Mainland common stock shall be issued in exchange for shares of American Exploration common stock pursuant to the merger (exclusive of any shares of Mainland common stocks issued in exchange for shares of American Exploration common stock which are issued upon exercise prior to closing of any outstanding American Exploration stock options or American Exploration common stock purchase warrants). The Merger Agreement was amended by letter agreement dated July 28, 2010, to slightly increase the maximum number of shares of Mainland common stock issuable pursuant to the merger to 15,068,000. Such increase was necessary to accommodate an unregistered offering of 200,000 units by American Exploration on April 5, 2010, at a subscription price of US $0.25 per unit, for aggregate gross proceeds of US $50,000. American Exploration has informed Mainland that the unit offering was effected pursuant to Regulation S under the Securities Act of 1933, as amended, in order to provide American Exploration with the funds necessary to pursue the transactions contemplated by the Merger Agreement and to meet its continuing reporting obligations under the Securities Exchange Act of 1934, as amended.
The foregoing description of the merger and the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, as amended.
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