HONG KONG,
July 7, 2011 /PRNewswire/ - Kunekt
Corporation (OTCQB: KNKT) ("Kunekt" or the "Company") announces
that, on June 29, 2011, the Company
entered into a master agreement (the "Master Agreement") with
China-based Ya Zhu Silk, Inc.
("YaZhu") (OTCBB: YZSK), Hong
Kong-based AMS-INT Asia Limited ("AMS"), Ferngrui Yue
("Yue"), China-based Guangzhou
Xingwei Communications Technology Ltd. Inc. ("XingWei"),
Matt Li ("Li"), China-based Beijing Yiyueqiji Science and
Technology Development Ltd. Inc. ("Yiyueqiji"), and Mark Bruk ("Bruk").
The following highlights terms of the Master
Agreement and agreements entered into pursuant to the Master
Agreement:
- Kunekt and AMS entered into a non-exclusive trademark license
agreement, whereby Kunekt granted to AMS the right to use its
trademarks throughout the world in exchange for a royalty of one
half of one percent of the gross revenues produced by AMS.
- Kunekt and YaZhu entered into an asset purchase agreement,
whereby Kunekt agreed to sell all of its assets to YaZhu (the
"Sale") in consideration of the issuance of 2,480,000 shares in the
common stock of YaZhu (62 million shares after a proposed 25 for 1
forward split). The Sale is subject to Kunekt receiving the
approval from its shareholders for the Sale. Kunekt agreed to use
commercially reasonable efforts to obtain approval for the Sale
from its shareholders.
- YaZhu, Yue, and XinWie entered into a share exchange agreement,
whereby YaZhu will acquire all of the Shares of AMS held by Yue in
exchange for the issuance of 1,200,000 shares in the common stock
of YaZhu (30 million shares after a proposed 25 for 1 forward
split).
- YaZhu, Li, and Yiyueqiji entered into a share exchange
agreement, whereby YaZhu will acquire all of the Shares of AMS held
by Li in exchange for the issuance of 3,384,000 shares in the
common stock of YaZhu (84.6 million shares after a proposed 25 for
1 forward split).
- All of the parties to the Master Agreement entered into a
registration rights agreement, whereby YaZhu agreed to register,
within 120 days of June 30, 2011, all
shares in the common stock of YaZhu issued pursuant to the Master
Agreement and agreements entered into pursuant to the Master
Agreement.
The closing of the Sale will take place on the
later of (i) five business days after Kunekt receives shareholder
approval for the Sale; (ii) five business days after the date that
AMS, Yiyueqiji and XingWei provide YaZhu with the information
necessary and in the proper form to file a Current Report on Form
8-K that contains Form 10 information about YaZhu after the
acquisition of AMS, as required by Item 2.01(f) of Form 8-K,
including the consolidated audited financial statements for AMS,
Yiyueqiji and XingWei, or (iii) such other date as the parties
hereto mutually agree.
Pursuant to a share subscription agreement (the
"Share Subscription Agreement") entered into between Kunekt and a
subscriber (the "Subscriber"), the Subscriber transferred
$1,750,000 (the "Advance") to Kunekt
as an interest free loan and as consideration for the issuance of
1,223,777 shares in the common stock of Kunekt (each, a "Kunekt
Share") at a price of $1.43 per
Kunekt Share. Due to a temporary cease trade order issued by the
British Columbia Securities Commission prohibiting the trading in
the securities of Kunekt, Kunekt has been unable to close the
transactions contemplated by the Share Subscription Agreement,
including the issuance of any Kunekt Shares to the Subscriber. On
June 29, 2011, Kunekt, the
Subscriber, and AMS entered into an agreement, whereby the Advance
made by the Subscriber to Kunekt was forgiven in exchange for the
payment of $784,000 from Kunekt to
the Subscriber and the assignment of a promissory note issued by
AMS to Kunekt in the amount of $216,000 to the Subscriber.
For additional details on the terms of the
Master Agreement and agreements entered into pursuant to the Master
Agreement, please review the Company's Form 8-K filing dated
July 6, 2011, filed with the SEC at
www.sec.gov and filed with the Canadian Securities Administrators
at www.sedar.com and also available on Kunekt's investor relations
website at www.kunekt.com/investor.
The agreements pertaining to the previously
announced acquisition of AMS, as filed with the Company's Form 8-K
dated April 8, 2011, filed with the
SEC at www.sec.gov and filed with the Canadian Securities
Administrators at www.sedar.com and also available on Kunekt's
investor relations website at www.kunekt.com/investor, were subject
to regulatory approval, including the issuance by the British
Columbia Securities Commission of an order varying its temporary
cease trade order issued against the Company, which the Company has
been unable to obtain and therefore, these previously announced
agreements are not valid and are terminated and cancelled.
For more information about Kunekt and to sign up
for email alerts, visit www.kunekt.com and follow the company on
Twitter (www.kunekt.com/twitter) and Facebook
(www.kunekt.com/facebook).
All information provided in this release is as
of July 7, 2011, and Kunekt
undertakes no duty to update this information, except as required
by applicable law.
Facebook and Twitter are trademarks or
registered trademarks of their respective owners.
SOURCE Kunekt Corporation