Generation Zero Group Inc. (OTCBB: GNZR), an Atlanta-based Internet marketing company, has entered into an agreement to buy nearly all of Find.com URL Holdings LLC for $3.19 million in cash and notes plus shares worth $13.5 million, most of which will go to Scientigo Inc. (OTC: SCNG) for foregoing its option to buy a 40 percent stake in URL Holdings, according to an SEC filing.
The value of the shares is based on Generation Zero’s trading price this morning of about 90 cents.
Generation Zero agreed to issue $3.07 million in notes and 1 million shares to URL Holdings, which owns the domain name Find.com. Generation Zero also agreed to pay Charlotte, N.C.-headquartered Scientigo, a developer of search technology, $120,000 in cash and issue 14 million restricted shares.
Generation Zero agreed to issue an additional $1 million worth of shares to Scientigo if Generation Zero ends up selling the 40 percent stake in Find.com to another buyer for more than $50 million plus capital expenditure.
Generation Zero CEO Matthew Krieg is also the president and CEO of URL Holdings.
The agreement with URL Holdings covers 51 membership interests representing 99 percent of the ownership. Generation Zero plans to buy the remaining interest.
Generation Zero previously was called Velocity Oil & Gas Inc. and was headquartered in Houston.
Don’t know what to make of this but that is the news of the day
Here is more from the filing:
URL Holding owns the domain name Find.com.
URL Holding acquired the domain name through a consensual foreclosure process prior to the acquisition of the majority ownership of URL Holding by the Company.
Scientigo was a party to the consensual foreclosure process and had an option to acquire 40% of the domain name in exchange for Scientigo’s consent to the foreclosure. The Company acquired and extinguished Scientigo’s option rights in connection with the Asset Purchase Agreement in order to secure the maximum ownership the Company could acquire from URL Holding, which the Company expects will reach 100% as certain members of URL Holding were not available at the time of closing (June 30, 2010) to elect to participate in the transaction.
Pursuant to the Asset Purchase Agreement, the Company purchased and extinguished Scientigo’s pre-existing option to purchase a 40% interest in URL Holdings (the “Option”). In consideration for the Option, we issued Scientigo 14,000,000 shares of restricted common stock (representing approximately 39.7% of our then outstanding shares (not including the 1,000,000 shares we agreed to issue to the Note Holders, as described above) and agreed to pay Scientigo $120,000 in cash (the “Cash Payment”).
The Acquisition Of Find.Com Required The Company To Pay Substantial Costs And Issue Notes Totaling approximately $3,070,000, Which The Company Does Not Currently Have Funds To Pay, and the Repayment of Which is Secured By a Security Interest In Substantially All of our Assets.”
I don’t know how this quite totals $16M especially if the company buying the domain “Does Not Currently Have Funds To Pay”
But I guess this is how Wall Street Operates.