Mr. Richard Whitehead reports
FUNDAMENTAL APPLICATIONS COMPLETES FORO ACQUISITION
Fundamental Applications Corp. has closed its acquisition of Foro Technologies Inc., a software development company that creates mobile smart phone applications. This strategic acquisition significantly expands the IP holdings of Fundamental Applications and adds two new products to its offering.
Founded in December, 2012, by serial entrepreneur Ali Saheli, Foro Technologies developed and launched Truth: a one-to-one anonymous messaging app, and its namesake Foro: a peer-to-peer mobile ecommerce marketplace. Truth was launched in February, 2014, and has approximately 130,000 active users. Foro went live in 2013 and has over 8,500 active users.
"Acquiring Foro Technologies brings Fundamental's shareholders two innovative products with active and dedicated user communities," commented Richard Whitehead, chief executive officer of Fundamental Applications. "The Foro mobile app represents a key technology we feel has the ability to disrupt the peer-to-peer ecommerce space. Foro was built for the needs of students, which provides us a specific, quantifiable, and accessible target audience. Our plan is to systematically launch Foro in geographic regions with large student populations. Based on the current success of Foro and quantifiable pent-up demand, we anticipate significant uptake in the coming months."
"Following the development and deployment of Foro and Truth, I have been actively looking for methods to bring these apps to a larger audience," said Ali Saheli, Foro founder. "As early as our first discussions, the synergy between my development philosophy and the team at Fundamental was very apparent. Our common vision and proven capabilities are a recipe for success for these two products."
As a student-targeted mobile ecommerce platform, the estimated North American market size for Foro is 5,084 campuses with a combined total of 24.5 million students.
Pursuant to the terms of the acquisition, Fundamental exchanged 1.7 million shares for 100 per cent of the issued and outstanding shares of Foro. Six hundred thousand of the 1.7 million shares will be released immediately and the remaining 1.2 million shares will be subject to escrow restrictions and released upon the achievement of certain milestones. Six hundred thousand of the escrowed shares will be released once Foro reaches a minimum of 25,000 regular users of Foro and the remaining 600,000 escrowed shares will be released once Foro reaches 50,000 regular users of Foro. If the milestones have not been achieved within 12 months of closing of the acquisition of Foro, all escrowed shares not yet released will be cancelled. Concurrent with the acquisition, Fundamental issued 464,927 shares and contributed a cash payment of $50,000 to payout certain creditors of Foro.
Further to the company's news release dated March 30, 2015, Fundamental completed a private placement of 1,393,778 units at a price of 18 cents per unit for gross proceeds of $250,884.04. Each unit comprises one common share and one-half common share purchase warrant. Each whole common share purchase warrant entitles the holder to acquire one common share of Fundamental at a price of 30 cents at any time prior to April 9, 2017.
Finders' fees totalling $7,245 in cash were paid and 40,250 in common share broker warrants were issued in connection with this private placement. All securities issued under this private placement are subject to a statutory four-month hold period and will not be tradeable until Aug. 10, 2015.
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