Business Context and Reporting Period
This Form 8-K, dated December 18, 2012, reports a reverse acquisition and change in control for Flux Technologies, Corp. (the "Company"). The filing details the consummation of an acquisition agreement with Brazil Mining, Inc., a private placement of equity, and a change in the Company's fiscal year end from February 28 to December 31. The Company will file a Form 10-K covering the transition period from March 1, 2012, to December 31, 2012.
Key Financial Metrics and Capital Structure
- Private Placement Proceeds: The Company raised approximately $2,000,007 from the sale of 60,002 shares of Common Stock at $33.333 per share to 37 investors.
- Acquisition Consideration: The Company issued 1,073,511 shares of Common Stock to Brazil Mining, Inc. and received a cash payment of $25,000, which was used to satisfy all existing Company liabilities.
- Debt and Liabilities: The $25,000 payment from Brazil Mining was utilized to pay and satisfy all of the Company's liabilities as of the transaction date.
- Equity Changes: 3,000,000 shares of Common Stock held by the former sole director were cancelled and retired. One share of Series A Convertible Preferred Stock was issued to Marc Fogassa for $1.00.
- Ownership Structure: Brazil Mining, Inc. owns 51% of the outstanding Common Stock. Marc Fogassa holds 51% of the total voting power via the Series A Preferred Stock.
Material Changes Versus Prior Period
- Change in Control: Marc Fogassa acquired control of the Company, replacing Iryna Antaniuk as the sole director and officer. Fogassa now serves as CEO, Chairman, President, CFO, Treasurer, and Secretary.
- Asset Acquisition: The Company acquired mineral exploration rights on a 10,000-hectare property in Borba, Amazonas, Brazil, via an Assignment of Mineral Rights from Brazil Mining.
- Strategic Option: The Company secured an option to purchase a 20% share of monthly diamond production from Brazil Mining for $800,000, contingent on Brazil Mining acquiring a 55% equity interest in a Brazilian entity.
- Corporate Governance: The Articles of Incorporation were amended to authorize 10,000,000 shares of "blank check" preferred stock, with specific voting rights granted to the Series A holder.
Guidance, Outlook, and Risks
The filing contains forward-looking statements regarding future financial results and projections, which are subject to inherent uncertainties. Management disclaims any duty to update these statements. Key risks and contingencies include:
- Forward-Looking Uncertainty: Actual results may differ materially from expectations due to the speculative nature of mineral exploration and the uncertainty of estimates.
- Option Redemption: The option to purchase diamond production shares may be redeemed by Brazil Mining upon the occurrence of certain events specified in the Option Agreement.
- Regulatory Compliance: The private placement was conducted under Section 4(2) of the Securities Act and Regulation D; investors must verify their status as accredited investors.
Investor Verification Checklist
- Verify the status and validity of the mineral exploration rights on the 10,000-hectare property in Brazil.
- Confirm the terms and redemption conditions of the $800,000 option for diamond production shares.
- Review the full text of the Acquisition Agreement (Exhibit 10.1) and Subscription Agreement (Exhibit 2.1) for undisclosed covenants.
- Assess the financial stability and track record of Brazil Mining, Inc., which now controls 51% of the Company.
- Monitor the upcoming Form 10-K for the transition period to understand the Company's historical financial position prior to the reverse acquisition.