SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 10, 2006
BIG FLASH CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-31187 87-0638336
State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
19 East 200 South, Suite 1080, Salt Lake City, Utah 84111
(Address of principal executive offices) (ZIP Code)
(801) 322-3401
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
FORM 8-K
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
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On April 10, 2006 Big Flash Corporation ("Big Flash" or the "Company")
entered into an agreement ("Share Exchange Agreement") to acquire, indirectly
though a Canadian holding corporation, all of the issued and outstanding shares
of Intelgenx Corp. ("Intelgenx"), a Canadian corporation based in Quebec.
Following completion of the acquisition, Intelgenx will continue its operations
as an controlled subsidiary of Big Flash (the "Intelgenx Acquisition").
Business of Intelgenx
Intelgenx is a drug delivery company established in 2003 and headquartered
in Montreal (Quebec), which focuses on the development of oral
controlled-release products for the generic pharmaceutical market as well as
novel buccal delivery systems.
Intelgenx currently has two unique, proprietary platform technologies that
it uses to develop products: a Tri-Layer Tablet technology which allows for the
development of oral controlled release products, and a Quick Release Wafer
technology for the rapid delivery of pharmaceutically active substances to the
oral cavity. Intelgenx's Tri-layer technology is aimed at reducing manufacturing
costs significantly as compared to competing delivery technologies. The wafer
technology allows for the instant delivery of pharmaceuticals to the oral
mucosa.
Intelgenx's business strategy is to develop pharmaceutical products based
on its proprietary drug delivery technologies and license the commercial rights
to competent partner companies once the viability of the product has been
demonstrated.
Terms of Share Exchange Agreement
Pursuant to the Share Exchange Agreement, the Intelgenx acquisition will be
completed through a series of agreements among Big Flash, its wholly owned
subsidiary 6544631 Canada Inc. ("Exchangeco") and Horst Zerbe, Ingrid Zerbe and
Joel Cohen (the "Principals") and Equity Transfer Services Inc. ("Equity").
Under the Share Exchange Agreement, Exchangeco will acquire all of the issued
and outstanding common shares of Intelgenx in exchange for 10,991,000 Class A
Special Shares of Exchangeco ("Exchangeable Shares"). At closing of the Share
Exchange Agreement, Big Flash, Exchangeco, the Principals and Equity will enter
into an Exchange and Voting Trust Agreement (the "Exchange and Voting Trust
Agreement") pursuant to which 10,991,000 shares of Big Flash common stock (the
"Trust Shares") shall be issued to Equity, as trustee for the Principals, as
security for Big Flash's covenants under the provisions of the Exchangeable
Shares. Big Flash, Exchangeco and Equity will also enter into a support
agreement ("Support Agreement") which will, among other things, set forth the
terms and conditions upon which the Principals may exchange the Exchangeable
Shares for a corresponding number of Big Flash common stock. Big Flash may
satisfy its obligations by instructing the Trustee to deliver one Big Flash
common share for each such Exchangeable Share. Big Flash, Exchangeco, Equity and
the Principals will also enter into an escrow agreement (the "Escrow Agreement")
pursuant to which the Principals shall deposit into escrow with Equity, as
escrow agent, all of the Exchangeable Shares and any Trust Shares for which the
Exchangeable Shares may be exchanged from time to time, over a term of 3 years
following closing. The Escrow Agreement provides that the Exchangeable Shares
and Trust Shares held in escrow may not be sold, assigned or transferred, except
as expressly permitted under the Escrow Agreement, and shall be released from
escrow at the end of the 3-year term.
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The Trustee, as the holder of record of the Trust Shares, shall be entitled
to all of the voting rights, including the right to vote in person or by proxy
the Trust Shares on any matters, questions, proposals or propositions whatsoever
that may properly come before the stockholders of Big Flash or at a meeting of
Big Flash stockholders or in connection with respect to all written consents
sought by Big Flash from its stockholders (the "Voting Rights"). The Voting
Rights shall be and remain vested in and exercised by the Trustee. As further
particularized in the Exchange and Voting Trust Agreement, the Trustee shall
exercise the Voting Rights only on the basis of instructions received from the
Principals entitled to instruct the Trustee as to the voting thereof at the time
at which the stockholders meeting is held or a stockholders' consent is sought.
To the extent that no instructions are received from a Principal with
respect to the Voting Rights to which such Principal is entitled, the Trustee
shall not exercise or permit the exercise of such Voting Rights.
Under the terms of the Exchangeable Shares, the Principals will have the
right to exchange the Exchangeable Shares for a corresponding number of shares
of Big Flash common stock at any time after closing of the transaction. Prior to
the exercise of such exchange rights, Equity will be the owner of record of the
Trust Shares and will retain power to vote the Trust Shares or grant consent in
regard to any and all matters presented for approval by the holders of Big Flash
common stock. Under the terms of the Exchange and Voting Trust Agreement,
Equity, in its capacity as trustee, will act in regard to such matters only in
accordance with instructions given by the Principals, respectively.
In its capacity as trustee, Equity does not have any powers of disposition
over the Trust Shares except as expressly required under the Exchange and Voting
Trust Agreement and the Support Agreement.
All of such Exchangeable Shares and the Trust Shares were issued pursuant
to the exemptions from registration provided under National Instrument 45-106
under Canadian securities laws and will be exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2) of that Act and
Regulation D - Rule 506 and/or Regulation S promulgated thereunder.
Intelgenx proposes to issue additional common shares and warrants to
investors ("Investors") pursuant to private placements prior to the closing of
the Share Exchange Agreement. On or before the completion of the purchase of the
Intelgenx shares by Exchangeco from the Principals pursuant to the Share
Exchange Agreement, it is contemplated that the Investors will enter into and
complete agreements with Big Flash for the sale of their shares and warrants of
Intelgenx to Big Flash in exchange for an aggregate of up to 3,525,000 common
shares of Big Flash and 100,000 common share purchase warrants of Big Flash.
After giving effect to the proposed issuance of the 10,991,000 shares of
Big Flash common stock in connection with the Intelgenx acquisition and the
3,525,000 shares of Big Flash stock and 100,000 warrants of Big Flash to be
issued to the Investors, the number of Trust Shares that will be issued to
Equity as trustee for the Vendors in the aggregate will constitute 68.7% of the
approximately 16 million shares of Big Flash common stock that will be issued
and outstanding. After giving effect to the issuance of the shares of Big Flash
in connection with the Intelgenx acquisition, Horst Zerbe, Ingrid Zerbe and Joel
Cohen will, pursuant to rights attached to the Exchangeable Shares to be issued
to them under the Share Exchange Agreement, be entitled to acquire and
beneficially own, respectively, 4,709,643, 4,709,643 and 1,571,713 shares of Big
Flash common stock constituting, respectively, 29.4%, 29.4% and 9.8% of the Big
Flash common stock that will be issued and outstanding.
Prior to the completion of the Intelgenx acquisition and except for the
Share Exchange Agreement and the transactions contemplated thereunder, neither
Intelgenx nor the shareholders of Intelgenx are or have been engaged in any
direct or indirect transaction with Big Flash and the Intelgenx acquisition is
not considered a related party transaction.
Pursuant to the terms of the Support Agreement, the holders of the
Exchangeable Shares will economically benefit to the same extent as direct
shareholders of Big Flash in the event of any dividend or other distribution.
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Exchangeco shall on any day ("Redemption Date") to be determined by
Exchangeco's board of directors after the tenth anniversary of the date of the
Intelgenx acquisition, redeem the then outstanding Exchangeable Shares for an
amount per Exchangeable Share (the "Redemption Price") equal to (I) the current
market price of a Big Flash common share on the last business day prior to the
Redemption Date (which may be satisfied in full by Exchangeco causing an
instruction to be given to the Trustee to deliver, in respect of each
Exchangeable Share held by each respective holder thereof, one Big Flash common
share, and obtaining written confirmation of such delivery by the Trustee), plus
(ii) the unpaid dividend amount, if any, on each such Exchangeable Share held by
such holder on any dividend record date which occurred prior to the Redemption
Date.
The Exchangeable Shares may, at any time prior to the Redemption Date, be
exchanged by any of the Principals in exchange for the same number of shares of
Big Flash common stock. The number of shares of Big Flash common stock to be
transferred to the holders of the Exchangeable Shares upon such exchange will be
subject to corresponding adjustment in the event of any Big Flash securities
dividend, forward split, reverse split, or similar event. The holders of the
Exchangeable Shares will also benefit to an identical extent as all other Big
Flash shareholders in the event of a tender offer or other similar transaction.
All Big Flash events related to payment of dividends, redemption or
purchase or any capital distribution in respect of Big Flash common shares or
any shares other than the Exchangeable Shares, redemption or purchase of any
shares other than the Exchangeable Shares, or issuance of any other exchangeable
shares, shall in each case be subject to approval by holders of not less than
66.6% of then-outstanding Exchangeable Shares. In addition, Big Flash must
obtain the same consent prior to any action to reclassify, subdivide, re-divide
or make any similar change to the outstanding shares of Big Flash, or effect an
amalgamation, merger, reorganization or other transaction affecting the Big
Flash shares of common stock.
Section 2 - Financial Information
Item 2.01 Acquisition or Disposition of Assets.
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See Item 1.01 above for disclosures in regard to the Acquisition or
Disposition of Assets, incorporated herein by reference thereto.
Section 3 - Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities
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See Item 1.01 above for disclosures in regard to the Unregistered Sales of
Equity Securities, incorporated herein by reference thereto.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
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(a) Financial Statements of Businesses Acquired.
The financial statements and pro forma financial information for the
acquired businesses disclosed in Item 2.01 and required by Item 9.01 (a) will be
filed by amendment no later than four business days after completion of the
transaction.
(b) Pro Forma Financial Information.
Any pro forma financial information required pursuant to Article 11 of
Regulation S-X with respect to the Acquired Businesses will no later than four
business days.
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(c) Exhibits.
99.1 Share Exchange Agreement by and between Big Flash Corporation.,
6544631 Canada Inc., Horst Zerbe, Ingrid Zerbe, Joel Cohen and
Intelgenx Corp. dated April 10, 2006 including the following
agreements attached as schedules:
(a) Exchange and Voting Trust Agreement to be executed at
closing by and among Big Flash Corporation, 6544631 Canada Inc.,
Equity Transfer Services Inc. and Horst Zerbe, Ingrid Zerbe and
Joel Cohen;
(b) Support Agreement to be executed at closing by and among
Big Flash Corporation, 6544631 Canada Inc. and Equity Transfer
Services Inc.; and
(c) Escrow Agreement to be executed at closing by and among
Big Flash Corporation, 6544631 Canada Inc., Equity Transfer
Services Inc. and Horst Zerbe, Ingrid Zerbe and Joel Cohen;
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BIG FLASH CORPORATION
Dated: April 13, 2006 By: /s/ Edward F. Cowle
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Edward F. Cowle
President
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