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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: MARCH 11, 1999
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CORNUCOPIA RESOURCES LTD.
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(Exact name of registrant as specified in its charter)
BRITISH COLUMBIA, CANADA 0-16778 NONE
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(State or other jurisdication of (Commission (IRS Employer
incorporation) File Number) Identification No.)
540 THE MARINE BUILDING, 355 BURRARD STREET, VANCOUVER, B.C. V6C 2G8
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(Address of Principal Executive Office)
Registrant's telephone number, including area code: (604) 687-0619.
Unless otherwise indicated, all references to "dollars" and "$" are to
Canadian dollars.
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CORNUCOPIA RESOURCES LTD.
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TABLE OF CONTENTS PAGE
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ITEM 1: CHANGES IN CONTROL OF REGISTRANT -
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS 3 - 6
ITEM 3: BANKRUPTCY OR RECEIVERSHIP -
ITEM 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT -
ITEM 5: OTHER EVENTS -
ITEM 6: RESIGNATION OF REGISTRANT'S DIRECTORS -
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS 6
ITEM 8: CHANGE IN FISCAL YEAR -
ITEM 9: SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S. -
SIGNATURES 7
EXHIBITS 8 - 9
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CORNUCOPIA RESOURCES LTD. (THE "COMPANY")
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On March 2, 1999, the Company announced that it has entered into arrangements
with arm's length parties which will result in a substantial reorganization
of the Company and its business. The reorganization, which is subject to
requisite regulatory and shareholder approvals at the Company's Annual
General Meeting (the "Meeting"), scheduled for May 19, 1999, will involve the
disposition of the Company's interest in a mining property, a consolidation
and name change, the acquisition of Stockscape Technologies Ltd., a
privately-held Internet investment research provider; and a change of the
Company's name and composition of Board of Directors;
Details of the arrangements are outlined below and in the Company's news
release, dated March 2, 1999, attached to this filing as Exhibit 20.1.
A. DISPOSITION OF IVANHOE JOINT VENTURE INTEREST
The Company has entered enter into an agreement dated March 2, 1999, (the
"Sale Agreement") with Great Basin Gold Ltd., ("Great Basin") pursuant to
which the Company will sell its wholly-owned subsidiary, Touchstone Resources
Company, ("Touchstone") to Great Basin in exchange for 2,750,000 common
shares of Great Basin (the "Great Basin Shares") at a deemed price of C$1.25
per share and 250,000 share purchase warrants of Great Basin. Each share
purchase warrant will entitle the Company to purchase one additional share of
Great Basin at $2.00 per share for one year. Touchstone holds the Company's
25% joint venture interest in the Ivanhoe Project, and is party to a joint
venture agreement, dated August 13, 1997, with Great Basin Gold Inc. and
holder of the other 75% interest in the Ivanhoe project. The Ivanhoe Project
is a 21 square mile mineral claim package located between the Barrick
Goldstrike Mine and the Franco\Euro Nevada Ken Snyder Mine on the Carlin
Trend in north-central Nevada. The Sale Agreement is subject to approval by a
special resolution of the shareholders of the Company to be passed at the
Company's next Annual General Meeting scheduled for May 19, 1999.
Great Basin is a British Columbia public company and is listed on the
Vancouver Stock Exchange and the NASD OTC Bulletin Board. Great Basin
presently has 16,918,271 common shares issued and outstanding. Ownership of
Great Basin is through numerous independent parties. Directors, senior
management, officers and employees of Great Basin independently hold
interests in Great Basin, none of which by any party exceeds 10% of the
issued and outstanding shares. Great Basin is a member of the
Hunter/Dickinson group of companies, which companies are administered by
Hunter Dickinson Inc. of Vancouver, British Columbia.
The Sale Agreement also provides that:
1. Resale of the Great Basin Shares will be restricted, by agreement, over a
period of twelve months.
2. The Company has agreed to a voting trust in favor of Great Basin management
for a period of two years and will be given representation to the board of
directors of Great Basin.
3. The Company will have the right to participate in future financings of
Great Basin in order to maintain its equity interest if desired.
4. Completion of the purchase and sale is subject to conditions precedent in
favor of both parties which include the requisite regulatory and
shareholder approvals, satisfactory due diligence review of and favorable
opinions on matters material to the transaction.
Because the Company's interest in the Ivanhoe Project is its sole remaining
active mining asset, the sale of that asset represents a major change in the
status of the Company as a mining entity and a sale of substantially all of
the Company's present undertaking. Such a disposition requires special (75%)
approval of the shareholders of the Company, which management will seek in
the form of a special resolution approving the transaction at the Meeting.
Under the Company Act (British Columbia), a registered shareholder of a
company that is disposing of substantially all of its undertaking has a right
to dissent to the disposition and, if the company proceeds with the
disposition, to require the Company to purchase all of his or her shares in
the Company. Specifics of this right of dissent and how to exercise it will
be provided in the Company's proxy circular prepared in respect of the Annual
General Meeting.
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B. CONSOLIDATION
The Company presently has 41,591,834 common shares issued and outstanding.
As part of the reorganization, the Company proposes to consolidate its issued
and outstanding common shares on a 10-for-1 basis. At the Annual General
Meeting shareholders will be asked to pass a special resolution approving the
consolidation. This resolution must be passed by a majority of 75% of the
votes cast on the resolution.
The common share consolidation is fundamental to the Company's reorganization
and conditions precedent to completion of the acquisition by the Company of
Stockscape Technologies Ltd., described below.
C. ACQUISITION OF STOCKSCAPE TECHNOLOGIES LTD.
Under the terms of the agreement (the "Share Exchange Agreement") to be
entered into between the Company and the shareholders of Stockscape
Technologies Ltd. ("Stockscape"), the Company will acquire all of the issued
and outstanding shares of Stockscape by issuing 10,000,000 post-consolidation
Common Shares of the Company (the "CRL Shares"). The parties have agreed
that the CRL Shares will be issued for a deemed value of C$0.50 per share
making the overall deemed value of the transaction C$5 million. Both the
shareholders of Stockscape and Stockscape are entirely at arm's length to the
Company. The acquisition of Stockscape is conditional upon the completion of
due diligence by both parties and the execution and delivery of definitive
documentation. The CRL Shares will be subject to trading restrictions under
U. S. securities legislation for a minimum of two years.
The acquisition of Stockscape is also subject to the following conditions
precedent:
1. the requisite approvals of all matters requiring shareholder approval;
2. the absence of any order or decree of a court restraining, interfering with
or enjoining the closing of the transaction;
3. the sale of the Ivanhoe Project as contemplated;
4. the number of shareholders of the Company who exercise their dissent rights
in respect of the disposition of the Ivanhoe Project being insignificant;
5. the completion of the consolidation of the Company's common share capital
on a 10-for-1 basis;
6. the completion of a change of name of the Company from "Cornucopia
Resources Ltd." to a new name that is reflective of the Company's new
business;
7. completion or shareholder approval of the restructuring of the Board of
Directors of the Company to include individuals with expertise in areas
related to the new business;
8. commitments for a financing of up to C$2,000,000 and up to 4,000,000 units
(the "Units"), each Unit consisting of one common share and two share
purchase warrants of the Company, to be completed at the time of closing of
the acquisition of Stockscape.
One of the share purchase warrants forming part of a Unit will be exercisable
for one year and entitle the holder to acquire one additional common share in
the capital of the Company at C$0.65. The second share purchase warrant
forming part of the unit will be exercisable for two years and entitle the
holder to acquire one additional common share in the capital of the Company
at C$0.95. Both of the share purchase warrants will include forced conversion
features. The proceeds of this financing will be used to further develop
Stockscape's customer base and for working capital purposes.
It is contemplated that a formal agreement for the acquisition of Stockscape,
containing the customary representations and warranties by each of the
Company and the shareholders of Stockscape will be executed by such parties
in the near future.
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BUSINESS OF STOCKSCAPE
Stockscape is a private British Columbia company and was incorporated on July
9, 1996, as "523833 B.C. Ltd." and changed its name to "Stockscape
Technolgies Ltd." on October 17, 1996.
Stockscape is a privately-held Internet investment research provider. It is
in its third year of operations. Stockscape maintains a home page at
www.stockscape.com with links to other web pages that contain up-to-date
information on financial markets, including information on specific sectors
of the market, and new developments concerning public companies.
Stockscape's customer base is publicly traded companies which subscribe for
Stockscape's services. Stockscape maintains web pages organized by market
sector and works with subscribing companies to post and maintain up-to-date
information concerning such companies as well as investment research
available from other sources. Stockscape's present customer base is
primarily resource companies, but management is seeking to expand beyond the
resource sector. Stockscape offers access to all of its web pages free of
charge to Internet users and derives its revenue from fees paid by
subscribing companies. Stockscape is at a start-up stage in its development,
has not generated operating profits to date and the development costs it has
incurred are carried in its deficit account.
RISK FACTORS
The Company's proposed acquisition of Stockscape involves a high degree of
risk. The following factors, in addition to the other information contained
herein, should be carefully considered in evaluating the Company and the
business of Stockscape before purchasing the Company's common shares.
1. Stockscape is in an early stage of developing its business, has not
achieved profitability and anticipates that it will continue to incur net
losses in the near term. The potential success of Stockscape's business
concept is unproven and is reliant on Stockscape's ability to attract and
retain business from subscribing companies and visitors to its Web site.
2. Stockscape currently anticipates that it will need significant additional
funding to cover its operating needs over the next 24 months. The Company
may need to raise additional funds, in addition to the private placement
contemplated herein, in order to fund operations, marketing and other
promotional efforts and additional content and such funds may not be
available on acceptable terms to the Company or at all.
3. The market for Stockscape's business is new and rapidly evolving and
competition for visitors, subscribing companies, contributors and strategic
partners is intense and is expected to increase significantly in the
future. Barriers to entry are relatively insubstantial. The Company may
be unable to compete with companies with significant financial resources
that undertake more extensive or more aggressive marketing campaigns, adopt
more aggressive advertising pricing policies and make more attractive
offers to potential customers or providers.
4. The performance of Stockscape's server and networking hardware and software
infrastructure is critical to the success of Stockscape's business and
reputation and its ability to attract customers and providers. Any failure
in such systems could have a dramatic adverse impact on the performance of
Stockscape.
5. Presently, there are very few laws or regulations directly applicable to
Internet commerce. However, due to increasing popularity and use of the
Internet, applicable legislative and regulatory requirements could be
adopted and, in fact, some such legislation is already proposed. The
impact of such legislative or regulatory requirements is not known but
could adversely impact on the performance of Stockscape.
6. Stockscape could become liable for various types of claims in respect of
defamation, negligence or copyright or trademark infringement and the
Company may not carry adequate or any insurance for such liability.
7. The success of Stockscape's business is substantially dependent upon
continued growth in the use of the Internet and the World Wide Web in order
to support e-commerce development on Stockscape's Web site. There can be
no assurance that the number of Internet users will continue to grow or
that e-commerce over the Internet will become more widespread.
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8. Stockscape is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches and is in the process
of working with its software vendors to ensure that the software that
Stockscape is using will operate properly at and after the beginning of the
year 2000.
D. CHANGE OF NAME AND COMPOSITION OF BOARD
In addition to the consolidation of the common shares of the Company described
above, the Company will be seeking shareholder approval to a special resolution
approving a change of the name of the Company to "Stockscape.com Inc." or such
other name as may be proposed by the Company and the board of Directors of the
Company will be re-organised to include 6 members, 3 of which will be nominees
of the current shareholders of Stockscape.
E. STOCK EXCHANGE LISTING
In addition to the foregoing matters, the Company has made application to the
Toronto Stock Exchange to delist its common shares. The Company's common shares
will continue to trade in the United States on the OTC Bulletin Board and the
Company will retain its registration in the United States.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The Company has determined that it is impracticable to provide the
financial statements of the acquired business in time for this report to be
filed with the Securities and Exchange Commission. Such financial
statements will be filed with the required securities commissions no later
than 60 days after the date on which this report must be filed.
(b) Pro Forma Financial Information
The Company has determined that it is impracticable to provide this pro
forma financial information at the time this report on Form 8-K is filed
with the Commission. Such information will be filed with the required
securities commissions no later than 60 days after the date on which this
report must be filed.
(c) Exhibits
20.1 News release of the Company dated March 2, 1999.
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CORNUCOPIA RESOURCES LTD.
SIGNATURES
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.
CORNUCOPIA RESOURCES LTD.
/s/ Andrew F. B. Milligan
Date: March 11, 1999 -------------------------
Andrew F. B. Milligan
President
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[LOGO] CORNUCOPIA RESOURCES LTD.
Suite 540 - 355 Burrard Street, Vancouver, BC Canada V6C 2G8
Telephone: (604) 687-0619 - Facsimile: (604) 681-4170
TSE TRADING SYMBOL: CNP
OTCBB TRADING SYMBOL: CNPGF
NEWS RELEASE DATE MARCH 2, 1999
CORNUCOPIA RESOURCES LTD. TO UNDERGO MAJOR REORGANIZATION
VANCOUVER, BC -. Cornucopia Resources Ltd. announces that it has entered into
arrangements with arm's length parties which will result in a substantial
reorganization of the Company and its business. The reorganization, which is
subject to requisite regulatory and shareholder approvals, will involve:
(1) the sale of the Company's primary asset, its joint venture interest in the
Ivanhoe property in the State of Nevada; (2) a consolidation of its
authorized and issued common share capital; (3) the acquisition of a new
business; and (4) a change of name and restructuring of the Board of
Directors of the Company to reflect the nature of the Company's new business.
SALE OF IVANHOE INTEREST. As an important first step in the reorganization,
the Company has entered into an agreement with Great Basin Gold Ltd., its
joint venture partner, pursuant to which the Company's interest in the
Ivanhoe project will be sold in exchange for 2,750,000 common shares at a
deemed price of C$1.25 per share and 250,000 warrants of Great Basin,
exercisable to purchase an additional 250,000 shares at C$2.00 per share for
one year. Resale of the shares issued in consideration for the Company's
interest will be restricted, by agreement, for a period of twelve months.
The Company has agreed to a voting trust in favour of Great Basin
management for a period of two years and will be given representation to the
board of directors of Great Basin. As well, the Company will have the right
to participate in future financings of Great Basin in order to maintain its
equity interest. In addition to the requisite regulatory and shareholder
approvals, completion of the purchase and sale is subject to conditions
precedent in favour of both parties which include satisfactory due diligence
review of and favourable opinions on matters material to the transaction.
ACQUISITION OF INTERNET INVESTMENT RESEARCH PROVIDER. The Company has also
reached an agreement in principle for the acquisition of a privately-held
Internet investment research provider, Stockscape Technologies Ltd. The
acquisition will be accomplished by the issuance of 10,000,000
post-consolidation shares of Cornucopia at a deemed price of C$.50 per share
for aggregate consideration of C$5,000,000 and is conditional upon the
completion of due diligence and the execution and delivery of definitive
documentation. These shares will be subject to trading restrictions under
U.S. Securities legislation for a minimum of two years.
Further conditions precedent to the acquisition are: (1) a consolidation of
the Company's common share capital on the basis of one new for ten (10) old;
(2) a change of name of the Company from Cornucopia Resources Ltd. to
Stockscape.com, Inc. or a similar name reflective of the Company's new
business; (3) restructuring of the Board of Directors to include individuals
with expertise in areas related to the new business; and (4) commitments for
a financing of up to 4 million units of the Company to be completed
contemporaneously with the acquisition. Also under consideration, in
connection with the reorganization and the Company's change of business, is a
possible continuation of the Company to a jurisdiction other than
British Columbia.
FINANCING. The 4,000,000 unit financing will be done on a post-consolidation
basis at C$0.50 per unit to raise maximum proceeds of C$2,000,000. Each unit
will consist of one common share and two share purchase warrants. One share
purchase warrant will be exercisable in the first year to acquire one additional
common share in the capital of the Company at C$0.65. The second warrant will
be exercisable for a period of two years to acquire one additional common share
at C$0.95. The warrants will have forced conversion features. Proceeds of the
financing will be used to further develop the Stockscape.com customer base and
for working capital purposes.
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It is expected that a formal agreement for the acquisition, containing the
necessary representations and warranties by each of the Company and vendors,
will be entered into by the parties within the next few days. The Company
intends to seek all required shareholder approvals for the foregoing at the
Annual General Meeting of the Company scheduled to be held on May 19, 1999.
STOCK EXCHANGE LISTINGS. The Board of Directors has authorized the
application by the Company to delist the Company's shares from trading on
the Toronto Stock Exchange. The Company's shares will continue to trade in
the United States on the OTC Bulletin Board and the Company will retain its
registration in the United States, which Cornucopia's management believes is
the principal market for Internet stocks.
Andrew Milligan, President of Cornucopia Resources Ltd., provides the
following background to the Board's decision and further details of the
reorganization:
"Over the past two years the junior mining and exploration sector has
experienced a devastating decline which has left a great many
companies unable to raise the necessary capital to proceed with their
projects. These problems are all the more serious since it seems
generally accepted that no recovery in metals prices can be foreseen
in the near future and that the drought in financing for junior
resources companies likely will continue.
Cornucopia has been a victim of these circumstances, and there have
been times when the survival of the Company appeared to be in doubt.
However, with the successful sale of the Mineral Ridge Mine in October
1998, we have been able to maintain a much reduced operation and until
recently the costs associated with the Company's 25% interest in the
Ivanhoe Joint Venture have been carried by Great Basin Gold Ltd. In
the absence of funds to maintain this position in the future, however,
the Company's interest would be subject to progressive dilution. The
likelihood of funding our share of the substantial costs associated
with the anticipated drilling program at Ivanhoe seems extremely
remote.
The Company has therefore made the decision to exchange its direct
interest in the Ivanhoe property for a significant equity interest in
Great Basin. Coupled with the Company's holding of 1.57 million
shares of Vista Gold Corp., the shares of Great Basin will represent a
continued stake in the two projects which formed the backbone of the
Company in earlier days and which, we believe, will be valuable
investments as the projects are advanced and the price of gold
eventually recovers.
With the Company's gold interests reverting to the status of passive
investments, it is sensible to consider a change of course in which
our well-established reputation and SEC registration can be put to
good use. It has become axiomatic to state that "Crisis equals
Opportunity" and in this context it is clearly the time for Cornucopia
to establish new objectives having the potential for development of an
expanded asset base and a concomitant increase in shareholder value.
Management believes that this entry into the Internet field with an
established provider would be timely. The industry offers huge
long-term potential which, coupled with the residual investments
in precious metals exploration and production, should create an
exceptional formula for success."
ON BEHALF OF THE BOARD OF DIRECTORS
(SIGNED)
Andrew F. B. Milligan
President and CEO
CORNUCOPIA RESOURCES LTD. INVESTOR RELATIONS: 1.604.687.0619
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