U.S. 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: November 19, 1996
ICHI-BON INVESTMENT CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO
(State or other jurisdiction of incorporation)
0-25388 84-1156459
(Commission File No.) (IRS Employer
Identification No.)
3222 S. Vance, Suite 100
Lakewood, Colorado 80227
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 988-1441
1
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Item 2. Acquisition and Disposition of Assets.
Effective November 11, 1996, Ichi-Bon Investment Corporation
(the "Company") entered into a letter of intent with Covenant
Financial Group of America, Inc. ("CFG"), a privately held Alabama
corporation, whereby the Company has agreed in principle to acquire
all of the issued and outstanding shares of CFG in exchange for
issuance by the Company of previously unissued "restricted" common
stock. The relevant terms of the proposed transaction require the
Company to issue to the CFG shareholders an aggregate of 9,500,000
"restricted" common shares, representing approximately 95% of the
Company's then outstanding common stock, in exchange for all of the
issued and outstanding shares of CFG.
The proposed share exchange is subject to satisfaction of
certain conditions, including completion of due diligence
activities, the approval of the transaction by all of the
shareholders of each of CFG and the Company and issuance of an
order of effectiveness by the SEC for the Company's Registration
Statement on Form S-4 and the filing of the Company's Definitive
Proxy Statement. If the proposed transaction with CFG is
consummated, the present officers and directors of the Company are
expected to resign their respective positions with the Company, to
be replaced by the present management of CFG, or their designees.
A copy of the letter of intent between the Company and CFG is
attached hereto as Exhibit 2.0 and incorporated herein as if set
forth.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
2.0 Letter of Intent between the Company and Covenant
Financial Group, Inc.
2
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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.
ICHI-BON INVESTMENT CORPORATION
By:/s/ Cheryl Okizaki
Cheryl Okizaki,
President
Dated: November 19, 1996
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ICHI-BON INVESTMENT CORPORATION
EXHIBIT 2.0
LETTER OF INTENT BETWEEN
THE COMPANY AND
COVENANT FINANCIAL GROUP OF AMERICA, INC.
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ICHI-BON INVESTMENT CORPORATION
3222 S. Vance, Suite 100
Lakewood, Colorado 80227
November 11, 1996
Board of Directors
Covenant Financial Group of America, Inc.
266 Gadsden Highway
Suite 201
Birmingham, AL 35235
Attention: Ms. Brenda Lovelady Shiflett, President
Re: Proposed Plan of Reorganization Between Ichi-
Bon Investment Corporation and Covenant
Financial Group of America, Inc.
Dear Ms. Shiflett:
This letter is intended to express the general terms of the Plan of
Share Exchange to be formalized between Ichi-Bon Investment
Corporation, a Colorado corporation ("IBI") and Covenant Financial
Group of America, Inc., an Alabama corporation ("CFG"). The
objective of our discussions has been the execution and
consummation of applicable formal agreement(s) between IBI and CFG
(the "Exchange Agreements") which, among other things, would
provide for the various matters set forth below.
1. Plan of Share Exchange and Reorganization of the Companies.
The board of directors of IBI and CFG have completed an initial
evaluation of the business plan, financial statements and other
relevant corporate documents of the other and have concluded that
an exchange of all of the issued and outstanding securities of CFG
for shares of IBI common stock equal to ownership of approximately
95% of IBI's outstanding shares would be in the best interest of
both companies. It is the intent of the parties hereto that the
proposed share exchange of CFG and IBI be effected as a tax-free
reverse merger pursuant to Section 368 of the Internal Revenue Code
of 1986, as amended.
2. Terms of Share Exchange.
(A) IBI Capitalization. IBI's total authorized capital
stock consists of 25,000,000 shares of Common Stock, par value
$0.001 per share, and 10,000,000 shares of Preferred Stock, par
value $0.01 per share. As of the date hereof there are 500,000
common shares of IBI issued and outstanding. There are no
preferred shares issued or outstanding.
(B) CFG Capitalization. CFG's total authorized capital
consists of 50,000,000 Common Shares, $0.01 par value per share. As
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Board of Directors
Covenant Financial Group of America, Inc.
November 11, 1996
Page 2
of the date hereof, CFG has 46,791,419 common shares issued and
outstanding. Prior to the date of Closing, as defined hereinbelow,
CFG intends to undertake a reverse split of its issued and
outstanding common shares, wherein 1 share of common stock will be
issued in exchange for every 5 shares presently issued and
outstanding. As a result, on the Closing Date there will be
9,358,284 Common Shares issued and outstanding.
(C) Special Board and Shareholder Meetings.
(i) Prior to Closing, the Board of Directors of IBI will
call a special meeting of the IBI shareholders for the
purposes of: (a) ratifying the transaction proposed herein;
(b) amending the IBI Articles of Incorporation, to change
the name of IBI to "Covenant Financial Group of America,
Inc.", or such other name as may be available and acceptable
to the present CFG Board of Directors; (c) providing
applicable dissenter's rights afforded to the IBI
Shareholders pursuant to the laws of the State of Colorado;
and (d) undertaking any additional amendments to the IBI
Articles of Incorporation reasonably requested by the CFG
Board of Directors and acceptable to the IBI Board of
Directors.
(ii) Prior to Closing, the Board of Directors of CFG will
(a) call a special meeting of the CFG shareholders for the
purposes of ratifying the transaction proposed herein,
including providing applicable dissenter's rights afforded
to the CFG Shareholders pursuant to the laws of the State
of Alabama; and (b) take all additional action necessary to
cause the intent of this letter to be adopted and ratified.
(D) Share Exchange. Upon IBI filing a Definitive Proxy or
Information Statement with the SEC and subject to the approval of
the terms and conditions contained herein by the IBI and CFG
shareholders (hereinafter the "Closing Date"), CFG shall merge with
IBI, with IBI emerging as the surviving entity, by the CFG
shareholders exchanging all of the issued and outstanding CFG Stock
owned by them for 9,500,000 "restricted" Common Shares of IBI.
(E) Officers and Directors. At Closing, the present
officers and directors of IBI shall deliver to CFG their respective
letters of resignation, along with certified minutes of the IBI
Board of Directors accepting such resignation and appointing to the
IBI Board those persons designated by CFG to be officers and
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Board of Directors
Covenant Financial Group of America, Inc.
November 11, 1996
Page 3
directors of the surviving entity herein.
(F) Filing of Registration Statement. If deemed necessary
by the respective legal counsel of the parties hereto, IBI shall
file with the Securities and Exchange Commission a Registration
Statement on Form S-4 (the "Registration Statement"), wherein all
of the IBI Common Shares to be issued to the CFG shareholders
relevant herein shall be registered pursuant to the Securities Act
of 1933, as amended.
3. Financial Condition of IBI. Except as provided herein, as
of the Closing Date, IBI balance sheet will reflect no assets or
liabilities.
4. Financial Condition of CFG. CFG has provided to IBI its
unaudited balance sheet for the period ended September 30, 1996,
which indicates total assets of $476,628 and shareholders' equity
of $26,761. Upon execution hereof, CFG shall undertake and
complete an independent audit in accordance with Paragraph 5(B),
below, which shall demonstrate total assets and shareholders'
equity consistent with the unaudited financial statements provided
to IBI herein. For purposes herein, any negative deviation of 10%
or more shall be deemed to be inconsistent with the unaudited
financial statements.
5. Conditions to Closing.
(A) Closing. The Closing of the transaction proposed
herein shall take place as soon as practical after the IBI
Definitive Proxy is filed with the SEC, the respective shareholders
of IBI and CFG approve the terms included herein and the
Registration Statement is deemed effective by the SEC (if so
required as provided herein). The Closing shall take place in
Aurora, Colorado at the offices of legal counsel for IBI, Andrew I.
Telsey, P.C., 2851 S. Parker Road, Suite 720, Aurora, Colorado
80014, or such other location as the parties may so agree. At the
discretion of the parties hereto, Closing may also occur via
telephonic means.
(B) To Be Provided by CFG. At or prior to Closing, CFG
shall provide to the present Board of Directors of IBI the
following:
i) a financial audit of it's books, which shall be prepared
in accordance with Generally Accepted Accounting Principles
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Board of Directors
Covenant Financial Group of America, Inc.
November 11, 1996
Page 4
and provided by an independent, SEC Certified Public
Accountant and such audit shall demonstrate balance sheet
information consistent with the financial information
provided to IBI by CFG prior to Closing. If it is deemed
necessary for IBI to file the Registration Statement, CFG
agrees to provide said audit as soon as possible in order
to include the same in either or both of the Registration
Statement and Proxy Statement discussed herein; and
ii) if no Registration Statement is deemed necessary, an
investment letter in a form acceptable to counsel to IBI,
duly executed by each CFG shareholder, acknowledging that
each such shareholder is exchanging their respective
securities of CFG for their pro rata applicable number of
IBI common shares, that such shares to be acquired by each
CFG shareholder are solely for their account and for
investment and they have no plan, intention, contract,
understanding, agreement or arrangement with any person to
sell, assign, pledge, hypothecate or otherwise transfer to
any person such shares, or any portion thereof; or
iii) if such a Registration Statement is deemed necessary,
a "lock-up" agreement in a form acceptable to management of
both IBI and CFG, wherein each CFG shareholder shall agree
not to sell, assign or otherwise convey any of the IBI
shares to be issued herein for a minimum period of two (2)
years from the Closing Date, unless otherwise released prior
by a majority of the present members of the IBI Board of
Directors, in their sole discretion
(C) Non-Delivery. Failure by CFG to provide those items
described hereinabove, or failure of said audit to confirm the
financial condition of CFG as represented herein, shall render this
proposed transaction voidable at the discretion of the present
Board of Directors of IBI. For purposes herein, any deviation in
excess of 10% shall be construed as conforming with the financial
condition of CFG represented herein.
(D) Representations of IBI. IBI hereby represents that, as
of the Closing date, it shall be current in all filings required to
be tendered to the Securities and Exchange Commission ("SEC")
pursuant to the Securities Exchange Act of 1934, as amended,
including but not limited to, filings on Forms 10-K, 10-KSB, 10-Q
and/or 10-QSB.
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Board of Directors
Covenant Financial Group of America, Inc.
November 11, 1996
Page 5
6. Default. In the event CFG fails to perform pursuant to
Paragraphs 4 or 5, above, or close the transaction without the
fault of IBI, CFG shall be responsible for payment of all
reasonable costs incurred by IBI, including but not limited to
attorneys fees, due diligence costs, costs related to proxy
solicitation and such other costs as may be incurred directly
relating to this proposed transaction. Otherwise, each party
hereto shall be responsible for payment of their own legal,
accounting and any other out-of-pocket expenses reasonably incurred
in connection with this transaction, whether or not this
transaction is consummated, except as provided in Paragraph 8,
hereinbelow.
7. Confidentiality. Upon the signing of this Letter of Intent,
IBI and CFG will provide to each other full access to their books
and records and will furnish financial and operating data and such
other information with respect to their business and assets as may
reasonably be requested from time to time. If the proposed
transaction is not consummated, all parties shall keep confidential
any information (unless ascertainable from public filings or
published information), obtained concerning the other's operations,
assets and business.
8. Retainer of Counsel. The principals of the parties hereto
will assign the SEC counsel who is responsible for the preparation
of all required/desired SEC filings. As a material condition
hereto, upon execution hereof by CFG, CFG shall tender a non-
refundable fee of $25,000 to counsel to IBI, herein referenced, in
order to allow such counsel to commence preparation of all SEC
filings and other related documentation necessary to allow IBI to
comply with the rules and regulations necessary to consummate the
transaction proposed herein. In the event the applicable costs
incurred by IBI herein exceed the aforesaid fee, the remaining
obligation shall remain due and owing by the surviving company.
9. Finders Fees. It is hereby acknowledged that each party
hereto may be responsible for payment of certain finders fees
relating to the transaction proposed herein and that as a further
condition to Closing, as defined herein, each party shall warrant
in such Closing documents that such finders fees have been paid and
further, shall indemnify and hold harmless the other party from
such obligation.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
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Board of Directors
Covenant Financial Group of America, Inc.
November 11, 1996
Page 6
which together shall constitute one and the same instrument.
11. Jurisdiction. It is the intention of the parties that the
laws of the State of Colorado govern the determination of the
validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties.
12. Notices. Any notice relevant herein shall be deemed to have
been sufficiently served for all purposes if delivered personally
to the party to whom the same is directed, or, if sent, by deposit
with the United States mail, certified mail, return receipt
requested, postage prepaid, at such party's address listed
hereinabove, or to such other address as shall be furnished in
writing by any party to the other. Any such notice shall be deemed
to be given three (3) days after deposit in the U.S. mail.
13. Further Action. Each party shall execute and deliver such
papers, documents and instruments, and perform such acts as are
necessary or appropriate to implement the terms hereof and the
intent of the parties hereto.
14. Amendments. This Agreement may only be amended by the
mutual consent of all the parties hereto which Amendment shall be
in writing, duly executed by the parties.
If the foregoing accurately reflects your understanding of the
terms and conditions of our agreement please so indicate by signing
below as designated.
Yours truly,
ICHI-BON INVESTMENT CORPORATION
By: s/Cheryl L. Okizaki
Cheryl L. Okizaki, President
APPROVED AND ACCEPTED this 11th day of November, 1996.
COVENANT FINANCIAL GROUP OF AMERICA, INC.
By: s/Brenda Lovelady Shiflett
Brenda Lovelady Shiflett, President
