Completion of the stock exchange is subject to several conditions, including completion of the audit of AVRS' financial statements, completion of lock-up agreements from SMYD
shareholders in which these shareholders agree not to sell certain of their SMYD
shares for a one-year period, the payment of $250,000 to SMYD
shareholders holding an aggregate of 500,000 shares of SMYD
common stock, and completion of agreements from SMYD
shareholders holding an aggregate of 3,500,000 shares of SMYD
common stock in which these shareholders agree to pay to SMYD
an amount equal to $1,750,000 within 90 days of the closing of the Stock Exchange Agreement, or in the alternative, tender to SMYD
for cancellation two shares of SMYD
' s common stock for every $1 not paid.
In addition to the stock exchange between SMYD
and the AVRS shareholders, the letter of intent also contemplates the transfer of all of SMYD
's current oil and gas assets and liabilities to SMYD
's largest shareholder in exchange for that shareholder's transfer to SMYD
of 22,749,998 shares of SMYD
common stock currently owned by it.