SAN DIEGO, Oct. 24 /PRNewswire-FirstCall/ -- Favrille, Inc. (OTC Bulletin Board: FVRL) announced today that it has entered into a non-binding term sheet for a reverse merger whereby Favrille would acquire all of the capital stock of a private company, MyMedicalRecords.com, Inc. ("MMR"), in a stock for stock merger that would result in MMR becoming a wholly-owned subsidiary of Favrille. If the proposed transaction is consummated on the terms set forth in the non-binding term sheet, at the effective time of the merger, the existing equity holders of MMR would own approximately 64% of the equity of Favrille on a fully diluted basis. The existing equity holders of Favrille would own approximately 29% of the Company. Approximately 7% of Favrille's equity would be newly issued to certain creditors as settlement for a portion of the outstanding debt obligations. Favrille is in the process of negotiating with its creditors to settle its current liabilities and is required to make disclosures to creditors regarding the potential merger as part of the settlement process. Favrille's progress in settling its creditor claims, consistent with a creditor plan that is outlined in the non-binding term sheet with MMR, is a condition to the signing of a definitive agreement for the proposed merger. It is anticipated that post merger, Favrille's common stock will continue to be traded on the OTC Bulletin Boards.
The proposed merger is subject to completion of mutual diligence and the negotiation of a definitive agreement. Any definitive agreement will contain conditions to closing, including a requirement to complete specified creditor settlements, and the approval of the proposed merger by the MMR stockholders. There can be no assurance that the parties will be able to reach a definitive agreement or consummate the proposed merger on the terms set forth in the non-binding term sheet.
Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to the listing or trading of Favrille's common stock on the OTC Bulletin Boards. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Favrille's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the listing status of Favrille's common stock on the OTC Bulletin Boards, Favrille's ability to continue its operations, conserve cash or recognize value on its assets, risks relating to Favrille's ability to negotiate settlements with its creditors, risks relating to the ability of Favrille and MMR to negotiate and execute a definitive agreement for the possible merger transaction or to satisfy conditions to closing to a possible merger transaction and additional risks discussed in Favrille's filings with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. Favrille is providing this information as of the date of this release and, except as required by law, does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.
|SOURCE Favrille, Inc.|
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