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| VQ-Shield Coatings and Chemicals Corp.
On June 7, 1999, VisionQuest advised that its wholly-owned subsidiary,
WEST Corp. had entered into a Co-operative Resource Pooling and Operating
Agreement with Modco Specialty Coatings Inc. ("Modco"), pursuant to which,
each of WEST Corp. and Modco would co-operate and pool their mutual resources
in an arrangement to develop and expand a worldwide strategic alliance,
developing, manufacturing and distributing environmentally safe coatings
and chemicals. Modco is an established eco-friendly business and maintains
an architectural specialty coatings and chemical production facility in
Delta, British Columbia. Modco's product lines, based on several proprietary
core chemistries, target lucrative high growth niches in the environmental
technologies market estimated at in excess of $4 billion per annum in
North America alone. VisionQuest affected this transaction through WEST
Corp., which incorporated a new joint ventured WEST Corp. subsidiary named
VQ-Shield Coatings and Chemicals Corp. ("VQ-Shield"). VQ-Shield
was launched with the benefit of Modco's existing facilities, experience,
proprietary information, technologies, products and processes. WEST provides
executive and financial management to VQ-Shield and is responsible for
arranging all financing for VQ-Shield. To date VisionQuest has provided Modco with an aggregate of $130,000
in sales financing of which $50,000 has been repaid. However, due to seasonal
and industry factors, VQ-Shield's product supplier has been unable or
unwilling to securitize or otherwise qualify for further sales advances.
Negotiations are continuing to either re-configure the facility with Modco
and resume financing, or terminate the agreement and have Modco repay
the outstanding sales finance advances. This failure in its supply line has precipitated the need to evaluate and re-deploy VQ-Shield's resources. VQ-Shield is endeavoring to secure alternative suppliers/manufacturers as well as expand the environmentally friendly product lines in both the coatings and chemicals markets. |
