By: Dylan Sikes - AllPennyStocks.com News

Wednesday, May 1, 2013

The best-laid plans of mice and men, Often go awry. The translation to this form was made famous by John Steinbeck in his novel Of Mice and Men in 1937, but the original form dates back more than two centuries to a Robert Burns poem. Regardless, the meaning stands the test of time that sometimes no matter how well something is thought out, reality has a way of stepping in and disrupting those plans. Such was the case of Everton Resources Inc. (TSX-Venture:EVR) when it struck a deal to take a 16-percent stake in then-private Focus Graphite Inc. (TSX-Venture:FMS) in 2009. After some amendments, Focus completed an initial public offering and became listed on the TSX-Venture on May 21, 2010. Everton, the largest shareholder, took one seat on the Focus board of directors. With the listing, Everton received 6 million shares of the new public company. Under a Surplus Security Escrow Agreement, the common shares were subject to a 36-month staged release escrow.

"The spin-off allows Everton to participate in the growth of the new vehicle and allows the new company to actively work and develop [a] very promising portfolio of properties", Everton President and CEO André Audet commented at the time of Focus going public, clearly optimistic about the future.

Well, not everything goes as planned.

In November 2012, Everton was named as a defendant, along with a current officer, a former officer and a third party, in a motion to institute proceedings, filed by Focus Graphite in Montreal, Quebec. Public discussions of the lawsuit by either company were scant with Focus merely explaining that it was seeking legal recourse against “certain parties” related to a transaction for the Labrador Trough group of properties in 2009 and 2010. Everton’s public comments said that the plaintiff was “unable to quantify the value of its loss,” but the company was seeking $120,000 in declarations in the motion.

Perhaps some due diligence missed something, but it appears that the lawsuit stems from Everton agreeing to sell Focus 13 properties in the Labrador Trough region of Quebec to focus for 6 million shares of Focus for an aggregate consideration of $480,000.

At the time of initiating the litigation, Everton held 3,300,000 common shares in Focus, which were in escrow. Focus had not released 900,000 shares from escrow that were due to be released on November 27, 2012.

The legal battle is finally over. Everton said on Tuesday that the legal claim is settled with an agreement to sell the 3.3 million shares of Focus to a third party for gross proceeds of $900,000. Everton completed the first closing by selling 900,000 shares for $600,000 in gross proceeds. The remaining shares are slated to be received by Everton around May 27 at which time the final transaction is anticipated to occur, bringing another $300,000 in gross proceeds to Everton.

Everton is scheduled to receive the balance of its common shares of Focus on or about May 27, 2013, at which time the second and final closing of the transaction is expected to occur, resulting in gross proceeds to Everton of $300,000.

Outwardly, it looks like Focus didn’t get its claims, but that may have been factored into the final agreement of the share sale. All in all, it doesn’t look like Everton got a bad ROI either, although it doesn’t seem likely that this is the way the plan was first mapped-out several years ago.

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