FOR IMMEDIATE
RELEASE
JMG Exploration Inc. Signs Share Exchange
Agreement with Newco Shareholders; Completes Sale of Oil &
Gas Properties
Pasadena, California – September 5,
2007 – JMG Exploration, Inc., (“JMG” or
the “Company”) (NYSE ARCA: JMG, JMG+) today
announced that it has signed a Share Exchange Agreement
with the shareholders of Newco Group Limited, a limited
liability company organized under the laws of the British Virgin
Islands (“Newco”), providing for the delivery to JMG
of 100% of the outstanding stock of Newco in exchange for the
delivery by JMG of JMG common stock representing 62.5% of
JMG’s capital stock on a partially diluted basis after
taking into account outstanding stock options (but not
outstanding warrants). Therefore, after the share exchange,
existing JMG shareholders will retain approximately a 37.5%
equity interest in JMG on a partially diluted basis. JMG
Exploration’s Board of Directors has approved the Share
Exchange Agreement and is recommending shareholder approval of
the transaction.
Newco currently owns approximately 14.5% of the
outstanding ordinary shares of Iris Computers Ltd., a
corporation organized under the laws of India and one of the
leading distributors of IT products in India
(“Iris”). Newco has an outstanding agreement with
Iris and Iris shareholders to become a majority shareholder in
Iris.
The closing of the share exchange contemplated
by the Share Exchange Agreement is conditioned upon the
delivery of 2007 US GAAP audited financial statements, a partial
year review for 2008 for Iris and Newco and approval of the
share exchange transaction by JMG shareholders (The 2007 fiscal
year of Iris ended on March 31, 2007). Upon receipt of the 2007
audited financials and subject to regulatory approval, a proxy
statement is expected to be mailed to JMG’s shareholders
in mid-October relating to a special shareholder meeting to vote
upon the share exchange transaction, and the transaction is
expected to close no later than December 31 st
2007.
Within the next week, JMG expects to execute
documents providing for a $3,000,000 loan by JMG to Newco to
enable Newco to purchase additional shares in Iris representing
approximately a 39% equity interest in Iris (excluding the 14.5%
equity interest in Iris already owned by Newco). As
security for the loan, JMG expects to take a security interest
in the ordinary shares of Iris purchased by Newco with the
proceeds of the JMG loan. As further security for the loan, JMG
expects to receive an irrevocable proxy from ESAPI Ltd., a
company organized under the laws of the Commonwealth of the
Bahamas (“ESAPI”), granting to JMG the right to vote
the shares of Iris currently owned by Newco
