EasTower Wireless Ceases Business Operations as a Result of an Inability to Raise Capital and Begins Exploring Change of Business
January 12 2023 - 11:20AM
EasTower Wireless Inc. (“
EasTower” or the
“
Company”) (TSXV:ESTW), announces that as a result
of its inability to complete an equity or debt financing, it has
been forced to cease business operations. The Company has negative
cash flow and has been trying to raise capital to continue its
operations and meet its obligations. To assist the Company with
meeting its current working capital requirements and bridge the gap
until a potential financing, EasTower’s founder and CEO, Vlado P.
Hreljanovic, had personally loaned the Company US$90,000 in
October 2022 and USD$67,200 in November 2022 (both previously
announced by the Company).
In addition, Mr. Hreljanovic loaned US$116,000
to the Company in December 2022 pursuant to an unsecured demand
promissory note bearing interest at 8% per annum from the date of
issue, payable on maturity. The loan is unsecured and is fully
redeemable, without bonus or penalty, at any time by the
Company.
The Company currently has cash of US$33,344 and
account receivable of US$103,925 as a result of work already
completed. Current accounts payable equal US$359,393.
The Company will begin a process of identifying
and evaluating businesses or assets with a view to completing a
Change of Business or Reverse Takeover (as such terms are defined
by the TSX Venture Exchange (the “Exchange”). As
of the date hereof, no such agreement or understanding in respect
of a Change of Business or Reverse Takeover has been
consummated.
In addition, the Company wishes to correct
information from its November 23, 2022 press release. Two senior
officers of the Company (Mr. Hreljanovic and Margaret Perialas)
have agreed to accept an aggregate of 14,257,297 common shares of
the Company at a deemed price of CAD$0.01 per share in satisfaction
of a portion of accrued and unpaid salary from May 2020 to March
2022, representing an aggregate of US$106,429.52 of
indebtedness.
The Company also announces its intention to
complete a debt conversion transaction with an arm’s length
service provider, pursuant to which the Company will issue
4,500,000 common shares of the Company at a deemed price of
CAD$0.01 per share in satisfaction of CAD$45,000 of indebtedness.
The transaction is subject to approval of the directors of the
Company and regulatory approval from the Exchange. In addition,
the shares will be subject to an Exchange four-month hold
period.
The Company has also been notified by the
Exchange that as a result of ceasing business operations it no
longer meets the Exchange’s Tier 2 Continued Listing Requirements
(“Tier 2 CLR”). Accordingly, in accordance with
section 3.2 of Exchange Policy 2.5, the Exchange has placed the
Company on notice for transfer to NEX with a deadline of 90 days if
it is not able to provide evidence it has become in a position to
meet Tier 2 CLR.
Accordingly, in accordance with section 3.2 of
Exchange Policy 2.5, the Exchange has notified the Company that it
will be providing it notice of its failure to meet Tier 2 CLR (the
“Tier 2 Notice”). The Exchange will allow the
Company 90 days from the date of the Tier 2 Notice to meet Tier 2
CLR. If, after that 90 day period, the Company does not meet all
Tier 2 CLR, the Exchange may either, at its discretion, transfer
the Issuer’s listing to NEX or suspend and delist the Listed Shares
of the Issuer. The NEX is a separate board of TSXV that provides a
trading forum for listed companies that have fallen below TSXV's
ongoing listing standards.
The common shares of the Company will resume
trading on the Exchange upon completion of the Exchange’s
resumption review.
For further information
Vlado P. HreljanovicChief Executive OfficerPh: (561)
549-9070Email: wireless@eastower.com
Shareholder Communications Contact
Email: investor@eastowerwireless.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this press release.
Forward-Looking Information
Certain statements contained in this press
release constitute “forward-looking information” as such term is
defined in applicable Canadian securities legislation. The words
“may”, “would”, “could”, “should”, “potential”, ”will”, “seek”,
“intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and
similar expressions as they relate to the Company, including: the
Company’s anticipated business objectives; the completion of the
transactions; transfer to NEX; and resumption of trading; are
intended to identify forward-looking information. All statements
other than statements of historical fact may be forward-looking
information. Such statements reflect the Company’s current views
and intentions with respect to future events, and current
information available to the Company, and are subject to certain
risks, uncertainties and assumptions, including, without
limitation: receipt of necessary approvals for the transactions;
closing conditions for the transactions being satisfied or waived;
and closing of the transactions noted herein. Many factors could
cause the actual results, performance or achievements that may be
expressed or implied by such forward-looking information to vary
from those described herein should one or more of these risks or
uncertainties materialize, including those risk factors discussed
or referred to in the Company’s disclosure documents filed with
the securities regulatory authorities in certain provinces of
Canada and available at www.sedar.com. Should any factor affect
the Company in an unexpected manner, or should assumptions
underlying the forward-looking information prove incorrect, the
actual results or events may differ materially from the results or
events predicted. Any such forward-looking information is expressly
qualified in its entirety by this cautionary statement. Moreover,
the Company does not assume responsibility for the accuracy or
completeness of such forward-looking information. The
forward-looking information included in this press release is made
as of the date of this press release and the Company undertakes no
obligation to publicly update or revise any forward-looking
information, other than as required by applicable law.
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