Extenway Solutions Inc. (TSX VENTURE: EY) ("Extenway" or the
"Corporation") announces today the conclusion of a private
placement of 14,730,000 units for an amount of $ 3,682,500 as well
as the settlement of debts of an amount of $ 3,756,165 with three
major shareholders.
This financing together with the reimbursement of the debts of
the Corporation and the execution of an agreement with a financial
institution to make available, subject to certain conditions, term
loan facilities of an amount of 25M$ will allow the Corporation to
accomplish its business plan to install 3000 bedside terminals in
the hospital sector and to continue to deploy its system at the
Jewish Rehabilitation Hospital, where it is currently in the final
stage the installation.
Each unit of the private placement issued at a price per unit of
$ 0.25 consists of one common share plus one common share purchase
warrant, where each common share purchase warrant entitles the
holder to purchase one common share at a price of i) $0.50 within
twelve months following the issuance of the warrant, ii) at $0.70
between twelve months and one day and twenty-four months from the
issuance of the warrant and iii) at $1.00 between twenty-four
months and one day and on the date that is thirty-six months from
the issuance of the warrant (hereinafter the " Conditions of
exercise of the warrants "). Pursuant to this private placement,
14,730,000 common shares and 14,730,000 common share purchase
warrants of Extenway have been issued.
On March 22, 2010, the Company announced its intention to
proceed with a private placement of units for a maximum value of
$8M. The sale of 14,730,000 units for $3,682,500 represents the
first closing and the Company intends to use commercially
reasonable efforts to proceed with subsequent closings.
Extenway proceeded with the reimbursement of debts for an amount
of $3,756,165 toward John McAllister Holdings Inc. ("Holdings"),
David Brown and Societe Innovatech Quebec Chaudiere-Appalaches ("
Innovatech "), by the issuance of 15,024,660 common shares of the
Corporation at a deemed price of $0.25 per share and the grant of
1,320,000 common share purchase warrants to Innovatech.
The three major shareholders involved in reimbursement of the
debts are:
-- John McAllister Holdings Inc. ("Holdings") a corporation controlled by
John McAllister, Extenway's Chief Executive Officer and a director of
the Corporation, which, prior to this stock issuance held 17,618,027
common shares or 21.58% of total Extenway shares outstanding; Holdings
accepted to convert an amount of $1,417,627 due for services performed
by Holdings and Primonics (2006) Inc., its subsidiary, in prior years.
The debt was converted into 5,670,508 common shares, at a deemed price
of $0.25 per share.
-- David Brown, Chief Financial Officer of Extenway, who already held
20,433,333 common shares, or 25.03% of Extenway common shares
outstanding, accepted to convert $2,008,538 of unconditional, non
interest-bearing cash advances made in the course of the past years into
8,034,152 common shares, at a deemed price of $0.25 per share.
-- Innovatech, an early stage venture capital fund, which held 29,836,516
or 36.55% of Extenway common shares outstanding, accepted to convert
$330,000 representing the amount of a loan to Extenway and the interests
payable thereon into 1,320,000 common shares, at a deemed price of $0.25
per share and the grant of 1,320,000 common share purchase warrants,
each warrant entitling the holder to purchase one common share pursuant
to the Conditions of exercise of the warrants.
"We are pleased to announce the conclusion of the equity
financing and the setting up of the term loan facilities with a
financial institution which will permit to Extenway to execute its
business plan in the hospital sector in the province of Quebec "
said John McAllister, CEO of Extenway.
IBS Capital acted as finder for the private placement and
received a commission of 8 % of the proceeds of the private
placement and 736,500 common share purchase warrants, each warrant
entitling the holder to purchase one common share pursuant to the
Conditions of exercise of the warrants.
The private placement is subject to compliance with applicable
securities legislation. The underlying warrants and common shares
are subject to a statutory hold period of four months plus on day
from the date of issuance, i.e. until July 23, 2010.
Following the private placement and the settlement of debts
completed today, Extenway has 111 397 660 common shares issued and
outstanding and Holdings, David Brown and Innovatech will hold
respectively 23,288,535, 28,467,486 and 31,156,516 common shares or
20.9%, 25.55% and 27.97% of Extenway shares issued and outstanding
on a non diluted basis. In order to proceed with these
transactions, Extenway benefited from the exemptions of the formal
valuation and of the approval of the minority shareholders of
sections 5.5 g) and 5.7 e) of Regulation 61-101 Respecting
Protection of Minority Security Holders in Special Transactions.
The Board of Directors, to the exclusion of the interested
Directors in these transactions has determined that the private
placement as well as the reimbursement of the debts in shares and
warrants of Extenway was in the best interest of Extenway. Pursuant
with applicable securities legislation, the shares and warrants
issued in regards with the settlement of the debts are subject to a
statutory hold period of four months plus one day from the date of
issue, i.e. until July 23, 2010.
A material volume of common shares has been exchanged on the TSX
Venture Exchange as an important institutional shareholder sold,
through the market, in pre-arranged trades, 14,000,000 common
shares of Extenway, and subsequently purchased 14,000,000 units
under the private placement.
About Extenway Solutions Inc.
Extenway is a trusted provider of media, connectivity and
communications solutions serving the hospitality and healthcare
industries. The company's services include Interactive Television
Solutions, Bedside Terminal Solutions, as well as Internet,
entertainment, Content, Marketing, Advertising Media, Education and
Integration Solutions. Extenway enables guest-centric organizations
get connected, informed and entertained. For more information,
visit www.extenway.com.
Disclaimer - Safe Harbour Forward -Looking Statements
Certain statements contained in this press release constitute
forward-looking statements. These forward-looking statements relate
to the future financial conditions, results of operations or
business of the Company. These statements may be current
expectations and estimates about the markets in which Extenway
Solutions Inc. operates and management's beliefs and assumptions
regarding these markets. These statements are subject to important
risks and uncertainties which are difficult to predict and
assumptions which may prove to be inaccurate. The results or events
predicted in forward-looking statements may differ materially from
actual results or events. The Company disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise. In particular, forward-looking statements do not reflect
the potential impact of any merger, acquisitions or other business
combinations or divestitures that may be announced or completed
after such statements are made.
Neither 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 release.
Contacts: Extenway Solutions Inc. Mr. John McAllister President
and CEO 514-694-1916 514-694-4280 (FAX)