TSX Venture Exchange: "WUF.V"
VERNON, BC, June 13, 2012 /CNW/ - Darford International Inc. ("Darford" or the "Company") provides the following corporate update.
Private Placement of Convertible Notes
On December 23, 2011, Darford closed a previously announced private placement (the "Private Placement") of convertible notes ("Notes") in the aggregate principal amount of $1,020,000 with Southern
Interior Innovation (VCC) Inc. ("SIIF") (refer to press releases dated January 30, 2012, December 23, 2011,
December 16, 2011, and September 29, 2011). 50% of the subscription
proceeds from the Private Placement were deposited in escrow pursuant
to an escrow agreement dated December 22, 2011 between Darford, SIIF
and a third party escrow agent (the "Escrow Agreement"). Pursuant to the terms of the Escrow Agreement the escrowed funds
were to be released to Darford subject to the Company meeting certain
conditions. The Company advises that the escrow release conditions were
not satisfied within the time period set forth in the Escrow Agreement
and $500,000 together with interest was returned to SIIF. The
outstanding principle amount of the remaining Notes is $500,000.
HSBC Credit Facility
HSBC Bank Canada has advised the Company that it is currently in breach
of certain financial covenants under its credit facilities with HSBC
consisting of a $1,200,000 operating line of credit, a $469,165
non-revolving demand loan, a $504,000 demand revolving loan and a
$1,500,000 revolving demand loan facility (collectively, the "Facility"). The Facility is secured by, among other things, a general security
agreement over all of the personal property of Darford. As at May 31,
2012, the Company had $1,940,122 drawn under the Facility. The breach
puts the Company at risk of having the entire Facility being demanded
by HSBC. On May 29, 2012, the Company entered into a forbearance
agreement with HSBC pursuant to which HSBC agreed to continue to make
the Facility available to Darford and not enforce the security against
the Facility until July 31, 2012, or such later date as may be agreed
to by HSBC.
Darford markets and manufactures treats and food for dogs under its own
Darford® brand name in Canada and in the United States. Darford also
contract manufactures products for well known North American brands.
For more information please visit www.darford.com and www.ilovealldogs.org.
Neither the TSX Venture Exchange nor its Regulation Service provided (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news
release. The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this news release.
SOURCE Darford International Inc.
For further information:
Chief Financial Officer
Darford International Inc.