RICHMOND, BC, April 3 /CNW/ - CON-SPACE Communications Ltd. (the
"Company" or "CON-SPACE") (TSX-V: CCB), (http://www.con-space.com), today
announced that it is proceeding with a private placement of 22,000,000 common
shares at $0.05 each, for gross proceeds of $1,100,000, to Turret Oy Ab
("Turret"), its largest shareholder and secured lender. Completion of the
private placement is subject to regulatory approval and is subject to
completion of a proposed restructuring to address the Company's current
serious financial difficulties. The restructuring is to include certain
agreements with its bank to maintain its current credit facilities and,
settlement and payout of security held by the vendors of Search Systems Inc.
(the "SSI Vendors").
The Company has a secured loan agreement with Turret (the "Turret
Agreement"), securing a principal balance of CDN$4,900,000, which is currently
in default including with respect to the failure to pay the quarterly interest
payment due March 31, 2009. Turret has made a second $50,000 interim loan to
the Company as a further advance under the Turret Agreement, pending
completion of the private placement. Proceeds of the private placement are to
be utilized to pay out the SSI Vendors, repay Turret the two $50,000 bridge
loans and pay the overdue interest, with the balance for general working
capital and costs associated with the financing and restructuring.
Turret currently holds 11,528,609 shares of the Company, representing
46.5% of the outstanding shares, and on completion of the private placement
will hold 33,528,609 shares, representing 71.6% of the outstanding shares. As
well, Turret holds warrants exercisable for 675,000 shares and holds
conversion rights with respect to $4,800,000 of the principal amount owing
under the Turret Agreement, as more particularly described in the Company's
news release of November 6, 2008. The conversion rights would be exercisable
for a maximum of 13,750,000 common shares and if default conversion rates are
applicable, the conversion rights would be exercisable for a maximum of
32,000,000 common shares.
Gordon Cook, the Company's President and CEO, said, "This transaction is
a necessary step toward resolving the burden of a debt load and capital
structure that has been negatively affecting the Company for the past year.
Operationally, we have made and continue to make progress toward completing
our turnaround plan, even in the current economic downturn. This transaction
is expected to put the Company on firmer financial ground and assist us in our
endeavours to meet our stakeholders' needs and allow for our operations to
continue uninterrupted. We are fortunate that Turret has responded favourably
to our request for additional financing during these difficult financial
CON-SPACE is recognized as a leading designer and manufacturer of
specialized voice communication equipment used by Police, Fire, Rescue,
Government Agencies, Militaries, Municipalities and general industry.
CON-SPACE has distribution throughout North America, Great Britain, Australia,
parts of Asia, South America, and Europe. CON-SPACE also supplies many other
manufacturers with private labeled products.
This news release contains forward-looking statements which reflect
management's current expectations regarding the Company's objectives, plans,
goals, strategies, future growth, results of operations, performance and
business prospects and opportunities. These forward looking statements include
the Company's proposal to complete a restructuring plan and complete the
financing with Turret. There can be no assurance that all necessary conditions
will be met such that the private placement will be completed, or that such
completion will be sufficient for the Company's needs over any foreseeable
time horizon. These forward-looking statements are not guarantees, but only
predictions. Although the Company believes that these statements are based on
information and assumptions which are current, reasonable and complete, these
statements are necessarily subject to a number of factors that could cause
actual results to vary significantly from current expectations. These factors
and other risks and uncertainties are discussed in the Company's materials
filed with the Canadian securities regulatory authorities from time to time,
as identified in the Company's disclosure record on www.sedar.com. The
forward-looking statements included in this news release are made only as of
the date of this news release and the Company does not undertake to publicly
update these forward-looking statements to reflect new information, future
events or otherwise.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: Gordon E. Cook, President and Chief Executive
Officer, CON-SPACE Tel: (800) 755-2528 or firstname.lastname@example.org