RANCHO MIRAGE, CA, April 29, 2014 /CNW/ - Craig Wireless Systems Ltd. ("Craig Wireless" or the "Company") (TSX-V: CWG), today released its financial results for the second
quarter ended February 28, 2014. All dollar figures are reported in
Revenues were $3,021,210 during the quarter ended February 28, 2014.
Total assets amounted to $21,127,544 and total shareholders' equity was
$16,244,935 at the quarter end. The Company reported a net loss
attributable to shareholders of $2,109,160 ($0.04 per share) for the
quarter ended February 28, 2014.
Craig Wireless also announces that it has, subject to certain conditions
including TSX Venture Exchange ("TSX-V") approval, agreed to complete a further financing to replace the
existing US$2,000,000 note issued by Craig Wireless to T. Boyd Craig in
connection with the loan announced on November 29, 2013 (the "Prior Note"). Pursuant to a commitment letter dated as of the date hereof (the "Commitment Letter"), Mr. Craig has agreed to advance the further sum of US$1,500,000 (the
"Additional Sum") upon the issuance of a convertible promissory note (the "Convertible Note") in replacement of the Prior Note and in respect of the Additional
Sum. Accordingly, the Convertible Note will provide for a loan for the
principal sum of US$3,500,000. Pursuant to the terms of the Commitment
Letter, the Prior Note and the 3,700,000 detachable warrants issued by
Craig Wireless to T. Boyd Craig in connection with the Prior Note will
be cancelled upon issuance of the Convertible Note.
Interest will accrue on the principal amount of the Convertible Note at
12% per annum, calculated daily and payable semi-annually in advance.
The principal and accrued and unpaid interest on the Convertible Note
is due two years from the date of issue (the "Term"), subject to the right of the Company to prepay in minimum increments
on 30 days' notice during the Term. The outstanding principal amount of
the Convertible Note is convertible at any time, in whole or in part,
until maturity, into subordinate voting shares of the Company. The
conversion price in respect of the first year of the Term is CDN$0.08,
and the conversion price in respect of the second year of the Term is
Mr. T. Boyd Craig is a director, senior officer and control person of
Craig Wireless and has beneficial ownership of, or control or direction
over, directly or indirectly, more than 10% of the issued and
outstanding subordinate voting shares and multiple voting shares of the
Company. The entering into of the Commitment Letter and the issuance
of the Convertible Note is considered a related party transaction for
the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Pursuant to MI 61-101, a related party transaction requires formal
valuation and minority shareholder approval unless an exemption
applies. The Convertible Note offering pursuant to the Commitment
Letter is exempt from the formal valuation and minority approval
requirements due to the applicability of the financial hardship
exemption set out in section 5.5(g) and section 5.7(1)(e) of MI 61-101.
Specifically, a committee of independent directors of the Company
reviewed the terms and conditions of the Commitment Letter and the
Convertible Note offering and have determined that as Craig Wireless is
in serious financial difficulty, the acceptance of the Commitment
Letter and the Convertible Note offering pursuant thereto is designed
to improve the financial position of Craig Wireless and the terms of
the Commitment Letter and the Convertible Note issued pursuant thereto
are reasonable in the circumstances of the Company.
About Craig Wireless Systems Ltd.
Craig Wireless and its affiliates (collectively, the "CWS Group") offer a broad range of telecommunications services, including,
broadband internet access, business connectivity solutions, hosting,
security and telecommunications solutions. Through certain members of
the CWS Group, Craig Wireless holds or leases licenses for spectrum in
the 2.3 GHz, 2.5 GHz, 2.6 GHz or 3.5 GHz bands in New Zealand,
Riverside County in Southern California, United States and in Greece.
The CWS Group also has spectrum interests in Norway. Spectrum in these
ranges is effective for delivery of point-to-multipoint signals,
possesses robust bandwidth capability and supports emerging 4G-based
applications, including portable and mobile applications.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
Notice on forward-looking statements:
This release includes forward-looking statements regarding Craig
Wireless and its business. Such statements are based on management's
current expectations. The forward looking events and circumstances
discussed in this release may not occur and actual results could differ
materially as a result of known and unknown risk factors and
uncertainties affecting Craig Wireless and its business. Not to limit
the generality of the foregoing, the forward-looking information set
forth in this news release is subject to various risks and other
factors including the following: availability of funding; the risks of
conducting business in a foreign country; currency fluctuations; in
addition to those risks enumerated under the heading "Risk Factors" in
the Company's AIF, available on SEDAR at www.SEDAR.com. No forward-looking statement can be guaranteed. Forward-looking
statements speak only as of the date on which they are made and Craig
Wireless does not undertake any obligation to publicly update or revise
any forward-looking statement, whether as a result of new information,
future events, or otherwise.
SOURCE: Craig Wireless Systems Ltd.
For further information:
T. Boyd Craig, Chief Executive Officer, Craig Wireless Systems Ltd., email: email@example.com.