/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
TORONTO, May 6 /CNW/ - PIONEERING TECHNOLOGY CORP. (the "Corporation")
(TSX-V: PTE) announces that it has secured credit support in the amount of
$250,000 from HSBC Bank Canada ("HSBC"). The debt facility (the "Loan") bears
interest at a rate of prime plus 200bps per annum, is guaranteed by McAllister
Holdings Ltd. ("McAllister"). The Loan will be used to assist the Corporation
with financing its ongoing inventory requirements.
The Corporation's business is growing and on the cusp of some very
promising business developments. Its inventory requirements, which are subject
to long lead times, have come at the expense of much needed operating capital.
After exploring a number of financing alternatives the directors of the
Corporation believe that that this transaction enables the Corporation to move
forward meeting its current sales obligations without further diluting
shareholders. The transaction, including the agreement between McAllister and
Pioneering, was reviewed and unanimously approved by the Corporation's board
In consideration of McAllister's guarantee of the Loan, the Corporation
has agreed to pay McAllister a monthly fee equal to 5% of product sales during
each month in which the Loan remains guaranteed by McAllister. As security for
its obligations to McAllister, the Corporation has also granted McAllister a
general security interest over all of its assets.
McAllister currently owns approximately 16.3% of the Corporation's
outstanding common shares and is therefore a "related party" of the
Corporation pursuant to National Instrument 61-101 - Special Transactions ("NI
61-101"). As a result, McAllister's guarantee of the Loan is a related party
transaction under NI 61-101 and TSX Venture Exchange rules. The Corporation is
relying on the exemption in Section 5.7(e) of NI 61-101 in respect of the
minority shareholder approval requirement that would otherwise apply to this
transaction under NI 61-101
This news release contains "forward-looking statements" within the
meaning of applicable securities laws relating to, among other things, the
Corporation's business prospects. Readers are cautioned not to place undue
reliance on forward-looking statements. Actual results and developments may
differ materially from those contemplated by these statements.
The TSX Venture Exchange Inc. has not reviewed and does not accept
responsibility for the adequacy and accuracy of this release.
For further information:
For further information: Kevin R. Callahan, the President and CEO of
Corporation, at (905) 712-2061