/NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, June 25 /CNW/ - SOFTWARE GROWTH INC. (TSXV: SGW.P) (the
"Corporation"), a capital pool company, announced today that it has entered
into a term sheet concerning a proposed transaction (the "Transaction")
between the Corporation and Lavell Systems Inc. ("Lavell") which, if
completed, will be the Corporation's qualifying transaction pursuant to the
policies of the TSX Venture Exchange Inc. (the "Exchange").
Lavell is a private company incorporated under the laws of Canada on
July 3, 2007 for the purpose of acquiring, managing and integrating satellite
network providers. Lavell develops and operates trusted networks for private,
government and military organizations by combining both terrestrial and
satellite-based solutions with superior network design and management. Lavell
is committed to providing trusted networks by leveraging best-of-breed
technologies, business expertise and sophisticated engineering.
The Transaction will consist of a number of steps including the
(a) Lavell will conduct a brokered private placement in an amount of
between $3,000,000 and $10,000,000, with an option to increase the
size of the offering by $2,000,000 (the "Private Placement").
Lavell proposes to appoint an agent on a best-efforts basis in
connection with the Private Placement.
(b) The Corporation will, on closing of the Transaction, increase its
board of directors from four to five and change its trading symbol
subject to Exchange approval.
(c) The Corporation will, on or subsequent to closing of the Transaction,
and subject to shareholder approval, change its name, consolidate its
shares (if desired), change is auditors (if not previously done by
the board of directors) and increase its board of directors from five
The Transaction is an arm's length transaction. No related party of the
Corporation has any interest in Lavell. Accordingly, the Transaction will not,
as currently contemplated, be subject to approval by the shareholders of the
Corporation but a filing statement will be issued in respect of the
Transaction. Further details of the Transaction will be announced as
The Transaction will be structured as a share exchange whereby all of the
shares of Lavell will be acquired in consideration for the issuance of shares
of the Corporation. The purchase price is $40,000,000, not including the
Private Placement, which is to be satisfied by the issuance of 88,888,889
shares of the Corporation having a transaction value of $0.45 per share.
The Private Placement will consist of a minimum of 6,666,667 units at
$0.45 per unit (based on an $3,000,000 financing). Each unit is comprised of
one common share and 1/2 share purchase warrant on a consolidated basis. Each
whole share purchase warrant will entitle the holder to acquire one share at a
price of $0.65 on a pre-consolidated basis for a period ending 12 months from
the closing date.
Lavell will pay any agents involved in the Private Placement a cash
commission, on the new investment and exercise of overallottment options,
equal to 7% of the subscription proceeds derived from subscribers introduced
by the agent and a broker warrant. The broker warrant will enable the broker
to acquire that number of shares equal to 7 1/2% of the shares purchased by
new investors exercisable at a price of $0.45 per share for a period of 12
months following the closing date. Such broker warrant translates into
500,000 shares in total (based on the $3,000,000 financing). The shares issued
pursuant to the Private Placement will be exchanged for the same number of
shares in the capital of the Corporation. The proceeds of the Private
Placement will be used for working capital.
Assuming $3,000,000 is raised by way of the Private Placement, there will
be an estimated 103,113,889 shares outstanding in the capital of the
Corporation on completion of the various transactions. In addition, there will
be warrants, options and broker warrants to acquire a further estimated
The Corporation is currently in the process of preparing a detailed press
release regarding the Transaction which will satisfy the disclosure
requirements of the Exchange. Trading in the common shares of the Corporation
will remain halted pending the release of more fulsome disclosure regarding
the Transaction and the satisfaction of the filing requirements of the
Completion of the Transaction is subject to a number of conditions,
including but not limited to, Exchange acceptance and if applicable pursuant
to Exchange Requirements, majority of the minority shareholder approval. Where
applicable, the Transaction cannot close until the required shareholder
approval is obtained. There can be no assurance that the Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management
information circular or filing statement to be prepared in connection with the
Transaction, any information released or received with respect to the
Transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
Transaction and has neither approved nor disapproved the contents of this
For further information:
For further information: Mark Lawrence, President, Chief Executive
Officer, Chief Financial Officer and Director, Software Growth Inc. at (416)
707-6630 or firstname.lastname@example.org