RTN Stealth resolves liquidity issues, strengthens balance sheet, elects new Chair and announces annual meeting.


MISSISSAUGA, ON, Jan. 10 /CNW/ - Michael Boulter, President, COO and interim CEO of RTN Stealth Software Inc. (the "Company" or "RTN Stealth") advised today that the Company has successfully addressed its short-term liquidity issues by means of a non-brokered private placement which is scheduled to close on or about January 11, 2011. The private placement will immediately generate liquidity of approximately $500,000 for the Company. Pursuant to the placement the Company will issue 9,523,809 units at a purchase price of $0.0525 per unit.  Each unit will include one (1) common share of the Company (a "Common Share") and four (4) common share purchase warrants (each, a "Warrant").  Each whole Warrant entitles its holder to purchase one (1) additional Common Share at an exercise price of $0.0525 per share at any time prior to 5:00 p.m. (Toronto time) on March 31, 2011.

In conjunction with the closing of the private placement, the Company is delighted to make a number of related announcements:

1. Mr. Todd Halpern, appointed to the Company's Board of Directors in October, 2010, has been elected as Chair of its Board of Directors. Primarily engaged as President of Halpern Enterprises. Mr. Halpern and his family have been in the business of importing fine wines and spirits into Canada for over 57 years.  Mr. Halpern joined Halpern Enterprises in 1979 and has since built the company into Canada's largest importer of wine and spirits, representing over 100 of the world's leading producers. Mr. Halpern was also a member of the Board of Sentinelle Medical Inc. and was involved in the successful acquisition of the company by Hologic Inc. He is also a member of the Board of Mobilotto, a software development company focused on creating secure mobile games for regulated environments.

Heavily involved in philanthropy in the healthcare sector, Mr. Halpern has served as a member of the Board of Toronto General Hospital since 2005. In addition to being Board Champion of the Krembil Neuroscience Centre's Krembil Discovery Tower and Krembil Neuro Program, he chairs the annual Grand Cru Culinary Wine Festival, which benefits research at University Health Network.

As chair of the Company, Mr. Halpern will lead its efforts to strengthen overall governance and management. 

2. On the recommendation of an independent committee of its Board of Directors, the Company has also concluded an agreement to restructure its indebtedness which, having become due and payable, was in default. Certain insiders led by Mr. Halpern have agreed to purchase and hold promissory notes of the Company in an aggregate principal amount of US$2,407,212, together with interest accruing thereon at the rate of Prime + 1%.  Under the terms of the agreement, the Company may elect at any time prior to March 31, 2011, to pay all, but not less than all, of the aggregate principal amount then outstanding on one or more of the notes, together with all interest then accrued on the notes being repaid, by issuing to the holder a number of Common Shares equal to the amount then owning on the relevant note divided by an issue price of $0.0525 per share.  Although holders of the promissory notes have also agreed to extend the term of the notes for three (3) years on the same terms and conditions, it is currently anticipated that the Company will elect to satisfy its indebtedness by the issuance of common shares.

The agreement to amend the promissory notes is a related party transaction for purposes of applicable securities laws.  The Company is relying upon one or more exemptions from certain of the requirements applicable to related party transactions, including an exemption that is available to the Company because it is in serious financial difficulty and the transaction is designed to improve its financial position.

3. Subject only to shareholder approval at the next annual meeting of the Company, the Board of the Company has approved and agreed to recommend the amendment of its articles of incorporation to permit the early conversion of 5,250,000 special convertible Class B preferred shares (Series 1) (the "Special Preferred Shares") into 52,500,000 common shares of the Company in accordance with the 10;1 conversion ratio specified in its current articles of incorporation. The Special Preferred Shares were issued to shareholders of Market Guidance Systems Inc. ("MGS") and certain transaction advisors in 2010 in connection with the purchase of MGS's assets by the Company announced on May 17, 2010. The  Special Preferred Shares were specified to be convertible into common shares only upon a $20 million revenue milestone target being reached on the retail version of RTN Stealth software, a condition which has not yet been satisfied.

4. The Board of the Company will shortly be issuing formal notice for an Annual Meeting of the Company to be held in Toronto, Ontario on February 16, 2011 with the Record Date set in respect thereof being January 14, 2011. In addition to resolutions dealing with the conversion of the Special Preferred Shares, the Company will be seeking shareholder approval to amend its articles of incorporation, adopt a new general bylaw, expand the size of its Board to 10 members, elect a new Board of Directors, authorize the Company's continuance under Ontario law and conduct such other and further business as may be usual or appropriate.

"The immediate and near term cash injection provided by the private placement, together with the restructuring of the Company's debt, will strengthen the Company's balance sheet considerably, relieve the previously disclosed liquidity pressures and position the Company to move forward again and enable the rationalization of its equity capital structure," Mr. Boulter said. "The exercise of the warrants and repayment of the notes with shares, coupled with shareholder approval for the elimination of the overhange related to the preferred shares, will give the company a viable capital structure to build on over the long term, enabling it to complete the development and testing of its unique securities trading system and platform. Our strengthened Board under Mr. Halpern's leadership will bring new direction and focus to the Company as it moves forward to commercial deployment of its software solutions."

Except for historic information, the matters discussed in this document contain certain forward-looking statements. These statements involve known and unknown risks, delays, uncertainties and other factors not under the Corporation's control that may cause actual results, levels of activity, performance or achievements to be materially different from the results, levels of activity, performance, achievements or expectations expressed or implied by these forward-looking statements.

CNSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.

SOURCE RTN Stealth Software Inc.

For further information:

RTN Stealth Software Inc., please contact us at (905) 629-1333 or visit us at www.rtnstealth.com

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RTN Stealth Software Inc.

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