CALGARY, March 14, 2013 /CNW/ - Pursuant to early warning disclosure
requirement of applicable securities laws, Werklund Capital Corporation
("Werklund"), announces that there has been a change in material facts contained
in its early warning report dated September 6, 2012 (the "Prior Early Warning Report"), filed in connection with the acquisition by Melbye from Werklund
Capital Corporation ("Werklund") of 50% undivided interest (the "Interest") in the $6,000,000 principal amount debenture (the "Debenture") granted by RS Technologies Inc. ("RS") to Werklund and dated July 2011 (and executed and delivered on or
about July 5, 2011), as well as the security and ancillary documents
related to the Debenture (which, together with the Debenture, are
collectively, referred to as the "Loan Documents").
Subsequent to the filing of the Prior Early Warning Report, Melbye and
Werklund advanced a further $670,000 under the Debenture. Melbye and
Werklund each advanced $335,000 of this amount. As a result of these
further advances, Melbye and Werklund are entitled to acquire an
aggregate of 18,181,818 Common Shares of RS (the "Common Shares") upon conversion of the Debenture at the conversion price of $0.33 per
Common Share, which would represent approximately 50.3% of the
outstanding Common Shares. Werklund is entitled to acquire 9,090,909
Common Shares upon conversion of Werklund's 50% undivided interest in
the Debenture, representing approximately 33.6% of the outstanding
Common Shares (based upon the currently outstanding number of Common
Shares and giving effect to the issuance of Common Shares to Werklund),
and Melbye is entitled to convert its interest in the Debenture for the
same number of Common Shares.
The Interest was acquired by Melbye from Werklund on September 4, 2012
pursuant to a debenture syndication and agency agreement (the "Debenture Syndication and Agency Agreement") dated August 31, 2012 between Melbye and Werklund (the "Acquisition"). For further details on the Acquisition and the Debenture Syndication
and Agency Agreement, please refer to Werklund's press release dated
September 4, 2012 and the Prior Early Warning Report, a copy of which
can be found under the SEDAR profile of RS on www.sedar.com.
On March 14, 2013, the Alberta Court of Queen's Bench (the "Court") granted RS's application for an initial order (the "Initial Order") under the Companies' Creditors Arrangement Act (Canada) ("CCAA") granting protection from its creditors. Werklund and Melbye (each
for a 50% interest) have granted an interim credit facility (the "Interim Facility") in favour of RS to finance its operations and costs incurred during
those proceedings under the CCAA (the "CCAA Proceedings"). The maximum amount currently available to RS under the Interim
Facility is $750,000. In the Initial Order, the Court granted to
Melbye and Werklund a super priority charge (the "Charge") to secure the obligations of RS under the Interim Facility. The
Charge ranks in priority to all other security granted by RS other than
a first ranking administration charge created by the Court in the
amount of $250,000, which secures the professional fees and expenses of
the Monitor and of counsel for the Monitor and RS. All other security
ranks behind these charges, including the security interest granted by
RS to Melbye and Werklund in connection with the Loan Documents.
Consequently, Melbye and Werklund will no longer have first priority
security in connection with the Loan Documents.
Werklund will be filing a related early warning report as required by
National Instrument 62-103.
SOURCE: Werklund Capital Corporation
For further information:
Further information may be obtained by contacting Stefan Erasmus at: Telephone: (403) 231-6545 and Facsimile: (403) 231-6549. Werklund's head office is located at 4500 Devon Tower, 400 - 3rd Avenue SW, Calgary, Alberta T2P 4H2.