OTTAWA, Nov. 19, 2014 /CNW/ - Clearford Water Systems Inc. ("Clearford" or the "Company"), (TSX-V: CLI), announced today, that it has entered into a long-term loan agreement, pursuant to which the Company will be provided with a C$3.25 million 20 year term debt facility. As part of the agreement, Clearford will issue up to 9,629,630 Treasury Shares to the Lender as bonus shares, and the Lender has agreed to return to Clearford for cancellation warrant certificates, which would have allowed the Lender to purchase up to 19,238,863 shares of Clearford. The issuance of bonus shares, is subject to the approval of the TSX Venture Exchange.
The loan will be secured under a general security agreement (GSA) over assets of Clearford and pledge of 90.5% of outstanding shares of UV Pure Technologies Inc. UV Pure will also provide the Lender with a GSA in support of guarantee of Clearford's obligations under the loan. The UV Pure GSA will provide for up to $1 million of commercial credit facilities within UV Pure to rank in priority to the Lender.
Subject to the terms and conditions of the loan agreement, Clearford will receive C$1.5 million upon signing the agreement, and C$1.75 million on or before December 10, 2014.
The bonus shares issued to the Lender will be held in escrow and delivered to the Lender upon receipt of the final advance under the loan by Clearford. The bonus shares will be subject to a 4 month trading restriction required by the TSX-V.
Clearford will use the proceeds of the loan (i) for working capital and project finance requirements, and (ii) to complete its acquisition of UV Pure, the details of which are subject to a separate press release.
"This is a significant announcement for Clearford", said President and CEO Kevin Loiselle. "The commitment by our Lender shows the continued confidence in Clearford's strategic direction. The funds will allow us to add to working capital and provide the necessary funds to finalize the acquisition of UV Pure. UV Pure's advanced Crossfire™ technology for Ultra Violet purification completes our Clearford OneTM System".
Clearford will pay a 10% fee to an arm's length third party as amounts are advanced.
The Company currently has 67,411,836 shares outstanding and 110,383,440 shares on a fully diluted basis. Subsequent to the completion of the transaction and the issuance of the bonus shares, the Company will have 77,041,466 shares outstanding and 100,774,207 on a fully diluted basis.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Clearford Water Systems Inc.
Clearford Water Systems Inc. (TSX-V: CLI) is a provider of unified water management and sanitation systems. Clearford One™ is based on Clearford's proprietary ClearDigest™ smart digester, SBS® ClearConvey™ small bore sewer, and ClearRecover™ treatment facilities customized to meet the requirements of each location. For more information on Clearford, please visit www.clearford.com.
Forward Looking Statements
This news release contains certain statements that constitute forward-looking statements as they relate to the Company and its management. Forward-looking statements are not historical facts but represent management's current expectation of future events, and can be identified by words such as "believe", "expects", "will", "intends", "plans", "projects", "anticipates", "estimates", "continues" and similar expressions. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.
By their nature, forward-looking statements include assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those in the forward-looking statements. If and when forward-looking statements are set out in this news release, Clearford will also set out the material risk factors or assumptions used to develop the forward-looking statements. Except as expressly required by applicable securities law, the Company assumes no obligation to update or revise any forward looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: industry cyclicality; the ability to secure third party agreements; successful integration of Clearford's system with third party technology; competition; reduction in demand for products; collection from customers; relationships with suppliers; product liability; intellectual property; reliance on key personnel; environmental; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; income tax matters; credit facilities; availability and terms of financing; distribution of securities; restrictions on potential growth; effect of market interest rates on price of securities; and potential dilution.
SOURCE: Clearford Industries Inc.
For further information: Mark McGuire, Clearford Water Systems Inc., Phone: (613) 599-6474 ext. 310, www.clearford.com