TORONTO, Nov. 27, 2014 /CNW/ - Mitec Technologies Inc. ("Mitec", NEX: MTM.h) announces that it has arranged a financing with its Chairman, Mr. Abe Schwartz. The secured convertible debenture in the amount of $109,125 will bear interest at a rate of 12% per annum, compounded annually, maturing on the date which is five years from closing.
The principal of the debenture is convertible, in whole or in part, during the Loan term, at the option of Mr. Schwartz, into a maximum of 485,000 common shares at a value of $0.225 per common share. Mr. Schwartz will also receive 485,000 common share warrants exercisable at $0.225 per share for a period of one year from closing.
The financing is subject to the approval of the TSX Venture Exchange.
The financing will constitute a related party transaction under Multilateral Instrument 61-101 ("MI 61-101") for Mr. Schwartz, in his capacity as Chairman. Mr. Schwartz is a significant shareholder of Mitec holding 5,200,000 common shares, which represents approximately 41.3% of Mitec's currently outstanding shares and $390,875 in existing debentures, convertible into 1,475,000 common shares. Should Mr. Schwartz convert the entire amount of the existing and this new debenture, he would increase his ownership in Mitec from 41.3% to approximately 49%. Mr. Schwartz has agreed to provide this loan to Mitec in order to assist with its current working capital needs and has no present intention of acquiring other securities of the company or disposing of any of the securities of the company he currently holds.
Mitec has determined that distribution of an information circular to shareholders, preparation and distribution of a formal valuation and seeking of shareholder approval of the loan is not necessary under MI 61-101 (including TSX-V policy 5.9 which incorporates such policy by reference) as Mitec intends to rely on the exemptions found in sections 5.5(a) and 5.7(1)(a) of MI 61-101. The maximum aggregate principal amount of the debenture represents approximately 4% of Mitec's market capitalization.
The financing was approved by Mitec's Board of Directors, Mr. Schwartz having abstained.
Mitec also announces the record date for its upcoming Annual and Special Meeting which will take place in Toronto, Ontario on February 2, 2015 will be December 24, 2014. Mitec will be taking advantage of the Notice and Access rules to reduce printing and mailing costs associated with the dissemination of annual information to shareholders. Notice and Access permits annual financial statements, management's discussion and analysis and meeting circulars to be posted on a publicly available website, instead of being mailed to shareholders.
Shareholders may access these materials as well as the company's financial disclosure for the period ending September 30, 2014 under the company's profile on SEDAR at www.sedar.com or at www.mitectechnologies.com.
This news release contains forward-looking statements which reflect Mitec's current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan, "estimate", "expect", "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including the difficulty in predicting product approvals, acceptance of and demands for new products, the impact of the products and pricing strategies of competitors, delays in developing and launching new products, the regulatory environment, fluctuations in operating results and other risks, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industry; others are more specific to Mitec. Investors should consult Mitec's ongoing quarterly filings for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. The Mitec assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Mitec Technologies Inc.
For further information: Mr. Jeffrey Mandel, President & CEO, [email protected], Tel.: (905) 822-8170