TSX Symbol: NLC
WOODBRIDGE, ON, April 16 /CNW/ - National Challenge Systems Inc., a
leader in the provision of vacuum truck services for the collection, treatment
and disposal of non-hazardous liquid waste, today announced that, subject to
regulatory approval, it intends to convert all of the outstanding Class A and
Class B Preferred shares into common shares on June 1, 2007, and subsequently,
subject to regulatory and shareholder approvals consolidate the issued and
outstanding common shares of the Company on the basis of one new common share
for every ten issued and outstanding common shares.
PREFERRED SHARE CONVERSION
The disinterested directors approved a resolution to cause all class A
and B preferred shares to convert into common shares on June 1, 2007; the
earliest date allowed by the terms of the preferred shares. As at June 1, 2007
there will be a total of 4,086,971 class A and B shares outstanding. Under the
terms of these shares, the conversion into common shares is to be calculated
by dividing the redemption value of the preferred shares at $1.00 per share by
an amount per common share, which would be equal to the lesser of:
1. $0.40; or
2. the average weighted market price over the 15-day period immediately
prior to the date upon which conversion notice is given, which in
this case will be June 1, 2007.
Based on the current market price of the Company's common shares, the
conversion will result in the issuance of approximately 40 million additional
SPECIAL SHAREHOLDER MEETING
National Challenge will be holding a special shareholder meeting to seek
shareholder approval for the proposed consolidation at its head office,
located at 3700 Steeles Ave. W. Suite 601, Woodbridge Ontario on June 12,
2007. Pending approval of the consolidation, each shareholder would receive
one new share of common stock for every ten shares of common stock previously
held. Immediately after the reverse stock split, the aggregate value of the
shareholder's stock would be unchanged.
PURPOSE OF SHARE STRUCTURE REORGANIZATION
The purpose of the share conversion and consolidation is to present the
investment community with a more appropriate and compelling capital structure
as the Company prepares for its anaerobic digester/renewable energy
"The Board believes that a higher stock price would generate greater
interest among professional investors, institutions and potential financiers.
If the Company is successful in generating interest among such entities,
National Challenge anticipates that shares of its common stock would have
greater liquidity and a stronger investor base," said Mr. Charles Buehler, the
The conversion of the preferred shares to common shares will also
eliminate the Company's dividend expense which was $319,000 in fiscal 2006 and
$174,000 for the first six months of fiscal 2007.
This press release is available on the Company's official on-line
investor relations site for investor commentary, feedback and questions.
Investors are asked to visit the investor relations section of the Company's
website at http://www.nationalchallenge.com/NCS_Investor.asp. Alternatively,
investors are asked to e-mail all questions and correspondence to
Info@NationalChallenge.com where they can also request addition to the
National Challenge investor e-mail list to receive all future press releases
and updates directly.
About National Challenge Systems Inc.
National Challenge is Canada's largest provider of vacuum truck services
for the collection, treatment and disposal of organic and other non-hazardous
liquid waste. NCS services in excess of 8,000 commercial, industrial,
institutional and residential customers in Ontario, Quebec, and British
Columbia. Further information about NCS may be obtained at the Company's web
site at www.nationalchallenge.com.
Note: Certain information contained in this press release may be
forward-looking and therefore subject to unknown risks or uncertainties. The
actual results, performance or achievements of National Challenge Systems Inc.
may differ materially from the results, performance or achievements of the
Company expressed or implied by such forward-looking statements.
For further information:
For further information: Corporate Inquiries: Charles H. Buehler,
President and CEO, firstname.lastname@example.org