MONTREAL, Oct. 9, 2015 /CNW Telbec/ - (TSXV: SDW): Sofame Technologies Inc. is disclosing developments in accordance with Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults. On March 30, 2015, the TSX Venture Exchange suspended securities trading as a result of a CTO issued by Québec's AMF.
Sofame intends to file audited annual financial statements, MD&A and officer certifications for the year ended September 30, 2014, by November 30, 2015. Sofame is in discussions with its auditors, Brunet, Roy, Dubé, to complete their audit within an extension granted by the TSXV. Sofame will file quarterly financial reports for the quarters ending December 31, 2014, March 31, 2015 and June 30, 2015, by November 30, 2015 after the auditor's work is completed.
On October 1, 2015, Sofame entered a settlement agreement with TCA Global Fund regarding a debt to TCA in the amount of US$600,000. This debt is secured by a mortgage bond in second rank charging all assets. Under the Agreement, Sofame must make a payment to TCA of $150,000 by October 15, 2015, and $450,000 in monthly installments of $10,000 over 45 months commencing October 30, 2015. TCA has agreed to waive further interest and fees if the payment schedule is respected.
In order to pay TCA, Sofame signed a Funding Agreement with a new lender who has agreed to guarantee the monthly payments, as well as to provide funding in the amount up to $600,000, to ensure that TCA does not enforce its corporate and personal guarantees. The new lender has also agreed to purchase the outstanding notes representing the principal of Sofame's secured Bridge Loan totaling US$ 225,000, over a period of time being negotiated with the investors, through their Toronto representative, BNY Trust.
The new lender may offer to merge Sofame in a share-for-share exchange, which would be tabled prior to the next Annual General and Special Meeting of the shareholders, tentatively scheduled for December 2015. Conditional to the new funding now in place, Sofame's key executives, John Gocek and Luc Mandeville, have assumed identical roles in the holding company which offered Sofame refinancing. The funding arrangement has been vetted by the Board of Sofame Technologies, and is subject to final approval by the TSX Venture Exchange.
After restructuring of secured debts is complete, Sofame will offer to convert unsecured liabilities totaling C$1,825,000 into common shares. TSXV limits the pricing of debt conversions to $0.05 cents. Conversion would result in a fifteen percent dilution of current shareholders. 146 unsecured creditors hold an average creditor debt of $12,500. Quarterly filings ending June 30, 2014, reported net value Sofame's assets as C$173,626.
Sofame continues to operate as a going concern, and in August delivered its Percotherm® direct contact condensing economizer to the CHUM super hospital in Montreal. Pumps and heat exchangers skids in production are scheduled for delivery in November. Sofame is also completing the start-up of three industrial heat recovery systems in Montreal, which are at a dairy plant, hospital and pharmaceutical manufacturer.
According to John Gocek, President & CEO of Sofame, "The restructuring of Sofame's secured debts is great news for all stakeholders. Sofame's proven energy efficiency technologies are still recognized as world-leading. We recently travelled to China and Eastern Europe at the request of new customers, who are paying three to five times more than North Americans for their natural gas. We have concluded that Sofame's future success lies beyond Canada's borders."
Directors, officers and insiders are prohibited from trading in securities of the company for as long as the annual financial statements, MD&A and related certifications are not filed. Free trading in the Corporation's securities will be restored to all persons after the audit is completed, and only if reinstatement is accepted by TSXV and AMF by November 30, 2015.
Neither 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.
SOURCE Sofame Technologies Inc.
For further information: John Gocek, President & CEO, (514) 523-6545 x200; Stone Communication Services, Jason Stone, (416) 867-2533, [email protected]