Fareport Capital Inc.
TSX VENTURE : CAB

Fareport Capital Inc.

October 01, 2007 09:28 ET

Fareport Capital Inc. Announces Change of Control by Way of Shares for Debt, Private Placement and Share Consolidation Transactions

TORONTO, ONTARIO--(Marketwire - Oct. 1, 2007) - Fareport Capital Inc. ("Fareport" or the "Company")(TSX VENTURE:CAB) announced today that on Friday, September 28th, 2007 A to Z SPI 3 Inc. became its controlling shareholder, holding approximately 83% of the outstanding common shares of Fareport on a fully diluted basis as a result of the completion of Fareport's previously announced shares for debt, private placement and share consolidation transactions (collectively, the "Transactions"). A to Z SPI 3 Inc., an Ontario corporation controlled by Andrew A. DeFrancesco, is an affiliate of A to Z Holdco Corp. and A to Z Capital Corp.

Fareport completed the shares for debt transaction pursuant to previously entered into debt settlement agreements with secured and unsecured creditors of the Company. The Company owed to secured creditors an aggregate amount of $1,588,885 on the outstanding secured debentures and had outstanding loans to unsecured parties in an aggregate amount of $790,000. Secured creditors received 30% of the total outstanding indebtedness owed to them by the Company in an aggregate amount of $476,665 with 10% being paid in the form of pre-consolidation common shares and 20% being paid in the form of cash for a total amount of $317,777. Unsecured creditors received 15% of the total outstanding indebtedness owed to them by the Company in the aggregate amount of $118,500 with 5% being paid in the form of pre-consolidation common shares and 10% being paid in the form of cash for a total amount of $79,000. A to Z SPI 3 Inc. also converted its outstanding debt in the sum of $200,000 pursuant to a demand debenture dated March 19, 2007 into pre-consolidation common shares of the Company.

Fareport also completed a private placement transaction in the amount of $1,800,000 pursuant to a subscription agreement dated June 13, 2007 with A to Z SPI 3 Inc., for 240,000,000 pre-consolidation common shares of the Company. In addition, Fareport issued a common share purchase warrant to A to Z SPI 3 Inc. equalling 12% of the total aggregate amount invested in the Company. The warrant is non-transferable, exercisable at $0.01 per share and has a term of two years. The net effect of the foregoing transactions is that A to Z SPI 3 Inc. now becomes the controlling shareholder of Fareport.

Fareport also effected a share consolidation of its common shares on the basis of 100 pre-consolidation common shares for each one post-consolidation common share in the capital of the Company.

Fareport also settled certain longstanding litigation between itself and other past and present stakeholders of the Company.

It is currently expected that Fareport's common shares will commence trading on the TSX Venture Exchange (the "TSXV") on a post-consolidation basis the week of October 1, 2007 under its current symbol "CAB".

The shareholders of the Company approved the Transactions at the Company's special meeting of shareholders held in Toronto on September 26, 2007. All materials necessary to effect the consolidation have been filed with the TSXV.

Letters of transmittal describing the details of the share consolidation and the process by which shareholders obtain actual share certificates representing the consolidated common shares were mailed out to registered shareholders of the Company on or about September 28, 2007. Registered shareholders may also obtain copies of the letter of transmittal by contacting their brokers or other intermediary or the Company's transfer agent, Equity Transfer & Trust Company.

Shareholders who hold their shares through their broker or other intermediary and do not have actual share certificates registered in their name will not be required to complete and return a letter of transmittal. Any pre-consolidation common shares owned by such shareholders will automatically be adjusted as a result of the share consolidation to reflect the applicable number of post-consolidation common shares owned by them and no further action is required to be taken by such shareholders. If as a result of the consolidation a shareholder becomes entitled to a fractional share, such fractions will be rounded down to the nearest whole common share.

It is also currently expected by the Corporation that the financial statements for the three months ended March 31, 2007 will be filed under applicable securities laws on or prior to December 31, 2007. The temporary management and insider cease trade order (the "MCTO") previously imposed pursuant to OSC Policy 57-603 will continue to be in effect until the financial statements for such period are filed under applicable securities laws. The MCTO imposed pursuant to OSC Policy 57-603 continues to be in effect. The MCTO prohibits present and certain past directors, officers and insiders of Fareport from trading in securities of Fareport. Fareport will continue to provide updates on these and related matters in accordance with OSC Policy 57-603.

A to Z Capital Corp. is a private issuer engaged in private equity transactions, including the restructuring and reorganization of distressed entities, acquisitions and business combinations, change in control transactions and mezzanine and subordinated debt financings.

A to Z Capital Corp. has five subsidiaries, four of which are each special purpose vehicles holding direct investments in other private issuers and one of which, A to Z Lending Corp., is engaged only in mezzanine and gap debt financing, primarily in the North American film and television production industry. Each subsidiary also has preferred shareholders who are accredited investors.

Neither the TSX Venture Exchange nor any securities regulatory authority has reviewed nor approved the contents of this news release and do not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Fareport Capital Inc.
    Emlyn David
    President, and Chief Executive Officer
    (416) 725-2177
    or
    Fareport Capital Inc.
    Andrew A. DeFrancesco
    Chairman
    (416) 358-4411