Redstone Capital Corp.
TSX VENTURE : REC.P

May 19, 2006 18:17 ET

Redstone Capital Corp. Announces Closing of Private Placement and Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 19, 2006) - Redstone Capital Corp. ("Redstone") (TSX VENTURE:REC.P) is pleased to announce that it completed a brokered private placement of 4,000,000 subscription receipts ("Subscription Receipts") in the capital of Redstone (the "Offering"). The Offering was led by Versant Partners Inc. as lead agent and Haywood Securities Inc. (the "Agents"). Redstone further announces that it completed its acquisition (the "Acquisition") of all of the issued and outstanding shares of Fireswirl Systems Inc. ("Fireswirl") as its "Qualifying Transaction" as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). These transactions closed effective May 18, 2006 and were previously announced in Redstone press releases dated January 20, 2006, March 30, 2006 and May 8, 2006.

Pursuant to the Offering, 4,000,000 Subscription Receipts were sold at a price of $0.80 per Subscription Receipt for gross proceeds of $3,200,000. Each Subscription Receipt was exchanged without any further action on the part of the holder thereof and for no additional consideration for one Redstone unit ("Unit") upon completion of the Acquisition. Each Unit consists of one Redstone common share (a "Share") and one-half of one Redstone share purchase warrant (the "Warrants"). Each whole Warrant will entitle the holder to acquire one Share at an exercise price of $1.10 per Share for a period of twenty-four (24) months following completion of the Offering. The securities issued pursuant to the Offering (including the Shares and Warrants) are subject to statutory resale restrictions until September 19, 2006. It is anticipated that certificates evidencing the Shares and Warrants will be mailed to purchasers within three business days.

In connection with the Offering, compensation warrants were issued, allowing the Agents and members of the selling group formed in connection with the Offering, to purchase up to 400,000 Units at an exercise price of $0.80 per Unit for a period of twenty-four (24) months following completion of the Offering. Additionally a cash commission of 7% of the gross proceeds was paid to the Agents.

Pursuant to the terms of a share purchase agreement dated May 1, 2006, (the "Acquisition Agreement") among Redstone, Fireswirl and the shareholders of Fireswirl, Redstone purchased all of the issued and outstanding securities of Fireswirl for consideration comprised of an aggregate of 12,300,000 Redstone Shares and $300,000 in cash. A finder's fee of 500,000 Redstone Shares has been paid in connection with the Acquisition. After completion of the Offering (including exercise of the Subscription Receipts) and Acquisition, there are 19,920,000 Redstone Shares issued and outstanding. In addition, Redstone plans to grant stock options to acquire up to 361,500 Redstone Shares at an exercise price of $0.80 per share under its stock option plan to directors, officers, employees and consultants of Redstone and its subsidiaries. For further information regarding Redstone and Fireswirl, please refer to the Redstone filing statement dated May 1, 2006 and the previous press releases, available on SEDAR at www.sedar.com.

The board of directors of Redstone is now comprised of the following individuals: Tony Lau, Andrew Mah, Robert Pollock (a current director of Redstone) and Steve Latham. The management of Redstone now consists of: Tony Lau as President and Chief Executive Officer, Renato Finamore as Chief Financial Officer and Andrew Mah as Chief Operating Officer and Secretary.

The Exchange has conditionally approved the Offering and the Acquisition as Redstone's "Qualifying Transaction" and Redstone now intends to file all necessary final documents with the Exchange to obtain final approval for the Offering and the Acquisition and to have trading of the Shares reinstated.


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Redstone Capital Corp.
    Tony Lau
    President and Chief Executive Officer
    (604) 696-2069