Software Growth Inc.
TSX VENTURE : SGW.P

September 26, 2007 17:36 ET

Software Growth Inc. Announces Proposed Qualifying Transaction

TORONTO, ONTARIO--(Marketwire - Sept. 26, 2007) - SOFTWARE GROWTH INC. (TSX VENTURE:SGW.P) (the "Corporation"), a capital pool company, announced today that it has entered into a term sheet concerning a proposed transaction (the "Transaction") between the Corporation and Sensicore, Inc. ("Sensicore") which, if completed, will be the Corporation's qualifying transaction pursuant to the policies of the TSX Venture Exchange Inc. (the "Exchange").

Sensicore

Sensicore is a private company incorporated under the laws of the State of Delaware with its head office located in Ann Arbor, Michigan. Sensicore is engaged in the business of designing and selling a new generation of smart water quality sensors, sensor networks and information monitoring systems that advance the purity and surety of water on a global basis. Sensicore helps municipalities ensure the quality of the water they produce and assists them in safeguarding their water infrastructure. Sensicore also sells its products in the industrial and commercial markets where water quality is critical to many process applications.

Transaction Summary

The Transaction will consist of a number of steps including the following:

(a) The Corporation will be continued under the laws of Delaware.

(b) The Corporation will incorporate a wholly owned subsidiary ("Newco") under the laws of Delaware.

(c) The Corporation, Sensicore and Newco will engage in a "three cornered" amalgamation whereby Sensicore and Newco will merge to form a new company which will be wholly-owned by the Corporation. The holders of common shares, preferred shares, options and warrants of Sensicore will exchange all such rights for shares, options and warrants in the capital of the Corporation.

(d) Sensicore will conduct a private placement in an amount of $15,450,000 including the conversion of existing shareholder loans and accrued interest (the "Private Placement").

(e) The Corporation will consolidate its shares, change its name and appoint new auditors.

The Transaction is an arm's length transaction. No related party of the Corporation has any interest in Sensicore. Accordingly, the Transaction will not, as currently contemplated, be subject to approval by the shareholders of the Corporation but a filing statement will be issued in respect of the Transaction. Further details of the Transaction will be announced as available.

Share Capital

The common shares in the capital of the Corporation will be consolidated on the basis of two existing common shares for one new common share. For the purposes of the Transaction the existing common shares in the capital of the Corporation have been valued at $0.39 per share on a pre consolidated basis.

The Private Placement will consist of 19,312,500 units at $0.80 per unit on a consolidated basis. Each unit is comprised of one common share and 1/2 share purchase warrant on a consolidated basis. Each whole share purchase warrant will entitle the holder to acquire one share at a price of $1.44 on a consolidated basis.

Assuming $15,450,000 is raised by way of the Private Placement, there will be an estimated 46,161,962 shares outstanding in the capital of the Corporation on completion of the various transactions. In addition, there will be warrants, options and broker warrants to acquire a further estimated 13,042,685 shares.

Conditions

Completion of the Transaction is subject to a number of conditions, including but not limited to, completion of the Private Placement, negotiation and signing of a definitive agreement, Exchange acceptance and shareholder approval of the continuance, share consolidation and name change. The Transaction cannot close until all the conditions are satisfied. There can be no assurance that the Transaction will be completed as proposed or at all.

Other

The Corporation is currently in the process of preparing a detailed press release regarding the Transaction which will satisfy the disclosure requirements of the Exchange. Trading in the common shares of the Corporation will remain halted pending the release of more fulsome disclosure regarding the Transaction and the satisfaction of the filing requirements of the Exchange.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • Software Growth Inc.
    Mark Lawrence
    President, Chief Executive Officer,
    Chief Financial Officer and Director
    (416) 707-6630
    Email: mark@northcrestpartners.com