StorageVault Canada Inc.
TSX VENTURE : SVI

March 18, 2010 08:00 ET

StorageVault Completes First Tranche of Preferred Share Financing

REGINA, SASKATCHEWAN--(Marketwire - March 18, 2010) - Further to a press release dated March 5, 2010, StorageVault Canada Inc. ("StorageVault") (TSX VENTURE:SVI)  is pleased to announce that on March 17, 2010 (the "Closing Date") it entered into subscription agreements with two subscribers to purchase 4,000,000 preferred shares of StorageVault (the "Preferred Shares") for total gross proceeds of $4,000,000 (the "Preferred Share Financing") upon the full Preferred Share Financing being drawn down. On the Closing Date, StorageVault issued 2,000,000 Preferred Shares for total gross proceeds of $2,000,000. The subscription agreements also contain a commitment by the subscribers to purchase a further 2,000,000 Preferred Shares for total gross proceeds of a further $2,000,000 when StorageVault draws down the second tranche of the private placement, which StorageVault has committed to draw down within one year of the Closing Date. Completion of the Preferred Share Financing is subject to final approval of the TSX Venture Exchange. The Preferred Shares issued on the Closing Date are subject to a four month hold period (until July 18, 2010). StorageVault will issue a further press release announcing when the second tranche of the Preferred Shares are issued.

TERMS OF THE PREFERRED SHARES

Issuance Price and Dividends

The Preferred Shares have an issuance price of $1.00 per Preferred Share and pay a fixed rate cumulative dividend of 5% per annum payable as follows: (i) 2.5% in cash payable quarterly, in arrears, from the date of issuance ("Issuance Date"), calculated for the immediately preceding period; and (ii) 2.5% in Preferred Shares, credited quarterly, in arrears from the Issuance Date, calculated for the immediately preceding period.

Conversion

All or a portion of the Preferred Shares will be convertible, from time to time, at the holder's option into common shares of StorageVault for a period of (3) three years from each respective Issuance Date at a conversion price of $0.30 ("Original Conversion Price"). After the Closing Date, in the event that StorageVault completes a financing of equity securities at a price lower than $0.30 (a "Down Round Financing"), the Original Conversion Price will be reduced to such lower price of the equity securities issued on the Down Round Financing (the "Reduced Conversion Price"), provided that the total dollar amount of Preferred Shares that can be converted at the Reduced Conversion Price cannot exceed the total dollar amount of the Down Round Financing, and further provided that the lower limit of the Reduced Conversion Price is $0.19 (collectively, the Original Conversion Price and the Reduced Conversion Price are referred to as the "Conversion Price").

Retraction

The Preferred Shares shall be retractable, from time to time, after the third anniversary of each respective Issuance Date (each, a "Put Date"). After a Put Date, holders of Preferred Shares shall have the right, upon 150 days prior written notice to StorageVault, to have StorageVault retract all or a portion of the Preferred Shares for an amount, payable in cash, equal to the aggregate issuance price of the Preferred Shares and all accrued and unpaid dividends.

Redemption

The Preferred Shares shall be redeemable anytime after the fourth anniversary of each respective Issuance Date (each a "Call Date"). After a Call Date, StorageVault shall have the right, upon 60 days prior written notice to the holder, to redeem all or a portion of the Preferred Shares for an amount, payable in cash, equal to the aggregate issuance price of the Preferred Shares and all accrued and unpaid dividends. Upon the election by StorageVault to redeem Preferred Shares, the holders shall have a 30 day first right of refusal to convert the Preferred Shares at the Conversion Price.

OTHER INFORMATION

Use of Proceeds

Proceeds of the Preferred Share Financing will be used to fund the acquisition of the self-storage facility located in Cambridge, Ontario (and announced in a press release of StorageVault dated March 4, 2010), the development of PUPS portable storage facilities at such location and for general working capital purposes.

StorageVault Canada Inc.

StorageVault currently owns and operates Trans Can Mini-Stor in Regina, Kenaston Self Storage in Winnipeg and Canadian PUPS in Saskatoon. Both Trans Can Mini-Stor and Kenaston Self Storage are fixed unit storage facilities operating in conjunction with high margin Canadian PUPS portable storage franchises at each location. Under a Proof of Concept arrangement StorageVault also manages AMJ Self Storage in conjunction with a Canadian PUPs portable storage operation in Kanata, Ontario.. StorageVault operates Canadian PUPS in Saskatoon as a stand-alone portable storage franchise. StorageVault intends to continue to grow its business through the acquisition of additional self-storage properties and organically as master franchisee through the development of Canadian PUPS portable storage facilities in Canada. The common shares of StorageVault are listed on the TSX Venture Exchange.

Forward-Looking Information: This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward- looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in StorageVault's disclosure documents on the SEDAR website at www.sedar.com. StorageVault does not undertake to update any forward-looking information except in accordance with applicable securities laws.

Neither the 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.

Contact Information

  • StorageVault Canada Inc.
    Mr. Alan Simpson
    (306) 536-3771
    or
    StorageVault Canada Inc.
    3603 Selinger Crescent
    Regina, Saskatchewan
    S4V 2H7