Canadian Public Venture Finance I Inc.
TSX VENTURE : NNN.P

August 04, 2005 17:49 ET

Canadian Public Venture Finance I Announces Execution of Amalgamation Agreement with Extenway

MONTREAL, QUEBEC--(CCNMatthews - Aug. 4, 2005) -

(Not for dissemination in the United States of America)

Canadian Public Venture Finance I Inc. ("Finance I" or the "Corporation") (TSX VENTURE:NNN.P) is pleased to announce that it has entered into a formal amalgamation agreement (the "Amalgamation Agreement") with Extenway Solutions Inc. ("Extenway"), pursuant to which the parties have agreed Extenway and Finance I will amalgamate (the "Business Combination") and continue as a new company to be named Extenway Solutions Inc. ("Amalco"). Pursuant to the terms of the Amalgamation Agreement:

(a) each one class A share and class B share of Extenway shall be exchanged for one (1) fully-paid and non-assessable common share of Amalco;

(b) each one agent's option of Extenway shall be replaced with/continued into one replacement agent's option of Amalco with identical terms;

(c) each $1.00 principal amount of Extenway convertible debentures shall be replaced with/continued into $1.00 principal amount of replacement convertible debentures of Amalco with identical terms;

(d) each common share of Finance I shall be exchanged for one fully-paid and non-assessable common share of Amalco;

(e) each agent's option of Finance I shall be replaced with/continued into one replacement agent's option of Amalco with identical terms; and

(f) each one stock option of Finance I shall be replaced with/continued into one replacement stock option of Amalco with identical terms.

Pursuant to the Business Combination, Extenway intends to complete a private placement (the "Private Placement") for gross proceeds of a minimum of $1,300,000 and a maximum of $2,300,000 by way of the issuance of subscription receipts of Extenway at a price of $0.30 per receipt, or such other price per receipt as may be agreed by Extenway and Finance I in the context of the market subject to regulatory approval. Assuming the Private Placement is completed at a price of $0.30 per receipt, Extenway will issue a minimum of 4,333,333 and a maximum of 7,666,667 subscription receipts of Extenway.

The following table describes the outstanding share capital after completion of the Business Combination and the completion of the Private Placement:



Pro Forma After Completion of the
Business Combination and the
Maximum Private Placement
------------------------------------------------------------------------
Current Finance I Shareholders 9,700,000
Current Extenway Shareholders 26,666,667
Private Placement Investors 7,666,667
(4,333,333 if only Minimum
Private Placement)
Existing Extenway Debentureholders
and debtholders 6,816,666
TOTAL: 50,850,000
Agents' Options issued as part of
the Private Placement 806,666 exercisable at
$0.30 per share
(473,333 if only Minimum
Private Placement)

Existing Agent's Options 300,000 exercisable at $0.25
per share
Existing Convertible Debentureholders $150,000 convertible at $0.30
per share
Existing Stock Options 970,000 exercisable at
$0.25 per share


The completion of the Business Combination is subject to the approval of TSX Venture and all other necessary regulatory approval. The completion of the Business Combination is also subject to additional conditions precedent, including shareholder approval of the Corporation and Extenway for the Business Combination, the entering into of employment agreements with certain key personnel of Extenway, the completion of the Private Placement and certain other conditions.

Finally, Finance I announces the Information Circular of Finance I describing the terms of the Business Combination has now been mailed to shareholders and posted on www.sedar.com.

As indicated above, completion of the Business Combination is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval of the Corporation. The Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular of the Corporation to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Factors that might cause a difference include, but are not limited to, market acceptance of principal products, the impact of competitive products and technologies, the possibility of products infringing patents and other intellectual property of fourth parties, and costs of product development. Neither Extenway nor Finance I will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Finance I and Extenway.

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

Contact Information

  • Canadian Public Venture Finance I Inc.
    Alain Lambert
    President
    (514) 219-7988
    or
    Extenway
    John McAllister
    President and Chief Executive Officer
    (514) 694-4866