Compel Capital Inc.

July 07, 2010 17:21 ET

Compel Capital Inc. Business Update

TORONTO, ONTARIO--(Marketwire - July 7, 2010) - Compel Capital Inc. (the "Company") is pleased to announce that it has agreed to issue a total of 1,494,660 common shares to certain of the Company's debt-holders at an ascribed price of $0.10 per share in full and final settlement of $149,660 principal amount of unsecured debt (the "Debt Settlement Transaction").

Affected debt-holders include the following "related parties" of the Company (within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"): Mr. Rob Saltsman, president, chief executive officer and a director of the Company; Accretive Capital Ltd., a holding company owned and controlled by Mr. Martin Bernholtz, chief financial officer and a director of the Company; and Miracle Capital Ltd., a 10% voting security holder of the Company.

The Debt Settlement Transaction constitutes a "related party transaction" for the purposes of MI 61-101 and was duly approved by Mr. Michael Frank, being the sole director of the Company that is independent from the Debt Settlement Transaction. The Company relied on the financial hardship exemption from the formal valuation and minority voting requirements that would otherwise have applied to the Debt Settlement Transaction under MI 61-101.

Management believes that the Debt Settlement Transaction will result in a cleaner balance sheet and add overall value to the Company.

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