Contec Innovations Inc.
TSX VENTURE : BUZ

Contec Innovations Inc.

October 07, 2005 13:35 ET

Contec Announces Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 7, 2005) - Contec Innovations (TSX VENTURE:BUZ), a provider of mobile Internet infrastructure software, today announced a non-brokered private placement offering to raise gross proceeds of up to C$875,000. Under the terms of the private placement, the Company will offer for sale a maximum of 5,000,000 Units (the "Units") at C$0.175 per Unit.

Each Unit will consist of one common share and one half of a non-transferable share purchase warrant (the "Warrants") where each full Warrant will allow the subscriber to purchase an additional share at C$0.25 until the earlier of: (i) One year from issuance of the warrant; and (ii) the date which is the later of: (A) 30 days following the issuance of a press release by the Company confirming that the closing price of the common shares of the Company on the TSX Venture Exchange exceeded C$0.40 for 10 consecutive trading days and the aggregate number of common shares of the Company traded during that period was not less than one half of the common shares issued in the private placement; and (B) Four months and one day from the date of issuance of the warrant.

The Company will pay a cash finder's fee equal to 8% of the total gross proceeds of the offering and finder's warrants ("Finder's Warrants") equal to 10% of the number of Units sold under the offering exercisable at C$0.175 per warrant for a period of one year from the closing. Each Finder's Warrant may be exercised for one additional common share of the Company. The Finder's Warrants are subject to the same accelerated expiry conditions as the Warrants sold to subscribers.

The Units issued upon the closing of the placement are subject to a 4-month hold period. The private placement is subject to the acceptance of the TSX Venture Exchange.

Contec has signed a loan agreement with an officer of the Company for working capital purposes at commercial lending rates to be repaid at the closing of the above-mentioned financing.

ON BEHALF OF THE BOARD OF DIRECTORS OF CONTEC INNOVATIONS

Don Lay, CEO

About Contec Innovations

Contec accelerates the growth of the mobile Internet by enabling mobile service providers to capitalize on new data services. Contec's core product, the Hornet™, is an open, carrier-class mobile services delivery platform capable of hosting multiple mobile applications in a secure, scalable environment allowing service providers to generate new revenues by efficiently deploying reliable and compelling data applications. Founded in 1999 and headquartered in Vancouver, Canada, Contec is listed on the TSX Venture Exchange under the symbol "BUZ". For more information, visit www.contec.ca.

The statement made in this press release may contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from the Company's expectations. Hornet™ is a trademark of Contec Innovations Inc.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of the content of the information contained herein.

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