Epstein Enterprises Inc.

April 02, 2009 18:01 ET

Epstein Enterprises Inc. Announces It Has Acquired Warrants of Kelman Technologies Inc.

TORONTO, ONTARIO--(Marketwire - April 2, 2009) - Epstein Enterprises Inc. ("EEI"), a corporation controlled by Seymour Epstein, Chairman of the Board of Directors and major indirect shareholder of Kelman Technologies Inc. ("Kelman"), today announced that as described in a press release of Kelman dated March 31, 2009 as filed on SEDAR, it reached an agreement with Kelman to refinance (the "Refinancing") Kelman's 7.25 percent cumulative Series B Senior Preferred Shares due November 5, 2009 (the "Series B Shares") and the 7.25 percent cumulative Series C Senior Preferred Shares due June 30, 2010 (the "Series C Shares") owned by Seyco Operations Limited ("Seyco"), a corporation controlled by Seymour Epstein.

Pursuant to the Refinancing, Kelman will issue (i) a $4,230,696 principal amount 12.25 percent secured non-convertible debenture (the "Debenture") and (ii) 42,306,960 share purchase warrants (the "Warrants") to EEI in exchange for a cash payment of $4,230,696 that will be used to purchase for cancellation 6,861,392 Series B Shares and 2,666,666 Series C Shares owned by Seyco. The Refinancing will enable Kelman to defer payment of $3,430,696 that would have been payable to Seyco on November 5, 2009 and $800,000 that would have been payable to Seyco on June 30, 2010, respectively, upon the mandatory redemption of such shares. Each Warrant will entitle the holder thereof to purchase one common share in the capital of Kelman at an exercise price of $0.10 per share, at any time, on or before the close of business on the date that is four years from the closing date of the Refinancing.

After the acquisition of such Warrants, Seymour Epstein and entities controlled by him will beneficially own or control approximately 70% of the outstanding common shares of Kelman, assuming exercise of all rights to acquire common shares of Kelman by entities affiliated with Seymour Epstein.

The Refinancing is a related party transaction and, in accordance with Multilateral Instrument 61-101, will require approval on a "majority of the minority" basis from the holders of Kelman's common shares. Such approval will be sought at a meeting of the shareholders to be held in the second quarter of 2009. Closing of the Refinancing will be subject to certain conditions set forth in the agreement relating to the Refinancing, including regulatory approval.

Contact Information