MONTREAL, QUEBEC--(Marketwire - Oct. 15, 2012) - Solutions Extenway Inc. ("Extenway") (TSX VENTURE:EY) is pleased to announce that it has agreed to undertake a prospectus-exempted private placement of Convertible Debentures for a minimum gross proceeds of $3M and a maximum gross proceeds of $6M (the "Offering"). Extenway is further pleased to announce that it has received a signed subscription agreement from a major institutional fund manager, pursuant to which the fund is committed to invest $1.5M in the Offering, and that another investor has committed to invest $500,000 in the Offering, subject to the terms and conditions set out herein. The Offering is expected to close no later than November 1st, 2012 (the "Closing Date").
The Convertible Debentures will be unsecured, will mature on August 31, 2017 and will bear an annual compounded interest rate of 12%.
The Convertible Debentures will be convertible into common shares of Extenway (the "Common Shares") at a conversion price of $0.13 if the conversion is effected no later than at 5:00 pm on April 29, 2016, or $0.17 if the conversion is effected thereafter, subject to customary adjustment provisions.
In the event that, at any time after August 31, 2015, (a) Extenway issues Common Shares at a price per share equal to or greater than $0.25 (subject to customary adjustments), or (b) the Current Price (as defined in the Convertible Debenture) of its Common Shares is greater than $0.30 (subject to customary adjustments), Extenway will be entitled to buyback the Convertible Debentures prior to their maturity date for a purchase price equal to the principal thereof plus all accrued and unpaid interest thereon. The buyback right will be exercisable pursuant to a prior written notice of at least 30 days prior to the closing of same.
Upon the occurrence of a liquidity event (which includes a merger, an amalgamation, a reorganization, the sale of shares or any other transaction resulting in a change of control of Extenway, or the sale of all or substantially all of the assets of Extenway) (a "Liquidity Event") pursuant to which:
- the conversion price of the Convertible Debentures is lower than the price per Common Share of Extenway determined pursuant to such Liquidity Event (the "Offered Price"), the Convertible Debentures will be automatically converted into Common Shares of Extenway at the applicable conversion price;
- the conversion price of the Convertible Debentures is equal to or greater than the Offered Price, Extenway shall be entitled to cancel the Convertible Debentures by paying to the holders thereof an amount equal to the sum of: (a) the outstanding principal amount of such Convertible Debentures, (b) the accrued and unpaid interest thereon, and (c) a 3% penalty calculated on the outstanding principal amount of such Convertible Debentures.
The proceeds of the Offering will be used for working capital purposes. The private placement is subject to compliance with applicable securities legislation and to the approval of the TSX Venture Exchange.
It is anticipated that finder's fees in the amount of 5% of the gross proceeds of certain placements under the Offering will be payable to registered exempt-market dealers in connection with certain placements. These exempt-market dealers will also be entitled to a maximum of 600,000 share purchase warrants to purchase Common Shares of Extenway at a purchase price of $0.13 per Common Share if exercised on or before the third anniversary of the Closing Date, or $0.17 per Common Share if exercised thereafter. The share purchase warrants will expire on the fifth anniversary of the Closing Date.
All Convertible Debentures and all underlying Common Shares which may be issued to purchasers under the Offering will be subject to a four-month plus one-day hold period from the Closing Date, pursuant to securities legislation and the policies of the TSX Venture Exchange. The Convertible Debentures and all underlying Common Shares offered in the Offering have not been nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States or to an account for the benefit of US persons, absent such registration or an exemption from registration.
About Solutions Extenway
Extenway Solutions (TSX VENTURE:EY) provides technology solutions to the healthcare sector. Among the services offered by Extenway are interactive televisions, bedside patient terminals, Internet, entertainment, content integration, advertising, education, and integrated solutions. Extenway allows organizations to optimize the way they manage and coordinate interactions in the areas of communications, information and entertainment. For more information, visit www.extenway.com or follow us on Twitter @Extenway.
Disclaimer - Safe Harbour Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements. These forward-looking statements relate to the future financial conditions, results of operations or business of Extenway. These statements may be current expectations and estimates about the markets in which Extenway operates and management's beliefs and assumptions regarding these markets. These statements are subject to important risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. The results or events predicted in forward-looking statements may differ materially from actual results or events. Extenway disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In particular, forward-looking statements do not reflect the potential impact of any merger, acquisitions or other business combinations or divestitures that may be announced or completed after such statements are made.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.