GLOBEL DIRECT, INC.
TSX VENTURE : GBD

GLOBEL DIRECT, INC.

November 10, 2005 18:14 ET

Globel Direct, inc. Announces Significant Financing

CALGARY, ALBERTA--(CCNMatthews - Nov. 10, 2005) - Globel Direct, inc. (TSX VENTURE:GBD) ("Globel" or "the Company"): Globel is pleased to announce that it has completed a financial restructuring plan which includes a private placement of convertible secured debentures of up to $1.8 million and the conversion of over $3.9 million of debt into common and preferred shares of the Company.

This is a significant step forward for Globel, our shareholders and our customers," said J.R. Richardson, President and CEO of Globel. "As an active service company in a very busy sector, we have time and time again demonstrated our unique ability to successfully compete with the large, incumbent providers in the business transaction market. This financing provides Globel with a much improved balance sheet and a solid foundation for future growth and success".

The Private Placement

The Company has issued a convertible secured debenture of $1,500,000 to Quorum Secured Equity Trust, managed by the Quorum Group of Companies, an arm's length third party, convertible in whole or in part into 25 million common shares of Globel at a base price of $0.06 per common share and, on a best efforts basis, may issue additional convertible secured debentures of up to $300,000 on the same terms and conditions as the debenture issued to Quorum Secured Equity Trust.

The Quorum Debenture matures on December 15, 2009, and the outstanding balance bears interest at the rate 8.5% per annum, payable quarterly. On closing, the Company prepaid the interest accruing during the first 8 months of the term.

Net proceeds of the Private Placement will be used to expand Globel's product offerings in Canada through internal development and through strategic relationships, and for general working capital purposes.

The Debenture is convertible in whole or in part during the term into common shares at the price of $.06 per common share for the first two years, such conversion price increasing by 10% per year thereafter until maturity, for a maximum of 25 million common shares. The Debentures distributed in the private placement, and the common shares issuable on conversion of the Debentures, will be subject to a 4 month hold period under applicable securities laws.

In connection with the issuance of the Debenture to Quorum Secured Equity Trust, Michael Goffin, SVP of Investments of the Quorum Group, has been invited to join the Board of Directors of Globel. Mr. Richardson stated: "Quorum's involvement will allow us to rapidly implement our strategic growth plans. We are pleased to be involved with Quorum and to have Michael join our Board of Directors. They are a substantial investor in companies of our size, and have done their homework on our sector and we look forward to working with them to the benefit of all shareholders to restore the Company back to its prosperity path."

Conversion of Debt for Common Shares

Certain existing debt of Globel has been converted into common shares and preferred shares of Globel. In particular:

(a) principal indebtedness of $2,700,000 under an existing convertible debenture previously issued by Globel to Roynat Capital Inc. has been satisfied by the issuance of: (i) 8,750,000 common shares at a price of $0.08 per common share; (ii) 5,555,555 common shares at a price of $0.09 per common share; and iii) 1.5 million of preferred shares retractable at certain enterprise values; and

(b) shareholder loans of $1,233,828 have been converted to 13,709,200 common shares at the rate of $0.09 per common.

All shares acquired as a result of the conversion of debt are subject to a 12 month escrow period.

"I am pleased to see so many of our stakeholders join together to invest, and re-invest, in the company's future", says Richardson. "It is without question an important milestone in ensuring Globel's future success and the re-structured balance sheet provides a sound base for future growth. The demand for our goods and services is rapidly increasing in the Canadian business market, and we believe Globel is firmly positioned to capitalize on its competitive strengths."

These transactions are subject to receipt of final listing acceptance from the TSX-V.

About Globel Direct:

Globel Direct inc. is a leading provider of business communications solutions that help organizations inform, educate, service and attract customers more effectively and efficiently. The Company's solutions integrate its expertise in out-sourced marketing, billing, customer support and fulfillment with specialized equipment, proven technologies, and a multi-site delivery infrastructure that enables its clients to target the right audience, in the right format, at the right time and at the right price. For more information about Globel Direct visit www.globel.com.

About Quorum

THE QUORUM GROUP OF COMPANIES - The Quorum Group of Companies was founded in 1987 under the leadership of Wanda Dorosz, the current CEO and Managing Partner. It operates from its headquarters in Toronto with subsidiary offices in Bermuda and London, UK. Since 1987, Quorum has successfully invested over $350 million on behalf of institutions and high net worth individuals in growth capital. It recently closed the Quorum Secured Equity Trust in December 2004, Canada's first dedicated pool for undervalued publicly-traded Canadian companies.

This document contains forward-looking statements. Some forward looking statements may be identified by works like "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. The statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. The Company's actual results could differ materially from those currently anticipated due to a number of factors, including, but not limited to, successful integration of structural changes, including restructuring plans, acquisitions, technical or manufacturing or distribution issues, the competitive environment for the Company's products, the degree of market penetration of the Company's products, and other factors set forth in reports and other documents filed by the Company with Canadian securities regulatory authorities from time to time.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Globel Direct, inc.
    J.R. Richardson
    President
    (403) 531-6579 or Toll-Free: 1-800-551-5721
    (403) 531-6560 (FAX)
    Email: jr@globel.com