Open EC Technologies, Inc.
TSX VENTURE : OCE

Open EC Technologies, Inc.

August 12, 2005 20:38 ET

Open EC Technologies Announces Non-Brokered Private Placement

NORTH VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 12, 2005) - Open EC Technologies, Inc. (the "Company") (TSX VENTURE:OCE) is pleased to announce, subject to regulatory approval, a private placement financing of up to approximately C$230,000 on a non-brokered basis under which the Company would issue up to approximately 2.3 million units (the "Units"), each Unit consisting of one common share of the Company and 1/2 of one common share purchase warrant (a "Warrant"). Each Unit will be priced at $0.10. Each whole Warrant entitles the holder to purchase an additional common share of the Company at a price of $0.15 for a period of 12 months following closing.

Up to 500,000 Units will be issued to a holding company controlled by Martyn Armstrong, President, CEO and a director of the Company and up to 500,000 Units will be issued to a holding company controlled by John Versfelt, CFO and a director of the Company. As a related party transaction, the private placement is subject to the provisions of Policy 5.9 of the TSX Venture Exchange and Ontario Securities Commission Rule 61-501.

The Company is relying on the exemption from the valuation requirement available to issuers listed on the TSX Venture Exchange (and not on any other exchange) and on the exemption from the minority approval requirement available in the case of financial hardship. The Company has obtained an opinion of Gray & Associates, Chartered Accountants that the Company is in serious financial difficulty. The Company's board of directors and the independent director on the board have each unanimously determined that the Company is in serious financial difficulty, that the proceeds of the private placement will help the Company improve its financial position and that the terms of the private placement are reasonable in the Company's circumstances.

The proceeds from the private placement will be used for general working capital purposes and are intended to enable the Company to reduce certain of its debts, and thereby improve its financial position. The private placement is expected to close by the end of August, 2005. This shorter period of time, being less than 21 days from the date of this press release to the expected date of closing, is reasonable as the private placement is small and a fairly short period is typical for private placements of this nature.

The private placement is subject to acceptance for filing by the TSX Venture Exchange.

These securities have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act"), as amended, or the securities laws of any state and may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S of the U.S. Securities Act) unless an exemption from registration is available.



On Behalf of the Board of Directors

"John A. Versfelt"

John A. Versfelt
Director & CFO


The foregoing contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The statements may be identified by such forward-looking terminology as "expect," "believe," "may," "will," "intend," "plan," and similar statements or variations. Such forward-looking statements are based on our current estimates and assumptions and involve certain significant risks and uncertainties, including: risk associated with and dependence on the industry subject matter of the information; fluctuations in quarterly revenues due to lengthy selling cycles; product implementation cycles; customer budget cycles; and timing of revenue recognition; dependence on major customers; successful and timely development and introduction of new products and versions; rapid technological changes; increased competition; retention of key senior managers; and other industry related factors. Other important factors that should be considered are included in the Company's audited financial statements for the fiscal year ended May 31, 2004 and other reports filed on SEDAR and the Company's 20F and 6K's filed with the SEC. Actual results may differ materially. The Company assumes no obligation for updating any such forward-looking statements.

The Exchange has not in any way passed upon the merits of this news release.

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