Pacific Safety Products Inc.

Pacific Safety Products Inc.

June 15, 2010 10:04 ET

Pacific Safety Products Inc. Announces Termination of Proposed Arrangement and Sale of Assets

KANATA, ONTARIO--(Marketwire - June 15, 2010) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") today announced that it has agreed with Revision Eyewear Inc. ("Revision") to terminate the Arrangement Agreement pursuant to which Revision would have acquired all of the outstanding shares of PSP for $0.18 each. Several of PSP's larger share holders have indicated that they would not support the Arrangement Transaction and it is apparent that there is insufficient shareholder support to obtain the required two-thirds approval of the shares voted in person or by proxy at the special meeting of the shareholders of PSP (the "Meeting") scheduled for June 17, 2010. Accordingly, the Arrangement Transaction has been terminated and the Meeting will be adjourned. The Company has agreed to reimburse Revision for $150,000 of transactions costs incurred by Revision in connection with the Arrangement Transaction. 

Concurrently, the Company announced the sale of its headborne system assets to Revision for $1, 275,000. Mr. David Scott, Chief Executive Officer of PSP stated: "The headborne program was established by PSP to develop new protection products for future market opportunities. To date the Company has made advances in the development of products; however, significant further investment is required in order to capitalize on these anticipated market opportunities. Given the state of the industry and the current economic conditions, the Company simply does not have the capital required to continue its headborne R&D program and Revision's offer provides the Company with the opportunity to monetize this asset. " The transaction is subject to certain key development and engineering employees associated with the headborne initiative signing long term employment agreements with Revision; third party and governmental consents and TSX Venture Exchange acceptance of the transaction. The transaction is expected to close on or about June 30, 2010.

As previously reported, the Company is currently in breach of a financial covenant in its operating loan agreement; and the bank has indicated that it would not extend its waiver of this breach if the Arrangement Transaction was not approved by shareholders. Proceeds from the sale of the headborne system assets will be used, in part, to bring the Company into compliance with its bank covenants.

About PSP

The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely™. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against chemical and biological hazards. PSP is the largest armour manufacturer in Canada, directly supplying the Canadian Department of Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company also provides specialized law enforcement and safety products through APS Distributors, a division of PSP that services law enforcement and public safety agencies across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing and emergency medical kits. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.

Forward-Looking Statements: This news release contains forward-looking statements based on management's expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the proposed transaction, its likelihood of completion on either the terms currently proposed or on revised terms, together with any statements about the Company's growth strategy, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents which may be filed with the British Columbia Securities Commission, the Alberta Securities Commission, the Ontario Securities Commission, the TSX Venture Exchange, as well as others, could cause results to differ materially from those stated.

Contact Information

  • Pacific Safety Products Inc.
    David Scott
    Chief Executive Officer
    (613) 254-9488 ext. 322