Redstone Capital Corp.

March 31, 2006 12:11 ET

Redstone Capital Corp. Announces Revised Private Placement and Further Information in Regards to its Acquisition

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 31, 2006) - Redstone Capital Corp. ("Redstone" or the "Corporation") (TSX VENTURE:REC.P) announces that it has finalized the terms of its previously announced brokered private placement.

The Corporation announces that it has entered into an agreement with Versant Partners Inc., the lead agent on behalf of a syndicate of investment dealers (collectively the "Agents") to complete a brokered private placement of up to 4,000,000 subscription receipts ("Subscription Receipts") at a price of $0.80 per subscription receipt on a best efforts basis (the ("Offering"). Each Subscription Receipt will be exchanged without any further action on the part of the holder thereof and for no additional consideration for one (1) Redstone unit upon the completion of certain conditions including, among other things, the completion of the acquisition (the "Acquisition") by Redstone of all of the issued and outstanding securities of Fireswirl Systems Inc. ("Fireswirl"). Each Redstone unit ("Unit") will consist of one (1) common share in the capital of the Corporation (the "Shares") and one-half (1/2) of one share purchase warrant (the "Warrants"). Each whole Warrant will entitle the holder to acquire one (1) Share at an exercise price of $1.10 per Share for a period of twenty-four (24) months following the completion of the private placement. The securities issued pursuant to the Offering will be subject to statutory resale restrictions for a period of four months and one day from the closing date.

The gross proceeds of the Offering will be held in escrow and released to the Corporation upon completion of the Acquisition. In the event that the Acquisition is not completed within four months from the closing date of the Offering, the escrowed proceeds will be used to repurchase the subscription receipts from the holders thereof.

In connection with the proposed private placement up to 400,000 agent's options will be issued, allowing the Agents to purchase up to 400,000 Units at an exercise price of $0.80 per Unit for a period of twenty-four (24) months. Additionally a cash commission of 7% of the gross proceeds will be paid to the Agents which is equal to an amount of up to $224,000.

Further to the Corporation's press release dated January 20, 2006, the following information regarding Fireswirl and the Acquisition is now available.

Selected Consolidated Financial Information of Fireswirl

Year Ended December 31,
2005 2004 2003
($) ($) ($)
Total Revenue 1,004,627 754,511 590,193
Income (Loss) before other items 240,827 174,314 189,074
Net Income (Loss) Per Share 0.008 (0.32) 9.44
Net Income (Loss) Diluted Per Share 0.008 (0.32) 9.44
Net Income (Loss) 114,823 (4,263) 125,902
Total Assets 406,520 299,925 296,815
Long Term Financial Liabilities nil nil nil
Cash Dividends Declared Per-Share nil nil nil
Operating Expenses 763,800 580,197 401,119

This information is from Fireswirl's audited annual financial statements dated December 31, 2005, 2004 and 2003.

Insiders of the Resulting Issuer

The proposed board of directors of the resulting issuer will consist of Tony Lau, Andrew Mah, Robert Pollock (a current director of Redstone), Renato Finamore and Steven Latham. In addition, it is proposed that Renato Finamore will be an officer of the resulting issuer. Information relating to Tony Lau, Andrew Mah and Renato Finamore can be found in the Corporation's January 20, 2006 press release.

Steven Latham

Steven Latham, a proposed director of the resulting issuer, has been involved in the high technology field for the past 20 years. From 1995 to 1997, Mr. Latham was employed by Corel Corporation in the international sales group. In 1998, Mr. Latham founded his own company, Gateway Technology Inc., a company which provided solutions for both video conferencing and online gaming software. Gateway Technology Inc. was acquired by Chartwell Technology Inc., a public company specializing in online casino gaming software. Mr. Latham served as a Director for Chartwell Technology Inc. from August 1998 to March of 2004. He was also the Director of Sales & Marketing for Chartwell Technology Inc. from June 1997 to March of 2005.

The Corporation has made its initial filing of materials for the Acquisition to the TSX Venture Exchange.

The Corporation is a "capital pool company" and intends for the Acquisition to constitute the "Qualifying Transaction" of the Corporation as such terms are defined in the policies of the TSX Venture Exchange. Upon completion of the Acquisition, it is expected that the resulting issuer will be a Tier 2 Technology Issuer. The Proposed Acquisition is an arm's length transaction.

On completion of the Acquisition, the Corporation will carry on in the software development industry and will continue to market and license its online poker and gaming related software. The Corporation intends to geographically diversify its business by launching its products in emerging markets, including Eastern Europe, South America and Asia.

In accordance with Exchange policy, the Corporation's shares are currently halted from trading.

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

Contact Information

  • Redstone Capital Corp.
    Richard A. Graham
    President and Director
    (604) 689-1428
    Fireswirl Systems Inc.
    Tony Lau
    Chief Executive Officer
    (604) 696-2069