Semcan Inc.
TSX VENTURE : STT

Semcan Inc.

May 02, 2011 12:02 ET

Semcan Inc. Announces Additional Debt to Equity Conversion of $240,756 and Summary of $6,481,961 Financial Restructuring

TORONTO, ONTARIO--(Marketwire - May 2, 2011) - Semcan Inc. (TSX VENTURE:STT) ("Semcan" or the "Company") today announced that it has converted $240,756 of debt into 641,736 common shares at a deemed price of approximately $0.28 per share and 200,000 common shares at a deemed price of $0.30 per share. On April 15, 2011, the Company announced the conversion of $3,743,363 of debt into common shares. The total conversion of debt to shares accomplished as part of the recent financial restructuring is $3,984,119 (the "Debt Conversion"). The common shares are subject to a four-month hold period from the date of issuance.

Summary of $6,481,961 Financial Restructuring

On April 27, 2011, the Company announced the closing of the second and final tranche of a financing for gross proceeds of $2,497,842 through a private placement to accredited investors (collectively, the "Lenders") of a secured convertible loan (the "Loan"). The total effect of the funding provided by the Loan and the Debt Conversion is as follows:

Source of FundingAmountAverage Share PriceNumber of Shares Issued on Conversion
Loan$2,497,842
(new funding)
$0.14
(at time of conversion)
17,841,729
(potential)
Debt Conversion$3,984,119
(conversion of existing debt)
$0.3629
(average for all
conversions)
10,980,009
(issued)
Total$6,481,961$0.224928,821,738

David Deacon, Semcan's CEO, commented, "The closing of the Loan and Debt Conversion transactions represent an enormous improvement in the Company's working capital position and debt load. We have effectively raised approximately $6.5 million at an average price of nearly $0.225 per share at a time when the Company's shares were trading at $0.14 per share. In addition, the future exercise of the warrants available to the Lenders could add in excess of $1.2 million of additional equity with no incremental transaction costs."

The terms of the Loan provide that upon the exercise of the conversion privilege, the Lenders would receive 8,920,865 common share purchase warrants exercisable into common shares at $0.14 per share. The exercise of these warrants would provide the Company with an additional $1,248,921 of funding, and bring the average share price relating to the restructuring as a whole to $0.2048 per share. At the time of the announcement of the Loan, the quoted price of the Company's common shares was $0.14 on a consolidated basis.

About Semcan Inc.

Semcan is a supplier of industrial processes and environmental solutions with specific emphasis on water remediation and emission control systems to the North American markets.

Caution Regarding Forward-Looking Information and Non-GAAP Measures

Forward-Looking Information

This news release contains certain forward-looking statements. These statements relate to future events or future performance and reflect management's current expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and expectations and are based on information currently available to management of Semcan. In particular, statements regarding the future operating results and economic performance are forward-looking statements. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including risks outlined under "Risk Factors" in our Annual Information Form, which is posted at www.sedar.com. In evaluating these statements, investors should specifically consider various factors, including such risks as Investment Risk; Business Valuations; Condition of Capital Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk Factors" could cause actual events or results to differ materially from any forward-looking statement. These factors should not be considered exhaustive. Although the forward-looking statements contained in this press release are based on what management of Semcan considers to be reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and none of Semcan nor its directors assume any obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking statements.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Semcan Inc.
    David Deacon
    CEO
    (905) 875-5577