Semcan Inc.
TSX VENTURE : STT

Semcan Inc.

March 23, 2011 09:31 ET

Semcan Inc. Announces Retirement of Chairman and Appointment of Successor, as Well as Additional Details Relating to Financing Expected to Close in Early April, 2011

TORONTO, ONTARIO--(Marketwire - March 23, 2011) - Semcan Inc. (TSX VENTURE:STT) ("Semcan or the "Company") announced today that Mr. P. M. Jamieson, the Company's Chairman, retired as Chairman on March 21, 2011. Mr. Jamieson will remain a significant shareholder and director of the Company. The Company also announced additional information regarding the terms of a new financing and debt restructuring originally announced on March 7, 2011. The financing is expected to close, subject to negotiation of final documentation, certain other conditions precedent, shareholder approval and TSX Venture Exchange approval, in early April, 2011.

Semcan's board of directors is pleased to announce that Mr. Randy Fowlie has been appointed the Company's Chairman as of March 21, 2011. Randy Fowlie is CEO of RDM Corporation. He also held the position of Vice President and General Manager, Digital Media, of Harris Corporation, a public software and hardware company, and he was formerly Chief Operating Officer and Chief Financial Officer of Inscriber Technology Corporation, a software company acquired by Leitch in 2005. Previously, Mr. Fowlie was a partner with KPMG LLP, Chartered Accountants. Mr. Fowlie sits on the board of Open Text Corporation.

Mr. Ian Conn, on behalf of the Company's board, commented "I am delighted with the appointment of Randy Fowlie as Chairman. Randy has been a strong independent board member over the last year and has made a significant contribution to the evolution of the Company which has allowed it to announce the new financing expected to close in early April, 2011."

Simultaneously, Mr. Ron O'Hearn retired from the board on March 21, 2011 and Mr. David Deacon, the recently-appointed CEO, joined the board. Mr. O'Hearn has been a director of the Company since 2000, and he continues to be a significant shareholder.

Financing

The Company confirmed that, in addition to the terms of the secured convertible loan (the "Loan") announced on March 7, 2011, it may raise up to a maximum of $3,000,000 under the Loan.

A condition of the Loan is that a minimum of $3,300,000 of the Company's existing debt and trade accounts payable be converted to common shares at between $0.34 and $0.40 per share (post-consolidation). The Company confirms that lenders have agreed to this condition, and that a total of $3,743,363 of existing debt will be converted to 10,138,273 common shares, as follows:

Amount of Debt Converting to Common Shares Conversion Price   Number of Shares to be Issued
$30,000 $0.14   214,286
52,590 $0.20   262,950
557,983 $0.30   1,859,943
100,000 $0.34   294,118
3,002,790 $0.40   7,506,976
$3,743,363     10,138,273

The conversion of debt to common shares, private placement of the Loan, and repayment of $100,000 of principal are related party transactions for purposes of MI-61-101 "Protection of Minority Security Holders in Special Transactions." The transactions are exempt from the formal valuation requirements of MI-61-101 as the Company is listed on the TSX Venture Exchange and not listed on the specified markets of s. 5.5(b) of MI-61-101. The transactions have been reviewed and recommended by a committee of independent directors and approved by the board of directors, subject to majority of the minority shareholder approval. The interest in the transactions and anticipated effect on securities holdings of related parties are as follows, with "Pre" referring to pre-transaction and "Post" referring to post-transaction:


Name and Relationship to the Company
  Common Shares   Estimated Term Debt at March 31, 2011   Convertible Debt   Common Shares on a Partially Diluted Basis (2)
David Campbell, Shareholder   Pre: 4,059,858 (13.06%), indirectly through:

(1) Tricaster as to 2,278,108; and
(2) Combined as to 1,781,750

Sale Prior to Closing
: Sell 3,821,750 to hold 238,108

Post, after Consolidation:
119,054
  Pre:

$903,560

Transaction
: Nil

Post
: $903,560
  Pre:  Nil

Transaction
: Invest $600,000 plus proceeds from sale of 3,821,750 Common Shares, total estimated at $845,700.

Post
: $845,700, convertible into 9,061,072 Common Shares(1)
  9,180,125

(26.42%)
Ian L. T. Conn,
Director
  Pre: 1,063,000 (3.42%)

Sale Prior to Closing
: Sell 300,000 to hold 763,000

Post, after Consolidation
: 381,500
  Pre: Nil

Transaction
: Nil

Post
: Nil
  Pre:  Nil

Transaction
: Invest $30,000 plus proceeds from sale of 300,000 shares, total estimated at $49,500.

Post
: $49,500, convertible into 530,357 Common Shares (1)
  911,857 

(3.48%)
Randy Fowlie, Director   Pre: Nil

Sale Prior to Closing
: Nil

Post, after Consolidation
: Nil
  Pre: Nil

Transaction
: Nil

Post
: Nil
  Pre:  Nil

Transaction
: Invest $60,000.

Post
: $60,000, convertible into 642,857 Common Shares (1)
  642,857

(2.44%)
Philip M. Jamieson,
Chairman, CEO and Director
  Pre: 2,362,041 (7.6%)

Sale Prior to Closing
: Sell 2,120,000 to hold 242,041 (pre-consolidation), 121,021 (post-consolidation)

Receive 4,009,593 upon conversion of debt.

Post, after Consolidation
: 4,130,614



  Pre: $1,653,837

Transaction
: Receive $50,000 of principal

Convert remaining $1,603,837 to Common Shares at $0.40

Receive 4,009,593 Common Shares

Post
: Nil
  Pre:  Nil

Transaction
: Invest proceeds from sale of 2,120,000 shares, estimated at $130,000.

Post
: $130,000, convertible into 1,392,857 Common Shares. (1)
  5,523,471

(20.4%)
Ronald F. O'Hearn,
Director
  Pre: 2,086,991 (6.71%)

Sale Prior to Closing
: Sell 1,000,000 to hold 1,086,991

Post, after Consolidation
: 543,496
  Pre: Nil

Transaction
: Nil

Post
: Nil
  Pre:  Nil

Transaction
: Invest $30,000 plus proceeds from sale of 1,000,000 Common Shares, total estimated at $95,000

Post
: $95,000, convertible into 1,017,857 Common Shares (1)
  1,561,353

(5.85%)
David Snowden, Director   Pre: 506,000 (1.63%)

Sale Prior to Closing
: Nil

Post, after Consolidation
: 253,000
  Pre: Nil

Transaction
: Nil

Post
: Nil
  Pre:  Nil

Transaction
: Invest $30,000

Post
: $30,000, convertible into 321,429 Common Shares (1)
  574,429
(2.21%)
Remy Stachowiak, Director   Pre: 135,000 (0.43%)

Sale Prior to Closing
: Nil

Post, after Consolidation
: 67,500
  Pre: Nil

Transaction
: Nil

Post
: Nil
  Pre:  Nil

Transaction
: Invest $32,500.

Post
: $32,500, convertible into 348,214 Common Shares (1)
  415,714

(1.6%)
John Wilby,
CFO and Secretary
  Pre: 1,000,000 (3.22%), indirectly through Minnorm Holdings Inc. ("Minnorm")

Sale Prior to Closing
:Nil

Post, after Consolidation
: 500,000
  Pre: $33,667, indirectly through Minnorm

Transaction
: Nil

Post
: $33,667
  Pre:  Nil

Transaction
: Invest $50,000

Post
: $50,000, convertible into 535,714 Common Shares (1)
  1,035,714

(3.95%)
Notes: 
   
(1) Giving effect to the issuance of Common Shares on conversion and exercise of the warrants issued on conversion.
   
(2) Giving effect to the exercise or conversion of securities by the holder only.

About Semcan Inc.

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

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