Shannon International Inc.
OTC Bulletin Board : SHIR

Shannon International Inc.

April 03, 2006 10:54 ET

Shannon Enters Settlement Agreement with Quadrangle Holdings Ltd.

HALIFAX, NOVA SCOTIA--(CCNMatthews - April 3, 2006) - As previously reported, on December 20, 2005 Shannon's (OTCBB:SHIR) ("SHIR", or "the Company") Board of Directors appointed J. William Clements and J. Thomas Netzel as directors as a result of settlement discussions with Quadrangle Holdings, Ltd., a shareholder of SHIR with whom SHIR had a dispute over the liquidation of collateral given to secure payment of the exercise of warrants in May 2004. The appointment of the new directors was done as a confidence building measure in furtherance of continued settlement discussions with Quadrangle Holdings, Ltd.

On February 01, 2006, Mr. Blair Coady resigned as Chief Executive Officer, Chief Financial Officer, and Director of SHIR, and the Board of Directors appointed Mr. J. William (Bill) Clements as SHIR's new Chief Executive Officer and Chief Financial Officer.

On March 22, 2006, SHIR entered into a Settlement Agreement with Quadrangle Holdings Ltd. The Settlement Agreement was unanimously approved by the SHIR board. The Settlement Agreement calls for the issuance of a Series A Preferred Stock to Quadrangle which has a Stated Value of $775,000.00 CDN, has a mandatory redemption on or before December 31, 2006, entitles Quadrangle to elect a majority of SHIR's board of directors, and may be converted into SHIR common stock at $0.08 per share. Quadrangle was also issued 568,000 additional common shares and a warrant to acquire 968,750 shares at $0.08 per share. Quadrangle's note to SHIR for the exercise of warrants which gave rise to the dispute was cancelled. The Agreement, Series A Preferred Stock Designation, and other details are contained in an 8-K Current Report filed on March 31, 2006.

SHIR and Quadrangle acknowledged that a General Security Agreement over SHIR's assets was filed with the Province of Alberta by the Company's former President, Mr. Blair Coady, without SHIR board approval, on or about November 23, 2005, for the benefit of EW Power, Inc., an Alberta corporation, of which Mr. Coady is believed to be a control person. SHIR has agreed to take any and all steps necessary to dispute the validity and obtain the release thereof in favor of the security interest to Quadrangle as referenced in the Settlement Agreement.

On February 17, 2006, the board of directors of SHIR technology subsidiary, Logical Sequence, resolved and has taken the initial steps to cancel preferred stock on the basis that the stock was not validly created and issued and is therefore null and void. Completing the steps involved in canceling the preferred stock will eliminate an approximately $5,000,000 liability from the balance sheet of LSI and SHIR.

Logical Sequence has grown its automotive client base by over five percent during the past year and continues to work toward the launch of its new dealership management system, LynXphere®, scheduled for later this year.

On March 27 2006, Tom Netzel resigned as a director of Shannon.

ABOUT SHANNON

Shannon strategically grows its business by finding, evaluating, and creating value. In addition to Eastern Canada resource assets, Shannon owns an interest in a seismic database compression software platform developed by Helical Systems Inc., Nova Scotia, and controlling interest in Logical Sequence Incorporated, Nova Scotia, a developer of web-based dealership management software, LynXphere® for the automotive market.

FORWARD LOOKING STATEMENTS

Except for the Historical Information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially. These forward- looking statements speak only as of the date hereof and the Company disclaims any intent or obligation to update the forward-looking statements.

Contact Information

  • Shannon International Inc.
    Bill Clements
    President
    (902) 481-7225 x 1002
    (902) 481-7224 (FAX)
    Email: bclements@shannon-intl.com
    or
    Shannon International Inc.
    Dennis Brovarone
    Secretary
    (303) 466-4092
    (303) 466-4826 (FAX)
    Email: dbrovarone@aol.com