Sonomax Hearing Healthcare Inc.
TSX VENTURE : SHH

Sonomax Hearing Healthcare Inc.

May 31, 2006 10:49 ET

Sonomax Announces Second Closing of Private Placement

MONTREAL, CANADA--(CCNMatthews - May 31, 2006) -

NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Sonomax Hearing Healthcare Inc. ("Sonomax" or "The Company") (TSX VENTURE:SHH) today announces the closing of a second tranche of 8,775,000 units for gross proceeds of $1,755,000. Each unit consists of one common share of Sonomax and one common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one common share of Sonomax at a price of $0.25 per share for a period of twelve months.

With respect to the second tranche of 8,775,000 units, Sonomax paid Max Capital Partners Ltd. a cash commission equal to 8% of the gross proceeds, other than proceeds from subscriptions by Sonomax insiders.

Mr. Barry Schwartz, Chairman and CEO of Sonomax stated: "The proceeds from this private placement will do much more than just raise working capital for Sonomax. Earlier this year, Sonomax embarked on a comprehensive initiative to rationalize its capital structure by satisfying its working capital needs while also easing its debt load and associated interest costs."

On April 5th and 18th, 2006, Sonomax announced that the holders of approximately $5.9 million of the Company's $8 million of unsecured convertible notes had agreed to convert their debt to equity, $3.6 million of which agreed conditional upon the Company completing new equity financing of at least $2 million. Mr. Schwartz further added: "The conditions precedents have now been satisfied and the steps to complete these conversions will now be taken. This private placement will provide Sonomax with the working capital to achieve its ambitious business objectives and pursue exciting opportunities that are now presenting themselves as our technologies gain more universal acceptance. It also facilitates the removal of $3.6 million of the Company's debt from its balance sheet, over and above the $2.3 million that previously converted unconditionally. In total, approximately $5.9 million is being removed from Sonomax's balance sheet along with the applicable interest of 10% per annum."

The common shares and warrants issued by Sonomax under the private placement are subject to a four-month hold period, expiring on September 30, 2006, in accordance with applicable securities laws and the policies of the TSX Venture Exchange. The first closing of the private placement has increased the number of outstanding common shares of Sonomax to 79,866,248.

About Sonomax Hearing Healthcare Inc:

Sonomax Hearing Healthcare Inc (TSX Venture Exchange: SHH) is a leader in the development and manufacturing of intra-ear technology for hearing protection, hearing enhancement, and other auditory applications. Sonomax created SonoCustom®, a unique expansion earpiece and a highly efficient gatekeeper between sounds and eardrums. Sonomax is actively building a worldwide licensee network, as recently highlighted by signing important partners such as Oilind Safety, a leading safety service supplier in the United States. Sonomax was awarded the prestigious 2005 British Safety Industry Federation Product Innovation Award for its SonoCustom® technology. Furthermore, Sonomax was granted third-party validation for its SonoPass® software by universities, military contractors and government. Sonomax's SonoPlatform™ is the foundation for state-of-the-art hearing aids and digital wireless applications. The company plans to launch SonoPlatform™ later on this year via a new paradigm of quality, affordability, and consumer access.

For further information, please visit our website: www.sonomax.com

About Max Capital Partners Ltd.

Max Capital is a Toronto based investment dealer that provides capital raising and advisory services to late stage private firms and publicly traded companies. Max Capital acts as an agent in raising equity capital for companies by utilizing their strong network of financial, strategic and crossover investors. In addition to their capital raising capabilities, they provide advisory and merchant banking services to assist clients in achieving their strategic growth initiatives and to enhance their exposure to value maximizing opportunities.

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

Contact Information

  • Sonomax Hearing Healthcare Inc.
    Nick Laperle
    President
    (514) 932-2674
    nlaperle@sonomax.com
    or
    Sonomax Hearing Healthcare Inc.
    Dave Herbert
    Investor Relations
    (514) 932-2674
    ir@sonomax.com
    or
    HKDP Communications and public affairs
    Jacques C. Gagnon
    Senior Consultant
    (514) 395-0375
    jgagnon@hkdp.qc.ca
    or
    Max Capital Partners Ltd.
    Scott Walters
    Managing Partner
    (416) 369-0374
    scott@maxcpl.com