Urban Communications Inc.
TSX VENTURE : UBN

Urban Communications Inc.

October 02, 2014 19:50 ET

Urban Communications Inc. Announces Closing of First Tranche of Convertible Debenture Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 2, 2014) - Urban Communications Inc. (TSX VENTURE:UBN) is pleased to announce that on September 25, 2014, the TSX Venture Exchange accepted for filing documentation with respect to the non-brokered convertible debenture private placement announced August 14, 2014, for a minimum of $1,000,000 and a maximum of $2,500,000. The first tranche of the private placement has closed, raising $1,227,000.

The debentures are convertible into units of the Company at a price of $0.10 per share for a period of 30 months. Each unit consists of one common share and one share purchase warrant, and each warrant is exercisable for a period of thirty months from the closing date to purchase one common share at $0.20. The debenture will carry a thirty month term at an interest rate of 8.0% per annum, and proceeds will be secured by the Company's assets. The debenture will rank pari passu with existing secured debt with an aggregate principal amount outstanding of $892,000, which together with the new convertible debenture will have first priority against the Company's assets. Outstanding debt may be repaid after 6 months and thereafter upon 30 days notice. Any accrued but unpaid interest is payable semi-annually until the earlier of the maturity date or the date of conversion into units.

A finder's fee of 7.0% of the proceeds received by the Company from investors introduced by the finder, and non-transferrable finders warrants equal to 7% of the proceeds received by the Company payable in units on the same terms as the offering, will be paid to eligible agents in connection with the financing.

The proceeds of the financing will be to discharge certain indebtedness, and allocate the majority of the balance to facilitate the continued implementation of the Company's business plan. Urban will deliver industry leading broadband connectivity to residential and commercial customers on its 200 km. fibre optic footprint in metro Vancouver and Victoria. The company will create recurring revenue by financing building entry, inside wiring and by marketing unequalled Internet speeds and disruptive Over the Top (OTT) IPTV products at prices significantly below those of the incumbent providers. "This is a new era in broadband demand with per capita consumption doubling at record rates due to higher quality video, the advent of disruptive OTT services like NETFLIX and an increasing number of connected devices." says CEO John Farlinger. "We are uniquely positioned to aggressively capture a significant portion of this new market of high demand users that are craving broadband capabilities that are just now becoming reality."

Shares allotted and issued upon conversion of the debentures or exercise of the warrants are subject to a hold period and may not be traded in British Columbia until February 2, 2015, except as permitted by the British Columbia Securities Act and Regulations made thereunder. In addition, without prior written approval of the TSX Venture Exchange and compliance with all applicable securities legislation, the shares may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until February 2, 2015.

Urban Communications Inc., through its operating subsidiaries, is a telecommunications company providing a full suite of Internet, voice, video and broadband application products over its state-of-the- art carrier grade fibre optic network to commercial, residential and public sector customers in metro Vancouver and Victoria.

BY ORDER OF THE BOARD

Leslie E. Maerov

Executive Chairman

Neither 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

  • Urban Communications Inc.
    John A. Farlinger
    Chief Executive Officer
    (604) 763-7565
    ir@ubn.ca
    www.ubn.ca