Urban Communications Inc.
TSX VENTURE : UBN

Urban Communications Inc.

December 04, 2014 08:00 ET

Urban Communications Inc. Announces Closing of Second and Third Tranches of Convertible Debenture Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 4, 2014) - Urban Communications Inc. (TSX VENTURE:UBN) is pleased to announce that it has closed a second and third tranche of a non-brokered convertible debenture private placement. These tranches have raised $1,273,000, which together with the first tranche of $1,227,000 that closed on September 30, 2014, have raised a total of $2,500,000, which is the maximum authorized by the board of directors. The private placement was announced on August 14, 2014, and the TSX Venture Exchange granted conditional approval to raise a minimum of $1,000,000 and a maximum of $2,500,000.

John Farlinger, CEO of Urban Communications Inc. said: "We have had overwhelming demand for this financing, and we appreciate the confidence our investors have placed in our management team and the business plan in a very competitive market place."

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.

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 March 30, 2015, for the second tranche and April 2, 2015, for the third tranche, 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 March 30 or April 2, 2015, respectively.

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 Communications owns and operates a 200 km. fibre optic network throughout the greater Vancouver and Victoria areas. The company is about to launch Urbanfibre with service of 1000 Mbps to residential and commercial buildings along its fibre optic core.

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