Urban Communications Inc.

Urban Communications Inc.

November 14, 2006 09:30 ET

Urban Communications Inc. Announces Convertible Debt Financing

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 14, 2006) - Urban Communications Inc. (TSX VENTURE:UBN) is pleased to announce that, subject to regulatory approval, it has arranged an initial non-brokered convertible debt financing of $1,035,000. Pursuant to the financing the Company will issue a debenture in the principal amount of $1,035,000 secured by all the assets of the Company pursuant to which the debt will be convertible into 4,508,333 units of the Company for a period of two years from the closing date.

$635,000 of the debt is convertible into 3,175,000 units consisting of one common share and one share purchase warrant at a price of $0.20 per unit, and one warrant is exercisable to purchase one common share for a period of two years from the closing date on payment of $0.20 in the first year and $0.30 in the second year. $400,000 of the debt is convertible into 1,333,333 units consisting of one common share and one half share purchase warrant at a price of $0.30 per unit, and two half-warrants are exercisable to purchase one common share for a period of two years from the closing date on payment of $0.30 in the first year and $0.40 in the second year.

The debenture will have a two year term and carry an interest rate of 10% per annum. Any accrued but unpaid interest may be converted into units at the closing price of the Company's stock on the conversion date of the principal amount.

A finder's fee of 6.66% of each portion of the debt, payable in units on the same terms as the offering, will be paid in connection with the total financing.

Proceeds from the financing will be used primarily to launch the Company's no-cap high speed, fully synchronous, Internet service and demonstrate commercial viability of the Company's plan to provide its unique services to multiple tenanted commercial and residential buildings located along the Company's network. The Company will also engage strategic consulting support, conduct a formal valuation of the assets and establish a comprehensive investor and public relations program. Details with respect to launch date, consumer and commercial service offerings, investor relations plan, third party support plans and other initiatives will be provided in forthcoming announcements.

The Company also announces that the maturity dates of financing instruments totalling $450,000 have been extended until September, 2007.

About Urban Communications Inc.

Urban Communications Inc., through its operating subsidiaries, specializes in the construction, operation and management of fibre optic telecommunications networks and the delivery of broadband subscriber services. Urban is a CRTC licensed non-dominant carrier with 125 km. of metropolitan area fibre strategically located in high density corridors of Vancouver and Victoria, British Columbia. Urban is planning to offer high speed metro Ethernet products and applications for commercial customers and residential subscribers over its optical infrastructure. By virtue of this fully operational, privately owned, state-of-the-art fibre optic backbone network, Urban is uniquely positioned to deliver innovative "Urban" branded high speed broadband services, including interactive IP content applications, web based entertainment and gaming portals, to aggressively compete with existing Internet service providers, incumbent telecommunications carriers and cable companies.

On behalf of the Board of Directors

Leslie E. Maerov, President and CEO

Except for historical information contained herein, the statements in this news release contain or may contain forward-looking statements, such as statements regarding Urban Communications Inc.'s future growth and profitability, growth strategy and anticipated trends in the industries in which Urban Communications Inc. operates. These forward-looking statements are based on Urban Communications Inc.'s current expectations and are subject to a number of risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in any forward-looking statements made by Urban Communications Inc. in this news release. These risks and uncertainties include, among other things, raising significant investment capital, locating and retaining senior technical and financial expertise, customer loyalty, demand for services, market competition and other risks detailed in documents filed with the TSX Venture Exchange or British Columbia Securities Commission. Urban Communications Inc. does not undertake any obligation to revise these forward-looking statements to reflect future events or circumstances.

Shares issued: 20,253,191

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Urban Communications Inc.
    Jim Greene
    Vice-President, Corporate Affairs
    (604) 439-8536
    Email: jgreene@ubn.ca
    Website: www.ubn.ca