Urban Communications Inc.

Urban Communications Inc.

August 14, 2014 07:00 ET

Urban Communications Inc. Announces Non-Brokered Convertible Debenture to Support Continued Growth

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 14, 2014) - Urban Communications Inc. (TSX VENTURE:UBN) is pleased to announce a non-brokered convertible debenture financing offering of a minimum of $1,000,000 and a maximum of $2,000,000. The debenture will carry a thirty month term at an interest rate of 8.0% per annum, payable semi-annually, 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.

Urban intends to use the proceeds of the financing to discharge certain existing indebtedness, and to allocate the majority of the balance to creation of recurring revenue by financing building entry from Urban's fibre optic trunk network, installation of inside wiring, electronic equipment and marketing, to facilitate Urban providing Internet, telephone and video services ("triple play") to multi-dwelling residential buildings, for the establishment of a co-location and data centre facility, and for working capital and general corporate purposes to meet the cash flow requirements related to the Company's operations.

Each $1,000 of the debt is convertible into 10,000 units, each unit consisting of one common share and one share purchase warrant at a price of $0.10 per unit with a minimum of 10,000,000 units and a maximum of 20,000,000 units. Each warrant is exercisable for a period of thirty months from the closing date to purchase one common share at $0.20. Outstanding debt may be repaid after 6 months and thereafter upon 30 days notice. Any accrued but unpaid interest must be converted into units at the closing price of the Company's shares on the conversion date of the principal amount.

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.

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.

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. contact:
    John A. Farlinger, Chief Executive Officer
    Phone: (604) 763-7564