Versatile Systems Inc.
TSX VENTURE : VV

Versatile Systems Inc.

April 10, 2006 04:30 ET

Versatile Closes U.S. $4.2 Million Convertible Debenture Financing

VANCOUVER, CANADA--(CCNMatthews - April 10, 2006) - Versatile Systems Inc. (TSX VENTURE:VV), announces that it has completed its previously announced non-brokered private placement consisting of a convertible debenture for U.S. $4,200,000 with Laurus Master Fund, Ltd. a New York based institutional equity fund that specializes in making direct investments in growing public companies. The net proceeds will be used to repay the Promissory Notes that are due in the current fiscal year.

"Laurus gave us the ability to design a tailor made financial instrument that allows us to repay our current debt in a manner that is not dilutive to our shareholders," said Fraser Atkinson, CFO of Versatile. "The relationship with Laurus provides us with the balance of capital that we required for this fiscal year and a financial partner for future growth opportunities."

The financing consists of:



a. A three-year convertible debenture for U.S. $4.2 million (the
"Investment") issued by the Company's U.S. subsidiaries with
interest at the Wall Street Journal prime rate plus 2%,

b. A conversion warrant tied to the debenture, which has the effect
of making the debenture convertible at an average premium of 33%
to the ten day trading average on March 31, 2006 based on the
following tiered schedule: a premium of 5% for one-third of the
Investment, a premium of 20% for one-third of the Investment and
a premium of 75% for one-third of the Investment,

c. A three year Warrant to acquire 1,411,808 common shares at $0.38
per share, a three year Warrant to acquire 1,411,808 common shares
at $0.414 per share and a five year Warrant to acquire 1,411,808
common shares at a price of $0.569 per share all subject to a four
month hold period,

d. An early termination fee of 5% if the convertible debenture is
repaid in the first year, 4% in the second year and 3% in the
third year,

e. A non shorting provision, and

f. A security interest, including a lien on the accounts receivable
and inventory of one of the Company's U.S. subsidiaries as well as
the assets of the Company.


About Versatile

Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. By using Versatile's technology, companies in the consumer packaged goods, and transportation industries have gained the benefits of supply chain visibility, shortened fulfillment cycles and improved customer satisfaction. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computing environments. Versatile has the ability to architect solutions involving both proprietary and third party components. For more information go to www.versatile.com.

About Laurus

Laurus Master Fund, Ltd. is a U.S. financial institution that makes direct investments in listed small and micro cap companies. Their vision is to lead the transformation of financial resources into growing profitable businesses in the small and micro cap universe. Agile expert teams at Laurus capitalize on unique investment opportunities enabling companies to enjoy rapid access to funds, build cash reserves and enhance shareholder value. More information about Laurus can be found at www.laurusfunds.com

Forward-Looking Statements

Certain of the statements contained in this news release are forward looking statements, including without limitation, statements relating to the convertible debenture. Such forward looking statements involve unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Versatile to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward looking statements. Consequently readers should not place any undue reliance on such forward-looking statements. In addition, these forward looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

(C) 2006 Versatile Systems Inc. All rights reserved.

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

Contact Information

  • Versatile Systems Inc.
    John Hardy
    Chairman and CEO
    1-800-262-1633
    or
    Versatile Systems Inc.
    Fraser Atkinson
    CFO
    1-800-262-1633
    www.versatile.com