Virtutone Networks Inc.
TSX VENTURE : VFX

August 17, 2011 19:24 ET

Virtutone Networks Inc. Announces Closing of Non-Brokered Private Placement

FORT SASKATCHEWAN, ALBERTA--(Marketwire - Aug. 17, 2011) -

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Virtutone Networks Inc. (TSX VENTURE:VFX) ("Virtutone" or the "Corporation") is pleased to announce that it has closed its previously announced non-brokered private placement of 4,000,001 common shares ("Common Shares") of the Corporation at a price of $0.075 per share for aggregate proceeds of $300,000 (collectively the "Private Placement").

Certain insiders (the "Insiders") of the Corporation, directly or indirectly, collectively subscribed for 2,938,668 Common Shares pursuant to the Private Placement. The Insiders include: Jason Allen, the President and Chief Executive Officer of the Corporation; Colin Campbell, the Chief Financial Officer of the Corporation, and Randal Matkaluk, a director of the Corporation. Following the completion of the Private Placement, the Insiders collectively hold 9,367,904 Common Shares (approximately 53.6% of the issued and outstanding Common Shares).

The Common Shares issued pursuant to the Private Placement are subject to a hold period of four months and one day from the closing date as well as other restrictions with respect to sales from control positions.

The proceeds of the Private Placement will be used for general working capital and corporate purposes.

Pursuant to the Private Placement Mr. Campbell acquired 1,752,000 Common Shares (the "Purchased Shares"). The Purchased Shares represent approximately 10.0% of the issued and outstanding Common Shares, after giving effect to the Private Placement. Prior to the Private Placement Mr. Campbell held 442,736 Common Shares (approximately 3.3% of the issued and outstanding Common Shares). Following the completion of the Private Placement, Mr. Campbell holds 2,194,736 (approximately 12.5% of the issued and outstanding Common Shares). Mr. Campbell acquired the Purchased Shares for investment purposes. Mr. Campbell may in the future take such actions in respect of its shareholdings in Virtutone as it may deem appropriate in light of the circumstances then existing, including the purchase of additional shares or other securities of Virtutone through open market purchases or privately negotiated transactions, or the sale of all or a portion of its holdings in the open market or in privately negotiated transactions to one or more purchasers. A copy of Mr. Campbell's related early warning report to be filed with the applicable securities commissions and further information may be obtained by contacting the Corporation at (780) 702-5777.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including, without limitation, statements regarding the use of proceeds from the Private Placement. These forward-looking statements are based upon the opinions, expectations, estimates and assumptions of management as at the date the statements are made, including, without limitation, assumptions with respect to the receipt of regulatory approval for the Private Placement and general economic conditions in North America. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, risks that the Private Placement will not be completed or if completed not on the same terms as disclosed above and a failure to obtain necessary regulatory approvals. The statements in this news release are made as of the date of this release. We undertake no obligation to update such forward-looking information except as required by applicable securities laws.

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Virtutone Networks Inc.
    Jason Allen
    President and Chief Executive Officer
    (780) 235-4100