MISSISSAUGA, ON, July 11 /CNW/ - BSM Technologies Inc. ("BSM" or the
"Company"), (GPS: TSX-V) (http://www.bsmtechnologies.com) a leading provider
of high security vehicle tracking and surveillance solutions announces that
further to its press release dated May 9, 2006, it has completed settlements
of $827,098.48 worth of debt with Applied Innovations Group Inc. and Nick
Cirella RCA Trust, which are under the control of Nick Cirella, a director and
the President, CEO and controlling shareholder of the Company, by issuance of
an aggregate of 3,596,080 common shares priced at $0.23 per common share to
these entities.
BSM also announces that it has completed a $1,300,000 Convertible
Debenture financing previously announced in the Company's press release dated
May 9, 2006. On July 7, 2006, the Company obtained approval from the TSX
Venture Exchange to reduce the conversion price on the debenture to $0.23 and
to reduce the exercise price of the warrants associated therewith to $0.23.
After giving effect to the debt settlement, the current outstanding
capital is 46,051,458 common shares.
The insider debt settlement is exempt from the valuation and minority
shareholder approval requirements of OSC Rule 61-501 (the "Rule") by virtue of
the exemptions contained in sections 5.5(4) and 5.7(3) of the Rule in that the
transaction is a distribution of securities of the issuer to a related party
for cash consideration and the fair market value of the securities to be
distributed is not more than $2,500,000.
As a result of the debt settlement, Nick Cirella currently holds directly
and indirectly 20,860,312 common shares and 150,000 options to acquire common
shares of the Company at $0.185 until December 22, 2008. If Mr. Cirella were
to exercise all of his 150,000 options, he would own approximately 45.48% of
the Company (based upon outstanding capital of 46,201,458 common shares).
Nick Cirella has informed the Company that except as disclosed herein, he
has acquired the common shares for investment purposes and that he may
decrease or increase his beneficial ownership, control, or direction over
common shares of the Company through market transactions, private agreements,
exercise of options or warrants, other treasury issuances or otherwise.
Shares issued relating to this debt settlement are legended and
restricted from trading until November 8, 2006.
With respect to the closing of the Convertible Debenture financing, BSM
has issued Convertible Debentures in the aggregate amount of $1,300,000 and
2,260,869 warrants (the "Warrants"). The Convertible Debentures have a term of
two (2) years and are convertible into common shares of BSM at the rate of one
common share for each $0.23 of debt converted. The Convertible Debentures are
secured against the assets and undertaking of the Company and bear interest at
the rate of 14% per year. The subscribers received one Warrant for each $0.575
in principal amount of Convertible Debenture purchased. Each Warrant is
exercisable at $0.23 to acquire a further common share until July 7, 2008.
The Convertible Debentures and Warrants and any common shares issued on
the conversion or exercise thereof will be legended and restricted from
trading until November 8, 2006.
Aly Rahemtulla, a director and a principal of Onbelay Partners Limited
("Onbelay"), indirectly through his personal holding company acquired $100,000
of Convertible Debentures and 173,913 Warrants, John Bell, a director and
principal of Onbelay, indirectly through his personal holding company acquired
$100,000 of Convertible Debentures and 173,913 Warrants and Onbelay acquired
$300,000 of Convertible Debentures and 521,739 Warrants. The insider
Convertible Debenture subscriptions are exempt from the valuation and minority
shareholder approval requirements of the Rule by virtue of the exemptions
contained in sections 5.5(2) and 5.7(2) of the Rule in that the fair market
value of the consideration for the securities of the Company issued does not
exceed 25% of its market capitalization.
As a result of the transaction, Onbelay now owns 3,333,333 common shares
of BSM, a Convertible Debenture in the principal amount of $300,000
convertible into common shares at the rate of one (1) common share for each
$0.23 in principal amount converted, 3,333,333 warrants to acquire common
shares at $0.20 per share until January 23, 2008 (the "Prior Warrants") and
521,739 Warrants. Aly Rahemtulla indirectly owns a Convertible Debenture in
the principal amount of $100,000 convertible into common shares at the rate of
one (1) common share for each $0.23 in principal amount converted and 173,913
Warrants. John Bell indirectly owns a Convertible Debenture in the principal
amount of $100,000 convertible into common shares at the rate of one (1)
common share for each $0.23 in principal amount converted and 173,913
Warrants. Aly Rahemtulla and John Bell collectively control Onbelay (referred
to as the "Onbelay Group"). If the Onbelay Group were to convert the $500,000
in Convertible Debentures and exercise all of the Prior Warrants and the
869,565 Warrants, they would own approximately 18.52% of the outstanding
capital of BSM (based upon outstanding capital of 52,428,270 common shares).
The Onbelay Group has informed the Company that except as disclosed
herein, they have acquired the Convertible Debentures and the Warrants issued
relating thereto for investment purposes and that they may decrease or
increase their beneficial ownership, control, or direction over common shares
of the Company through market transactions, private agreements, exercise of
options or warrants, other treasury issuances or otherwise.
The proceeds of this Convertible Debenture financing will be used for
marketing and working capital purposes.
About BSM Technologies (GPS:TSX-V) (http://www.bsmtechnologies.com)
BSM Technologies designs, manufactures and markets a comprehensive line
of AVSL (Automatic Vehicle Security and Tracking) solutions for Fleet
Management, Law Enforcement, and Consumer Vehicle Protection, through its
subsidiary BSM Wireless. The BSM line of products range from Fleet Management
and Consumer Vehicle Protection offerings to the full featured "Stinger"
product featured in news media worldwide as the key technology behind the Bait
and Covert application used by hundreds of Law Enforcement agencies to deter
vehicular, trailer and heavy equipment theft.
Superior functionality, seamless switching between 2 separate footprints,
enhanced reliability, advanced security features, and excellent value
characterize BSM products. By incorporating advanced wireless locating and
mapping technology, and IP-based communications protocols, the BSM line of
products provides sophisticated real-time monitoring and control of commercial
and personal vehicle assets to meet the demanding needs and stringent
requirements of today's mobile environments. BSM's unique end-to-end
solutions, features sophisticated wireless hardware, firmware and software all
developed by and proprietary to BSM. The BSM product line can be easily
adapted and customized to match any customer user requirement while BSM's
in-house support infrastructure assures that all clients receive the premium
AVSL solution in the industry to meet their needs.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. This News
Release may include certain "forward-looking statements" that involve risks
and uncertainties. Actual results may differ materially from results indicated
in any forward-looking statements. The company cautions that, among other
things, in view of the rapid changes in communications markets and
technologies, and other risks including the cost and market acceptance of the
company's new products, the level of individual customer procurements and
competitive product offerings and pricing, and general economic circumstances,
the company's business prospects may be materially different from
forward-looking statements made by the company.
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