MISSISSAUGA, ON, May 9 /CNW/ - BSM Technologies Inc, (GPS: tsx-v)
(http://www.bsmtechnologies.com) a leading provider of high security vehicle
tracking and surveillance solutions today announced that Nick Cirella, the
controlling shareholder of the Company has agreed to settle $827,098.48 worth
of debt owed to him and companies under his control by the Company as a result
of cash advances made by Mr. Cirella and companies under his control in
exchange for 3,596,080 common shares priced at $0.23 per common share. In
addition, the Company proposes to issue up to $1,500,000 in Convertible
Debentures. Mr. Cirella has agreed to settle his outstanding debt to
facilitate the Convertible Debenture financing and to allow the Convertible
Debentures to have a first security interest in the assets and undertaking of
the Company.
The Convertible Debentures have a term of two (2) years and are
convertible into common shares of the Company at the rate of one common share
for each $0.25 of debt converted. The Convertible Debentures will be secured
against the assets and undertaking of the Company and will bear interest at
the rate of 14% per year. The subscribers will receive one warrant for each
$0.625 in principal amount of Convertible Debenture purchased. Each Warrant
will be exercisable at $0.25 to acquire a further common share for two (2)
years from closing. The terms of the Convertible Debenture are still being
finalized but the Convertible Debenture will be subject to certain performance
covenants usual for a financing of this nature.
Mr. Cirella is the President & CEO, a director and the controlling
shareholder of the Corporation. He currently controls indirectly and owns or
has beneficial interest in 18,072,716 common shares of the Company. 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 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 transaction, Mr. Cirella will hold directly and
indirectly 21,668,796 common shares being 47.32% of the Company (based upon
outstanding capital of 45,795,122 common shares) after giving effect to the
issuance of the shares for debt settlement.
Onbelay Partners Limited ("Onbelay"), which currently has the ability to
acquire more than 10% of the outstanding capital of the Company, Aly
Rahemtulla, a director of the Company and a principal of Onbelay, and John
Bell, a director of the Company and a principal of Onbelay, intend to
subscribe for up to $600,000 of the Convertible Debentures. The insider
Convertible Debenture subscriptions are exempt from the valuation and minority
shareholder approval requirements of the Rule by virtue of the exemptions
contained 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 to be issued does not
exceed 25% of its market capitalization.
BSM will use the proceeds of this financing for working capital and
general corporate purposes.
The transactions are subject to the approval of the TSX Venture Exchange.
This press release is available on the company's official on-line
investor relations site for investor commentary, feedback and questions.
Investors are asked to visit http://www.agoracom.com/ir/bsm alternatively,
investors are asked to e-mail all questions and correspondence to
GPS(at)agoracom.com where they can also request addition to the BSM Technologies
investor e-mail list to receive all future press releases and updates
directly.
About BSM Technologies (GPS:tsxv) (http://www.bsmtechnologies.com)
BSM Technologies and its subsidiaries HGI Wireless and BSM Wireless
design, manufacture and market a comprehensive line of high security vehicle
tracking and surveillance solutions for: Law Enforcement Bait and Covert, High
Security and Executive Protection, Fleet Management and Consumer Safety. BSM
products are designed with the enhanced reliability, functionality, and
security today's GPS technology allows. By also incorporating advanced,
mapping and wireless technologies, the BSM line of products provides
sophisticated real-time monitoring and control of vehicle assets.
The BSM line of products range from our Fleet and Trailer management
Edition, to our full featured "Stinger" featured in news media worldwide as
the key technology behind the "Bait & Covert application used by Law
Enforcement to deter auto, Trailer and heavy equipment theft. That same
quality and attention to detail is dedicated to the manufacture of all our
products. Recognized as an industry leader in Covert Telematics, BSM provides
solutions for any asset-tracking requirement. Our product line can be adapted
to your requirements, and our support infrastructure assures you receive the
premium GPS solution in the industry.
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This press release is available on the company's official on-line
investor relations site for investor commentary, feedback and questions.
Investors are asked to visit http://www.agoracom.com/IR/BSM and view the
"BSM Technologies" IR HUB.
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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.
%SEDAR: 00008990E
