TSX VENTURE EXCHANGE: SRO
MONTREAL, Jan. 3 /CNW Telbec/ - Section Rouge Media Inc. (TSX Venture
Exchange: SRO) ("Section Rouge") announces today that on December 23, 2005, it
has signed an Engagement Letter with Research Capital Corporation ("Research")
to act as agent in connection with a private placement of common shares to
raise a minimum of $ 2.5 million and a maximum of $ 4 million ("Placement"),
as announced by Section Rouge on October 13, 2005. The Placement consists of a
minimum of 8,333,333 common shares of Section Rouge ("Shares") at a price of
$0.30 per Share and a maximum of 13,333,333 Shares. Research will be granted a
fifteen percent (15%) over-allotment option in connection with the Placement.
The over-allotment option will expire sixty (60) days after Closing of the
Placement.
Section Rouge will pay Research a cash commission of ten percent (10%) of
the gross proceeds received from the Placement, except for subscriptions from
the Section Rouge's President's List. Section Rouge agrees to pay Research a
cash commission of seven and one-half percent (7.5%) on subscriptions from the
President's List, which will not exceed $1,500,000 in total subscriptions.
In addition, Research will receive an option entitling it to purchase up
to that number of Broker Warrants as is equal to 10% of the Placement sold
under the Offering for 18 months from the Closing at a price of $0.30 per
Share. Upon Closing of the Placement, Section Rouge will pay a corporate
finance fee of $25,000 (plus GST) to Research.
The proceeds from the offering will be used for the acquisition of Image
in Media Inc., project development, commercialization of the IPEXTV(TM)
platform and for general working capital.
It is expected that the closing of the Placement and the acquisition of
Image in Media Inc. will occur during the first quarter of 2006.
About Section Rouge
Section Rouge, a media company founded in October 2001, owns
30 publications with an annual circulation of over 4.8 million copies of
weekly newspapers and magazines. The acquisition plan of Section Rouge aims to
provide the company a diversity of niches in order to guarantee the company's
long-range financial viability and its development capacity in the world of
communications.
Completion of the transaction is subject to a number of conditions,
including but not limited to, Exchange acceptance and Shareholder approval.
The transaction cannot close until the required Shareholder approval is
obtained. There can be no assurance that the transaction will be completed as
proposed or at all. Investors are cautioned that, except as disclosed in the
Filing Statement to be prepared in connection with the transaction, any
information released or received with respect to the RTO may not be accurate
or complete and should not be relied upon. Trading in the securities of
Section Rouge MDedia Inc. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
