Symbol: SUT: TSX Venture Exchange
CALGARY, Jan. 10 /CNW/ - Suntec Pure Water Technologies Inc. ("Suntec" or the "Company") is pleased to announce that it has entered into a letter of intent with a group of private investors respecting a corporate reorganization (the "Reorganization") of the Company. Pursuant to the Reorganization, the Company's outstanding common shares will be consolidated, the Company will be recapitalized with $1.5 million cash and its existing assets will be sold. Upon completing the Reorganization, Suntec's existing shareholders will continue to own approximately 25% of the shares of the ongoing public company, which will continue its listing on the NEX board of the TSX Venture Exchange (the "TSXV").
The Reorganization shall include the following steps, to be approved, as and if required, at a special meeting of the shareholders of the Company to be convened in due course:
1. The consolidation of the outstanding common shares on a one (1) new
for each two and eight-tenths (2.8) outstanding shares basis, such
that the Company shall have outstanding after such consolidation a
total of 10,046,222 Common Shares.
2. A non-brokered private placement of 30,000,000 units of the Company
at $0.05 per unit for gross proceeds of $1,500,000, each unit
consisting of one post-consolidation common share of the Company and
one warrant to buy one additional post-consolidation common share for
$0.10 for a period of one year from closing. The proceeds of the
private placement, along with the proceeds from the sale of the
Company's existing assets, will be used to pay the remaining debts of
the Company, and to provide the Company with working capital to
enable it to move forward and find and develop a new business.
Finders' fees will be payable with respect to the private placement
in accordance with the policies of the TSXV.
3. A change of the Company's name to a name approved by the new
directors.
4. The election of a new board of directors.
5. The sale of all or substantially all of the existing assets of the
Company.
As soon as reasonably possible after closing the Reorganization, the Company will appoint a new management team and shall commence the process of selling of all or substantially all of its existing assets, including the building located in Wheatland County. Management shall then also begin to pursue appropriate asset and/or corporate acquisitions, and carry out such additional financings, as are necessary to graduate the Company's listing from the NEX to the TSXV or the TSX.
Upon completing the Reorganization, the Company will have approximately 40 million shares outstanding, no debt, approximately $600,000 in working capital (before asset sales) and no active business, and its listing will be transferred to the NEX board of the TSXV.
Trading of Suntec's shares on the TSXV has been halted pending the approval of the transaction and the new management and directors of the Corporation by the TSXV.
All of the transactions described in this news release require the approval of the Company's board of directors as to their final terms, the entering into of definitive agreements, the approval of the TSX Venture Exchange and, with respect to certain matters, the approval of the shareholders of the Company.
On Behalf of the Board of Directors
"Gene Moody"
Gene Moody, President, Chief Executive Officer and Chief Financial
Officer
This release includes forward-looking statements and potential future circumstances and developments. Forward-looking statements regarding future performance are subject to risks and uncertainties and actual results may differ materially.
THE TSX VENTURE EXCHANGE INC. HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE