CMQ Announces Details of Private Placement Financing and Extension of Forbearance
29 Mayo 2012 - 3:04AM
PR Newswire (Canada)
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/ CALGARY, May 30, 2012 /CNW/ -
CMQ Resources Inc. ("CMQ") announced today that it intends to
complete a private placement (the "Offering") of approximately
$2,500,000 principal amount of secured convertible debentures to
Matco Investments Ltd. ("Matco"), CMQ's principal creditor and
shareholder and a control person of CMQ. The Offering will consist
of the issuance of $2,500,000 principal amount of convertible
debentures (the "Debentures") secured against all present and after
acquired property of CMQ on similar terms to CMQ's existing secured
indebtedness owing to Matco. The Debentures shall have a
maturity date of two years from the date of issuance and bear
interest at a rate equal to 9% per annum. The accrued
principal and interest amounts owing on the Debentures shall be
convertible, at Matco's election, into common shares of CMQ at a
price equal to $0.10 per common share. It is currently
anticipated that Matco will be the only subscriber to the
Offering. Matco and related persons currently hold 22,094,141
common shares of CMQ, representing 49.99% of CMQ's outstanding
common shares and would hold 69,188,682 common shares of CMQ,
representing 68% of CMQ's outstanding common shares if the full
principal amount of the Debentures were to be converted. Matco also
holds the November 2011 convertible debenture with a principal
amount of $1,500,000. If the full principal amount of the November
2011 convertible debenture were to be converted Matco would own an
incremental 15,000,000 common shares. In CMQ's information circular
relating to the annual and special meeting of shareholders of CMQ
held on June 21, 2011 (the "Meeting"), CMQ disclosed that it
intended to enter into future financings which may involve Matco
acquiring up to 90% of the issued and outstanding shares of the
Corporation. At the Meeting, shareholders of CMQ approved,
both on a majority basis and on a "majority of the minority" basis,
a resolution approving such financing and Matco's participation
therein to become a de facto control person of CMQ in accordance
with Multilateral Instrument 61-101 ("MI 61-101"). In
connection with the Offering, CMQ is relying upon the exemption set
forth in section 5.5(c) of MI 61-101 which allows an issuer to
forego receiving a formal valuation in respect of a related party
transaction. There have been no prior valuations of CMQ, its
material assets or its securities made in the twenty four months
preceding the date hereof. On December 19, 2010, CMQ entered into a
funding and forbearance agreement with Matco, pursuant to which
Matco agreed that it would, for a period ending on October 19,
2011, forbear from enforcing its rights and remedies against the
Corporation (the "Forbearance") in respect of substantially all
amounts CMQ was indebted to Matco. On October 19, 2011 the
Forbearance was extended to May 30,( )2012. In connection with the
Offering, CMQ and Matco have entered into an agreement to extend
the Forbearance previously granted by Matco to February 20, 2013,
conditional on completion of the Offering on or prior to June 30,
2012, and for no additional consideration. The net proceeds of the
Offering will be used principally for working capital purposes. The
terms of the Offering and the extended forbearance were negotiated
between Matco and an independent committee of CMQ's board of
directors consisting of independent directors of CMQ, free from any
interest in the Offering, which has recommended proceeding with the
Offering and forbearance extension. The completion of the
Offering remains subject to receipt of all required regulatory
approvals not previously obtained, including that of the TSX
Venture Exchange. This press release is not an offer to sell
securities in the United States. Securities may not be
offered or sold in the United States in the absence of registration
or an exemption from registration. The Exchange does not accept
responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements This press release contains certain
forward-looking statements and forward-looking information
(collectively referred to herein as "forward-looking statements")
within the meaning of Canadian securities laws including with
respect to the timing, completion of and terms of the Offering and
forbearance. All statements other than statements of historical
fact are forward-looking statements. Forward-looking statements
typically contain statements with words such as "anticipate",
"believe", "plan", "continuous", "estimate", "expect", "intend",
"may", "will", "shall", "project", "would", "should", or similar
words suggesting future outcomes. Undue reliance should not be
placed on forward-looking statements, which are inherently
uncertain, are based on estimates and assumptions, and are subject
to known and unknown risks and uncertainties (both general and
specific) that contribute to the possibility that the future events
or circumstances contemplated by the forward-looking statements
will not occur. There can be no assurance that the plans,
intentions or expectations upon which forward-looking statements
are based will in fact be realized. Actual results will differ, and
the difference may be material and adverse to CMQ and shareholders.
Forward-looking statements are based on management's current
beliefs as well as assumptions made by, and information currently
available to, management. Though management considers these
assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect. By their very
nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and risks that
forward-looking statements will not be achieved. The
forward-looking statements contained in this press release are made
as of the date hereof and CMQ does not undertake any obligation to
update publicly or to revise any of the included forward-looking
statements, except as required by applicable law. The
forward-looking statements contained herein are expressly qualified
by this cautionary statement. CMQ Resources Inc. CONTACT: Please
contact Ryan Jennings, Corporate Secretary, CMQ ResourcesInc.,Tel:
(403) 294-6496.
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