OTTAWA, Nov. 19, 2014 /CNW/ - Clearford Water
Systems Inc. ("Clearford" or the "Company"), (TSX-V: CLI),
announced today, that it has entered into a long-term loan
agreement, pursuant to which the Company will be provided with a
C$3.25 million 20 year term debt
facility. As part of the agreement, Clearford will issue up
to 9,629,630 Treasury Shares to the Lender as bonus shares, and the
Lender has agreed to return to Clearford for cancellation warrant
certificates, which would have allowed the Lender to purchase up to
19,238,863 shares of Clearford. The issuance of bonus shares, is
subject to the approval of the TSX Venture Exchange.
The loan will be secured under a general security agreement
(GSA) over assets of Clearford and pledge of 90.5% of outstanding
shares of UV Pure Technologies Inc. UV Pure will also provide the
Lender with a GSA in support of guarantee of Clearford's
obligations under the loan. The UV Pure GSA will provide for up to
$1 million of commercial credit
facilities within UV Pure to rank in priority to the Lender.
Subject to the terms and conditions of the loan agreement,
Clearford will receive C$1.5 million
upon signing the agreement, and C$1.75
million on or before December 10,
2014.
The bonus shares issued to the Lender will be held in escrow and
delivered to the Lender upon receipt of the final advance under the
loan by Clearford. The bonus shares will be subject to a 4 month
trading restriction required by the TSX-V.
Clearford will use the proceeds of the loan (i) for working
capital and project finance requirements, and (ii) to complete its
acquisition of UV Pure, the details of which are subject to a
separate press release.
"This is a significant announcement for Clearford", said
President and CEO Kevin Loiselle.
"The commitment by our Lender shows the continued confidence in
Clearford's strategic direction. The funds will allow us to add to
working capital and provide the necessary funds to finalize the
acquisition of UV Pure. UV Pure's advanced Crossfire™ technology
for Ultra Violet purification completes our Clearford
OneTM System".
Clearford will pay a 10% fee to an arm's length third party as
amounts are advanced.
The Company currently has 67,411,836 shares outstanding and
110,383,440 shares on a fully diluted basis. Subsequent to the
completion of the transaction and the issuance of the bonus shares,
the Company will have 77,041,466 shares outstanding and 100,774,207
on a fully diluted basis.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
About Clearford Water Systems Inc.
Clearford Water
Systems Inc. (TSX-V: CLI) is a provider of unified water management
and sanitation systems. Clearford One™ is based on Clearford's
proprietary ClearDigest™ smart digester, SBS® ClearConvey™ small
bore sewer, and ClearRecover™ treatment facilities customized to
meet the requirements of each location. For more information on
Clearford, please visit www.clearford.com.
Forward Looking Statements
This news release contains
certain statements that constitute forward-looking statements as
they relate to the Company and its management. Forward-looking
statements are not historical facts but represent management's
current expectation of future events, and can be identified by
words such as "believe", "expects", "will", "intends", "plans",
"projects", "anticipates", "estimates", "continues" and similar
expressions. Although management believes that the expectations
represented in such forward-looking statements are reasonable,
there can be no assurance that they will prove to be
correct.
By their nature, forward-looking statements include assumptions
and are subject to inherent risks and uncertainties that could
cause actual future results, conditions, actions or events to
differ materially from those in the forward-looking
statements. If and when forward-looking statements are set out
in this news release, Clearford will also set out the material risk
factors or assumptions used to develop the forward-looking
statements. Except as expressly required by applicable securities
law, the Company assumes no obligation to update or revise any
forward looking statements. The future outcomes that relate to
forward-looking statements may be influenced by many factors,
including, but not limited to: industry cyclicality; the ability to
secure third party agreements; successful integration of
Clearford's system with third party technology; competition;
reduction in demand for products; collection from customers;
relationships with suppliers; product liability; intellectual
property; reliance on key personnel; environmental; interest rates;
uninsured and underinsured losses; operating hazards; risks of
future legal proceedings; income tax matters; credit facilities;
availability and terms of financing; distribution of securities;
restrictions on potential growth; effect of market interest rates
on price of securities; and potential dilution.
SOURCE Clearford Industries Inc.
