ePals Announces C$4.5 Million Private Placement and Completes First Tranche and Shares for Debt Transactions
06 March 2014 - 2:51AM
Marketwired
ePals Announces C$4.5 Million Private Placement and Completes First
Tranche and Shares for Debt Transactions
Not for Distribution to United States Newswire Services or for
Dissemination in the United States
WASHINGTON, DC--(Marketwired - Mar 5, 2014) - ePals Corporation
(TSX-VENTURE: SLN) ("ePals" or the "Company") announces that it is
conducting a non-brokered private placement (the "Offering") of up
to 60,000,000 units of the Company (each a "Unit") at a price of
C$0.075 per Unit for aggregate gross proceeds of up to
C$4,500,000. Each Unit will consist of one common share of the
Company and one-third of one common share purchase warrant (each
whole warrant, a "Warrant"). Each Warrant will entitle the holder
to purchase one additional common share of the Company at a price
of C$0.075 until August 31, 2014. The Company intends to use the
net proceeds of the Offering for general corporate purposes and
working capital.
The common shares of the Company to be issued in connection with
the Offering (including the common shares issuable upon exercise of
the Warrants) are anticipated to be voting common shares for
non-U.S. purchasers and restricted voting common shares for U.S.
purchasers. Each restricted voting common share is convertible
into one voting common share at any time at the option of the
holder. The restricted voting common shares are not listed or
posted for trading on the TSX Venture Exchange or any other stock
exchange or marketplace and do not carry the right to vote for the
election of directors of the Company.
The Company has completed the first tranche of the Offering and
issued 7,372,000 Units for gross proceeds of C$552,900. The
Units issued pursuant to this first tranche consisted of one
restricted voting common share and one-third of one Warrant, with
each Warrant being exercisable to acquire one restricted voting
common share. The Company may complete additional tranches of
the Offering up to a maximum of C$4,500,000.
The Company also announces that it has issued an aggregate of
11,058,000 restricted voting common shares (the "Consideration
Shares") in settlement of aggregate indebtedness of US$750,000
payable to ZG Ventures, LLC ("ZG") pursuant to a revolving loan
facility in favour of ePals, Inc., a wholly-owned subsidiary of the
Company. The parties determined the Canadian dollar amount of
the debt to be C$829,350 and the restricted voting common shares
were issued at a deemed price of C$0.075 per share. In
addition, further to its news release of February 10, 2014, the
Company has issued an aggregate of 3,166,336 restricted voting
common shares in settlement of aggregate indebtedness of US$150,000
payable as an earnout to the former shareholders of Carus
Publishing Company. The parties determined the Canadian dollar
amount of the debt to be C$166,035 and the restricted voting common
shares were issued at deemed price of C$0.05244 per share.
The Units issued under this first tranche of the Offering were
issued to ZG and one of its affiliates. Pursuant to Multilateral
Instrument 61-101 Protection of Minority Security Holders in
Special Transactions ("MI 61-101"), the issuance of the Units
and the Consideration Shares is each a "related party transaction"
for the Company. For these transactions, the Company has
relied on the exemption from the formal valuation requirements of
MI 61-101 contained in section 5.5(b) of MI 61-101 and has relied
on the exemption from the minority shareholder approval
requirements of MI 61-101 contained in section 5.7(a) of MI
61-101.
The securities described herein have not been and will not be
registered under the U.S. Securities Act of 1933, as
amended, or any state securities laws and may not be offered or
sold in the United States absent registration or an applicable
exemption from those registration requirements. This press release
does not constitute an offer to sell or the solicitation of an
offer to buy any securities nor shall there by any sale of the
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
All securities issued pursuant to the first tranche of the
Offering, as well as the restricted voting common shares issued
pursuant to the shares for debt transactions described above, are
subject to a four month hold period expiring on July 6, 2014.
About ePals Corporation
ePals Corporation (TSX-VENTURE: SLN) is an education media
company and Global Learning Network. Focused on the K-12 market,
ePals offers school administrators, teachers, students and parents
worldwide trusted content, interactive learning experiences, and a
collaborative learning community. ePals' award-winning products
include: popular children's educational publishing brands from
toddlers to teens, including Cricket® and Cobblestone®; the ePals
Global Community®; and In2Books®, a Common Core eMentoring program
that builds reading, writing and critical thinking skills. ePals
also offers a content-licensing, clearance and production service
for education publishers. ePals serves approximately one million
classrooms and reaches millions of teachers, students and parents
in over 200 countries and territories. Product websites include:
www.ePals.com; www.Cricketmag.com; and www.In2Books.com.
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.
Forward Looking Statements
This news release contains statements that may constitute
"forward-looking statements" within the meaning of applicable
Canadian securities legislation. These forward-looking statements
include, among others, statements regarding the completion of the
Offering and the expected use of proceeds of the Offering. Readers
are cautioned not to place undue reliance on such forward-looking
statements. Forward-looking statements are based on current
expectations, estimates and assumptions that involve a number of
risks, which could cause actual results to vary and in some
instances to differ materially from those anticipated by the
Company and described in the forward-looking statements contained
in this press release. No assurance can be given that any of the
events anticipated by the forward-looking statements will transpire
or occur or, if any of them do so, what benefits the Company will
derive therefrom. The forward-looking statements contained in this
news release are made as at the date of this news release and the
Company does not undertake any obligation to update publicly or to
revise any of the forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required by applicable securities laws.
FOR FURTHER INFORMATION PLEASE CONTACT: Aric Holsinger Chief
Financial Officer ePals Corporation Phone: (703) 885-3400
aholsinger@corp.epals.com Cory Pala Investor Relations E.vestor
Phone: (416) 657-2400 cpala@corp.epals.com
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