NewsSemcan Inc. Announces Retirement of Chairman and Appointment ofSuccessor, as Well as Additional Details Relating to FinancingExpected to Close in Early April, 2011
Last Update: 3/23/2011 9:31:50 AMTORONTO, ONTARIO, Mar 23, 2011 (MARKETWIRE via COMTEX) --Semcan Inc.(STT) ("Semcan or the "Company") announcedtoday that Mr. P. M. Jamieson, the Company's Chairman, retired asChairman on March 21, 2011. Mr. Jamieson will remain a significantshareholder and director of the Company. The Company also announcedadditional information regarding the terms of a new financing anddebt restructuring originally announced on March 7, 2011. Thefinancing is expected to close, subject to negotiation of finaldocumentation, certain other conditions precedent, shareholderapproval and TSX Venture Exchange approval, in early April, 2011.
Semcan's board of directors is pleased to announce that Mr. RandyFowlie has been appointed the Company's Chairman as of March 21,2011. Randy Fowlie is CEO of RDM Corporation. He also held theposition of Vice President and General Manager, Digital Media, ofHarris Corporation, a public software and hardware company, and hewas formerly Chief Operating Officer and Chief Financial Officer ofInscriber Technology Corporation, a software company acquired byLeitch in 2005. Previously, Mr. Fowlie was a partner with KPMG LLP,Chartered Accountants. Mr. Fowlie sits on the board of Open TextCorporation.
Mr. Ian Conn, on behalf of the Company's board, commented "I amdelighted with the appointment of Randy Fowlie as Chairman. Randy hasbeen a strong independent board member over the last year and hasmade a significant contribution to the evolution of the Company whichhas allowed it to announce the new financing expected to close inearly April, 2011."
Simultaneously, Mr. Ron O'Hearn retired from the board on March 21,2011 and Mr. David Deacon, the recently-appointed CEO, joined theboard. Mr. O'Hearn has been a director of the Company since 2000, andhe continues to be a significant shareholder.
Financing
The Company confirmed that, in addition to the terms of the securedconvertible loan (the "Loan") announced on March 7, 2011, it mayraise up to a maximum of $3,000,000 under the Loan.
A condition of the Loan is that a minimum of $3,300,000 of theCompany's existing debt and trade accounts payable be converted tocommon shares at between
.34 and
.40 per share(post-consolidation). The Company confirms that lenders have agreedto this condition, and that a total of $3,743,363 of existing debtwill be converted to 10,138,273 common shares, as follows:
Amount of Debt
Converting to
Number of Shares
Common Shares
Conversion Price
to be Issued
---------------------------------------------------------
$30,000
.14
214,286
52,590
.20
262,950
557,983
.30
1,859,943
100,000
.34
294,118
3,002,790
.40
7,506,976
--------------------
-----------------
$3,743,363
10,138,273
--------------------
-----------------
--------------------
-----------------
The conversion of debt to common shares, private placement of the Loan,and repayment of $100,000 of principal are related party transactionsfor purposes of MI-61-101 "Protection of Minority Security Holders inSpecial Transactions." The transactions are exempt from the formalvaluation requirements of MI-61-101 as the Company is listed on theTSX Venture Exchange and not listed on the specified markets of s.5.5(b) of MI-61-101. The transactions have been reviewed andrecommended by a committee of independent directors and approved bythe board of directors, subject to majority of the minorityshareholder approval. The interest in the transactions andanticipated effect on securities holdings of related parties are asfollows, with "Pre" referring to pre-transaction and "Post" referringto post-transaction:
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-----
Common
Name and
Shares on a
Relationship
Estimated Term
Partially
to the
Debt at March
Convertible
Diluted
Company
Common Shares
31, 2011
Debt
Basis (2)
----------------------------------------------------------------------------
David
Pre: 4,059,858
Pre:
Pre:
Nil
9,180,125
Campbell,
(13.06%),
Shareholder
indirectly
$903,560
Transaction:
(26.42%)
through:
Invest $600,000
Transaction:
plus proceeds
(1) Tricaster
Nil
from sale of
as to
3,821,750
2,278,108; and
Post: $903,560
Common Shares,
(2) Combined as
total estimated
to 1,781,750
at $845,700.
Sale Prior to
Post: $845,700,
Closing: Sell
convertible
3,821,750 to
into 9,061,072
hold 238,108
Common
Shares(1)
Post, after
Consolidation:
119,054
----------------------------------------------------------------------------
Ian L. T.
Pre: 1,063,000
Pre: Nil
Pre:
Nil
911,857
Conn,
(3.42%)
Director
Transaction:
Transaction:
(3.48%)
Sale Prior to
Nil
Invest $30,000
Closing: Sell
plus proceeds
300,000 to hold
Post: Nil
from sale of
763,000
300,000 shares,
total estimated
Post, after
at $49,500.
Consolidation:
381,500
Post: $49,500,
convertible
into 530,357
Common Shares
(1)
----------------------------------------------------------------------------
Randy
Pre: Nil
Pre: Nil
Pre:
Nil
642,857
Fowlie,
Director
Sale Prior to
Transaction:
Transaction:
(2.44%)
Closing: Nil
Nil
Invest $60,000.
Post, after
Post: Nil
Post: $60,000,
Consolidation:
convertible
Nil
into 642,857
Common Shares
(1)
----------------------------------------------------------------------------
Philip M.
Pre: 2,362,041
Pre: $1,653,837
Pre:
Nil
5,523,471
Jamieson,
(7.6%)
Chairman,
Transaction:
Transaction:
(20.4%)
CEO and
Sale Prior to
Receive $50,000
Invest proceeds
Director
Closing: Sell
of principal
from sale of
2,120,000 to
2,120,000
hold 242,041
Convert
shares,
(pre-
remaining
estimated at
consolidation),
$1,603,837 to
$130,000.
121,021 (post-
Common Shares
consolidation)
at
.40
Post: $130,000,
convertible
Receive
Receive
into 1,392,857
4,009,593 upon
4,009,593
Common Shares.
conversion of
Common Shares
(1)
debt.
Post: Nil
Post, after
Consolidation:
4,130,614
----------------------------------------------------------------------------
Ronald F.
Pre: 2,086,991
Pre: Nil
Pre:
Nil
1,561,353
O'Hearn,
(6.71%)
Director
Transaction:
Transaction:
(5.85%)
Sale Prior to
Nil
Invest $30,000
Closing: Sell
plus proceeds
1,000,000 to
Post: Nil
from sale of
hold 1,086,991
1,000,000
Common Shares,
Post, after
total estimated
Consolidation:
at $95,000
543,496
Post: $95,000,
convertible
into 1,017,857
Common Shares
(1)
----------------------------------------------------------------------------
David
Pre: 506,000
Pre: Nil
Pre:
Nil
574,429
Snowden,
(1.63%)
(2.21%)
Director
Transaction:
Transaction:
Sale Prior to
Nil
Invest $30,000
Closing: Nil
Post: Nil
Post: $30,000,
Post, after
convertible
Consolidation:
into 321,429
253,000
Common Shares
(1)
----------------------------------------------------------------------------
Remy
Pre: 135,000
Pre: Nil
Pre:
Nil
415,714
Stachowiak,
(0.43%)
Director
Transaction:
Transaction:
(1.6%)
Sale Prior to
Nil
Invest $32,500.
Closing: Nil
Post: Nil
Post: $32,500,
Post, after
convertible
Consolidation:
into 348,214
67,500
Common Shares
(1)
----------------------------------------------------------------------------
John Wilby,
Pre: 1,000,000
Pre: $33,667,
Pre:
Nil
1,035,714
CFO and
(3.22%),
indirectly
Secretary
indirectly
through Minnorm
Transaction:
(3.95%)
through Minnorm
Invest $50,000
Holdings Inc.
Transaction:
("Minnorm")
Nil
Post: $50,000,
convertible
Sale Prior to
Post: $33,667
into 535,714
Closing:Nil
Common Shares
(1)
Post, after
Consolidation:
500,000
----------------------------------------------------------------------------
Notes:
(1) Giving effect to the issuance of Common Shares on conversion and
exercise of the warrants issued on conversion.
(2) Giving effect to the exercise or conversion of securities by the holder
only.
About Semcan Inc.
Semcan is a North American supplier of industrial processes andenvironmental solutions with specific emphasis on water remediationand emission control systems
Caution Regarding Forward-Looking Information and Non-GAAP Measures
Forward-Looking Information
This news release contains certain forward-looking statements. Thesestatements relate to future events or future performance and reflectmanagement's current expectations and assumptions regarding thegrowth, results of operations, performance, and business prospectsand opportunities. Such forward-looking statements reflectmanagement's current beliefs and expectations and are based oninformation currently available to management of Semcan. Inparticular, statements regarding the future operating results andeconomic performance are forward-looking statements. Forward-lookingstatements involve significant risks and uncertainties. A number offactors could cause actual events or results to differ materiallyfrom the events and results discussed in the forward-lookingstatements, including risks outlined under "Risk Factors" in ourAnnual Information Form, which is posted atwww.sedar.com. Inevaluating these statements, investors should specifically considervarious factors, including such risks as Investment Risk; BusinessValuations; Condition of Capital Markets; Dependence on KeyPersonnel; General Economic Factors; Interest Rate Risk; Competition;and Reliance on Key Suppliers. One or more of these "Risk Factors"could cause actual events or results to differ materially from anyforward-looking statement. These factors should not be consideredexhaustive. Although the forward-looking statements contained in thispress release are based on what management of Semcan considers to bereasonable assumptions based on information currently available tothem, there can be no assurance that actual events or results will beconsistent with these forward-looking statements, and management'sassumptions may prove to be incorrect. These forward-lookingstatements are made as of the date of this press release, and none ofSemcan nor its directors assume any obligation to update or revisethem to reflect new events or circumstances. Undue reliance shouldnot be placed on forward-looking statements.
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.
Contacts:
Semcan Inc.
David Deacon
CEO