Vancouver, BC, May 2, 2005--Contec Innovations Inc. has announced a non-brokered private placement offering to raise gross proceeds of up to $800,000. Under the terms of the private placement, the Company will offer for sale a maximum of 7,111,111 Units (the "Units") at C$0.1125 per Unit. Directors and officers of the Company are leading this financing.
Each Unit will consist of one common share and one non-transferable share purchase warrant (the "Warrants") where each Warrant will allow the subscriber to purchase one additional common share at C$0.15 for a period of two years from the closing date.
The Company will pay a cash finder's fee equal to 8% of the total gross proceeds of the offering and finder's warrants ("Finder's Warrants") equal to 10% of the number of Units sold under the offering exercisable at C$0.1125 per warrant for a period of one year from the closing. Each Finder's Warrant may be exercised for one additional common share of the Company. Directors and officers of the Company are not entitled to the cash finder's fee or the Finder's Warrants.
The Units issued upon the closing of the placement are subject to a 4-month hold period. The private placement is subject to the acceptance of the TSX Venture Exchange.
The Company has also entered into an agreement with certain directors of the Company to obtain interim financing. The agreement provides for financing by way of a C$150,000 loan bearing interest at prime plus 10%. The term of the debt will commence on April 26, 2005 and end on the date that is earliest of: (i) June 30, 2005; (ii) 30 days following the date any of the lenders cease to be a director of the company; (iii) the Company has a minimum of C$500,000 in the treasury; and (iv) the date the debt has been paid in full.
Contec Innovations has reorganized its leadership team to reflect its focus on marketing and sales in China. As part of this reorganization, Craig Townsend, Vice President and co-founder, has left the company effective immediately. The Company wishes to thank Mr. Townsend for his contributions to Contec.
Don Lay, a director, principal at One Degree Capital and a significant investor of the company, has agreed to take an active role working with senior management in both sales and capital market development.
"I would like to take this opportunity to welcome Don to Contec. This transition marks the natural evolution of the Company and I look forward to working with Don as Contec's focus moves to commercialization of our Hornet(TM) platform in China," stated Perry Quan, Contec's President and CEO. "Don's success in China and experience in the capital markets will serve the Company well."
The company will provide additional details on the reorganization shortly.
About Contec Innovations
Founded in 1999, Contec accelerates the growth of the mobile Internet by enabling mobile service providers to capitalize on new data services. Contec's objective is to provide a complete mobile data solution by providing a technologically advanced delivery system, the Hornet, and compelling applications that are currently being demanded by mobile operators and service providers. Contec's core product, the Hornet(TM), is an open, carrier-class mobile services delivery platform capable of hosting multiple mobile applications in a secure, scalable environment. With Hornet, service providers can generate new revenues by efficiently deploying reliable and compelling data applications. Contec is headquartered in Vancouver, Canada and is listed on the TSX Venture Exchange under the trading symbol "BUZ". For more information, visit www.contec.ca.
The statement made in this press release may contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from the Company's expectations. Hornet(TM) is a trademark of Contec Innovations Inc.
Contact:
Contec Innovations Inc.
Brian Buckley
Investor Relations
(604) 468-5638 or 1-888-552-0360
brian.buckley@contec.ca
OR
Contec Innovations Inc.
Asa Zanatta
Media Relations
(604) 408-1389
azanatta@spiritcommunications.ca
www.contec.ca
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