|By Marketwired .||
|August 25, 2014 08:49 AM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 08/25/14 -- Innovative Composites International Inc. (CSE:IC) ("ICI", or the "Company") is pleased to announce that it has entered into a definitive Commitment Letter and Advisory Agreement (the "Agreement") with Bassett Financial Corporation ("Bassett") to assist with the restructuring of the Company to build a more stable financial platform for the Company, and to assist in growing the Company to meet its full sales potential. The Agreement also contemplates new funding for the Company, including a $500,000 6-month bridge loan (the "Bridge Loan") and $1 million in equity funding (the "Financing").
The terms of the Agreement include:
-- Completion of $500,000 Bridge Loan, secured by working capital and certain intellectual property owned by the Company, with a term of 6 months extendable under certain conditions to 12 months at a rate of 3% per month payable monthly in arrears; -- Completion of a $1 million private placement Financing at the current share price of $0.01 per share; -- Installation of Bassett Director, Chris Carl, as Chief Financial Officer of the Company; -- A corporate finance advisory engagement whereby Basset will assist the Company in restructuring its balance sheet, work with ICI to revise the business plan toward achieving high growth sales in Canada and the US, and to provide multi-faceted assistance in leveraging the public listing potential of the Company; -- Payment of a $10,000 per month working fee which will be increased to $20,000 per month in the event the Company reaches monthly positive earnings before tax and depreciation at any point during the term of the Agreement; -- Issuance of 48,000,000 common shares of the Company at a deemed price equal to the price of shares issued in the Financing, with such Common Shares vesting equally over the achievement of 4 critical milestones for the Company, as additional payment for services; and -- The nomination of Basset's CEO, Matthew Bassett, to the Board of Directors of ICI.
Completion of the obligations of Basset as set out in the Agreement are subject to, among other things, the holders of the Company's existing convertible debentures agreeing to amend their existing conversion privileges so as to permit conversion only at the time of maturity. The Agreement is also subject to the satisfaction of certain customary conditions, including the receipt of all required regulatory approvals and satisfaction of all regulatory requirements, including the requirements of the Canadian Securities Exchange (the "CSE").
The proceeds of the new funding will be used to reduce trade payables and to fund new inventory to meet a growing backlog of sales orders. As the Company's balance sheet is restructured, overhead is reduced where practical and the Company achieves a growth in sales, the Company hopes to reach break-even on an EBITDA basis. Based on these assumptions, if completed, the Bridge Loan and the Financing would give the Company approximately 18 months of operating cash and working capital without a need for additional financing.
ICI has been actively involved in developing its patented technology into a line of lightweight, non-corrosive structural building materials which can be used in a wide array of industrial and commercial applications by large corporate customers. Following a long period of developing home and emergency shelter products for disaster relief situations, ICI has enjoyed much greater sales success recently, concentrating on more immediate commercial and industrial opportunities.
"We believe that Bassett Financial gives us the solid foundation we have been seeking to help ICI grow to become a profitable organization within the next few years", said ICI CEO, Mark Rivers. "Not only does Bassett bring much needed financial assistance, but their experience in growing and managing small public companies makes them excellent partners for our capable technical management team. Building on the quality and uniqueness of our technology and our processes our products continue to be validated by governmental agencies and global fortune five hundred companies in a wide range of industries, including, automotive, industrial, construction, travel, and transportation. With the support of Bassett we now have the financial foundation to pursue these opportunities systematically and professionally."
"ICI has an incredible array of practical, cost competitive and environmentally friendly products that we believe will see growth in demand in the coming years and we are excited to become an active partner to assist the Company in managing this growth effectively," said Basset CEO, Matthew Bassett. "By bringing a renewed focus on sales growth and conservative capital management to the Company, we believe that ICI will be well positioned to deliver increased value to all its stakeholders, old and new. "
About Innovative Composites
The flagship product, Structure-Lite composite panels are widely usable in the transportation industry, cargo containers, truck body containers as well as highway sound barrier panels. Using recycled materials such as plastic water bottles, the panels are environmentally friendly made with low cost, readily available raw materials. This lets the panels be created quickly and efficiently and able to be customized for nearly any application. The composite panels won't rust, rot or warp and each one is insect, water and UV resistant. The strength to weight ratio also makes them much lighter compared to steel panels, which have the same strength but are twice as heavy. The versatility and durability of ICI's composite panels makes them ideal to replace many conventional materials.
To find out more about ICI please visit our website at: www.innovativecompositesinc.com
This press release contains forward-looking information under Canadian securities legislation. These statements relate to future events or future performance and reflect management's current expectations and assumptions. Forward-looking information includes, but is not limited to, statements with respect to completion of the Bridge Loan and the Financing, the development Company's future sales-growth, and future funding requirements. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions, estimates and assumptions of management of the Company as of the date such statements are made. Although ICI believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward- looking statements because ICI can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of ICI to be materially different from those expressed or implied by such forward-looking statements, including but not limited the failure to close the Bridge Loan or the Financing based on the inability of either party to meet a condition to closing as set forth in the Agreement, and those risks described in the Company's public documents filed on SEDAR from time to time. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.
This news release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such. The CSE has not reviewed and neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
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