Montreal, July 24, 2001 -Montreal, July 24, 2001 – Cenosis Inc. announces today that its Board of Directors has unanimously approved the signing of agreements with Bell Nexxia, which will result in the issuance of $3.3 million of Cenosis convertible preferred shares to Bell Nexxia and the modification of the technology transfer agreement signed at the end of 1999.
Under the terms of the agreements, Cenosis will issue to Bell Nexxia a total of 2 million series D preferred shares and 1.3 million series E preferred shares at $1 per share. In exchange, Bell Nexxia will return to Cenosis share warrants allowing for the purchase of common shares of KangaCom Inc., a subsidiary of Cenosis, equivalent to a 20% stake in KangaCom if exercised. Furthermore, Bell Nexxia also surrenders rights to royalties of $2 million payable by KangaCom.
The series D and E preferred shares are convertible into common shares of Cenosis over the course of the next 18 months, at the market price existing the moment conversion is requested by Bell Nexxia. However, the conversion price of the series E preferred shares, which represent an amount of $1,330,000 of the total, cannot be below $5.00 per share nor above $7.00 per share. The series D and E preferred shares are subject to a minimum holding period of 12 months, carry no dividend and can be bought back at any time by Cenosis at a price of $1.25 per share.
“We are very pleased with this agreement, which converts Bell Nexia investments into preferred shares of Cenosis and allows KangaCom to become a wholly owned subsidiary, fully integrated into the activities of Cenosis. This will also allow KangaCom to conserve its financial resources for the execution of its business plan,” stated Richard Corbo, President and Chief Executive Officer of Cenosis.
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