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Halifax, Nova Scotia - August 23, 2006 - Nexient Learning Inc. (formerly CrossOff Inc.)(the "Company") will be holding a special meeting of its shareholders at the Company's offices at 2 Bloor St. West, Suite 800, Toronto, Ontario on Thursday, August 24, 2006 at 9:00 a.m. to approve a private placement previously announced on June 13, 2006. Further details on the private placement are contained in the management information circular dated July 27, 2006 previously mailed to shareholders.
Under the private placement, The VenGrowth Traditional Industries Fund Inc. and/or other funds under affiliated management("VenGrowth") proposes to purchase up to $1,000,000 of units to be issued by the Company as part of a larger private placement raising a minimum of $2,000,000 and a maximum of $3,000,000. Each unit will be issued at $0.28 and consist of one (1) common share of the Company and one-half (0.50) of a share purchase warrant. Each whole warrant will have a five-year term and be exercisable into one common share at an exercise price of $0.35 per warrant.
The maximum private placement has increased from the $2,500,000 previously announced and disclosed in the management information circular. As disclosed in the management information circular, existing executive officers and directors of the Company may purchase up to $560,000 of the private placement on the same terms as the other participating investors. The additional private placement amount of up to $500,000 will be sold only to purchasers at arm's-length to the Company.
Upon completion of the private placement, VenGrowth intends to purchase up to $2,500,000 9% subordinated secured debentures to be issued by the Company's subsidiary Nexient Learning Canada Inc. (formerly Polar Bear Software Corporation), plus 2,678,571 share purchase warrants of the Company. The debentures will mature on November 8, 2007. The warrants accompanying the debentures will have an exercise price of $0.28 and a term of five years.
The proposed transactions remain subject to certain conditions, including negotiation of final agreements, due diligence, approval of certain of the Company's existing lenders, regulatory approval and shareholder approval. Proceeds will be used to retire the Company's $3,450,000 9% Class A Unsecured Convertible Subordinated Debentures and for working capital purposes.
In addition, the Company has agreed to pay a $500,000 consent fee in aggregate to holders of its outstanding Series A, B, C and D debentures in consideration for their consent to the debt portion of the Company's pending private placement and the amendment of certain financial covenants contained in those outstanding debentures. VenGrowth and Wellington Financial Fund II, each of which has nominees on the Company's board of directors, are among the holders of outstanding debentures that will receive a pro rata share of the consent fee. At the option of the Company, this fee may be satisfied by the issuance of common shares of the Company at a value equal to the 5 day volume weighted average trading price on the TSX at August 24, 2006. The Company intends to pay the fee in common shares provided that the number of shares to be issued for this purpose will not exceed 2,598,965 shares. |