Graniz Mondal Inc. ("Graniz") (NEX BOARD: GRA.H) announces that,
after having entered into a non-binding letter of intent as
disclosed in its press release of April 9, 2009, it has entered
into a binding letter of intent dated June 22, 2009 with DigiScreen
Corporation ("DigiScreen", www.digiscreen.ca), a private
Montreal-based corporation that is at arm's length from Graniz.
DigiScreen specializes in creating and administering digital
networks for the international distribution and presentation of
independent film and alternative content, such as opera and musical
concerts.
The Proposed Transaction
The letter of intent contemplates that the parties will conduct
a reverse take-over or other business combination (a "Transaction")
whereby Graniz would acquire all of the outstanding shares of
DigiScreen from DigiScreen's shareholders for a purchase price of
$5,000,000 (calculated on a fully diluted basis, assuming that all
convertible debt issued by DigiScreen, other than the Bridge Loan
described below, will be converted into shares of DigiScreen prior
to the completion of the Transaction, and that all rights
convertible into or exercisable for shares of DigiScreen are
converted or exercised prior to that time). At the closing of the
Transaction, the resulting company would also assume the
outstanding liabilities of DigiScreen (to the extent those
liabilities are not discharged through conversion into shares of
the resulting company). Based on unaudited financial statements and
financial projections prepared by management of DigiScreen, at the
closing of the Transaction the resulting company would assume
approximately $575,000 of debt. The $5,000,000 payable for
DigiScreen's shares will be payable through the issuance of
20,000,000 Graniz common shares at $0.25 per share, and those newly
issued shares of Graniz would represent approximately 63% of the
common shares of Graniz ("Graniz Shares") issued and outstanding
after the completion of the Transaction (calculated on a
non-diluted basis and prior to taking into account the Bridge Loan
and Private Placement described below).
The completion of the Transaction is conditional upon a private
placement of Graniz securities for aggregate gross proceeds of not
less than $1,200,000, up to a maximum of $2,000,000 (the "Private
Placement"). Graniz anticipates that a majority of the funds raised
in the Private Placement will be from parties that are at arm's
length from Graniz and DigiScreen. It is proposed that the
securities issued in the Private Placement would be issued at a
price of $0.25 per share, and would convert on a one-for-one basis
into shares of Graniz upon completion of the Transaction. A
customary finder's fee, which may include a cash payment, shares
and/or broker warrants, may be paid to arm's length finders in
connection with the private placement. Upon completion of the
Transaction, Graniz would be a Tier 2 - Industrial Issuer listed on
the TSX Venture Exchange.
The Transaction is also conditional upon Graniz and DigiScreen
being satisfied with the results of the due diligence they have
each commenced with respect to each other and their businesses, and
upon DigiScreen obtaining a loan of not less than $200,000 from
other parties on terms and conditions that are agreeable to Graniz
(the "Bridge Loan") on or before July 20, 2009. On June 18, 2009,
DigiScreen completed a first closing of the Bridge Loan to raise
gross proceeds of approximately $160,000. Additional closings of
the Bridge Loan may occur from time to time, and Graniz and
DigiScreen have agreed that the maximum amount that may be borrowed
by DigiScreen under the Bridge Loan will be $750,000. The sums due
under the Bridge Loan are convertible into common shares of Graniz,
should the Transaction be concluded, at a price of $0.15 per share
at the closing of the Transaction. Interest on the Bridge Loan
accrues at a rate of 12% per annum and is payable in cash. The
principal and interest on the Bridge Loan will be payable in full
on January 30, 2010, unless the principal of the Bridge Loan is
converted into common shares of Graniz in accordance with its terms
prior to that date (in which case interest is also then due), or
unless the Bridge Loan is otherwise converted into shares of
DigiScreen prior to that date (in which case interest is also then
due). A cash transaction fee of 8% of the principal amount of the
Bridge Loan (other than portions advanced from existing
shareholders, securityholders and other creditors of DigiScreen)
will be payable to BID Capital Markets, a party that is at arm's
length from Graniz and DigiScreen, at each closing of the Bridge
Loan.
Byron Securities Limited has been engaged as the sponsor of the
Transaction. In connection with that sponsorship, Byron will be
paid a sponsorship fee of $25,000.
In connection with the Transaction, Graniz has agreed to advance
up to $250,000 to DigiScreen as a loan (the "Graniz Loan") for the
payment of Transaction-related and operational expenses to be
incurred by DigiScreen, so as to permit the continued operation of
DigiScreen while the transactions contemplated in the letter of
intent are being pursued. Graniz has already advanced $25,000 to
DigiScreen as part of the Graniz Loan, but will not advance any
additional funds until the TSX Venture Exchange has approved the
Graniz Loan. The parties have executed a loan agreement and other
documents for the Graniz Loan. Interest on the Graniz Loan will
accrue at a rate of 12% per annum. The Graniz Loan, plus interest,
is to be repaid to Graniz on or before January 30, 2010, but the
repayment date may be accelerated by Graniz in certain
circumstances. The Graniz Loan will be secured by a first priority
lien on all of the personal property of DigiScreen, and all other
secured creditors of DigiScreen have signed a subordination
agreement in favour of Graniz (except for a commercial lender that
has a security interest in support of approximately $5,000 of
credit). Details of the proposed Graniz Loan were previously
disclosed by Graniz in its press release of April 30, 2009.
The parties contemplate paying a 5% cash finder's fee in
connection with the Graniz Loan from Graniz to DigiScreen, as well
as issuing 200,000 Graniz Shares upon completion of the
Transaction. This fee will be paid to BID Capital Markets and Bill
Rusedski, both of whom are parties who are at arm's length from
Graniz and DigiScreen. This fee will be paid to these parties at
the closing of the Transaction, in consideration for the services
they rendered in introducing Graniz and DigiScreen and otherwise
facilitating the agreement between Graniz and DigiScreen regarding
the Graniz Loan and the Transaction. If Graniz advances to
DigiScreen the full $250,000 or principal that it is making
available under the Graniz Loan, the cash finder's fee will be
$12,500.
The parties are currently in the process of preparing definitive
agreements with respect to the Transaction.
The Transaction is subject to the approval of Graniz's
shareholders. In addition, the Transaction, the Graniz Loan, as
well as the payment of all finder's fees, are subject to the
approval of the TSX Venture Exchange.
Information about DigiScreen
DigiScreen was incorporated under the Canada Business
Corporations Act on February 11, 2003. The business of DigiScreen
consists in the operation of a digital network for the distribution
and presentation of independent films and alternative content. Such
alternative content is based on source material other than
feature-length movies, such as opera, sports and music-based shows.
The presentation of these events could take place in a full
spectrum of venues ranging from digital cinemas to handheld media
players. DigiScreen principally offers a technical solution that
allows a digital video projector to be fed from a server containing
various high-definition films stored in compressed format. The
digital film content can be delivered to remote cinema sites, via
terrestrial or satellite connection. DigiScreen serves customers in
the United States, Canada, United Kingdom, Europe, Japan and
Australia.
The current shareholders of DigiScreen are as follows:
Name Jurisdiction of Residence/Incorporation
---- ---------------------------------------
Daniel Langlois Investments Inc. Incorporated under the Canada Business
(a company wholly owned by Daniel Corporations Act
Langlois)
(925,000 common shares)
Mark Hooper Pointe-Claire, Quebec
(50,000 common shares)
Pierre Latour Town of Mount-Royal, Quebec
(25,000 common shares)
BDC Capital Inc. (a wholly owned Incorporated under the Canada Business
subsidiary of the Business Corporations Act
Development Bank of Canada)
(353,846 class A preferred)
The following tables set forth selected financial information
for DigiScreen for the six month period ended December 31, 2008
(unaudited) and the years ended June 30, 2008 (unaudited), June 30,
2007 (audited) and June 30, 2006 (unaudited). The following summary
of selected financial information is derived from, should be read
in conjunction with, and is qualified in its entirety by reference
to, DigiScreen's financial statements, including the notes thereto.
As noted, DigiScreen's financial statements for years ended June
30, 2008 and June 30, 2006 have not been audited.
Statement of Operations Data
----------------------------------------------------------------------------
Six months ended Year ended Year ended Year ended
December 31, 2008 June 30, 2008 June 30, 2007 June 30, 2006
(unaudited) (unaudited) (audited) (unaudited)
----------------------------------------------------------------------------
$ $ $ $
----------------------------------------------------------------------------
Operating
Revenues 182,667 52,391 25,697 92,132
----------------------------------------------------------------------------
Cost of
Goods Sold 135,385 398,449 28,096 52,242
----------------------------------------------------------------------------
Operating
Expenses 426,025 1,528,847 1,304,689 1,380,777
----------------------------------------------------------------------------
Financial
Fees 1,951 8.765 - -
----------------------------------------------------------------------------
Other
Revenues 4,920 219 - -
----------------------------------------------------------------------------
Net Income
(Loss)
Before
Taxes (375,774) (1,883,450) (1,307,088) (1,340,887)
----------------------------------------------------------------------------
Balance Sheet Data
----------------------------------------------------------------------------
Six months ended Year ended Year ended Year ended
December 31, 2008 June 30, 2008 June 30, 2007 June 30, 2006
(unaudited) (unaudited) (audited) (unaudited)
----------------------------------------------------------------------------
$ $ $ $
----------------------------------------------------------------------------
Total Assets 459,071 623,260 297,255 408,452
----------------------------------------------------------------------------
Current
Liabilities 1,432,696 427,020 129,635 163,659
----------------------------------------------------------------------------
Advance
From
Shareholders 586,000 400,000 - -
----------------------------------------------------------------------------
Redeemable
Shares and
Loans From
Shareholders 2,000,000 2,000,000 1,000,000 2,864,423
----------------------------------------------------------------------------
Shareholders'
Equity (2,973,624) (2,203,760) (832,380) (2,619,630)
----------------------------------------------------------------------------
Management and Principal Shareholders of the Resulting Issuer
After the Transaction
Upon the completion of the Transaction, the directors, senior
officers and principal shareholders of Graniz are expected to
include the following:
Daniel Langlois - Director and non-executive Chairman of the
Board of Directors - Mr. Langlois holds a bachelor of design degree
from Universite du Quebec a Montreal and is the President and
founder of Ex-Centris, a state-of-the-art multi-theatre and
production facility designed to evolve with the emergence of new
digital production technologies. In addition, Mr. Langlois is the
president of the Daniel Langlois Foundation, a private,
philanthropic organization he created in 1997. Mr. Langlois is also
involved in several other organisations active in cultural and
scientific innovation. Mr. Langlois also founded Softimage Inc.,
serving as its President and Chief Technology Officer from November
1986 to July 1998. Prior to that, Mr. Langlois worked eight years
as a film director and animator for private companies and the
National Film Board of Canada.
Mr. Langlois has received many significant honours throughout
his career. In 1994, Ernst & Young chose him as Canada's
national entrepreneur of the year. The University of Sherbrooke
bestowed an honorary doctorate degree in administration on Mr.
Langlois in 1996. In 1997, the Academy of Motion Picture Arts and
Sciences presented him with a Scientific and Technical Oscar. In
1999, he became a Knight of the National Order of Quebec and was
named as an Officer of the Order of Canada in 2000.
Gregory Borsk - Director - Mr. Borsk is a chartered accountant.
He is also the CEO and co-founder of Pine Point Capital Advisors
Inc., a firm that he joined in January 2008 and that specializes in
M&A, capital raising, corporate restructurings, and financial
due diligence and outsourced CFO services. He was the CFO of FTI
Foodtech International Inc., a public company, from September 2008
to March 2009. He was also the CEO and CFO of Thistletown Capital
Inc., a public company, from 2001 to 2002. He was formerly employed
with Becher McMahon Capital Markets Inc. in 2007, Veris Health
Services Inc. from 2005 to 2007, and Continua Capital Inc. from
2001 to 2004. Mr. Borsk was a senior manager at Deloitte &
Touche LLP from 1993 to 2000.
Richard-Marc Lacasse - Director - Mr. Lacasse is a professor in
Business Policy and Project Management at Universite du Quebec. He
is also director of Ditem Inc. since 2001 and a director of
Appalaches Resources Inc. since 2006.
Mark Hooper - Director and President - Mr. Hooper holds a
bachelor's degree in theoretical physics from Concordia University
and, since 2006, is the President and Secretary of DigiScreen Inc.
He joined DigiScreen in 2003 as Vice-President, Technology. Mr.
Hooper has been responsible for managing DigiScreen's technical and
business activities since its inception. From 1998 to 2003, Mr.
Hooper was Vice-President, Technology and Development of Pixel
Systems, a continent-wide network of computer systems used for
advertising campaign management, content distribution across
satellite and broadband networks, and for multi-media presentation
on large-format electronic displays. Mr. Hooper has a track record
of 25 years of development of successful new products for high-tech
companies in fields ranging from process sensors (pulp and paper),
machine vision and human perception emulation (forensic
ballistics), pattern recognition (security) to parallel processing
for medical imaging and on-demand multimedia networks.
Simon Britt - Chief Financial Officer - Mr. Britt received a
Bachelor of Commerce from Hautes Etudes Commerciales (University of
Montreal) in 2000 and is a member of L'Ordre des comptables agrees
du Quebec. Mr. Britt has served as the Chief Financial Officer
(CFO) of Kinbauri Gold Corp. since January of 2007. He is a
principal of Venture Corporate Outsourcing Services, which had
attended to Kinbauri's financial reporting during 2006. From 2001
to early 2005, Mr. Britt practiced audit and corporate finance at
Samson Belair, Deloite & Touche, mostly with public companies.
He has been engaged as CFO for multiple junior mining
companies.
Michel Lusignan - Secretary - Mr. Lusignan is a lawyer and
member of the Quebec Bar since 1982. He has acted as Secretary of
Graniz Mondal Inc. since July 2001 and as Secretary and Assistant
Secretary of Campbell Resources Inc. since July 2001. He has been
involved with numerous public mining companies since 1996. His
experience includes securities, corporate, commercial, financing
and intellectual property (software) law. He has been a specialist
writer in laws and regulations for the Minister of Revenue of the
Province of Quebec, and was a member of the Aon Group in the early
90's providing counsel to the actuarial, compensation, group
insurance and pension plan sectors.
Business Development Bank of Canada - The Business Development
Bank of Canada is Canada's business development bank. From 100
offices across the country, BDC promotes entrepreneurship by
providing highly tailored financing, venture capital and consulting
services to entrepreneurs. Visit www.bdc.ca for more
information.
Prior to completing the Transaction, an additional director will
be proposed to serve on the board of directors of Graniz upon
completion of the Transaction.
Graniz intends to hold a shareholders' meeting to approve the
Transaction, the change of board of directors and other matters
relating to the Transaction.
Trading of Graniz Shares has been halted at Graniz's request
while the parties pursue their discussions and will remain halted
until the Transaction is completed.
Completion of the Transaction is subject to a number of
conditions, including but not limited to TSX Venture Exchange
acceptance and disinterested shareholder approval. Where
applicable, the Transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that
the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of Graniz should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of
the proposed Transaction.
Byron Securities Limited, subject to completion of satisfactory
due diligence, has agreed to act as sponsor to Graniz in connection
with the Transaction. An agreement to sponsor should not be
construed as any assurance with respect to the merits of the
Transaction or the likelihood of completion.
The foregoing information may contain forward-looking statements
relating to the future performance of Graniz Mondal Inc.
Forward-looking statements, specifically those concerning future
performance, are subject to certain risks and uncertainties, and
actual results may differ materially from Graniz's plans and
expectations. These plans, expectations, risks and uncertainties
are detailed herein and from time to time in the filings made by
Graniz with the TSX Venture Exchange/NEX and securities regulators.
Graniz does not assume any obligation to update or revise its
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
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. No stock exchange, securities commission
or other regulatory authority has approved or disapproved the
information contained herein.
Contacts: Graniz Mondal Inc. Richard-Marc Lacasse President
(418) 564-8834