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BOCA RATON, Fla., Nov. 23, 2022 (GLOBE NEWSWIRE) -- EasTower Wireless Inc. (“ EasTower ” or the“ Company ”) (TSXV:ESTW), announces that it has received an additional cash loan from its founder and CEO, Vlado P. Hreljanovic, to assist with meeting current working capital requirements. Mr. Hreljanovic has loaned an additional US$67,200 to the Company pursuant to a demand promissory note bearing interest at 8% per annum from the date of issue, payable on maturity. The loan, and the US$90,000 loan previously provided by Mr. Hreljanovic to the Company (announced on November 4, 2022), is secured by the accounts receivables of the Company's indirect wholly owned operating subsidiary and is fully redeemable, without bonus or penalty, at any time by the Company.
In addition, the Company intends to complete a series of debt conversions to decrease the Company's debt and preserve the Company's cash for working capital.
Four directors of the Company (Ted Boyle, Joel Liebman, Fred Buzzelli and Margaret Perialas) have agreed to accept an aggregate of 4,018,800 common shares of the Company at a deemed price of CAD$0.01 per share in satisfaction of accrued and unpaid monthly director sitting fees, representing an aggregate of US$30,000 of indebtedness.
Two senior officers of the Company (Mr. Hreljanovic and Ms. Perialas) have agreed to accept an aggregate of 15,864,817 common shares of the Company at a deemed price of CAD$0.01 per share in satisfaction of a portion of accrued and unpaid salary from May 2020 to March 2022, representing an aggregate of US$118,429.52 of indebtedness.
In addition, the Company intends to complete a debt conversion transaction with an arm's length lender, pursuant to which the Company will issue 15,971,948 common shares of the Company at a deemed price of $0.01 per share in satisfaction of US$119,229.24 of indebtedness.
The foregoing transactions are subject to approval of the directors of the Company and regulatory approval from the TSX Venture Exchange (the“ Exchange ”). The shares issuable pursuant to the debt conversion transactions will be issued in reliance on exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the“ U.S. Securities Act ”), and applicable state securities laws, and will be issued as“restricted securities” (as defined in Rule 144 under the U.S. Securities Act). In addition, the shares will be subject to an Exchange four-month hold period.
The debt conversion transactions with the foregoing senior officers and directors of the Company are each considered a“related party transaction” as defined under Multilateral Instrument 61-101 (“ MI 61-101 ”). The transactions are each exempt from the formal valuation approval requirements of MI 61-101 as none of the securities of the Company are listed on a prescribed stock exchange. The transactions are each exempt from the minority shareholder approval requirements of MI 61-101 as at the time they were agreed to, neither the fair market value of the transaction, nor the fair market value of the consideration for the transaction, insofar as they involve interested parties, exceeded 25% of the Company's market capitalization, respectively.
While the Company is actively trying to secure debt or equity financing to assist it in meeting its working capital requirements, there can be no assurance that one or more financings will result, or successfully conclude in a timely manner or at all. Additional information will be released by the Company as it occurs.
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