RICHMOND, BC, March 13, 2009 (GLOBE NEWSWIRE) -- CON-SPACE Communications Ltd. (the "Company" or "CON-SPACE") (TSX-V:CCB), (http://www.con-space.com), today announced an update to its previously filed Financial Statements for the period ending December 31, 2008 and its Management's Discussion and Analysis for the period ended December 31, 2008, both filed on SEDAR (www.sedar.com) March 2, 2009.
In the reports filed on SEDAR, the Company stated that it did not meet the debt service covenant for the operating credit facility with its bank (the "Bank") and due to inter-creditor agreements that contain cross-default provisions, the default under the Bank operating line resulted in a default of the secured loan payable to its lender, Turret Oy Ab ("Turret") and the secured note payable to the vendors of Search Systems Inc. (the "SSI Vendors"). Accordingly, the loan payable and note payable have been presented as current liabilities on its balance sheet. The Company stated that it was seeking a waiver of the default with the Bank and that the ability of the Company to continue as a going concern was dependant upon any lender seeking immediate repayment under the terms of its existing loan agreement. The Company had previously amended its loan agreement with Turret (the "Turret Agreement") as described in the news release of the Company dated December 19, 2008.
The Company is now in further default under the Bank operating line as it has determined that its borrowings have exceeded the borrowing base limit set by the Bank based on accounts receivable and inventory levels. This further default, under the cross-default provisions in the inter-creditor agreements, constitutes a default under the Turret Agreement and the agreements with the SSI Vendors.
Management of the Company has now discussed both of the defaults with the Bank and has notified the other lenders of the defaults. Based on the Company's cash requirements and current the availability of the Company's credit facility with the Bank, the Company has also decided not to pay the most recent monthly principal and interest installment to the SSI Vendors.
The Company requested that Turret provide emergency interim financing to lessen the business disruption caused by the current cash constraints and Turret has now loaned $50,000 as a further advance under the Turret Agreement.
The Company is currently in discussions with the Bank, Turret, and the SSI Vendors and although there is some cooperation with all three secured lenders, there is no certainty as to the results of those discussions.
About CON-SPACE
CON-SPACE is recognized worldwide as the leading designer and manufacturer of specialized voice communication equipment used by Police, Fire, Rescue, Government Agencies, Militaries, Municipalities and general industry. CON-SPACE has distribution throughout North America, Great Britain, Australia, parts of Asia, South America, and Europe. CON-SPACE also supplies many other manufacturers with private labeled products.
This press release is available on CON-SPACE's official on-line investor relations site for investor commentary, feedback and questions. Investors are asked to visit http://www.agoracom.com and view the CON-SPACE Investor Contact & Information Centre. Alternatively, investors are asked to e-mail all questions and correspondence to CCB@Agoracom.com
Further information is available on the Company's website, www.con-space.com
DISCLAIMER
This news release contains forward-looking statements which reflect management's current expectations regarding the Company's objectives, plans, goals, strategies, future growth, results of operations, performance and business prospects and opportunities. These forward-looking statements are not guarantees, but only predictions. Although the Company believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, as identified in the Company's disclosure record on www.sedar.com. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.