BOCA RATON, Fla., Jan. 12, 2023 (GLOBE NEWSWIRE) — EasTower Wireless Inc., announces that as a result of its inability to complete an equity or debt financing, it has been forced to cease business operations. The Company has negative cash flow and has been trying to raise capital to continue its operations and meet its obligations. To assist the Company with meeting its current working capital requirements and bridge the gap until a potential financing, EasTower’s founder and CEO, Vlado P. Hreljanovic, had personally loaned the Company US$90,000 in October 2022 and USD$67,200 in November 2022 (both previously announced by the Company).
In addition, Mr. Hreljanovic loaned US$116,000 to the Company in December 2022 pursuant to an unsecured demand promissory note bearing interest at 8% per annum from the date of issue, payable on maturity. The loan is unsecured and is fully redeemable, without bonus or penalty, at any time by the Company.
The Company currently has cash of US$33,344 and account receivable of US$103,925 as a result of work already completed. Current accounts payable equal US$359,393.
The Company will begin a process of identifying and evaluating businesses or assets with a view to completing a Change of Business or Reverse Takeover (as such terms are defined by the TSX Venture Exchange (the “Exchange”). As of the date hereof, no such agreement or understanding in respect of a Change of Business or Reverse Takeover has been consummated.
In addition, the Company wishes to correct information from its November 23, 2022 press release. Two senior officers of the Company (Mr. Hreljanovic and Margaret Perialas) have agreed to accept an aggregate of 14,257,297 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$106,429.52 of indebtedness.
The Company also announces its intention to complete a debt conversion transaction with an arm’s length service provider, pursuant to which the Company will issue 4,500,000 common shares of the Company at a deemed price of CAD$0.01 per share in satisfaction of CAD$45,000 of indebtedness. The transaction is subject to approval of the directors of the Company and regulatory approval from the Exchange. In addition, the shares will be subject to an Exchange four-month hold period.
The Company has also been notified by the Exchange that as a result of ceasing business operations it no longer meets the Exchange’s Tier 2 Continued Listing Requirements (“Tier 2 CLR”). Accordingly, in accordance with section 3.2 of Exchange Policy 2.5, the Exchange has placed the Company on notice for transfer to NEX with a deadline of 90 days if it is not able to provide evidence it has become in a position to meet Tier 2 CLR.
Accordingly, in accordance with section 3.2 of Exchange Policy 2.5, the Exchange has notified the Company that it will be providing it notice of its failure to meet Tier 2 CLR (the “Tier 2 Notice”). The Exchange will allow the Company 90 days from the date of the Tier 2 Notice to meet Tier 2 CLR. If, after that 90 day period, the Company does not meet all Tier 2 CLR, the Exchange may either, at its discretion, transfer the Issuer’s listing to NEX or suspend and delist the Listed Shares of the Issuer. The NEX is a separate board of TSXV that provides a trading forum for listed companies that have fallen below TSXV’s ongoing listing standards.
The common shares of the Company will resume trading on the Exchange upon completion of the Exchange’s resumption review.
