N@N

Genesis Worldwide Inc.: Genesis Worldwide Inc. Announces Proposed $1,675,000 Non-Brokered Private Placement of Common Shares an

^{Published on 2009-07-20 03:41:44, Last Modified on 2009-07-20 03:41:51 - Market Wire}
 

MISSISSAUGA, ONTARIO--(Marketwire - July 17, 2009) - Genesis Worldwide Inc. ("Genesis" or the "Corporation"), (TSX:GWI), a leading provider of 'green' structural building products and technology in the light steel structural products industry, announces that it is proposing to complete a non-brokered private placement (the "Private Placement") of 6,700,000 common shares at a price of $0.25 cents per common share to raise aggregate gross proceeds of $1,675,000. In addition, each subscriber pursuant to the Private Placement will receive one half of a common share purchase warrant (a "Warrant") for each common share subscribed for. Each Warrant will be exercisable to purchase one common share of the Corporation at a price of $0.35 per common share and will expire on the fourth anniversary of the closing of the Private Placement. The proceeds of the Private Placement will be used for working capital purposes. It is anticipated by the Corporation that Codding Enterprises, L.P. ("Codding") and Vince Mifsud, the President and Chief Executive Officer of the Corporation, will subscribe for 4,000,000 common shares (and 2,000,000 Warrants), and 100,000 common shares (and 50,000 Warrants), respectively, pursuant to the Private Placement. The balance of the common shares and Warrants to be issued pursuant to the Private Placement will be subscribed for by arm's length parties.

If the Private Placement is completed, the $3,034,742 principal amount of convertible debentures (the "Debentures") previously issued by the Corporation will automatically be converted into 12,540,252 common shares of the Corporation at a conversion price of $0.242 per common share. As a result, following the completion of the Private Placement and the conversion of the Debentures, there will be 50,223,110 common shares of the Corporation issued and outstanding. Assuming the conversion of the Warrants immediately following the completion of the Private Placement and the conversion of the Debentures, there will be 53,573,110 common shares of the Corporation issued and outstanding.

Codding is currently the registered and beneficial holder of 1,051,400 common shares of the Corporation and $2,734,742 principal amount of Debentures. The automatic conversion of the Debentures on the completion of the Private Placement will result in the issuance of 11,300,586 common shares to Codding. As a result, following the completion of the Private Placement and the conversion of the Debentures, Codding will be the registered and beneficial holder of 16,351,986 common shares of the Corporation, representing approximately 32.56% of the issued and outstanding common shares of the Corporation. If only the Warrants issued to Codding pursuant to the Private Placement are exercised immediately following the completion of the Private Placement and the conversion of the Debentures, Codding will be the registered and beneficial holder of 18,351,986 common shares of the Corporation, representing approximately 35.14% of the issued and outstanding common shares of the Corporation. Codding currently has two representatives on the board of directors of the Corporation, being Bradley E. Baker, who is also the Executive Chairman of the Corporation, and Richard E. Pope.

In addition, the completion of the Private Placement will result in the automatic conversion of the $50,000 principal amount of Debentures held by Bradley Baker, who is also the Chief Executive Officer of Codding, who will, as a result, be the registered and beneficial owner of 206,611 common shares of the Corporation, representing approximately 0.41% of the issued and outstanding common shares of the Corporation following the completion of the Private Placement and the conversion of the Debentures. Each of Codding Baker Investments Inc., the Constance L. Codding Trust, and the Baker Family Trust, is the registered and beneficial owner of $25,000 principal amount of Debentures which will, on the completion of the Private Placement, be converted into an aggregate of 309,915 common shares of the Corporation. Bradley E. Baker exercises control or direction over the securities of the Corporation held by Codding, Codding Baker Investments Inc., the Constance L. Codding Trust and the Baker Family Trust. Following the completion of the Private Placement and the conversion of the Debentures, Bradley E. Baker will exercise control or direction over an aggregate of 16,868,512 common shares of the Corporation, representing approximately 33.59% of the issued and outstanding common shares of the Corporation. If only the Warrants issued to Codding pursuant to the Private Placement are exercised immediately following the completion of the Private Placement and the conversion of the Debentures, Bradley E. Baker will exercise control or direction over 18,868,512 common shares of the Corporation, representing approximately 36.13% of the issued and outstanding common shares of the Corporation.

The number of common shares of the Corporation issuable pursuant to the Private Placement (assuming the exercise of the Warrants) will represent in aggregate approximately 32.4% of the 30,982,858 currently issued and outstanding common shares of the Corporation on a non-diluted basis. The number of common shares issuable to insiders of the Corporation will represent approximately 19.8% of the Corporation's currently issued and outstanding common shares on a non-diluted basis.

The Private Placement is subject to the approval of the Toronto Stock Exchange (the "TSX") and, since the Private Placement will (i) provide for the issuance to insiders of the Corporation of greater than 10% of the number of common shares of the Corporation which are currently outstanding, (ii) be deemed under the rules of the TSX to materially affect control of the Corporation, and (iii) provide for the issuance of greater than 25% of the currently outstanding common shares of the Corporation, the rules of the TSX require that the Corporation obtain approval of the Private Placement from the holders of a majority of the common shares of the Corporation, excluding the votes attached to the common shares of the Corporation held by Codding and its associates and affiliates, and Vince Mifsud. However, the rules of the TSX also provide that such approval may be obtained in writing from shareholders without the requirement to convene a shareholders' meeting for such purposes, and the Corporation intends to rely on this exemption in connection with the Private Placement.

Due to the fact that Codding and Vince Mifsud are anticipated to subscribe for common shares and Warrants pursuant to the Private Placement, the Private Placement will be a "related party transaction" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Corporation anticipates it will rely on the exemptions from the valuation and minority approval requirements of MI 61-101 contained in paragraph (a) of Section 5.5 and paragraph (a) of Section 5.7, respectively, of MI 61-101, as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the portion of the Private Placement anticipated to be subscribed for by Codding and Vince Mifsud, will exceed 25% of the Corporation's market capitalization.

The closing of the private placement is anticipated to occur on or as soon as is practicable after July 23, 2009, as the Corporation requires the working capital that will be provided by the proceeds of the private placement.

About Genesis Worldwide Inc.

Genesis is a leading provider of green light steel structural building products, systems and technology targeted at the global commercial, residential and institutional building sectors. Genesis delivers customized turnkey structural solutions including innovative light steel products, software packages, industrial equipment, training programs, professional services and support. Headquartered in the Greater Toronto Area in Ontario, Canada, Genesis has established a network of partners with engineering, manufacturing and distribution operations in Canada, the United States, the Middle East, Eastern Europe and Russia. For additional information about the Company, visit [ www.genesisworldwide.com ].

Caution Regarding Forward Looking Information

Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements") and are made pursuant to the "safe harbour" provisions of such laws. Statements related to the Corporation's projected revenues, earnings, growth rates, performance, business prospects and opportunities are forward-looking statements, as are any statements relating to future events, conditions or circumstances. The use of terms such as "may", "will", "should", "plan", "believes", "predict", "potential", "anticipate", "expect", "project", "target", "estimate", "continue" and similar terms are intended to assist in identification of these forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities. These assumptions, although considered reasonable by the Corporation at the time of preparation, may prove to be incorrect.

Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance or achievements of the Corporation to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements.

Many factors could cause the actual results of the Corporation to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, those factors discussed under the heading "Risk Factors" in the Corporation's most recent Annual Information Form ("AIF"), a copy of which is available on SEDAR at [ www.sedar.com ]. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except required by law, the Corporation does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.