FACT Corporation Restructures Outstanding Debt
KATY, Texas-(Business Wire)-September 16, 2009 - FACT Corporation ( the “Company”) (OTCBB: FCTOA), a specialty nutrition solutions provider to the global baked-goods industry, today announced that the Company has successfully negotiated a restructure of the majority of its short term debt, including various loans and accounts payable, all of which have been converted to long-term, convertible debt.
The Company’s President, Ms. Jacqueline Danforth commented, “The Company is pleased to see the conclusion of negotiations with key creditors in order to restructure the debt on our balance sheet, making the Company more attractive to financing sources for the future investment capital required to fund our planned growth initiatives”.
On August 20, 2009, the Company entered into debt settlement agreements with three creditors to settle a total of $74,692.15 in debt by way of the issuance of 746,922 shares at a deemed price of $0.10 per share.
On September 11, 2009, the Company entered into debt settlements with seven creditors to settle a total of $1,304,172.10 by way of convertible loans. Under the terms of the convertible loans, the creditors have executed loan agreements for a period of three years, with interest payable annually at 8% per annum. The loans are unsecured and convertible for a period of one year into shares of the Company’s Class A common stock at a deemed price of $0.15 per share, for a total issuance of 8,694,481 shares, if converted.
On September 11, 2009, the Company also renegotiated an outstanding debenture due in December 2009. As a result of the renegotiations the Company has entered into a new debenture agreement in the amount of $317,517.14 with Ultimate Resort Destinations Inc. (“Ultimate”). Ultimate currently holds a debenture over the shares of Food and Culinary Technology Group Inc. (FACT Group Inc.), the Company’s wholly-owned subsidiary operating in the customized nutrition solutions industry. The debenture is being rewritten for a period of three years, with interest payable at 6% per annum. The debenture will be convertible for a period of two years into the Company’s Class A common stock at a deemed price of $0.14 per share, for a total issuance of 2,267,980 shares, if converted.
CEO Jacqueline Danforth added, “It’s very encouraging that our key creditors have agreed to enter into long term debt agreements with the Company. This will eliminate a great deal of the short term debt from our balance sheet, allowing management to put together a funding proposal to raise the required capital to fund our future growth plans.”
The Company intends to seek new financing of up to $1 million in order to fund the final stage of development of several new product lines that it hopes to launch in the Spring of 2010.
About FACT Corporation
FACT has been engaged in the healthy lifestyle market since 2002. Operating through our wholly-owned subsidiary, Food & Culinary Technology Group Inc., we develop and market customized nutrition solutions created for the global baked-goods industry. Presently, our core products are proprietary specialty bake mixes, which we sell to commercial producers who use these mixes to manufacture popular, health-friendly packaged baked goods. These items target a rapidly-growing, increasingly-sophisticated consumer marketplace focused on quality, taste and nutrition. Our customers market their finished products (foods we all love to eat, such as bagels, brownies, muffins and cookies) through both conventional and alternative distribution channels, including branded and private-label retail opportunities, as well as foodservice and specialty markets. For more information about FACT and its products, please visit www.factfoods.com.
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