RS Announces Financing with a Strategic Investor

CALGARY, June 6, 2011 /CNW/ -- 
Not For Distribution to U.S. News Wire Services or for Dissemination in
 the United States


CALGARY, June 6, 2011 /CNW/ - RS Technologies Inc. ("RS" or the "Corporation") (RS.H - NEX), a technology innovator and manufacturer of advanced
 composite products for infrastructure markets, announced that it has
 entered into a commitment letter (the "Letter") with Werklund Capital Corporation ("WCC") pursuant to which the parties agreed, among other things, that:






(a)      WCC intends to lend RS $6 million in the form of a first
         secured convertible debenture ("Convertible Debenture") which
         shall be convertible at WCC's option at a price of $0.33 per
         common share ("Common Share") until the maturity date
         ("Maturity Date") of the Convertible Debenture, being 30
         months from the date of closing ("Closing"). In the event that
         WCC elects to convert the Convertible Debenture, the
         conversion will result in WCC owning not less than 50.1% of
         RS's outstanding Common Shares, after giving effect to the
         conversion of certain bridge funds ("Bridge Funding") into
         Common Shares at a price of $0.33 per Common Share. The Bridge
         Funding contemplated in the Letter for conversion into Common
         Shares may be up to $1,800,000 at the time of Closing. The
         funds from the Convertible Debenture shall be used to fund
         RS's working capital needs.

          

         Completion of the Transaction is subject to a number of
(b)      conditions and approvals including, but not limited to, the
         following:

         (i)   the approval by a majority of the holders of Common
               Shares, excluding those Common Shares where direct or
               indirect beneficial ownership of (or control or
               direction is held by) directors and officers of RS, for
               the delisting of the Common Shares from the facilities
               of the NEX and the approval of the NEX for such
               delisting, all as more fully described in the
               Corporation's news release of June 1, 2011 and in the
               information circular - proxy statement that the
               Corporation has mailed to shareholders and posted on
               SEDAR;

         (ii)  the conversion of the Corporation's existing $6,666,480
               in outstanding 10% secured notes ("Secured Notes") into
               preferred shares, with the terms of such preferred
               shares to provide that they be redeemed for cash or
               Common Shares in the first half of 2016;

         (iii) the receipt of certain third party consents and waivers
               from certain of the Corporation's lenders, including the
               holders of Secured Notes, for the transaction, whom the
               Corporation has approached and have provided their
               agreement in principle such that the transaction as
               contemplated in the Letter may proceed as agreed to by
               RS and WCC;

         (iv)  that nothing shall have occurred, between the signing of
               the Letter and Closing, that would have a material
               adverse effect on the business, operations, properties,
               financial position, prospects or the ability of RS to
               perform any of its obligations; and

         (v)   the execution and delivery of all definitive documents,
               including the final form of Convertible Debenture,

         (the foregoing matters being collectively referred to as the
         "Transaction").








The Board of Directors of RS believes that the Transaction provides RS
 with financial stability that will allow the Corporation to execute its
 business plan. In addition, the Corporation believes that RS's balance
 sheet will be strengthened as a result of the Transaction due to both
 the injection of additional new equity and the conversion of the
 Secured Notes into preferred shares, the latter of which would
 eliminate certain interest payments and provide the Corporation with
 the option to ultimately redeem the preferred shares for Common Shares
 in lieu of cash.


"The Transaction assures our customers that we will be able to continue
 our record of meeting 100% of our product delivery schedules and
 steadfastly support our sales efforts, today and in the future" said
 Paul Giannelia, president and CEO of RS.


Blake Lyon, president and CEO of WCC said, "Werklund Capital is excited
 to assist RS in solidifying its balance sheet to ensure it can deliver
 its business plan. We believe in this industry changing technology and
 look forward to being a part of its positive impact on the
 infrastructure industry."


About Werklund Capital Corporation
Werklund Capital Corporation is your global creative capital partner. As
 one of Canada's largest family-owned investment companies, WCC's
 business philosophy is to achieve an above average return on its
 capital by seeking investment opportunities in which WCC can make a
 significant and positive contribution. WCC was founded by Mr. David P.
 Werklund, a successful and respected Calgary businessman, and is
 comprised of a team of highly experienced and focused professionals
 committed to partnering with our portfolio companies to achieve
 advanced financial growth and maintaining Mr. Werklund's solid
 reputation for superior business practices.


About RS
RS is an ISO 9001:2008 certified technology innovator that develops
 advanced composite material products for infrastructure markets. The
 composite products manufactured using the company's proprietary resins
 and processes are typically lighter, more durable and longer-lasting
 than competing products made from the traditional building blocks of
 wood, steel or concrete. RS's flagship product is its award-winning
 RStandard(® )composite pole. The pole is used as transmission and distribution poles
 to carry electric grids and as communication structures for various
 uses including wireless networks and microwave communications systems.


For the latest on RS's developments, go to the company's website at www.grouprsi.com.


"RStandard" is a registered trademark of RS.


Reader Advisory


Certain information set forth in this news release, including: the
 failure to close the Transaction on the terms disclosed or any terms at
 all; the negotiation and settlement of certain definitive documentation
 in respect of the Transaction; the delisting of the Common Shares from
 the NEX; the conversion of the secured notes; and the mailing of an
 information circular to approve, among other things, the delisting of
 the Common Shares from the NEX, contains forward-looking statements
 which are based on RS's current internal expectations, estimates,
 projections, assumptions and beliefs, which may prove to be incorrect.
 Some of the forward-looking statements may be identified by words such
 as "expects", "anticipates", "believes", "projects", "plans" and
 similar expressions. These statements are not guarantees of future
 performance and undue reliance should not be placed on them. Such
 forward-looking statements necessarily involve known and unknown risks
 and uncertainties, which may cause events to differ materially from any
 projections expressed or implied by such forward-looking statements.
 These risks and uncertainties include, among other things, failure to
 secure the requisite shareholder approval for the delisting; the
 failure to secure requisite third party consents to the Transaction,
 including the Corporation's lenders and holders of Secured Notes; a
 condition precedent set forth in the Letter not being satisfied or
 waived by either party; RS not having adequate funds to continue as a
 going concern prior to Closing; RS's lack of revenues and
 unpredictability of future revenues; the uncertainty of the
 profitability of existing and contemplated products of RS; RS's ability
 to attract and retain key employees; competition from established
 competitors with greater resources; the uncertainty of the developing
 markets in which RS operates; the risks associated with rapidly
 changing technology; RS's reliance on third parties to supply raw
 materials and the cost of such raw materials; intellectual property
 risks; foreign exchange rate fluctuations; and changes in general
 economic, market and business conditions. Many of these risks and
 uncertainties are described in RS's annual information form for the
 year ended December 31, 2010 and other documents RS files with the
 Canadian securities authorities. The forward-looking statements are
 made as of the date hereof and RS assumes no obligation to update or
 revise such statements to reflect new events or circumstances except as
 required by applicable securities laws.


This news release does not constitute an offer to sell or the
 solicitation of an offer to buy any securities within the United
 States. The securities to be offered have not been and will not be
 registered under the U.S. Securities Act of 1933, as amended, or any
 state securities laws, and may not be offered or sold in the United
 States absent registration or an applicable exemption from the
 registration requirements of such Act or other laws.


To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/June2011/06/c2909.html



p RS Technologies Inc.br/ Laurien Abel, Investor Relationsbr/ Tel: [phone] Fax: [phone]br/ Email: a href="mailto:[e-mail]"[e-mail]/a /p 

Copyright