Neptune arranges C$8.5 million to meet increased demand; Verb Exchange hopes to raise C$1.5 million

By Devika Patel

Knoxville, Tenn., Sept. 8 - Neptune Technologies & Bioressources Inc. cemented an arrangement with Desjardins Group to conduct an C$8.5 million debt financing. The company plans to use the funds to expand Neptune's production capacity as the business continues to grow.

"This expansion of our capacity is crucial to meeting actual and forecasted strongly increasing customer demand for our products with our plant presently running at full capacity," Neptune's vice president of finance and administration, Andre Godin, said in a press release.

Verb Exchange Inc. waited until after the close on Friday to announce a C$1.5 million sale of units. Magna Partners Ltd. will assist the company by marketing the offering to investors.

Neptune: C$8.5 million

Neptune Technologies announced plans for an C$8.5 million debt financing, which the company hopes will be enough to meet its production needs. The company has boosted its production capabilities and plans to expand significantly in the face of rising consumer demand for its nutritional products.

"Obtaining better financing conditions, particularly in the context of the current credit environment, constitutes a validation of our financial strength and of our business plan," Neptune director of finance Xavier Harland said in a press release.

The Laval, Quebec-based company develops nutritional products from marine biomasses.

Of the financing, C$3 million is earmarked to purchase customized equipment to optimize the extraction process and to increase productivity and production capacity with a target of reaching 120,000 kg of Neptune Krill Oil production per year, doubling current capacity.

Another C$3.5 million of the financing will be allocated to refinance the company's long-term debt at a lower annual interest rate of 7.71%. This refinancing will allow the company to save more than 2.5% of its interest charge and improve next year's cash flow.

Finally, a line of credit, initially of C$1 million, which can be increased to C$2 million, has also been established.

Investissement Quebec plans to participate in this financing by guaranteeing up to 38% of the financing, excluding the line of credit.

The company also said it was cancelling earlier plans for an offering of convertible debentures.

"Now we have the financial resources to quickly implement the first phase of our capacity expansion program and the financing provides the company with adequate financial resources to eliminate any pressure for raising additional capital such as the convertible debentures under current market conditions," vice president Godin said in the release.

"Since Neptune maintains its position for the minimum conversion price, which is over C$2.00, the company has decided in agreement with its U.S. investment banker that given current market conditions, it would not be advantageous to the company or in the best interest of our existing shareholders to proceed with the previously announced private placement of convertible debentures at this time," Godin said.

"If funds are required for any future needs," Godin continued, "Neptune has other options with better conditions to explore in due course, and now, with the bank financing concluded for the plant expansion, we have eliminated any previous concerns about capital needed."

The company's shares (TSX Venture: NTB) increased 1.59%, or 3 cents, to close at C$1.92 Monday.

Verb Exchange plans C$1.5 million

Verb Exchange said it has arranged a C$1.5 million non-brokered private placement of units.

The company will sell 12.5 million units at C$0.12 apiece. Each unit consists of one common share and one half-share warrant, with each whole warrant exercisable at C$0.20 for 18 months.

The exercise period may be reduced to 30 days if the shares trade at C$0.30 or more for 10 consecutive days.

Magna Partners Ltd. will help market the offering to institutional investors.

Proceeds will be used to finance the company's planned growth and marketing campaigns, aimed at expanding the company's Tabrio platform, which allows consumers to use the company's VoIP network for inexpensive phone calls and text messaging. According to Verb Exchange's web site, the company plans to enhance this platform by adding web search and instant messaging.

"With unique site traffic numbers trending toward 500K per month, it's clear that Tabrio is well-positioned as a best-of-breed communications platform for users globally," Verb president Aron Buchman said in a news release. "We've seen viral growth in more than 125 countries to date and we're defying industry averages with conversion figures on limited marketing campaigns at more than 10%. We'll be continuing an aggressive growth campaign this fall and into 2009."

The Vancouver, B.C.-based communications services provider's shares (TSX Venture: VEI) sank 6.9%, or 1 cent, to close at C$0.135 Monday.

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