Extenway Announces Proposed Debt Settlement and Second Tranche of a $2,910,000 Private Placement; Management Change - Seite 2

The purpose of the Private Placement and Debt Settlement is to immediately improve the financial position of the Company given its actual financial situation. The Company has been diligently pursuing additional sources of debt and equity financing and has determined that the proposed Private Placement and Debt Settlement was the best alternative for the Company.

Mr. John McAllister, President and Chief Executive Officer of Extenway, stated: "As previously announced the Company has secured a significant number of new hospital contracts and believe that additional opportunities are pending. This has encouraged our major shareholders to address balance sheet issues in advance of these installations and is a major vote of confidence for us."

The Debt Settlement and the Private Placement will allow the Company to greatly improve its balance sheet while its non-banking debts for borrowed money will be reduced by at least $8,119,805.03 and its working capital will be increased by $2,410,000. " added Mr. McAllister.

Private Placement

The Company has been in discussion with a group of accredited investors, including Caisse and DI, which have indicated their interest in participating in the Private Placement, subject to: (i) the conversion of at least 70% of the Convertible Indebtedness; (ii) the settlement of the Working Capital Advances, and (iii) other customary closing conditions. It is expected that Caisse and DI will subscribe for 18,750,000 common shares ($1,500,000) and 6,250,000 common shares ($500,000), respectively.

Related Party Transactions

The Company understands that McAllister, Brown and DI own, directly or indirectly or exercise control or direction over, 31,988,535 common shares, 29,975,210 common shares and 31,156,516 common shares, respectively, representing 22.38%, 20.98% and 21.80%, respectively, of the currently issued and outstanding common shares of the Company. In addition, McAllister and Brown are officers of the Company.

As a result, each of the proposed Private Placement and the Debt Settlement is considered a related party transaction pursuant to Policy 5.9 of the TSX Venture Exchange and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and triggers the requirement for a valuation and minority approval unless exemptions therefrom are available. As Exentway is not listed on or quoted on any prescribed senior exchange listed in MI 61-101, the proposed Private Placement and Debt Settlement are each exempt from the formal valuation requirement contained in MI 61-101 pursuant to section 5.5(b) of MI 61-101. In addition, Extenway is relying on the financial hardship exemption from the minority approval requirement contained in MI 61-101 pursuant to section 5.7(e) of MI 61-101. In reliance thereon, the Board of Directors of the Company (other than Mr. McAllister, who abstained from voting on the proposed transaction), including all of its independent members, has unanimously concluded that the Company is in serious financial difficulty and the proposed Private Placement and Debt Settlement, the terms of which are reasonable in the circumstances, will improve the financial position of the Company. Finally, in accordance with MI 61-101, the Company will not file a material change report in respect of the proposed related party transactions before at least 21 days of the expected date of the closing considering the fact that it is in the best interests of the Company to collect the proceeds from the Private Placement as soon as possible.