DVOP new Press Release: Wednesday, June 4, 2008
Market Update
QRSciences (ASX:QRS) (QRSNY:PK) provides the following update in relation to various matters affecting the Company.
Acquisition of controlling interest in Diversified Opportunities Incorporated (DVOP.OB)
QRS has completed the transaction it announced to the market on May 19, 2008 to purchase 9,000,000 shares or approximately 98% of the outstanding shares of Diversified Opportunities Incorporated (Diversified) for $676,000.
Diversified trades on the over-the-counter bulletin board through the NASDAQ quotation system with the trading symbol (DVOP.OB).
QRS is now in the process of finalising a proposed restructure involving Diversified and the existing QRS technology assets which will involve Diversified and QRSciences entering into a share exchange that will interpose Diversified between QRSciences Holdings and QRSciences Pty Ltd leaving Diversified as a subsidiary of QRSciences Holdings Limited and the parent of QRSciences Pty Ltd.
The Board of Directors of QRSciences have long held a view that its technology assets have been undervalued by the Australian market and are hopeful that this exercise will provide those assets a wider investor audience which will encompass the United States and Europe.
Spectrum convertible note
QRSciences has extended the Convertible Note which it recently issued to Spectrum by an additional U$200,000. The note now totals $600,000 and on full conversion would take QRSciences ownership position in Spectrum to 32.08%. In addition, the Company is in mature negotiations with Spectrum to significantly increase its equity stake and will report back to the market as developments arise. QRSciences hold an option to buy all of the outstanding stock in Spectrum through September 2009.
BTG International
The Company has renegotiated its Option Purchase Agreement with BTG International reducing the acquisition cost by approximately $7.28M. The adjustment will be reflected in the Company’s year end accounts.
Debt Facilities
The Company has put in place additional debt finance with its principal banker NAB and a private investor based in Europe to assist with funding the restructure and the Company’s ongoing investment activities.
The private investor has purchased a two-year Convertible Debenture in QRS for $500,000. The debenture bears a coupon of 10% and is convertible at 25 cents per share with a feature that allows limited amounts to be converted into equity at a 15% discount to the QRS current market price.
The private investor has also provided a two-year Secured Convertible Note in the amount of $800,000 with an interest rate of 10%. The Note will be retired by monthly instalment payments or at the election of the investor can be forgiven in exchange for conversion into equity at 25 cents per share or in limited amounts converted at a 15% discount to the QRS then current market price.
Through these relationships the Company will have access to additional finance of approximately $3M.
About QRSciences
QRSciences Holdings Limited is based in Melbourne , Victoria with offices in Perth , Western Australia and San Diego , California . Its wholly owned distribution business Q Video Systems is based in Port Melbourne, Australia. The primary commercial focus of the company is the design, development and sale of advanced technology systems, sub-systems, components and software for security related applications. Applications for its technologies and products include the detection of explosives and narcotics, metal detection and imaging, surveillance and monitoring.
For more information on the Company please visit www.QRSciences.com or www.qcctv.com.au , phone +61 3 9681 9884 in Australia or +1 (858) 613 8755 in the United States .
