March 1, 2007
ATI AirTest Technologies Inc.
TSX Venture Symbol (AAT)
(Vancouver B.C. March 1, 2007): George Graham, President of ATI AirTest Technologies Inc. (the “Company”), a provider of sensor technologies for building applications, is pleased to provide an update on the status of the Company and its future
plans. The Company, subject to a cease trade order issued by the BC and Alberta Securities Commissions, has made applications to revoke the cease trade order. Once the Commissions have issued the revocation order, the TSX Venture Exchange will reinstate the Company to trading.
For the past three years the Company has been focussed on promoting energy saving gas detection equipment technology to the commercial buildings market. The Company has developed a strong product offering and has improved its presence in the market. The market for its products is growing rapidly primarily due to the emphasis by both governments and power utilities on energy conservation. However the Company’s ability to grow its business has been severely restricted due to its weak financial position, which includes a high debt load and a large working capital deficiency. This working capital deficiency was $4.9 million at December 31, 2006. The deficiency resulted from two primary causes; (a) the acquisition of a company in 1999 whose patented technology for the aerial surveillance of natural gas pipelines became worthless due to aircraft regulation changes; and (b) the complete restructure and product development program undertaken by the Company from 2002-2005 as it directed its full attention and resources to the commercial and institutional building HVAC market.
The Company’s business plan has attracted several investors over the past two years, however its high debt load has proven to be a deterrent to investors who expect their investment to create growth as opposed to paying off existing debt. In 2006 the Company initiated a debt conversion program that will result in approximately $4 million of its outstanding debt being converted to shares. This program is subject to the approval of the TSX Venture Exchange. Another $400K will be postponed thereby moving that portion of debt from current to long term. This program, to be completed upon the revocation of the cease trade order, will eliminate the working capital deficiency and reduce interest costs related to the outstanding loans.
To meet current working capital requirements the Company plans to raise $750,000 through a non-brokered private placement. The Company expects this financing to be completed in the first quarter, 2007 once the cease trade order is revoked.
The Company is pleased to announce that it has signed a Letter of Intent with a marketing partner in California who has launched a retrofit program for commercial buildings to effect energy savings due to reduction in ventilation power costs. The non-binding Letter of Intent outlines the terms of a pending Private Label Agreement being developed between the two companies. In return for the Company’s commitment to private label its manufactured products at competitive prices, the partner company will commit to advance $350,000 USD as an interest free loan. The loan is to be repaid by the Company rebating 10% of the partner’s product purchases against the loan until the complete loan has been repaid. The partner company will have to purchase $3.5 million USD from the Company in order to fully recover its advance. A further news release will be issued upon execution of the Private Label Agreement.
The combination of the two financing programs will yield over $1,000,000, which will provide sufficient liquidity for the Company to aggressively pursue its business plan through 2007. The majority of the funding will be used to finance growth in inventory and accounts receivable with approximately 15% of the funding to be allocated to product development.
The Company’s current product offering fits well with today’s emphasis on energy management in North America, therefore the outlook for growth in sales of the Company’s products is very positive.
Statements about the Company’s future expectations and all other statements in this press release other than historical facts are “forward looking statements”. The Company intends that such forward-looking statements be subject to the safe harbours created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the Company’s actual results may differ materially from the expected results.
For further information, please contact:
Mr. George Graham, President
Phone: (604) 517 3888
Fax : (604) 517 3900
The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.