Syscan International Announces Letter of Intent for Bridge Loan and Private Placement: Financial News

Syscan International Announces Letter of Intent for Bridge Loan and Private Placement
Tuesday August 19, 2008 4:23 pm ET

MONTREAL, CANADA--(MARKET WIRE)--Aug 19, 2008 -- Syscan International Inc. ("Syscan" or the "Company")(CDNX:SYA.V - News) today announced that it has entered in a Letter of Intent ("LOI") with Bluehill ID, AG (the "Investor"), an international company with headquarters in Switzerland and listed on the Frankfurt Stock Exchange, for a bridge loan to be used for working capital and for a subsequent Private Placement.

The bridge loan is for a term of 4 months, in the amount of C$ 150,000 and is to be repaid from the proceeds of the private placement. The loan will be interest bearing at a rate of 18% and is secured by the assets of the company.

The Private Placement ("PP") is in the amount of C$ 750,000 and is subject to a number of closing conditions including regulatory and shareholder approval.

Terms of the PP also require shareholder approval of a 40 to 1 reverse share split; a post consolidation share price as determined by the volume-weighted average trading price of the shares during the ten-trading days following the reverse share split, less the allowable TSX discount; the entitlement of the Investor to nominate up to three of the five directors of the company, and other customary conditions for transactions of this nature.

The Investor has the option to not proceed with the placement if the 10 day post consolidation, volume-weighted average share price of the Company is above C$ 0.40 per share or if the aggregate indebtedness of the Company as of the closing exceeds C$ 350,000.

Closing of the PP is also subject to the completion of a customary due diligence; unanimous approval of the Company's disinterested directors, including independent directors; final approval by the Investor's board of directors and/or investment committee; receipt by the Company of all necessary regulatory and third party consents and approvals, including, to the extent required, the approval of the TSX and the shareholders of the Company; no material adverse change in the Company or its business; execution by the Company and the Investor of definitive documentation relating to the bridge financing satisfactory in all respects to the Investor and the Company; and such other conditions as are customary for transactions of this type.

The Company will be subject to a "Penalty Fee" in the amount of C$ 200,000 should it decide not to proceed with the transaction, as well as legal costs and expenses.

After extensive efforts to raise money for acquisitions and operating purposes, the Company has decided this is the best course of action given the state of the financial markets and the Company's financial condition and operating history. The company believes these actions will give it the best realistic opportunity to remain as on-going concern.

The Company plans to use the proceeds to pay down its obligations and for working capital to support its on-going marketing and sales plans.

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About Syscan International Inc.

Syscan is a unique supply chain solution provider that delivers integrated real-time tracking and tracing systems that improve business efficiency through Radio Frequency Identification (RFID). Its standardized supply chain solutions include traceability, temperature monitoring and quality control applications for the food and pharmaceutical and military sectors. Shares of Syscan trade on the TSX Venture Exchange under the symbol SYA. There are approximately 48 million shares outstanding.

The TSX Venture Exchange has not reviewed this release and it does not accept responsibility for its adequacy or accuracy.

Forward-looking statements: This news release may contain forward-looking statements that relate to future events or expectations of future performance. Forward looking statements reflect management's current beliefs and are based on information presently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. The forward-looking statements are made as of the date hereof and Syscan does not assume any obligation to update or revise them to reflect new events or circumstances.