EDMONTON, April 11, 2012 /PRNewswire/ - Virtual Universe Corporation (the "Company") (TSXV: VU), announced today that it has entered into an agreement with 1596598 Alberta Ltd. ("1596598") for the Company to provide 1596598 with an Indefeasible Right of Use ("IRU") to its fibre optic cable assets for term of 15 years. The terms of the agreement will provide the Company with revenue from its fibre optic cable assets in the amount of $150,000 per year plus recovery of certain operating expenses.
In addition, the Company announced that it has reached agreement with related party debt-holders to restructure the terms of all interest-bearing related party debts. The restructuring includes the following terms:
- The related party interest-bearing debt terms will be adjusted as of January 1, 2011 to reduce the interest charge to simple interest on the outstanding principal amounts to 3% per annum;
- There will be a one-time reduction of the outstanding accrued interest on the advances in the amount of $485,170 as of December 31, 2011;
- The related parties agree not to demand payment of current year accrued interest until after January 1, 2013;
- $900,000 of the existing debt principal will be payable on demand; with the remainder of the outstanding debt to be due on January 1, 2015.
The amended terms for the debt will reduce annual interest expense for 2011 from $517,700 to $82,000. Under the proposed new arrangements, annual interest expense on the debt for the 2012 to 2014 fiscal periods will continue at $82,000 per annum. In addition, the agreement will reduce the portion of the indebtedness that is due on demand to $900,000 until January 1, 2015. Prior to the agreement, the entire amount of the debt was due on demand.
The Company has two principal areas of interest. It owns and maintains an IRU in two dark strands of optical fibres in Alberta, Canada, and has proprietary technology called Virtual Talker, which allows multiple participants to engage in real-time verbal conversations over the internet.
This press release contains certain "forward-looking statements". These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These forward-looking statements are made as of the date of this press release and the Company does not undertake to update any forward-looking statements that are contained in this press release, except in accordance with applicable securities laws.
SOURCE Virtual Universe Corporation