A Beachhead in the Southeastern United States to Expand Geographic Coverage and Software Suite for Law Enforcement and Public Safety Agencies TORONTO, July 25 /CNW/ -- ComnetiX(TM) Inc (TSX: CXI), a leading provider of biometric identification and authentication solutions across North America, announced today that it has signed an agreement and plan of merger to acquire Paragon Total Solutions Inc, an established, privately-held, Carrollton, GA-based biometrics technology company with a broad base of law enforcement and government customers throughout the southeastern United States. The purchase price totals US $4.45 million, consisting of assumption of certain Paragon liabilities, approximately US $1.5 million in cash paid to the Paragon shareholders and approximately 820,000 ComnetiX Common Shares. The ComnetiX Common Shares will be subject to contractual lockup for at least one year and a majority of such shares will also be subject to a contractual escrow. Subject to the satisfaction of certain closing conditions and regulatory approval, the deal is expected to close by August 15, 2005. Paragon's founder Andy Horton will serve as Vice President of Sales -- Southeastern Region for ComnetiX following the closing. Paragon was incorporated in 1998 and recorded approximately US $2.9 million in sales in calendar year 2004. Approximately 200 customers in the Southeast are currently employing one or more of Paragon's comprehensive solutions, such as Paragon's record and jail management software solutions, or its arrest booking and applicant screening fingerprinting solutions for criminal and job-applicant needs, or its software for mobile applications linking law enforcement agencies with officers in the field. Paragon's flagship product family, EAGLEADVANTAGE, is a comprehensive suite of software solutions specifically designed for law enforcement and public safety agencies and complements the products ComnetiX currently offers, according to ComnetiX CEO Jim Scullion. "This acquisition allows us to round out our suite of biometric software solutions for law enforcement and public safety agencies, particularly in the jail and records management areas. Just as important, however, it adds Paragon's established customer base in a part of the country that we need to serve -- the southeastern United States," Scullion said. "Our goal has been to expand our presence from Canada, New York and the Northeast to other parts of North America. We've made initial strides in building a customer base in the Midwest and California and now Paragon provides us an immediate operation and sales force that is known and respected in the Southeast." Investor Conference Call At 4:15 PM EDT today, Monday, July 25, 2005, ComnetiX will host an investor conference call to discuss its pending acquisition of Paragon Total Solutions Inc; the call will also be broadcast live over the internet at www.vcall.com. An Internet replay will be available through August 1st as well, at the URLs noted above. About Paragon Total Solutions Inc (www.paragontotalsolutions.com) Paragon Total Solutions Inc (Paragon) was incorporated in 1998 for the single purpose of providing advanced technology as a total solution for the public safety community. Paragon provides a complete comprehensive suite of public safety software and integrated turnkey solutions that include mobile systems, a full-featured computer aided dispatch system, live-scan (criminal & applicant), Internet data sharing, AFIS and archive systems. About ComnetiX(TM) Inc ComnetiX(TM) Inc provides secure identification and authentication solutions to both the public and private sectors throughout North America. ComnetiX offers multimode biometric identification solutions for use in areas such as applicant screening, financial services, health care, transportation, airlines and airports, casinos and gaming, and energy and utilities. Clients include American Airlines, Lehman Brothers, New York City Health and Hospital Corporation, New York State Division of Criminal Justice Services, Toronto Police Services Board, Boston Police Department and the Royal Canadian Mounted Police. ComnetiX is also Canada's premier applicant fingerprinting services company, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada. In addition, ComnetiX has recently launched its first applicant fingerprinting services office in the US, located in Sacramento, California. Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement in this release containing words such as "believes," "plans," "expects" or "intends" and other statements that are not historical facts are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. For further information Investor Relations: Jesse Deal 1-877-691-8087 (toll-free) investor.relations@ComnetiX.com Tim Zahavich ComnetiX Inc 905-829-9988 ext 206 investor.relations@ComnetiX.com
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