TORONTO, Feb. 29 /CNW/ - MATIADEKA VENTURES INC. (TSXV:DKA.P) (the "Corporation") made an announcement today, further to its announcements made September 27, 2007 and February 12, 2008, concerning its agreement to acquire Avante Security Inc. ("Avante"). This acquisition will involve a share exchange between Avante and the Corporation and will be the Corporation's arm's length qualifying transaction (the "Qualifying Transaction") pursuant to the policies of the TSX VentureExchange Inc. (the "Exchange").
ABOUT AVANTE SECURITY
Avante is a private company that was incorporated under the laws of the Province of Ontario on April 9, 1996 with its head office located in Toronto, Ontario. Avante is engaged in the business of designing, installing and monitoring complex residential and commercial security systems and providing alarm response, executive protection and mobile and static guard services in the Greater Toronto Area.
Avante has developed proprietary hardware and software for wireless security, which provides monitoring for data and video, home automation and remote monitoring, demand/response energy management and metering applications. Avante's Secure 724 S-WIP is a smart interactive portal module that uses proprietary hardware to convert wired information to a wireless format without the need of a personal computer or server. Secure 724 transmits data in multiple formats to wireless mobile devices and/or PC's. With 724 S-WIP BlackBerry software, a BlackBerry can remotely control and obtain data from the 724 S-WIP module installed in a dwelling.
The acquisition of Avante by the Corporation will provide Avante with a vehicle to become a public issuer on the Exchange. Each shareholder of Avante will receive shares in the capital of the Corporation in exchange for shares held by them in Avante. It is estimated that upon completion of the Qualifying Transaction the shareholders of Avante will hold 29,000,000 shares (73%) and the shareholders of the Corporation will hold 10,750,000 shares (27%).
ABOUT MATIADEKA VENTURES
The Corporation is classified as a capital pool company pursuant to the policies of the Exchange. The principal business of the Corporation is identifying and evaluating assets or businesses with a view to completing a transaction to acquire a business or assets which, when completed, would result in the resulting issuer meeting the minimum listing requirements of the Exchange.
The Corporation completed its initial public offering of 2,000,000 Common Shares on January 5, 2007 at a price of $0.20 per Common Share for gross proceeds to the Corporation of $400,000. The proceeds of the offering together with total cash proceeds raised prior to the initial public offering provided the Corporation with a total of approximately $1,553,000 with which to identify and evaluate companies, businesses or assets with a view to completing a Qualifying Transaction.
QUALIFYING TRANSACTION
Background
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The Corporation proposes to complete an arm's length Qualifying Transaction through the acquisition of Avante. The Corporation and the principal shareholders of Avantehave entered into a share purchase agreement (the "Share Purchase Agreement") dated as of January 10, 2008, as amended, pursuant to which the Corporation will acquire all of the common shares of Avante (the "Avante Shares"). Upon completion of the transaction, Avante will be a wholly-owned subsidiary of the Corporation.
The Share Purchase Agreement provides for the acquisition of the Avante Shares at apurchase price, subject to adjustments, of approximately $5.8 million. The purchase price will be satisfied by the issuance of Common Shares in the capital of the Corporation on a one for one basis, at the deemed value of $0.20 per share. All options to acquire securities in the capital of Avante shall be replaced by options to acquire the same number of shares and on substantially the same terms in the capital of the Corporation. The Share Purchase Agreement contains customary covenants, representations and warranties given by both Avante and its shareholders as well as the Corporation.
Since the transaction is arm's length, the Corporation is not required to obtain shareholder approval. The Corporation proposes to issue a filing statement pursuant to Exchange policies containing full disclosure regarding Avante and the transaction. This filing statement, when issued, will be accessible on SEDAR by viewing the Corporation's public documents (www.sedar.com).
The Corporation proposes to change its name to Avante Security Corp. and appoint new auditors subject to completion of the Qualifying Transaction. In addition, the Corporation has increased the size of its board of directors from three to five. The change of corporate name and increase in the size of the board of directors were approved at a special meeting of shareholders held November 20, 2007. The change in auditors will occur subsequent to completion of the Qualifying Transaction.
Avante Capital Reorganization And Private Placement
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Avante intends to complete a share reorganization and private placement in conjunction with the Qualifying Transaction.
As at January 1, 2008, 21,200,000 common shares in the capital of Avante were issued and outstanding all of which are owned by Emmanuel Mounouchos or The Emmanuel Mounouchos Family Trust both of the City of Toronto, Ontario. On or before the completion of the Qualifying Transaction, Avante has or will:
(a) issue 1,800,000 common shares in the capital of Avante to Illyria
Inc., a corporation controlled by Leland Verner, as partial
consideration for services provided to Avante. Illyria Inc. has been
retained by Avante since 2003 to provide strategic planning and
business development services including assessing and completing
business acquisitions, financial advice concerning cash
flow management, raising capital and implementing strategic business
plans and product development;
(b) conduct a private placement in the amount of $1,304,247
(4,830,545 shares) at a subscription price of $0.27 per share and
capitalize shareholder loans owing to Mr. Mounouchos in the principal
amount of $315,753 (1,169,455 shares). The proceeds of the private
placement will be used to pay creditors and for working capital. All
of the shares issued pursuant to the private placement and
loan capitalization are to be acquired by the Corporation, through
the issuance of shares, having a transaction value of $0.20 per
share; and
(c) on January 7, 2008 Avante granted options to acquire 1,210,000 common
shares of Avante to certain senior managers, employees and
consultants on the basis of one common share at a price of $0.20 per
share until January 6, 2013.
Matiadeka Securityholders
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At present, there are 10,750,000 Common Shares issued and outstanding in the capital of the Corporation. In addition, there are incentive options to acquire a further 450,000 Common Shares granted to the officers and directors of the Corporation and options to acquire 200,000 Common Shares granted to the agent as part of the Corporation's initial public offering. 5,070,000 of these Common Shares are subject to Exchange escrow provisions.
Emmanuel Mounouchos is the registered owner of 1,000,000 Common Shares in the capital of the Corporation. These shares represent 9.3% of the issued and outstanding shares in the capital of the Corporation. Illyria Inc. is the registered owner of 980,000 Common Shares in the capital of the Corporation or 9.1% of the issued and outstanding shares in the capital of the Corporation.
Avante Securityholders
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Immediately prior to completion of the Qualifying Transaction, Avante is anticipated to have 29,000,000 shares issued and outstanding assuming completion of the Avante private placement and loan capitalization as described above. In addition there are options to acquire 1,210,000 shares granted to certain members of its senior management, employees and consultants. These options have an exercise price of $0.20 per share and term of 5 years.
Resulting Issuer Securityholders
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Immediately following completion of the Qualifying Transaction, the resulting issuer is anticipated to have 39,750,000 common shares issued and outstanding. In addition there will be options to acquire 1,860,000 common shares. It is estimated that 29,264,455 shares in the capital of the resulting issuer will be subject to Exchange escrow policies. Of these shares, 5,095,000 will be subject to a value escrow arrangement and 24,169,455 will be subject to a surplus escrow arrangement. In addition, any shares acquired by principals of Avante pursuant to the private placement or the Avante options will be subject to surplus escrow arrangements.
Emmanuel Mounouchos will own, directly or indirectly through The Emmanuel Mounouchos Family Trust, 23,369,455 shares in the capital of the resulting issuer representing 58.79% of the issued and outstanding shares.
Leland Verner will own, directly or indirectly through Illyria Inc., 2,750,000 shares in the capital of the resulting issuer representing 6.92% of the issued and outstanding shares.
The promoters, directors, officers and control persons of the resulting issuer and their associates and affiliates, as a group, will beneficially own or control, directly or indirectly, 28,213,955 Common Shares, which represents 70.98% of the issued and outstanding Common Shares of the issuer.
SELECTED FINANCIAL INFORMATION
The following tables present selected financial statement information concerning the financial condition and results of operations for Avante. This information is derived from the unaudited interim financial statements of Avante for the six months ended September 30, 2007 and the audited financial statements of Avante for the year ended March 31, 2007. The information provided herein should be read in conjunction with such financial statements, which have been prepared in accordance with Canadian GAAP, and which will be filed on SEDAR when the Corporation files its filing statement with respect to the Qualifying Transaction.
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Sept. 30, 2007 March 31, 2007
unaudited audited
interim year ended
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Revenue $3,326,634 $6,491,021
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Cost of Sales 2,632,736 5,515,667
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Expenses 654,059 1,492,196
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Net Income (61,030) (581,871)
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Assets 1,568,754 1,067,582
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Liabilities 3,845,929 3,283,727
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Capital Stock 110 110
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After the completion of the Qualifying Transaction, it is estimated that the resulting issuer will have $444,429 in initial net consolidated pro forma working capital based on the interim financial statements of Avante for the period ended September 30, 2007 and the financial statements of the Corporation for the period ended November 30, 2007, and after giving effect to the completion of the Avante private placement. Of this amount,approximately ($1,118,262) will be from Avante and approximately $1,562,691 will be from the Corporation.
SPONSORSHIP
Haywood Securities Inc., subject to completion of satisfactory due diligence, has agreed to act as a sponsor in connection with the transaction in accordance with Exchange policies. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
ARM'S LENGTH TRANSACTION
The transaction is an arm's length transaction. No director or officer of the Corporation has any interest in Avante. Accordingly, the transaction will not, as currently contemplated, be subject to approval by the shareholders of the Corporation.
DIRECTORS AND SENIOR MANAGEMENT
As part of the Qualifying Transaction, Avante's management will assume management responsibilities for the Corporation. The size of the board of directors of the Corporation has been increased from three to five and the following individuals have been elected as directors, namely, Bruce Bronfman, W. Wesley De Shane, James Joseph Leeder, J. Brian Medjuck and Leland Verner. Emmanuel Mounouchos will be elected as a director subsequent to completion of the Qualifying Transaction. Leland Verner will be the Chairman of the Board. Emmanuel Mounouchos will be the President and Chief Executive Officer, William McKetrick will be the Chief Financial Officer and Lawrence Busch will be the Vice-President of Operations.
Bruce Bronfman
Mr. Bronfman, 48, is a director of the Corporation. He is the President of Mida Investments Ltd., a private investment company. Mr. Bronfman has been a director and officer of several public companies. From June 1989 to February 1995 he was an executive vice-president of The Edper Group Limited and a director of Brascan Limited, Hees International Bancorp Inc. and Carena Developments Limited, all Toronto Stock Exchange listed companies. From May 1989 until December 1994 Mr. Bronfman was a director of NHC Communications Inc., also a Toronto Stock Exchange listed company. From August 2001 until May 2002 he was a director of Neatt Corporation. From September 2003 until March 2004 he was a director of Trophy Capital Inc. (a CPCcompany) which subsequently merged with LMS Medical Systems Inc. Mr. Bronfman was a director of Canada's Pizza Delivery Corp. from September 1998 to August 2007 and served as its audit committee chairman. From April 2004 until August 2005, he was a director of Academy Capital Corp. (a CPC company) which subsequently merged with Baymount Incorporated. Mr. Bronfman is also a director of Ontario MRI Inc., a privately held Ontario based company that specializes in offering third party diagnostics since 1997. He is also a director of Ottawa Valley MRI Center Inc., a private clinic in Hull, Quebec that offers private MRI services.
Lawrence Busch
Mr. Busch, 57, joined Avante as Vice President of Operations in June 2007, having served as a member of the RCMP for over 35 years. He served as a uniformed police officer, an undercover officer and a plain clothes serious crime investigator. His extensive technical experience includes covert electronic and video surveillance and tracking devices. He also served as a hostage negotiator and was deployed on three United Nations missions. Prior to his retirement, Mr. Busch was in charge of "O" Division's VIP Security Section, responsible for the complete security of Canada's senior political executives and visiting Internationally Protected Persons. His section was also responsible for Consulate Security and Counter Terrorist Surveillance. Mr. Busch has a Bachelor of Science degree in Psychology from the University of Toronto.
W. Wesley De Shane, C.A.
Mr. De Shane, 69, is a director of the Corporation. He is a principal of OFC Associates, a consulting firm. Mr. De Shane is a financial executive with experience in treasury, international tax planning, controllership, acquisitions and investor relations. He has strong relationships with commercial and investment bankers, buy/sell analysts and institutional investors. Previously, Mr. De Shane was chief financial officer of Invesprint Corporation, ZENON Environmental Inc., Canada Malting Co. Ltd. and Emco Limited, all Toronto Stock Exchange listed companies. Mr. De Shane earned his diploma from the University of Western Ontario and his designation as a Chartered Accountant from the Ontario Institute of Chartered Accountants.
James Joseph Leeder, B. Comm, C.A.
Mr. Leeder, 53, will serve as a director of the Corporation. He is currently vice president and chief financial officer of Envoy Capital Group Inc. Mr. Leeder earned a bachelor of commerce degree from Concordia University in 1979 and was granted the designation of chartered accountant from the Ontario Institute of Chartered Accountants in 1983. Mr. Leeder was formerly a partner of KPMG Canada and executive vice president of KPMG Corporate Finance Inc., a Limited Market Dealer in Ontario and a subsidiary of KPMG Canada.
William McKetrick
Mr. McKetrick, 54, will serve as the Chief Financial Officer of the Corporation. He has been vice-president of Avante since 2006. Mr. McKetrick has been involved with a number of public and private companies as Assistant Vice President, Controller or Senior Financial Analyst, including the Liquor Control Board of Ontario, Interactive Media Group, ExtendMedia and Creative Business Solutions. Mr. McKetrick earned his Bachelor of Arts Degree in Political Science and Economics from the University of Toronto.
J. Brian Medjuck, B. Comm, LL.B
Mr. Medjuck, 50, will serve as a director of the Corporation. He is president of Centennial Hotels Ltd., a Canadian hotel management company. Mr. Medjuck has been a member of the board of director of numerous charitable organizations, including, Best Buddies of Canada and Mount Sinai Hospital. Mr. Medjuck obtained his bachelor of commerce degree and law degree from Dalhousie University and earned his master of business at Schiller College in Paris, France.
Emmauel Mounouchos
Mr. Mounouchos, 45, has 21 years experience in the security industry. He founded Avante in 1996 with a vision of developing a company that would apply technology to distinguish itself from its competition. Mr. Mounouchos graduated as an electronic technologist in communications from Ryerson Polytechnic Institute in 1986. Mr. Mounouchos's responsibilities include; strategic visioning, oversight of all line and staff functions, approval of all financial obligations, and sourcing of new business opportunities and strategic alliances. In addition, Mr. Mounouchos sources, directs and coordinates financial programs to provide funding for new or continuing operations in order to maximize return on investment and increase productivity.
Leland Verner
Mr. Verner, 62, will serve as a director and Chairman of the Corporation. He has been president of Illyria Inc., an independent advisory firm based in Toronto since 1972. Illyria Inc. integrates business strategy into corporate and shareholder value for clients with an emphasis on industry intelligence, business model analysis and a singular focus on creating shareholder value from events and transactions. Mr. Verner was also a director of Extendmedia Inc. from July 1995 until April 2006. Mr. Verner was chairman and chief executive officer of Invesprint Corporation and chairman of Vincor International Inc., both Toronto Stock Exchange listed companies. Mr. Verner graduated from Ryerson Polytechnical Institute, Faculty of Business in 1968.
CONDITIONS
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, performance of the terms of the Share Purchase Agreement, receipt of Exchange approval, satisfaction of the minimum listing requirements of the Exchange, completion of the capital reorganization by Avante and completion of a private placement and loan capitalization by Avante in the aggregate amount of $1,620,000. The Transaction cannot close until all the conditions are satisfied.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholders approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
%SEDAR: 00024271E