Montreal, Quebec--(Newsfile Corp. - February 12, 2015) - Peak Positioning Technologies Inc. (TSXV: PKK) (PINK SHEETS: PKKFF) ("Peak" or the "Company") today announced that the TSX Venture Exchange (the "TSXV") has accepted, in principle, to treat Peak's pending acquisition of LongKey Hong Kong Limited ("LongKey") as a "Fundamental Acquisition" and will therefore be subject to Policy 5.3 of the TSXV Corporate Finance Manual. This essentially clears the way for Peak to proceed with the planned acquisition according to the terms that have already been agreed with LongKey.
"We've been working very hard with the TSXV to go over the details of the proposed transaction and we couldn't be happier with its decision", said Johnson Joseph, President and CEO of Peak. "Today's announcement should be seen as a huge win for all Peak shareholders. This decision clears and simplifies the path to the transaction, and essentially leaves the remaining elements to close the acquisition in our hands", he went on to say.
Final Steps to Close Acquisition
One key element of the announcement made today is that shareholder approval will not be required for the acquisition. This means that Peak will no longer need to organize and hold a special shareholders' meeting prior to being able to close the acquisition. The remaining elements to close the transaction can now be summarized into the following two steps: 1) the production of LongKey's 2014 consolidated audited IFRS financial statement; and 2) the contribution of CAD$1.6 million to LongKey's working capital, which is to be achieved through a through a brokered private placement financing to be closed concurrent to the closing of the acquisition. The Company also needs to provide certain documents and information to the TSXV related to the transaction.
Concurrent Private Placement Financing
Peak is currently working to determine the appropriate terms and conditions of the required brokered private placement, which will be announced as soon as they have been finalized. "We have a fairly large shareholder base, most of whom are very excited about the LongKey acquisition", commented Mr. Joseph. "Unfortunately, a large portion of them weren't eligible to participate in some of our previous private placement financings. However, this time around, we'll ensure that the offering is available to all existing Peak shareholders and not just accredited investors. Therefore we expect the private placement to be conducted either by way of offering memorandum or prospectus", concluded Mr. Joseph.
Use of Proceeds of Private Placement
The proceeds of the concurrent private placement financing will be used by Peak to meet its final working capital contribution commitment of CAD$1.6 million to LongKey in order for Peak to acquire a controlling majority interest in LongKey as per the existing agreement between Peak and LongKey. At the closing of the transaction, along with the final working capital contribution, Peak will issue 82,000,000 Peak common shares to LongKey's shareholders in exchange for 109,333,000 LongKey shares. This will give Peak a total of 136,000,000 (51%) of LongKey's 266,667,000 total issued and outstanding shares at the closing of the transaction.
Use of Proceeds of Working Cap Contribution and Executive Summary Presentation
The contribution by Peak to LongKey's working capital is intended to help LongKey speed up the process by which it sets up the Industrial and Commercial Bank of China's ("ICBC") manufacturing clients on ICBC's Internet Financial Services (IFS) product procurement platform. The IFS platform was launched in 2013 by ICBC in partnership with LongKey to help ICBC become the preferred lender for Chinese e-commerce merchants looking for loans to help them grow their businesses. The merchants pay an annual registration fee to use the web-based platform to order products from ICBC's manufacturing clients. This allows ICBC to collect data related to the merchants' transactions, data which ICBC then uses to help qualify these merchants for ICBC bank loans. For more on the IFS platform and Peak's acquisition of LongKey, please click here to download Peak's executive summary presentation.
Peak Adds to Investor Relations Team and Grants Options
Peak also announced that it has entered into an agreement with Paradox Public Relations Inc. ("Paradox") to provide investor relations services in addition to those currently being provided to Peak by CHF Investor Relations ("CHF"). Paradox will work in concert with CHF and focus on developing and expanding the company's communications with the investment community through a comprehensive investor relations program. Established in 2001 and based in Montreal, Paradox provides investor relations services to companies operating in a variety of industries, with a focus on emerging growth companies.
As compensation for the services to be provided, and subject to TSX Venture Exchange approval, Peak will issue to Paradox 500,000 options, vesting quarterly over a 12-month period, to acquire common shares of Peak at an exercise price of CAD$0.05 per share; and pay Paradox an average monthly fee of $6500 during the term of the agreement between the parties. The agreement between Peak and Paradox is for a 2-year term and may be terminated by either party after three (3) months by giving 10 days' written notice to that effect.
Subject to TSX Venture Exchange approval, Peak will also issue 500,000 options, vesting quarterly over a 12-month period, to CHF to acquire common shares of Peak at an exercise price of CAD$0.05 per share.
About Peak Positioning Technologies Inc.:
Peak Positioning Technologies Inc. ("Peak"), (TSX VENTURE: PKK) (PINK SHEETS: PKKFF), is a management company whose wholly-owned subsidiary, Peak Positioning Corporation provides Web development services and develops mobile software platforms destined to mobile network operators worldwide. Peak aims to deliver value to its shareholders by assembling a portfolio of high-growth projects and companies in the mobile, e-Commerce, and cloud-computing spaces in North America and China. For more information: http://www.peakpositioning.com
Forward-Looking Statements / Information
This news release may include certain forward-looking information, including statements relating to business and operating strategies, plans and prospects for revenue growth, using words including "anticipate", "believe", "could", "expect", "intend", "may", "plan", "potential", "project", "seek", "should", "will", "would" and similar expressions, which are intended to identify a number of these forward-looking statements. Forward-looking information reflects current views with respect to current events and is not a guarantee of future performance and is subject to risks, uncertainties and assumptions. The Company undertakes no obligation to publicly update or review any forward-looking information contained in this news release, except as may be required by applicable laws, rules and regulations. Readers are urged to consider these factors carefully in evaluating any forward-looking information.
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. Neither the TSX Venture Exchange, Inc. nor its Regulation Service Provider (as that term is defined under the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the contents of this news release.
For more information:
Cathy Hume
CEO
CHF Investor Relations
Phone: 416-868-1079 ext.: 231
Email: cathy@chfir.com
Or
Carl Desjardins
Managing Partner
Paradox Public Relations Inc.
Phone: 514-341-0408
Email: carldesjardins@paradox-pr.ca
Or
Johnson Joseph
President and CEO
Peak Positioning Technologies Inc.
Phone: 514-340-7775 ext.: 501
Email: investors@peakpositioning.com