Montreal, Quebec--(Newsfile Corp. - May 7, 2015) - Peak Positioning Technologies Inc. (TSXV: PKK) (PINKSHEETS: PKKFF) ("Peak" or the "Company") today provided the following updates concerning 1) the private placement (the "Private Placement") to be closed concurrent with a proposed transaction that will increase its interest in LongKey Hong Kong Limited ("LongKey") to 51%; 2) the planned consolidation of its securities; and 3) the LongKey acquisition process itself:
Private Placement and Stock Consolidation
Peak and Jones, Gable and Company Limited ("JGCL") have mutually agreed to terminate the letter of engagement signed by the parties on March 18, 2015, whereby Peak had retained JGCL to act as lead agent for the Private Placement. "I want to thank Jones, Gable and Company for all of their hard work so far to help move the Private Placement along", commented Johnson Joseph, President and CEO of Peak. "Unfortunately the timing wasn't right for us to work together this time around. We hope to be able to work with them again at some point in the future", he added.
The Company has a short list of 3 potential candidates to replace JGCL as lead agent for the Private Placement and expects to make a formal announcement in that regard soon. "We want to address any concerns that shareholders may have regarding how this change will affect the timing of the closing of the Private Placement and our transaction with LongKey", said Mr. Joseph. "Most of the work that we've done with Jones Gable in the preparation for the Private Placement is transferable to whomever ends up becoming our new lead agent, so we don't expect the impact to be material to the overall timing of our transaction with LongKey for which the Private Placement is being conducted", concluded Mr. Joseph.
During the annual and special meeting of its shareholders, held on April 30, 2015, the Company formally obtained unanimous approval from its voting shareholders to proceed with the consolidation of its outstanding securities, up to a 10:1 ratio. The Company plans to proceed with a 5:1 consolidation of its securities, which would bring the number of the Company's currently issued and outstanding shares from 139,936,889 to 27,987,378. Peak will proceed with the proposed 5:1 consolidation concurrently with the closing of its acquisition of LongKey and the Private Placement. The consolidation is part of the Company's overall plan to improve its share liquidity by making its securities a more attractive investment option to a broader range of prospective investors.
The Private Placement consists of the sale of units and/or debentures totaling up to $3,500,000. A maximum of 140,000,000 pre-consolidation units is offered at $0.025 per unit for gross proceeds of a maximum of $3,500,000. Each unit (a "Unit") consists of one (1) pre-consolidation common share and one (1) one common share purchase warrant. Each common share purchase warrant entitles its holder to purchase one pre-consolidation common share of Peak, at a price of $0.04, for a period of twenty-four (24) months following the closing date. A maximum of 750 debentures, at a price of $1,500 per debenture for proceeds of up to $1,125,000 (the "Debentures"), are also offered as part of the Private Placement. The Debentures pay an annual interest rate of 10%, mature 24 months from the date of their issuance, rank equally in right of payment of principal and interest to all senior debt of the Company, and allow their subscribers to convert them into Common Shares of Peak at any time prior to maturity, subject to certain terms and conditions, at a price of $0.03 per Common Share on a pre-consolidation basis ($0.15 per Common Share post-consolidation), being a conversion rate of 50,000 Common Shares (10,000 Common Shares post-consolidation) per $1,500 principal amount of Debenture until their maturity date. In order for the Private Placement to close, the sale of Units and Debentures must combine for gross proceeds of a minimum of $2,500,000 and a maximum of $3,500,000. The minimum amount needed to close the Private Placement can be achieved either through the sale of Units only or through the sale of any combination Units and Debentures.
All securities to be issued as part of the Private Placement will be issued on a post-consolidation basis, which means that Unit Private Placement subscribers will receive one common share and one common share purchase warrant for each 5 Units subscribed once the consolidation takes effect at the closing of the Private Placement. Taken on a post-consolidation basis, the Private Placement will result in the sale of a maximum of 28,000,000 units at a price of $0.125 per unit. Similarly, each issued warrant will give its holder the right to purchase one common share of Peak at a price of $0.20, and the Debentures will be convertible at a price of $0.15 per Common Share once the consolidation has been effected. Closing of the Private Placement is subject to, among others, satisfactory results from the lead agent's due diligence procedures, completion of the consolidation and of the Company's acquisition of a 51% interest in LongKey. The Company's acquisition of LongKey, the proposed securities consolidation, and the Private Placement are all subject to TSX Venture Exchange (the "TSXV") approval. All securities issued pursuant to the Private Placement, including any Common Shares issued pursuant to the exercise of the conversion right of the Debentures, will be subject to a four month and one day hold period from the date of their issuance.
LongKey Acquisition Process
The Company is still in the process of fulfilling the requirements of the TSXV to obtain approval of the proposed acquisition of LongKey. Several important elements still remain outstanding as of the present date, including legal opinions on LongKey and the Company, LongKey's audited year-end 2014 IFRS financial statements, and the translation of certain material documents. The Company is continuing to work closely with LongKey and the TSXV to satisfy the TSXV's requirements to close the transaction as soon as possible. At this stage, the Company is not in a position to provide a revised projected date for the proposed transaction to close, but will provide periodical updates on the process as progress continues to be made until final approval is obtained from the TSXV.
About Peak Positioning Technologies Inc.:
Peak Positioning Technologies Inc. ("Peak"), (TSXV: PKK) (PINKSHEETS: PKKFF), is an IT portfolio management company whose mission is to assemble, finance and manage a portfolio of high-growth-potential companies and assets in some of the fastest growing tech sectors in China, including e-commerce, cloud-computing and mobile development. Peak provides its shareholders with the opportunity to participate in the fastest growing economic sectors of the world's fastest growing economy, in partnership with some of the most reputable and high-profile institutions in those sectors. For more information: http://www.peakpositioning.com
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