Montreal, Quebec--(Newsfile Corp. - February 23, 2015) - Peak Positioning Technologies Inc. (TSXV: PKK) (PINK SHEETS: PKKFF) ("Peak" or the "Company") today released highlights of the 2014 operating results of its acquisition target LongKey Hong Kong Limited (together with its operating subsidiary, LongKey Software Limited, "LongKey").
For the fiscal year ended December 31, 2014, LongKey generated total revenues from operations of over CAD$3.6M. Of that amount, CAD$2.6M was generated by LongKey's SaaS (Software as a Service) division, while CAD$1.0M came from its IFS (Internet Financial Services) division, which LongKey operates in collaboration with the Industrial and Commercial Bank of China ("ICBC").
LongKey's SaaS Division
LongKey SaaS offering is comprised of two product lines, both accessed by clients though the cloud and supported by LongKey's proprietary cloud-computing Unified Information Services Platform (UISP). The first SaaS product offering is a suite of business management applications, such as office automation and inventory management applications, that allow small and medium businesses to manage their operations. Clients pay a monthly fee to access the applications they need in the cloud. Business management application revenues accounted for approximately 77% of SaaS revenues and 55% of LongKey's total revenues in 2014.
The second SaaS product offering, called Smart Community, is a cloud application specifically designed for China's residential community management companies. It facilitates communication with community residents, data collection from these residents, and data transmission by the community management companies to various government department systems. It also allows community management companies to manage several residential community services such as public sanitation services and security patrols. Community management companies, subsidized by the Chinese government, pay an average monthly fee of approximately CAD$2,900 to access and use the Smart Community application. The Smart Community offering was originally launched with 10 community management companies in Jiangsu province in March 2014, in collaboration with China Telecom Jiangsu. China Telecom's clients include more than 32,000 community management companies, which would give the Smart Community offering the potential to generate over CAD$1.1 billion in annual recurring revenues. As of December 31, 2014, there were 30 community management companies in Jiangsu province using the Smart Community application. Smart Community revenues accounted for approximately 23% of SaaS revenues and 16% of LongKey total revenues in 2014.
LongKey's IFS Division
The IFS program offering was launched Zhejiang province in 2013 by ICBC in partnership with LongKey to help ICBC become the preferred lender for Chinese e-commerce retailers. The IFS platform facilitates a product procurement system that ties in to ICBC's manufacturing clients' ERP systems, and allows retailers to login to a web-based application to order products from these manufacturers. By using the IFS platform to order products from ICBC's manufacturing clients, retailers allow ICBC to collect valuable data related to their business operations, which ICBC then uses to help qualify them for ICBC bank loans and lines of credit. Manufacturers pay a one-time setup fee of approximately CAD$1,800 and an annual registration fee of approximately CAD$1,800 to participate to the program. Retailers pay an annual registration fee of approximately CAD$180 to use the platform. ICBC has over 100,000 manufacturing clients in Zhejiang province with an estimated 8 million retailer partners, which would give the IFS program the potential to generate over CAD$1.4 billion in annual recurring revenues. As of December 31, 2014, there were about 400 manufacturers and over 2,500 retailers registered to the IFS program, with an estimated 5,000 manufacturers on standby to be setup, each with the potential to bring about 80 retailer partners to the program. IFS revenues accounted for approximately 29% of LongKey's total revenues in 2014.
Other Noteworthy Items
LongKey continued to make significant investments in 2014 to upgrade its servers and other computer equipment in order to keep pace with the expected growth to be provided by its IFS and Smart Community product offerings. These investments, which amounted to close to CAD$1.0M, contributed to the company posting a net loss of CAD$1.2M in fiscal year 2014. As of December 31, 2014, LongKey had no long-term liabilities, current liabilities of CAD$1.2M and current assets of CAD$1.4M.
Peak currently owns 4% of LongKey and has an agreement in place to acquire all of the issued and outstanding securities of LongKey within a 24-month period, starting with the acquisition of a 47% stake this spring, which will give Peak a 51% controlling interest in LongKey. The proposed acquisition consists of: 1) a contribution of CAD$1.6 million by Peak to LongKey's working capital; and 2) a share exchange transaction between Peak and LongKey's shareholders, whereby Peak will issue 82 million Peak shares to LongKey's shareholders in exchange for 47% of LongKey's issued and outstanding shares. The proposed acquisition is subject to certain conditions, including TSX Venture Exchange approval, which Peak and LongKey are currently working to satisfy.
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