Strategic Alternatives: Prosys Sells Its Participation in CDMS
16 Dicembre 2008 - 2:00PM
Marketwired
Prosys-Tech Corporation (hereinafter, "Prosys")(TSX VENTURE: POZ),
announces it has agreed to the offer by Chris Danielle Micro
Solutions (CDMS) Inc. (hereinafter, "CDMS"), a computer services
provider, to purchase for cancellation from Prosys all of the
shares in the share capital of CDMS held by Prosys, being an
aggregate of one hundred and ninety-three (193) Class A common
shares of CDMS (hereinafter, the "Shares") (hereinafter, the
"Transaction").
The purchase price is of four hundred and fifty thousand dollars
($450,000), payable in cash at the closing of the Transaction
(hereinafter, the "Purchase Price"), such Purchase Price being
subject to a deduction equivalent to the value of any and all
amounts paid to Prosys by way of dividends between November 11,
2008 and the closing of the Transaction. The parties acknowledged
that the value of the said amounts is $173,000 so that the net
purchase price is of $277,000. There has been no prior valuation
made in respect to the total consideration to be received in the
past 24 months.
Prosys acquired the said Shares on September 27, 2007 for a
total price of $2,850,000. The consideration for the acquisition
was $1,950,000 in cash and 4,500,000 common shares of CDMS at $0.20
each, for a total of $900,000.
This decision, which was unanimously approved by the Board of
Directors of Prosys, is part of the previously announced
restructuring following the deterioration of Prosys' and CDMS'
financial position and market circumstances. The Board of Directors
of Prosys and its senior management considered several items with
respect to the value of Prosys' investment in CDMS in making the
foregoing decision, including the loss of benefits. They also
considered that CDMS paid $350,000 to Prosys by way of dividends on
or before November 11, 2008 and that CDMS assumed part of the
expenses and advances related to Prosys' stake in Peak Positioning
Corporation (hereinafter, "Peak") for an approximate amount of
$70,500, for which Prosys will get a complete release at the
closing of the Transaction.
Following this Transaction, the continuing operations of Prosys
will be its interest in Peak. As previously announced, Prosys
reached an agreement on October 3, 2007, for a maximum investment
of $750,000 in Peak, in exchange for an option to acquire up to
50.1% of the issued and outstanding voting and participating class
"A" shares in the share capital of Peak. As of this day, Prosys
approximately holds 45% of the issued and outstanding voting and
participating class "A" shares in the share capital of Peak (41.48%
as at September 30, 2008). The proceeds of this Transaction will be
used to exercise Prosys's option to increase its interest in Peak
to 50.1 % in addition to repay a portion of Prosys' outstanding
indebtedness and support its working capital.
Peak, a Montreal based start-up company, has partnered with
global leaders in the field of wireless communications to develop a
portfolio of wireless security and asset recovery services for the
laptop computer industry. The services will include the usage of
wireless communications to disable and retrieve lost or stolen
laptop computers.
Related Party Transaction
The Transaction is deemed a non arm's length party transaction
pursuant to Policy 5.3 Acquisitions and Dispositions of Non-Cash
Assets of the TSX Venture Exchange (hereinafter, "Policy 5.3") and
a related party transaction pursuant to Regulation 61-101
respecting protection of minority security holders in special
transactions of the Autorite des marches financiers (hereinafter,
"Regulation 61-101") as Danielle Lafleur is a shareholder of Prosys
and a control person of CDMS and her husband, Chrisanthos Symeon,
is an insider of Prosys as President and director of CDMS.
However, the directors of Prosys who voted for the Transaction
determined that the exemptions from the formal valuation and
minority shareholder approval requirements under Regulation 61-101
are available since the fair market value of the subject matter of
the Transaction, and the fair market value of the consideration
received in exchange therewith, is reasonable and does not exceed
25% of the market capitalization of Prosys.
This Transaction has no effect on the percentage of securities
of Prosys or CDMS beneficially owned or controlled by each person
referred to herein, except for Danielle Lafleur who will now be the
sole shareholder of CDMS.
Prosys was not be able to provide a notice of material change
within the minimum of 21 days before the closing of the
Transaction, as stipulated in Regulation 61-101, given the need to
move forward quickly with the Transaction considering the reasons
for the decision.
Regulatory and Shareholder Approval
The TSX Venture Exchange may require the written consent of
Prosys's shareholders who hold the majority of the issued and
outstanding shares in the share capital of Prosys, except Danielle
Lafleur, as proof of shareholder's approval of a reviewable
disposition pursuant to Policy 5.3.
This Transaction is also subject to the resignation of Mr.
Georges Hebert and Kerrigan Turner as Directors of CDMS as well as
to the usual approval of securities regulators and, if applicable,
the majority of the disinterested shareholders of Prosys, thus
excluding Danielle Lafleur.
About Prosys
Prosys is a distributor of information technology products
having offices in Montreal, Quebec City and Ottawa. Prosys
maintains its participation in Peak Positioning Inc. Prosys
currently holds about 45% of Peak's issued shares and has an option
to increase its participation in Peak to 50.1%. The investment in
Peak is in the scope of the Prosys' steps to diversify the global
offer of services to its current customers and to improve Prosys'
positioning for the development of the SMB market. For more
information regarding Peak, please visit
www.peakpositioning.com.
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.
Contacts: Prosys Tech Corporation Mr. Georges Hebert President
and Chief Executive Officer 514-255-3454, extension 270
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