MONTREAL, Quebec, Dec. 5, 2014 (GLOBE NEWSWIRE) -- Peak Positioning Technologies Inc. (TSX VENTURE:PKK) (PINK SHEETS:PKKFF) ("Peak" or the "Company") today announced that is has closed a non-brokered private placement financing consisting in the sale of 25,000,000 units at a price of CAD$0.02 per unit for gross proceeds of CAD$500,000 (the "Financing").
Each unit (a "Unit") sold as part of the Financing consists of one (1) common share and one (1) one common share purchase warrant. Each common share purchase warrant entitles its holder to purchase one common share of Peak, at the price of CAD$0.05, for a twelve (12) month period following the closing date. Peak has paid a cash commission finder's fee, to eligible persons who helped place the Units, equal to 8% of the gross proceeds of the Units they helped sell. Peak has also granted finder's compensation options to the same eligible persons who helped place the Units entitling them to purchase a number of Peak common shares equal to 8% of the total number of Units they helped sell, exercisable at the price of CAD$0.05 per common share for a twenty-four (24) month period following the closing date.
The securities issued pursuant to the Financing are subject to a hold period expiring four (4) months and one day from the date of closing.
The proceeds of the Financing will be used to help the Company meet its working capital payment obligations under the terms and conditions of its agreement to acquire LongKey Hong Kong Limited ("LongKey"), and for working capital purposes.
"We're very pleased with the combination of new and existing Peak shareholders who took part in this placement", commented Johnson Joseph, President and CEO of Peak. "In addition to our loyal base of existing shareholders, we managed to pick up some important long-term financial partners. We expect these new partners to play significant roles going forward, leading up to and following our acquisition of LongKey, to assist us in obtaining the capital we need to allow LongKey to take full advantage of its Internet Financial Services initiative with the Industrial and Commercial Bank of China. The closing of the placement allowed us to move one step closer to acquiring LongKey by making another pre-acquisition contribution to its working cap in accordance with our agreement. Now that that's taken care of, we can turn our full attention to satisfying the remaining elements required, including the concurrent financing at closing, to obtain the TSX Venture Exchange's final approval and close the transaction", concluded Mr. Joseph.
Pursuant to Policy 5.9 of the TSXV and Multilateral Instrument 61-101 Respecting protection of minority security holders in special transactions ("MI 61-101"), the Financing constitutes a "related party transaction" as certain directors and officers of Peak (the "Related Parties") subscribed to securities. In reviewing the applicable valuation requirements under MI 61-101, Peak has determined that the exemption set out in subsection 5.5 (a) of MI 61-101 is applicable since the aggregate consideration to be paid by the Related Parties does not exceed 25% of the market capitalization of Peak at the date hereof. In addition, subsection 5.7(a) provides that a transaction meeting such criteria is also exempt from the minority shareholder approval requirement. The board of directors of Peak has unanimously approved the Financing. Peak has not filed a material change report 21 days prior to the closing of the Financing as participation of insiders had not been established at that time.
Peak also today announced its plans to proceed with a five (5) to one (1) consolidation of its issued and outstanding shares. The consolidation will take place on a date to be determined, but no later than May 31, 2015. Peak has already received support for the proposed consolidation from a significant number of shareholders and will seek to obtain formal shareholder approval at a Special Shareholders' meeting to be held after the Company issues its information circular in relation to its pending acquisition of LongKey. The share consolidation is in line with management's plans to attract more institutional investors to the Company following its acquisition of LongKey.
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
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.