Oceanlake Commerce Inc.
TSX VENTURE : OLI

Oceanlake Commerce Inc.

May 12, 2005 16:28 ET

OceanLake Commerce Inc.: Press Release

TORONTO, ONTARIO--(CCNMatthews - May 12, 2005) - OceanLake Commerce Inc. ("OceanLake") (TSX VENTURE:OLI) announced today that it has approved a restructuring initiative that is designed to maximize shareholder value and enhances its strategic position as a market leader in providing mobile Internet-enabling software for corporate enterprises, financial institutions, solution providers and mobile operators.

Background

When OceanLake Commerce Inc. created its Asian presence, a private company called OceanLake Asia Private Limited (OAPL) was established to facilitate ongoing operating activities, including staffing, banking and application for the EDB financial assistance. OceanLake Commerce Inc. (OLI Public) owns 100% of OAPL.

Additionally, a Promissory Note was negotiated between OLI Public and Branksome Associates Limited (Branksome) in April 2004 for a one year term in the amount of USD$2,051,506.85. The Note was to be extended for a further year, with OLI Public's intellectual property providing security. However, OLI would be in default under the Note immediately, as OLI Public does not have the funds required to pay the obligations under the Note. Branksome has no other relationship with OLI, other than as a shareholder and creditor under the Note.

New Developments

Given the growth and future prospects for OAPL in the Asian market, Branksome has agreed to participate in a strategic restructuring plan. A legal and binding Term Sheet has been signed between OLI Public, OAPL and Branksome. The terms of the agreement are as follows:

In order to facilitate the restructuring, Branksome has agreed to:

1. Cancel the promissory note of USD$2,051,506.85, plus any unpaid and accrued interest, owing from OLI Public;

2. Transfer its 10.4 million OLI Public shares back to OLI Public, thereby potentially reducing the outstanding number of OLI Public shares to the extent OLI Public determines it appropriate to return these shares to the treasury for cancellation;

3. Pay OLI Public USD$150,000 under the condition that OLI Public also raises USD$150,000 to meet its obligations as a result of the agreement;

4. Immediately assume the ongoing operating expenses and staff for OAPL, significantly reducing the monthly expenditures at OLI Public; and,

5. Assume day-to-day management and financial responsibility of OAPL.

In return, OLI Public has agreed to:

1. Transfer 60% ownership of OAPL to Branksome;

2. Transfer all Intellectual Property rights to OAPL;

3. Commence an independent company valuation of OLI Public and OAPL;

4. Receive ongoing royalties from OAPL on revenues;

5. Representation on the Board of Directors of OAPL;

6. Have the right to participate, on a pro rata basis, on any future financings through a pre-IPO and IPO of OAPL on the Singapore Stock Exchange, or such other suitable exchange;

7. Seek out potential, profitable companies where OLI's tax losses can be used to the benefit of both companies; and

8. Raise USD$150,000.

The obligation for OLI Public to raise USD$150,000 is a requirement for Branksome to release its USD$150,000 to OLI Public.

This transaction positions OAPL to enhance its presence in the Asian market with its proven mobile Internet-enabling solutions. OAPL now has the corporate and financial structure in place to continue the marketing and sales effort required without compromising the financial state of OLI Public.

The transaction is scheduled to close as soon as possible, with transfer of 60% ownership in OAPL in process now. It is expected that all material aspects of the transaction will be completed by the end of May, 2005.

The Board of Directors of OceanLake Commerce Inc. believes the agreement represents the best and most fair opportunity to protect shareholder interests, and continue the OLI Public business. As a result of this restructuring, OLI Public will have no debt; cash to pay current and ongoing expenses; a potential revenue stream from the sales volumes generated by OAPL; and the ability to share in the potential future success of OAPL in an IPO offering. The transaction has not received regulatory approval.

This transaction has not been approved by the TSX Venture Exchange.

The Board of Directors of OLI Public also announced today that in conjunction with this restructuring and the focus of management in OAPL in Singapore, Steven Moya has resigned his position as a director and as President and CEO of OceanLake effective immediately. The Board acknowledges the contributions made by Mr. Moya over the past two years in building OAPL's presence in South East Asia. The Board also announced that Bradley Phillips, who held the position of Director of Finance in OLI Public, has also resigned effective immediately, and thanked Mr. Phillips for his work.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • OceanLake Commerce Inc.
    William Car
    COO & EVP Global Sales
    (416) 568-5267