Saratoga Electronic Solutions Inc.

Saratoga Electronic Solutions Inc.

December 10, 2007 10:06 ET

Saratoga Elecronic Solutions Inc. to Purchase a Building

MONTREAL, QUEBEC --(Marketwire - Dec. 10, 2007) - Saratoga Electronic Solutions Inc. (TSX VENTURE:SAR) ("SES") is pleased to announce that on November 23, 2007, its wholly-owned subsidiary, Saratoga ATM Corporation Inc. ("SAC"), has entered into an agreement to purchase from Saratoga Multi-Media Inc. ("SMM") the building located at 2975 Hochelaga, Montreal, Quebec, Canada (the "Building") in which the offices of SES are currently located (the "Acquisition"). The purchase price for the Building will be $1,420,000, and will be paid by way of the issuance by SAC to SMM of non-voting, non-convertible, non-participating, non-retractable preferred shares of its share capital carrying an annual dividend of 8% and having an aggregate redemption value of $1,420,000. SES has decided to proceed with the Acquisition in order to better control its head office facilities as well as to strengthen its balance sheet.

The Acquisition constitutes a related party transaction under applicable corporate and securities legislation due to the fact that Mr. Georges A. Durst, the President and a director of SES, and SES's principal shareholder, exercises control over SMM. As a result, Mr. Durst did not participate in the deliberations of the Board of Directors of SES pertaining to the Acquisition. In arriving at its decision to approve the Acquisition, the Board of Directors considered the conclusions of an independent appraisal that it had commissioned in respect of the Building.

The Board of Directors of SES has determined that the Acquisition is exempt from the valuation and minority shareholder approval requirements of OSC Rule 61-501 Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions ("Rule 61-501") and Regulation Q-27 Respecting protection of minority securityholders in the course of certain transactions ("Regulation Q-27") due to the fact that the value of the Building is less than 25% of the market capitalization of SES.

Closing of the Acquisition is subject to the receipt of all requisite regulatory approvals and, given the advanced state of the transaction, is expected to occur prior to the 21-day delay otherwise contemplated by Rule 61-501 and Rule Q-27.

Following the closing of the Acquisition, SES intends to enter into lease agreements at market rates with various related parties in order allow such parties continued use of the premises that they currently occupy within the Building.

No finder's fee was paid to any third party in connection with the Acquisition.


SES is in the business of placing and operating automatic teller machines. In addition, SES has recently developed an infrastructure to support the international electronic remittance of funds designed to enable persons residing in Canada to electronically transfer funds to persons residing overseas. The initial launch of this service by SES has been focused on the needs of the Canadian Filipino community to send funds to the Philippines in an economical and secure manner.

SES has also entered into an agreement for the acquisition of Car-Tel Distributions Inc. ("Car-Tel"), a wholesale distributor of prepaid phone cards and point-of-sale activated prepaid phone PINs. Pending the closing of this transaction, SES has been managing the day-to-day operations of Car-Tel in return for an administrative fee.

Forward looking statements

This news release contains certain forward-looking statements concerning our future operations, economic performance and financial condition. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks, uncertainties and assumptions. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us and our subsidiaries or their businesses or operations. We undertake no obligation and do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.

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

Contact Information

  • Saratoga Electronic Solutions Inc
    Georges Durst