Java Capital Inc.

October 06, 2010 17:03 ET

Java Capital Inc. Announces Agreement in Principle for Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - Oct. 6, 2010) -


Java Capital Inc. (the "Company") (TSX VENTURE:JCI.P) is pleased to announce that it has entered into an agreement in principle dated effective September 24, 2010 with Peak Positioning Corp. ("Peak"), pursuant to which the Company will acquire (the "Acquisition") all of the issued and outstanding securities in the capital of Peak (the "Peak Shares").

The Company is a "capital pool company" and intends for the Acquisition to constitute its "Qualifying Transaction," as such term is defined in the policies of the TSX Venture Exchange (the "TSXV"). The Acquisition is an arm's length transaction. Upon completion of the Acquisition, it is expected that the Company will be a Tier 2 Technology Issuer.

Peak is a private company with an office based in Montreal, Quebec. It was incorporated under the Canada Business Corporations Act on May 3, 2004.

Further information concerning the Company can be found at SEDAR online at

Peak Positioning Corp.

Peak is a Montreal-based IT security solution provider, and creator of the "HomeWave" service. HomeWave is a patent-pending wireless based remote security, forensic analysis and asset location service for reported missing notebooks, netbooks and PDAs. The HomeWave service was developed to help businesses fight the growing problems associated with the loss and theft of portable computers and devices by providing a way to use wireless communications to remotely disable lost or stolen portable computers and devices, as well as to remotely determine what, if any, files were accessed on the missing systems while they are still missing. HomeWave is the result of years of research and collaboration between Peak and global leaders in the fields of hardware engineering, wireless communications and location-based technologies.

The HomeWave service can wirelessly initiate communication with a missing portable computer, rather than to wait for the computer to be connected to a network or the Internet before it can be communicated with. The service is provided on a SAAS (Software as a Service) model, for which clients pay a monthly license subscription fee. HomeWave can be self-serviced and/or managed from any corporate IT department, and is expected to be officially launched in the North American market in early 2011.

Peak was incorporated under the Canada Business Corporations Act on May 3, 2004. Peak's share capital consists of an unlimited number of class A common shares (the "Common Shares"), and class B preferred shares, of which only 3,499,207 Common Shares are issued and outstanding. Peak's top three shareholders are Prosys-Tech Corp. (TSX Venture: POZ) with 47.46% of the issued and outstanding Common Shares, followed by Johnson Joseph with 14.83% of the issued and outstanding Common Shares, and Varujan Tasci with 12.87% of the issued and outstanding Common Shares.

As at June 30, 2010, Peak's unaudited second quarter financial statements showed current assets of $224,873 and total assets of $255,068 against current liabilities totalling $491,358. Peak had no long-term liabilities as at that date, and a net loss of $85,600 for the six-month period as it prepares to commercialize its HomeWave service.

The Acquisition

In consideration of the Peak Shares, the Company intends to issue an aggregate total of 30,000,000 common shares to the shareholders of Peak, at a deemed price of $0.12 per share, for an aggregate total consideration of $3,600,000. Upon completion of the Acquisition, it is expected that the Company will be a Tier 2 Technology Issuer.

The names and jurisdiction of residence of each of the Peak shareholders are listed below:

Prosys-Tech Corp. (Montreal, QC)
Johnson Joseph (Montreal, QC)
Varujan Tasci (Dollard-Des-Ormeaux, QC)
Leo Kohn (Montreal, QC)
Laval Bolduc (Longueuil, QC)
Scott Pritchard (Westmount, QC)
Joel Waxman (Cote-Saint-Luc, QC)
Daniel Lavoie (Laval, QC)
Khajag Satchlian (Laval, QC)
Kerrigan Turner (Westmount, QC)
Georges Hebert (Mont-Royal, QC)

Prosys-Tech Corp. is a publicly traded company trading on the TSX Venture Exchange under the symbol "POZ". The sale by Prosys of its Peak Shares will be subject to the approval of its board of directors, its shareholders and the TSXV. Additional information on Prosys-Tech Corp. is available at

Each of the Peak shareholders act independently of each other and will not constitute a voting block.

Directors and Officers

Upon completion of the Acquisition, it is anticipated that the current directors of the Company will resign from their positions upon completion of the Acquisition, and the board of directors will be comprised of at least six directors. It is also anticipated that, following completion of the Acquisition, Mr. Joseph, the current president and chief executive officer of Peak, will be appointed as chief executive officer of the Company, that Mr. Bolduc, current chief financial officer of Peak, will be appointed chief financial officer and secretary/treasurer of the Company, and that Mr. Varujan Tasci, current chief technology officer of Peak, will be appointed chief technology officer of the Company. In addition to Mr. Joseph and Mr. Bolduc, Mr. Charles-Andre Tessier, Mr. Jean-Paul Perusse, Mr. Kerrigan Turner, and Mr. Georges Hebert will also be appointed as directors of the Company following the Acquisition.

The following provides is a brief summary of the backgrounds of each of the expected directors and officers of the Company:

Mr. Johnson Joseph

Prior to co-founding Peak Positioning, Mr. Joseph was VP of Product Development and Operations of a Montreal-based e-commerce portal. In this role, Mr. Joseph was responsible for the day-to-day operations of the business and was a lead negotiator for the company's partnership agreements, which included signed agreements with the Toronto-Dominion Bank (VISA), the National Bank of Canada (MasterCard), United Parcel Service Canada, Canada Post Corporation and Concord EFS (a Memphis, TN based transaction processing and financial settlement bank). Mr. Joseph was credited for designing a transaction reconciliation and financial settlement system, certified by the TD Bank's VISA division that was instrumental in allowing the company to become the first Canadian entity authorized by Visa International to have the sales proceeds of multiple retailers be deposited into a common bank account under the authority of a third party. Mr. Joseph has over 10 years experience in the IT industry, paying particular attention to how products and services are sold and distributed in the industry. This experience has played an important role in allowing him to create an innovative and incentive-laden reseller partner program, which helps to provide Peak Positioning with a distinct competitive advantage in the remote security space. Mr. Joseph holds an MBA from HEC-Montreal with a track in Information Technology and a Bachelor's degree in Finance from Texas Tech University.

Mr. Laval Bolduc

Mr. Bolduc brings over 30 years of experience in finance, project management, management of information systems, contract negotiations and auditing to the Peak Positioning management team. Throughout his professional career he has provided clients around the world with business and financial expertise for their large-scale projects in information technology and outsourcing. Mr. Bolduc was formerly VP, Financial Planning at DMR Group Inc., a major information management and technology consulting firm. Most recently he completed two major projects 1) a long-term consulting mandate with Bombardier Transportation, where he played a key role in negotiating two major European outsourcing contracts worth a combined $950 million CAN per year; and 2) a long term consulting mandate with Infrastructure Quebec (formerly Partenariats Public/Prive Quebec), where he played a key role in project managing the provisioning process of a research centre under a public-private partnership approach worth $500 million CAN. He also previously held a group leader position for an international firm of chartered accountants. Mr. Bolduc attended the University of Sherbrooke where he graduated with a Bachelor degree in Accounting.

Mr. Varujan Tasci

Mr. Tasci spans over 35 years experience in computing and has held several executive positions in the IT industry, including CTO and CEO. An accomplished entrepreneur with a proven track record, Mr. Tasci has founded and operated several successful IT companies, such as Montreal-based IT solution provider CossN'Crew Corporation, in business for 20 years. Mr. Tasci has researched, designed and been directly involved with the development of distinct commercialized state-of-the-art systems and applications, including an Internet-based Wireless Wide Area Network (WWAN) ordering system, and Intelligent Virtual Guard (iVG), a leading-edge, analytic-based, proactive Internet security video monitoring and management system. Mr. Tasci is responsible for the concepts behind the technology at the core of Peak Positioning's patent applications and is expected to continue to spearhead Peak's research and development efforts to keep it at the forefront of the remote security space. Mr. Tasci attended Concordia University where he graduated with a Bachelors degree in Computer Science.

Mr. Charles-Andre Tessier

Mr. Tessier is currently the Executive Vice President, Corporate and Legal Affairs of R3D Consulting Inc., a management and information technology consulting group based in Montreal and with offices in Canada, the US and Europe. From 2001 until 2009, Mr. Tessier was a senior partner at the business law firm BCF LLP, where he represented and assisted his clients operating primarily in the high-tech, life sciences and manufacturing sectors. Prior to joining BCF, Mr. Tessier was a senior executive at two prestigious Quebec companies, working for more than six years with BioChem Pharma Inc., a successful biopharmaceutical company registered with TSX and listed on the NASDAQ, and for eight years with DMR Group, also registered with the TSX, an international information technology consulting services corporation. Mr. Tessier draws on over 30 years of business experience and knowledge in assisting entrepreneurial companies in improving performance and achieving their growth objectives.

Mr. Tessier has also participated in and completed numerous complex commercial and financial transactions in Canada, the United States, Europe, Asia and Australia. He has a vast experience and numerous successes in the management and realisation of large commercial projects in real estate, information technology and life sciences as well as in realisation of large mandates relating to financing, merger and acquisition, outsourcing, technology transfer and intellectual property matters. As an officer at DMR, BioChem Pharma, BCF and now R3D, he has supported and provided counselling to senior management as well as played a significant role in the elaboration and implementation of these companies' business and strategic plans. Mr. Tessier has served and continues to be on the board of directors of a number of private and public companies and non-profit organizations. Mr. Tessier is a former president of the Quebec Association of Secretaries and General Counsels and has sat on the Executive Committee of the Association of Canadian General Counsel.

Mr. Kerrigan Turner

Mr. Turner is currently the Chairman of the Board of Prosys Tech Corp., a position he has held since 2003. Mr. Turner is also the CEO of Adatif International Inc., a holding company having interests in various businesses worldwide, which he founded back in 1981, and currently serves as Chairman of the Board of Bouclair Inc, a well-known privately owned home decor and fabrics specialty retailer with over 81 stores in Quebec and Ontario.

Mr. Georges Hebert

Mr. Hebert is currently the president and CEO of Prosys Tech Corp. and has served in that capacity since 2003. Prior to joining Prosys, Mr. Hebert was the CEO and majority shareholder of security company J.A. Provost Ltd up until 1998, when he sold the company to Bell Canada. He is currently a Board member of Vitran Corporation and was a Board member of the Laurentian Bank of Canada from 1990 to 2008. Mr. Hebert holds an MBA from Western University in Ontario.

Mr. Jean-Paul Perusse

Mr. Perusse is an accomplished entrepreneur with many years of experience having successfully started, managed and financed several companies specializing in software development and information processing services. Through Parmatec, a company he founded, he became the first to provide a computer based solution to financial institutions using ICR ("Intelligent Character Recognition") to capture amounts on cheques and other payments items. The Parmatec solution was sold and distributed to major accounts in the US and Canada via Banctec of Dallas. Earlier in his professional career, he left a position with IBM to partner with DMR Consulting and eventually started and operated APG, his own consulting company. APG was sold five years later to CGI. Mr. Perusse has represented Investissements Desjardins on several technology company boards. As an investor in the business, he's had an opportunity to work closely with the management of Above Security, a leading Quebec-based software security company. He currently serves on the boards of Keops Technologies, a consulting company providing MES solutions, and of Montreal-based IT modernization solution provider, Speedware. Mr. Perusse has a master's degree in systems engineering from Ecole Polytechnique of Montreal.

Concurrent Financing

The Acquisition will be subject to completion by the Company of a concurrent brokered private placement (the "Concurrent Financing") in the amount of $750,000 or any other higher amount required by the TSXV to meet its initial listing requirements and be exempted from the sponsorship requirements, but not exceeding $2,010,000. The Company has retained the services of Industrial Alliance Securities Inc. ("IAS") to act as lead broker in conducting, on a best-effort basis, the Concurrent Financing for gross proceeds of a minimum of $750,000 (6,250,000 shares at a price of $0.12 per share) and a maximum of $2,010,000 (16,750,000 shares at a price of $0.12 per share). The proceeds of the Concurrent Financing will be used by the Company for working capital and the commercialization of the HomeWave service.

Broker Compensation

For its role in the Concurrent Financing, IAS will receive a 10% cash commission on all amounts raised (minimum of $75,000 and maximum of $201,000). IAS will also receive 10% in share purchase warrants on all amounts raised for a minimum of 625,000 warrants and a maximum of 1,675,000 warrants, each warrant allowing the holder to subscribe to one common share of the Company at a price of $0.12 for a period of 24 months following the date of issuance of the warrant.

Finder's Fee

The Company will pay Ansacha Capital (the "Finder") an aggregate finder's fee of $30,000 in cash, 500,000 shares of the Company, and 500,000 warrants, each warrant allowing the holder to subscribe to one common share of the Company at a price of $0.12 for a period of 24 months following the date of issuance of the warrant. This finder's fee will be payable to the Finder at the closing of the Qualifying Transaction, subject to TSXV approval.


Sponsorship of a qualifying transaction is required by the TSXV unless exempt in accordance with their policies. Pursuant to an agency agreement dated September 24, 2010, the Company has retained IAS to act as its sponsor with respect to the Qualifying Transaction. As compensation for its sponsorship role, IAS will receive $35,000 in cash and be issued 250,000 warrants, each warrant allowing the holder to subscribe to one common share of the Company at a price of $0.12 for a period of 24 months following the date of issuance of the warrant.

Forward Looking Information

This press release contains forward-looking information. More particularly, this press release contains statements concerning the prospective qualifying transaction of the Company and Peak and its HomeWave service. The information about Peak and its HomeWave service contained in the press release has not been independently verified by the Company. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Forward-looking information involves known and unknown risks, uncertainties, assumptions (including, but not limited to, assumptions on the marketability of the HomeWave service) and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the prospective Qualifying Transaction may change based on the Company's due diligence on Peak and its products and services (which is going to be limited as the Company intends largely to rely on the due diligence of other parties of the Acquisition and Concurrent Financing to contain its costs, among other things), the success of the Concurrent Financing, regulatory and third party comments, consents and approvals and the ability to meet the conditions of the Qualifying Transaction in the required timeframes. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Conditions of the Acquisition

Completion of the Acquisition is subject to a number of conditions, including the parties completing their respective due diligence reviews, completion of the Concurrent Financing, and TSXV acceptance, which may, among other things, require disinterested shareholder approval and/or sponsorship. In such situation, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.

IAS, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the Acquisition. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Acquisition or the likelihood of completion.

Pursuant to the policies of the TSXV, trading of the Company's shares will remain halted until the requirements thereunder have been satisfied and the Acquisition is completed.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Acquisition and has neither approved nor disapproved the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Java Capital Inc.
    780, 910 - 7 Avenue SW
    Calgary, Alberta T2P 3N8
    403-770-8370 (FAX)
    Java Capital Inc.
    Mansoor Anjum
    President and Chief Executive Officer