KIK Polymers Inc.
TSX VENTURE : KPI.H

May 17, 2011 13:27 ET

KIK Polymers to Acquire Edgewater Wireless

CALGARY, ALBERTA--(Marketwire - May 17, 2011) - KIK Polymers Inc. (TSX VENTURE:KPI.H) ("KIK") is pleased to announce that it has entered into a binding letter of intent ("LOI") dated May 13, 2011 with Edgewater Computer Systems, Inc. ("Edgewater"), a company based in Ottawa, that sets out the basic terms and conditions pursuant to which it is intended that KIK will complete a reverse takeover by acquiring all of the issued and outstanding shares of Edgewater Wireless Systems, Inc. ("Edgewater Wireless"), a wholly-owned subsidiary of Edgewater, in consideration for the issuance to Edgewater of 35,000,000 KIK common shares (the "Proposed Transaction"). Edgewater is at arm's length to KIK.

Proposed Transaction

The Proposed Transaction is subject to the completion of due diligence by each of Edgewater and KIK and the approval of the Proposed Transaction by their respective Board of Directors. The Proposed Transaction is also subject to there being no material adverse change in the business, results of operations, assets, liabilities, financial conditions or affairs of either Edgewater Wireless or KIK through to the completion of the Proposed Transaction and the approval of the shareholders of both Edgewater Wireless and KIK.

Among other customary conditions in a transaction of this nature, including receipt of all applicable stock exchange and regulatory approvals, it is a condition to the closing of the Proposed Transaction that KIK will complete a brokered private placement of units at a price of $0.25 ("Units"), each Unit consisting of one KIK common share and one warrant to acquire an additional KIK common share at a price of $0.45 for a period of 24 months, subject to acceleration in certain circumstances (the "Private Placement") for gross proceeds of not less than $5,625,000 and up to a maximum of $6,468,750. Further details regarding the Private Placement will be announced when determined.

It is also a condition to closing of the Proposed Transaction that an independent valuation of Edgewater Wireless in support of a minimum value of $8,750,000 will be obtained. It is expected that KIK will engage a sponsor in connection with the Proposed Transaction. A finder's fee of 900,000 Units is expected to be paid at closing of the Proposed Transaction.

KIK and Edgewater have agreed to deal exclusively with each other and not solicit, encourage or entertain proposals or enter into negotiations with any other party for a period which expires on the earlier of 120 days or the date that the LOI is terminated. Each of KIK and Edgewater will be responsible for their own costs in connection with the Proposed Transaction.

Either of KIK or Edgewater may terminate the LOI if the conditions to closing of the Proposed Transaction have not been met by August 1, 2011; the Private Placement has not closed by July 31, 2011; or if after completing its due diligence review either party is not prepared to proceed with either the Private Placement or the Proposed Transaction. Edgewater may terminate the LOI on 10 days' written notice to KIK that Edgewater has determined that KIK is unable or will be unable to complete the Private Placement.

Additional information regarding the Proposed Transaction, the Private Placement and Edgewater Wireless will be announced by KIK in due course.

Edgewater Wireless Systems, Inc.

A wholly owned subsidiary of Edgewater Computer Systems, Inc., an established defence research and development organization, Edgewater Wireless Systems, Inc. develops and commercializes leading edge technologies and intellectual property for the telecommunications market. Backed by an extensive patent portfolio, the flagship EAP3000 products use an advanced, multi-channel WiFi chipset that provides significant advantages over traditional single channel WiFi chipsets which have been used for the last decade.

The advantages include greater bandwidth density, better security and carrier grade reliability in order to meet the requirements of telecommunications companies looking to service the explosive growth in data communications globally. The EAP3000 is compatible with off the shelf equipment and can provide up to 50x greater throughput in a typical network environment when compared to many other commercial technology solutions. Drawing from top industry professionals, Edgewater Wireless is managed by a team with extensive commercialization and development expertise. Edgewater Wireless is headquartered in Ottawa, Ontario, Canada and is incorporated in Canada. Edgewater Wireless also has offices in Sao Paulo, Brazil.

Founded in 1988, Edgewater Computer Systems, Inc. is a privately‐held provider of advanced computer and communications technology products for enterprise, military and industrial computing and networking applications. Edgewater Computer Systems, Inc. has developed an extensive background in realtime, high‐performance software and multiprocessor systems. For more information on the EAP3000, please visit http://www.edgewater.ca/networking-solutions/eap3000

Trading in the shares of KIK will remain halted until such time as a sponsor has been engaged and initial sponsorship materials have been filed with and satisfactorily reviewed by the Exchange.

READER ADVISORY

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable pursuant to the requirements of the Exchange, shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement or management information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.

Trading in the securities of KIK should be considered highly speculative.

Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning KIK's proposed transaction with Edgewater. The forward-looking statements and information are based on certain key expectations and assumptions made by KIK, including expectations and assumptions concerning its ability to raise capital, and meeting other conditions precedents to the transaction, including regulatory approval and completing due diligence. Although KIK believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because KIK can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause KIK's actual results and experience to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to access to capital markets and and regulatory conditions. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. KIK undertakes no obligation to update publicly or revise any forward looking information, whether as a result of new information, future events or otherwise, except as required by law.

The securities of the Corporation have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved of the contents of this press release. NEITHER THE 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

  • KIK Polymers Inc.
    Lew Dillman
    CEO
    604-568-0733

    Edgewater Wireless Systems, Inc.
    Andrew Skafel
    613-271-1101 x 2262
    andrews@edgewater.ca