KIK Polymers Inc
TSX VENTURE : KPI.H

August 04, 2011 17:56 ET

KIK Polymers to Acquire Edgewater Wireless

CALGARY, ALBERTA--(Marketwire - Aug. 4, 2011) - KIK Polymers Inc. (TSX VENTURE:KPI.H) ("KIK") wishes to expand on its May 16, 2011 press release concerning its binding letter of intent ("LOI") dated May 13, 2011 with Edgewater Computer Systems, Inc. ("Edgewater") an Ontario incorporated company. The LOI 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 incorporated under the laws of Ontario. On completion, KIK will issue to Edgewater 35,000,000 KIK common shares at a deemed price of $0.25 ($8,750,000 in total consideration) and assume $375,000 in debt owing by Edgewater Wireless to its parent (the "Proposed Transaction"). Edgewater is at arm's length to KIK, and operates in the telecom/technology section. It is the intention of the parties to change the name of KIK to Edgewater Wireless Systems Inc. post-closing.

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 and the TSX Venture Exchange. 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 non-brokered private placement of units at a price of $0.25 ("Units") for gross proceeds of not less than $5,625,000 and up to a maximum of $6,468,750 . Each Unit consists 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"). KIK has closed $6,170,250 of the Private Placement on a subscription receipt basis, which is in excess of the minimum required to complete the Proposed Transaction. Each subscription receipt will convert, at no extra cost into Units upon TSX-V approval of the Proposed Transaction, provided conditional approval of the transaction is received from the TSX Venture Exchange by August 31, 2011. Proceeds will be used to execute the business plan of Edgewater Wireless, primarily of sales and marketing, and for general corporate purposes. Commissions of 7% cash and 7% finder's warrants will be payable upon release of the subscription funds. On the amount closed to date, the following finders will receive commissions as set out below:

Cash commission received Number of broker warrants received
Jordan Capital Corp.
1920 - 1075 W. Georgia St.
Vancouver, BC
V6E 3C9
32,497.50 129,990
Haywood Securities Inc.
2000-400 Burrard Street
Vancouver, BC
V6C 3A6
324,625 1,298,500
Raymond James
925 West Georgia
Suite 2200
Vancouver, BC
V6C 3L2
1,750 7,000
Phoenix Communications Group
1732 Smithson Drive
Kelowna BC
V1Y 4E3
25,445 101,780
Chris McGillivray
Suite 609-1578 West Georgia Street
Vancouver, BC
V7Y 1G5
2,100 8,400
Gilford Capital Inc.
Suite 1000, 67 Yonge St.
Toronto, Ontario
M5E 1J8
35,000 140,000 Broker Warrants

Note(1): Each broker warrant entitles the holder to purchase one Common Share at a price of $0.25 per share for a period of 12 months from closing.

An independent valuation of Edgewater Wireless exceeding the minimum value of $8,750,000 has been obtained. A finder's fee of 900,000 Units at a deemed price of $0.25 per Unit and is expected to be paid at closing of the Proposed Transaction to arm's length parties cons isting of Brent Cumberford and Vincent Robichaud, both of Calgary, Alberta and Rare Earth Africa Holdings Corp., of Vancouver, BC, a private company controlled by Chris McGillivray.

Either of KIK or Edgewater may terminate the LOI if the conditions to closing of the Proposed Transaction have not been met or waived by August 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.

Upon completion of the transactions the following individuals will join the Company:

Duane Anderson, Ottawa, Ontario Director Duane Anderson is the controlling shareholder (92% of the issued and outstanding shares) and President of Edgewater Computer Systems, Inc., and founded Edgewater Computer Systems, Inc. in 1988 with the goal of developing theoretically correct real-time computer systems based on open system standards. He provides research and development consulting services to organizations, including the Canadian Department of National Defence, the U.S. Air Force and the U.S. Navy, that require assistance to produce high-performance multi-processor systems.

Mr. Anderson has driven Edgewater's expansion to offer products in addition to services. He is at the forefront of the company's development of wireless and wired communications and networking products and of a new release of the 1553 military standard for data bus technology in military avionics.

Previously, Mr. Anderson spent several years as a senior engineer and project engineer with a major manufacturer of VMEbus-based military computers. He also has experience as a principal designer of high-speed VLSI Tech test equipment. Additionally, he has worked in the research and development of microprocessor-based oilfield instrumentation, and as a developer of power-system instrumentation technologies.

Mr. Anderson has a BSc in electrical engineering from the University of Saskatchewan. He has been an active participant in real-time computer systems research and in high-performance interface standard developments by organizations such as the institute of Electrical and Electronics Engineers (IEEE).
Greg Fielding, Ottawa, Ontario Director & CEO With over 20 years experience and a deep understanding of RF and ASIC (application specific integrated circuits), Greg is a senior technology executive responsible for marketing and business development for Edgewater's business units.

Prior to joining Edgewater, Greg spent 17 years with Texas Instruments (TI), the international leader in the development of RF, analog and digital integrated circuits. While at TI, Greg led the networking and telecommunications ASIC design centre in Ottawa, Canada and helped spearhead the acquisition of new business. Recruited from TI, Greg joined the leadership team at wireless pioneer, Engim, where he ran the Canadian operations and led RF design team while expanding the business development activities in the Asia Pacific region. Greg's team successfully developed state of the art 2.5 GHz and 5 GHz wideband transceivers and secured design wins at multiple ODMs in the Asia Pacific region.

Greg holds a B.A. Sc. in Electrical Engineering from the University of Ottawa.
Andrew Skafel, Ottawa, Ontario President Prior to joining Edgewater, Andrew co-founded an innovative GSM operator in Brazil, taking the project from concept to operation. Andrew built his career while based in Asia and South America (Brazil) where he worked for major telecom players such as Newbridge Networks, Alcatel and Silicon Valley based interWAVE Communications, and in Canada, where he joined the management team of Natural Convergence (acquired by Broadview Networks).

Andrew holds an MBA in finance from INSEEC (Paris), a post graduate diploma in Asia Pacific Management from the McRae Institute at Capilano University (Vancouver) and a BA in Economics & Politics from the University of Western Ontario (London).
Brian Kronick
Kanata, Ontario
CFO Brian was the CFO of spotwave Wireless of Kanata, Ontario from 2000 to 2007, and then held the same position with CFO4 Results Inc until now. Brian is a CMA and holds a B. Comm. degree from Carlton University.

Anastase Maragos and Lew Dillman will remain on the Board of Directors. Details of the background of each of the continuing directors can be found on www.sedar.com in a news releases filed on March 30, 2011 and April 29, 2011. Kuldip Baid remains as interim CFO until Closing.

264646 Alberta Ltd., a private company controlled by Vic Walls, formerly the largest shareholder of KIK, has been granted the right to participate up to 10% in any private placement done by KIK within 12 months of Closing.

Below is information from the audited balance sheet of Edgewater Wireless as at April 1, 2011.

Property & Equipment 126,854
Intellectual Property 60,027
Shareholder's Equity 186,881

Haywood Securities Inc., of Vancouver BC, has agreed to act as sponsor to the Transaction and will receive a fee of $30,000 and their reasonable costs, including legal fees. Haywood is an arm's length party to the Company and does not currently own any securities in the capital of the Company. Haywood did assist the Company in placing part of the private placement, and will receive a commision as described above upon closing.

Edgewater Wireless

A wholly owned subsidiary of Edgewater Computer Systems, Inc., Edgewater Wireless Systems, Inc. develops and commercializes leading edge technologies and intellectual property for the communications market. Backed by an extensive patent portfolio, the flagship EAP3000 product family leverages an internally developed, high-performance multi-channel, standards compliant radio chipset that targets the rapidly growing demand for data communications capacity. With a customer base that includes some of the world's largest telcos and enterprises, Edgewater Wireless' EAP3000 product family uniquely delivers significantly greater bandwidth density, advanced network visibility, improved security, and network reliability required to meet the demands generated by the explosive growth in data communications occurring around the world. Drawing from top industry professionals, Edgewater Wireless is managed by an experienced team with extensive commercialization and development expertise in advanced wireless, communications and semiconductor solutions.

Founded in 1988, Edgewater Computer Systems, Inc. (ECSI) is a privately held provider of advanced computer and communications technology products for enterprise, military and industrial computing and networking applications. Leveraging greater than $50M of investment in the development of multi-channel wireless technology and the expansion of the EAP3000 product family, ECSI continues to invest in growing the business in targeted markets around the world. In February 2011, ECSI spun out its Wireless Business Unit as Edgewater Wireless Systems, Inc. For more information, please visit www.edgewater.ca

The company has been advised that trading of its shares will commence trading on August 8, 2011.

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 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 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.

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.

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.

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