MONTREAL, QUEBEC--(Marketwired - May 24, 2013) - Peak Positioning Technologies Inc. ("Peak" or the "Company") (TSX VENTURE:PKK) is pleased to provide updated financial information further to its press release dated April 17, 2013. A trading halt on the Company's shares had been in effect since the announcement of the Company's intentions to acquire its Chinese partner LongKey Hong Kong Limited ("LongKey") on April 17, 2013. Peak expects the TSX Venture Exchange ("TSXV") will be in a position to reinstate trading in the common shares of Company on or about Monday May 27, 2013.
Further to the news release dated April 17, 2013, the Company also announced today that it has received the 2011 and 2012 audited financial statements of LongKey's operating subsidiary, LongKey Wuxi Software Technology Limited ("LK-Wuxi"). It should be noted that LongKey is a holding company whose sole assets consist of cash and LK-Wuxi. Peak has requested, and LongKey has initiated the process to provide Peak with consolidated IFRS compliant financial statements. Meanwhile Peak has obtained LK-Wuxi's financial statements, which were prepared and audited based on Chinese Accounting Standards for Business Enterprises (ASBE). This means that the information contained in these financial statements may differ materially had the statements been prepared and audited under IFRS. A summary of the key figures from these financial statements is provided in the table below:
||Fiscal Year Ended Dec. 31, 2011
||Fiscal Year Ended Dec. 31, 2012
The loss reported in 2012 can be attributed in part to the fact that LK-Wuxi made significant investments during the year, such as the opening of a new office in the city of Taizhou, to prepare for the distribution of the AiNi™ mobile cloud platform jointly developed with Peak.
The financial highlights provided above relate to LK-Wuxi's operations only and do not include any financial data from LongKey itself, LK-Wuxi's parent company and the entity being acquired by Peak.
Notwithstanding the fact that consolidated financial information is not yet available, LongKey is a private holding company that has never carried on any activities, has no current operations and no employees. As at December 31, 2012 and April 30, 2013, LongKey had a cash balance of approximately USD$ 8,350. LongKey has no liabilities or financial transactions other than certain intercompany transactions between it and LK-Wuxi. The nature of the financial transactions between LongKey and LK-Wuxi relate to flow through transactions (i.e. money received and disbursed) to facilitate the flow of funds between LK-Wuxi and foreign third-parties such as Peak. The proceeds of sales and purchases transactions between LK-Wuxi and these third-parties flow through LongKey Hong Kong with no markups or discounts. The consolidated financial impact of these intercompany transactions is nil on both LongKey's and LK-Wuxi's financial statements. Therefore although the financial highlights presented above are from LK-Wuxi's audited financial statements, they also provide a fair indication of the expected income statement figures of LongKey's consolidated statements once these statements are produced. Peak will publish highlights of LongKey's IFRS-compliant audited consolidated financial statements in a subsequent news release once available.
In addition to the formal request of all relevant documents from LongKey, such as the aforementioned IFRS-compliant audited consolidated financial statements, to complete its ongoing due diligence, Peak has sought the advice of experts in the field foreign entities doing business in China in order to optimize the post-acquisition legal and operational structure of its transaction with LongKey. More details on the relevant aspects of the due diligence process as well as the possible post-acquisition legal and operational structure of the entity in China will be release once available.
As the proposed acquisition of LongKey by Peak requires approval of the TSXV, the Company intends to continue to follow the guidelines set out by the TSXV in order to obtain the TSXV's approval of the proposed transaction.
Peak would also like to announce that the terms of the promissory notes for an aggregate amount of CAD$ 55,000, issued as part of the financing closed on April 30, 2013 and for which 220,000 bonus shares were issued, have been changed from nine months to twelve months and now have a maturity date of April 30, 2014.
About Peak Positioning Technologies Inc.:
Peak Positioning Technologies Inc. (TSX VENTURE:PKK), is a Canadian software developer for smartphones and other mobile computing devices, conducting business primarily in China and North America. In association with its partner, LongKey-Hong Kong Ltd, the company has developed a suite of applications for mobile devices that includes: cloud-based calendar, e-mail and contacts synchronization, automated device configuration, and HomeWaveä mobility security. While LongKey markets the applications in China through its partnerships with major Chinese telecommunication companies and banks, Peak plans to similarly market the applications for its own account in North America. For more information: http://www.peakpositioning.com
Forward-Looking Statements / Information
This news release may include certain forward-looking information, including statements relating to business and operating strategies, plans and prospects for revenue growth, using words including "anticipate", "believe", "could", "expect", "intend", "may", "plan", "potential", "project", "seek", "should", "will", "would" and similar expressions, which are intended to identify a number of these forward-looking statements. Forward-looking information reflects current views with respect to current events and is not a guarantee of future performance and is subject to risks, uncertainties and assumptions. The Company undertakes no obligation to publicly update or review any forward-looking information contained in this news release, except as may be required by applicable laws, rules and regulations. Readers are urged to consider these factors carefully in evaluating any forward-looking information.
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