Redex Inc.
TSX VENTURE : RDX

Redex Inc.

October 24, 2005 20:57 ET

Redex Inc.: Update of Corporate Affairs and Resumption to Trading

MONTREAL, QUEBEC--(CCNMatthews - Oct. 24, 2005) - Redex Inc. (TSX VENTURE:RDX) ("Redex" or the "Corporation") wishes to provide an update on the affairs of the Corporation.

Resumption to trading

Redex is pleased to announce that it has satisfactorily addressed the issues raised by the TSX Venture Exchange (the "Exchange") regarding its review and as such, the halt in trading will be lifted and its shares will resume trading on October 25, 2005.

Corporate governance

In the scope of its review, the Exchange had determined that the Corporation:



- Failed to seek Exchange approval for the disposition of certain
assets;
- Issued loans / advances to related parties without Exchange
acceptance;
- Failed to disclose certain material transactions;
- Did not have a director with public company experience on its Board
of Directors;
- Did not have a properly constituted Audit Committee; and
- Did not have the sufficient corporate governance procedures and
internal controls in place.


As such Redex had to improve its corporate governance structure and procedures. This exercise has allowed the Corporation to enhance its internal controls thereby allowing the Corporation to improve the quality of its leadership and ensuring that communications to the general investing public will be disseminated in a transparent, consistent, structured and timely manner. As part of the Exchange's review the Corporation was required by the Exchange to:



- Adopt a written confidentiality and disclosure policy;
- Implement an audit committee to act as an independent and
objective party to verify its reporting process and internal
control procedures;
- Execute an undertaking by Mr. Guy Descoteaux to reimburse the
periodic advances paid to him by the Corporation since the
beginning of 2002 in an amount totaling $136,663 by means of
minimal annual payments of $35,000 deducted from his annual base
salary;
- The successful completion of a corporate governance course by Guy
Descoteaux and Robert Labrie;
- The addition to its Board of Directors of a person with public
company experience which the company has done by the appointment of
Pierre-Hubert Seguin effective September 20, 2005; and
- File and receive Exchange acceptance for the disposition of certain
assets.


Pursuant to above the Exchange will not be taking any further action against the Corporation at this time. However, the Corporation is now placed on notice to comply with all Exchange requirements. Any further violations of the Exchange Requirements may result in a review being commenced and further action being initiated by the Exchange against the Corporation and its management, directors and officers.

In order to update shareholders of the material events not previously disclosed and the efforts of the directors and officers, Redex Inc. is proud to announce the following transactions over the course of the last 2 years.

Private placement

Redex is pleased to confirm that it has concluded a non-brokered private placement of 4,166,664 units ($1,125,000) at an offering price of twenty-seven cents ($0.27) per unit (the "Private Placement") announced in its press release of May 5th, 2005. Each unit consists of one common share of the Corporation and one half purchase warrant, each full warrant entitling the holder to purchase one common share of the Corporation at a price of thirty-three cents ($0.33) per share, at all times for a period of 2 years. There are no commissions or finder's fees associated with the financing.

Real estate transactions

Further to the Corporation's press release of June 14, 2005, the Corporation has conditionally purchased from Mr. Michel Piette, all of the shares owned by Mr. Michel Piette in 9146-8785 Quebec Inc., that is to say 100 common Class "A" shares, representing 100% of the issued and outstanding shares of the capital stock of 9146-8785 Quebec Inc. 9146-8785 Quebec Inc. is the owner of 2 residential properties of 50 units located at 168-170, 172, 174 and 176 Levesque Boulevard, in Laval (the "Levesque Property"). One building includes 2 sets of 10 units, and the other includes 3 sets of 10 units. The sale is made for and in consideration of $337,500. The Corporation issued 1,343,284 common shares of its capital stock to Mr. Michel Piette, at a price of $0.25125 per share, in payment of the total sum of the purchase price. No commission or finder's fee was paid in conjunction with the acquisition of said properties. The Levesque Property, held by 9146-8785 Quebec Inc., was appraised at $5,265,000 by Groupe HPDG on August 9, 2005. Mr. Michel Piette had no prior relationship with Redex Inc. at the time of the transaction. The Exchange accepted this transaction on October 21, 2005.

On July 27, 2004, the Corporation, through its affiliate Societe Immobiliere Redex Inc., sold to Edifice 1010 Ste-Catherine Est Ltee., in an arm's length transaction, the commercial property located at 1010 Ste-Catherine Street East, in Montreal. The property, with a rental area of 141,823 sq.ft, was sold at a price of $5,120,000. A commission of $82,449.92, including taxes, was paid to each of Banko Realties and Century 21 Max-Immo, as well as a commission of $172,470.60, including taxes, was paid to Mr. Abderrazak Boughanmi for services rendered as internal real estate agent. The Exchange accepted this transaction on October 21, 2005. On September 15, 2005, Edifice 1010 Ste-Catherine Est Ltee. sued Societe Immobiliere Redex Inc. and Guy Descoteaux, for false representations and warranties made in the deed of sale, for a total of $738,000.00. The case is deemed frivolous and unfounded by the Corporation.

On June 1st, 2004, the Corporation sold to Societe Gestion Robert & Belanger Inc., in the scope of an arm's length transaction, the commercial property located at 3601 St-Jacques West, in Montreal. The property, with a rental area of 35,818 sq. ft., was sold at a price of $2,075,000. A commission of $69,015, including taxes, was paid to Century 21 Max-Immo Vieux Montreal, as well as a commission of $69,763.40, including taxes, was paid to Mr. Abderrazak Boughanmi for services rendered as internal real estate agent.

True to its strategic plan of positioning itself in the conversion market of residential rental housing into condominiums, the Corporation is also proud to announce the sale, through its affiliate Societe Immobiliere Redex Inc., of 16 condominiums located at 65-75 Beausejour, in Laprairie. Said condominiums were sold on September 3, 2004 and October 20, 2004 at purchase prices varying from $65,000 to $100,000, for a total consideration of $1,253,000. The sales of the condominiums were Arm's Length Transactions and involved the following purchasers: 9109-7832 Quebec inc., Marie-Claude Boisvert, Karyne Pelletier, Jean Monchamp and Diane Lapointe. A commission of $21,459.05 was paid to RE/MAX Signature with respect to the disposal of the 4 condominiums and no other commissions were paid in conjunction with the disposal of the other condominiums. The Exchange accepted the transaction on October 21, 2005.

In the scope of arm's length transactions in November 2004, Redex acquired, for the price of $51, fifty and one half percent (50.5%) of the shares in 9111-7945 Quebec inc. and this subsidiary acquired one hundred percent (100%) of the shares of 2432-1671 Quebec inc. The two entities were amalgamated on December 3, 2004 to form the resulting amalgamated company 9111-7945 Quebec inc. which owns and operates a retirement home in the city of Saint-Hyacinthe. The purchase price of the subsidiary's participation, that is $1,015,704, is secured by a loan in an initial amount of $975,000 of which a balance of $942,500 was owing at the last fiscal year end.

Lastly, on September 17, 2003, the Corporation sold to Societe Gestion Robert & Belanger Inc., in the scope of an arm's length transaction, the commercial property located at 3171-3177 St-Jacques West, in Montreal. The property, with a rental area of 20,051 sq. ft., was sold at a price of $1,220,000. A commission of $50,000, excluding taxes, was paid to Century 21 Max-Immo Vieux Montreal.

These real estate transactions are more fully described in the Filing Statement that can be found on the Sedar website at www.sedar.com.

Debts related to fixed assets

The Corporation has renegotiated a loan of an initial amount of one million five hundred thousand dollars ($1,500,000) secured by an income-producing property of which an amount of $1,300,000 is left outstanding. The loan was renegotiated before the end of its initial term at the end of May 2005 and its maturity date was extended to November 2005. The Corporation intends to obtain financing or re-financing prior to the loan's maturity.

Officers and Stock Options

The Board of Directors proudly announces that Mr. Michel Piette ("Mr. Piette") has joined Redex's executive management team as President and Chief Executive Officer as of August 1st, 2005. Endowed with real estate experience, Mr. Piette will bring a new dynamic to the Redex team. In compliance with its Stock Option Plan, the Corporation has granted Mr. Piette an option to purchase 450,000 common shares of the Corporation at a price of thirty cents ($0.30) per share.

In compensation for the work done in completing the Private placement and realizing the above noted real estate acquisitions, the Board of Directors of the Corporation has also granted Mr. Guy Descoteaux an option to purchase 200,000 common shares of the Corporation at a price of forty-two cents ($0.42) per share.

Board of directors changes

The Board of Directors' composition has changed over the course of the Corporation's history. Initially consisting of Mr. Guy Descoteaux, Henri Beaudry and Rene Branchaud at the time of the reverse takeover on February 12, 2003, the Board of directors has since received the resignation of Mr. Henri Beaudry on March 24, 2003. Mr. Rene Branchaud did not seek re-appointment for a subsequent term; as such, Mr. Beaudry and Mr. Rene Branchaud were replaced by Mr. Robert Labrie and Mr. Gilles Levert at the Annual Shareholders Meeting on June 30, 2003. Mr. Gilles Levert later resigned on April 16, 2004 and his vacancy was replaced on June 30, 2004, through the nomination of Mr. Robert Vivian. The latter resigned on April 1st, 2005, and was replaced on September 20, 2005 by M. Pierre-Hubert Seguin, Attorney, whose public company experience will undoubtedly benefit the Corporation in this new era.

About Redex Inc.

The Corporation is in the field of real estate recovery by managing bank repossessions. The corporation is working to become a leader in the conversion of residential rental housing into co-ownerships.

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

Contact Information

  • Redex Inc.
    Mr. Guy Descoteaux
    Chief Financial Officer
    (514) 954-1551