Rym Capital Corp.
TSX VENTURE : RYM.P

June 30, 2005 16:51 ET

Rym Announces Proposed Qualifying Transaction With 1141931 Ontario Ltd.

TORONTO, ONTARIO--(CCNMatthews - June 30, 2005) - Rym Capital Corp. (TSX VENTURE:RYM.P) ("Rym" or the Company), is pleased to announce that it has signed a Letter of Intent with 1141931 Ontario Ltd. ("Inkas") dated June 22, 2005 whereby Rym will acquire all of the issued and outstanding securities of Inkas on the basis of one (1) common share of Rym for each outstanding common share and preferred share of Inkas (the "TOB").

Proposed Transaction

At the time of the completion of the TOB, it is expected that Inkas will have 57,500,000 common shares outstanding (the "Common Shares"). Rym will acquire these Common Shares on the basis of one (1) common share of Rym (a "Rym Share") for each Common Share.

In addition, prior to the completion of the TOB, Inkas intends to raise $900,000 from arm's-length parties (the "Financing") by issuing 4,500,000 First Preferred Series A Shares (the "Preferred Shares"). As part of the TOB, Rym will acquire all of the issued and outstanding Preferred Shares on the basis of one (1) Rym Share for each Preferred Share. In addition, it is expected that Inkas will also have outstanding an option (the "Preferred Share Option") to acquire 450,000 Preferred Shares at a price of $0.20 per share for a period of eighteen months as a finder's fee in respect of the Financing. Rym will acquire the Preferred Share Option in consideration for the issuance of an option to acquire 450,000 Rym Shares at a price of $0.20 per Rym Share for the same term as the Preferred Share Option.

Following the TOB, the holders of the Common Shares will hold approximately 79.31% of the issued and outstanding capital of Rym. On completion of the TOB there will be 72,500,000 common shares of Rym issued and outstanding. Rym has agreed to pay to Inkas a non-refundable deposit in the amount of $25,000 in accordance with the policies of the TSX Venture Exchange.

1141931 Ontario Ltd.

Inkas is a company formed under the laws of the Province of Ontario. It has three subsidiary companies: Inkas Finance Corp., incorporated under the laws of Canada and Inkas Security Services Ltd., and 2000007 Ontario Inc., which were incorporated under the laws of the Province of Ontario. (the "INKAS® Group of Companies" or "INKAS®").

Business of Inkas

The INKAS® Group of Companies provides integrated financial and security solutions that are designed to reduce costs and risk mitigation by providing valuable security and transport solutions to its clients.

Various financial institutions, retailers, government agencies, armored transport and ATM companies in Canada and around the world have shown trust in INKAS by utilizing its services and solutions.

INKAS® delivers financial and security product and service solutions through the combination of its four divisions:

1. ATM and POS Division (Inkas Finance Corp.)

2. Armed Courier Services Division (Inkas Security Services Ltd.)

3. Safe Manufacturing Division (2000007 Ontario Inc.)

4. Armored Vehicle Manufacturing Division (2000007 Ontario Inc.)

INKAS® began Canadian operations in October of 1996. To date, INKAS® has grown to employ over 50 highly skilled and specialized team members. INKAS® facilities include:

1. Head Office and Manufacturing Plant in Toronto, Ontario - 60,000 square-feet;

2. Quebec Sales and Service Office in Gatineau, Quebec; and

3. Armed Courier and Vehicle Operations in Concord, Ontario.

INKAS® ATM & POS Division designs and delivers ATM and POS solutions for the retail and financial services industry. INKAS' services include the supply, sale and placement of ATM/POS equipment, transaction processing services, monitoring, reporting and revenue payment, as well as around the clock equipment service and client support. Additionally, it has the unique capability to offer and install TTW ("Through The Wall" ATMs) and Drive-Thru/Walk-up ATMs, as well as the means to provide the most cost-effective cash handling service through its armed courier service offering. INKAS® has installed over 1420 ATM and POS devices across Canada.

INKAS® Armed Courier Services Division provides first-line armed courier service and equipment to its customers. INKAS® Security Services has earned a reputation for offering timely, accurate, professional and premium security services delivered consistently and professionally through its highly-trained armed guards. This division offers a multitude of services including ATM cash loading, vault cash forecasting and management, armed courier deposit pick-up, and consolidation services for its Cash-In-Transit (CIT) customers.

INKAS® Safe Manufacturing Division produces an assortment of safes, offering premium and customized packages for retailers, government agencies, financial institutions, jewelry stores, and pharmaceutical chains. INKAS® safes are highly reputable and supplemented (serviced) with its network of 2000 locksmiths located across North America. INKAS currently supports 8 safe models available in 37 sizes; including high security burglary safes, cash depository safes, and customized safes manufactured to customer specifications.

INKAS® Armored Vehicle Manufacturing Division manufactures the highest quality and security standard armored trucks, vans, SUV's and limousines in its own factory using advanced defense technologies constructed with modern composite and transparent ballistic steel and glass. INKAS strives to stay at the leading-edge of technology within the industry.

Inkas Selected Financial Information

During the last nine months ending April 30, 2005, Inkas has had revenue of over $4.6 million and Earnings before Interest, Taxes, depreciation and amortization (EBITDA) of over $450,000 (unaudited). Inkas currently has 523 ATM machines and 905 POS in their network in Canada. On March 31, 2004, Inkas sold their UK operations to TRM for total cash $7.0 million and contingent receivable of $3 million based on milestones that TRM meet certain minimum performance under the sales agreement. On September 29, 2004, the company received $529,036 as a partial payment of the contingent receivable from TRM. Another $1 million is due from TRM during the next fiscal year. During the previous audited fiscal year end July 31, 2004 the company had revenue of $4.8 million and net loss from continuing operations of $1.2 million.

Management and Directors

Upon closing of the TOB, the Company shall appoint new directors and officers. The following is a summary of the new board and senior management of the Company and the number of common shares of Rym they will hold on the completion of the TOB:

David Khazanski - President, C.E.O. and Director

Mr. Khazanski, age 41, is one of the original founders of INKAS in Canada, who successfully brought the company from zero to one of the well known names in Canada in the armed messenger service, ATM and POS distribution and operations and safe manufacturing sectors. Mr. Khazanski has been the President of Inkas since 1996.

Margarita Simkin - VP Operations and Business Development and Director

Ms. Simkin, age 41, is one of the original founders of INKAS. She was the Managing Director of a brand new subsidiary of INKAS in the United Kingdom, who successfully obtained the company's full membership in the LINK Network, UK's largest transaction processing network equivalent to Interac in Canada. She developed and managed the company's Distribution Network which covered sales territory from coast to coast in the United Kingdom. She created and managed an "all in-house" Service and Technical Branch in providing installation, 1st and 2nd line maintenance and 7/24 service to the company's fleet of over 400 ABMs. This division was sold by INKAS in March of 2004.

Thomas Taylor - Director

For over 25 years Mr. Taylor, age 53, has been president and owner of various manufacturing and distribution companies. He is currently president of Auralim Gift, a gift importer and distribution company, and has been with Auralim Gift since December of 1996. Mr. Taylor is a director of The Royal Canadian Mint where he is a member of the Audit, and Strategic Planning Committees.

Martin Bernholtz - C.F.O., Treasurer and Director

Mr Bernholtz, age 46, is employed as Vice President, Finance with Kerbel Group Inc, an integrated construction and land development company. In this capacity he is responsible for finance, accounting, personnel and residential management. He has been with Kerbel Group Inc. since 1988. He also serves as a director of several residential and commercial condominium corporations.

Mr. Bernholtz graduated with a bachelor degree in business administration from York University in 1981. He became a Chartered Accountant in 1984 and in 2000 became an Associate Reserve Fund Planner.

Michael Newman - Director

Mr. Newman, age 59, is employed as President and Chief Executive Officer and director of InterRent International Properties Inc., a public company listed on the TSX Venture Exchange. Mr. Newman has held the position of President and Chief Executive Officer since September 1997. He is also Managing Director of Adevam Investments Inc., a Toronto based investment firm, a position he has held since October 1989.

Mr. Newman currently serves as director for a number of public companies including Covalon Technologies Ltd. (TSX.V), Inspiration Mining Corporation (TSX.V), Lombardi Media Corporation (TSX.V) and The Skor Food Group Inc. (TSX.V). Mr. Newman also serves as a director of Ribbon Capital Corp. and as a director of Willowstar Capital Inc., capital pool companies, in respect of which preliminary prospectus' have been filed for their respective initial public offerings and listing on the Exchange is being sought.

Israel Ellis - Director

Israel Ellis, age 39, is the Chief Executive Officer of 3 EYE Fish Corporation, a company involved in developing and importing consumer electronics for mass-market consumption since January of 2004. He is also the founder and principal shareholder of Links Logistics Corporation, an active warehousing boutique operation and Prozad Media, an online business solutions company. Prior to his current position, commencing in 1997, Mr. Ellis was the president of Elco Ventures, a holding company that participated in various importing and exporting, investment and media ventures.

Adrian Newman - Director

After graduating from York University with a bachelor's degree in English in 1996, Mr. Newman, age 32, commenced employment as a copywriter with Lombardi Publishing Inc., a publisher of financial and health newsletters. Since 1997, Mr. Newman has assumed positions of increased responsibility within Lombardi Publishing Inc., from Production & Database Manager at Lombardi Media's Clixx Direct Marketing Services subsidiary to his current position as Publisher, Business Opportunity Titles with the Lombardi Publishing subsidiary of Lombardi Media Corp., a public corporation listed on Tier 1 of the TSX Venture Exchange.

Mr. Newman has, since 1990, been the President and a director of Adevam Investments Inc., a private financial intermediary firm of which he was also a founder. Mr. Newman is (and has been since 1999) the Secretary and a director of InterRent International Properties Inc., a publicly traded corporation listed on Tier 2 of the TSX Venture Exchange.

Felix Semberov - Director

Called to the Ontario Bar in 1996, Mr. Semberov, age 38, has practiced with the law firm of Gardiner Roberts LLP since April 2003. Prior to such time, Mr. Semberov practiced law in Toronto, Ontario at Blaney McMurtry LLP following his call to the bar. He is actively involved in international trade and business executive cross border migration issues, and has assisted Canadian companies with expansion into Eastern and Western Europe. Mr. Semberov is fluent in English, French and Russian.

The above sets out all officers, directors and insiders of Rym known at this time who will hold shares of Rym as a result of the TOB.

Sponsorship

Research Capital Corporation, subject to completion of satisfactory due diligence, will be retained by Inkas to act as sponsor in connection with the TOB. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

Regulatory Approval

Completion of the transactions are subject to a number of conditions, including but not limited to, approval of the Exchange. The transactions cannot close until the required approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all. The TOB is not a "non-arm's length qualifying transaction" within the meaning of Policy 2.4 of the Exchange and as such shareholder approval is not required for the purposes of the TOB.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the TOB, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Rym should be considered highly speculative. The trading in common shares of Rym will remain halted pending review of the transaction by the TSX Venture Exchange and the preparation of a Sponsor Report to the Exchange.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Rym Capital Corp.
    Thomas Taylor
    President and a Director
    (416) 597-1773
    or
    Inkas
    Margarita Simkin
    VP Operations and Business Development
    (416) 744-3322 ext. 227