Sackport Ventures Inc.

June 24, 2005 17:21 ET

Sackport Ventures Inc. Announces Qualifying Transaction to Acquire Subsidiary of Straight Forward Marketing Corporation

TORONTO, ONTARIO--(CCNMatthews - June 24, 2005) - Sackport Ventures Inc. (TSX VENTURE:SAK.P) (the "Corporation" or "Sackport") is pleased to announce that it has entered into a letter of intent dated June 21, 2005 with Straight Forward Marketing Corporation ("SFMC") pursuant to which Sackport has agreed to acquire (the "Proposed Transaction") all of the issued and outstanding securities of Straight Forward Marketing Inc. ("SFMI"), a wholly owned subsidiary of SFMC, by issuing an aggregate of 6,571,125 common shares of Sackport ("Sackport Shares") at a deemed price of $0.20 per share in consideration for all of the common shares of SFMI ("SFMI Shares") and by issuing an aggregate of up to 975,090 Sackport Share purchase warrants in exchange for all of the outstanding SFMI Share purchase warrants for aggregate deemed consideration of approximately $1.3 million. The Proposed Transaction is expected to constitute Sackport's Qualifying Transaction as defined in Policy 2.4 of the TSX Venture Exchange Inc. ("TSXV").

SFMI is a consumer products marketing company incorporated under the laws of Ontario which is wholly owned by SFMC, a public company which is listed on the Canadian Trading & Quotation System Inc. ("CNQ"). SFMI currently has two products in its portfolio. The first product is the patent pending "Straight Shooter", a golf practice swing device. This product is fully developed and is currently in production in China. The first production units have been received in Canada and are undergoing production qualification and quality control testing. The company is planning to release this product to the marketplace within the next 30 days. SFMI's second product is the patented "Genesis-HPI Light Therapy Device". The technology represents a new and advanced form of Light Emitting Diode Therapy (LEDT) for effective, non-invasive pain relief of swollen muscles and joints due to injury or illness. After conducting field trials with over 400 generation 1 units over a period of 4 years, Health Canada has certified the Genesis HP1 as a medical device. The next generation of the device is currently in the final design cycle. The new design is efficient and allows for lower cost manufacturing out of China. Sales for the "Genesis-HP1" are expected to commence within the upcoming fiscal year.

The letter of intent contemplates Sackport advancing SFMC a refundable deposit of Cdn $25,000, subject to all necessary approvals. The proceeds of this advance will be used by SFMI to further the development and marketing of SFMI's business.

The following is a summary of selected financial information for Sackport and SFMI based on management prepared financial statements for the periods indicated:

Sackport SFMI Consolidated
For the 3 month period For the 9 month period
ended March 31, 2005 ended March 31, 2005

(unaudited) (unaudited)
-------------------------- --------------------------
Total Assets $100,000 (1) $514,522
Total Liabilities NIL $438,635 (2)
Revenue NIL NIL
Net Income (Loss) NIL ($251,477)
Working Capital $100,000 (1) ($228,326)

1: Subsequent to the 3 month period ended March 31, 2005, Sackport
closed on its initial public offering. Cash balances increased by
2: Subsequent to the 9 month period ended March 31, 2005, SFMI converted
$184,875 due to directors into common shares of the company at $.14
per share.

There are currently 19,731,946 SFMI Shares and 3,500,000 Sackport Shares issued and outstanding. Upon completion of the Proposed Transaction, the resulting issuer would have 10,071,125 common shares and 975,090 warrants outstanding. It is anticipated that upon completion of the Proposed Transaction, the resulting issuer will meet the Tier 2 listing requirements of the TSXV for an industrial issuer.

In conjunction with the completion of the Proposed Transaction, it is intended that the board of directors of the resulting issuer shall consist of Ernest Kolenda, Brian Kennedy, William Gilmour and Derek Peatling. Brief biographies for the proposed nominees are as follows:

Ernest Kolenda is an independent businessman, who currently provides consulting services in matters of corporate operations, governance, structure, mergers/acquisitions, and capital funding. During the course of his career, Mr. Kolenda has been actively involved in the various business operations, from infancy to maturity, including, from 1992 to 2000, the successful transition of his own private company to the TSX and OTCBB. He has an operational and distribution background and has experience with dealing with manufacturing in China. Mr Kolenda will be appointed Chairman and Chief Executive Officer of the resulting issuer and plans to work with the corporate management team to achieve key operational objectives and build shareholder value.

Brian Kennedy is a Chartered Accountant and holds a Bachelor of Business Administration degree from York University. He is the President of Kennedy and Associates which provides Executive Management, Business Development, Technology Licensing, Strategic Partnering and Distribution, Strategic Planning and Corporate Finance services to companies with international potential. From 1995 to 2002, Mr. Kennedy was the President & Chief Executive Officer of Luxell Technologies Inc. a publicly traded company listed on the Toronto Stock Exchange. Luxell is a leading technology company that develops, manufactures and licenses its technology globally for applications in the flat panel display market space. Prior to that he held senior management positions at Itochu Technologies and Epson which are both large Japanese based technology products companies. Mr. Kennedy is the proposed Chief Financial Officer of the resulting issuer.

Derek Peatling is the President and Chief Executive Officer of Mississauga Steel, a successful steel distributor. Under Mr Peatling's leadership in innovative production and business practices, he has successfully introduced the most advanced production techniques. Mr Peatling is a very diversified, disciplined individual, as he is presently Chief Executive Officer and founder of four completely dissimilar companies. These companies are all dealing with the latest concepts in their particular fields and all are successful. He is a hands on, operations expert with a proven track record in managing start ups to success.

William Gilmour is a prominent Brampton, Ontario based lawyer who was admitted to practice in 1988. He is a Partner with the firm of PROUSE, DASH and CROUCH and has a practice that specializes in General Litigation, Insolvency and Corporate/Commercial work. Mr Gilmour is a court room lawyer and performs extensive civil and criminal trial work. Before becoming a lawyer he was a Constable for the RCMP and prior to that the Metropolitan Toronto Police Force. Mr Gilmour has owned and managed a number of businesses and currently is involved with a franchise that is based in London, England.

The Corporation plans to hold a annual general shareholders meeting after the Proposed Transaction is completed to expand the board to 5 members at which time Brian Ablett will be nominated to join the Board.

Brian Ablett is founder and a Board member of SFMC and has served as President and Chief Executive Officer since inception. Mr. Ablett will act as President of the resulting issuer and will focus on driving the launch and sales of the company's products. He has over 35 years of business experience and has served as an officer, director and consultant to a number of companies involved in technology invention and development, with a primary focus on emerging technology companies, both in the public and private sectors.

Stepping down from the current board of Sackport is Kenneth Wawrew. The company would like to thank Mr Wawrew for his contributions to date.

The Filing Statement prepared and filed on SEDAR in conjunction with the Proposed Transaction will contain complete biographical information on each proposed nominee. Mr. Kennedy is currently a director of both Sackport and SFMC. However, the Proposed Transaction will not be a non-arm's length transaction as none of the insiders of Sackport directly or indirectly control SFMI. Accordingly, approval from the shareholders of Sackport will not be required.

Sackport has reserved a price of $0.20 per share for the Sackport Shares to be issued pursuant to the Proposed Transaction. Sackport also announces that it has reserved a price of $0.20 per share for the grant of options to acquire up to that number of Sackport Shares equal to 10% of the issued and outstanding Sackport Shares ("Resulting Issuer Options") in the event that the Proposed Transaction is completed. The grant of the Resulting Issuer Options is subject to regulatory approval and Sackport is required to file a formal application with the TSXV to maintain this price reservation.

This is an initial press release and the Sackport Shares will remain halted until such time as permission to resume trading has been obtained from the TSXV. Sackport is a reporting issuer in Alberta, British Columbia and Ontario.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, satisfactory due diligence reviews, negotiation and execution of definitive transaction documentation, approval by both boards of directors, availability of prospectus and registration exemptions or obtaining exemptive relief, obtaining any necessary governmental and third party approvals and TSXV acceptance. 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 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 Sackport should be considered highly speculative.

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

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

Contact Information

  • Sackport Ventures Inc.
    Ernest Kolenda
    President and Chief Executive Officer
    (905) 873-2829