Tajac Capital Inc.

October 22, 2010 16:54 ET

Tajac Capital Inc. Announces Proposed Qualifying Transaction

SURREY, BRITISH COLUMBIA--(Marketwire - Oct. 22, 2010) - TAJAC CAPITAL INC. of Surrey B.C. ("Tajac" or the "Corporation") is pleased to announce that that it has entered into a letter of intent dated July 26, 2010 (the "Agreement") pursuant to which it intends to acquire all of the issued and outstanding common shares of Kwick Clean and Green Ltd. ("KCG"), a Surrey-based company which manufactures and distributes the patented environmentally friendly paintbrushes sold under the brand name Envirobrush, in exchange for the issuance of common shares ("Common Shares") in the capital of the Corporation (the "KCG Acquisition"). Tajac was originally listed on the TSX Venture Exchange (the "Exchange") in 2007 as a capital pool company but was delisted from the Exchange on October 29, 2009, for failure to complete a Qualifying Transaction within the time frames required by Exchange policies. It is expected that the KCG Acquisition will constitute a "Qualifying Transaction" for the Corporation as such term is defined in the Exchange policies and Tajac will be making application to re-list its common shares in conjunction with the approval of the proposed Qualifying Transaction.

Pursuant to the terms of the Agreement, it is intended that KCG will, in conjunction with the completion of the KCG Acquisition: (i) complete a private placement financing of shares for gross proceeds of a minimum of $500,000, and a maximum of $800,000 (the "Private Placement"), and (ii) facilitate the conversion of outstanding indebtedness in the amount of approximately $593,775 into common shares of KCG. Subject to the approval of the shareholders of Tajac, it is expected that the Corporation will change its name to "ENVIROBRUSH INC." or such other similar name as is acceptable to regulatory authorities and approved by the board of directors.

A special meeting of the shareholders of Tajac (the "Meeting") will be held to consider and approve certain aspects related to the Qualifying Transaction in accordance with the policies of the Exchange and the Business Corporations Act (Alberta), including the appointment of the new board of the Resulting Issuer (as defined in Exchange Policy 2.4) and the change of name.

All information contained in this news release with respect to KCG was supplied by KCG, and with respect to such information, Tajac and its board of directors and officers have relied on KCG.

Highlights of the Transaction

The Parties

The Corporation was incorporated on April 4, 2006, under the provisions of the Business Corporations Act (Alberta) and is based in Surrey, British Columbia.

Tajac was listed on the Exchange as a capital pool company in 2007, and was subsequently delisted from the Exchange for failure to complete a Qualifying Transaction within the time frames required by Exchange policies. Tajac's only business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction.

KCG is a corporation incorporated under the Canada Business Corporations Act and extra-provincially registered in the Province of British Columbia, with its head office situated in Surrey, B.C. KCG is a private company which manufactures and distributes the patented environmentally friendly paintbrushes sold under the brand name Envirobrush. KCG was originally founded in 1990 as New Concept Rendezvous Limited, and subsequently changed its name to Kwick Clean and Green Ltd. on October 29, 1993.

KCG has spent over $7,000,000 developing and test marketing the various designs of its environmentally friendly paint brush and currently holds patents for all of the elements of the brush. The company has recently been approved as a supplier to one of the largest retailers of paintbrushes in the United States and the brushes are currently available in many Canadian outlets of big box building supply centers and smaller retail outlets.

The following is a summary of KCG financial information (unaudited) prepared by KCG's management for the year ended January 31, 2010:

total assets $ 1,021,855
total liabilities $ 514,936
gross revenue $ 376,100
net income/(loss) $ (430,521)

Upon completion of the KCG Acquisition, KCG will be a wholly owned subsidiary of the Resulting Issuer, as such term is determined is defined in Exchange policies. It is anticipated that Resulting Issuer will be a Tier 2 Industrial Issuer under Exchange policies.

The KCG Acquisition

Subject to the completion of satisfactory due diligence, a definitive share acquisition agreement and receipt of applicable regulatory and shareholder approvals, the Corporation intends to acquire all of the outstanding and issued common shares of KCG such that KCG will be a wholly owned subsidiary of Tajac upon completion of the KCG Acquisition.

The consideration to be paid by Tajac, for all of the KCG common shares issued and outstanding at the time of closing, shall be satisfied by the issuance of:

  1. approximately 32,176,515 Common Shares to the existing shareholders of KCG, at a deemed price of $0.20 per share, and
  2. a minimum of 2,500,000 shares of KCG, and a maximum of 4,000,000 shares to investors in the Private Placement, at a  deemed price of $0.20 per share.

The final number of Common Shares to be issued shall be subject to final adjustment as agreed upon by the parties and, subject to completion of the Private Placement and conversion of shareholder loans as contemplated below, in KCG.

The principal shareholders of KCG are Terry Douglas (resident in Surrey, B.C.), Roy Cummings (resident in Burnaby, B.C.) and DeRandt Enterprises Ltd., a B.C. corporation (beneficially owned by Kenneth DeGraff, a resident of North Vancouver, B.C.) who collectively hold 59% of the shares of KCG. After giving effect to the debt conversion and the minimum Private Placement, The Principals will hold approximately 44% of the Resulting Issuer.

Related Transactions

In connection with the KCG Acquisition, it is intended that KCG will complete the Private Placement and further obtain the conversion to common shares of KCG of approximately $593,775 in existing KCG obligations and shareholder loans.

The Private Placement

Concurrently with, and as a condition of the KCG Acquisition, KCG will complete the Private Placement for gross proceeds of a minimum of $500,000 and a maximum of $800,000. The net proceeds of the Private Placement will be used for general working capital. Pursuant to the Private Placement, KCG will issue up to 4,000,000 share of KCG at a deemed price of $0.20 per share.

Conversion of Debt Obligations and Shareholder Loans

KCG will also facilitate the conversion of approximately $593,775 of debt obligations and shareholder loans that are currently outstanding at prices ranging from $0.10 to $0.20 per share in consideration of the conversion of these obligations.

Share Capital of the Corporation

The Corporation currently has 1,528,114 common shares issued and outstanding prior to Completion of the Qualifying Transaction. Assuming the completion of the KCG Acquisition, namely: (i) the issuance of 26,053,799 Common Shares as consideration for the KCG common shares; (ii) the issuance of a minimum of 2,500,000 Common Shares and a maximum of 4,000,000 Common Shares pursuant to the Private Placement; and (iii) the issuance of 5,622,716 Common Shares for the converted KCG debt obligations and shareholder loans, (iv) the issuance of 500,000 shares to Surefund Capital Corp. The Resulting Issuer will have a minimum of approximately 36,204,629 Common Shares and a maximum of approximately 37,704,629 Common Shares issued and outstanding, of which the former shareholders of KCG will own approximately 72%, based on the minimum Private Placement or approximately 69%, based on the maximum Private Placement.

Conditions Precedent to Completion of the Transaction

Completion of the Transaction is subject to a number of conditions, including but not limited to:

  1. completion of the Private Placement by KCG for a minimum of $500,000 and maximum of $800,000 gross proceeds, which Private Placement shall satisfy TSX Venture Exchange requirements for public distribution and working capital;
  1. approval of all regulatory bodies, including, but not limited to, the TSX Venture Exchange, the Alberta Securities Commission and the British Columbia Securities Commission, having jurisdiction in connection with the subject transactions;
  1. approval of the final terms and conditions of the KCG Acquisition by the board of directors of Tajac and the board of directors of KCG;
  1. approval of the shareholders of KCG for the KCG Acquisition;
  1. as required, the entering into of formal agreements reflecting the proposed KCG Acquisition, which are agreeable to all parties; and
  1. the KCG Acquisition being accepted by the Exchange as Tajac's Qualifying Transaction with a Final Exchange Bulletin being released by no later than November 30, 2010, or such other date the parties may agree upon.

Arm's Length Transaction

Under the policies of the Exchange, the KCG Acquisition was negotiated as and is being completed as an arm's length transaction.

Proposed Management

Upon completion of the KCG Acquisition, it is anticipated that Tajac's board of directors will change with the election of KCG's nominees, including Terry Douglas, Michael Reilly, Roy Cummings, Art Higham and James Krause and it is agreed that Terence Rogers, President of Tajac Capital Inc. will remain on the board of the Resulting Issuer.

The backgrounds of each of the proposed members of the board of directors and senior management of the Resulting Issuer are as follows:

Terry Douglas

Board Chairman and CEO– Surrey, B.C.

Mr. Douglas has had an extensive career in the paint industry. He has owned and operated a number of successful businesses including Douglas Paint Co Ltd, a paint manufacturer and distributor, H.E.R.O. Manufacturing Co Ltd., inventor and marketer of an airless paint sprayer and the Blenderama Colorant Machine. He founded KCG. and has spent a number of years developing the Envirobrush. This patented product is now being sold in outlets in Canada and the United States.

Michael Reilly

President, COO, Director –Delta, British Columbia

Mr. Reilly is currently Managing Broker of Sutton Realty in Vancouver, President of onefrogtwo company inc. of Langley, British Columbia, which manufactures and distributes a portable boat designed by Mr. Reilly. He has been a successful real estate developer and project manager having completed numerous construction projects on Vancouver Island and elsewhere.

Roy Cummings

Chief Financial Officer and Director, Burnaby, B.C.

Mr. Cummings co-founded Nordahl, Craig, Cummings and Gares, a firm of Chartered Accountants, following a number of years with KPMG. He retired from Nordahl in 2004. Since then he has been Chief Financial Officer of KCG and managed their administrative functions.

Terry Rogers

Director – Surrey, British Columbia

Mr. Rogers has been retired since March 2002. He is currently President, CEO and a director of Tajac Capital Inc. Mr. Rogers was President, CEO and a director of Ryjencap Inc. a capital pool company from January 2005 to June 2006. Ryjencap Inc. completed its Qualifying Transaction and is now trading as Empire Industries Ltd. Prior to this he was involved in a number of other CPC's that successfully completed Qualifying Transactions. Prior to retirement, Mr. Rogers was Vice President of Ezenet Inc., a publicly traded company on the TSE. He received his B. Comm. from Concordia University in 1967 and his chartered accountant designation from the Institute of Chartered Accountants of British Columbia in 1972. Following qualification as a C.A., Mr Rogers had a successful career with a number of private and public Canadian companies.

Art Higham Director, Surrey, B.C.

Mr. Higham, following a long and successful career in real estate sales and property development with his own company, has continued to provide consulting services to property developers in the Vancouver area. For the past several years, he has provided valuable sales and marketing services to KCG.

James Krause Director – Flat Rock, North Carolina

Mr. Krause started his career with 3M Company in a number of marketing and sales management positions. In 1980, he joined Sherwin Williams, the largest paint and paint sundry company in the world. While with Sherwin Williams, he served in a variety of management and sales positions including 6 years as Senior Vice-President of Operations, Merchandising and Marketing of the Paint Stores Division and 7 years as President and General Manager of the Automotive and International Divisions. In 1994, he became Chairman, President and CEO of National Vision, Inc., a company listed on the American and NASDAQ stock exchanges. Since leaving National Vision Inc. in 2001, Jim has been an independent consultant to several companies.

It is anticipated that Messrs. Higham, Cummings and Krause will form the audit committee of the Resulting Issuer.

Sponsorship and Resumption of Trading

Leede Financial Markets Inc. has agreed to act a sponsor for the proposed Qualifying Transaction in accordance with Exchange requirements, subject to due diligence review. Tajac will be making an application to re-list its common shares in conjunction with the approval of the proposed Qualifying Transaction with KCG.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the information circular, 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 a capital pool company should be considered highly speculative.

Forward-Looking Statements

Certain statements contained in this news release constitute forward looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "subject to" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements are based on reasonable assumption but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.

Neither 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.

Contact Information

  • Tajac Capital Inc.
    Terry Rogers
    President and CEO
    (604) 531-8113
    or
    Kwick Clean and Green Ltd.
    Mike Reilly
    (604) 230-5225