Whiteknight Acquisitions Inc.

July 27, 2011 11:07 ET

Whiteknight Acquistions Inc. Announces Letter of Intent to Complete a Qualifying Transaction With SES-Software, Solutions and Service, Inc.

TORONTO, ONTARIO--(Marketwire - July 27, 2011) - Whiteknight Acquisitions Inc. ("Whiteknight") (TSX VENTURE:WKA.P), a Capital Pool Company, is pleased to announce that on July 19, 2011 it entered into a letter of intent with SES—Software, Solutions and Service, Inc. ("SES"), to complete a business combination (the "Transaction") whereby all of the issued and outstanding securities of SES will be exchanged for securities of Whiteknight. The Transaction is intended to constitute the Qualifying Transaction of Whiteknight as such term is defined in Policy 2.4 of the Corporate Finance Manual of the TSX Venture Exchange (the "Exchange").

About SES

SES is an Ontario corporation which was incorporated on December 17, 2010, with a registered head office at 2355 Skymark Avenue, Mississauga , Ontario L4W 4Y6. SES is a provider of group benefits insurance solutions. It utilizes a unique proprietary adjudication and administration technology platform (the "Software Technology") in order to provide its clients total group benefits solutions.

John McKimm is the President and CEO of SES. John has over 35 years of experience providing operations and financial expertise to public and private companies. John's experience covers many sectors, including financial services and technology. John is a successful entrepreneur with extensive investment banking and corporate finance expertise. John has served as a director and officer of many public and private companies. Most recently, John founded, was Chief Executive Officer, and grew Brainhunter Inc. (TSX:BH) from start-up to recording annual revenue of approximately $235 million in 2008 (his last full year with the company), and in the process recorded a positive EBITDA for each of the years between 2003 and 2008.

SES currently has assets of approximately $8.3 million consisting of the Software Technology valued at $8 million and business assets of $0.3 million. SES has current liabilities of $0.8 million and a long-term liability capped at $7.5 million consisting of a royalty stream payable as follows: up to $0.5 million based on 1% of the first $50 million of sales revenue; up to $2 million based on 2% the next $100 million in sales revenue; and up to $5 million based on 3% of the next $167 million of sales revenue. The asset and liability numbers have not been audited or assigned present values. Management of SES estimates that approximately $15 million has been spent by predecessor owners developing and proving out the Software Technology.

SES is a recently incorporated, early stage development company, and as such does not have any meaningful revenue or financial information generally at this time. As part of the Qualifying Transaction process it will generate audited financial statements for inclusion in a Filing Statement to be filed on www.sedar.com prior to closing of the Transaction. SES is controlled by Bevertec CST Inc., an Ontario corporation (which is in turn controlled by Barry Walsh, an Ontario resident), Mr. McKimm, Robert Prentice, Ralston Senewiratne, Walter Simone, John Cochrane, and Scott Studley, all of whom reside in Ontario.

The Qualifying Transaction

Subject to regulatory approval, Whiteknight will acquire all of the currently issued and outstanding common shares of SES, by issuing 30 million common shares of Whiteknight (the "Whiteknight Shares") to the shareholders of SES, at a deemed issuance price of $0.30 per Whiteknight Share, in exchange for all of the issued and outstanding common shares of SES (the "SES Shares"), being 3 million SES Shares. Each SES shareholder will be entitled to receive ten Whiteknight Shares for each SES Share owned. Additionally, all outstanding convertible securities of SES will be converted into convertible securities of Whiteknight, on a ten for one basis while having their exercise prices divided by the conversion ratio, which will entail 300,000 warrants to purchase SES Shares at an exercise price of $3.00 per share being exchanged for warrants to purchase 3 million Whiteknight Shares at an exercise price $0.30 per share. The proposed Qualifying Transaction will constitute an arm's length transaction, and as such, will not require approval by the shareholders of Whiteknight.

Management of SES anticipates closing a private placement of convertible debentures with an aggregate principal amount of between $1 million and $2 million prior to the closing of the Transaction, which would be automatically converted upon closing of the Transaction into Whiteknight Shares at a conversion price of $0.24 per Whiteknight Share. The net proceeds from this financing will be used for general working capital purposes. Pursuant to the terms of the Transaction, Whiteknight will reserve for issuance up to an additional 8,333,333 Whiteknight Shares to be issued upon conversion of these convertible debentures pursuant to the Qualifying Transaction.

Additionally, and concurrently with the closing of the Transaction, it is anticipated that a private placement (the "Private Placement") of a minimum of up to 3,333,333 Whiteknight Shares, at an issue price of $0.30 per share for gross proceeds of $1 million, will be completed. Standard fees and commissions are anticipated to be paid in connection with the Private Placement, and the net proceeds of this issuance will be used for general working capital purposes.

It is currently anticipated that the board of directors of the resulting issuer will consist of David Mitchell and Keith Harris, each of whom is currently a director of Whiteknight, as well as Mr. McKimm, Barry Walsh and Walter Simone. Mr. Simone will also serve as Chairman, while Mr. McKimm will act as Chief Executive Officer and Robert Prentice will act as Chief Financial Officer, of the resulting issuer. The current directors of Whiteknight, other than Mr. Mitchell and Mr. Harris, will resign upon closing of the Transaction.

Walter Simone

Walter has been in the insurance and financial services industry for 40 years and is considered to be one of the best in his field in Canada. Walter is a Qualifying & Life member of the Million Dollar Round Table, 35 years uninterrupted qualifying with 6 of those years at the Court of the Table and the last 11 years at the Top of the Table. The Million Dollar Round Table is an international network of insurance and investment financial services professionals/advisors who serve their clients by maintaining the highest standards of ethics, knowledge and productivity. Walter is a regular speaker on topics of life insurance and related products, motivation and practice management. He has written many articles on these same topics.

In addition to his academic and business achievements, Walter has and continues to give back to the community with his involvement in a number of organizations, including the Canadian Italian Business & Professional Association, the National Federation of Canadian Italian Business & Professional Associations, the school of Business Management Advisory Council at Ryerson University. Walter has previously been past member, officer and/or Director of numerous organizations including Royal Opera Canada, Royal Ontario Museum, Toronto Historical Board, Toronto Community Foundation, Advisory Boards of Great West Life, North American Life, Confederation Life, Crown Life and Standard Life, among other. Walter is the Executive Chairman of SES, a position he will also assume for the resulting issuer upon closing of the Qualifying Transaction.

Barry Walsh

Barry has over forty years of success as an entrepreneur in the technology field. Barry is the founder of Bevertec CST Inc., the former owner of the Software Technology prior to transferring it to SES. Barry has extensive global experience in both selling and building technology solutions. He has been the chief business and sales strategist in building Bevertec in both IT professional services and banking software solutions. Barry has expanded Bevertec's business globally, providing IT services and banking solutions to clients from Mongolia to Peru. Barry has a Bachelor of Arts in Computer Science.

Robert Prentice

Robert has over 40 years experience as a financial professional. He has operated across many industry sectors. Most recently, Robert was CFO and a founder of Brainhunter Inc. (TSX:BH) a technology based service business, which grew from a start-up to recording revenue of $235.0 million in 2008 (his last full year with the company). Robert has extensive operational expertise in creating Best Practices discipline and structure in high growth opportunities. Robert has extensive public company expertise and has been involved in multiple acquisitions and financings as a member of the negotiating, due diligence and integrations team.

The Acquisition is conditional upon, among other things, receiving all necessary regulatory and third party approvals and authorizations, the receipt of an independent valuation of SES if required by the Exchange, approval by each of the board of directors of SES and Whiteknight, the entering into of satisfactory employment agreements for senior management, confirmation of no material adverse change having occurred for either entity prior to close, , the completion of a definitive agreement setting forth the terms and conditions for the closing of the Acquisition, the completion of due diligence satisfactory to each party, and the completion of a sponsorship report satisfactory to the Exchange (or waiver by the Exchange of that requirement).

Whiteknight is currently confirming the terms of a sponsorship relationship for this transaction with an Exchange member firm, which will be disclosed as soon as an engagement is formalized.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. 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 management information circular or filing statement to be prepared in connection with the transaction, 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.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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