PKK

Peak Positioning Technologies Inc. ("Peak" or the "Company") (TSX VENTURE:PKK)
today announced that following the announcement originally made on April 17,
2013, of the signing of a letter of intent to acquire its Chinese business
partner, LongKey Hong Kong Limited ("LongKey), the Company has now entered into
a definitive share purchase agreement to acquire a majority stake in LongKey
(the "Acquisition").


The Acquisition is structured such that Peak will initially acquire 51% of
LongKey's issued and outstanding shares (the "LongKey Shares") at the closing of
the proposed transaction. Peak will have the option to acquire the remaining 49%
of LongKey's issued and outstanding shares within a 24-month period of the
closing of the transaction.


The contemplated Acquisition is an arm's length transaction.

About LongKey

LongKey is a private holding company based in Hong Kong. It was incorporated as
a Company Limited by Shares under the Hong Kong Business Registration Ordinance
on July 11, 2007. LongKey's authorized share capital consists of 750,000,000
ordinary class shares, of which 300,000,000 are issued and outstanding. LongKey
has a total of six shareholders whose names, percentage of share ownership and
jurisdiction of residence are listed in the table below:




----------------------------------------------------------------------------
Shareholder Name         % of Ownership           Jurisdiction of Residence 
----------------------------------------------------------------------------
Alex Wang                35.00                    Fremont, California       
----------------------------------------------------------------------------
Liang Qiu                18.00                    Montreal, Quebec          
----------------------------------------------------------------------------
Lin Lu                   18.00                    Wuxi, China               
----------------------------------------------------------------------------
Daming Wang              16.00                    Guangzhou, China          
----------------------------------------------------------------------------
Lei Zhang                6.50                     Central, Hong Kong        
----------------------------------------------------------------------------
Kai Bao                  6.50                     Beijing, China            
----------------------------------------------------------------------------
Total                    100.00                                             
----------------------------------------------------------------------------



LongKey is the parent company of LongKey Software Technology Limited ("LongKey
Soft"), which is a Wuxi, China based IT solution provider. LongKey Soft provides
B2B Software as a Service (SaaS) solutions to Chinese businesses in partnership
with China Telecom, China's largest telecom service provider, and e-commerce and
mobile e-commerce solutions in partnership with the Industrial and Commercial
Bank of China (ICBC), China's largest bank.


LongKey Soft is a growth-stage company. Its e-commerce division is growing
particularly rapidly in large part due to a project launched by ICBC in the city
of Huzhou in December 2012, which was expanded to the provincial level of
Zhejiang in 2013. For the 12-month period ended December 31, 2013, LongKey
Soft's audited year-end financial statements showed a net loss of CAD$841,273 on
revenues of CAD$3,228,490, compared to revenues of CAD$1,774,940 in 2012,
representing a revenue increase of 81.9% in 2013. As of December 31, 2013,
LongKey Soft's financials showed current assets of CAD$1,038,510 and total
assets of CAD$6,474,190 against current liabilities of CAD$821,510 and no
long-term liabilities.


The E-commerce and Mobile E-commerce Opportunities

According to iResearch Global Inc., China is the largest and fastest growing
e-commerce market in the world with sales of gross merchandise value (GMV) of
USD$294 billion in 2013, and projected to grow to USD$712 billion by 2017. As
the largest bank in the world by many measures, with its more than USD$2.8
trillion in assets, 4.3 million business clients, and 393 million individual
clients as of 2012, ICBC has the potential play a significant role in the
rapidly-growing Chines e-commerce space. In December 2012, in collaboration with
LongKey Soft, ICBC launched the "Gongyinju" e-commerce B2B marketplace
(http://www.gongyinju.com). Gongyinju was first made available to ICBC business
clients in the city of Huzhou, and then access was extended to ICBC business
clients in the entire province of Zhejiang in 2013. The launch of Gongyinju
accounted for most of the dramatic increase in LongKey Soft's revenues in 2013.
With plans to further expand the Gongyinju e-commerce B2B marketplace to ICBC
business clients in other Chinese provinces and eventually to all of ICBC's
business clients in China, LongKey Soft requires working capital to expand its
operations to keep pace with the planned expansion of Gongyinju.


In addition to the Gongyinju marketplace offering, LongKey Soft is well
positioned to leverage its existing partnerships to introduce a peer-to-peer
mobile e-commerce solution, such as the Quickable mobile e-commerce platform,
that would allow its banking partner's individual clients to buy and sell
products among themselves using their mobile devices.


The Software as a Service (SaaS) and Mobile Opportunities

The cloud-based SaaS landscape in China is emerging and is projected to grow at
a CAGR of 50%approx. 60% through 2015 according to China Materialia LLC. This
makes SaaS one of the fastest growing sectors of the Chinese tech industry.
Recognizing the potential of SaaS in China back in 2009, well before the its
current emergence, LongKey Soft partnered with China Telecom, China's largest
telecommunication service provider, to offer SaaS solutions to China Telecom's
business clients. Today LongKey Soft provides cloud-based SaaS solutions such as
office automation tools and real estate community management software to over
450 China Telecom business customers in three cities in the province of Jiangsu
with plans to expand the offerings to other cities and other provinces in the
future.


Furthermore, LongKey Soft has partnered with Peak Positioning Corporation ("Peak
Corp"), Peak's wholly-owned subsidiary, on the development of a mobile
application platform for smart devices aimed at helping mobile network operators
(MNOs) increase and maintain their mobile subscriber bases. The mobile platform
comes with a suite of standard applications and features for mobile subscribers
and offers MNOs the possibility for the development of additional custom
applications and features to be integrated to the platform. LongKey Soft and
Peak Corp are in discussions with one of China's largest MNOs to introduce the
mobile platform on the MNO's network to help reduce the subscriber churn rate of
its more than 280 million mobile subscriber base.


Peak is looking to access the capital markets in Canada and the US to meet
LongKey Soft's rapid-growth working capital needs and looks forward to
identifying strategic investors interested in the current LongKey Soft
opportunities, and the opportunity to offer additional products and services in
some of China's fastest growing economic sectors.


About The Acquisition

As consideration for the LongKey Shares, the Company will pay LongKey a total of
CAD$10.2 million, of which CAD$2 million is to be paid in cash, which LongKey
Soft will use as working capital to grow its business, and CAD$8.2 million in
Peak shares through the issuance of 82 million shares to LongKey's shareholders
at a deemed price of CAD$0.10 per share. Peak will have the option to purchase
the remaining issued and outstanding shares of LongKey over the 24-month period
following the close of the Acquisition for a total consideration of CAD$10
million payable in a combination of cash and Peak shares, of which at least
CAD$4 million must be contributed as working capital.


Each of the LongKey shareholders acts independently and therefore will not
collectively constitute a voting bloc.


"We have a unique opportunity in front of us", commented Alex Wang, President
and CEO of LongKey. "LongKey is strategically positioned for exceptional growth
over the next few years. We were able to recognize the tech sector trends in
China early on and found the right partners to offer the right products at the
right time. It's all about timing and the timing couldn't be better for LongKey
and Peak. It's also about relationships. We've worked with Peak on several
projects over the past three years and have developed very strong business and
personal relationships with the people and the Company. We look forward to being
a part of Peak and benefitting with all other Peak shareholders from the
opportunities before us", concluded Mr. Wang.


"This agreement has been a long time coming, and required a lot of hard work to
satisfy all of the various stakeholders on both sides of the deal", said Johnson
Joseph, President and CEO of Peak. "Having LongKey as a subsidiary will allow
Peak to have unprecedented access to introduce its products and services to the
Chinese mobile, e-commerce and mobile e-commerce markets through LongKey Soft's
existing partnerships".


"With this share exchange transaction we will once and for all align LongKey's
shareholders interests with our own, thereby allowing all Peak shareholders to
participate in some of China's fastest growing tech sectors through a
Canadian-based public vehicle. It's an exciting time to be a Peak shareholder
and we look forward to closing on the transaction as soon as possible", he
concluded.


Concurrent and Interim Financings

The Acquisition will be subject to the completion by Peak of a concurrent
private placement financing, the terms and conditions of which will be disclosed
once they have been determined by the Company (the "Concurrent Financing"). The
proceeds of the Concurrent Financing will be used by Peak to help cover the
working capital contribution portion to LongKey of the Acquisition.


Since closing of the Concurrent Financing will not occur until the completion of
the Acquisition, which itself may take several months to complete, Peak will
endeavor to close an interim financing to help meet its ongoing obligations and
cover the expected expenses related to the Acquisition while the Acquisition
process unfolds. The interim financing will be in the form of a non-brokered
private placement consisting of the issuance of 30,000,000 units (a "Unit") at
the price of CAD$ 0.05 per Unit for gross proceeds of CAD$1.5 million. Each Unit
consists of one (1) common share and one (1) one common share purchase warrant.
Each common share purchase warrant entitles its holder to purchase one common
share of Peak, at the price of $0.10, for a 12 month period following the
closing date (the "Interim Financing").


Broker Compensation

Eligible brokers who help place Units of the Interim Financing will receive an
8% cash commission on all amounts raised and a number of broker warrants
representing 8% of the number of Units placed. Each broker warrant will entitle
its holder to acquire one (1) common share at a price of $0.05 for a period of
twelve (12) months from the closing date and at a price of $0.10 after the
initial twelve (12) month period following the closing date up to a maximum of
twenty-four (24) months from the closing date.


Finder's Fees

Peak will not pay any finder's fee in relation to the Acquisition. Peak may pay
a finder's fee to eligible finders in relation to the Concurrent Financing
and/or the Interim Financing. Any finder's fee will be payable to eligible
finders at the closing of either the Concurrent Financing and/or the Interim
Financing, as applicable, subject to TSX Venture approval.


Other Conditions of the Acquisition

Completion of the Acquisition is subject to a number of conditions, including
the parties completing their respective due diligence reviews, completion of the
Concurrent Financing, and TSX Venture approval, which may, among other things,
require disinterested shareholder approval and/or sponsorship. The Acquisition
cannot close until the required conditions are met. There can be no assurances
that the Acquisition 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 Acquisition,
any information released or received with respect to the Acquisition may not be
accurate or complete and should not be relied upon. Trading in the securities of
the Company should be considered highly speculative.


About Peak Positioning Technologies Inc.:

Peak Positioning Technologies Inc. ("Peak"), (TSX VENTURE:PKK), is a management
company whose wholly-owned subsidiary, Peak Positioning Corporation provides Web
development services and develops mobile software platforms destined to mobile
network operators worldwide. Peak aims to deliver value to its shareholders by
assembling a portfolio of high-growth projects and companies in mobile, mobile
e-Commerce, and Web development in North America and China. For more
information: http://www.peakpositioning.com


Forward-Looking Statements / Information

This news release may include certain forward-looking information, including
statements relating to business and operating strategies, plans and prospects
for revenue growth, using words including "anticipate", "believe", "could",
"expect", "intend", "may", "plan", "potential", "project", "seek", "should",
"will", "would" and similar expressions, which are intended to identify a number
of these forward-looking statements. Forward-looking information reflects
current views with respect to current events and is not a guarantee of future
performance and is subject to risks, uncertainties and assumptions. The Company
undertakes no obligation to publicly update or review any forward-looking
information contained in this news release, except as may be required by
applicable laws, rules and regulations. Readers are urged to consider these
factors carefully in evaluating any forward-looking information.


The TSX Venture Exchange has in no way passed upon the merits of this
transaction and has neither approved nor disapproved the contents of this press
release. Neither the TSX Venture Exchange, Inc. nor its Regulation Service
Provider (as that term is defined under the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of the contents of
this press release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Jeanny So
Director of Operations
CHF Investor Relations
416-868-1079 ext.: 225
jeanny@chfir.com


Johnson Joseph
President and CEO
Peak Positioning Technologies Inc.
514-340-7775 ext.: 501
investors@peakpositioning.com

Peak Positioning Technologies (TSXV:PKK)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

Peak Positioning Technologies (TSXV:PKK)
Historical Stock Chart
Von Jul 2023 bis Jul 2024