MONTREAL, Feb. 11 /CNW Telbec/ - Kangaroo Capital inc. ("Kangaroo"), a capital pool corporation (TSX Venture: KTV), is proud to announce that it signed an agreement in principle on February 4, 2004 (the "Agreement in Principle") providing for the acquisition of all the issued and outstanding shares of 3721477 Canada inc. (the "Target Company"), which in turn holds all the issued and outstanding shares of World Audio-Visual Entertainment Systems (W.A.V.E.S.) Inc. ("Waves") and of 4121856 Canada Inc. (the Target Company, Waves and 4121856 Canada Inc. are hereinafter referred to as the "W.A.V.E.S. Group of companies")
This share purchase will be made in consideration of a price of $6,000,000, payable by the issuance of 30,000,000 common shares of Kangaroo, at a price of $0.20 per share. This transaction constitutes Kangaroo's qualifying transaction pursuant to the applicable regulations of the TSX Venture Exchange Inc. (the "Exchange") and is hereinafter referred to as the "Qualifying Transaction".
The conditions having to be completed prior to the completion of the Qualifying Transaction are the following:
(i) the completion of a due diligence of the W.A.V.E.S. Group of
companies by Kangaroo;
(ii) receipt of an independant valuation confirming that the fair
market value of the W.A.V.E.S. Group of companies is of at least
90% of the agreed purchase price;
(iii) the closing of a private placement, of at least $750,000, but no
more than $ 2,000,000, in the form of common shares of Kangaroo at
a price of $0.20 per share;
(iv) receipt of a sponsorship report from a firm recognized by the
Exchange, in accordance with the requirements of the Exchange;
(v) receipt of all required regulatory authorizations pursuant to
laws, regulations and applicable policies; and
(vi) the absence of any adverse material change in the W.A.V.E.S. Group
of companies' affairs between December 31, 2003 and the date of
the closing of the Qualifying Transaction.
The true Vendors in respect of the Qualifying Transaction are the shareholders of the Target Company, that is to say: (i) 2441-0045 Québec inc., a company incorporated under the Companies Act (Québec), held by Mr. Marc Arseneau of Morin-Heights (Quebec), (ii) Mr. Jean Arseneau of Boisbriand (Québec), (iii) Mr. Marc Bédard of l'Ile Bizard (Québec), (iv) Mr. Stéphane Lemieux of Blainville (Québec), (v) Mr. Alain Charette of Saint-Jérôme (Québec), and (vi) Mr. Stéphane Lambert of Rosemère (Québec).
M. Marc Arseneau is the sole director and officer of the W.A.V.E.S. Group of companies.
The head office of the W.A.V.E.S. Group of companies is located at 17 000, Chemin Charles, Suite 200, Mirabel (Quebec) and all the important assets of the W.A.V.E.S. Group of companies are located at such address.
The W. A. V. E. S. Group of companies is mainly involved in the design, manufacture and marketing of an interactive technology: the Kangaroo.tv, a portable multifunctional wireless audio-visual and multimedia entertainment system, allowing users to improve their experience as a spectator at a sporting or cultural event. For example, the user may choose among different camera angles, replay portions of the event, listen to audio content, all the while, offering interactive access to a wealth of entertaining and useful information. Further details on the Kangaroo.tv system are available at www.kangaroo.tv .
As at December 31, 2003, the W.A.V.E.S. Group of companies, which is in its pre-marketing phase, has no significant revenues. However, 11 pre- marketing events already been completed in North America in order to demonstrate the viability of the technology and business model. The full commercial launch of the Kangaroo.tv product should begin in spring 2004. In its consolidated audited financial statements of December 31, 2003, the W.A.V.E.S. Group of companies lists as assets, fixed assets, patents, technological development expenses and pre-marketing costs totaling approximately 2 million dollars. As mentioned in its financial statements, the W.A.V.E.S. Group of companies has, as at December 31, 2003, positive shareholders equity of $486,821, negative working capital of $1,420,320, assets totaling $2,724,126 and liabilities totaling $2,237,305.
Following the completion of the Qualifying Transaction, Kangaroo intends to continue the W.A.V.E.S. Group of companies current activities.
After giving effect to the Qualifying Transaction, subject to the securities which may be issued in the framework of the projected minimum private placement of $750,000, 45,333,333 common shares of Kangaroo will be issued and outstanding, of which 4,000,000 shares were issued as discount seed capital for a price of $0.075 per share, 11,333,333 shares were issued at the closing of Kangaroo's initial public offering of last January 30th, for a price of $0.15 per share and 30,000,000 shares which will be issued upon completion of the Qualifying Transaction.
Kangaroo has also granted 1,533,333 options to its directors allowing them to acquire 1,533,333 common shares of Kangaroo at a price of $0.15 per share for a period of 5 years, subject to the provisions of the stock option agreements and 566,666 options to Dlouhy Merchant Group Inc., the agent having completed the initial public offering of Kangaroo, allowing it to acquire 566,666 common shares of Kangaroo at a price of $0.15 per share for a period of 18 months.
The Qualifying Transaction will not be subject to the approval of the shareholders of Kangaroo. The Qualifying Transaction is an arm's length transaction. W.A.V.E.S. Group of companies and its officers and Kangaroo and its officers are not related parties pursuant to the applicable securities laws.
Once the Qualifying Transaction is completed, it is anticipated that the insiders of Kangaroo will be Mr. Marc Arseneau (as President and CEO of Waves), Jean Arseneau (as Vice-President Technology and Engineering of Waves), Alain Charette (as Executive Vice-President, Corporate Development of Waves), Stéphane Lambert (as Operating Manager of Waves), Bertin Castonguay (as President and Director of Kangaroo), Normand Balthazard (as Secretary- Treasurer and Director of Kangaroo), Valier Boivin (as Director of Kangaroo) and Claude Roy (as Director of Kangaroo).
Founder of DeltaVision, Mr. Marc Arseneau also served as its President and General manager until 2002. Under his management, DeltaVision's annual income reached $30,000,000. Due to Mr. Arseneau's vision and leadership, DeltaVision developed and brought to market, on a worldwide basis, hundreds of electronic products, in a highly competitive market.
Graduate from "L'Ecole Polytechnique de Montréal" in 1978, Mr. Alain Charette organized and directed highly qualified teams operating on major projects in Canada, United States, Europe and Asia. As a senior manager, Mr. Charette has been involved in the start-up of many technological companies in various sectors. He has 25 years of hands-on, IT, B2B and entrepreneurial experience.
Mr. Jean Arseneau has spent his career acquiring extensive experience in video electronic systems. He was in charge of the Product and Operations department at DeltaVision for 6 years where he successfully managed the many challenges of a fast growing company. He has extensive experience in the design, installation and service of complex integrated video systems.
Mr. Stéphane Lambert possesses more than 15 years of professional experience in supply management on an international level and production management of cutting edge electronic products. Besides having spent several years as head of production at DeltaVision, Mr. Lambert was, among other things, responsible for sub-contracted production for global businesses such as Nortel and Siemens.
Mr. Bertin Castonguay is President of Permacon Group Inc., a corporation that specializes in the manufacture and marketing of concrete pavements and other concrete products.
Mr. Balthazard is President of Biocapital Mutual Fund Management Inc. since 2001. Since 1994, he has been a director of numerous public companies listed with recognized Canadian exchanges.
Mr. Valier Boivin, lawyer, tax specialist and accountant, is member of the Quebec Bar and of the "Assocation des comptables agréés du Québec". He is the founder and partner of Boivin O'Neil, s.e.n.c., a Montreal law firm, since 1987. Since 1996, he is member of various board of directors of private and public companies.
Mr. Claude Roy is President of Groupe Sports Odyssée Inc., a corporation specialized in the distribution of clothes and sports articles, since 1993.
In order to allow the W.A.V.E.S. Group of companies to pursue its operations until the closing of the Qualifying Transaction, Kangaroo wishes to grant a secured loan in the amount of $225,000 to the Target Company, upon approval by the Exchange. This loan will bear interest at an annual rate of 8%, will be secured by a hypothec charging all of the W.A.V.E.S. Group of companies' assets and will be repaid upon the closing of the Qualifying Transaction, or, at the latest, 6 months following the effective date of the loan if the Qualifying Transaction is not completed.
Kangaroo has made a request to the Exchange in order for trading of its shares on the Exchange to be halted until the closing of the Qualifying Transaction in order to facilitate the completion of the projected private placement of at least $750,000.
Subject to completion of satisfactory due diligence, Dlouhy Merchant Group Inc. has agreed to act as sponsor in connection with the Qualifying Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of its completion. Moreover, there is no assurance that the Qualifying Transaction will be completed. Neither Kangaroo, nor the W.A.V.E.S. Group of companies is related or associated to Dlouhy Merchant Group Inc. However, Dlouhy Merchant Group Inc. will receive a fee for its sponsorship report regarding the Qualifying Transaction.
Completion of the Qualifying 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 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 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 has neither approved nor accepts any responsibility with respect to the veracity or exactitude of this press release.
/For further information: Valier Boivin, Director, Kangaroo Capital inc., (514) 844-5468/
