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Attention Business/Financial Editors
Signing of a Letter of Intent with Exactsoft Technologies Inc.
TSX Venture Symbol: ERS.H
MONTREAL, Aug. 2 /CNW Telbec/ - Emergence Resort Canada Inc., a Capital
Pool Company whose shares are listed on the NEX Exchange with no assets other
than two hundred and fifty thousand dollars ($250,000.00) in cash, is pleased
to announce that it has entered into a Letter of Intent with the shareholders,
warrantholders, and optionees of Exactsoft Technologies Inc. (hereinafter
referred to as "Exactsoft"), dated July 20, 2005, and has agreed, subject to
regulatory and shareholder approval, to initiate procedures for the conclusion
of an arm's length Qualifying Transaction in accordance with the policies of
the TSX Venture Exchange Corporate Finance Manual.
The proposed Qualifying Transaction consists of the acquisition of all of
the issued and outstanding shares and securities of Exactsoft, a Canadian
public company with 171 shareholders, based in Longueuil, Quebec. Exactsoft's
main shareholders are Investhorn Private Trust (based in Chambly, Quebec)
which owns 9,470,002 common shares (representing 52% of the share capital
issued and outstanding) and is controlled by Mr. Yves Guertin and the JGP
family Trust (based in Ste-Adele, Quebec) which owns 2,000,000 common shares
(representing 12.09% of the share capital issued and outstanding) and is
controlled by Mr. Jean-Guy Proulx.
Operating since 1999, Exactsoft was incorporated that same year in Quebec
according to the Quebec Companies Act and is a leading supplier of vertical
and cost-effective enterprise software solutions. Its head office is located
at 1010, rue de Sérigny in Longueuil, Quebec. In October 2003, Exactsoft
acquired all of the issued and outstanding common shares of Exactsoft Inc., a
leading Canadian provider of Human Capital Management and Time and Attendance
solutions incorporated under the Quebec Companies Act. In July 2004, Exactsoft
expanded its worldwide activities by acquiring from Cogicom Corporation,
UNIBANX, its wealth management software solution as well as its international
client base. Exacsoft also holds all of the issued and outstanding common
shares of Exactsoft Financial Systems Canada Inc., a company duly incorporated
according to the Canada Business Corporations Act.
Exactsoft's unique and proprietary software solutions are presently used
by more than two thousand five hundred (2,500) end-users for more than three
hundred (300) clients. All of Exactsoft's software can be used on a stand-
alone basis or on a complementary basis with other software to create a fully
integrated powerful solution. The range of the solutions are comprised of
three (3) principal products entirely developed by Exactsoft based on leading
edge technology in the stock of knowledge and skills in various markets namely
enterprises resource planning (ERP), human capital management (HCM), time and
attendance and wealth management.
Exactsoft's Technology:
----------------------
New Edge(TM)
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New Edge is a complete Enterprise Resources and Planning (ERP) solution
specifically designed for the small and medium sized businesses (SMB). NewEdge
is comfortable enough to help companies realize their long-term vision into
the future. The solution includes for a series of perfectly integrated
modules;
- Financial series
- Distribution
- Manufacturing
- as well as Payroll
NewEdge is powered by EdgeBOX, Exactsoft's development framework.
Exact Solution(TM)
------------------
Exact Solution is a powerful modular human capital management (HCM) and
time and attendance software suit consisting of:
- Exact-Time Time and Attendance management;
- Exact-HR Human resources management;
- Exact -Training Quebec Training 1% Law;
- Exact-Scheduling Manpowered scheduling;
- Exact-Punch Punch clock simulation;
- Exact-Cost Job labor costing
To complement the Exact-Cost module, Exactsoft developed for
manufacturers who make a suit of standard and non-standard products, a
production management module called Exact-Cam. Designed for small
manufacturing companies, it is comparable to the best systems, known as MRP
without the inherence of the complexity and the costs. Exact-Cam addresses
variable markets such as tools/machine, shops, furniture, metallic parts, and
machinery manufacturing.
UNIBANX(TM)
-----------
UNIBANX is used by wealth managers, investment dealers/brokers, trustees,
and mutual fund companies. It is a fully integrated, web-enabled, straight
through processing wealth-managing system that handles all types of financial
instruments and transactions in multiple currencies and is designed to
function in a real time environment.
UNIBANX is powered by EdgeBOX, Exactsoft's development framework.
EdgeBox(TM)
-----------
EdgeBOX is a mission critical application development framework. It uses
Progresses' latest technologies in its own set of tools to provide a complete
solution for application development and deployment.
EdgeBOX eases and accelerates the development of complex application
software. The administration series is used for control security, setting,
audit trails and personal user configuration.
In its audited financial statements for the period ended
February 28, 2005, Exactsoft reported gross revenues of three million eight
hundred ninety thousand and sixty-three dollars ($3,890,063.00). At that date,
total assets amounted to three million seven hundred eight thousand and five
hundred forty-eight dollars ($3,708,548) major assets consisting in account
receivables and intellectual property. For the period ended February 28, 2004,
Exactsoft's net earnings amounted to five hundred and fifty thousands seven
hundred and eighty-two dollars ($550,782) and its shareholders equity to one
million two hundred sixty-two thousand and six hundred and four dollars
($1,262,604). Exactsoft's liabilities amounted to two millions four hundred
and forty-five thousand nine hundred and forty-four dollars ($2,445,944).
The parties had agreed that the aggregate purchase price for all of the
issued and outstanding shares warrants and options of Exactsoft shall be of a
minimum of twelve million two hundred and ten thousand dollars
($12,210,000.00) and a maximum of sixteen million dollars ($16,000,000)
(hereinafter referred to as the "Purchase Price") payable by the issuance of
(i) a minimum of 16,550,002 and a maximum of 21,666,666 Class B non-voting
preferred shares of Emergence (the "Preferred Shares"), and (ii) a minimum of
3,800,000 and a maximum of 5,000,000 Class "A" common shares of Emergence (the
Common Shares) at a deemed value of sixty cents ($0.60) per share.
The holders of Preferred Shares will have the right, at any time, to
convert their shares into Common Shares of Emergence. The conversion ratio
will be based on a weighted average of the closing prices, based on a thirty
(30) days trading average of the shares of the Resulting Issuer, subject to a
floor price of $0.60.
The value attributed to Exactsoft, in the amount of $12,210,000, will be
subject to an independent valuation conducted by an independent valuator
chosen and paid by Emergence. Should the independent valuation conclude to a
value higher than $12,210,000, (but lesser than $16,000,000), the Purchase
Price will be adjusted and additional Common and Preferred Shares will be
issued accordingly.
In conjunction with the Qualifying Transaction, Emergence shall adopt a
new stock option plan (the "Plan") in order to grant options to acquire Common
Shares of Emergence at an exercise price of sixty cents ($0.60). Said Plan
will enable Emergence to issue options up to 20% of the issued and outstanding
Common Shares of Emergence.
The completion of the Qualifying Transaction is subject to regulatory
approvals, completion of formal agreement between the parties involved, and
appropriate due diligence inquiries and investigations by said parties.
The Transaction is also subject to the conclusion of a public offering of
Units, at a price of sixty cents ($0.60) per Units for a minimum of seven
hundred and fifty thousand dollars ($750,000) representing 1,250,000 Common
Shares, and a maximum of two million five hundred thousand dollars
($2,500,000) representing 4,166,667 Common Shares, to take place concurrently
with the acquisition.
Should the acquisition price be of sixteen million dollars ($16,000,000)
following the report of the independent valuation conducted, the public
offering of Units, at a price of sixty cents ($0,60) per Units will be for a
minimum of one million dollars ($1,000,000) representing 1,666,667 Common
Shares, and a maximum of three million two hundred thousand dollars
($3,200,000) representing 5,333,333 Common Shares, which will take place
concurrently with the acquisition.
Each Unit will consists of one (1) Common Share of Emergence and one half
(1/2) of one (1) Common Share Purchase Warrant (a "Warrant"). Each whole
Warrant will entitle its holder to subscribe for one (1) Common Share at a
price of $0.75 for a period of 24 months following the closing date of the
private placement or public offering.
Jitney Group Inc. (the "Agent") has agreed to act as an Agent in
connection with the public offering.
The Agent will receive a cash commission of 10% of the gross proceeds of
the private placement or public offering, and will receive options to
purchased number of Units equal to 10% of the number of Unit sole in
connection with the private placement or public offering, at a price of
$0.75 per Unit and exercisable for a period of 24 months following the closing
date.
The proceeds from the private placement or public offering, together with
the existing working capital of the corporation following the Qualifying
Transaction, shall serve a number of purposes including: technological needs,
working capital, as well as for product commercialization's activities and
future acquisitions.
The acquisition of the Exactsoft shares and the private placement or
public offering, are expected to be completed concurrently and shall
constitute Emergence's Qualifying Transaction in accordance with the policies
of the TSX Venture exchange, corporate finance manual.
Following the proposed transaction, Mr. Francois Houille de Beaulieu,
Mr. Yves Guertin, Mr. Andre Duquenne, Mr. Angello Martelli, Mr. Robert Morin,
and Mr. Stephane Rancourt will become insiders of the resulting issuer of whom
Mr. Yves Guertin will be president and Mr. Angelo Martelli will act as chief
financial officer. The board of directors of the resulting issuer will be
composed of six (6) directors, that is, Mr. Yves Guertin, Mr. Andre Duquenne,
Mr. Angello Martelli, Mr. Robert Morin, and Mr. Stephane Rancourt and of one
(1) existing director of Emergence, Mr. Francois Houille de Beaulieu.
Mr. Yves Guertin, one of the co-founders of the Corporation, has been
President and Chief Executive Officer since June 1992. Mr Guertin has also
been a director of the Corporation since its inception. Prior to founding the
Corporation, Mr. Guertin held the office of Vice-Chairman as well as Vice-
President, Development, with Consultation et logiciel Pronix Inc. Having
graduated with a degree in computer sciences, Mr. Guertin also held various
positions with Logibec Groupe Informatique Ltée. over a period of seven (7)
years, the most recent as Information Technologies Manager.
Mr. Stéphane Rancourt joined the Corporation in October 2003 as Vice-
President, Business Development, following the Corporation's acquisition of
Exactsoft Inc. Prior to joining the Corporation, Mr. Rancourt was the
president of Exactsoft Inc., a company that Mr. Rancourt co-founded in 1999.
Between 1989 and 1998, Mr. Rancourt held different managerial positions for
various companies such as La Maison Lacouline, Informatique Système DATA and
International Data Technologies, all specializing in the development and
implementation of time and attendance and human capital software solutions.
Mr. André Duquenne currently serves as President of T2ic, a services
company in Technology transfer Innovation Capital. From 1997 to December 2004
Mr. Duquenne was Senior Vice President of Information Technologies of T2C2, a
venture capital firm specializing in the high technology industry start up.
Mr. Duquenne has been a cofounder of Innovatech of Greater Montréal, a venture
capital firm of three hundred and fifty million dollars ($350,000,000)
fostering growth in technology-based industries including life sciences,
information technology and aerospace and served, from January 1993 through
June 1997, as Senior Vice President for technology investments in information
technology and aerospace.
Prior to such time, Mr. Duquenne served as a special advisor to the
Quebec Government's Minister, Industry, Science, Commerce and Technology, from
September 1989 to December 1992. Since 1993 Mr. Duquenne has served as a
director for a number of public companies such as Positron Fiber Systems (TSX
& NASDAQ), Cognicase (TSX & NASDAQ), AdOpt Technologie (TSX), Engenuity (TSX),
TouchTunes Juke Box (NASDAQ), Tecsys (TSX), H2O Innovation (TSX), Bigknowledge
(TSX), Technologies D-Box ((TSX Chairman) and private Nomino Technologies;
Quantiscript, IC-Vision etc. André Duquenne is a member of Licensing
Executives Society USA/Canada and Member of the Advisory Committee of MBA
Sciences and Technology of Queen School of Business of Queen University of
Kingston.
François Houille de Beaulieu studied literature, human sciences (at the
University of Sorbonne, Paris) as well as communications (Institut des
Sciences Politiques, Paris, 1984). Mr. de Beaulieu is the author of several
essays (on file at the Lamont Library and Widener Library, Harvard University)
and articles (Le Monde Informatique). He has also acted as a director of the
board of directors of the non-profit organization Felix-Hubert d'Herelle
Corporation ("Maison d'Herelle"), from 1998 until 2004. Since 2002,
Mr. de Beaulieu has acted as the President of Emergence Resort Canada inc., a
publicly listed corporation listed on the NEX, said corporation he founded.
From 1998 until 2000, Mr. de Beaulieu managed a software development company
in Montreal, Canada. From 1992 until 1998, Mr. de Beaulieu acted as a market
research consultant for numerous industrial and real estate projects mainly in
Canada and the United States. From 1990 until 1992, he acted as secretary
general for a national lobbying organization supporting the high technology
industry as well as contributing as deputy editor of the magazine published by
this organization. From 1978 until 1990, Mr. de Beaulieu held various
international marketing and sales management positions either in Paris, France
or Switzerland, for US and European high technology companies (namely Hermes-
Olivetti and General Electric). He has been a director of Emergence since
June 2002.
Mr. Robert Morin is the president and CEO of XRS Services Financiers, a
financial planning company. From 1972 to 2003, Mr. Morin was President and CEO
of Services financiers Vision Plus, a financial planning firm he founded and
sold to the Caisse de dépôt et placement du Québec. Mr. Morin counts over
25 years of experience in the financial and insurance industry. He holds a
Bachelor's degree in Economy from Université du Québec à Montréal (UQAM).
Mr. Angelo Martelli holds a Bachelor of Commerce degree, with a major in
Accounting from Montreal's Concordia University. In the early 1980's, after
completion of his Bachelor's degree, Mr. Martelli went on to study and prepare
to become a Chartered Accountant, while articling with Price Waterhouse. After
several years in public accounting, Mr. Martelli joined the Standard Life
Insurance Company in 1987. While at Standard Life, Mr. Martelli was
responsible for a diverse range of Internal Audit mandates and later moved to
the Company's Finance division in 1995, where he oversaw Accounting and
Control functions relating to day-to-day operations, as well as reviewed new
company initiatives from an accounting and control standpoint. In 2000,
Mr. Martelli began to devote his time to investment activites on a full-time
basis. In 2002, Mr. Martelli joined the Berkshire Group in Canada where he
offered financial, tax and estate planning services to his clients. In the
third quarter of 2004, Mr. Martelli left Berkshire to become involved in the
founding of Magna Carta Capital Markets and Magna Carta Securities.
The Qualifying Transaction was introduced to Emergence by Magna Carta
Capital Markets, who will receive a Finder's Fee payable through the issuance
of one hundred and sixty six thousand six hundred and sixty seven (166,667)
Common Shares (at a price per share of sixty cents ($0.60) of the resulting
issuer) for a total amount of one hundred thousand dollars ($100,000.00).
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. 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 statements 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 as being 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 content
of this press release.
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