FOR Corporation Cogivar
TSX VENTURE SYMBOL: GIV.P
September 14, 2004
Corporation Cogivar RE: Signing of Letter of intent with Kree Technologies Inc.
MONTREAL, QUEBEC-- Corporation Cogivar ("Cogivar") (TSX-V: GIV.P), a Capital Pool Company with no asset other than $1,200,000 in cash, trading on the TSX Venture Exchange, is pleased to announce that it has entered into a Letter of Intent with the shareholder of Kree Technologies Inc. (hereinafter “Kree”), dated July 20, 2004 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 of Kree,a Canadian privately owned company based in St-Hubert, Quebec with an affiliated company and operations in Plattsburg, New York. The sole shareholder of Kree is the Greg Moffat Trust, a Canadian Trust controlled by Greg Moffat, who is also the beneficiary of the said trust.
Operating since 1993, Kree was incorporated in Quebec under the Canada Business Corporations Act and specializes in the development and manufacturing of innovative pressure sensitive materials of superior quality for marketers and manufacturers primarily in the healthcare industry.
Kree has become a key raw material supplier to leading private label manufacturers in the retail plastic coated and fabric adhesive dressings market in both Canada and the USA.The Company enjoys a positive reputation in the industry as a reliable, quality and on time supplier of key raw materials.
Kree has also developed its own coating formulations giving its medical bandages good adherence and versatility. In cooperation with fabric producers, Kree was instrumental in the establishment of various fabric adhesive dressing materials. Additionally, Kree pioneered the development and application of latex-free adhesives at the time when restrictions on the use of latex in medical devices were becoming widespread. These innovations, which also permitted Kree to acquire the sole production rights for Branded specialty tapes and have attracted a number of marketers and manufacturers in the North American first aid market, including Branded and Private Label Marketing Companies for whom Kree currently manufactures and prints products.
In its audited financial statements for the period ended April 30, 2004, Kree reported gross revenues of $5,686,938. At that date, total assets amounted to $2,381,122 major assets consisting in accounts receivable, $567,768 and inventories, $609,498. For the period ended April 30, 2004, Kree’s net earnings amounted to $196,825 and it’s equity to ($ 230,550).
The parties have agreed that the aggregate purchase price for the shares of Kree shall be of $3,750,000 payable by the issuance of 10,714,286 Class "A" Shares of Cogivar (the "Common Shares") at a deemed value of $0.35 per share.
In conjunction with the Qualifying Transaction, Cogivar shall grant options to acquire a maximum of 1,285,714 Common shares at an exercise price of $0.35 in accordance with the Cogivar Incentive Stock Option Plan.
The completion of the Qualifying Transaction is subject to regulatory approvals, completion of formal agreements among the parties involved, and appropriate due diligence enquiries and investigations by said parties.
The Transaction is also subject to the conclusion of a private placement of Common Shares, at a price of $0.35 per Common Share, for a minimum of $750,000 and a maximum of $1,500,000 to take place concurrently with the acquisition.
The proceeds from the private placement, together with the existing working capital of the Corporation following the Qualifying Transaction, shall serve a number of purposes including: technological needs, working capital, and product commercialization activities.
The acquisition of the Kree shares and the private placement are expected to be completed concurrently and shall constitute Cogivar’s Qualifying Transaction in accordance with policies of the TSX Venture Exchange Corporate Finance Manual.
Following the proposed transaction, Mr. Gregory Moffat, Mr. Charles Gelber, Mr. Robin B. Hutchison and Mr. Alan Neil will become insiders of the resulting issuer of whom Mr. Gregory Moffat will be president.
The board of directors of the resulting issuer will be composed of five (5) directors that is Gregory Moffat, Charles Gelber, Robin B. Hutchison and two existing directors of Cogivar: Guy Girard and Christian Savard.
Mr. Gregory Moffat is the Chief Executive Officer of Kree. He served as technical manager in the R & D department for Smith & Nephew PLC from 1987 to 1993. He graduated from Dawson College in 1988 where he obtained his diploma in Chemical Technology. Mr. Moffat was born in Halifax (Nova Scotia), and now resides in Plattsburgh, NY.
Mr. Alan Neil is the president of Kree. He worked for Smith and Nephew where he occupied a number of international senior managerial roles with the First Aid and Advanced Wound Care products division. In 1997, he became an independent consultant and developed products for companies such as Sun Coast Medical and Kree Technologies. Mr. Neil graduated from McGill University in 1972 where he obtained his degree in Biology.
Mr. Gelber is a lawyer and has been self-employed since 1999. From 1993 to 1998, he practiced law as a partner in the firm Yanofsky, Cooperstone, Gelber.
Robin B. Hutchison has over than 23 years experience in the IT industry
and has founded Canadian and US based company. He was the founder of eCharge
Corporation, a Seattle based company specializing in alternative payment
methods for the internet. From 1997 to 2001, he held numerous positions
within eCharge from President to Chief Technical
Mr. Guy Girard graduated from Laval University in Quebec city with a finance degree (1985) and master degree in finance (1992). Mr. Girard has worked from 1985 to 1998 as an advisor, director and vice-president for different Canadian brokerage firms. From 1998 to 2003, Mr. Girard worked for Corporation Avensys Inc., a firm he founded, as finance vice-president. Mr. Girard specializes in financing businesses through acquisitions. He is the president and chief executive officer (CEO) of Cogivar Corporation.
Mr. Christian Savard graduated from McGill University with a business degree and started his career in 1984 with an important accounting firm. Mr. Savard is president of CS Capital Inc., a company specialized in corporate Finance. Mr. Savard has worked for Canaccord Capital from August 2000 to August 2003 and for Merrill Lynch Canada from September 1994 to August 2000. Mr. Savard is a director of Cogivar Corporation.
The Qualifying Transaction was introduced to Cogivar by Mr. Eric Boyd and NÉA Communication Inc., who will jointly receive a finder’s fee payable through the issuance of 628 571 common shares (at $0.35 per share) of the resulting issuer for a total amount of $219,999.
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 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 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 contents of this press release.
FOR FURTHER INFORMATION PLEASE CONTACT:
For Kree Technologies:
For Corporation Cogivar: