Mr. Claude Blanchet, President of Demcap Investments Inc. ("Demcap") (TSX VENTURE: DEM.P), a Capital Pool Company, and Mr. Jerry Tarasofsky from iPerceptions Inc. ("iPerceptions"), are pleased to announce that, on January 31, 2007, Demcap and iPerceptions signed an agreement in principle for the acquisition of all issued and outstanding shares of iPerceptions. Demcap expects the acquisition of iPerceptions (the "Qualifying Transaction") to constitute its Qualifying Transaction pursuant to Policy 2.4 of the TSX Venture Exchange Inc. (the "Exchange"). The completion of the Qualifying Transaction will be subject to a number of conditions including the completion of a private financing of a minimum amount of $2,000,000 and of a maximum amount of $2,750,000, more fully described below.
iPerceptions is a Canadian controlled company incorporated pursuant to a Certificate of Amalgamation issued, pursuant to the Canada Business Corporations Act (the "CBCA"), on January 1st, 2007. iPerceptions is the resulting entity of the amalgamation, on January 1st, 2007, of 3701344 Canada Inc., 3701336 Canada Inc., both being holding corporations incorporated under the CBCA, and iPerceptions 360 Research Inc./Recherche iPerceptions 360 Inc. iPerceptions Inc. is continuing the business of iPerceptions 360 Research Inc./Recherche iPerceptions 360 Inc., which was incorporated pursuant to a Certificate of Incorporation issued, pursuant to the CBCA, on February 23, 2000. iPerceptions Inc. has a wholly owned subsidiary, iPerceptions US Inc. incorporated on January 1st, 2007, pursuant to the General Corporation Law of the State of Delaware.
iPerceptions is one of North America's leading Internet based customer satisfaction and experience research provider. Its webValidator Continuous Listening solutions capture the voice of actual online customers in the context of an actual website visit helping companies learn more about their customers with satisfaction metrics that quickly turn learning into customer led decision-support. Using a perceptual framework to evaluate key elements of the visitor experience as well as predictive algorithms and modeling to identify those attributes that drive satisfaction, the resulting iPerceptions Satisfaction Index (iPSI) helps companies obtain a clear understanding of the key issues impacting satisfaction; purchase intent, customer loyalty and the likelihood customers will refer friends and associates to the site. iPSI metrics provide not only insights into current customer satisfaction; they also help organizations create internal benchmarks, best practices standards, compare their performance against industry norms and identify critical issues that exist just over the horizon. The iPSI is the only index of its kind and is quickly becoming a standard for measuring online customer satisfaction. All of iPerceptions' solutions are extremely flexible and can be customized to meet customer specific needs. As an ASP solution, the solutions require little or no-time to implement and are entirely web-enabled. The solutions provide real time monitoring and include an extensive suite of easy to use and powerful online analytical tools.
Evaluation of iPerceptions
According to the agreement in principle signed on January 31, 2007, Demcap expects to conclude an agreement according to which it intends to purchase all of iPerceptions' issued and outstanding shares, that is to say 10,667,371 Common shares. The purchase price for the acquisition of all the issued and outstanding Common shares of iPerceptions will be paid by the issuance of 24,302,222 Common shares of Demcap at a deemed price of $0.45 per share. iPerceptions and Demcap have agreed to evaluate iPerceptions at $10,936,000.
Private Financing between $2,000,000 and $2,750,000
In order to meet the minimum listing requirements of the Exchange, Demcap will complete a private financing of a minimum of $2,000,000 and a maximum of $2,750,000 concurrently with the Qualifying Transaction, through the issuance of units. The price of the units offered will be $0.45 each. The units will be comprised of one Common share of Demcap and one half tranche A Common share purchase warrant and one half tranche B Common share purchase warrant.
Each tranche A common share purchase warrant will entitle the holder thereof to acquire one common share from treasury at an exercise price of $0.60 for a period of 18 months from closing. Each tranche B common share purchase warrant will entitle the holder thereof to acquire one common share from treasury at an exercise price of 0.75 $ for a period of 24 months from closing. Canaccord Capital Corporation ("Canaccord") has agreed to act as agent for this private financing on a "best efforts" basis and will receive an agent's commission equal to 7% of the gross proceeds from the financing. This commission may be reduced to 4% for investors coming from a president list when no selling concession will be applicable. Demcap will also issue to Canaccord such number of Common share purchase warrants necessary to allow Canaccord to purchase a number of Common shares of Demcap equal to 7% of the units issued by Demcap under the private placement, to be exercised at the price of $0.45 per share, over the 24 month period following closing of the private placement. As additional compensation for its role in advising Demcap in the context of the Qualifying Transaction and the financing, Demcap will pay a corporate finance fee to Canaccord, payable through the issuance, at closing, of 50,000 fully paid and non-assessable common shares of Demcap. Finally, Canaccord will be reimbursed of the legal fees that it will incur with regards to the private placement, up to the maximum amount of $30,000 (plus applicable taxes and disbursements).
On April 5, 2007, Fier-Succes, societe en commandite, granted to iPerceptions a unsecured, 12 month term loan in the principal amount of $500,000, carrying interest at the rate of 15% per annum for the first 6 months of the term, and at the rate of 20% per annum for the remaining 6 months of the term (the "Fier-Succes Loan"). The interests are payable, in cash, upon maturity of the loan or upon conversion of the loan. Said loan will be automatically converted, upon closing of the Qualifying Transaction, into an aggregate of 1,111,111 fully paid and non-assessable units carrying the same terms and conditions as those issued under the private placement. For purposes of the private placement, the capital amount of said term loan shall be considered to form an integral part of the private placement.
The financing shall serve, among other, to support iPerceptions' sales and marketing efforts, Hardware and software acquisitions, Product research and development and to its working capital and general corporate expenses.
Sponsorship of the Qualifying Transaction
If necessary, Canaccord, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
Trading Halt of Demcap
Demcap's Board of Directors has decided that trading in the shares of Demcap will remain halted until completion of the Qualifying Transaction.
Demcap's Share Capital and Allocation of Options
Demcap currently has 5,999,998 Common shares issued and outstanding, as fully paid securities. Upon closing of Demcap's initial public offering, options allowing for the purchase of an aggregate of 300,000 Demcap Shares, at the price of $0.30 per share, were granted to the directors and a technical consultant of Demcap under Demcap's Stock Option Plan. Also, an option allowing for the purchase of 400,000 Demcap Shares, at the price of $0.30 per share, was granted to Desjardins Securities Inc. as agent to Demcap in connection with its initial public offering. This option is exercisable up to and including August 10, 2008.
iPerceptions' headquarters and business offices are located in Montreal. iPerceptions' significant assets are also located in Montreal and its current directors are Mr. Jerry Tarasofsky of Hampstead (Quebec) and Mr. Denis M. Sirois of Quebec City (Quebec). iPerceptions currently has 10,000,000 Common shares issued and outstanding which are held by fifteen shareholders, among which the main shareholders are: (i) Telesystem Ltd (44%), a company ultimately controlled by Mr. Charles Sirois and the head office of which is located in Montreal, (ii) Capability Snapshot Inc. (19.77%), a company controlled by Mrs. Elaine Tarasofsky, wife of Mr. Jerry Tarasofsky and the head office of which is located in Montreal, (iii) Mr. Stephen James Berns from Beaconsfield (Quebec) (14.20%), (iv) Mr. Daniel Taras from Toronto (Ontario) (6.5%), and (v) Mr. Robert Duff Anderson from Verdun (Quebec) (6.5%). There is no other share of any class presently issued and outstanding in the share capital of iPerceptions.
On April 5, 2007, iPerceptions entered into the Fier-Succes Loan. The Fier-Succes Loan, in the capital amount of $500,000, will be automatically converted, concomitantly with the closing of the Qualifying Transaction, into an aggregate of 1,111,111 fully paid and non-assessable units carrying the same terms and conditions as those issued under the private placement referred to above.
As well, on January 30, 2007, iPerceptions issued to Telesystem Ltd a non-secured, non-transferable, convertible debenture in the capital amount of $436,000, carrying interest at the rate of 8% per annum compounded monthly. The principal owed under said debenture is convertible into an aggregate of 667,371 common shares of iPerceptions, at a deemed price of $0.65331 per share. Under the terms and conditions of the convertible debenture, the principal amount owed will be converted into the number of common shares of iPerceptions indicated above, immediately preceding closing of the Qualifying Transaction. Upon conversion of the debenture, Telesystem Ltd will also be issued warrants to subscribe for and purchase i) during the 12 month period following issuance of said warrants, and aggregate of 333,686 common shares of iPerceptions, at a price of $1.03 per share, and ii) during the 24 month period following issuance of said warrants, an aggregate of 333,685 common shares of iPerceptions, at a price of $1.37 per share. All these warrants will be exchanged, upon closing of the Qualifying Transaction, for warrants of the resulting issuer allowing Telesystem Ltd to subscribe for and purchase i) an aggregate of 760,198 common shares of the resulting issuer, at the price of $0.45 per share, for the 12 month period following closing of the Qualifying Transaction, and ii) an aggregate of 760,195 common shares of the resulting issuer, at the price of $0.60 per share, for the 24 month period following closing of the Qualifying Transaction.
Therefore, upon closing of the Qualifying Transaction, an aggregate of 10,667,371 common shares of iPerceptions will be issued and outstanding, taking into account the conversion of the convertible debenture describe above.
According to iPerceptions' audited financial statements for the financial year ended December 31, 2006, iPerceptions had total assets of $2,114,444, total liabilities of $2,768,391 and a shareholders' deficit of ($653,947). In addition, the audited financial statements reflect revenues of $2,074,400 for the year ended December 31, 2006 and an operating loss of ($919,614). Non-recurring income, in the amount of $3,173,624, representing a forgiveness of debt pursuant to the corporate reorganization effected in December 2006 results in net earnings of $2,254,010 for the year. The Qualifying Transaction is between parties dealing at arm's length.
Loan in favour of Iperceptions
Subject to the consent of the Exchange and in connection with the Qualifying Transaction, Demcap intends to grant a loan of a maximum amount of $250,000 to iPerceptions, to be secured by a movable hypothec without delivery on the universality of iPerceptions' movable property. The loan will be refundable on demand and will bear interests at the preferential rate of iPerceptions' financial institution, plus 2%. The loan will be disbursed 15 days following publishing of the present press release, at the earliest. iPerceptions will use the loan for its current operations.
The Board of Directors after Completion of the Qualifying Transaction
Upon completion of the Qualifying Transaction, the resulting issuer's directors will be Jerry Tarasofsky, Denis M. Sirois, Claude Blanchet, Daphne Kis, Jean Lavigueur and Mario Jacob.
Jerry Tarasofsky, 67 years old, is currently President and Chief Executive Officer of iPerceptions. Mr. Tarasofsky has over thirty-five (35) years of business and technology experience. Prior to founding iPerceptions in 2000, Mr. Tarasofsky co-founded and was CEO of Capability Snapshot Inc., a privately held company that conceived and developed a unique methodology for evaluating organizations capabilities. Major corporations in both North America and Europe continue to use Capability Snapshot's solutions as a management tool. In 1984, Mr. Tarasofsky co-founded and was President of Mage Centers for Management Development (MAGE), an international management consulting firm. In 1976, Mr. Tarasofsky co-founded Compucentre Inc., a national retail chain and oldest computer chain store in the world.
Denis M. Sirois, 36 years old, is Executive Vice-President of Exaclan Inc. and has been since 1996 and he is also Vice-President, investments of Telesystem Ltd, and has been since March 2006, both organizations being private holding companies. Mr. Sirois also sits on the Board of directors of Opsens inc. (TSX VENTURE: OPS), Telesystem Ltd and Gestion du Fier-Succes Inc. Mr. Sirois also sits on the Executive Committee of Exaclan Inc. and on the Investment Committees of both Fonds Propulsion III, societe en commandite and Fonds ID, societe en commandite. Mr. Sirois started his career working for Bureau de credit collectif ltee (BCCL) where he became General Manager in 1993. BCCL was a leader in the Province of Quebec with regards to credit information systems and was sold to a multinational corporation in 1996.
Daphne Kis, 52 years old, is currently Vice-President, business to business programs, for CNET Networks Inc. (Nasdaq: CNET), an American information technology corporation. Prior to CNET Networks Inc.'s acquisition of EDventure Holdings in March 2004, Ms Kis was President and CEO of EDventure Holdings, a private company out of New York acting in the field of specialized information technology publications, for a period of sixteen (16) years. Since joining business partner Esther Dyson, founder of EDventure Holdings, in 1988, Ms Kis has been responsible for publishing Release 1.0, executive producing EDventure Holdings' conferences and for the company's strategic business development and overall management. She is active in the venture capital community with personal investments in a variety of start-ups. She sat, from March 2000 to October 2001, on the Board of directors of About.com, a private corporation specialized in the production of Internet content, and currently sits on the advisory board of both ApplyWise, LLC, a private corporation providing services with regards to student admissions into colleges and universities, as well as on the advisory board of Infinity Labs Inc., a digital technology magazine available on Internet. Ms Kis is also a Board Member of "Girls Learn International", a non for profit organization dedicated to building female literacy worldwide. Ms Kis holds an MBA from New York University Stern's School of Business and a bachelor's degree in women history from Hampshire College.
Claude Blanchet, M.B.A., 61 years old, was President and chief Executive Officer of Overlord Financial Inc., a Calgary-based corporation specialized in the management of energy-related investment funds, from January 2006 to December 2006 and also acted as Vice-President of the Board since august 2005. From April 1997 to May 2003, he was Chairman of the Board and Chief Executive Officer of Societe Generale de Financement du Quebec and was President and Chief Executive Officer of Fonds de Solidarite des Travailleurs du Quebec (F.T.Q.) from November 1983 to March 1997. Mr. Blanchet has been a director of Dacha Capital Inc. (TSX: DAC) since September 2006 and of Demcap Investments Inc. since September 2005. He also acted as director for Saputo Inc. (TSX: SAP), a corporation operating in the food industry, from August 1999 to August 2004 and of Domtar Inc. (TSX: DTC), a producer of specialty and fine papers, from April 1995 to April 2001. Mr. Blanchet obtained his Masters in Business Administration from Universite Laval in 1970.
Jean Lavigueur, 46 years old, currently serves as Chief Financial Officer of Coveo Solutions Inc., an enterprise search vendor since April 2006. Before Coveo, he co-founded and served as chief financial officer of Taleo Corporation (NASDAQ: TLEO), a public company providing talent management and staffing solutions on the Web (ASP), from March 1999 to May 2005, and served from June 2005 to December 2005 in other capacities, including Vice President, Finance. Before Taleo, Mr. Lavigueur served as chief financial officer of Baan Supply Chain Solutions, an enterprise resource planning (ERP) applications vendor, from May 1996 to February 1999, and as chief financial officer of Berclain Group, a supply chain management solutions vendor acquired by BAAN, from May 1991 to April 1996. Prior to his engagement with Berclain Group, Mr. Lavigueur worked in the audit and tax divisions of Coopers & Lybrand (now PriceWaterhouseCoopers), a public accounting firm. Mr. Lavigueur holds a bachelor's degree in business from Laval University in Canada and has been a Chartered Accountant since 1986.
Mario Jacob, 35 years old, is currently President and director of Maximus Capital Inc., a business funding and corporate reorganization consulting corporation. He is a registered lawyer and he has been a member of the Quebec Bar since 1995. He currently acts as director of Power Tech Corporation inc. (TSX VENTURE: PWB) and Virginia Mines Inc. (TSX: VOQ). He also acts as director of Opsens Inc. (TSX VENTURE: OPS) and Investissements St-Pierre Inc. (TSX VENTURE: INP.P). He was also a director and the President of the capital pool corporation Dufort Capital Inc. that became Odesia Group Inc. (TSX VENTURE: ODS) upon completion of its qualifying transaction. He was director and Secretary of Les investissements Rasa inc., a capital pool company, which later became Fortune 1000 Group Inc. (now Fortsum Business Solutions Inc., TSX VENTURE:FRT), following the completion of its qualifying transaction, and of SLC Capital Inc., which later became Conporec Inc. (TSX VENTURE: CNP). He was Vice President and director of LBJ Partenaires Inc., a private management corporation from October 2000 to October 2004. He was a partner with the law firm of Flynn Rivard from January 1996 to October 2000. He was Corporate Secretary of Ressources Plexmar Inc. (TSX VENTURE: PLE) from January 2002 to February 2005, and of Lyrtech Inc. (TSX VENTURE: LYR) from August 2000 to June 2001.
Upon completion of the Qualifying Transaction, Demcap's officers will be: Mr. Jerry Tarasofsky (President and Chief Executive Officer), Mr. Burt Podmere (Chief Financial Officer), Mr. Robert Duff Anderson (Vice-President, Research, Development and Knowledge Delivery), Mr. Daniel Taras (Vice-President Business Development), Mr. Jonathan Levitt (Vice-President, Sales) and Mr. Stephen James Berns (Chief Technology Officer).
Burt Podmere, 41 years old, will be Chief Financial Officer of iPerceptions Inc. He is currently Director of Finance at Adteractive Inc., out of San Francisco, USA, a privately held online advertising corporation with $150M global revenues, where he is responsible for all financial accounting and reporting functions of the company. Mr. Podmere has worked as a financial professional for over 15 years. During that time, he has served as a senior financial officer in Canada, Ireland and the US. Prior to joining iPerceptions, Mr. Podmere held a number of operational and financial positions with Vivendi Universal (NYSE: V), Amdocs (NYSE: DOX), Symantec Corporation (NASDAQ: SYMC), and Adteractive Inc. He also worked for Ernst & Young, LLP for 4 years where he obtained his designation as a Chartered Accountant. Mr. Podmere earned a bachelor degree in economics from McGill University and he is a member of the Canadian Institute of Chartered Accountants.
Robert Duff Anderson, 43 years old, is currently Vice-President, Research and Development of iPerceptions Inc. Mr. Anderson is a leader in designing and implementing online research methodologies as well as analyzing and reporting on their results. From 1995 to 2000, he held the position of Director of Development at Capability Snapshot Inc., a privately held company that conceived and developed a unique methodology for evaluating organizations capabilities. Mr. Anderson is responsible for co-product development, research design, data modeling and analysis with iPerceptions Inc. He was instrumental to the original development of the webValidator and its strategic focus implications.
Daniel Taras, 37 years old, is currently Vice-President Business Development of iPerceptions Inc. As such, he has overall responsibility for managing the company's extensive and most valuable portfolio of automotive, travel and consumer electronics clients. Mr. Taras is a founding member of iPerceptions and brings many years of direct sales and business development experience to the company. His vertical market focus includes over 6 years of hands-on experience working with brand leaders in the travel and automotive sectors and more recently consumer electronics brands, including Dell, Panasonic and Samsung. Mr. Taras also has direct experience working with a number of technology companies where he directed the corporate sales department of two (2) national internet service providers. He also managed the North-American office of an international Cisco gold certified network integration provider. Mr. Taras holds a bachelor's degree from McMaster University.
Jonathan Levitt, 34 years old, is currently Vice-President, Sales of iPerceptions Inc. As such, Mr. Levitt is responsible for directing iPerceptions' sales team in Montreal and New York. He is responsible for all sales training and development initiatives as well as territory management and sales tracking. Mr. Levitt has more than 13 years of hands-on sales experience, the last 10 years spent primarily in e-business strategy and management. He has worked with some of North America largest corporations including Bank of America, Mastercard International, Verizon Information Services and the US Navy primarily on data base marketing and consumer retention projects, the whole during prior employments. Mr. Levitt was, from April 2000 to August 2005, President of Infochase Corporation and, from 1998 to 2000, account executive with Generation Net.
Stephen James Berns, 53 years old, is currently Chief Technology Officer of iPerceptions Inc. Mr. Berns is a former partner with Richter Systems, an international management consulting firm, directing a number of major consulting assignments around the world, for which he worked from 1983 to 1999. Mr. Berns specializes in policy development and deployment of information technologies. Among other achievements in the development area, he was a chief architect of a widely recognized and internationally distributed Apparel MRP/ERP (Material/Enterprise Resource Planning) software package. Previously, Mr. Berns was a founding partner in a company that designed and developed IT solutions for major international hotel chains, with installations throughout the world. Mr. Berns holds a bachelor's degree in commerce from Sir George Williams University.
Conditions for the Completion of the Qualifying Transaction
The completion of the Qualifying Transaction is subject to a number of conditions, including a private financing of a minimum amount of $2,000,000 and a maximum amount of $2,750,000, compliance of the resulting issuer with the minimum listing requirements of the Exchange, consent of the Exchange and the successful completion of a due diligence review of the business of iPerceptions. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying 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 Exchange has in no way passed upon the merits of the proposed Qualifying Transaction, and has neither approved nor disapproved the content of this press release.
The prospectus of DEMCAP INVESTMENTS INC. can be consulted on SEDAR's website at the addresses: www.sedar.com
Demcap Investments Inc.
Chief Financial Officer and Director