HUNTINGTON BEACH, Calif., Aug. 5, 2004 (PRIMEZONE) -- Quintek Technologies, Inc. (OTCBB:QTEK) announced today that it has signed an agreement with a private investment company for the purchase, by the investment company, of $2.38 million of Quintek's restricted common stock in exchange for tradable shares of the investment company. The investment company's proposed portfolio consists of investments in 23 U.S. based micro cap companies currently valued at $139 million.
The investment company is a newly formed London-based company that applied for its shares to be admitted to trading on the London Stock Exchange as an investment trust on August 2, 2004. Once the investment company shares are admitted for trading on the London Exchange, the agreement with Quintek goes into effect. The investment company has been established specifically to invest in U.S. micro cap companies with long term growth potential. The investment company expects its shares to be trading on the London Stock Exchange by September 30, 2004.
"This investment will significantly increase the asset base of Quintek providing for more financial stability," said Andrew Haag, CFO of Quintek. "This increase in assets, coupled with our restructuring efforts to reduce liabilities, should represent a dramatic change in the financial condition of Quintek, which should be evident in our upcoming filing for the Quarter ending June 30, 2004."
Robert Steele, CEO of Quintek commented, "Quintek is 1 of 23 companies selected by the managers of this fund from the universe of U.S. micro cap companies." He continued, "This solid vote of confidence from an institutional investor indicates that the interest in Quintek is growing. As we build momentum and move forward with our aggressive growth plan, we hope to see more interest from individual and institutional investors."
The investment company has entered into a "lock-up" agreement with Quintek pursuant to which it has agreed not to trade the Quintek shares it will receive as a result of this transaction, for a period of two years from the closing date. In full payment for the shares of Quintek, the investment company will issue to Quintek USD $2.38 million equivalent of its shares at a price per share valued at One Pound Sterling.
Fifty percent of the investment company's shares will be held in escrow for two years following their issuance and in the event the per share market price of the Quintek common stock at such time is less than the per share value of the Quintek stock at the time of the closing, the investment company shall be entitled to receive out of escrow a percentage of the shares equal to the percentage of such decline. The remaining shares held in escrow shall be released to Quintek at such time. The closing of this transaction is subject to certain contingencies, including the listing of the investment company shares on the London Stock Exchange on or before September 30, 2004.
About Quintek
Quintek Technologies, Inc. has been a manufacturer of hardware and software and a service provider to the corporate and public sector markets since 1991. The Company's new division, Quintek Services Inc. (QSI) delivers Business Process Outsourcing (BPO) services and Information Lifecycle Management (ILM) solutions to document intensive industries such as public utilities, healthcare, insurance, financial, legal, telecommunications and manufacturing.
The solutions and services the Company provides enable organizations to secure and manage their information and document business processes more efficiently. The Aberdeen Group, a provider of IT market intelligence, forecasts 13 percent annual growth for the BPO industry through 2005, when the market is projected to reach $248 billion.
"Safe-Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding potential sales, the success of the company's business, as well as statements that include the word "believe" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Quintek to differ materially from those implied or expressed by such forward-looking statements. Such factors include, among others, the risk factors included in Quintek's Annual Report on Form 10-KSB for the fiscal year ended June 30, 2002 and any subsequent reports filed with the SEC under the Exchange Act. This press release speaks as of the date first set forth above and Quintek assumes no responsibility to update the information included herein for events occurring after the date hereof. Actual results could differ materially from those anticipated due to factors such as the lack of capital, inability to secure funding, timely development of products, inability to deliver products when ordered, inability of potential customers to pay for ordered products, and political and economic risks inherent in international trade.