FiberQuest Networks Corp.

CDNX Symbol: FQN



Apr 03, 2001, 01:00 ET from FiberQuest Networks Corp.

    VANCOUVER, April 3 /PRNewswire/ - Harish C. Consul, President, Chief
 Executive Officer and a Director of FiberQuest Networks Corp. ("FiberQuest")
 (CDNX: FQN) announces that FiberQuest has completed a Letter Agreement dated
 March 28, 2001 (the "Letter Agreement") with Securitinet Storage Solutions
 Inc. ("Securitinet") of Vancouver, BC, and its principals, Creekstone
 Consulting Inc., Qwest Emerging Technologies (VCC) Fund Ltd., Qwest Bancorp
 Ltd. ("Qwest"), Gary Wallin, Wallin Family Trust (the "Contracting
 Shareholders"), pursuant to which FiberQuest has agreed to acquire 100% of the
 issued and outstanding shares of Securitinet in consideration of the issuance
 of an aggregate of 2,950,000 shares of FiberQuest (the "Acquisition"). The
 Acquisition will constitute a "Reverse Takeover" pursuant to the policies of
 the Canadian Venture Exchange (the "CDNX").
     Securitinet is a private BC incorporated company, incorporated October
 23, 2000, which has participated in the rapidly growing electronic data
 storage services sector with an emphasis on building a full suite of managed
 storage and protection services for its customers' essential digital assets.
 Securitinet's services include the provision of innovative online data backup
 and recovery services. Securitinet's product offerings are expanding to meet
 market demands and will focus initially on providing storage utility services
 (storage on demand), data protection services and custom archiving solutions.
 Securitinet has approximately 90 shareholders, most of whom are BC residents.
 Securitinet had an unaudited estimated revenue of $24,000 for the month of
 March 2001.This compares with $13,500 for December 2000, all unaudited
 numbers. Securitinet currently employs eight full time employees at its
 offices in Vancouver, Calgary and Toronto.
     At the time of closing of the Acquisition, Securitinet will have
 approximately 16,250,000 Class A Voting Common Shares, and 450,000 Class B
 Shares issued and outstanding.
     Under the terms of the Letter Agreement, holders of all of the issued
 Class A Voting Common Shares of Securitinet (the "Securitinet Class A Shares")
 and the 450,000 Class B Shares of Securitinet (the "Securitinet Class B
 Shares) will receive an aggregate of 2,950,000 common shares in the capital of
 FiberQuest (the "FiberQuest Shares") having a deemed value of $1.25 per
 FiberQuest Share. The Securitinet Class A Shares will be exchanged on a ratio
 equal to the then current outstanding Class A Shares divided by 2,500,000 and
 the Securitinet Class B Shares will be exchanged for common shares of
 FiberQuest on a one for one basis. The FiberQuest Shares will be subject, in
 whole or in part, to escrow provisions in accordance with CDNX policies. The
 Letter Agreement contemplates that Securitinet may commission a valuation to
 be conducted in respect of the shares of Securitinet with a view to reducing
 the CDNX escrow requirements.
     On closing of the Acquisition the Letter Agreement contemplates that Gary
 Wallin and Lyn Blanchard, shareholders of Securitinet, will join FiberQuest's
 board of directors. FiberQuest's board of directors will then be increased to
 five, comprising the following persons: Harish C. Consul, Steven Khan, Kenneth
 Hallat, Gary Wallin and Lyn Blanchard.
     Harish C. Consul is the President, CEO, and a director of FiberQuest. Mr.
 Consul is the Founder and President of Pacific Century Group Ventures Ltd.
 ("Pacific Century"), a privately held venture capital firm (www.pcentury.com)
 focused on the information technology sector on a global basis. Mr. Consul
 graduated with honors from the University of Calgary with a B.Sc. degree in
 1986, and is a professional engineer. In addition, he is also President of
 Pacific Sun Properties Ltd., a privately held real estate investment holding
 company.
     Steven N. Khan is the Secretary and a director of FiberQuest. Mr. Khan is
 the Executive Vice President and an Investment Advisor with IPO Capital Corp.
 From 1995 to 1998, Mr. Khan was a Vice-President and an Investment Advisor
 with Whalen Beliveau & Associates. Mr. Khan graduated from the University of
 British Columbia with a B.Sc. (1978) and an MBA (1983). He is a Chartered
 Financial Analyst and is a member of the Association for Investment Management
 Research, and a Fellow of the Canadian Securities Institute.
     Kenneth B. Hallat is a director of FiberQuest. Mr. Hallat is Chairman and
 CEO of Novas Capital Corp., a private venture capital firm. In addition he is
 Chairman and CEO of M-Chem Industries Inc., which manufactures and markets
 industrial cleaning chemicals throughout North America. Mr. Hallat graduated
 from University of British Columbia with a BComm (1969) & a MBA (honors) in
 1970 and serves on the boards of several public companies including Sleeman
 Breweries Ltd, SunRype Products Ltd. & Marine Bioproducts International Corp.
     Gary Wallin is the founder, Chairman, Chief Technology Officer and a
 director of Securitinet. For the past four years, Mr. Wallin has focused on
 the digital storage services sector where he began and led Intellisave
 Datavaults Inc. and was responsible for developing relationships with Compaq
 and QC Data among others. Prior to this, he was with a leading Canadian
 financial institution where he was responsible for strategic positioning,
 delivering & support of the information technology solutions for the lending
 portfolios on a national basis.
     Lyn Blanchard is the CEO and a director of Securitinet. Ms. Blanchard has
 been a consultant within the Canadian telecommunications industry, with a
 background in marketing, sales & business development. Previously she was VP,
 Strategic Business Development with RSLCOM Canada Ltd. (1997-2000) & prior to
 this, she held positions with Telus (formerly BCTEL), and Stentor (1985-1997).
 Ms. Blanchard graduated from Laurentian University with a BComm (1977).
     Messrs. Consul, Khan, Hallatt and Wallin and Ms. Blanchard are all
 residents of British Columbia.
     On closing of the Acquisition there will be approximately 10,400,000
 shares of FiberQuest issued and outstanding (on a fully diluted basis). No
 related parties of FiberQuest have an interest in Securitinet, except Pacific
 Century, which owns 200,000 Class B Shares of Securitinet. Pacific Century is
 owned by Harish Consul, the President, CEO and a director of FiberQuest.
     Prior to closing FiberQuest will use its best efforts to arrange a
 brokered special warrant private placement of approximately $3,000,000 (plus
 or minus 20%) at a price of approximately $2.00/share. Each special warrant
 will be exchangeable for one common share for a period of one year. FiberQuest
 has agreed to use its best efforts to file an annual information form so that
 the common shares issuable on the exchange of special warrants are subject to
 a reduced hold period of four months. Qwest is required to use its best
 efforts to arrange $500,000 of the FiberQuest Financing. The proceeds of the
 FiberQuest Financing will be used to finance its business development plans
 with Securitinet.
     FiberQuest will use its best efforts to complete a consolidated audit
 with Securitinet and to file within 120 days of closing an Annual Information
 Form so that the common shares issuable on exchange of the special warrants
 issued pursuant to the FiberQuest Financing will be subject to a 4 month hold
 period rather than a one year hold period.
     The completion of the Acquisition by Securitinet and the Contracting
 Shareholders is subject to FiberQuest having closed in escrow a private
 placement financing and having cash on hand of $2,475,000 as well as
 Securitinet and the Contracting Shareholders having completed satisfactory due
 diligence on FiberQuest. The completion of the Acquisition by FiberQuest is
 subject to FiberQuest having completing satisfactory due diligence on
 Securitinet and Securitinet having approximately $700,000 in its treasury at
 the end of FiberQuest's due diligence period, which will be approximately two
 weeks after the completion date of the Letter Agreement.
     The Acquisition is also subject to acceptance of the share exchange offer
 terms by 90% of Securitinet shareholders. When the conditions of the Letter
 Agreement have been met, FiberQuest will offer to acquire the shares of the
 Securitinet shareholders other than the Contracting Shareholders by way of
 formal take-over bid or other transaction format authorized under securities
 legislation.
     Closing of the Acquisition is expected to occur on the third business day
 following the approval of the Acquisition by the CDNX. The transactions
 contemplated by the Letter Agreement are subject to regulatory approval and
 the approval of a majority of non-insider shareholders of FiberQuest. On
 closing of the Acquisition, FiberQuest will have completed its qualifying
 transaction in accordance with CDNX Policy 2.4 and will be classified as a
 technology issuer. Securitinet has agreed to pay FiberQuest a breakup fee if
 the Acquisition does not proceed in the form of a percentage of financing or
 other business conducted by Securitinet with persons introduced by FiberQuest.
     Raymond James (the "Agent") has agreed, subject to completion of a
 satisfactory due diligence review, to act as sponsor of FiberQuest in
 connection with the Acquisition. The Agent is at arms-length to FiberQuest and
 Securitinet. The Agent will receive a sponsorship fee and reimbursement of
 expenses. An agreement to sponsor should not be construed as any assurance
 with respect to the merits of the transaction or the likelihood of completion.
     Upon completion of the Acquisition, FiberQuest will change its name to
 StorageFlow Systems Corp. and more detailed information will soon be available
 at the company's new website, www.storageflow.com.
 
     Completion of the Acquisition is subject to a number of conditions,
 including but not limited to, CDNX acceptance and a majority of the minority
 shareholder approval. 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 a management
 information circular to be prepared in connection with this transaction, any
 information released or received with respect to the transaction may not be
 accurate or complete and should not be relied upon. Trading of the securities
 of a capital pool company should be considered highly speculative.
     The CDNX has in no way passed upon the merits of the proposed transaction
 and has neither approved or disapproved the contents of this press release.
 
 

SOURCE FiberQuest Networks Corp.
    VANCOUVER, April 3 /PRNewswire/ - Harish C. Consul, President, Chief
 Executive Officer and a Director of FiberQuest Networks Corp. ("FiberQuest")
 (CDNX: FQN) announces that FiberQuest has completed a Letter Agreement dated
 March 28, 2001 (the "Letter Agreement") with Securitinet Storage Solutions
 Inc. ("Securitinet") of Vancouver, BC, and its principals, Creekstone
 Consulting Inc., Qwest Emerging Technologies (VCC) Fund Ltd., Qwest Bancorp
 Ltd. ("Qwest"), Gary Wallin, Wallin Family Trust (the "Contracting
 Shareholders"), pursuant to which FiberQuest has agreed to acquire 100% of the
 issued and outstanding shares of Securitinet in consideration of the issuance
 of an aggregate of 2,950,000 shares of FiberQuest (the "Acquisition"). The
 Acquisition will constitute a "Reverse Takeover" pursuant to the policies of
 the Canadian Venture Exchange (the "CDNX").
     Securitinet is a private BC incorporated company, incorporated October
 23, 2000, which has participated in the rapidly growing electronic data
 storage services sector with an emphasis on building a full suite of managed
 storage and protection services for its customers' essential digital assets.
 Securitinet's services include the provision of innovative online data backup
 and recovery services. Securitinet's product offerings are expanding to meet
 market demands and will focus initially on providing storage utility services
 (storage on demand), data protection services and custom archiving solutions.
 Securitinet has approximately 90 shareholders, most of whom are BC residents.
 Securitinet had an unaudited estimated revenue of $24,000 for the month of
 March 2001.This compares with $13,500 for December 2000, all unaudited
 numbers. Securitinet currently employs eight full time employees at its
 offices in Vancouver, Calgary and Toronto.
     At the time of closing of the Acquisition, Securitinet will have
 approximately 16,250,000 Class A Voting Common Shares, and 450,000 Class B
 Shares issued and outstanding.
     Under the terms of the Letter Agreement, holders of all of the issued
 Class A Voting Common Shares of Securitinet (the "Securitinet Class A Shares")
 and the 450,000 Class B Shares of Securitinet (the "Securitinet Class B
 Shares) will receive an aggregate of 2,950,000 common shares in the capital of
 FiberQuest (the "FiberQuest Shares") having a deemed value of $1.25 per
 FiberQuest Share. The Securitinet Class A Shares will be exchanged on a ratio
 equal to the then current outstanding Class A Shares divided by 2,500,000 and
 the Securitinet Class B Shares will be exchanged for common shares of
 FiberQuest on a one for one basis. The FiberQuest Shares will be subject, in
 whole or in part, to escrow provisions in accordance with CDNX policies. The
 Letter Agreement contemplates that Securitinet may commission a valuation to
 be conducted in respect of the shares of Securitinet with a view to reducing
 the CDNX escrow requirements.
     On closing of the Acquisition the Letter Agreement contemplates that Gary
 Wallin and Lyn Blanchard, shareholders of Securitinet, will join FiberQuest's
 board of directors. FiberQuest's board of directors will then be increased to
 five, comprising the following persons: Harish C. Consul, Steven Khan, Kenneth
 Hallat, Gary Wallin and Lyn Blanchard.
     Harish C. Consul is the President, CEO, and a director of FiberQuest. Mr.
 Consul is the Founder and President of Pacific Century Group Ventures Ltd.
 ("Pacific Century"), a privately held venture capital firm (www.pcentury.com)
 focused on the information technology sector on a global basis. Mr. Consul
 graduated with honors from the University of Calgary with a B.Sc. degree in
 1986, and is a professional engineer. In addition, he is also President of
 Pacific Sun Properties Ltd., a privately held real estate investment holding
 company.
     Steven N. Khan is the Secretary and a director of FiberQuest. Mr. Khan is
 the Executive Vice President and an Investment Advisor with IPO Capital Corp.
 From 1995 to 1998, Mr. Khan was a Vice-President and an Investment Advisor
 with Whalen Beliveau & Associates. Mr. Khan graduated from the University of
 British Columbia with a B.Sc. (1978) and an MBA (1983). He is a Chartered
 Financial Analyst and is a member of the Association for Investment Management
 Research, and a Fellow of the Canadian Securities Institute.
     Kenneth B. Hallat is a director of FiberQuest. Mr. Hallat is Chairman and
 CEO of Novas Capital Corp., a private venture capital firm. In addition he is
 Chairman and CEO of M-Chem Industries Inc., which manufactures and markets
 industrial cleaning chemicals throughout North America. Mr. Hallat graduated
 from University of British Columbia with a BComm (1969) & a MBA (honors) in
 1970 and serves on the boards of several public companies including Sleeman
 Breweries Ltd, SunRype Products Ltd. & Marine Bioproducts International Corp.
     Gary Wallin is the founder, Chairman, Chief Technology Officer and a
 director of Securitinet. For the past four years, Mr. Wallin has focused on
 the digital storage services sector where he began and led Intellisave
 Datavaults Inc. and was responsible for developing relationships with Compaq
 and QC Data among others. Prior to this, he was with a leading Canadian
 financial institution where he was responsible for strategic positioning,
 delivering & support of the information technology solutions for the lending
 portfolios on a national basis.
     Lyn Blanchard is the CEO and a director of Securitinet. Ms. Blanchard has
 been a consultant within the Canadian telecommunications industry, with a
 background in marketing, sales & business development. Previously she was VP,
 Strategic Business Development with RSLCOM Canada Ltd. (1997-2000) & prior to
 this, she held positions with Telus (formerly BCTEL), and Stentor (1985-1997).
 Ms. Blanchard graduated from Laurentian University with a BComm (1977).
     Messrs. Consul, Khan, Hallatt and Wallin and Ms. Blanchard are all
 residents of British Columbia.
     On closing of the Acquisition there will be approximately 10,400,000
 shares of FiberQuest issued and outstanding (on a fully diluted basis). No
 related parties of FiberQuest have an interest in Securitinet, except Pacific
 Century, which owns 200,000 Class B Shares of Securitinet. Pacific Century is
 owned by Harish Consul, the President, CEO and a director of FiberQuest.
     Prior to closing FiberQuest will use its best efforts to arrange a
 brokered special warrant private placement of approximately $3,000,000 (plus
 or minus 20%) at a price of approximately $2.00/share. Each special warrant
 will be exchangeable for one common share for a period of one year. FiberQuest
 has agreed to use its best efforts to file an annual information form so that
 the common shares issuable on the exchange of special warrants are subject to
 a reduced hold period of four months. Qwest is required to use its best
 efforts to arrange $500,000 of the FiberQuest Financing. The proceeds of the
 FiberQuest Financing will be used to finance its business development plans
 with Securitinet.
     FiberQuest will use its best efforts to complete a consolidated audit
 with Securitinet and to file within 120 days of closing an Annual Information
 Form so that the common shares issuable on exchange of the special warrants
 issued pursuant to the FiberQuest Financing will be subject to a 4 month hold
 period rather than a one year hold period.
     The completion of the Acquisition by Securitinet and the Contracting
 Shareholders is subject to FiberQuest having closed in escrow a private
 placement financing and having cash on hand of $2,475,000 as well as
 Securitinet and the Contracting Shareholders having completed satisfactory due
 diligence on FiberQuest. The completion of the Acquisition by FiberQuest is
 subject to FiberQuest having completing satisfactory due diligence on
 Securitinet and Securitinet having approximately $700,000 in its treasury at
 the end of FiberQuest's due diligence period, which will be approximately two
 weeks after the completion date of the Letter Agreement.
     The Acquisition is also subject to acceptance of the share exchange offer
 terms by 90% of Securitinet shareholders. When the conditions of the Letter
 Agreement have been met, FiberQuest will offer to acquire the shares of the
 Securitinet shareholders other than the Contracting Shareholders by way of
 formal take-over bid or other transaction format authorized under securities
 legislation.
     Closing of the Acquisition is expected to occur on the third business day
 following the approval of the Acquisition by the CDNX. The transactions
 contemplated by the Letter Agreement are subject to regulatory approval and
 the approval of a majority of non-insider shareholders of FiberQuest. On
 closing of the Acquisition, FiberQuest will have completed its qualifying
 transaction in accordance with CDNX Policy 2.4 and will be classified as a
 technology issuer. Securitinet has agreed to pay FiberQuest a breakup fee if
 the Acquisition does not proceed in the form of a percentage of financing or
 other business conducted by Securitinet with persons introduced by FiberQuest.
     Raymond James (the "Agent") has agreed, subject to completion of a
 satisfactory due diligence review, to act as sponsor of FiberQuest in
 connection with the Acquisition. The Agent is at arms-length to FiberQuest and
 Securitinet. The Agent will receive a sponsorship fee and reimbursement of
 expenses. An agreement to sponsor should not be construed as any assurance
 with respect to the merits of the transaction or the likelihood of completion.
     Upon completion of the Acquisition, FiberQuest will change its name to
 StorageFlow Systems Corp. and more detailed information will soon be available
 at the company's new website, www.storageflow.com.
 
     Completion of the Acquisition is subject to a number of conditions,
 including but not limited to, CDNX acceptance and a majority of the minority
 shareholder approval. 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 a management
 information circular to be prepared in connection with this transaction, any
 information released or received with respect to the transaction may not be
 accurate or complete and should not be relied upon. Trading of the securities
 of a capital pool company should be considered highly speculative.
     The CDNX has in no way passed upon the merits of the proposed transaction
 and has neither approved or disapproved the contents of this press release.
 
 SOURCE FiberQuest Networks Corp.