ComnetiX to Acquire Paragon Total Solutions Inc

TORONTO -- ComnetiX Inc, a leading provider of biometric identification and authentication solutions across North America, announced today that it has signed an agreement and plan of merger to acquire Paragon Total Solutions Inc, an established, privately-held, Carrollton, GA-based biometrics technology company with a broad base of law enforcement and government customers throughout the southeastern United States. The purchase price totals US $4.45 million, consisting of assumption of certain Paragon liabilities, approximately US $1.5 million in cash paid to the Paragon shareholders and approximately 820,000 ComnetiX Common Shares. The ComnetiX Common Shares will be subject to contractual lockup for at least one year and a majority of such shares will also be subject to a contractual escrow. Subject to the satisfaction of certain closing conditions and regulatory approval, the deal is expected to close by August 15, 2005.

Paragon's founder Andy Horton will serve as Vice President of Sales -- Southeastern Region for ComnetiX following the closing.

Paragon was incorporated in 1998 and recorded approximately US $2.9 million in sales in calendar year 2004. Approximately 200 customers in the Southeast are currently employing one or more of Paragon's comprehensive solutions, such as Paragon's record and jail management software solutions, or its arrest booking and applicant screening fingerprinting solutions for criminal and job-applicant needs, or its software for mobile applications linking law enforcement agencies with officers in the field.

Paragon's flagship product family, EAGLE*ADVANTAGE, is a comprehensive suite of software solutions specifically designed for law enforcement and public safety agencies and complements the products ComnetiX currently offers, according to ComnetiX CEO Jim Scullion.

"This acquisition allows us to round out our suite of biometric software solutions for law enforcement and public safety agencies, particularly in the jail and records management areas. Just as important, however, it adds Paragon's established customer base in a part of the country that we need to serve -- the southeastern United States," Scullion said. "Our goal has been to expand our presence from Canada, New York and the Northeast to other parts of North America. We've made initial strides in building a customer base in the Midwest and California and now Paragon provides us an immediate operation and sales force that is known and respected in the Southeast."