SAN MARCOS, Calif., Jan. 21, 2003 (PRIMEZONE) -- Global ePoint, Inc. (Global) (Nasdaq:GEPT) today announced that it has signed a letter of intent to acquire 100 percent of the issued and outstanding stock or membership interest, as applicable, of Sequent Technologies, Inc., Best Logic, Inc., and McDigit, Inc (the "Companies").
The letter of intent regarding the proposed merger with the Companies provides that, if the merger is consummated, the current shareholders and members of the Companies would receive shares of Global's common stock. Initially, it is anticipated that the number of shares to be issued to the shareholders and members of the Companies would be equal to a percentage ownership of Global of 50.1 percent of the total outstanding shares of Global at time of closing. However, that percentage may be reduced to approximately 40 percent if certain performance levels for the Companies are not achieved for the year ended December 31, 2002. The shareholders and members of the Companies can receive additional shares of Global's common stock if they meet certain net income performance requirements over the next three years.
The merger is subject to a number of other conditions, including the completion of a definitive agreement, approval by the companies' respective boards of directors, and approval by Global's shareholders. As such, there can be no assurance that Global will enter into a definitive agreement with the Companies, or that the merger will be consummated.
"We are excited about the opportunity to merge with Global ePoint," said Johnny Pan, President of Best Logic, Inc. and controlling member and a principal shareholder of the Companies. "The anticipated merger with Global ePoint will provide additional assets, including management and international relationships, that can significantly assist in accelerating the growth of the Companies."
Frederick Sandvick, Global's Chairman and Chief Executive Officer, commented, "We are very pleased to have negotiated what we believe will be a very synergistic merger opportunity for Global. Over the past two years, we have set forth on a series of actions intended to transform Global and to strategically move forward with new market opportunities. On June 1, 2001, we sold our core lottery business in order to provide us the liquidity and up front cash we required to proceed with our strategic initiatives. The sale of our lottery business was the first major step in Global's transformation process and the entry into a new market opportunity will be our second major step."
Sandvick noted, "Over the past year and a half, we have been reviewing a number of merger and acquisition opportunities. Although we were ready to proceed with another merger last year, that company could not meet certain pre-conditions necessary to complete the agreement. We are fortunate now to have signed a letter of intent with another exciting opportunity that involves the combination of several companies in the ever-evolving Homeland security market with worldwide application. We believe this merger not only provides our shareholders tremendous upside potential, it provides certain synergistic abilities to assist Global in maximizing its current asset values. Aside from the over $4 million of cash and liquid assets, Global has over $3 million in card dispensing equipment, up to a potential of $15 million in future earn-out payments from the sale of its lottery business, and rights it has retained to proprietary designs for the world's first on-line activated instant lottery ticket. Based on the management breadth, and on the domestic and international relationships of the proposed combined companies, we believe that we will be strategically positioned to pursue the exploitation of our combined target markets."
About Global ePoint
Global has provided effective technologies for transaction automation since its formation in 1991. Global pioneered the development of the instant ticket vending machine for lotteries worldwide and has designed sold, leased and serviced high-security vending machines both domestically and internationally. In June 2001, Global sold its assets used in its existing lottery business, relating to the manufacture, sale, lease, and service of instant lottery ticket vending machines. Global is now proceeding with plans to enter into new market opportunities.
About Sequent Technologies, Best Logic and McDigit
Headquartered in the City of Industry, California, Sequent Technologies, Inc. (Sequent) is a leading provider of mobile visual telecommunication systems using advanced compression and encryption techniques. These patented systems transmit video, audio and data streams from anywhere using virtually any data transmission system and the Internet. Sequent's ability to network video surveillance systems and provide secure access via existing Internet, cellular and computer interfaces can dramatically enhance the potential use of video in Law Enforcement, Public Safety, Commercial Security, Homeland Defense, Airport/Airline, and Military applications. For more information on Sequent, visit its website at www.sequentusa.com.
Best Logic is a specialized manufacturer of computing solutions for industrial applications. Best Logic's primary markets include the electronic security market and x-ray scanning equipment for the airline industry.
McDigit is a marketing company primarily focused on the distribution, sales and marketing of Sequent's and Best Logic's products in the key security markets.
Any forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the successful completion of the proposed merger with the Acquired Companies, the successful completion of equity raises, which may be necessary for Global to implement its plans to develop new market opportunities, continued acceptance of Global's products and services in the marketplace, competitive factors, new products and technological changes, Global's successful entry into new markets, Global's ability to increase its customer base, as well as general, political and other uncertainties related to customer purchases and agreements and other risks detailed in Global's periodic filings with the Securities and Exchange Commission.