IRVINE, Calif., Sept. 2, 2004 (PRIMEZONE) -- Military Communications Technologies Inc. (OTCBB:MLTA), announced today that it has finalized an agreement to acquire the majority of the assets of its Australian-based affiliate Global SDR Technologies Pty Ltd ("GSDR") from the majority owner of the company GIF Limited. Additionally the acquisition includes the purchase of the controlling interest in the Exclusive License for the proprietary SpectruCell SDR(tm) and PC4 Intellectual Property. At the conclusion of the transaction MLTA will own a minimum of sixty percent (60%) of the GSDR assets and SpectruCell SDR Intellectual Property rights.
Consideration for the purchase will be by way of MLTA Reg. 144 shares of common stock at US$0.15 cents and cash. Final pricing is subject to valuation and is expected to be in the vicinity of US$80 million. Full details of the acquisition will be announced when it is finalized in the next thirty days. This transaction has been in planning for more than six months and was recently approved by the Board of Directors of both companies.
MLTA's decision to acquire majority control of the proprietary SpectruCell & PC4 Software Defined Radio wireless communications technology and IP is also expected to be well received by the Wall Street investment community who while expressing a high degree of interest have consistently maintained that any funding commitments for MLTA will be entirely conditional on the controlling interest of the SpectruCell SDR technology rights being owned and held by the US public company.
It has also been well established by company management during the last eighteen months that USA based ownership of the SpectruCell SDR IP North American based development facilities should substantially enhance the company's opportunities to access the US Military and Homeland Security markets open to US based companies.
Roger May, Executive Director of MLTA said, "This transaction removes any barriers to MLTA gaining access to the enormous Homeland Security and Military communications contracts while creating a sound investment basis for the company to attract appropriate funding from US-based Investment houses. This in turn is intended to fuel the company's plans to dramatically expand marketing and distribution of the proprietary SpectruCell SDR technology both in North America and globally. The SpectruCell SDR wireless communications technology has already received substantial recognition from many key industry players throughout the USA, Canada and Asia of its `leading edge' status in the software defined radio field."
New Engineering & Development facilities in North America.
The transaction is an essential first step in consolidating MLTA's plan to establish the main SpectruCell SDR engineering and development facilities in North America instead of Australia. Specific details of the relocation timing and location should be available in the coming weeks.
May also stated that, "Company management expects that MLTA's acquisition of a controlling interest in the SpectruCell SDR Intellectual Property combined with the establishment of the main engineering facilities in North America may prove to be to be the most significant event in the history of MLTA. It is also expected to instigate a series of far reaching positive developments for the company many of which are well into the negotiating stage. It also signals a major consolidation of the company's activities as well as helping to establish firm foundations for the company's future growth as a major player in the rapidly expanding global demand for Software Defined Radio communications technologies and applications. Company advisors have indicated that establishment of US-based operations will be of significant importance and assistance in regard to finalizing a major acquisition and a substantial funding for MLTA. The securing of funding for the company has been a major priority for management and a significant acquisition and funding arrangement are presently in the in the latter stages of negotiations."
As a result of the MLTA acquisition, the Australian affiliate GSDR will maintain a smaller operational facility to align itself with the Company's plan to locate the primary engineering facilities in North America, and to establish manufacturing and development operations in both the Chinese mainland and a smaller facility in Europe during the next twelve months. The transaction takes into account certain agreements and licenses already in place in relation to the Hong Kong SunWah Finance Holdings joint venture and further development required with some of their partners that plan manufacture some SpectruCell applications in China. However MLTA will still receive revenue from this initiative. The restructured facility in Melbourne, Australia will enable the Company to maintain access to the expertise of key SpectruCell SDR engineering and development personnel not relocating outside of Australia, and complete the delivery of product to existing customers and partners in Asia and Canada.
Recent SDR Industry Report
"In a recent study conducted by Venture Development Corporation (VDC)," Software-Defined Radio: North American and European Market Demand Analysis," 88% of U.S. public safety respondents indicated that software-defined radio (SDR) technology could help solve the numerous interoperability issues experienced when trying to communicate between departments.
Because they employ radios that operate on various frequencies and use several different protocols, most public safety branches have no means of direct radio-to-radio communication. Police, fire and local government personnel resort to swapping radios between departments or transporting communication gateways to the site to solve interoperability issues, causing unnecessary delay and confusion in critical situations.
When similar interoperability issues were identified within the United States military, the DoD established the Joint Tactical Radio System (JTRS) program. The program quickly recognized that software-defined radios could supply a highly diverse installed base of systems with support for multiple protocols and frequency bands, and alleviate these problems. Procurement of SDR devices for the military is currently underway, with plans to replace all of the military's radios. In fact, the DoD plans to spend an estimated $4.7 billion incorporating SDR devices and technology over the next four years." Go to- http://www.vdc-corp.com/telecom/press/04/pr04-40.html
About Military Communications Technologies
Military Communications Technologies, Inc. is a technology company involved in the development and distribution of proprietary software defined radio (SDR) commercial and military mobile wireless network applications. The Company's core military product, PC4 is specifically targeted to the demands of the Military and Homeland Defense agencies for large-scale defense grade reconfigurable wireless communications systems. PC4, which stands for Programmable, Command, Control, Compute, and Communicate, is a next-generation SDR framework and proprietary operating system uniquely designed for interoperable, lightweight and mobile military communications systems. The PC4 framework is also especially suitable for radar and high-speed digital RF and GSM surveillance systems. The Company's proprietary SpectruCell SDR(tm) multiple protocol wireless base station technology offers commercial wireless providers a cost-effective, software-based method to upgrade systems to next-generation standards and makes next generation networks interoperable with most wireless protocols all over the same network.
Statements in this release, which relate to other than strictly historical facts, including statements about the Company's plans and strategies, as well as management's expectations and new and existing products, technologies and opportunities, market growth, demand for acceptance of new and existing products, are forward-looking statements. The words, "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements that speak only as the date hereof. This press release contains certain forward-looking statements regarding Military Communications Technologies, INC. ("MLTA"), its business prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause MLTA's actual business, prospects and results of operations to differ materiality from those that may be anticipated by such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by MLTA in this news release and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect MLTA's business.