MONTREAL, June 1, 2002 (PRIMEZONE) -- Isee3d Inc. ('Isee3d' or the 'Corporation') (TSX Venture Exchange:YEY) announced today that it has signed a 'Letter of Intent' ('LOI') which contemplates a reverse takeover ('RTO') transaction of QuikView, Inc. ('QuikView') of Cupertino, California, as part of a broader strategy to realign and focus Isee3d's technology offerings, accelerate its growth, broaden its telephony-related product line, raise capital and expand its presence in the U.S. marketplace.
Overview of Transaction
Immediately preceding the RTO with Isee3d, QuikView will acquire Interactive Classified Corporation ('ICC') of Montreal, Quebec (a company controlled by Morden C. Lazarus and other insiders of the Corporation as detailed below). The combined QuikView / ICC entity provides interactive voice response (IVR) and web-based products for the Online Dating, Online Classified and Recruitment Industries and will complement Isee3d's wholly owned subsidiary InstantLive Communications (YEY) Inc.'s ('InstantLive') Get Connected! line of products which enable two or more traditional phone-to-phone calls to be initiated from the web. When combined, the new entity's product offering will range from traditional IVR systems to fully-integrated web, IVR and callback solutions that will be unique to their respective industries'. The post-RTO company's combined operations currently generate revenues in excess of $58,000 (Cdn.) per month (unaudited).
InstantLive Technologies Inc., the proposed new name of the Corporation, subject to shareholder and regulatory approval, will be based in Montreal, Quebec and will have an office in Silicon Valley. It will continue the development of its proprietary InstantLive Get Connected! software and system technologies for use in Online Dating, Online Classified, Recruitment, eCommerce, Customer Service, and other applications.
"I am extremely pleased with the proposed acquisition as well as the potential outcome of the post transaction operations. I believe that, for many months, the work and progress delivered by Isee3d management was not reflected in the market price of our stock, notwithstanding the execution of several material agreements," stated Morden C. Lazarus.
"This deal allows Isee3d to restructure, re-capitalize and, most importantly, ally with prominent people in the technology space who will help Isee3d achieve a much higher level of success," continued Mr. Lazarus.
Christopher Kape, Isee3d's and InstantLive's Vice President of Business Development announced: "Today we present a series of strategic initiatives designed to focus our efforts and to build on the initial success of our proprietary telephony technology with the ultimate goal of delivering a profitable company and shareholder value. By combining our respective organizations, we can provide the market with a more comprehensive set of telephony-based solutions and products. With existing revenues, clients, and prominent Silicon Valley endorsements, the new entity can position itself as a significant technology player."
"Furthermore, with the contribution of Eric McAfee, a seasoned entrepreneur and Silicon Valley venture capitalist with the firm Berg McAfee Companies who is a principal of QuikView, we are confident of taking our restructured company to the next level," continued Mr. Kape.
Mr. McAfee said: "Isee3d's telephony technology immediately caught my attention as a great fit for QuikView's business. With an existing revenue stream, additional financing, U.S. presence, and help from key industry contacts that our venture capital group can bring to the table, the combined entity has a promising future.'
Description of Transaction
Pursuant to the previously announced share consolidation, the common shares of Isee3d will be consolidated on a 7 for 1 basis and Quikview shareholders will be issued one post consolidated common share of the Corporation in exchange for each common share of Quikview. On the basis of the share exchange, shareholders of the Corporation at closing of the transaction will hold approximately 35.71% of the Corporation while former shareholders of Quikview shall hold the balance. Any convertible securities of Isee3d issued and outstanding at closing will be consolidated on the same basis and the exercise price adjusted accordingly.
There are currently 68,260,108 common shares of Isee3d issued and outstanding. Immediately prior to closing, QuikView will have 18,000,000 common shares issued and outstanding, including the 1 million shares reserved under the convertible bridge loan. On the basis of the proposed share consolidation of Isee3d, the deemed acquisition cost of each QuikView share will be $0.259 (Cdn.) representing an aggregate acquisition cost of $4,662,000 (Cdn.), subject to the approval of the TSX Venture Exchange. The per share cost is calculated using the average closing price of the Corporation's shares for the last month.
Completion of the transaction is subject to a number of conditions including, but not limited to, stock exchange and securities commission approvals and disinterested shareholder approval. There can be no assurance that the transaction will be completed as proposed, or at all.
It is anticipated that the transaction will be completed following Isee3d's annual and special meeting of shareholders, which has been postponed to deal with the approvals required under the transaction and is now expected to take place in August 2002. In light of the proposed transaction, Isee3d has decided to indefinitely suspend the previously announced rights offering. Provided the proposed transaction is completed, the Corporation will consider the possibility of a future rights offering to raise funds for its new undertaking.
Notwithstanding the foregoing, the Corporation intends to market its Medical and Three Dimensional Technologies by finding a suitable partner to pursue the various ventures that the Corporation already has underway and has made public through various disclosures. In the event that shareholders do not approve the RTO or the TSX Venture Exchange rejects the RTO proposal, the Corporation will renew the strategy of pursuing its already-approved rights offering, based on its medical technologies.
Based on TSX Venture Exchange Policy 5.2, Isee3d's stock, which has been halted to allow dissemination of this announcement, will continue to be halted on a temporary basis pending the preliminary review by the TSX Venture Exchange of certain initial documentation regarding the RTO.
Purpose of Transaction
Given the current market price of the Corporation's shares, the cash position remaining on hand and the difficulty in finding suitable financing to continue current operations, Isee3d was faced with finding a suitable and timely means of generating break-even revenue in the very near short-term.
Mr. Lazarus stated: "With approximately $100,000 (Cdn.) left in cash and having difficulty raising new cash at the current market prices for the shares of Isee3d, I have undertaken to sell my personal control position in Interactive Classified Corporation, which will have the effect of vending a revenue-generating asset to improve the company's outlook. We have been extremely patient during a very difficult economic period and market downturn, in seeking the kind of strategic deal, which adds growth, revenue and cash, and a significant upside opportunity for the shareholders of Isee3d. We feel strongly that this transaction accomplishes all of those goals"
Description of Isee3d's Subsidiary InstantLive Communications (YEY) Inc.
Through Isee3d's wholly owned subsidiary, InstantLive Communications (YEY) Inc., is involved in the research, development and marketing of telecommunication-based technologies, which include, Voice over IP (VoIP), Video-Conferencing and standard telephone based communication protocols.
Recent material events at Instantlive include the company entering into a Service Contract and License Agreement with Intertops.com for the installation and service of its Get Connected! Technology. Intertops.com represents one of the most successful online gaming web sites. The basic revenue to be generated from this agreement is $120,000 over a 2-year contract plus excess per-minute usage of the service over and above thresholds within the contract.
Instantlive also entered into a strategic partnership agreement with Bell Zinc Corporation to distribute the Get Connected! product to small and medium sized businesses through the bellzinc.ca portal.
About QuikView, Inc. and Interactive Classified Corporation
Based in Cupertino, California, QuikView, Inc. is a software products company offering enterprise Internet and Intranet eRecruitment solutions for mid to large size companies. QuikView's products utilize the latest tools to automate the recruitment process of permanent and temporary personnel, effectively reducing the cost and time to identify and hire qualified candidates. QuikView's suite of tools offers unparalleled and unprecedented efficiency to companies. QuikView's focus is providing enterprise level products to their target customers.
Based in Montreal, Quebec, Interactive Classified Corporation ('ICC') is a leader in web and telephony technologies and services with marketable solutions that range from websites to fully integrated web and IVR with local / toll-free access dialing numbers. Its core solutions, oriented to the dating industry, are currently private-labeled by four media companies. Furthermore, ICC has extensive experience in large-scale telephony networks and database management in the online classifieds markets and also offers 24 hour / 7 day per week centralized customer support. ICC's product offerings are oriented to service large vertical markets, where the combination of IVR and web accessibility adds a significant dimension to the quality of the information. Other ICC applications include a recruiting solution that enables the automatic screening of candidates online and / or through IVR providing employers with said candidates' video and voice records to facilitate and expedite the hiring process. To date, ICC has benefited from over $7.5 million (U.S.) in research and development.
Interactive Voice Response is a software application that accepts a combination of voice telephone input and touch-tone keypad selection and provides appropriate responses in the form of voice, fax, e-mail and perhaps other media. IVR is normally part of a larger application that includes database access. Common IVR applications include:
* Telephone Dating and Classified Services * Bank and stock account balances and transfers * Surveys and polls * Call center forwarding * Simple order entry transactions * Selective information lookup (movie schedules, etc.)
An IVR application provides pre-recorded voice responses for appropriate situations, keypad signal logic, access to relevant data, and the ability to record voice input for later handling. Using computer telephony integration, IVR applications can hand off a call to a person who can view data related to the caller at a display.
The QuikView / ICC acquisition will result in an entity with non-related principals including (with accompanying jurisdictions): Eric McAfee, Cupertino, CA, USA; Richard Thompson, CA, USA; Robert Drescher, CA, USA; and related party principals, including: Morden C. Lazarus, Montreal, QC, Canada; Michael Gruber, Montreal, QC, Canada; Christopher Kape, Montreal, QC, Canada; and Louis Veronneau, Montreal, QC, Canada.
QuikView Inc. - Consolidated Financial Results - for 4 month period ending* April 30, 2002 (unaudited)
Total Assets $ 1,376,954 Long Term Debt $ 202,036 Working Capital $ 158,355 Retained Earnings $ 1,139,234 Revenues $ 198,444 Net Income (EBITDA) $ 16,872
* The above are unaudited results based on the consolidated reporting of QuikView and its subsidiaries for the period ending April 30, 2002 taking into account the acquisition by QuikView of Interactive Classified Corporation
Related Party Nature of Transaction
ICC, a non-competing entity to InstantLive, was acquired by Lazarus, Gruber, Kape and Veronneau on July 4, 2001, prior to the Corporation acquiring InstantLive (Netemet.com) on August 1, 2001 and prior to the employment of Mr. Louis Veronneau on July 10, 2001 and Mr. Michael Gruber on November 29, 2001. Mr. Veronneau and Mr. Gruber had been consultants for 3 years and held a minority shareholder interest since 1993, respectively, of iClassified Inc., the predecessor corporation to ICC.
From an historical perspective, Eric McAfee had been in talks with ICC in regards to QuikView's potential acquisition of ICC prior to his involvement in the current RTO plan of Isee3d, when InstantLive's technologies subsequently presented a synergy to both QuikView and ICC's combined operations in the Online Dating, Online Classified and Recruitment industries.
QuikView Inc. currently has 5.5 million shares of common stock issued and outstanding and is currently controlled by Eric McAfee and the firm Berg McAfee Companies. In connection with the RTO, QuikView will be acquiring 100% of the issued and outstanding shares of Interactive Classified Corporation Inc. ('ICC') of Montreal, Quebec in exchange for 11.5 million common shares of QuikView. Upon completion of QuikView's acquisition of ICC, QuikView will have 17 million shares of common stock outstanding. ICC is owned by the following insiders of the Corporation in the following proportions, making the Corporation's acquisition of QuikView a "related party" transaction: Morden C. Lazarus, 63%; Michael Gruber, 22%; Christopher Kape, 7.5%; and Louis Veronneau, 6%. A valuation of the business of QuikView will be submitted to TSX Venture Exchange in connection with its review of the transaction.
Upon closing of the transaction, Berg McAfee principals, all of California, USA, and Morden C. Lazarus, of Montreal, Quebec, will be considered to be the controlling shareholders of the Corporation, beneficially holding 10.75% and 25.82% respectively of the post RTO entity. Michael Gruber, Christopher Kape and Louis Veronneau, all of Montreal, Quebec will hold 8.64%, 2.95% and 2.36% of the Corporation respectively post closing.
It should be noted that none of the 2 million shares beneficially held by Eric McAfee and/or Berg McAfee Companies post the RTO will be vested and available to him until certain milestones are met. In addition, all of the shares held by insiders of the Corporation will be subject to resale restrictions or other hold periods under applicable securities laws and TSX Venture Exchange policies.
Financing
As a part of the LOI, ICC has agreed to immediately fund a bridge loan to Isee3d in the amount of $300,000 (Cdn.), which loan was made previously to ICC by an unrelated third party and is convertible into 1 million QuikView shares upon the successful implementation and approval of this transaction. Should this transaction not occur, the loan is repayable to ICC by the Corporation, on demand, at an interest rate of 6% per annum.
Also contained in the LOI is the understanding that Mr. McAfee, with the available resources at Berg McAfee Companies, will use his best-efforts to assist the Corporation to raise an additional amount of $2 Million (Cdn.) of equity funding by the Corporation following successful completion of the RTO.
About Berg McAfee Companies:-
Berg McAfee is a five-year-old venture firm based in Cupertino, California with holdings in more than 20 companies. The firm has active investments in enterprise software, telecommunications, devices and networking companies in both the U.S. and Asia.
Berg McAfee has, amongst others, interest in the following organizations: MindArrow Systems (rich media CRM software); IQ Biometrix (security technologies); mvion (wireless software); Netstream (MPLS network CLEC); CustomerLink Systems (emarketing solutions); Global Digital (Internet software for newspapers); iCommerce (ecommerce software); DataZone (mobile network storage); Intraop Medical (mobile device for cancer treatment); and DAC Intl (precision lathes for optical lenses).
Directors and Officers
Upon the successful completion of the RTO and subject to shareholder approval, the Corporation proposes to have the following persons comprise its Board of Directors: Morden C. Lazarus, Eric McAfee, Robert Drescher, Christopher Kape, Robin St. Arnaud, and Rene Arbic.
It is also proposed that the officers of the post RTO company will be as follows: Morden C. Lazarus as Chief Executive Officer (CEO); Christopher Kape as Chief Operating Officer (COO), Louis Veronneau as Chief Technical Officer (CTO), Michael Gruber as V.P., Business Development and Robin St. Aranud as V.P. Legal Affairs.
About Eric McAfee:- Proposed Director of the Corporation
Eric A. McAfee is a principal at Berg McAfee Companies, a venture capital firm based in Cupertino, California. Mr. McAfee has co-founded six technology companies, raising more than $115 million (U.S.) from investors, and has venture funded 22 technology companies. Mr. McAfee currently serves on the board of directors of eight technology companies, two venture firms and two family businesses. He also serves on the George W. Bush National Information Technology Advisory Board; has served for eight years on the board of the California Manufacturers and Technology Association; lectures as the 2001 Entrepreneur in Residence at Fresno State University (FSU); and received a 1985 Congressional Award for his volunteer work. Mr. McAfee received a Bachelor of Science in Management from FSU (Dean's Medalist) and is a graduate of the Stanford Graduate School of Business Executive Program, as well as the Harvard Business School private equity course.
About Robert Drescher:- Proposed Director of the Corporation
Robert Drescher has, through various corporate positions, demonstrated expertise in marketing, manufacturing, engineering and general management. Mr. Drescher has held the following positions throughout his career: President and CEO of Optivo Corporation; Vice President, Marketing of Oblix Corporation; Vice President, Marketing of Aspect Telecommunications; Director, Marketing of Verifone; Vice President, Marketing of Mircrolog Corporation; Vice President, Product Development and Marketing of Genesis Electronics Corporation; Manager, Voice Applications Marketing of ROLM Corporation; and Management Consultant with McKinsey and Company, Inc.
Mr. Drescher received an MBA from MIT Sloan School of Management, a Master's in Engineering from MIT and a Bachelor's in Mechanical Engineering from MIT. He currently is a Board member of the YMCA of Santa Clara Valley and was on the Advisory Board of Webline Communications, which was acquired by Cisco Systems.
About Morden C. Lazarus:- Current and Proposed Chief Executive Officer and Chairman of the Board.
Mr. Morden C. Lazarus has been legal counsel for many years to a number of professional athletes and entertainment personalities, as well as several Canadian producers and entertainment corporate entities. He is a practicing gaming Attorney and has acted as legal counsel to approximately 20 casino properties and gaming companies located in Canada, Aruba, Puerto Rico, Bahamas, Atlantic City, New Jersey and Las Vegas, Nevada. He was named 'General Counsel' in November of 2001 of the International Association of Gaming Attorneys (IAGA), which is a world body composed of members from every jurisdiction where legalized gaming is permitted.
Mr. Lazarus was appointed by the Quebec Cabinet to the Board of Directors and Executive Committee of Societe de developpement industriel du Quebec (S.D.I.) (now "Investissement Quebec") (Quebec's largest Crown Corporation) where he served for approximately six years.
He is a member of the Board of Directors of DPC Biosciences Corporation, a public company, whose shares are traded on the TSX Venture Exchange, Anchor Gaming (Canada) Inc. and United Tote (Canada) Inc., subsidiaries of International Game Technology (NYSE:IGT).
About Rene Arbic:- Current and Proposed Director of the Corporation
Mr. Arbic has held numerous positions in the technology and telecommunications industry, including Director, National Accounts for AT&T International Inc, Marketing Director for Stentor International, and currently is the president of GSI Technologies USA. He has held various positions during his career with Bell Canada between 1975 and 1992. He is also the founder of Rave Communications, and Bridgepoint International, where he held the title of CEO but remains presently as a member of the Board.
About Christopher Kape:- Current V.P., Business Development of the Corporation, Proposed Chief Operating Officer and Director of the Corporation.
Christopher Kape first joined Isee3d Inc. in January 2000 and InstantLive in July 2001, as Vice President Business Development. Since that date, Mr. Kape has contributed to establishing close and solid relationships with important partners in the technological and telephony fields.
Mr. Kape's background includes a two-year employment history with the Paper Division of Procter & Gamble, in Toronto, Ontario; one-year as a systems consultant in Toronto, Ontario; and three-years as a principal in a firm involved in the senior-management recruiting industry specializing in the technology sector.
Mr. Kape holds a Bachelor of Arts in Administrative and Commercial Studies (Finance and Economics) from the University of Western Ontario and is presently pursuing his Master's in Business Administration at the John Molson School of Business.
About Michael Gruber:- Current President of InstantLive Communications (YEY) Inc., Proposed V.P., Business Development of the Corporation
Mr. Gruber has been involved in the telecommunication business for more than 22 years both as an owner and entrepreneur and as an independent distributor of products and services for and on behalf of international companies. Mr. Gruber is a founder and shareholder of successful telephony and technology companies such as P.C. Micro Express, C.C.E.B. Inc. and MultiNet.
About Louis Veronneau:- Current and Proposed Chief Technical Officer of the Corporation
Mr. Veronneau is an electrical, automation and computer engineer who graduated from the University of Montreal, Ecole Polytechnique in 1988, Mr. Veronneau held the positions of Senior Engineer, Realtime Programming, ROM, with Positron Industries Inc., Senior System Consultant, assigned in Kuwait, from Computer Science Corporation, Engineer Director with MXPert Technologies, Vice President Research and Development with Global Medic Inc. and Executive Vice President of CanSyst Inc.
Mr. Veronneau joined Isee3d and InstantLive's team of managers in July 2001, as Chief Technology Officer. Since then, he has contributed to the outcome of its many applications and has improved InstantLive's technology.
About Robin St. Arnaud:- Current and Proposed V.P., Legal Affairs, Proposed Director of the Corporation
As a practicing attorney and member of the Quebec Bar since 1991, Mtre. St-Arnaud, who graduated with a Bachelor of Political Science, Public Administration, completed his legal studies in Civil Law in 1989 and in Common Law in 1990 from the University of Ottawa.
Mr. St. Arnaud joined Isee3d in February 2000 and InstantLive in July 2001 as Vice President Corporate and Legal Affairs.
The Corporation also regrets to announce that Fernand Lalonde has tendered his resignation as a Director of the Corporation effective immediately.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Disclaimers
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested 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 the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Isee3d Inc. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Subject to completion of satisfactory due diligence on behalf of the Corporation, a suitable sponsor will be announced in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.