SAN MARCOS, Calif., Jan. 10, 2001 (PRIMEZONE) -- On-Point Technology Systems, Inc. (On-Point) (Nasdaq:ONPT) today announced that it has implemented the letter of intent announced last month and executed a definitive agreement to acquire most of the assets of a privately-held Web-enabled systems company (the Business).
The Business has developed public-access Web-enabled systems, which the Company believes will be beneficial to realizing On-Point's strategic plans to develop electronic solutions to high-volume, cash-oriented transactions. The assets of the Business include proprietary delivery systems, strategic arrangements for content delivery, contractual revenue-generating arrangements, equipment, and experienced management.
The agreement provides for the acquisition of most of the assets of the Business, including the assignment of certain existing contracts, in exchange for shares of preferred stock of On-Point that are convertible into shares of common stock if revenue from the Business's products between closing and December 31, 2003 exceed $10 Million. The conversion ratio varies depending on the amount of revenue in excess of $10 Million. Additional shares of common stock of On-Point will be issued if revenue in 2001, 2002 and 2003 each exceed $10 Million.
Frederick Sandvick, On-Point's Chairman and Chief Executive Officer, commented, "We are pleased to have reached a definitive agreement for the acquisition of these assets, which will assist us in the repositioning of On-Point to pursue new strategic market opportunities.
"As we previously announced, our new strategic plans include the re-positioning of On-Point and the realigning of its operations to strategically transition the Company for the development, marketing and operation of new market opportunities. Our focus for these new market opportunities is the development of electronic solutions to high-volume, cash-oriented transactions, such as prepaid telephony, bill payments, prepaid debit processes, consumer entertainment and public access mediums.
"The acquisition of the assets of this Business not only provides us with a Web-enabled delivery system that we believe will serve as a foundation for all our products in this new market area, it also accelerates our ability to launch new product opportunities in the national and international consumer entertainment and information market. This market represents a huge cash flow industry that we believe will benefit greatly from Web-enabled delivery systems. We plan on launching an e-commerce vending machine as our first product into this market. We are excited about this new product launch and look forward to further developments in this area."
About On-Point
On-Point provides effective technologies for transaction automation. On-Point pioneered the development of the instant ticket vending machine for lotteries worldwide and is one of the world's largest providers of these and other high-security vending products. On-Point designs, sells, leases and services high-security vending machines both domestically and internationally and has begun developing automated electronic solutions for high-volume, cash-oriented transactions.
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 proposed equity raises, continued acceptance of the company's products and services in the marketplace, competitive factors, new products and technological changes, the company's successful entry into new markets, the company's successful transition to its next generation product line, dependence upon third-party vendors, a limited number of customers, political and other uncertainties related to customer purchases, the ability to generate cash flow sufficient to sustain operating activities, completing conditions under the definitive agreement to acquire the assets of the Web-enabled systems company that are necessary to close the transaction and other risks detailed in the company's periodic filings with the Securities and Exchange Commission.