NVXE news:
Friday March 31, 8:30 am Eastern Time
Company Press Release
SOURCE: New Visual Entertainment, Inc.
New Visual Entertainment, Inc. and
Intelecon Services, Inc. Sign Definitive
Merger Agreement
SAN DIEGO, March 31 /PRNewswire/ -- New Visual Entertainment, Inc. (OTC Bulletin Board: NVXE - news)
announced today that it has signed a definitive agreement for the Company to acquire Intelecon Services, Inc., a leading
provider of entertainment and business communications technology and value-added services, in a stock transaction.
Intelecon is a privately-held production, e-commerce, multimedia, staging and audio-visual company. Intelecon offers
complete turnkey solutions for productions, concerts, corporate events, tradeshows, and multimedia. Its services include
stereoscopic 3D, 2D and 3D animation, on-line and off-line nonlinear non-compressed digital editing, special effects, 3D
visualization, audio, lighting, rigging, video walls, large screen and panoramic projection. Intelecon is headquartered in
Dallas, Texas, where the company is today hosting an open house in its new, multi-million dollar, state of the art, expanded
design studio. For further information, see Intelecon's web site at www.intelecon.com.
Intelecon currently has 70 full-time and five part-time employees, and offices in Dallas, Los Angeles and Las Vegas. Based
upon its unaudited income statement for the year ended December 31, 1999, Intelecon generated gross revenues of
approximately $9.2 million, EBITDA (earnings before taxes, interest, depreciation and amortization) of approximately $1.5
million, and net income of approximately $17,500. The difference between 1999 EBITDA and net income was principally
due to $1.1 million in depreciation in 1999 on previously acquired assets.
In consideration of the merger, the former shareholders of Intelecon will receive 2,000,000 restricted shares of New Visual
common stock. An additional 3,500,000 restricted shares of New Visual common stock will be delivered to an escrow
agent and be released to the Intelecon shareholders over a five-year period upon the achievement of certain pre-tax net
income milestones. If the milestones are not satisfied, the shares will not be released from escrow until the end of the
five-year escrow period, and under certain circumstances would be forfeited by the shareholders. An additional 70,000
shares of New Visual common stock will be reserved for issuance upon the exercise of stock options held by certain
Intelecon employees that will be exchanged for New Visual stock options in the merger.
After the merger, Intelecon will be a wholly-owned subsidiary of the Company, and will continue to operate under the
Intelecon name. Consummation of the merger is subject to various conditions, including: the filing by the Company of an
application for listing of its common stock on the Nasdaq Stock Market; the receipt by the Company of a commitment letter
from Lilly Beter Capital Group, Ltd. concerning the placement of at least $18 million of debt or equity securities of the
Company within 12 months after the closing of the merger; Intelecon's liabilities (excluding capital leases) being no greater
than $1.5 million; Intelecon's restructuring of certain obligations that would permit certain Intelecon indebtedness, preferred
stock and warrants to be canceled at closing in exchange for the issuance by the Company of no more than 2 million
restricted shares of common stock; and the completion of an audit of Intelecon's 1998 and 1999 financial statements
acceptable to New Visual. The merger also is subject to the satisfactory completion of each party's due diligence and
requisite board and shareholder approval. The Company's shareholders are not required to approve the merger, which is
scheduled to be completed by June 30, 2000.
Upon completion of the merger, Edward Vakser and Vladimir Vakser, Intelecon's founders, will be appointed to the
Company's board of directors. Edward Vakser will become the Company's President, and Vladimir Vakser will become
the Company's Chief Financial Officer after the merger. Ray Willenberg, Jr., the Company's current President and
Chairman of the Board, will continue to serve as the Chief Executive Officer and Chairman of the Board of the Company.
Mr. Willenberg stated, ``After having spent considerable time getting to know the special venue entertainment markets, it
makes me very proud to now offer a competitively-priced IMAX/Iwerks-like 3D consumer experience, made possible by
combining our 3D filming technologies and Intelecon's 3D digital studios. Part of what made this happen is the extremely
talented and professional team of designers and producers that the Intelecon team brings to the table. We are excited to work
with a highly successful and energetic group of leaders in Eddie and Vladimir Vakser to push the envelope for 3D and to
offer our shareholders a stable, proven platform upon which to build for future acquisitions and developments.'
New Visual Entertainment, Inc. is a true stereoscopic 3D production company that specializes in 3D product development
and distribution for special venue theaters, home video, broadcast and theatrical markets by utilizing patented technology
for the creation and exhibition of 3-dimensional media. Through its New Wheel Technology, Inc. subsidiary, New Visual
is attempting to develop a metallic high speed digital transmission technology for a variety of applications. Through its
Impact Pictures, Inc. subsidiary, New Visual intends to develop web animation, streaming media, multimedia productions
and CD-ROM business cards and corporate presentations. New Visual's common stock is traded on the Nasdaq stock
market's over-the-counter bulletin board under the symbol NVXE. Lilly Beter Capital Group, Ltd., with offices in
Washington, DC, New York, California, Florida, Minnesota, Illinois, Gibraltar, Turks and Caicos Islands, and the British
West Indies, is providing investor and public relations services for the Company and can be reached at 561-361-1030.
With the exception of the historical information contained in this release, this release includes forward-looking statements
made under the ``safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. These statements involve
risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements,
including but not limited to the following: product development difficulties; manufacturing difficulties; market demand and
acceptance of products; the impact of changing economic conditions; business conditions in the internet, computer, and 3D
film and video industries; reliance on third parties including potential suppliers, licensors and licensees; the impact of
competitors and their products; risks concerning future technology and research and development efforts; and other factors
detailed in this release and in the Company's Securities and Exchange Commission filings.
SOURCE: New Visual Entertainment, Inc.
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