NEWS RELEASE
February 2, 2000 Trading Symbol: "IVS" CDNX
IVS Intelligent Vehicle Systems Inc. (the "Company") is pleased to announce
that it has now reached a satisfactory resolution of the outstanding issues
raised by the Vancouver Stock Exchange in its Notice dated July 23, 1999
(the "Notice") and that the Company?s shares will be reinstated for trading
effective at the opening of the market on February 3, 2000.
By agreement dated January 10, 2000 (the "Settlement Agreement") the Company
has reached a settlement with McCarney Technologies Inc. ("MTI") regarding
approximately $2,500,000 in net advances made from the Company to MTI since
1992. Under the terms of the Settlement Agreement such advances will be
applied and settled as follows:
1. $1,500,000 on account of all research, development, engineering and
consulting services performed by MTI on behalf of the Company during the
period April 1, 1992 to May 1, 1997 including, among other things, upgrading
the MTI owned / IVS licensed Snapshot Diagnostic System ("Snapshot") and the
Company's proprietary "Smartlink" communications controller and integrated
software system;
2. $55,000 on account of royalties under the license agreement dated April
1, 1992, as amended (the "License Agreement");
3. $108,850 on account of GST in respect of the above payments (for which
the Company will be claiming an input credit during the current fiscal
quarter); and
4. the balance of $836,150 to be treated as non-interest bearing advances
from the Company to MTI for the period May 1, 1997 to September 30, 1998.
Subsequent to September 30, 1998 MTI has repaid a total of $297,500 to the
Company in cash and paid additional expense totaling $108,909 on behalf of
the Company thereby reducing the amount of the outstanding advances to
$429,741 (the "Outstanding Amount"). Under the terms of the Settlement
Agreement MTI has agreed to return the Outstanding Amount to the Company in
equal monthly installments of $20,000 each commencing on February 15, 2000
and continuing on the 15th day of each and every month thereafter until
fully paid. In addition, MTI has agreed to assign to the Company two lump
sum payments totaling US$197,000 (Cdn$295,500) due from Quicklink
Diagnostics ("QLD") on account of engineering services to be performed by
MTI pursuant to a product development agreement dated June 23, 1999 between
the Company and QLD (the "QLD Agreement"). See below for further details of
the QLD Agreement. The Company expects to receive an initial installment in
the range of US$50,000 to US$100,000 from QLD within the next two to three
weeks. In consideration for MTI repaying the Company for all advances made
subsequent to May 1, 1997, the Company has acknowledged that any products or
intellectual property developed by MTI since that date are for the sole
account of MTI.
By separate agreement dated January 10, 2000 (the "Amending Agreement") the
Company and MTI have amended the terms of the existing License Agreement by
dividing the market for MTI's licensed products including "Snapshot" (the
"Licensed Products") into two separate markets, namely the Vehicular Heavy
Duty Market and the Vehicular Light Duty Market. Under the terms of the
Amending Agreement the Company will now have the exclusive right and
license, throughout the world, to commercially exploit the Licensed Products
for the Vehicular Light Duty Market; defined as being ?any manufacturer,
dealer, distributor, merchant or other retailer who is primarily engaged in
the business of manufacturing, distributing or selling gasoline powered
light duty trucks or automobiles including any dealer, distributor, merchant
or other retailer who provides repair and/or after-market sales or services
to the gasoline powered automobile and light duty truck market or the
emission testing industry?. MTI on the other hand, shall retain all rights
to the Vehicular Heavy Duty Market.
As a further term of the Amending Agreement, all future research,
development, engineering, consulting and manufacturing services as may be
required by the Company from time to time shall be performed by MTI pursuant
to a written statement of work or purchase order setting out in detail the
nature of the project to be developed, the estimated costs and timetable
involved. In all other material respects the License Agreement remains in
full force and effect for the balance of the term expiring on March 31,
2002, subject to the Company's automatic right of renewal as provided for
therein.
Both the Settlement Agreement and the Amending Agreement are subject to the
approval of the "disinterested" shareholders of the Company.
The Company is also pleased to announce that it has entered into a product
development agreement dated July 23, 1999 with QLD pursuant to which the
Company has agreed to develop and produce five working engineering
prototypes of a hardware and software device that will capture data from a
vehicle's assembly line data link and process this data under various test
conditions (i.e. Key on, engine off; start-up; idle, closed loop; 1500 rpm,
closed loop and road test). The cost to QLD for the design and development
of the five prototypes is US$197,000 (the "Development Fee"). By addendum
agreement dated September 9, 1999 the Company contracted MTI to provide the
requisite design and engineering services to produce the prototypes at a
cost equal to the Development Fee. To date the Company has received a good
faith deposit of US$10,000 from QLD and expects to receive an additional
US$50,000 to US$100,000 within the next two to three weeks. As disclosed
above MTI has agreed to assign the Development Fee to the Company as part of
the Settlement Agreement. The scheduled time frame to develop the
prototypes is between 16 to 18 weeks after receipt of the initial payment
from QLD.
The Company also announces that there are currently no plans to merge or
amalgamate the Company with MTI as previously disclosed and in this regard
all of the Company's administrative operations were separated from MTI in
September, 1999. In conjunction with such separation James McCarney resigned
as a Director of the Company. The current directors and officers of the
Company are as follows:
Name Position
Truel Brown Chief Executive Officer and Director
E. Tony Stickel President, Secretary and Director
James Mead Director
R. Dean Trenholm Director
However, due to the nature of its ongoing relationship with MTI the Company
will continue to work closely with MTI in the future development and
commercial application of the Licensed Products for the Vehicular Light Duty
Market.
Finally, the Company announces that it has reached a settlement with 526053
B.C. Ltd., a private company controlled by a former director of the Company,
with respect to the recovery of $319,960 paid to 526053 B.C. Ltd. in
December, 1997 on account of services rendered and reimbursement of
out-of-pocket expenses. Of such amount, $208,850 was paid to 526053 B.C.
Ltd. at the direction of MTI and has been included as part of the overall
settlement of the $2,500,000 under the Settlement Agreement. An additional
$40,000 has been offset against an outstanding payable due from the Company
to another private company controlled by the same individual and the balance
of $71,110 will be repaid on February 15, 2000 as to $50,000, April 1, 2000
as to $10,000 and May 1, 2000 as to $11,110.
ON BEHALF OF THE BOARD OF DIRECTORS
?Truel Brown"_________________ |
