Irvine Sensors Negotiates Strategic Partnership; Preliminary Terms of $55M Investment Framed for iNetWorks
COSTA MESA, Calif., July 23 /PRNewswire/ -- Irvine Sensors Corporation (Nasdaq: IRSN - news; BSE: ISC - news) today announced that it has entered into a non-binding letter-of-intent describing preliminary terms for $55 million of financing to support the business plans of Irvine Sensors (ISC) and, in particular, its iNetWorks Corporation subsidiary. The financing will be led by an independent investment firm newly organized to invest in companies with significant, paradigm-shifting and/or disruptive technologies, products, and services in electronics, communications, displays, software, and media.
The proposed financing contemplates the issuance of a new class of Irvine Sensors preferred stock, which will be convertible either into common shares of Irvine Sensors or iNetWorks at the option of the holder, or automatically upon the earlier of an initial public offering of iNetWorks or September 30, 2006. Based on the current fully-diluted capital structure of ISC and iNetWorks, conversion of the preferred stock will represent an approximate 79% ownership interest in either entity, with protection against dilution except as a result of subsequent rounds of financing at higher prices. The investment firm and Irvine Sensors have agreed to explore mechanisms for potential rights offerings to ISC's current stockholders to provide a means to offset dilution and allow for stockholder participation in the iNetWorks opportunity. Until the next annual meeting, holders of the new preferred will have three seats on the Irvine Sensors Board of Directors and five seats on the iNetWorks Board of Directors, both of which will be expanded to nine seats. The transaction is subject to a number of contingencies including the arrangement of financing satisfactory to the lead investment firm, the satisfactory completion of on-going due diligence, the negotiation and execution of the final terms of a formal stock purchase agreement and the approval of the terms of the transaction by Irvine Sensors' stockholders. In the event the transaction is not consummated under certain circumstances, Irvine Sensors has agreed to pay the new investor firm a ``breakup'' fee of $1 million in cash or common stock. The terms of the transaction are subject to change.
Irvine Sensors currently expects to schedule a special meeting of its stockholders to approve the transaction before September 30, 2001 and to consummate the transaction on or before October 31, 2001.
iNetWorks is developing a telecommunications router product for potential introduction in 2002-2003 that combines Irvine Sensors' 3-dimensional (3-D) chip stacking and interconnect structures with superconducting electronics resulting in significant advantages in terms of throughput, power, operational flexibility and economics. iNetWorks is presently co-located with its parent, Irvine Sensors Corporation, in Costa Mesa, California.
Except for historical information contained herein, the matters set forth in this news release are forward-looking statements that are dependent on risks and uncertainties including such factors, among others, as the risks that financing may not close due to market or other conditions, the impact of competitive technologies and the pace at which new markets develop. Further information on Irvine Sensors Corporation and its subsidiaries, including iNetWorks Corporation, is contained in publicly filed disclosures available through the SEC's EDGAR database (www.sec.gov) or from the Company's Investor Relations Department.
SOURCE: Irvine Sensors Corporation |
