Here's the news....
Photonics Announces Merger With Broadsino
Business Wire - July 21, 1998 18:00
SAN JOSE, Calif.--(BUSINESS WIRE)--July 21, 1998--Photonics Corporation (OTC BB:PHOX) dba DTC Data Technology (the "Company") announced that it has signed a letter of intent and the Board of Directors has approved the merger of Broadsino Computer Development Ltd. ("Broadsino"), a privately held company in Hong Kong with DTC Hong Kong, a wholly owned subsidiary of the Company.
Under the terms of the agreement, the Company will issue one share of the Company's Series A Convertible Preferred ("Preferred") for each U.S. dollar of net asset of Broadsino, approximately 6 to 7 million U.S. dollars, for all the shares of Broadsino.
The Preferred shares bear a 10% cumulative dividend rate, payable 12 months in arrears in the form of common stock. The Preferred shares are convertible to common shares of the Company at a 1:1 ratio at any
time. The Company may convert the Preferred shares to common if the price of the common stock equals or exceeds $2 per share for more than 20 consecutive trading days.
Broadsino has sales of over $70 million (USD) for fiscal year ended March 1998 with a net profit after tax of approximately $1.5 million (USD). Broadsino is in the business of contract assembly and markets a variety of add on cards, including modems, VGAs, and sound cards, and cases for IBM personal computers under its brand name of "Actionmedia." It does approximately 40% of its business in U.S. and the balance divided between Europe and China.
Broadsino is the largest supplier and one of the largest shareholders of the Company. The managing director of Broadsino, K. C. Yeung, has been a board member of the Company and managing director of DTC Hong
Kong for more than 4 years.
The Company expects the merger to be completed subject to regulatory and shareholder approval.
The Board has also approved an issuance of an additional 2 million shares of Preferred stock at $1.00 per share to support the future growth of the Company. After this and the merger, there will be in total approximate 4.6 million shares of common and 10.6 million shares of Preferred stock outstanding on a fully diluted basis.
Chairman David Lee commented that the merger is beneficial both to the Company and its shareholders. After the merger, the combined Company will sell products of both companies through their combined channels.
This will result in much larger product offerings, broader international sales channels and stronger financial resources. The Company intends to seek re-listing on a U.S. stock exchange.
Except for any historical information contained herein, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties, including but not limited to economic, key employee, competitive, governmental, regulatory and technological factors affecting the Company's growth, operations, markets, products, services, licenses and other factors discussed in the Company's filings with the Securities and Exchange Commission.
Actual results may vary materially due to these and other risks and uncertainties.
Photonics Corporation dba DTC Data Technology develops, designs and markets a broad range of EIDE, I/O and SCSI controller cards and host adapters.
CONTACT: Photonics Corporation
Gloria C. Lee, 408/546-5678
www.datatechnology.com
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What about the DTEC >PHOX conversion????
Are the Preferred shares floorless???? (Though one would be hard-pressed to imagine being closer to the "floor" at the moment!<G>)
Re-listing??? Any comments on the reason/necessity?
--FRED |
