INTERNET--(esecurities.W)--June 20, 1999 - NewKidCo LLC 25% Joint Venture Buyout.
ALPHA SOFTWARE CORP. A SUBSIDIARY OF SOFTQUAD INTERNATIONAL ANNOUNCES LETTER OF INTENT TO FORM A JOINT VENTURE WITH NEWKIDCO LLC; VENTURE HOLDS LICENSES FOR SESAME STREET® CHARACTERS FOR PLAYSTATION®
"...In exchange for a cash payment, SoftQuad's subsidiary, Alpha Software Corporation, will own a majority interest in the joint venture and beginning in June 1999 will have an option to acquire, or under certain circumstances be required by NewKidCo to acquire, NewKidCo's interest in the joint venture for $1,500,000 (U.S.) in cash or 1,000,000 shares of SoftQuad stock*, warrants to acquire up to 4,000,000 shares of SoftQuad stock at varying prices in excess of the current market price of SoftQuad stock and cash payments based upon the joint venture's profits three years from closing..."
Source: NewKidCo newkidco.com
SOFTQUAD INTERNATIONAL FINALIZES NEWKIDCO JOINT VENTURE; EXPECTED TO MAKE STRONG CONTRIBUTION TO Q4 RESULTS
Burlington, MA (June 10, 1998) -- SoftQuad International Inc. (NASDAQ:SWEBF; TSE:SKI), announced today that it has finalized its joint venture with NewKidCo Holdings, LLC to create NewKidCo, LLC ("NewKidCo"). NewKidCo publishes children's video games for "next generation" console systems. The companies announced a letter of intent to form the joint venture on April 21.
SoftQuad International Inc. owns 75% of NewKidCo and has an option to purchase, and under certain circumstances may be required to purchase, the remaining interest in NewKidCo. NewKidCo's first three titles are slated for shipment in the fourth quarter and are expected to be broadly distributed to toy superstores, mass merchandisers, computer specialty retailers and other retail outlets nationwide. NewKidCo management expects NewKidCo's revenues to be in the range of $9 million (U.S.) in the fourth quarter with strong earnings contribution***, based upon preliminary reactions from major retailers and the performance of other popular titles in the market...At the E3 show (Electronic Entertainment Expo) at the end of May, NewKidCo introduced and demonstrated its fall product line up. NewKidCo will publish two Sesame Street® Titles for PlayStation® -- Elmo's Magical Number Tour™ and Elmo's Magical Letter Tour™. NewKidCo also announced and displayed its third PlayStation® title - Buster and The Beanstalk™, based on Warner Bros.' popular TINY TOONS Adventures® television show.
Joint Venture Transaction Details Under the transaction, NewKidCo Holdings LLC has transferred its assets and business to the joint venture. In exchange for a $500,000 (U.S.) cash payment, SoftQuad International's subsidiary, Alpha Software Corporation, now owns a 75% interest in the joint venture and beginning in June 1999 will have an option to acquire, or under certain circumstances be required by NewKidCo Holdings LLC to acquire, NewKidCo Holdings LLC's 25% interest in the joint venture for 975,000 shares of SoftQuad International stock and cash payments based upon the joint venture's profits for the first three years from its formation. If prior to Alpha's acquisition of NewKidCo Holdings LLC interest, the joint venture has achieved specified revenue and profit goals, NewKidCo Holdings LLC will also receive warrants to acquire up to 4,000,000 shares of SoftQuad International stock at prices ranging from $1.50 (U.S.) to $4.00 (U.S.) and may elect to receive, in lieu of the 975,000 shares of SoftQuad International stock, a cash payment of $1,462,500 (U.S.)**..."
Source: NewKidCo newkidco.com
NEWKIDCO ANNOUNCES CLOSING OF PRIVATE PLACEMENT OFFERING
"...NewKidCo is also pleased to announce that it has acquired control of the remaining 25% interest in NewKidCo Holdings, LLC (the "LLC"), which conducts the Company's children's video console game business. Pursuant to the arrangements entered into in June 1998, when the Company acquired its initial 75% interest in the LLC, the Company has paid or will pay US$500,000 and issued 641,667 common shares to acquire the remaining 25% interest***. As well, under the acquisition arrangements, the Company is obligated to pay the original owners of the LLC 25% of the net profits of the LLC for the three year period ending April 30, 2001, to a maximum of US$6,000,000. In addition, as part of such acquisition, warrants entitling the vendors to acquire 4,000,000 common shares of the Company until June 1, 2003, at prices ranging from US$1.50 to US$4.00 have become exercisable..."
Source: NewKidCo newkidco.com
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* $US 1.5M/1M shares = $US 1.50/share.
** $US 1.4625M/.975M shares = $US 1.499/share.
*** $US .5M/.333M shares = $US 1.67/share ...the Company has paid or will pay US$500,000 and issued 641,667 common shares to acquire the remaining 25% interest.... note: said NewKidCo LLC buyout terms were also based upon NewKidCo LLCs very optimistic projections made pursuant to its June 10, 1998 announcement, above, none of which were met in re: "...NewKidCo management expects NewKidCo's revenues to be in the range of $9 million (U.S.) in the fourth quarter [1998 ending December 31] with strong earnings contribution...".
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