Press Release Source: True Product ID, Inc. (TPID)
True Product ID Acquires 40% of Chinese Joint Venture Company, True Product ID Technology (Beijing) Limited
Friday January 5, 8:45 am ET
BEIJING & PHILADELPHIA--(BUSINESS WIRE)--True Product ID, Inc. (TPID) (OTCBB:TPDI - News) announced that pursuant to a Restructuring Agreement dated January 4, 2007, TPID has acquired 40% of Chinese joint venture company, True Product ID Technology (Beijing) Limited.
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The acquisition of the 40% interest in the Chinese Joint Venture and other transactions in the Restructuring Agreement are part of the ongoing efforts of TPID's new management which started with the May 2006 dividend by Sure Trace Security Corporation ("SSTY") of all of its shares in TPID and TPID's separation from SSTY.
Richard Bendis, TPID's president, said: "As a result of these ongoing restructuring efforts, TPID's new management hopes to strengthen the corporate structure, management, and technical teams in both the U.S. and China needed to best perform contracts in China and elsewhere. TPID's new management believes that its ongoing restructuring efforts will help maximize shareholder value."
In addition to other contracts listed on the Chinese JV website, in October 2006, the Chinese JV entered into a nationwide contract with the China Federation of Industry and Commerce Auto & Motorbike Parts Chamber Of Commerce (AMP), a Chinese national organization founded to regulate, standardize and overhaul the Chinese Auto & Motorbike Parts & Accessories Industry. AMP will use TPID's anti-counterfeiting technology (now registered with the Chinese National Industrial and Commercial Bureau) as an intellectual property protection tool on automobiles and motorcycles manufactured in China.
Li Ning, the Chinese JV's CEO, remarked: "We believe that these developments bring together the best that the U.S. and China can offer to create the partnership needed to deliver China."
SSTY's president, Michael Cimino, added: "This restructuring completes the process where SSTY envisioned TPID as a totally independent concern controlling all aspects of the anti-counterfeiting business. With the acquisition of an interest in the JV, TPID is better positioned to deliver as envisioned, and SSTY, in addition to the royalties it may receive, will be able to shift its primary focus to Globe Staff Consulting and its tagging and tracking business and related companies."
Pursuant to the Restructuring Agreement, TPID acquired the 40% ownership interests in a Chinese JV held by Sure Trace Security Corporation (SSTY), Sure Trace Asia Limited (STA), and William Chan. The remaining 60% ownership interest in the Chinese JV is held by unrelated Chinese entities.
Under the Restructuring Agreement, SSTY agreed to: (1) terminate in its entirety the March 16, 2006 licensing agreement between SSTY and TPID, wherein SSTY licensed to TPID certain contractual rights of SSTY in exchange for, inter alia, a royalty, and certain payments to SSTY and others and repayment; and (2) strike in its entirety certain provisions of the March 17, 2006 Agreement to Issue Stock for Technology License between SSTY and TPID, wherein SSTY could have received TPID shares in addition to the shares SSTY had already received and had distributed to its shareholders as a dividend.
In return, TPID agreed to:
* Pay SSTY a royalty in the amount of 2% of its gross receipts which TPID actually collects from customers outside China, Hong Kong, and Macau for a period of 2 years commencing as of January 4, 2007;
* Pay SSTY all reasonable, properly documented out-of-pocket post-spinout expenses SSTY incurred on TPID's behalf;
* Assume, pursuant to a January 4, 2007 Amended Payment Agreement, all outstanding payments owed by SSTY to the former control block holder of TPID to acquire TPID. Under the Amended Payment Agreement, TPID is obligated to (a) pay the former control block holder $100,000 by January 31, 2007; $185,000 by March 31, 2007; and $34,410 in interest and penalties by June 30, 2007 and (b) assume SSTY's obligations to issue the former control block holder 6 million common shares of TPID, as SSTY had previously agreed post-SSTY's acquisition of TPID but pre-spinout, in return for, inter alia, the former control block holder agreeing to waive $85,000 of the balance owed by SSTY and all interest and penalties on the $85,000;
* Pay SSTY, on an interest-free basis, within 3 years of the effective date of the Restructuring Agreement $1,130,000, minus the amount of penalties and interest TPID must pay the former control block holder under the Amended Payment Agreement (the "Subject Payment"). If TPID timely makes payments under the Amended Payment Agreement, the amount of such penalties and interest is $34,410; in the event that TPID fails to make timely payments under the Amended Payment Agreement, interest will accrue on the unpaid portions at 25% simple interest per annum. TPID is also obligated to make the following prepayments towards the Subject Payment: (a) $50,000 upon receipt of the first $1 million of investment raised by TPID after January 4, 2007; and (b) 25% of any investment raised by TPID after the initial $1 million investment;
* The obligations of SSTY are secured by a security interest in TPID's ownership interest in Chinese JV until the Subject Payment is paid in full. SSTY is authorized to file the appropriate UCC-1 financing statements to perfect such a security interest in all appropriate jurisdictions.
Under the Restructuring Agreement, SSTY and TPID further agreed, inter alia, to non-competition provisions in which (1) SSTY in general agreed not to compete with TPID in the anti-counterfeiting and/or product authentication business; and (2) TPID agreed in general not to compete with SSTY in the geo-tracking-related or All-in-One-Key-related business.
The effective date of the Restructuring Agreement shall be February 18, 2007, provided, however, that the Restructuring Agreement shall go immediately into effect upon the conclusion of aspects, if any, of the ongoing SEC investigation relating to SSTY which may affect the transactions contemplated in the Restructuring Agreement. The SEC commenced a formal investigation of SSTY in August 2005, which remained ongoing during the period when SSTY acquired and owned the controlling interest in TPID and delivered the shares it held in the Registrant as a dividend to SSTY stockholders. As part of the investigation, the SEC Staff has questioned whether the delivery of the shares to SSTY shareholders required registration with the SEC. SSTY agrees not to withdraw its consent to the Restructuring Agreement during period between its execution and effective dates.
About True Product ID
True Product ID produces integrators for anti-counterfeiting and security surveillance applications and is a provider of integrated tracking devices. The Company delivers turnkey solutions for governments, armed forces, and industry, through its own proprietary technology and through aggregating the technology, products, and services of third parties via licensing agreements and or joint ventures. For more information go to: http://www.tpid.net / http://www.trueproductid.com/
About Sure Trace Security Corporation
SSTY has developed a mix of security tracking service businesses and technologies targeting businesses, governments and consumers. Our technology assists our customers to be informed in real time of the exact location of products or people, with 2way communication and can be customized to meet additional client requirements. The company's innovative product and service offerings provide the best advantages to customers, including the smallest tracking modules with GSM and GPS dual capability and innovative specialty cellular phone models, data capability, all hosted on an ASP server platform. For more information go to: http://www.suretrace.com and http://www.gsc.fr/corp/.
SAFE HARBOR STATEMENT: This news release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that our products may not achieve customer acceptance or perform as intended, that we may be unable to obtain necessary financing to continue operations and development, and other risks. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements.
Contact:
True Product ID, Inc. (TPID)
Richard Bendis, 215-496-8102
rbendis@tpid.net
Source: True Product ID, Inc. (TPID) |
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