NEWS!Brockton QT target Cyberhand extends to Pocketop
2003-06-09 17:59 ET - News Release
See News Release (C-BKC) Brockton Capital Corp
Mr. Kevin Hanson of Brockton reports
CYBERHAND TO EXPAND BUSINESS WITH ACQUISITION OF POCKETOP
On June 4, 2003, Cyberhand Technologies Inc. signed a letter of intent to acquire all of the common shares of Pocketop Computer Corporation by way of a plan of arrangement. Brockton and Tullaree Capital, the majority shareholders of Pocketop, also signed the letter of intent. The proposed acquisition is anticipated to close in conjunction with the previously announced acquisition of Cyberhand by Brockton, which is intended to serve as Brockton's qualifying transaction pursuant to TSX Venture Exchange Policy 2.4.
Pocketop, a private Canadian incorporated company that has operations in Vancouver, B.C., is developing innovations in the portable hand-held personal digital assistant (PDA) market to advance users into the next era of mobile computing. Founded in 1997 by architect Michael Katz, Pocketop completed the development of its first product, the Pocketop keyboard, in October, 2001. The Pocketop keyboard is the world's first wireless portable PDA keyboard. The keyboard is half the volume and weight of the market leader, but has traditional keyboard functionality and allows for touch-typing. This distinction is a size-and-form-factor innovation, since it turns the PDA into a functioning pocket laptop, enabling users to send and receive E-mail, surf the Web, compose documents, take notes and perform spreadsheet calculations. Its wireless technology and built-in software eliminates clumsy hardware connections and enables broad compatibility, as it is compatible with most Palm OS, Linux OS and PocketPC devices. Over the last 15 months, to March 31, 2003, Pocketop has revenues of over $1.3-million from the sales of the Pocketop keyboard. For further information please refer to the Web site www.pocketop.net.
"The consolidation of the companies will generate many synergies for the combined entities and represents immediate value for our shareholders," explained by Patrick Burke, president of Cyberhand. "For example, from a philosophical perspective, the Pocketop focus on innovative design of technologically advanced, high-quality computer peripheral equipment is reciprocally matched by Cyberhand's. Further, this perspective is complementary to Cyberhand's attention to ergonomic design details and will be maximized by utilizing Cyberhand's own in-house design studios to enhance the combined entities' product offerings. From an operating perspective, specific business activities such as the sales, marketing and distribution for both current and future product offerings will be fully integrated. These operating synergies, combined with Pocketop's existing revenue, will significantly enhance the successful commercialization of Cyberhand's current and future product offerings."
The acquisition is intended to close concurrently with the Brockton's qualifying transaction. Under the terms of the letter of intent, Brockton has agreed to issue up to six million value and earn-out common shares from its treasury at a deemed price of $1 per share in exchange for 100 per cent of the outstanding shares of Pocketop.
In addition, Cyberhand will cause all the outstanding loans owing by Pocketop to Tullaree to be repaid. Currently, these loans have a total principal amount of approximately $400,000 and Tullaree agrees not to advance any further loans without the approval of Cyberhand.
The acquisition is subject to a due diligence investigation in respect of Pocketop by Cyberhand and Brockton, which must be completed on or before June 30, 2003. In addition, Pocketop and Cyberhand will negotiate an arrangement agreement, subject to Cyberhand's satisfaction with the results of the due diligence investigations, setting out the detailed terms of the letter of intent to be executed on or before July 31, 2003. Further, Tullaree has agreed to make an unsecured loan of up to a total of $150,000 to Cyberhand bearing interest at the rate of 12 per cent per year. The amounts advanced under the loan together with accrued interest are to be repaid on either the completion or termination of the acquisition as contemplated between the parties. The loan amount of $50,000 was advanced to Cyberhand on June 9, 2003. The balance of $100,000 is to be advanced upon certain conditions and milestones being met.
With respect to the original qualifying transaction, Brockton had submitted to the exchange a draft information circular and was working with the exchange to address its comments when the opportunity to acquire Pocketop was presented to Cyberhand. The submission to the exchange will have to be amended to include disclosure on Pocketop. Brockton believes that the potential acquisition of Pocketop will add more value for the Brockton shareholders as the commercialization risk of the combined entities will have been significantly reduced. In addition, the financing that was being raised to close concurrently with the qualifying transaction may now be increased up to $2.0-million with the same anticipated terms and conditions as previously disclosed. The business of Cyberhand has progressed over the past few months and will be detailed in a future information update.
The transactions contemplated in the above mentioned letter of intent are subject to formal documentation and other conditions precedent for the benefit of each party including formal approval of the majority of the minority shareholders of Brockton, approval of the TSX-V, and satisfactory completion of due diligence reviews by Brockton and Cyberhand. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.