DPAC and QuaTech Amend Reorganization Agreement and License Agreement.GARDEN GROVE Garden Grove, city (1990 pop. 143,050), Orange co., S Calif., a suburb of Long Beach and Los Angeles, on the Santa Ana River; founded 1877, inc. 1956. Many of its residents work in nearby aerospace and defense installations, and there is light manufacturing. , Calif. -- DPAC DPAC Denver Performing Arts Complex (CO, USA aka: DCPA) DPAC Deferred Policy Acquisition Costs (insurance) DPAC District Parent Advisory Committee DPAC Dover Partnership Against Crime Technologies Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DPAC): --Reorganization agreement's amendment changes exchange ratio and extends agreement termination date termination date, n See expiration date. to March 31, 2006. --License agreement's amendment gives QuaTech an option to prepay exclusive license fees to DPAC for a one-time cash payment of $2.4 million. --DPAC expects to file a Form S-4 registration statement and seek shareholder approval. DPAC Technologies Corp. (OTCBB:DPAC), Development Capital Ventures LP ("DCV DCV Demand Controlled Ventilation (HVAC) DCV Directional Control Valve DCV Direct Current Volts DCV Defense Combat Value DCV Dress Code Violation DCV Document Control Voucher (banking & finance) ") and QuaTech, Inc. (www.quatech.com) today announced that they have for the second time amended their agreement and plan of reorganization and have for the first time amended their license agreement. The reorganization agreement was originally entered into on April 26, 2005, and provides for DPAC to acquire all of the stock and options of QuaTech in exchange for issuing previously unissued shares of DPAC's common stock. The amendment to the agreement between DPAC and QuaTech establishes a new exchange ratio. The new exchange ratio was informally based on DPAC's shareholders as of immediately before the merger continuing to hold (as of immediately after the merger) 30% of the outstanding common stock of DPAC, before the potential dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of conversion of an outstanding bridge loan, which would result in current DPAC shareholders owning approximately 25.5% of the issued and outstanding shares immediately following the consummation of the merger. The merger shall be contingent on Adj. 1. contingent on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent upon, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent QuaTech consummating approximately $3.1 million in debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay in accordance with the terms of nonbinding proposals it has obtained from lenders; however, it is no longer a condition that QuaTech repay its outstanding subordinated note in the original principal amount of $3.0 million. The amendment also extends the termination date of the reorganization agreement to March 31, 2006. The parties have also amended the license agreement between DPAC, DCV and QuaTech that was originally entered into on August 5, 2005. The amendment provides an option for QuaTech to elect to prepay all exclusive license fees for a one-time cash payment of $2.4 million, which the parties have agreed is the fair market value of the exclusive license. The exclusive license remains subject to DPAC shareholder approval. If QuaTech exercises its option to prepay the license fees, the cash will be held in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. pending DPAC shareholder approval. If DPAC's shareholders approve the license agreement, and if the merger agreement is terminated for any reason, QuaTech has the option of rescinding its election to prepay and allow the license to convert to a non-exclusive license with the obligation to pay ongoing license fees to DPAC based on quantities shipped. In that event, the cash payment in escrow will be returned to QuaTech. If DPAC's shareholders do not approve the license agreement, and the merger agreement is terminated, the license shall automatically be converted to a non-exclusive license, with royalties payable in the normal course, and any prepaid license fees shall be returned. DPAC intends to file an S-4 registration statement with the Securities and Exchange Commission as soon as possible. The S-4 will seek DPAC shareholders approval of the proposed merger and exclusive license agreement, as well as certain other proposals, including a proposal to increase the number of authorized shares Authorized shares Number of shares authorized for issuance by a firm's corporate charter. and a proposal to approve a reverse split of the company's common stock upon or after consummation of the merger with QuaTech. The Board of Directors has determined that shareholders of record as of December 15, 2005 shall be entitled to notice of and to vote on these matters at a DPAC annual shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. to be held on February 3, 2006. About DPAC Technologies Located in Garden Grove, California Garden Grove is a city centrally located in northern Orange County, California, United States. As of 2004, the city population was 170,000 people. California State Route 22, also known as the Garden Grove Freeway, passes through the city from east to west. , DPAC Technologies provides embedded Inserted into. See embedded system. wireless networking See wireless network. and connectivity products for machine-to-machine communication applications. DPAC's wireless products are used by major OEMs in the transportation, instrumentation and industrial control, homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States , medical diagnostics and logistics markets to provide remote data collection and control. The Company's web site address is www.dpactech.com. Information concerning DPAC is filed by DPAC with the SEC and is available on the SEC website, www.sec.gov. About QuaTech QuaTech, a privately-held company, is an industry performance leader in device networking Using an Ethernet LAN to interconnect sensors, instruments, machine tools, medical monitors, restaurant appliances, POS terminals and other devices. In the mid-1990s, Comtrol Corporation created the first "device server," which converts serial transmission to Ethernet, enabling and connectivity solutions. Through design, manufacturing and support, QuaTech maintains the highest levels of reliability and performance. Satisfied customers include OEMs, VARs and System Integrators, as well as end-users in many industries, including banking, retail/POS, access control, building automation and security, and energy management. QuaTech is a leading supplier of data connectivity products to financial institutions, serving five of the top 10 U.S. banks. Founded in 1983 and headquartered in Hudson, Ohio Hudson is a city in Summit County, Ohio, United States. The population was 22,439 at the 2000 census, making it the 389th largest city in the midwest. This number rose to 23,154 at the 2006 census estimates [1]. , QuaTech sells and supports its solutions both directly and through a global network of resellers and distributors. www.quatech.com About Development Capital Ventures, LP Headquartered in Chantilly, Virginia Chantilly is an unincorporated community located in western Fairfax County and southeastern Loudoun County of Northern Virginia. Recognized by the U.S. Census Bureau as a census designated place (CDP), the community population was 41,041 as of the 2000 census. , Development Capital Ventures is a Small Business Investment Company licensed and regulated by the Small Business Administration under the Small Business Act of 1958 as amended. Development Capital Ventures provides financing to manufacturing, distribution, and business-to-business service companies. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release includes forward-looking statements. You can identify these statements by their forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," predict," and "continue" or similar words or any connection with any discussion of future events or circumstances or of management's current estimates or beliefs. Forward-looking statements are subject to risks and uncertainties, and therefore results may differ materially from those set forth in those statements. A transaction as contemplated would require approvals of the Boards of Directors and shareholders of both parties and numerous other conditions. Full details of such a transaction will be provided to DPAC shareholders and filed with the SEC by DPAC as and when appropriate. There is no assurance possible, and none is intended, that the transaction will be completed at all or on the terms described. The transaction is and shall continue to be subject to certain conditions and contingencies until the transaction is completed. DPAC Technologies Corp. will provide further detailed information to its shareholder as and when required to solicit their consent. The transaction's costs and diversion of management attention could negatively impact results. The recent delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. of our shares could continue to have adverse effects on the liquidity of trading in the common stock and the price per share. Other factors that affect DPAC's business and its ability to conclude a merger transaction include, but are not limited to, that our Airborne(TM) products are new, that we sell to original equipment manufacturers for new product introductions by them, and that all of these are subject to risks and uncertainties regarding new product introductions such as uncertainty of market acceptance. The parties need additional financing to complete the transactions as envisioned. Such financing may not be available on favorable terms, and if available may result in issuance of warrants and additional dilution to holders of DPAC common stock. Also, there can be no assurance that such transaction will be completed or, if completed, that it will be successful. The transaction would involve a change of control, in that voting control of DPAC would be transferred to a former principal shareholder of QuaTech. Other factors that affect DPAC's business include, but are not limited to, the degree of market acceptance of our existing and planned wireless connectivity products, future business opportunities with these products, protection of licensed technology or proprietary rights, risks of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , our need for additional financing in order to realize our opportunities, other challenges related to completing our proposed merger with QuaTech, Inc., further challenges in subsequently combining our operations with QuaTech, Inc.'s own, and general market and economic conditions. More information about the risks and challenges faced by DPAC Technologies Corp. is contained in the Securities and Exchange Commission filings made by the Company on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , 10-Q and 8-K. DPAC Technologies Corp. specifically disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise. Additional Information: DPAC and QUATECH strongly urge their respective shareholders to read the relevant documents related to this transaction as and when filed by DPAC with the SEC, including especially a proxy statement/prospectus related to this transaction, because they shall contain important information all the shareholders should consider. All DPAC's SEC filings are made available free of charge at the SEC website (www.sec.gov). Such documents, when filed, also are made available free of charge by DPAC. DPAC has filed Forms 8-K or 8-K/A on April 27, 2005, August 9, 2005, and October 20, 2005 containing the current agreements between DPAC and QUATECH. This news release is neither a solicitation of any proxies nor an offer of any securities of any kind whatsoever. No securities mentioned herein have been registered or authorized or approved by any federal or state securities regulator or commission. |
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