MTC ELECTRONIC TECHNOLOGIES ANNOUNCES AGREEMENT TO ACQUIRE RIGHTS TO A NEW INVENTION
MTC ELECTRONIC TECHNOLOGIES ANNOUNCES AGREEMENT TO ACQUIRE RIGHTS
TO A NEW INVENTION
RICHMOND, B.C., Nov. 4 /PRNewswire/ -- MTC Electronic Technologies Co. Ltd. (NASDAQ: MTCFD) disclosed today that on Oct. 23, 1991, MTC (the "company") signed an agreement to acquire all rights to a new invention, an AC-DC Voltage Converter with isolation capability (the "Converter"). While the Converter has been designed to be configured as an integrated circuit (I.C.) device, the Converter is currently composed of discrete electronic components.
The Converter is the subject of a patent application, No. 07/757068 filed with the United States Patent Office in September 1991. The company acquired its exclusive worldwide rights to the Converter through a 70 percent owned subsidiary, which simultaneously sold the rights to the Converter to the company in exchange for royalties equal to 6 percent of the net sales of the Converter by the company and other consideration. The remaining 30 percent is owned by the engineers who designed the Converter, who are neither officers or directors of the company.
The Converter is designed to perform the functions of traditional power transformers. Traditional power transformers are heavyweight, bulky, costly and relatively inefficient. Two power transformers are traditionally employed in electronic devices, one to step voltage up and down and the other for isolation. The Converter is designed to perform the functions of both of these transformers as well as to convert AC voltage to DC.
In addition to being lighter and smaller, the Converter is designed to perform power transfer functions in a more efficient and less costly manner. The company has not initiated customer based product testing, finalized plans for product production, commenced or completed market research, or developed a complete business strategy for commercially exploiting the Converter. Consequently, there can be no assurance that the Converter will ever be commercially manufactured and marketed, and, if commercially manufactured and marketed, that it can be done so profitably.
During the next 12 months, the company intends to prepare and file worldwide patent applications covering the Converter and to prepare for its commercial manufacture. Due to the Converter's early stage of development, the company cannot currently determine the amount of money which may be necessary to commercially exploit this product. However, management does not currently expect the amount expended to exceed $2.5 million.
MTC is a Canadian communications and distribution company serving the consumer electronics, facsimile and cellular telephone industries. MTC distributes a broad line of consumer electronics products in Canada, Mexico and the United States.
In June 1991, MTC signed an agreement with an instrumentality of the Chinese government to develop and implement a cellular telephone system in Shanghai, a region of over 25 million inhabitants. Also in June 1991, MTC secured an additional agreement with China to develop a turnkey cellular phone system for the island of Hainan.
/CONTACT: Felicia Vonella of Dewe Rogerson, 212-688-6840, for MTC/
(MTCFD) CO: MTC Electronic Technologies Co. Ltd. ST: British Columbia IN: CPR SU: GK-FC -- NY064 -- 0845 11/04/91 15:46 EST