SkyLynx Communications Executes Definitive Merger Agreement to Acquire ADTECH Systems.SARASOTA, Fla. -- SkyLynx Communications, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : SKYC), a fast-growing wireless data network provider for mobile and static applications, and ADTECH ADTECH Advanced Technology ADTECH Advanced Decoy Technology Systems, Inc. (ASI ASI, n See Anxiety Sensitivity Index. ), a developer of high-value quality communications, information technology and security systems, have signed a definitive Agreement and Plan of Merger for the acquisition of ADTECH by SkyLynx. The acquisition will be structured as a reverse triangular merger Reverse Triangular Merger When the subsidiary of the acquiring corporation merges with the target firm. In this case, the subsidiary's equity merges with the target firm's stock. between ASI, SkyLynx and a subsidiary of SkyLynx (SkyLynx Sub), which will be formed for the sole purpose of consummating the merger. The merger would result in ASI becoming a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of SkyLynx Communications, Inc. Upon consummation of the Merger, all issued and outstanding shares of ADTECH common stock will be converted automatically into an aggregate of 9,249,998 shares of SkyLynx Series B Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". having a Stated Value Stated Value A value that, instead of being par value, is assigned to a corporation's stock for accounting purposes. Stated value has no relation to market price. Notes: of $.50 per share. At closing, 4,585,054 shares of the Series B Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. will be deposited and held under a Closing Escrow Agreement Escrow Agreement A certificate provided by an approved bank that guarantees the indicated securities are deposited at that particular bank. Notes: For example, an investor who writes a call option and can present an escrow agreement is considered covered. which will provide that 1,146,263 shares will be released, pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. , upon (i) the collection of the $2,200,000 account receivable account receivable Any amount owed to a business as the result of a purchase of goods or services from it on a credit basis. Although the firm making the sale receives no written promise of payment, it enters the amount due as a current asset in its books. claimed from Communications Technologies, Inc.; an additional 1,146,263 shares will be released, pro rata, upon (ii) the conversion of certain debt into shares of the Series A Preferred Stock; an additional 1,146,263 shares will be released, all-or-none; (iii) when gross revenues for ADTECH as a stand-alone subsidiary exceeds $20,000,000 in any fiscal year within five (5) years from closing; and an additional 1,146,263 shares will be released, all-or-none (iv) when pre-tax net profit for ADTECH as a stand-alone subsidiary exceeds $500,000 in a fiscal year within five (5) years from closing. An additional 5,212,946 shares of a Series A Convertible Preferred Stock of the Company (the "Series A Preferred") will be reserved for issuance in the transaction to the holders of outstanding ADTECH secured and unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. in the approximate amount of $2.6 million, principal and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. . To date, no holder of ADTECH secured or unsecured debt has agreed to accept shares of Series A Preferred Stock of SkyLynx in payment of their debt. Concurrently with the Merger, the Board of Directors of SkyLynx will be increased to an odd number of directors, and Richard Weitzel, President and the principal shareholder of ADTECH, will be elected to serve as a Director. Mr. Weitzel will also continue as President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of ADTECH. The respective obligations of the parties under the Merger Agreement are subject to the satisfaction or waiver of a number of conditions customary to transactions of this nature. ADTECH intends to call a meeting of its shareholders to vote upon the Merger Agreement as soon as practicable. Richard Weitzel, the Chief Executive Officer and principal shareholder of ADTECH, owns 80% of the total issued and outstanding shares of common stock of ADTECH and intends to vote in favor of the Merger. Therefore, approval of the Merger Agreement by the ADTECH shareholders is assured. The Merger Securities will be issued to the ADTECH shareholders without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon an exemption from the registration requirements of the Securities Act set forth in Section 4(2) and Regulation D thereunder. When issued, the Merger Securities will be "restricted securities" within the meaning of Rule 144 under the Securities Act and will be subject to restrictions on resale. The Merger Agreement will terminate if the Merger has not been consummated by June 30, 2005, which deadline may be extended by mutual agreement of the parties. SkyLynx Chairman and CEO Gary L. Brown said that ASI's proven information technology, engineering and physical security services capabilities will greatly enhance SkyLynx's current operations. "ASI is an excellent match for SkyLynx. Its business and government services complement ours, and its federal contracting experience and loyal customer base will provide a strong impetus to SkyLynx's overall growth." ASI Chairman and CEO E. Richard Weitzel II concurred, adding, "We believe the merger is a good business move that will result in a whole that is much greater than the sum of its parts." About SkyLynx (www.skylynx.com) SkyLynx Communications, Inc. is a provider of wireless data services for vehicle tracking and data communications for mobile and static applications. The Company's wireless network is being deployed on a national basis and has been well received for its ability to provide broad geographic coverage cost effectively. The ability of the SkyLynx network to track vehicles is not affected by topography, buildings, trees or other hindrances to line-of-sight tracking. It has a range many times greater than that of cellular and 3G systems, and it costs significantly less than satellite tracking. About ADTECH Systems (www.adtechsysinc.com) ADTECH Systems, headquartered in San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. , was incorporated in 1995, to develop and provide high-value quality communications, information technology and security systems for federal, state and local governments, as well as commercial customers. The Company has project offices in several countries. In addition to a growing customer base, ADTECH has numerous strategic alliances with other government contractors that complement its services. Safe Harbor Provision Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. In particular, the Company's statements regarding trends in the marketplace and potential future results are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the timing of projects due to the variability in size, scope and duration of projects, estimates made by management with respect to the Company's critical accounting policies, regulatory delays, clinical study results which lead to reductions or cancellations of projects, and other factors, including general economic conditions and regulatory developments, not within the Company's control. The factors discussed herein and expressed from time to time in the Company's filings with the Securities and Exchange Commission could cause actual results and developments to be materially different from those expressed in or implied by such statements. The forward-looking statements are made only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. |
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