Inova Technology Sells Trakkers to Xumanii International Holdings Corp
October 01 2013 - 6:00AM
Inova Technology (OTCQB:INVA) announced that it has sold its RFID
businesses, Trakkers and RightTag, to Xumanii International
Holdings Corp ("Xumanii") (OTCQB:XUII) for 2 million preferred
shares of Xumanii. The purpose of the transaction is to unlock
value by breaking up Inova into two segments where the RFID
business and network solutions business can pursue their own
respective business plans separately. The effective date of the
transaction is October 1, 2013.
Inova CEO, Adam Radly, said, "Inova reported annual revenue of
$18 million for our most recent fiscal year yet our market
capitalization is only in the hundreds of thousands. It's likely
that our debt is one reason for the low market cap. It's also
possible that the market doesn't like the combination of network
solutions and RFID in one company. Some investors have indicated
that they like RFID and don't like network solutions while others
take the opposite view. As a result, we decided to break Inova into
two parts so that the network solutions business and RFID business
can pursue their own business plans without being constrained by
the other and also to enable shareholders to choose to invest in
one or the other or both as opposed to being forced to invest in
both."
The sale of assets includes the following:
- Trakkers LLC along with all of the intellectual property
associated with its current and future products and solutions.
- The business and assets of Right Tag, Inc.
- Trakkers LLC has approximately $4 million of debt that will
remain with Trakkers LLC.
- All of the assets that were sold in this transaction were sold
by Tesselon LLC (a subsidiary of Inova)
Inova CEO, Adam Radly, said, "We sold Trakkers for $2 million.
Even though Trakkers only represents approximately 6% of Inova's
revenue the $2 million sale price is more than 5 times Inova's
entire market cap so we are obviously very happy with the
transaction. The transaction will also help both Inova and Trakkers
to restructure its debt."
When considering the $2 million valuation of Trakkers for the
purpose of this transaction management considered the following
factors:
- Revenue for Trakkers for the fiscal year ending April 2013 and
2012 was $1,573,473 and $1,200,142 respectively. Adjusted EBITDA
for the fiscal year ending April 2013 and 2012 was $383,110 and
$228,270 respectively.
- Trakkers LLC has approximately $4 million of debt and will
remain with Trakkers LLC.
- The market capitalization of Inova is approximately
$400,000
In addition to the $2 million of preferred stock of Xumanii, the
transaction also includes a commitment from Xumanii to file an S1
registration Statement that, upon being deemed effective by the
SEC, will allow Inova shareholders to acquire one Xumanii share for
each Inova share that they owned as at the Effective Date (October
1, 2013). However, shareholders should be aware that there can be
no assurance that the SEC will deem the S1 Registration Statement
effective.
Xumanii provides live concert streaming using its own
proprietary solution. Xumanii had previously announced that it has
filed for patent relating to this technology. Trakkers
currently generates the majority of its revenue from the rental of
scanners to trade shows and has been actively developing other
complementary solutions for trade shows including trade show apps
for mobile devices. There is a demand for live event streaming at
many trade shows and Trakkers will be able to offer the Xumanii
streaming solution to trade shows as an additional service.
Following the acquisition of Trakkers by Xumanii, Xumanii plans to
pursue the development of a mobile solutions business that will
include the use of RFID in mobile solutions for asset tracking
among other mobile solutions.
Upon completion of the transaction Mr. Adam Radly will
temporarily hold the position of CEO of both Inova and Xumanii
concurrently while the board and senior management of Xumanii are
adjusted to reflect its new business plan.
About Inova Technology
Inova Technology, Inc. (INVA) is an enterprise level Information
Technology solutions provider specializing in providing proprietary
RFID solutions, wireless networking, storage and security
technology solutions and IT professional services. For more
information please visit the company website at:
http://www.inovatechnology.com. Contact: Adam Radly,
info@inovatechnology.com.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995: Except for historical
information, the forward-looking matters discussed in this news
release are subject to certain risks and uncertainties which could
cause the Company's actual results and financial condition to
differ materially from those anticipated by the forward-looking
statements including, but not limited to, the Company's liquidity
and the ability to obtain financing, the timing of regulatory
approvals, uncertainties related to corporate partners or
third-parties, product liability, the dependence on third parties
for manufacturing and marketing, patent risk, copyright risk,
competition, and the early stage of products being marketed or
under development, as well as other risks indicated from time to
time in the Company's filings with the Securities and Exchange
Commission. The Company assumes no obligation to update or
supplement forward-looking statements that become untrue because of
subsequent events.
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