FOR IMMEDIATE RELEASE
Empower Technologies™ Closes “Telco” Purchase
July 31, 2013 – Richmond, British Columbia, Canada – Empower Technologies Corporation (TSX.V: EPT) (“Empower” or the “Company”), further to the June 28, 2013 news release, is pleased to announce it has closed the 100% purchase of AIC Global Communications Inc. (“AIC”, previously undisclosed “Telco”) from Y2K Investment Group Limited (“Vendor”), a privately held corporation. AIC is a highly respected and well-known telecom brand in the Asian Canadian market for over 20 years.
At Closing, Empower issued 3,000,000 Empower shares for the purchase of AIC at a deemed value of $0.25 per share. In addition, the Company will pay a performance based earnout bonus payment up to a maximum of $400,000 (“Maximum Earnout”) within the first 3 years from August 1, 2013 if:
a) AIC generates positive EBITDA equal to or greater than $200,000 (“Annual Earnout”) within any of those first 3 years from the date of Closing. Empower will then pay the Vendor 25% of the positive EBITDA in cash, provided that the Vendor has not received the Maximum Earnout from the cumulative Annual Earnout: or
b) AIC generates positive EBITDA equal to or greater than $25,000 but less than $200,000 within any of those first 3 years from the date of Closing. Empower will then pay the Vendor 10% of the positive EBITDA in cash, provided that the Vendor has not received the Maximum Earnout from the cumulative Annual Earnout. The EBITDA amounts above will be determined by the Company’s auditors calculated based solely on the audited financial statements of AIC in each of the three years.
If the earnout bonus is payable to the Vendor, the Vendor may elect by written notice to Empower to receive any portion of the earnout bonus in the form of Empower Shares in lieu of cash. The number of Empower Shares to be issued pursuant to such election will be determined based on a conversion price equal to the greater of the following:
a) a conversion price of $0.25 per Empower Share; or,
b) the Market Price of Empower Shares at the time of notice, as defined by the policies of the TSX Venture Exchange, and will be subject to resale restrictions, with 25% of such Empower Shares being released from the restrictions every six months.
If any portion of the earnout bonus is to be paid in cash, it must be paid from the cash flow generated from the Telco or the Business and not from capital or investment provided by Empower. Any financing arrangement to make the cash payment at once or over time must have the mutual approval of Empower and the Vendor, such approval not to be unreasonably withheld.
AIC will continue to operate as a wholly-owned subsidiary of Empower Technologies Corporation. Empower is extremely pleased that Mr. Victor Fung, the current head of AIC, will continue as the President and COO. There are no anticipated changes in the operation and staffing level at AIC. AIC currently has customer service centres in Greater Vancouver, Calgary and Toronto. AIC’s current annual revenue is approximately $2 million and it is EBITDA and cash flow positive.
AIC’s revenue growth will be through the execution of its business plan to expand its sales and marketing effort of the Smart Business VoIP phone services, Hosted IP PBX business systems, security, surveillance and alarm monitoring services to the SME market utilizing its Cloud based platforms. Plans are in place to sell Managed Business Solutions to the SMEs across Canada this year. Introduction of the triple play offering (High speed internet, TV and Home phone services) to AIC’s existing residential customer base and to new subscribers, the same package tailored to business customers will also be offered.
“I am very glad to see AIC is now part of the Empower team. The new parent provides AIC the certainty and the support to access growth capital to enable us to accelerate our sales and marketing effort. The result: it drives revenue growth and that has been AIC’s long term goal. Having Empower also gives us a competitive edge by leveraging Empower’s state of the art embedded and image processing technologies and expertise,” said Victor Fung, President and COO of AIC, a wholly-owned subsidiary of Empower Group.
“We welcome AIC and its excellent team of staff to join the Empower family. The completion of this acquisition provides Empower an instant revenue stream, a well-known brand and a very strong and well-built sales and marketing platform,” said Paul Leung, CEO of Empower Group.
With the success of this purchase, Empower will continue its acquisition strategy to drive revenue growth, to integrate, sell and market Empower’s existing compendium of state of the art technologies, products and services and to acquire talents.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “forecast”, “expect”, “potential”, “project”, “target”, “schedule”, budget” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the expected benefits of the acquisition of AIC are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Empower’s expectations include actual sales results, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other risks detailed herein and from time to time in the filings made by Empower with securities regulators. Although Empower has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this news release. Empower disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Empower Technologies™
Founded in 2000, Empower Technologies (TSX.V: EPT) has transformed from an embedded technology company to a full-fledged innovative technology, products and services and manufacturing enterprise. Empower Technologies as a group caters to communication, media, IT, security and surveillance, military, automotive and transportation, healthcare, industrial control and consumer electronics industries. Under the Empower Group, the Company has four operating divisions – Empower Embedded Engineering, Empower Imaging Laboratories, Empower Defense Systems and AIC Global Communications. For more information, please visit www.empowertechnologies.com.
Empower’s brands are “AIC”, “LEOs®”, Linux-based embedded operating systems, “BullsEye”, Real-Time Video Stabilizer, “PowerPlay™”, smart consumer electronics.
More Information on Empower Technologies: www.empowertechnologies.com
Chairman, President and CEO
Empower Technologies Corporation
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Empower Technologies, AIC, LEOs, PowerPlay and BullsEye are the trademarks of Empower Technologies, Inc. All other brands are trademarks of their respective owners.