LOS ANGELES -- Cash Technologies, Inc. (Amex: TQ) has agreed in principle to transfer certain of its North American CoinBank licensing and distribution rights which are operated through its CoinBank Automated Systems, Inc. subsidiary, and to sell its remaining CoinBank machine inventory.
Cash Tech plans to grant the acquirer, a newly-formed company called 1Constant, an unlimited perpetual license for its CoinBank technology, including software and information related to the design and manufacture of CoinBank machines. 1Constant would pay approximately $2.5 million in cash for these rights at closing and would additionally purchase all CoinBank machines and parts held in inventory during a one-year period for nearly $2 million in cash.
Cash Tech would retain ownership in the intellectual property and would retain the rights to operate the CoinBank business in all parts of the world other than North America. The company will also retain rights to manufacture the machines and will receive a 5 percent equity stake in 1Constant.
According to Bruce Korman, CEO of Cash Technologies, "As Cash Tech has shifted its focus to our EMMA transaction processing platform, we have not given the CoinBank subsidiary the support necessary to achieve its potential in the marketplace. We believe that our machine is the superior electronic coin-counting device on the market and by partnering with 1Constant, CoinBank will get the focus that it deserves."
Completion of the transaction is subject to the negotiation and execution of a definitive agreement, which the parties intend to complete prior to Jan. 8, 2001. The transaction is also subject to the approval of the board of directors of Cash Technologies, completion of due diligence by 1Constant and customary closing conditions. It will be necessary for 1Constant to complete its financing to consummate the transaction.
In a separate matter, Cash Tech disclosed that it has terminated the letter of intent to acquire RBSA, a third-party processor, and is instead pursuing its previously announced relationship with TII Smart Solutions.
