Motopia (ASX: MOT) has agreed to commercial terms for an all scrip acquisition of Priority Processing Systems Pty Ltd (NYSE:PPS) - which supplies range of financial transaction based services into a diverse range of industry sectors.
All importantly, the acquisition would enable the company to remain an industrial company and not need re-compliance to ASX listing rules.
These sectors include customer engagement program operators, clubs and associations, major utilities, super funds, unions, merchant groups and charitable organisations.
The acquisition will allow the Motopia to not only remain in the industrial sector but also afford it the opportunity to utilise its existing Lemon & Lime Platform through the development of event based applications utilized by PPS partners.
Subject to the successful completion of due diligence, the Motopia will seek shareholder approval for the issue of 1,000,000,000 ordinary shares at an issue price of $0.003 as consideration for the acquisition.
Ordinary shares will be subject to an escrow period of at least 24 months. In addition, and subject to shareholder approval, two tranches of performance shares linked to achievement of PPS financial performance targets will also be issued on success over a 36 month period.
The number and terms of performance shares will be determined at the completion of the due diligence process. Under the terms of the agreement the 1,000,000,000 ordinary shares and any performance shares issued as consideration for the acquisition, will be cancelled if specified performance targets are not met by PPS within 18 months from the date of the acquisition.
The acquisition is subject to shareholder approval and it is expected that the requisite Extraordinary General Meeting will be held in May.
Motopia is currently facilitating a raising of up to $550,000 through the issue of convertible notes, at a conversion price into Motopia shares of $0.002. The notes will be subject to shareholder approval at the Extraordinary General Meeting.
The company does intend to raise further funding following completion of this initial raising on terms to be determined in due course.
Priority Processing Systems plans
PPS is implementing programs that capitalize on the rapidly changing market place between the consumer and retailers.
Under development for 2 years, the centerpiece of the program is a loyalty debit card which marries the safety and security of a bank based debit card with a purpose built, proprietary loyalty ecosystem.
Contracts are in place with a range of high profile partners which will underpin the ongoing development and financial stability of the company.
The benefit for retailers is that the programs create dynamic interfaces with customers, which will drive business and create loyalty.
The business partners will be large member based organizations, church groups and charities seeking to support their members as well as their own businesses. The consumers will receive direct personal rewards as well as supporting their organizations.
The programs meet current demands of the industry. In addition, it will meet the technical migration challenges as the mobile phone becomes the EFTPoS device, a virtual transaction card and the communication centerpiece for consumers.
Motopia has also announced the appointment of Lindsay Brown as a non-executive director to the board. Brown is a Chartered Accountant with 36 years' experience, establishing his own practice in 1984.
The company also said that Frank Vetrone and Gernot Abl will serve as non-executive chairman and non-executive director respectively, effective immediately. Dr Michael Green resigned as a director.
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