Intertainment Media Inc. has announced that the company has entered into an agreement with an unnamed, well funded Toronto-based technology company to collectively bid for the assets of Poynt Corporation. The group is prepared to enter a cash bid together with Intertainment’s secured lender’s position valued at CDN $1.7 Million. At this point, the deadline for submission of the bid is November 29, 2012. If the group is successful in its bid to acquire Poynt’s assets, Intertainment and its partner will provide additional details on their relationship and go forward plans.
On November 1, 2012, it was announced that Hardie & Kelly Inc. of Calgary, Alberta, had been appointed receiver for Poynt Corporation after Poynt’s stay of proceeds under the Proposal Proceedings under the BIA was terminated effectively creating an assignment into bankruptcy. The appointment of the receiver put in place a process to work towards recovering maximum value for the assets of Poynt.
Intertainment maintains that the Poynt application and its assets may have significant value well in excess of its secured creditor position of approximately CDN $1.7 Million plus costs and unsecured position of CDN $150,000. Based on Poynt’s last reported unaudited interim financial statements released on August 29, 2012 for the period ended June 30, 2012, non-cash assets were reportedly valued in excess of CDN $21.5 Million.
On October 9, 2012, Poynt reported that its user base was in excess of 10 Million users on the Android platform alone. While an upgrade for the iPhone was recently released, on September 17, 2012, Poynt stated that year over year its unique iPhone user base had grown 132%. On July 31, 2012 Poynt reported that its overall unique user base, at that time, was 17 Million. The Poynt application is actively pre-loaded on new phones with a number of wireless carriers.
In March 2012, after Intertainment provided Poynt with a short term secured loan for CDN $1.5 Million, the parties initiated discussions and development of enhancements to the Poynt application which Intertainment expects, should they be able to be fully implemented and continue, will enhance the value of the Poynt application and create additional revenues for Intertainment and its partner. These include Intertainment’s real-time experiential communications platform, Ortsbo, which offers instant communications in over 65 languages; Ad Taffy, which provides enhanced “click to call” capabilities integrating actionable content with immediate communications connectivity; Deal Frenzy which offers unique value programs to a growing audience and Intertainment’s affinity solutions, including the Sweet Card, which provides pre-paid debit and virtual wallet platforms.
Intertainment Media has also entered into a letter of intent to sell its stake in the itiBiti platform for a total value of $3.5 million to a private technology group which is expected to provide up to $4.5 Million in additional equity value in the form of system development and enhancements. The transaction will take the form of cash, debt conversion as well as equity participation and will provide Intertainment with a 40% equity stake in the operating company. This operating company will be managed by the private technology group owning a 60% stake and will undertake the day to day management, operations and development of the platform including the KNCTR application. The deal also calls for Intertainment to receive one board seat as well as a secured perpetual revenue share of 40% for the first 2 years and declining to 20% annually at year 5 and beyond from the independently managed operation.
Should a future liquidity event occur, where the new enterprise is sold privately or transferred to a public vehicle, Intertainment will receive the initial 30% of the proceeds, up to $5 Million CDN, and 40% of the balance of the value of the transaction.
This announcement, coming in advance of Intertainment Media’s Annual General Meeting, where the company will outline its corporate focus moving forward, is one of the first that underscores the tangible delivery of Intertainment’s corporate strategy.
The transaction, which is expected to close within sixty (60) days, is subject to due diligence and negotiation of definitive agreements. This agreement represents a significant increase in value as well as a future opportunity with a liquidity event as the initial investment in the itiBiti platform was originally purchased in 2009 for $2 million in a cash and stock transaction.
“This transaction validates Intertainment’s incubation process, as we look to invest, develop and nurture investments with a view towards creating continuous value,” said David Lucatch, CEO Intertainment Media Inc.
Once a definitive agreement is finalized, the Company will provide further updates and details.