Completes the sale of three of its subsidiaries, Ingedigit International, Inc. ("III"), Gotham Ingedigit Financial Processing Corp ("P2P") and Connect2Family USA, Inc. ("C2F"), to Brankib Holdings Pty. Ltd, an Australian registered company.
In accordance with the completed Share Purchase Agreement, Flint sold all of the shares it currently held in the subsidiaries in exchange for cash consideration, to be paid over a period of five years contingent on future revenues earned by the companies. Under the terms of the agreement, Flint will be paid an agreed fee for each customer transaction during the contract period up to a maximum of $11,000,000. However, the total amount payable to Flint is contingent and variable based on actual customer usage in the future. The agreement does call for minimum payments totaling $2,440,000 in cash over the contract period.
All consideration received by Flint is subject to a number of third party deductions as follows; $1,000,000 must be used to repay certain liabilities of the subsidiaries; $2,000,000 must be used to repay Flint's outstanding secured loan issued from Thermo Credit LLC and $3,000,000 shall be set aside and paid to Flint's Series H Convertible Preferred Stock Holders in exchange for the return of the Series H Preferred Shares, at the Preferred Holder's option and pursuant to a settlement agreement.
Commenting on the deal, Vincent Browne, Chairman of Flint said, "Following a lengthy period of review of our existing operations since last Autumn, we are pleased to finally complete this sale to Brankib, our existing partner in the previously announced Vietnamese projects. We have given this transaction serious consideration and feel that this represents the best option for all of Flint's stakeholders, as Brankib has contracted to invest a further $1 million in the businesses as part of this transaction, in addition to the $500,000 they have already provided over the past six months. This means that Flint will potentially benefit from the rapidly growing market for these services over the next few years without having to further fund the operations. Given the continuing challenge that Flint faces in raising capital following the failure of the Kodiak funding process last year and the continuing low share price of Flint's common stock, the board decided that this was the best option available to the Company and would deliver the best outcome for its stakeholders over time. We wish the team at Brankib and the management and staff of the subsidiaries the very best for the future and we will continue to support the businesses in any way possible so that we can all maximize the returns available from this exciting market."