LaserCard Corporation Terminates Master License and Manufacturing Equipment Agreements with Prevent Global
November 23 2010 - 6:30AM
Business Wire
On November 17, 2010 LaserCard Corporation (NASDAQ:LCRD)
terminated its Master License and Manufacturing Agreement, dated
April 3, 2004, as amended (the “Master License Agreement”), and its
Equipment Sale Agreement, dated March 18, 2006, as amended, each
originally entered into with Global Investments Group (“GIG”)
(together, the “Subject Agreements”). The Subject Agreements were
part of a series of agreements that LaserCard entered into in 2004
with GIG (the “Agreements”). In 2007, GIG assigned all of its
rights, title and interest in the Agreements to Prevent Global
družba za upravljanje, investicije in razvoj d.d. (“Prevent
Global”) and Prevent Global agreed to assume all of the obligations
under the Agreements. However, a dispute arose regarding whether
Prevent Global or GIG (i) was obliged to make payments owed to
LaserCard under the Agreements; (ii) had rights to certain
equipment under the Agreements; and (iii) was subject to and bound
by the arbitration provisions contained in the Agreements. On July
12, 2010, the English High Court of Justice, Commercial Court
declared Prevent Global the rightful counterparty to the
Agreements, entitled to all rights and bound by all
obligations.
The Subject Agreements provided for non-refundable payments to
LaserCard of about $31 million to date, including wait fees and
interest, and provided for a seven-year mandatory training and
support package, the required manufacturing equipment and
installation support for the licensee’s new facility to achieve a
targeted initial manufacturing capacity of 10 million optical cards
annually. There were also 13 optional one-year support packages
that would have been provided upon the receipt of payments of $1
million annually to begin April 1, 2011.
Prevent Global ceased making payments under the Subject
Agreements after a December 1, 2008 payment. On July 21, 2010,
LaserCard notified Prevent Global that its failure to pay the
amounts owed under the Subject Agreements constituted a breach of
the Subject Agreements. On August 3, 2010, Prevent Global filed a
petition in bankruptcy in Slovenia also a breach of the Subject
Agreements. Given the repeated and uncured breaches of the Subject
Agreements, LaserCard notified Prevent Global by correspondence
dated November 17, 2010 that LaserCard had terminated the Subject
Agreements and intended to commence arbitration for recovery of the
sums owed under the Agreements. The Company intends to account for
the termination of the Subject Agreements by recording income in
the current period of approximately $20.7 million consisting of
payments to date net of costs deferred.
About LaserCard Corporation
LaserCard Corporation, together with its subsidiaries, is a
leading provider of secure ID solutions to governments and
commercial clients worldwide. It develops, manufactures, and
integrates LaserCard® optical security media cards, encoders,
peripherals, smart and specialty cards, biometrics, and modular
software. The company’s cards and systems are used in various
applications, including citizen identification, border security,
government service delivery and facility access.
For further information, please visit
www.lasercard.com
Forward-Looking Statements: All statements contained in this
press release that are not historical facts are forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and are not
historical facts or guarantees of future performance or events.
Rather, they are based on current expectations, estimates, beliefs,
assumptions, and goals and objectives and are subject to
uncertainties that are difficult to predict. As a result, our
actual results may differ materially from the statements made.
Often such statements can be identified by their use of words such
as may, will, intends, plans, believes, anticipates, visualizes,
expects, and estimates. Examples of forward-looking statements in
this release include the intention to account for the termination
by recording income of $20.7 million in the current period. This
and other forward-looking statements in this press release are
based upon our assumptions about and assessment of the future,
which may or may not prove true, and involve a number of risks and
uncertainties including, but not limited to whether the customer’s
scheduled delivery dates are rescheduled or canceled in whole or in
part, whether the customer continues to purchase products from the
Company and whether the Company encounters card production
difficulties as well as the risk factors detailed in the Company's
Form 10-K, and 10-Q filings with the Securities and Exchange
Commission under the caption “Risk Factors” and elsewhere in such
reports. Due to these and other risks, future actual results could
differ materially from the Company’s expectations. These
forward-looking statements speak only as to the date of this
release, and, except as required by law, the Company undertakes no
obligation to publicly release updates or revisions to these
statements whether as a result of new information, future events,
or otherwise.
Lasercard (NASDAQ:LCRD)
Historical Stock Chart
From May 2024 to Jun 2024
Lasercard (NASDAQ:LCRD)
Historical Stock Chart
From Jun 2023 to Jun 2024