ORLANDO, Florida, May 3, 2021 / PRNewswire / – VOXX International Corporation (NASDAQ: VOXX) (the “Company” or “VOXX”), a leading manufacturer and distributor of automotive and consumer technologies for global markets, today announced that EyeLock LLC (“EyeLock”), the majority-owned subsidiary of the Company has entered into a four (4) year exclusive distribution agreement (the “Agreement”) with GalvanEyes LLC (“GalvanEyes”), a Florida LLC operated by the largest shareholder of VOXX, Defeat Kahli.
As announced on November 2, 2020, the company had entered into a standstill agreement with Avalon Park International and Kähli Holding AG, the Swiss holding company founded by Beat Kahli, who is also President and CEO of Avalon Park Group. This agreement was based on the submission by Mr. Kahli and his affiliates of an indication of interest to potentially acquire a stake in EyeLock, under which VOXX would retain a significant stake, thereby preserving future potential for its shareholders.
The parties have entered into an agreement whereby GalvanEyes LLC will become the exclusive distributor of EyeLock products in the EU, Switzerland, Porto Rico, Malaysia, and Singapore, with the exception of any existing customer relationship. EyeLock has also granted GalvanEyes the exclusive distribution rights in United States for the residential real estate market and specific government agencies in the United States, and non-exclusive distribution rights in all other territories and verticals with the consent of the Company. In return for the exclusivity granted, GalvanEyes agreed to pay EyeLock $ 10.0 million with an annual membership fee of up to $ 5.0 million, with quarterly payments. Any gross profit generated by GalvanEyes on the sale of EyeLock products by GalvanEyes will be deducted from the annual membership fee.
As part of this agreement, a put / call agreement was established, according to which GalvanEyes has the right to hand over the exclusivity to EyeLock after the initial period of two (2) years, for a 20.0% stake in EyeLock . In turn, EyeLock has the option of calling exclusivity at any time during this deal, which would result in a 20.0% stake in GalvanEyes. In the event of EyeLock’s IPO or a significant change in control of EyeLock before the expiration of the two (2) year period, the put / call options may be exercised by the parts.
Pat Lavelle, President and CEO of VOXX International Corporation said, “Early in our process, we were looking to engage a strategic partner to help move EyeLock technology to untapped markets more quickly. With Defeat Kahli and the team together, we have achieved this goal, while maintaining the advantage we believe EyeLock has for our shareholders. This strategic alliance will also significantly reduce VOXX’s cash consumption and EyeLock’s loss of EBITDA. “
Lavelle continued, “The acceptance and use of biometrics is increasing globally and in many industries; and iris authentication is by far the most secure. We have worked closely with several companies over the past few years and believe we are on the cusp of more widespread adoption. With GalvanEyes as a strategic partner, we expect to see new opportunities emerge, especially given their extensive customer network and knowledge of our solutions, after rigorous due diligence. It has been a great working relationship to date, and we look forward to continuing to create value for EyeLock customers and all VOXX shareholders. “
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Mr. Kahli added, “We have been impressed with EyeLock since we started investing in VOXX and believe it is an asset that is not yet reflected in the valuation of the company. We look forward to working with the team to leverage our relationships and expertise to expand EyeLock’s reach, attract new clients and partners, and ultimately maximize shareholder value of VOXX. . “
The transaction is subject to certain closing conditions, including formal approval by VOXX’s board of directors and shareholder approval at the company’s annual meeting of shareholders currently scheduled to take place. July 29, 2021.
Important information about the transaction and where to find it
In connection with the proposed transaction, the Company will file documents with the Securities and Exchange Commission (“SEC”) and intends to send its shareholders a proxy regarding the proposed approval of the transaction upon the transaction. Annual meeting of shareholders. This document does not replace the Proxy Circular or any other document the Company may file with the SEC. SHAREHOLDERS ARE INVITED TO READ THE PROXY STATEMENT CAREFULLY (INCLUDING ANY CHANGES OR SUPPLEMENTS TO IT AND ALL DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT THE COMPANY WILL FILES FROM SECURITY WHEN CONTAINING IMPORTANT INFORMATION ABOUT THE TRANSACTION AND PARTIES TO THE TRANSACTION. Shareholders can obtain free copies of the proxy circular (when available) and other documents filed with the SEC through the website maintained by the SEC at www.sec.gov and the Company’s website at https://investors.voxxintl.com/financial-information/sec-filingsor by contacting the Company’s investor relations department at [email protected].
Participants in the call for tenders
The Company and certain of its directors, officers and employees may be considered “participants” in the solicitation of proxies in relation to the proposed transaction and related matters. Information regarding the directors and officers of the Company, including a description of their direct interests, by securities held or otherwise, is contained in the Company’s Form 10-K for the financial year ended. February 29, 2020, which has been filed with the SEC. Additional information regarding the directors and officers of the Company will be made available in the proxy circular as it becomes available.
This communication is not intended for and does not constitute a solicitation of any proxy, consent or authorization with respect to any security or with respect to the proposed transaction.
About VOXX International Corporation
VOXX International Corporation (NASDAQ: VOXX) has become a leader in automotive electronics and consumer electronics, with emerging biometric technology to capitalize on the increased need for advanced security. Over the past decades, with a portfolio of approximately 35 trusted brands, VOXX has built leading market positions in the areas of in-car entertainment, automotive safety, reception products, a number of customer segments. premium audio market, and more. VOXX is a global company, with an extensive distribution network that includes electrical retailers, mass merchants, 12 volt specialists and many of the world’s leading automakers. For more information, please visit our website at www.voxxintl.com.
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Safe Harbor Declaration
With the exception of historical information contained in this document, the statements made in this press release constitute forward-looking statements and may therefore involve certain risks and uncertainties. All forward-looking statements made in this press release are based on information currently available and the Company assumes no responsibility to update these forward-looking statements. The following factors, among others, may cause actual results to differ materially from results suggested in forward-looking statements. Factors include, but are not limited to: risk factors described in the Company’s annual report on Form 10-K for the fiscal year ended February 29, 2020 and other documents filed by the Company from time to time with the SEC. The factors described in these documents filed with the SEC include, but are not limited to: the impact of the COVID-19 outbreak on the Company’s operating results, the Company’s ability to achieve expected results its commercial realignment; cybersecurity risks; risks that may result from changes in the Company’s business operations; our ability to keep pace with technological advances; significant competition in the automotive electronics, consumer electronics and biometrics sectors; our relationships with major suppliers and customers; quality and consumer acceptance of newly introduced products; Market volatility; non-availability of the product; excess stocks; price and product competition; new product launches; fluctuations in foreign currencies; and debt covenants. Many of the aforementioned risks and uncertainties are and will be exacerbated by the COVID-19 pandemic and any resulting deterioration in the global business and economic environment. The Company assumes no obligation and does not intend to update these forward-looking statements.
Investor Relations Contact:
GW Communications (for VOXX)
E-mail: [email protected]
SOURCE VOXX International Corporation