COSTA MESA, Calif. -- Rapidtron, Inc. ("Rapidtron") announced that after signing of a Letter of Intent with AXESS AG ("AXESS") in February, they have moved forward towards negotiating a definitive agreement. Axess AG is a developer and marketer of access control products, POS solutions, software and Smart card technology. Rapidtron proposes to pursue a business combination between AXESS and Rapidtron USA (collectively, the "Proposed Transaction"). For the past five years, Rapidtron has been working under an exclusive distribution agreement with AXESS to market their products and technology in North America. AXESS is an Austrian company based in Salzburg, Austria.
The benefits for the proposed merger are considerable for both companies. It will allow Rapidtron to have more control over product development and market penetration. It also eliminates potential distribution conflicts with new markets that it is establishing in countries other than those covered in its current agreement with AXESS.
With the combined profits, the single entity would provide capital for increased research and development, allowing for more rapid growth in software and hardware development, and exploration of new technologies.
The transaction is contingent upon both parties completing due diligence and negotiating a definitive agreement over the next 120 days, and upon Rapidtron raising an additional $2 million of debt and/or equity financing prior to September 30, 2005. There can be no assurance that the transaction will close.
John Creel, Rapidtron CEO stated, "By bringing AXESS and Rapidtron together, there will be major economies in combining management with reduction of overhead and selling costs, resulting in better pricing and greater profitability."
Wolfram Kocznar, AXESS CEO stated, "The combination of the companies will provide a significant strategic advantage as we compete for projects. The increased profitability will allow us to be even more competitive through additional research and development."
The companies expect to enter into a definitive agreement within the next 120 days and close the transaction by July 31, 2005. The two companies will continue to work according to their existing agreement during the due diligence period and prior to closing.