OIS Sale of Assets and Dissolution
5 January 2000
OIS Sale of Assets and Dissolution
NORTHVILLE, Mich., Jan. 5 -- OIS Optical Imaging Systems,
Inc. (formerly Nasdaq: OVON) reports today that on December 21, 1999, OIS sold
all of its assets, including its intangible assets to Guardian Industries
Corp., a Delaware corporation ("Guardian") in accordance with the terms of an
asset purchase agreement between the parties dated as of December 21, 1999
(the "Asset Purchase Agreement"). OIS received proceeds of approximately
$40.2 million for the sale of its assets, approximately $30.5 million of which
was used to extinguish all outstanding bank debt which was due and payable at
December 31, 1999. The bank debt was collateralized by all of the Company's
assets and the Company's banks were not willing to extend the maturity of the
debt beyond December 31, 1999. Guardian, through its majority-owned
subsidiary, GD Investments Corp., holds approximately 79.6% of the outstanding
shares of OIS's common stock and all of the outstanding shares (91,137) of its
Series B cumulative preferred stock.
The proceeds received pursuant to the Asset Purchase Agreement described
above were allocated as follows: $0.1 million to accounts receivable; $0.7
million to inventory; $14.1 million to property and equipment; and $25.3
million to the Company's intellectual property asset (the "IP Assets"), which
were independently appraised. The proceeds were used to repay approximately
$29.8 million in outstanding bank debt, $0.7 million in accrued interest on
outstanding bank debt and to repay Guardian approximately $10.1 million in
advances previously made to the Company under a tax sharing agreement. The
Company recognized a gain of approximately $16.4 million (net of tax expense
of approximately $8.9 million) on the sale of the IP Assets. All other assets
were sold for approximately book value, as adjusted under liquidation basis
accounting. Had the Asset Purchase Agreement been consummated as of either
June 30, 1999 or September 30, 1999, the dates of the Company's most recent
year end and interim financial statements, respectively, the amounts disclosed
above would not have been materially different. As a result of this
transaction, the Company no longer has any operating assets. Pro forma
financial statements reflecting the transaction will be filed by subsequent
amendment to this report.
Prior to the sale of its assets to Guardian, the Company was involved in
negotiations with a world-wide liquid crystal display manufacturer regarding
the sale and licensing of certain of the Company's IP Assets. However, when
it became clear to the Company that the sale and licensing of the IP Assets to
such third party might not be completed by December 31, 1999, the date upon
which the Company's outstanding bank debt was due and payable, Guardian agreed
to purchase the Company's assets, enabling the Company to pay its outstanding
liabilities, and to complete on its own behalf for the sale and licensing of
the IP Assets to such third party on the same terms as were negotiated with
the Company.
The disposition of the assets of OIS described in this report were
effected in connection with a Plan of Liquidation and Dissolution (the "Plan
of Liquidation"), pursuant to which all of OIS's assets are to be liquidated
and OIS dissolved in accordance with the Delaware General Corporation Law.
The Plan of Liquidation was approved by OIS's board of directors on November
11, 1998 and became effective upon the approval of its stockholders at OIS's
annual meeting of stockholders on March 31, 1999.
Pursuant to the Plan of Liquidation OIS filed a certificate of dissolution
with the Secretary of State of the State of Delaware (the "Certificate of
Dissolution") which Certificate of Dissolution was accepted by the Secretary
of State of the State of Delaware on December 17, 1999. As a result, OIS's
existence, under Delaware law will continue only for the limited purpose of
winding-up its affairs and discharging or making provisions for the discharge
of its liabilities with creditors. Based on the proceeds received from the
sale of all of its assets to Guardian as described in this release and the
amounts of OIS's outstanding liabilities, as previously announced in its
public filings, there will be no funds or assets available to make
distributions to its preferred or common stockholders.
As more fully described in its previous filings, on September 18, 1998,
OIS ceased its manufacturing operation in accordance with a plant shut-down
approved by its board of directors. Before it discontinued operations on
September 18, 1998, OIS manufactured and sold active matrix liquid crystal
displays, primarily to the commercial and military avionics markets.
This press release contains statements that are not based on historical
fact and are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Among other things, they regard the
Company's liquidity, financial condition, liquidation of assets and
dissolution. Words or phrases denoting the anticipated results of future
events, such as "anticipate," "believe," "estimate," "expects," "may," "not
considered likely," "are expected to," "will continue," "project," and similar
expressions that denote uncertainty are intended to identify such forward-
looking statements. Additionally, from time to time, the Company or its
representatives have made or may make oral or written forward-looking
statements. Such forward-looking statements may be included in various
filings made by the Company with the Securities and Exchange Commission, or in
other press releases or oral statements made by or with the approval of an
authorized executive officer of the Company. The Company's actual results,
performance or achievements could differ materially from the results expressed
in, or implied by such forward-looking statements: (1) as a result of risks
and uncertainties identified in the Company's publicly filed reports; (2) as a
result of risks associated with its liquidation and dissolution; (3) as a
result of factors over which the Company has no control; and/or (4) if the
factors on which the Company's conclusions are based do not conform to the
Company's expectations.