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NEW
YORK, March 1, 2006 – Israel Technology Acquisition
Corporation (OTCBB: IXMO, IXMOW, IXMOU) and privately
held IXI Mobile, Inc. (“IXI Mobile”), developer
of the Ogo™ family of mobile messaging solutions for
the mass market, announced today that they have entered into
a definitive agreement pursuant to which IXI Mobile will merge
with ITAC Acquisition Subsidiary Corp., a wholly owned subsidiary
of Israel Technology Acquisition Corp. (“ITAC”).
As a result of the merger, IXI Mobile will become a wholly-owned
subsidiary of ITAC. Immediately following the merger, the
holders of equity interests of IXI Mobile (including holders
of employee options and warrants to purchase IXI Mobile common
stock) will own or have the right to acquire approximately
7.8 million shares of ITAC common stock. Of this amount, approximately
1.4 million shares will be available for issuance to IXI Mobile’s
senior management and employees under IXI Mobile’s Employee
Stock Option Plan. As further consideration, the holders of
equity interests of IXI Mobile will receive or have the right
to acquire up to an additional 10.0 million ITAC shares based
on attaining various targets described below. There are currently
7.8 million shares of ITAC common stock outstanding. If approved
by the ITAC stockholders, the transaction is expected to close
in the third quarter of 2006. At closing, ITAC will change
its name to IXI Mobile, Inc. (the “Company”).
IXI Mobile, headquartered in Redwood City, California, with
research and development facilities in Israel and Romania,
develops the Ogo family of devices and end-to-end solutions
that deliver popular mobile applications, including instant
messaging (IM), email, SMS and news, on optimized, easy-to-use
handheld devices. Since launching Ogo in September 2004, IXI
Mobile has shipped approximately $20 million of Ogo products
to customers including AT&T Wireless (now Cingular Wireless
), Swisscom Mobile, the leading Swiss mobile operator, and
e-kolay.net, one of the largest Internet Service Providers
(“ISPs”) in Turkey, in collaboration with Telsim
(now Vodafone) and Avea, leading Turkish mobile operators.
IXI Mobile has recently signed a contract to sell Ogo to one
of the largest ISPs in Europe with over 20 million subscribers.
The agreement is expected to be publicly announced by IXI
Mobile’s customer.
The Transaction
Under the terms of the agreement, the equity interests in
IXI Mobile will be exchanged at the closing for approximately
7.8 million shares of ITAC common stock (or the right to acquire
such shares). Of this amount, approximately 1.4 million shares
will be available for issuance to IXI Mobile’s senior
management and employees under IXI Mobile’s Employee
Stock Option Plan. Following the merger, the Company will
have access to the approximately $33,500,000 currently held
in ITAC’s trust account, which will be used for its
working capital to support current opportunities and future
sales initiatives, to pay expenses of the transaction, and
to pay the per-share amount to any ITAC stockholder that seeks
to convert his shares into cash. In addition, the funds may
be used to repay certain IXI Mobile indebtedness.
As further consideration, the holders of equity interests
of IXI Mobile (including holders of employee options and warrants
to purchase IXI Mobile common stock) will receive or have
the right to acquire up to an additional 10.0 million shares
based on attaining the following targets:
• If revenues exceed $45 million in 2006 – 1.0
million shares
• If net profits reach $15-25 million in 2007 –
1.0 million shares (linear allocation)
• If net profits reach $20-45 million in 2008 –
2.0 million shares (linear allocation)
• If the common stock trades, for 20 out of 30 days,
at a price of at least:
o $8.50 – 2.0 million shares
o $9.50 – 2.0 million shares
o $12.00 – 2.0 million shares
In addition, certain IXI Mobile senior management members
will be granted options to purchase up to 1.5 million additional
ITAC shares at $5.00 per share, becoming exercisable upon
attaining the same net profit and share price milestones detailed
above.
IXI Mobile’s audited financial statements for 2004
and 2005 are currently being prepared in accordance with U.S.
GAAP and will be included in the proxy statement/prospectus
to be mailed to ITAC stockholders following clearance from
the U.S. Securities and Exchange Commission.
About IXI Mobile and Ogo Solutions
Ogo devices, with features such as a clamshell form factor,
QWERTY keyboard and large screen, are designed for the optimal
delivery of mobile data applications. To facilitate Ogo deployment,
IXI Mobile provides all required back-end components, as well
as launch and support services. The complete Ogo solution,
including devices and support services, is sold to mobile
operators, mobile virtual network operators (MVNOs), and ISPs
worldwide.
IXI Mobile’s Ogo solution appeals to the mass market
with its unique application set and low price. While IXI Mobile
does not directly control Ogo’s pricing to consumers,
Ogo devices have been sold at retail from $0 (fully subsidized
by the service provider) to $99, with a monthly service fee
of approximately $15-18, offering a compelling alternative
to higher-priced offerings.
Large, Growing Industry
IXI Mobile operates in the large and growing global mobile
communications market. In 2005, worldwide mobile phone subscribers
exceeded 2.1 billion (according to Portio Research). To date,
operators have relied on mobile voice and data services, such
as SMS, MMS, and multi-media downloads, as key revenue drivers.
As the market matures, however, operators are looking to leading
desktop applications, including email and instant messaging
(IM), to increase mobile data traffic.
Email and IM are highly popular applications, with worldwide
email users estimated at over 660 million in 2005 (according
to Radicati Group), and worldwide IM users estimated at over
300 million in 2005, generating 1.2 billion messages daily
(according to ComScore Media Metrix and IDC). These applications,
while popular on the PC, have had limited mobile penetration.
In addition, mobile email has largely been focused on the
corporate market rather than the mobile mass market. In fact,
the mobile email leader, catering mainly to corporate users,
has only 4.5 to 5.0 million subscribers.
Seasoned Management Team
IXI Mobile’s seasoned management team is led by Mr.
Amit Haller, Co-Founder, President and Chief Executive Officer.
Mr. Haller is a wireless industry veteran with over 17 years
experience. He was founder and CEO of Butterfly VLSI, Ltd.,
a pioneer in short distance wireless technology that was sold
to Texas Instruments in 1999. At Texas Instruments, Mr. Haller
managed the group in charge of Bluetooth technology. Mr. Haller
stated “we are very excited about pursuing this partnership
with Israel Technology Acquisition Corp. We look forward to
becoming a publicly traded entity through this combination
and having the additional resources to advance our global
sales initiatives and continue to bring high-quality mobile
solutions to market.”
Mr. Gideon Barak, Co-founder and Chairman, brings over 25
years experience in the communications industry. Mr. Barak
served as CFO of DSP Group Inc. (NASDAQ: DSPG). He was Founder
and CEO of DSP Communications (DSPC), which was spun out from
DSPG and was sold to Intel Corporation. He also served as
Founder and Chairman of Envara, Inc. and Butterfly VLSI, which
were sold to Intel and Texas Instruments, respectively. He
also served as Director of Modem-Art Ltd. and Widcomm, Inc.
when they were acquired by Agere Systems and Broadcom Corporation,
respectively. Mr. Barak serves as a Director of additional
semiconductor and communications companies, including Metalink
Ltd. (NASDAQ: MTLK) and Advasense (founder and Chairman),
and also serves as venture partner with Benchmark Capital.
About ITAC
Israel Technology Acquisition Corp. is a Delaware corporation,
established on February 22, 2005. ITAC is a Specified Purpose
Acquisition Corporation (“SPAC”) with the objective
of acquiring an operating business that has manufacturing
operations or research and development facilities in Israel.
ITAC completed its initial public offering (IPO) in 2005,
through the sale of 6.318 million units at $6.00 per unit.
Each unit consisted of one share of ITAC common stock and
two redeemable ITAC common stock purchase warrants. A portion
of the net proceeds of the IPO, currently equivalent to approximately
$5.30 per share including interest earned since closing, are
held in escrow in the custody of an independent trustee until
the consummation of a business combination. In addition to
the approximately 7.8 million shares of ITAC common stock
currently outstanding, approximately 12.6 million redeemable
ITAC common stock purchase warrants are outstanding.
Israel Frieder, ITAC’s Chairman and Chief Executive
Officer, said: “IXI Mobile has a fantastic product that
addresses the sizeable but underserved mobile data communications
market. They have demonstrated the ability to develop and
sell value-added devices and services in major markets worldwide.”
He continued: “Through this merger, the interests of
IXI Mobile’s strong management team are closely aligned
with those of our stockholders. IXI Mobile’s stronger
balance sheet, impressive and growing customer base, and sound
strategy position the Company to further capitalize on the
significant growth opportunity in the global market for mobile
data services.”
Terms of Closing
The closing of the merger is subject to a number of legally
required and customary closing conditions, including ITAC
stockholder approval of the transaction. In addition, the
closing is conditioned on holders of fewer than 20% of the
shares of ITAC issued in the IPO voting against the business
combination and electing to convert their ITAC shares into
cash, as permitted by the ITAC certificate of incorporation.
It is expected that the transaction will close in the third
quarter of 2006. There can be no assurance that the transaction
will be approved by ITAC stockholders.
Prior to closing, IXI Mobile, with the cooperation of ITAC,
will seek to raise additional capital to support current opportunities
and future growth.
Following the closing, Israel Frieder will become Co-Chairman
of the Company. In addition, the Company’s Board of
Directors will be comprised of seven directors, including
Gideon Barak, Chairman of IXI Mobile, Amit Haller, President
and CEO of IXI Mobile, Israel Frieder, Chairman and CEO of
ITAC, and four independent directors, including Yossi Sela,
Managing Partner of Gemini Israel Funds.
Additional Information
ITAC stockholders are urged to read the proxy statement/prospectus
regarding the proposed transaction when it becomes available,
as it will contain important information. ITAC stockholders
will be able to obtain a free copy of the proxy statement/prospectus,
as well as other filings containing information about ITAC
and IXI Mobile, without charge, at the Securities and Exchange
Commission’s Internet site (http://www.sec.gov). Copies
of the proxy statement/prospectus and the filings with the
Securities and Exchange Commission that will be incorporated
by reference in the proxy statement/prospectus can also be
obtained, without charge, by directing a request to Israel
Technology Acquisition Corp., 7 Gush Etzion, 3rd Floor, Givaat
Shmuel, Israel 54030.
IXI Mobile was founded in 2000. The company is headquartered
in Redwood City, California, and has research and development
facilities in Israel and Romania. IXI Mobile also maintains
regional sales offices. For more information on IXI Mobile,
please visit www.ixi.com.
For more information on Ogo, please visit www.ogo.com.
Contact
Lee Roth
KCSA Worldwide
Lroth@kcsa.com
(212) 682-6300
Todd Fromer
KCSA Worldwide
Tfromer@kcsa.com
(212) 682-6300
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act
of 1995, about ITAC and IXI Mobile and their combined business
after completion of the proposed acquisition. Forward looking
statements are statements that are not historical facts. Such
forward-looking statements, based upon the current beliefs
and expectations of ITAC and IXI Mobile’s management,
are subject to risks and uncertainties, which could cause
actual results to differ from the forward looking statements.
The following factors, among others, could cause actual results
to differ from those set forth in the forward-looking statements:
the ability to obtain governmental approvals of the merger
on the proposed terms and schedule; the failure of ITAC stockholders
to approve the merger agreement and the transactions contemplated
thereby; the number and percentage of ITAC stockholders voting
against the merger and seeking conversion of their shares;
changing interpretations of generally accepted accounting
principles; outcomes of government reviews; inquiries and
investigations and related litigation; continued compliance
with government regulations; legislation or regulatory environments,
requirements or changes adversely affecting the businesses
in which IXI Mobile is engaged; fluctuations in customer demand;
management of rapid growth; intensity of competition from
other providers of mobile communications products and services;
timing, approval and market acceptance of new products introduction;
general economic conditions; geopolitical events and regulatory
changes, as well as other relevant risks detailed in ITAC’s
filings with the Securities and Exchange Commission, including
its Quarterly Report on Form 10-QSB for the period ended September
30, 2005. The information set forth herein should be read
in light of such risks. Neither ITAC nor IXI Mobile assumes
any obligation to update the information contained in this
press release.
The respective directors and executive officers of ITAC and
IXI Mobile and other persons may be deemed to be participants
in the solicitation of proxies in respect of the proposed
merger. Information regarding ITAC’s directors and executive
officers will be available in its Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2005, to be filed with
the Securities and Exchange Commission. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained the proxy statement/prospectus
and other relevant materials to be filed with the Securities
and Exchange Commission when they become available.
-ends-
1 Ogo is no longer being sold by Cingular Wireless
but service for existing customers continues.
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