Cash Tech invests $2 million in UK pre-pay outfit Bips
22 June 2006 | 2401 views | 0
Source: Cash Technologies
Cash Technologies, Inc. announced today that it has completed a $2,000,000 investment in Business Intelligent Processing Systems, Limited ("BIPS"), a London-based payment processor, in exchange for a 10% equity stake in BIPS.
BIPS was formed by the founders of Copeland Burtnick Associates, Ltd., pioneers in the online payment industry, providing domestic and international credit card processing, fraud and risk management services and consulting for online merchants in retail and gaming. BIPS is also a distributor of Cash Tech's prepaid debit card, marketed under the brand name Greenback Card(TM). Prepaid debit cards are new to the European market, where cross border money transfers, e-wallet functionality and other advanced features of Cash Tech's prepaid cards can be of significant value to cardholders and merchants.
Under the terms of the investment, Cash Technologies has issued 200 shares of its Series M Convertible Preferred Stock (the "Preferred Stock") to BIPS in exchange for 10% of the outstanding shares of BIPS (the "BIPS Shares"). The Preferred Stock is convertible into shares of Cash Tech's common stock after June 1, 2007 at a conversion price of between $1.00 and $2.00 per share, determined at the time of conversion based on the market value of the common stock, resulting in the issuance of between 1,000,000 and 2,000,000 shares of Cash Tech common stock to BIPS. In addition, if BIPS does not reach certain revenue targets within two years, Cash Tech can repurchase up to 75% of the Preferred Stock for $.01 per share. Preferred Stock which is subject to Cash Tech's repurchasing rights cannot be converted. Cash Technologies will have the right to appoint a director to the board of directors of BIPS.
Sean Copeland, Managing Director of BIPS, commented, "The partnership with Cash Technologies has far reaching benefits for both organizations. The collective expertise and products of our two organizations will take advantage of exploding payment processing and prepaid debit card opportunities in Europe and the U.S."
Bruce Korman, CEO of Cash Technologies, remarked, "This is an exciting development for Cash Tech. The investment in BIPS creates a relationship that brings Cash Tech another revenue stream, access to leading edge payment processing tools and a first mover's advantage in the rapidly developing European prepaid card market."