The deal, which will see eGlobal take control of wireless transaction technology and associated global patents and patent applications held by Imbros, will involve an initial payment of AU$1 million in cash and an issue of 25 million eGlobal shares. A further 35 million eGlobal shares will be conditional on performance and Imbros successfully establishing title to certain intellectual property over a two-year period.
"We are focused on establishing eGlobal as a truly international player in the fast-growing market for mobile payments, smart card solutions and internet security technologies, with unique and scalable intellectual property," said Jim Goldburg, eGlobal chairman.
eGlobal is currently in the process of buying its associated company, eGlobal Hong Kong, in order to establish a presence in China.
The Imbros technology provides a secure open platform for the delivery of mobile commerce applications on mobile phones, PDAs and 3G capable devices. The company has developed a compact smart card reader/transaction unit that can be attached to mobiles and PDAs to provide a personal and secure transaction terminal.
These two acquisitions follow the purchase of Citadel Securix in January. eGlobal said the acquisitions completed its overall strategy.
"Imbros successfully establishing title to certain intellectual property over a two-year period."
eGlobal banking on Imbros gaining IP outside Australia is a big risk, considering the current state of ownership surrounding this IP.
Funge Systems Inc. (FSI) which filed for bankruptcy (Chapter 11) in late 2000 was the original owner of the VSIM, Open transaction Platform and Card switch patents within the US. After a 12 month court battle, Imbros a.k.a. Funge Merger Corp. (FMC) gained rights to this IP. However IP outside the US still remains in the hands of Newcom Holdings Pty. Ltd.(www.newcom.com.au), the parent company to Funge Systems Inc.
Considering the last round of court hearings (FMC vs. Newcom Holdings) didn't go in favour of FMC/Imbros, I doubt they will ever get the IP rights to other WTO countries, let alone within the 2 year window. FMC’s appeal is pending, but analysts have stated it’s a last grasp attempt, siting weakness and it’s likely to fail, ending any further hopes of gaining the IP.
Unless eGlobal/Imbros make an offer directly to Newcom Holdings, I can't see the buy out of Imbros and the US IP, being useful to eGlobal's business at all. Added to this is eGlobal is exposing themselves the possible counter legal action as Newcom Holdings attempt to recover damages resulting from the above action.
Furthermore, the window of opportunity to use the IP has since closed, with the flooding of the PDA/Mobile market. Better technologies now exist, rendering VSIM and Card Switch IP dead.
The whole saga is kind of sad. Never did I imagine so much money and time could be wasted over a few weak patents. Too see more money wasted, when things looked like they were dead and gone, just makes me laugh.
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