City of Industry, Calif.—April 14, 2004—Global ePoint, Inc. (Company) (Nasdaq: GEPT) acquired the assets, including intellectual property and ongoing supply agreements, of Perpetual Digital (Perpetual), a privately held systems integrator and supplier of digital video recording (DVR) systems for commercial and industrial security and surveillance. Global ePoint was the sole manufacturer of the digital video recorder of Perpetual's surveillance system.
Terms of the acquisition included cash payments totaling $400,000 and a one-year earn-out based on performance. As of April 7, Perpetual held approximately $278,000 of parts inventory. In August 2003, Perpetual signed an exclusive three-year agreement to supply its DVR surveillance system to Richardson Electronics, Ltd. (Nasdaq: RELL), a worldwide provider of branded, engineered solutions for the communications, industrial, security, and display markets. From September through December 2003, Perpetual's sales to Richardson under this agreement totaled approximately $1.3 million.
Perpetual’s DVR system will simultaneously display live video, playback video, host multiple remote users, and archive data, all while recording from multiple cameras. The unit includes Perpetual's intelligent digital video management system that combines multiplexing, alarm/event, and multi-zone motion detection recording, and features an imbedded point of sale (POS) application designed specifically for financial institutions and small-to-large retail and restaurant chains. The POS application will interface with any cash register, support multiple registers per DVR, and enable searches by transaction or item. A "quick query" capability shows the related transaction receipt embedded in the video of the event at the cash register as a convenient method to track sales activity and potential fraud.
Global Chief Executive Toresa Lou commented: "This acquisition represents an important step in our strategy to develop secure network digital video technology and products for the fast-growing commercial digital video vertical markets. Perpetual's video surveillance technology and platform complement our digital video technology development and, through the exclusive supply agreement with Richardson, we gain a new and significant distribution channel with the added benefit of ongoing sales.
"Perpetual will become a separate operating division of Global ePoint and continue to perform under the agreement with Richardson," Lou continued. "So we expect to begin seeing incremental sales in the current second quarter.
"We plan to develop additional sales through this new, worldwide distribution channel by enhancing the current system and introducing new technologies and products, potentially under other Richardson brands," Lou added. "For example, we are planning to develop new application interfaces, such as advanced motion algorithms, biometrics, access control, and alarm interface, to incorporate into our DVR products. And, based on market feedback from Richardson, demand in general for DVR technology and products is strong and expected to rise further.
"Therefore, this acquisition and the opportunities it offers are consistent with our growth strategy to increase sales by expanding into commercial and industrial security markets with secure network digital video technologies and products," Lou stated. "With a strong partner like Richardson, which holds a well-established presence in a number of market verticals demanding an increasing variety of DVR products, we feel there are attractive opportunities, not only for growing our current business but also for expanding into original design manufacturing."