MINNEAPOLIS, MN / ACCESSWIRE / September 27, 2016 / Veritec, Inc. (the "Veritec") (OTCPink: VRTC), -- today announced that it has entered into a Non-Binding Letter of Intent ("LOI") to acquire all of Flathead Bancorporation, Inc.'s ("FB") issued and outstanding shares. FB is the majority owner of First Citizens Bank of Polson, Montana ("Citizens Bank").
Van Tran, Chief Executive Officer of Veritec, stated, "Veritec and its subsidiaries offer a complete line of secure verification and financial products including prepaid debit cards, mobile banking applications and secure payment systems. In the past, our ability to continually provide our products and services has been dependent on our finding and retaining a sponsoring bank, which has been difficult. With this acquisition, we remove that dependency and control our ability to continually provide our products to our customers without disruption. We also believe our vertical acquisition of FB will make our cutting-edge mobile banking and payment products the most efficient and cost-effective in the industry. Veritec anticipates that it will license its proprietary blinxpay™ App and blinx On-Off™ Visa Prepaid Debit Card technology and secure payment systems to Citizens Bank."
Under the proposed terms of the LOI, Veritec would acquire 9.9 percent of FB's issued and outstanding shares for $320,000 at the closing date. Veritec intends to purchase the remaining 90.1 percent of FB's outstanding common shares within three years of the closing date for $2,880,000. The total purchase price for FB's outstanding common shares (including the 9.9 percent discussed above) would be $3,200,000.
Veritec would also provide loans to FB to be used for capital purposes of $280,000 at the closing date, $500,000 on or before January 31, 2017 and $400,000 on or before April 1, 2017, for a total of $1,180,000. The loans would mature in five years, require annual interest only payments at interest rates to be determined and be secured by 38% of FB outstanding common stock.
Citizens Bank president, Rick Skates, will continue to oversee the Bank's operations and will be responsible for the integration of Veritec's proprietary technology into its operations.
In order for the Company to successfully complete the purchase of FB, amongst other items, the Company is currently seeking regulatory approval from applicable banking authorities and plans to raise funds from investors by issuing its common shares, debt, or both.
About Veritec, Inc.
Since 1982, Veritec, Inc. has been dedicated to providing businesses with secure technological solutions. Over the last 34 years, Veritec has grown to include two subsidiaries, Veritec Financial Systems, Inc. and Tangible Payments. Veritec and its subsidiaries offer a complete line of secure verification and financial products including prepaid debit cards, mobile banking applications and secure payment systems. For more information, please visit (www.veritecinc.com, www.vtfs.com; www.blinxprepaid.com; www.blinxpay.com).
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties affecting technology companies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. Our SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason unless otherwise required to do so by SEC Regulations.
Contact:
Van Tran
612-991-7928
SOURCE: Veritec, Inc.