Integrated Security Systems, has entered into an asset purchase agreement for the sale of substantially all of the assets of B&B ARMR to an affiliate of Strait Lane Capital Partners, of Dallas, Texas. The sale includes substantially all of the accounts receivable, inventory, fixed assets and intellectual property of B&B ARMR, plus its investment in the joint venture, B&B Roadway.
The purchase price to be paid to the company is US$6 million, subject to certain potential adjustments. In addition, the buyer agreed to assume certain of B&B ARMR's liabilities. The purchase price is made up of a cash payment in the amount of $5,550,000 and a promissory note in the original principal amount of $450,000. At the closing, ninety-five percent of the cash portion of the purchase price will be paid to the company, subject to certain adjustments, and the remaining five percent will be deposited into escrow. Of the cash portion of the proceeds from the sale, $450,000 will be used by the company to make an equity investment in the buyer's parent company, B&B Roadway Holdings, a newly-formed Delaware limited liability company. Employees of B&B ARMR will be offered employment by the buyer.
The Board approved the asset sale because it believes it was the strategic alternative most likely to maximize stockholder value. In reaching its conclusion to approve the asset sale, the Board reviewed and considered the company's current condition and future prospects, including its financial condition and related concerns over continuing as a going concern and the resulting difficulty in investing in new products. The Board also reviewed and considered the value of the company's assets, claims and obligations, and other strategic alternatives for the company, including the risks associated with these alternatives. After considering these factors and alternatives, the Board determined that the asset sale was advisable, and in the best interests of the company, its stockholders and creditors and that the company should proceed with the asset sale.