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Security Intelligence Technologies Sells Subsidiary
SecurityProNews
Staff Writer
2005-03-26
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Security Intelligence Technologies announced the sale of all of the stock in the Company's subsidiary, CCS International to Menahem Cohen.
The consideration consisted of $100, which was paid at the closing, and contingent consideration consisting of 5% of CCS's and its subsidiaries' net sales through March 31, 2015. Prior to 2004, the Company's retail operations were conducted almost exclusively through CCS and its subsidiaries, although modest retail sales were made from the Company's main office and its London office. The Company has discontinued substantially all of its retail operations, and it does not believe that the operations conducted by CCS are material to the Company's current business and, accordingly, it was in the best interest of the Company to sell the stock of CCS to Mr. Cohen. In determining the purchase price, the Company considered the negative net worth of CCS and the fact that substantially all of the business that had been conducted by CCS has been terminated.
In connection with the Company's sale of the CSS stock to Mr. Cohen, Mr. Cohen resigned as vice president and director of the Company.
In connection with the sale of the stock to Mr. Cohen, the Company entered into a consulting agreement with Mr. Cohen through December 31, 2007, pursuant to which the Company will pay him compensation at the annual rate of $108,000.
Prior to the sale of CCS, Mr. Ben Jamil, the Company's president and chief executive officer, had advanced to CCS the sum of $738,644. Pursuant to Mr. Jamil's employment agreement with the Company, the Company guaranteed CCS's obligations to Mr. Jamil to the maximum amount of $738,000. Pursuant to Mr. Jamil's employment agreement, the Company's obligations under this guaranty are payable only from cash flow from operations not required for the Company's business. Because of CCS's financial condition, the guaranteed obligations will be reflected as a liability of the Company's balance sheet.
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