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On Site Sourcing, Inc.
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On Site Sourcing, Inc.
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U.S. Technologies and On-Site Sourcing Sign Definitive Agreement.
WASHINGTON--Sept. 28, 2000--U.S. Technologies Inc. (NASDAQ BB:USXX - news), an
Internet enterprise developer and business-to-business technologies integrator,
today announced it has signed a definitive merger agreement to acquire On-Site
Sourcing (NASDAQ Small Cap:ONSS - news), a leading provider of digital imaging,
document management, and litigation reprographics services to law firms,
corporations, consulting firms, accounting firms and financial institutions.
Both companies' boards of directors have approved the definitive agreement.
Under the terms of the definitive agreement, On-Site's stockholders will
exchange their shares for U.S. Technologies' shares and cash in a transaction
valued at $35 million for all outstanding shares and shares subject to issuance
pursuant to options outstanding, plus the assumption of On-Site debt.
On-Site stockholders can elect to receive U.S. Technologies' stock, cash, or a
combination of stock and cash subject to proration due to the cash limitation
and adjustment formula discussed below. The transaction is intended to be
tax-free to On-Site stockholders to the extent they receive shares of U.S.
Technologies' common stock.
To ensure tax-free treatment of the transaction, holders of at least 50% of the
outstanding shares of On-Site common stock will receive U.S. Technologies common
stock. Accordingly, the aggregate cash consideration paid at closing will be
limited to the lesser of 50% of the number of shares of On-Site common stock
outstanding at closing or $12 million.
The exchange ratio for the stock portion of the merger consideration is subject
to an adjustment formula based on the average trading price of U.S.
Technologies' common stock during a twenty trading-day period ending three full
trading-days before the closing of the merger. If U.S. Technologies' average
stock price per share for the adjustment period is:
* less than $0.75, the value assigned to the U.S. Technologies' common
stock in the exchange ratio will be fixed at $0.75, except that On-Site may
terminate the merger agreement if the average stock price during the adjustment
period is below $0.67.
* equal to or greater than $0.75 but less than $0.90, the value assigned to
the U.S. Technologies' common stock in the exchange ratio will be the average
stock price during the adjustment period.
* equal to or greater than $0.90 but less than $1.15, the value assigned to
the U.S. Technologies' common stock in the exchange ratio will be fixed at
$1.00.
* equal to or greater than $1.15, the value assigned to the U.S.
Technologies' common stock in the exchange ratio will be fixed at $1.15.
On-Site's publicly traded warrants to buy shares at $6.00 are expected to be
converted to U.S. Technologies' warrants, with the exercise price and number of
shares to be adjusted based on the stock conversion formula for the merger. The
expiration date of these warrants will be extended for one year to July 8, 2002.
All options outstanding at closing will be converted into options to purchase
U.S. Technologies' common stock, with the exercise price and number of shares to
be adjusted based on the stock conversion formula for the merger. In addition,
in connection with the closing, U.S. Technologies will make 3.6 million options
available for grant to employees of On-Site Sourcing.
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On July 31, 2000, the companies had announced an Agreement in Principle which
called for On-Site's shareholders to exchange their shares for approximately
26.25 million U.S. Technologies' shares and $8.75 million in cash. Under the
terms of the definitive agreement, U.S. Technologies raised the cash component
of the deal to as much as $12 million and agreed to make the stock component
subject to adjustment within certain ranges of trading prices for U.S.
Technologies' common stock.
Also, On-Site's two top executives, CEO Christopher Weiler and Vice-President of
Marketing Allen Outlaw, have agreed to elect to receive only stock in the merger
and will exchange all of their shares of On-Site common stock for shares of U.S.
Technologies' common stock. Both Weiler and Outlaw will become members of the
U.S. Technologies board of directors at closing.
The revised terms and the commitment to elect stock consideration from Weiler
and Outlaw increases the amount of cash consideration available for On-Site's
public shareholders by reducing the amount of current outstanding shares
eligible for the cash election by 571,000.
On-Site's directors and officers owning 23% of the outstanding On-Site shares
have agreed to vote for the merger. Owners of more than 50% of U.S. Technologies
voting securities have committed to voting for the merger. Closing will be
subject to usual conditions including necessary shareholder approvals and SEC
registration of securities to be issued in the merger, as well as adoption of
U.S. Technologies already announced charter amendment to increase the common
shares it is authorized to issue. The companies hope to complete these steps and
close the merger early next year.
"We believe this is an attractive transaction for our shareholders. We expect to
leverage U.S. Technologies' contacts in the business, technical and financial
communities to strengthen our operations following the acquisition," said Chris
Weiler, President and CEO of On-Site. Weiler further stated, "U.S. Technologies
has assembled an excellent management team and portfolio of associated companies
and I firmly believe that, as holders of U.S. Technologies stock, our
shareholders will enjoy many years of superior returns."
Gregory Earls, U.S. Technologies Co-Chairman and Co-CEO, said "we are quite
pleased with both the terms of the agreement and the opportunities that
On-Site is anticipated to provide for U.S. Technologies and our Associated
Companies. We are a vastly different company today than we were this time
last year, and believe this acquisition integrates well with our strategic
plan and will enhance our future prospects."
The On-Site acquisition is part of U.S. Technologies' strategic plan to combine
leading edge Internet technology companies with more traditional, established
companies that will complement and integrate the technologies of its emerging
associated companies.
As part of its strategy, U.S. Technologies will continue to pursue
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opportunities for formation of, or significant investments in, Internet
technology companies that develop scalable products and services that are on the
verge of going to market, and then support and nurture these emerging companies
in order to accelerate their establishment in the marketplace.
Currently, U.S. Technologies has strategic investments in eight companies:
* PromiseMark, Inc. (www.promisemark.com) - the country's premier provider
of Internet and data related protection plans. PromiseMark offers a suite of
products that provide protection to keep individual computer users up and
running in a world of growing online risks.
* Portris, LLC - a software company that develops technology that
revolutionizes team-oriented information management over a network, allowing
business groups to efficiently manage large amounts of information via the
Internet.
* OneMade Inc. (www.onemade.com) - the marketplace for all things handmade,
is the World's online arts and crafts neighborhood dedicated to serving people
with a passion for handmade products. The company's website was launched in July
2000.
* Urban Box Office Network (www.ubo.net) - the next generation media company
that provides a unique on and off-line cultural and commercial platform for the
Urban Mindset. UBO defines the Urban Mindset as a global community that shares
common interests in music, arts, sports, and fashion, and establishes trends for
the emerging worldwide market.
* MEI Software Systems, Inc. (www.meisoft.com) - a software developer that
enables associations to become e-associations by providing leading edge Web
technology to create custom, robust vertical Web portal sites
* Buyline.net, Inc. - trading zone developer that partners with community
organizations to create, market, and operate e-commerce enabled web communities.
These partners include publishers, trade and professional organizations, and
corporations with dealer/franchise networks.
* bluemercury, Inc. (www.bluemercury.com)- clicks & bricks retailer that
enhances the lifestyle of time-starved women by offering a carefully edited
selection of high quality, indulgent, and innovative beauty and apothecary
products available both on their website and in their EFX retail stores.
* WebMilestones.com (www.webobits.com) - online publisher of information on
life milestones. WebMilestones.com has launched its first site, WebObits.com,
designed to complement local newspaper death notices and obituary services.o
On-Site Sourcing
On-Site Sourcing provides digital imaging, document management, litigation
reprographics services, offset printing, and facilities management throughout
the East Coast. On-Site's clients include law firms, corporations, non-profit
organizations, accounting firms, financial
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institutions and other organizations. On-Site currently operates in the New York
City, Washington, D.C., Atlanta, Philadelphia and Baltimore markets.
U.S. Technologies Inc.
U.S. Technologies is an Internet enterprise developer of early stage and
emerging companies and is a business-to-business technologies integrator. The
company integrates the technologies of its Associated Companies with those of
established companies to give these companies a new opportunity to launch their
Internet-based products and services and to accelerate the growth and success of
its Associated Companies. U.S. Technologies has recently been named one of the
Top 50 technology companies to watch in the Washington, DC metro area by
LocalBusiness.com (formerly dbusiness.com).
This release contains "forward looking statements" concerning prospective future
events and results. Such prospective events include acquisitions and
investments, and prospects for such acquisitions and investments. U.S.
Technologies cautions that actual developments and results may differ materially
from its prospective future events. There can be no assurance that the
conditions necessary to completing any prospective event will occur.
Additional investments in the Company, or by the Company or an unrelated person
in any of the Company's associated companies, provide no assurance that the
Company or such associated company will succeed or that the Company's
investments will be recovered or that the Company or any of its associated
companies will be profitable.
The Company's assets and operations, including results of operations, would be
affected materially by either occurrence of any such event or the failure of any
such event to occur, by the extent to which it and its associated companies
continue to have access to financing sources on reasonable terms in order to
pursue its and their business plans, by the success or failure of the business
plans of its associated companies, by economic conditions generally and
particularly in the developing e-commerce market, by competition and
technological changes in its and its associated companies' industries and
businesses, and by the results of its and its associated companies' operations
if and when operating.
The Company's assembly and other outsourcing business activities involve a
limited number of facilities serving a limited number of customers, all of which
are subject to material changes outside the Company's control. The Company is
contemplating a sale or other disposition of this business, but there can be no
assurance either that any such sale or other disposition will occur or as to the
nature of the terms for any such sale or other disposition.
This notice is not intended to constitute an offer to sell or an offer to buy
any securities. Any securities to be issued pursuant to the proposed merger
described in this press release will be issued pursuant to the applicable
provisions of the Securities Act of 1933. Investors are urged to read the
relevant documents to be filed with the Securities and Exchange Commission,
which will contain important information about the transaction.
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Investors can obtain any document filed with the Commission for free at the
Commission's web site at http://www.SEC.GOV.
CONTACT:
U.S. Technologies Inc. - www.usxx.com
Holly Moskerintz, Communications, 202/466-3100
[email protected]
or
Dana Rochelle, Investor Relations, 202/466-3100
[email protected]
or
On-Site Sourcing - www.onss.com
Jason Parikh, CFO, 703/276-1123
[email protected]
