12th November 2012. Qanda Technology Limited (ASX:QNA) has announced that it has entered into a binding share sale agreement to divest its 100% interest in the WebSpy business unit to Fastvue Inc, a software development company headquartered in Cupertino, California USA (incorporated in Delaware), and specializing in the development of real-time monitoring and reporting software for network security appliances and applications.
Fastvue is a company set up by ex-Webspy personnel Scott Glew and Luke Arnold, with former Webspy founder and CEO Jack Andrys as investor.
Qanda Technology was originally listed as WA-based Webspy (ASX:WSY) and changed its name to Qanda in 2010. It has effectively served as a 2009 backdoor listing for Sydney-based Marketboomer, a company specialising in supply chain software as a service technology, principally in the hospitality business.
Webspy was established in 1994 and listed via the Livingstone Group in 2000. At its peak Webspy employed over 50 full time staff and raised over $9.15m in working capital. It sold off non-core intellectual property and business to a value of $3.7m, generated total software revenue in excess of $25m, was awarded BRW and Deloitte Technology Fast 50 in 2004 ranked 18th in recognition of innovation and growth. It had offices in the United States, United Kingdom and Australia, and an extensive network of appointed Resellers and Distributors.
WebSpy provides Internet management tools that enable organizations to make informed decisions, helping them mitigate risk and maximize productivity. With an ever increasing threat to organizations from internal Internet misuse, WebSpy helps to limit and control recreational use of the Internet at work as well as provide Network Monitoring for valuable transparent insight into the health of systems.
Qanda will sell the Webspy Australian, US and UK subsidiaries and the IP on an going concern basis in return for a minimum consideration of A$1,050,000 as follows:
- A$800,000 in cash.
- Any Net Operating Assets surplus on the consolidated WebSpy Balance Sheet at settlement payable in cash.
- A Deferred Consideration of up to a further A$250,000 based on the following formula: if, on each six (6) month anniversary following the Settlement Date (each a Half YearlyDate) the total Revenue for the previous six month period from the sale, licensing,renewal or upgrade of WebSpy Products by any means whatsoever, equals or exceeds AUD$525,000, then 35% of the portion of any Revenue that exceeds AUD $525,000 (exclusive of GST or sales taxes) shall be paid to the Vendor by the Purchaser within 14 days of the relevant six monthly period, and shall continue in perpetuity until the Total Deferred consideration payable to the Vendor has been paid in full. Deferred Consideration Payments shall continue on an ongoing basis until such time as the Deferred Consideration has been paid in full.
The binding offer is subject to final diligence and various conditions precedent in the Share Sale Agreement, however the Directors anticipate settlement of the transaction to occur within the next 7 days.
In reviewing the initial offer and the alternatives as to the ongoing ownership of WebSpy, the directors of Qanda unanimously agreed that all resources should be applied to the continuing expansion of the Marketboomer business, which is showing encouraging growth signs and prospects, especially given the recent release of the new Purchase Plus product, and that opportunities in South East Asia and China progressing well.
The Directors have consulted with ASX on the sale of the Webspy business unit, who have confirmed that shareholder approval is not required.