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Poynt Corporation Announces Asian Expansion with Formation of Joint Venture with the People's Republic of China's China Youth LeaguePartnership To Offer Fully Integrated Mobile Search and E-Commerce Platform Targeting Over 230 Million Smartphone Users (February 13, 2012)
CALGARY, ALBERTA -- (Marketwire) -- 02/13/12 -- Poynt Corporation (TSX VENTURE:PYN)(OTCQX:PNYTF) ("Poynt Corp." or the "Company"), announced today that the Company has finalized the structuring of its first Asian operating entity, Poynt Asia (Hong Kong) Limited ("Poynt HK") and the formation of a joint venture (the "China JV" or "China Youth Poynt Limited") between Poynt HK and China Youth League's affiliated entity, China Youth Goyor Technology (Beijing) Co., Ltd. ("China Youth Goyor"). China Youth League ("CYL") is a youth movement of the People's Republic of China that plays a vital role in the development of China. CYL has over 83 million young members between the ages of 14 and 28, the majority of which are typically well-educated and influential.
As an initial objective of the China JV, China Youth Goyor will focus on obtaining the Chinese Ministry licenses required for conducting the business of China Youth Poynt Limited, securing data service agreements and preload agreements in China with major telecom companies, and facilitating consumer usage of the Poynt mobile platform in China (the "China Youth Poynt Platform"), initially among CYL's over 83 million members. As an initial performance benchmark of the China JV, China Youth Goyor is to deliver at least 20 million active users in or around August 2012. Based on preliminary discussions, China Youth Poynt Limited anticipates as many as 60% of CYL's membership may become active users (approximately 50 million active users) of the China Youth Poynt Platform. Additionally, the China Youth Poynt Platform will be marketed by the China JV to the broader smartphone population in China. This rapidly growing market is expected to surpass 230 million(i) users in 2012.
"The Company is extremely pleased to have China Youth Goyor as its joint venture partner for the development and expansion of the Poynt mobile platform in China. The Asian market presents a vast opportunity for expansion of the Poynt mobile platform," said Andrew Osis, CEO of Poynt Corp. "The Chinese mobile market alone has been estimated at nearly 1 billion users(ii) - that represents an enormous opportunity for Poynt Corp. as mobile users in China convert to smartphones and discover the power of apps, and mobile local search platforms in particular."
Through the China JV, Poynt HK and China Youth Goyor will deploy the China Youth Poynt Platform initially in China. The China Youth Poynt Platform will be based on the current Poynt local search platform; however, additional functionality, such as local news, video messaging, gaming, e-books, and online novels, social networking services, and e-wallet solutions are being considered for inclusion in the China Youth Poynt Platform.
China Youth Poynt Limited plans to enter into a number of China Youth Poynt Platform-related agreements in China with data partners, telecom providers and original device manufacturers to allow the China Youth Poynt Platform to reach into China's smartphone user population as a preloaded, subscription-based model.
Poynt HK has appointed David Wei Ren as CEO of China Youth Poynt Limited. Responsible for operations in China, Mr. Ren brings over 12 years of experience with multinational companies to the Poynt team. With a career focused in the IT industry including mobile software and app store business management, Mr. Ren has an in-depth understanding of the business model and trends in the mobile space and the role that mobile software applications play with device manufacturers.
In structuring the China JV, Poynt Corp. subscribed for a 60% equity interest in Poynt Asia, Ltd. ("Poynt Asia"), a Bermuda company, for nominal consideration. The balance of the equity of Poynt Asia is owned, as to 20%, by a company affiliated with Poynt's largest shareholder (owning or controlling approximately 16% of the outstanding Poynt common shares) and as to 20%, by an arm's length party. By way of an intercompany loan of $7M from Poynt Corp. to Poynt Asia (the "Poynt Asia Loan"), $2M was used by Poynt Asia to acquire a 100% equity interest in Poynt HK from an arm's-length party. The remaining $5M of the Poynt Asia Loan was in turn loaned by Poynt Asia to Poynt HK to fund the commencement of operations of the China JV.
Poynt HK will have a 70% economic interest and a 49% equity interest in China Youth Poynt Limited. The China JV structuring arrangements also contemplate: (i) Poynt Corp. providing access to its Poynt app technology to the China JV for use in Asia; (ii) additional contingent cash consideration being paid to the vendor of Poynt HK by Poynt Asia in the event certain pre-defined operational and financial targets are achieved in respect of Poynt HK's go forward business; (iii) the deferral of the repayment of the Poynt Asia Loan pending the return of capital to the non-arm's length minority shareholder of Poynt Asia; and (iv) the arm's length minority shareholder of Poynt Asia having a residual right to receive 1/7th of the dividends received by Poynt Asia from Poynt HK.
Payment of the above described additional contingent cash consideration and deferred repayment of the Poynt Asia Loan to Poynt are subject to the completion of all required due diligence and satisfaction of other customary conditions. The Company expects to complete this due diligence in the near term.
Investor Conference Call
Poynt Corp. will discuss details of the China JV in an investor conference call this afternoon (February 13, 2012) at 4:30 p.m. Eastern Time (3:30 p.m. Mountain Time). The Company's CEO, Andrew Osis, will host the presentation followed by a question and answer period.
Date: Monday, February 13, 2012 Time: 4:30 p.m. Eastern time (3:30 p.m. Mountain time) Dial-In Number: 1-877-941-8416 International: 1-480-629-9808 Conference ID#: 4512702
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
To listen to the live webcast please go to http://viavid.net/dce.aspx?sid=0000937C. A replay of the webcast will be available following the conclusion of the call via Poynt's website at http://about.poynt.com.
A telephone replay of the call will be available after 7:30 p.m. Eastern time (6:30 p.m. Mountain time) and until March 13, 2012.
Toll-free replay number: 1-877-870-5176 International replay number: 1-858-384-5517 Replay pin #: 4512702
About China Youth Goyor Technology (Beijing) Co., Ltd
China Youth Goyor is the partner with Network Film & TV Center of the Central Committee ("CNTC"), which is China's Grade A State business entity operated by CYL, responsible for deploying and utilizing network technology to serve Chinese youth. China Youth Goyor is in charge of CYL's WIFI Channel Technology Development and Operation, setup and maintenance of several portals of CYL's China Youth Net including its WIFI Channel, Game Channel, Juveniles Cyber Navigation Portal, Intra High School Clubs & Alliances Platform. Also, it has organized several large events hosted by the CNTC, including College Student Green Game Animation Design Competition, Green Mobile Game Collection Activity, and ChinaJoy sub-Forum.
About Poynt Corporation
Poynt Corporation (about.poynt.com) (OTCQX:PNYTF)(TSX VENTURE:PYN) is a global leader in the mobile local advertising space. Its Location Based Search (LBS) and advertising platform, Poynt (www.poynt.com), enhances a user's ability to connect with the people, businesses and events most important to them. Poynt is available on all major smartphone and tablet platforms in nine countries. Poynt Corp. entered the mobile publishing space with the acquisition of an advertising publishing platform in January 2011. Whether through the Poynt Local Search Platform or the Ad Publishing Platform, Poynt Corp. simplifies connecting consumers with businesses, retailers and events. Headquartered in Calgary, AB, Canada, Poynt Corp. trades on the TSX Venture Exchange under the symbol PYN and in the United States on the OTCQX under the symbol PNYTF.
Important Cautions Regarding Forward-looking Statements
This news release contains forward-looking statements relating to: anticipated user rates of the China Youth Poynt Platform in China; the ability of CYL to deliver and introduce the China Youth Poynt Platform to its members; estimates of the number of future smart phone users in China; the expected role of CYL in furthering the business of the China JV; the opportunities for expansion in the Asian market; terms of the China JV, including satisfaction of all items and conditions relating to the commencement of the China JV's operations; future contingent payments, loans and other transaction matters to be completed in the future; the anticipated features of the China Youth Poynt Platform; the anticipated business of the China JV, including agreements with various service providers offering the China JV's products on a pre-load subscription based model, permits, contractual relationships and penetration of the market in China; anticipated user uptake and other statements that are not historical facts. Such forward-looking statements are subject to important risks, uncertainties and assumptions. The results or events predicated in these forward-looking statements may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on these forward-looking statements.
These forward-looking statements are based on certain key assumptions regarding, among other things: the ability of the China JV to obtain anticipated permits, contracts and penetration of the market in China; the acceptance rate of the China Youth Poynt Platform by users; the anticipated number of devices on which Poynt will be virtually preloaded or made available as a preload; the ability of CYL to introduce the China Youth Poynt Platform to its members at the rates anticipated, or at all; future technological developments; delays bringing the China Youth Poynt Platform to market; the ability of the China JV to consummate agreements with local companies in China necessary to facilitate the roll-out of the China Youth Poynt Platform in China; the ability of Poynt to successfully repatriate funds generated in foreign jurisdictions; compliance by Poynt and its partners of applicable foreign corrupt practice legislation; reliance on in-country staff and personnel to run and efficiently manage the China JVs business; the cost of expanding product lines; the impact of increasing competition; the continuity of existing business relationships, including dependence on CYL and its associated and affiliated entities; the continued successful development, implementation and execution of the Poynt platform; continued growth in number of active users of the Poynt platform; conditions in general economic and financial markets; the ability to complete previously announced transactions; ability to obtain all necessary regulatory approvals; and our ability to obtain financing on acceptable terms, including Poynt's ability to finance its future commitments relating to the China JV.
Material risk factors that could cause actual results to differ materially from the forward-looking information include, but are not limited to: the inability of the China JV to successfully commence operations in the timeframes anticipated, or at all; the inability to secure contracts, permits and all other regulatory approvals related to the China JVs business; the incorrect assessment of the Chinese market and the potential benefits of the China JV; the inability of Poynt Corp. to fund its obligations; reliance on third parties; risks in conducting business in China, including (but not limited to) government nationalization, currency risks, inflation and compliance with domestic laws and regulations; risk that the China JV will not be able to comply with all applicable laws in conducting its business, including, but not limited to foreign corrupt practices legislation; the acceptance rate of the China Youth Poynt Platform by smart phone users is lower than anticipated; the risk that China Youth Poynt Platform will not be virtually preloaded or made available as a preload on the anticipated number of devices; the inability of CYL to introduce the China Youth Poynt Platform to its members at the rates anticipated, or at all; the inability of the China JV to consummate agreements with local companies in China necessary to facilitate the roll-out of the China Youth Poynt Platform in China; the deteriorating economic and market conditions that could lead to reduced spending on information technology products; competition in our target markets; potential capital needs; management of future growth and expansion; the development, implementation and execution of the Company's strategic vision; risk of third-party claims of infringement; protection of proprietary information; customer acceptance of the Company's existing and newly introduced products; the success of the Company's brand development efforts; risks associated with strategic alliances; failure of counterparties to perform on contracts; failure to successfully negotiate contracts; failure to successfully negotiate additional preload agreements; reliance on distribution channels; product concentration; need to develop new and enhanced products; failure to obtain necessary regulatory approvals; potential product defects; our ability to hire and retain qualified employees and key management personnel; risks associated with changes in domestic and international market conditions and the entry into and development of new markets for the Company's products; and the risks described under "risk factors" in our Annual Information Form for the year ended December 31, 2010 which is available on our SEDAR profile (www.sedar.com).
The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on expectations of, or statements made by, third parties in respect of the forward-looking statements identified above.
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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
European Media Communications Contact:
CC-Group Communications Ltd., for Poynt Corporation
Nicole Littlewood or Howard Jones
+44 118 920 7650
North American Public Relations Contact:
Global Results PR for Poynt Corporation
Investor Relations Contact:
Liolios Group, Inc.
Scott Liolios or Matt Glover
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