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EX-10.1 - LETTER OF INTENT AND TERM SHEET - Brekford Traffic Safety, Inc. | bfdi_ex101.htm |
8-K - CURRENT REPORT - Brekford Traffic Safety, Inc. | bfdi_8k.htm |
Exhibit
99.1
KeyStone Solutions, Inc. and Brekford Corp.
(OTCQX: BFDI) Announce Terms for Proposed
Merger
Merger Would Allow Combined Companies to Grow Existing Business
Through
Access to Additional Capital, Sales and Distribution
Resources
December 07, 2016 08:45 AM Eastern Daylight Time
Chantilly, VA--(ACCESSWIRE)—KeyStone
Solutions, Inc. (“KeyStone”), a company whose
subsidiaries presently serve the government contracting sector,
announced today that it has entered into a non-binding letter of
intent (“LOI”) to combine with Brekford Corp. (OTCQX:
BFDI) (“Brekford”). KeyStone is focused on building
end-to-end solutions for its clients through both acquisitive and
organic means. Brekford is a public company that delivers public
safety technology and turnkey automated traffic safety solutions to
federal, state and municipal audiences. KeyStone management
believes that through sales, partnering, expanding distribution and
strategic direction, it can create value for the combined
entity’s shareholders. The LOI contains an exclusivity
provision through March 31, 2017 during which time Brekford has
agreed they will not solicit, negotiate, or accept any third-party
proposals regarding the acquisition of Brekford, any merger or
consolidation with or involving Brekford, or any other
“Competing Transaction” (as defined in the LOI) of
Brekford, except for the sale of Brekford’s vehicle upfitting
business. The proposed transaction is conditioned on the sale by
Brekford of not more than 81% of its vehicle upfitting business to
a company with the resources to grow that business unit to a
national footprint, with the terms of such sale to be approved by
KeyStone.
The LOI contemplates a consolidation in which KeyStone and Brekford
would merge with two separate wholly owned merger subsidiaries of a
newly formed publicly traded holding company, with KeyStone and
Brekford surviving as wholly owned subsidiaries of that new holding
company. If the mergers were consummated as planned, shares in
KeyStone and Brekford would be exchanged for shares in the new
holding company, resulting in KeyStone and Brekford becoming wholly
owned subsidiaries of the holding company. The foregoing share
exchanges would be accomplished pursuant to an effective
Registration Statement on Form S-4 to be filed with the Securities
and Exchange Commission (“SEC”). The parties expect
that the consolidation would result in KeyStone stockholders and
Brekford stockholders holding approximately 80% and 20%,
respectively, of the new holding company’s shares on a fully
diluted basis upon the closing of the combination. The LOI requires
that the parties work exclusively together to complete definitive
agreements by January 31, 2017, with a view toward closing on the
combination by the end of the first quarter of 2017.
KeyStone previously announced its intended acquisition of Firestorm
Solutions, LLC (http://keystonewins.com/wp-content/uploads/2016/11/U-1-2016.11.21-Final-Firestorm.pdf).
KeyStone intends to leverage the
Firestorm network of principals and locations to expand
Brekford’s product distribution to municipalities and
government agencies. A combination of the three companies, should
it occur, would allow Brekford to increase sales in its two core
service areas, upfitting for
public safety vehicles and automated traffic safety
enforcement. KeyStone
management believes that through the use of additional capital,
strategic relationships, and broadened distribution, the combined
entity will grow beyond Brekford’s existing markets. The
boards of KeyStone and Brekford believe the resulting entity will
create greater opportunities for shareholder
value.
“The combination of KeyStone, Brekford and Firestorm will
allow the shareholders to enjoy the benefits of an entity that
gains greater market share in the government contracting space.
With the federal government spending an estimated $430-500 billion
annually procuring products and services, we feel this market is
stable, unlikely to shrink and has a strong need for
innovative products and services such as those provided by our
subsidiaries,” said
KeyStone Solutions CEO Robert A. Berman.
Upon closing of the consolidation, Robert A. Berman is expected to
become CEO of the combined entity.
“Brekford is excited to complete this combination with
Keystone and Firestorm, which we believe will provide increased
value to our shareholders and customers on multiple fronts. We
intend to offer our turnkey automated photo enforcement services
much more broadly throughout the United States, utilizing a force
multiplier effect with Firestorm’s business development
network. Additionally, we are confident that customers will
continue to benefit from our foundation as a public safety
solutions provider, as we seek to identify the appropriate buyer
for our public safety vehicle services business,”
said Rod Hillman, Brekford Corp.
President and COO.
The LOI is non-binding and any agreement is subject to the
negotiation and execution of a definitive transaction agreement,
which may vary from the terms set forth in the LOI. A final
transaction also is anticipated to be subject to material
conditions, including, but not limited to: (i) the approval of the
respective boards of directors and shareholders of KeyStone and
Brekford; (ii) the filing with, and declaration of effectiveness by
the SEC, of a Registration Statement on Form S-4 with respect to
the combination; and (iii) other customary conditions for a
transaction of this nature. Accordingly, there can be no assurance
that a definitive agreement will be reached by the companies, or
that any agreement will result in the completion of a
combination.
About KeyStone
KeyStone
Solutions is a holding company headquartered in Chantilly,
Virginia that was formed in 2016 to provide end-to-end services to
government contractors from its subsidiary companies. The
company’s acquisition strategy is to buy profitable, well run
businesses that provide a wide range of complementary services, a
“one stop shop” for government
contractors.
Through
strategic acquisitions, KeyStone Solutions aims to be the
preeminent source of products and services that provide solutions
to government contractors. For more than 30 years, KeyStone
subsidiaries have helped Fortune 50 companies and small businesses
succeed in the federal market, winning over $150 billion in federal
contracts.
For
more information, please visit www.keystonewins.com.
About Brekford
Brekford Corp. provides state-of-the art public safety technology
and automated traffic enforcement solutions to municipalities, the
U.S. military, various federal entities and other public safety
agencies throughout the United States. Its services include
automated speed and red light camera enforcement programs, parking
enforcement solutions and an end-to-end suite of technology and
equipment for public safety vehicle upfitting. Brekford's
combination of upfitting services, cutting-edge technology, and
automated traffic enforcement services offers a unique 360-degree
solution for law enforcement agencies and
municipalities.
The Company is headquartered in Hanover, Maryland, and its common
stock is traded on the OTC Markets under the symbol
"BFDI."
For more information, please visit www.brekford.com.
About Firestorm
Firestorm®
is America’s Crisis
Coach®. Since 2005,
Firestorm has assisted clients in transforming crisis into value.
The Firestorm Predict.Plan.Perform.® methodology
combines best-practice consulting with proven crisis management
expertise, empowering clients to manage risk and
crisis.
Firestorm
assesses, audits, develops, trains and tests strategies and
programs encompassing emergency response, business continuity,
crisis management, and crisis communications/PR. Firestorm
demonstrates thought leadership in workplace violence prevention,
cyber-breach response, communicable illness/pandemic planning,
predictive intelligence, and every preparedness
initiative.
Firestorm
works with businesses, organizations and schools to keep tens of
thousands of employees, customers, students and their communities
safe.
For
more information, please visit www.firestorm.com
Important Additional Information Will be Filed with the
SEC
This press release may be deemed solicitation material regarding
the potential business combination contemplated by the LOI. In
connection with a potential combination, Brekford currently intends
to file with the SEC an Information Statement on Schedule 14c. The
Information Statement and other relevant materials, including any
documents incorporated by reference therein, once available, may be
obtained free of charge at the SEC’s website at
www.sec.gov
, from KeyStone at www.keystonewins.com,
Brekford at www.brekford.com,
or by emailing riaz@keystonewins.com.
Information about the executive officers and directors of Brekford
is set forth in Brekford’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2015 as filed with the SEC on March
24, 2016.
Forward-Looking Statements
Certain statements in this press release constitute
“forward-looking statements” within the meaning of
section 27A of the Securities Act of 1933 and section 21E of the
Securities Exchange Act of 1934. These include statements regarding
the terms, structure and timing of the proposed business
combination between KeyStone and Brekford, as well as the
anticipated benefits or consequences of the proposed
combination.
Contacts
For KeyStone Solutions, Inc.
Riaz
Latifullah, CFO
riaz@keystonewins.com
For
Brekford Corp.
Rod
Hillman, President and COO
rhillman@brekford.com
For
Firestorm Solutions, LLC
Harry
Rhulen, CEO
hrhulen@firetorm.com