Yinda Infocomm has entered into a term sheet with The Institute of Machine Learning GmbH (IML) on July 5, along with IML’s founders, Adam Hegedüs and Roland Trimmel.
Under the term sheet, Hegedüs and Trimmel will incorporate a company in Singapore. Following this, Yinda Infocomm will then subscribe to new shares in the new company (newco).
The newco will acquire the business from IML, where Yinda Infocomm will provide the newco with a convertible loan.
Hegedüs and Trimmel will then provide a grant of option to Yinda Infocomm to acquire all the shares held in the newco by the duo.
Yinda Infocomm, IML, the founders Hegedüs and Trimmel and the newco will have to enter into definitive agreements within two months of the date of the term sheet for it to be valid.
Following the business acquisition of IML, the newco will be acquiring IML’s key assets used for its business. This includes IML’s intellectual property and software relating to facial liveness detection, age classification, KYC platform, as well as contracts with key customers and resellers.
The scope and content of the assets as well as the list of members from IML to be employed or engaged under the business acquisition will be set out in the definitive agreements.
IML is an Austrian company that is in the business of providing technology for biometric authentication and fraud prevention with the aim to offer developers and end-users an easy integration and seamless user experience.
The company was established by Hegedüs and Trimmel in 2019. Hegedüs is the sole shareholder and director of the company.
Hegedüs is a technology entrepreneur and a former venture capitalist who has played key roles in technology startups including Software Engineering and DevOps.
Trimmel is an entrepreneur and business transformation leader with over 10 years of experience in designing and delivering transformation projects with a wide variety of issues across Europe, US and Africa.
According to Yinda Infocomm, the company has been exploring new investment targets or partners across the digital identity space and biometrics industry value chain after its entry into the identity management biometrics technology business in early 2021.
The company has also found that various identity management biometrics technologies are desired by its customers after mapping its existing biometric technological capabilities against their customers’ needs.
The technologies found to be popular amongst Yinda Infocomm’s customers include facial liveness detection, age classification and KYC platforms.
After looking through options to build these capabilities internally and working with its existing technology partners like TECH5 SA, Yinda Infocomm says it had approached various global biometrics technology developers to cooperate with or invest in.
The proposed transactions, according to Yinda Infocomm, will benefit the company in terms of providing it with immediate access to biometric technologies with “clear market demand”. It will also shorten Yinda Infocomm’s time to market to cross-sell or cross-apply comprehensive biometrics products and solutions.
The transactions will also provide Yinda Infocomm with immediate access to a proven team of biometrics technologies developers.
The newco will be incorporated by the founders of IML within two weeks from the date of the term sheet.
It will have a total share capital of $3,000 comprising 3,000 shares. Hegedüs and Trimmel will hold 50.0% each.
It will be incorporated to receive the assets of IML and to employ or engage the IML team.
Following the incorporation of the newco, Yinda Infocomm will subscribe to 7,000 new shares, representing a 70.0% stake in the enlarged share capital, for a consideration of €1.5 million ($2.4 million).
The consideration will be payable in cash of € 500,000 as well as the issue of new shares in Yinda Infocomm equivalent to €1 million.
The cash portion is expected to be funded by Yinda Infocomm’s internal resources.
The issue price per new share will be at an 8.0% discount to the volume weighted average price (VWAP) for trades done on the full market day before the definitive agreement is signed.
Yinda Infocomm will also loan the newco €600,000, which can be converted into new shares in the share capital of the newco.
The interest rate of the loan will be at 3.0% per annum on a quarterly basis.
The loan will be conditional upon and extended only upon the completion of the acquisition of IML. It will be repaid within two years from the date of disbursement.
Under the term sheet, each of the founders of IML will also grant an option to Yinda Infocomm to acquire all the shares held by the founders in the newco.
This will be done upon the completion of the acquisition.
Yinda Infocomm will then have the discretion to exercise the newco shares option against each or both of the founders and in respect of all or part of the newco option shares.
Shares in Yinda Infocomm last traded at 29.5 cents on July 4, following a trading halt on the morning of July 5. The trading halt has since been lifted.
