EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Xxxxxxx X. Xxxxxx
InterActive Group, Inc.
Phone: (000) 000-0000
Fax: (000) 000-0000
R. Xxxxx Xxxxxxx
Arrowhead Research Corporation
Phone: (000) 000-0000
INTERACTIVE GROUP AND ARROWHEAD RESEARCH ANNOUNCE AGREEMENT
-----------------------------------------------------------
HUMBOLDT, S.D., and PASADENA, Calif., Dec. 12 /PRNewswire-FirstCall/ --
InterActive Group, Inc., a Delaware corporation (the "Company") whose common
stock is traded in the over-the-counter market and quoted on the NASD Electronic
Bulletin Board under the symbol "IACG.OB", and Arrowhead Research Corporation, a
privately-owned California corporation ("Arrowhead Research"), today announced
the execution of a definitive Stock Purchase and Exchange Agreement (the
"Exchange Agreement") pursuant to which, among other things, Arrowhead Research
would become a wholly-owned subsidiary of the Company and the former
shareholders of Arrowhead Research would acquire approximately 88.9% of the
Company's Common Stock.
Arrowhead Research was formed in May 2003, and completed a private
placement in October 2003, selling shares of its common stock and warrants to
purchase common stock for an aggregate of $2,645,000. Arrowhead Research has
recently initiated its plan of proposed operations, which involves financing
research projects primarily in the area of the development "nano" technologies
and applications, by entering into arrangements with the California Institute of
Technology in Pasadena, California ("CalTech"), and two individual professors on
the faculty of CalTech.
Subject to the satisfaction of a number of conditions precedent set forth
in the Exchange Agreement, the Exchange Agreement contemplates the completion of
several transactions prior to closing, with the result that an aggregate of
705,635 shares of the Company's common stock would then be outstanding
immediately prior thereto. The contemplated transactions include the following:
There will be a 1-for-65 "reverse split" of the Company's outstanding
common and a 1-for-6.5 "reverse split" of the Company's outstanding preferred
stock, which would reduce from a total of 25,276,000 to a total of 388,862 the
number of shares of the Company's common stock outstanding. Although approval
of the Company's stockholders is required to amend its Certificate of
Incorporation to effect the "reverse split", the officers and directors of the
Company, who together hold a majority of the votes entitled to be cast on the
matter, have indicated that they will vote in favor of the "reverse split."
Accordingly, approval of the "reverse split" is assured and proxies will not be
solicited from the Company's Stockholders. However, an Information Statement to
be filed with the Securities and Exchange Commission will be sent to each of the
Company's stockholders of record at least 20 calendar days before the "reverse
split" becomes effective.
The Company will acquire certain intellectual property from San Diego
Magnetics, Inc. ("SDM"), whose majority shareholder, TPR Group, Inc., is also
the principal stockholder of the Company. SDM was incorporated in 1998 to
acquire from Xxxxxxx Kodak Company ("Kodak") the assets and properties then
employed by Kodak in the ownership and activities of the Kodak San Diego
Laboratories, a research and development operation in San Diego, California
involved in the areas of thin film, specialty micro and nano devices and
detectors. In connection with the acquisition, SDM obtained a non-exclusive
right and license to use, for research, development and commercial purposes, a
portfolio of patents owned by
Kodak (the "Kodak Patents") that had been developed by Kodak, through its Kodak
San Diego Laboratories and otherwise. In August 2003, a portion of its
intellectual property relating to currency handling products was sold by SDM to
a third party. The balance of the SDM intellectual property will be transferred
to the Company.
The Company also is obligated to obtain the conversion and/or cancellation
of more than $1,800,000 of the Company's outstanding debt, pursuant to
agreements to be entered into with the holders thereof, leaving the Company with
liabilities not to exceed $150,000.
In connection with the acquisition of the SDM technology and the conversion
and/or cancellation of the Company's debt, a total of 316,773 shares of the
Company's common stock, and warrants to purchase an additional 658,583 shares of
the Company's common stock, at $1.50 per share, would be issued.
At the closing, the Exchange Agreement provides for the issuance of
5,655,000 shares of the Company's common stock, and warrants to purchase an
additional 5,645,000 shares of common stock, at the price of $1.50 per share, to
acquire all of the issued and outstanding common stock and warrants to purchase
common stock of Arrowhead Research. Arrowhead Research would thereby become a
wholly-owned subsidiary of the Company, whose corporate name would be changed to
"Arrowhead Research Corporation", with the former shareholders of the old
Arrowhead Research owning 5,655,000 shares, or approximately 88.9%, and the
stockholders of the Company (including those obtaining shares in connection with
the acquisition of the SDM technology and the debt cancellation and conversions)
owning approximately 11.1%, of the 6,350,635 shares of the Company's common
stock that would then be outstanding (before taking into account any exercises
of warrants that would then be outstanding).
The Exchange Agreement also specifies that the current officers and
directors of the Company resign all of their respective offices, to be replaced
by designees of Arrowhead Research, effective as of the closing of the
transactions contemplated thereby.
The shares of common stock and warrants to be received by the shareholders
of Arrowhead Research will be issued by Registrant without registration under
the Securities Act of 1933, as amended (the "Securities Act"). However, the
Exchange Agreement provides that, as soon as practicable following issuance, the
Company would be required to file a registration statement with the Securities
and Exchange Commission for the purpose of registering for resale under the
Securities Act all of these shares and warrants, as well as all of the shares
and warrants issued without registration under the Securities Act in connection
with the acquisition of the SDM technology and the cancellation and/or
conversion of the Company's debt.
For additional information regarding the Company and SDM, please contact
Xxxxxxx X. Xxxxxx at (000) 000-0000. For additional information concerning
Arrowhead Research, please contact R. Xxxxx Xxxxxxx at (000) 000-0000.
