GalvanEyes to Become Exclusive Distributor of EyeLock Products in Several International Markets

VOXX International is hoping to expand its international customer base after entering into an exclusive distribution agreement with GalvanEyes LLC. The agreement specifically concerns VOXX’s EyeLock subsidiary, with GalvanEyes now serving as the sole distributor of EyeLock products in several major markets around the world.

According to the terms of the arrangement, GalvanEyes will pay EyeLock an upfront fee of $10 million, as well as an annual fee of $5 million, in exchange for the distribution rights. Payments will be made to EyeLock on a quarterly basis, with gross profits from GalvanEye’s EyeLock sales to be deducted from the annual fee.

GalvanEyes will maintain the rights for an initial four-year term, though the contract does include a put/call clause that would allow GalvanEyes to return those rights at the two-year mark in exchange for a 20 percent equity stake in EyeLock (the same outcome would occur if EyeLock recalls its rights at any time). The two companies can exercise their respective put/call options if there is an EyeLock initial public offering, or if there is a significant change in EyeLock ownership before the two-year deadline.

With regards to territories, the new agreement grants GalvanEyes exclusive distribution rights for Switzerland, Puerto Rico, Malaysia, Singapore, and the European Union, in addition to the residential real estate market and select government agencies in the United States. However, it excludes any existing customer relationships that EyeLock has in any of those markets. EyeLock can also give GalvanEyes non-exclusive rights for other regions and business verticals.

GalvanEyes is managed by Beat Kahli. In addition to being VOXX’s largest shareholder, Kahli is the President and CEO of Avalon Park Group and the founder of Kähli Holding AG, both of which entered into a Standstill Agreement with VOXX in November. For its part, VOXX is hoping that the deal will improve cash flow and minimize EyeLock’s EBITDA loss. The agreement still needs the formal approval of the VOXX Board of Directors and the company’s stockholders, the latter of which could be secured at the Annual Meeting of Stockholders scheduled for July 29.

“We had been looking to bring on a strategic partner to help move EyeLock technology into untapped markets quicker,” said VOXX President and CEO Pat Lavelle. “With Beat Kahli and the team assembled, we have achieved that goal, while maintaining the upside we believe EyeLock possesses for our shareholders.”

EyeLock already has separate distribution agreements with IrisScanners and the Marubeni Corporation. The former covers the Indian market, while the latter covers Japan and other parts of Asia. EyeLock has also agreed to provide iris scanners for new government facilities in Egypt.

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May 7, 2021 – by Eric Weiss