An anonymous director reports

COURT OF APPEAL ISSUES DECISION IN ESCROW FUND APPEAL CASE

The Court of Appeal for Ontario has dismissed Baylin Technologies Inc.'s appeal of a decision of the Superior Court of Justice -- Ontario, which ordered the company to return to the escrow agent appointed in connection with the acquisition in January, 2018, of the radio-frequency and satellite communications business of SpaceBridge Inc. the amount of approximately $1.8-million, together with interest.

In October, 2018, as a result of an indemnity claim by the company in connection with the acquisition, the company received a payment from the then escrow agent of approximately $1.8-million pursuant to the terms of an escrow agreement that also governed the procedure for making indemnity claims against the escrowed funds.

In December, 2018, SpaceBridge commenced an application in the superior court to have the amount repaid to the escrow agent, principally on the equitable ground of relief from forfeiture. Over 3.5 years later, in June, 2022, SpaceBridge amended its application to assert that the company had failed to comply with the notice provisions of the escrow agreement such that its claim against the escrow fund was invalid. In its decision, rendered in July, 2023, the superior court found that the company's claim against the escrow fund was not validly delivered in accordance with the notice provisions of the escrow agreement. It also rejected the company's argument that the Amendment was made outside the prescribed limitation period of two years. As a result, the superior court ordered the company to repay $1.8-million, together with prejudgment interest (at the rate of 1.8 per cent, in accordance with the Courts of Justice Act), to the escrow agent.

The company then appealed the decision to the court of appeal, which had the effect of staying the superior court's order. In its decision, the court of appeal dismissed the company's appeal, upholding the superior court's decision ordering the company to return $1.8-million, together with interest, to the escrow agent.

About Baylin Technologies Inc.

Baylin is a leading diversified global technology company. The company focuses on the research, design, development, manufacture and sale of passive and active radio-frequency products and satellite communications products and the provision of supporting services. The company strives to meet its customers' needs and anticipate the direction of the market.

We seek Safe Harbor.