SUN VALLEY, Calif., April 1, 2005 (PRIMEZONE) -- Flamemaster Corporation (Nasdaq:FAMEC) announced today that it has consummated the acquisition of 100% of the equity of Best Candy & Tobacco Co. and affiliates. Located in Arizona, the Best Group is engaged in the sale, distribution and marketing of candy and tobacco products and other related items to wholesalers, convenience stores and other retailers primarily located in the States of California and Arizona.
In a related development, the Flamemaster Board of Directors authorized One Hundred Thousand (100,000) shares of Series A non-voting convertible preferred stock.
Each full share of Series A Preferred Stock is convertible, under certain conditions, into 193.221 shares of the Flamemaster's common stock. If all shares of Series A Preferred Stock are converted into common stock, Nineteen Million Three Hundred Twenty-Two Thousand One Hundred (19,322,100) shares of common stock would be issued, representing approximately 90% of Flamemaster's fully-diluted common stock. In exchange for 100% of the Best Group equity, Flamemaster issued the Series A Preferred Stock to the Best Group equity owners.
Prior to the conversion of the Series A Preferred Stock into Flamemaster common stock, Flamemaster shall dividend and distribute to all common stockholders of record on the dividend date, 100% of the capital stock of Flamemaster Aerospace Corporation, a wholly-owned subsidiary of Flamemaster. Flamemaster Aerospace (as at the date of such stock dividend) shall continue to own and operate the Flamemaster flame retardant and sealant business that was Flamemaster's sole business prior to the acquisition of the Best Group. The Flamemaster Aerospace stock dividend will be in the form of restricted (legended) common stock.
The Series A Preferred Stock may be converted into common stock only after the stock dividend of the shares of Flamemaster Aerospace has been consummated, and may not be converted until the earliest to occur of the approval by The Nasdaq Stock Exchange of the Best Group acquisition, consummation of the Flamemaster Aerospace stock dividend, or May 31, 2005. A holder of Series A Preferred Stock must give Flamemaster written notice of its intention to convert its shares of Series A Preferred Stock into common stock. Pending consummation of the Flamemaster Aerospace stock dividend and conversion of the Series A Preferred Stock into common stock, the board of directors and management of Flamemaster and Flamemaster Aerospace shall be the same as presently constituted.
The Flamemaster Aerospace stock will not be registered under the Securities Exchange Act of 1934. This means that Flamemaster Aerospace will not file periodic reports with the Securities Exchange Commission including, among other things, Annual Reports on Form 10-KSB and Quarterly Reports on Form10-QSB and will not be subject to the SEC's Proxy Rules.
Flamemaster is working towards completing the Flamemaster stock dividend and obtaining Nasdaq approval of the Best Group acquisition. However, there can be no assurance that the Best Group acquisition will be approved by The Nasdaq Stock Exchange; in which event, Flamemaster will undertake to list its common stock for trading on the NASD OTCBB(R).
Forward-Looking Statements:
Statements about the Company's future expectations, including future revenues and earnings and all other statements in this press release, other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comment made with this press release; the Company will appropriately inform the public.