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American Image Motor Signs Letter of Intent to Merge With Privately Held California Motorcycle Co.
SANTA CRUZ, Calif.--March 2, 1998--American Image Motor Co. Inc. (OTC BB:USMC - news) announced today that it has entered into a letter of intent to merge with privately held California Motorcycle Co. and subsidiaries, based in Gilroy, Calif.
The price of the transaction, which was not disclosed, will be paid for in stock.
California Motorcycle Co. (CMC) is the second-largest American motorcycle manufacturer in the world, after Harley-Davidson. Operating out of its own 27,000-square-foot facility, CMC has a production staff of 55 and has capacity to produce up to 300 motorcycles per month in two shifts.
1997 production was in excess of 1,000 motorcycles and sales in excess of $15 million. Both Reynaldo Sotelo, president, and Clifford Fenske, chief executive officer, will join the company's board of directors.
''This is an exciting transaction for American Image Motor Co. and a continuation of our strategy to re-focus the company on the manufacture of custom high-performance motorcycles,'' said Paul Comesky, acting president. ''Rey and Cliff have together built in the short span of four years the number two American motorcycle manufacturer in the world achieving average annual revenue growth in excess of 40% per year over the past three years.''
Upon the signing of a definitive agreement, American Image Motor Co. Inc. will change its name to California Motorcycle Co. Inc. and re-domicile from Idaho to Nevada. The closing of the transaction is expected to occur during the second quarter of 1998.
''The re-domiciling of the company from Idaho to Nevada is a part of our strategy to become a 'Reporting Company' and we have already retained legal counsel to assist us in the preparation of the necessary SEC documents,'' stated Comesky.
In order to facilitate the transaction, two of American Image Motor Co.'s major shareholders have agreed to contribute a majority of their shares back to the company. These shares, together with approximately 3.3 million shares held in treasury will be used to fund part of the transaction cost. American Image Motor Co. has 14,882,622 common shares outstanding.
Upon closing of the transaction, Sotelo will be appointed president and chief operating officer and Fenske will be appointed chief executive officer and chief financial officer of the company. ''We believe that by combining our manufacturing capacity and the tremendous brand name recognition of California Motorcycle and American Image Motorcycle, we can create a company with significant potential for growth,'' Sotelo said. ''The public vehicle provided by American Image will facilitate our growth strategy through access to capital in the public markets,'' commented Fenske.
American Image Motor Co. is a domestic manufacturer of a diversified line of high quality, high performance V-twin engine, heavyweight motorcycles which meet or exceed all U.S. Government standards and sells a full line of brand name accessories for the motorcycle enthusiast.
California Motorcycle Co. is the second-largest American motorcycle manufacturer in the world producing 16 different custom V-twin models, two exclusively for women. All CMC motorcycles are DOT, CARB and EPA approved and are listed in both NADA and Kelly blue books, so that CMC dealers are able to obtain floor financing and 100% consumer financing from a variety of financial institutions located throughout the U.S.
This press release contains ''forward-looking statements'' within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release are forward-looking statements.
American Image Motor Co. Inc. will not undertake and specifically declines any obligation to publicly release the result of any revisions which may be made to forward-looking statements to reflect revisions which may be made after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including without limitation, production, sales and/or other risks inherent to the motorcycle manufacturing and distribution industry.
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Contact:
American Image Motor Co. Inc.
Paul Comesky, 408/477-4450 |
