The Hartcourt Companies, Inc. (HRCT) Message Board

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Microcap & Penny Stocks : The Hartcourt Companies, Inc. (HRCT)

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From: StockDung	10/12/2004 11:27:04 AM
	of 2413

Candy Business Beckons for Flamemaster By TSC Staff 10/11/2004 1:27 PM EDT Flamemaster (FAME:Nasdaq - news - research) surged 7% after the fire-retardant coatings maker rolled out a plan to spin off its existing business and become a candy company. The company said it agreed to issue 1.62 million new shares to acquire Best Candy & Tobacco of Arizona. Before it does that, however, Flamemaster will execute a 1-for-10 reverse split of its stock and spin off its current operations as Flamemaster Aerospace. Flamemaster shareholders will get those assets in a dividend to be declared just before the Best Candy acquisition. As a result of the planned spinoff of its current operations, Flamemaster will be a shell company at the time of its merger with Best Candy. Best Candy holders will end up owning 90% of the merged company's stock. The agreement comes just a month after Flamemaster filed with securities regulators to deregister its common stock, citing the "severe financial and management burden" of complying with U.S. securities laws. The company said it would drop the deregistration effort as it proceeds with the Best Candy deal. Flamemaster, based in Sun Valley, Calif., said the preliminary agreement with Best Holdings Acquisition and Aries Capital Partners offers an "opportunity to enhance shareholder value, and thus worth the effort required to proceed to a definitive agreement." The news came less than two weeks after Care Concepts I (IBD:Amex - news - research) of Pompano Beach, Fla., said it signed a "non-binding letter of intent" to acquire Best Candy for $12 million in stock. Flamemaster CEO Joseph Mazin said he wasn't aware of the Care Concepts deal. A Care Concepts rep said the company rescinded its letter of intent "recently." On Monday, Flamemaster rose 23 cents to $3.39.

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