Cragar Industries, Inc. Raises $2.0 Million in Preferred Stock Offering
23 January 1998
Cragar Industries, Inc. Raises $2.0 Million in Preferred Stock Offering
PHOENIX, Jan. 23 -- Cragar Industries, Inc.
today reported that it had raised $2.0 million from a private placement of
Series A Convertible Preferred Stock, including the conversion of $900,000 of
debt into equity. The purpose of the private placement was to raise
additional capital in order to meet the minimum maintenance requirements for
continued listing on Nasdaq and the Boston Stock Exchange. The Company's
capital and surplus and shareholders' equity had fallen below the minimums
required by Nasdaq and the Boston Stock Exchange primarily as the result of
the establishment of an allowance for bad debt arising from the bankruptcy of
the Company's primary customer. With the proceeds from the offering, the
Company's net tangible assets exceed $2,000,000, the minimum requirement for
Nasdaq listing to become effective February 23, 1998, and the Company's
shareholders' equity substantially exceeds $500,000, the minimum requirement
for continued listing on the Boston Stock Exchange. There can be no
assurance, however, that the Company will continue to meet these minimum
requirements for listing on Nasdaq and the Boston Stock Exchange. If the
Company fails to meet such requirements in the future, the Company's
securities could be delisted from Nasdaq and the Boston Stock Exchange, which
likely would have a material adverse effect on the market value of the
Company's securities.
Cragar Industries, Inc. is an international designer, producer, and seller
of custom wheels and wheel accessories for cars, trucks, vans, sport utility
vehicles, racing vehicles, and motorcycles.
For additional information, contact Michael L. Hartzmark, President and
CEO, 602-247-1300. Internet address: http://www.prnewswire.com/cnoc. To
obtain hard copies, call Fax-On-Demand at 800-758-5804.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the Series A
Convertible Preferred Stock in any state in which such offer, solicitation, or
sale would be unlawful under the securities laws of any such state.
The Series A Convertible Preferred Stock to be sold in connection with the
private placement discussed herein has not been registered under the
Securities Act of 1933 and may not be offered or sold absent registration or
an applicable exemption from the registration requirements.
This release includes statements which may constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified. Future events and actual results could differ
materially from those set forth in, contemplated by, or underlying the
forward-looking statements. Please refer to the Risk Factors in the Company's
filings with the Securities and Exchange Commission which identify certain
important factors that could cause the actual results to differ materially
from those contained in our forward-looking statements. These factors
include, but are not limited to, the bankruptcy of the Company's primary
customer, dependence on external financing, product availability, market
conditions, as well as general economic conditions.
SOURCE Cragar Industries, Inc.