Merger of SkyTex International Inc. with The Majestic Co. Ltd. is Official
22 December 1998
The Merger of SkyTex International Inc. with The Majestic Companies Ltd. Has Become Official with the Filing of State Certificates of Merger Documents
SAN DIEGO--Dec. 22, 1998--Pursuant to the Merger Agreement between Skytex International Inc. (OTC BB:SKTX) and The Majestic Companies Ltd., the merger is now deemed effective by the filing of the "Certificates of Merger & Name Change" documents with both the Nevada and Delaware Secretaries of State.
The merger was a share for share exchange. The name of the surviving Company will be: The Majestic Companies Ltd. On Dec. 18, 1998, the Company was approved for their Corporation Records and Market Access listing on Standard & Poor's.
Currently, the Company has three operating subsidiaries: Majestic Modular Ltd., which is located in Modesto, Calif., and manufactures modular classrooms, office buildings, medical facilities and telecommunication equipment shelters; Majestic Financial Ltd., the leasing and financing arm of the Company (which will purchase modular structures slated for lease-back to California Unified School Systems, as well as to other users of modular structures); and Majestic Transportation Products Ltd., a product development company that designs, engineers, and markets transportation related safety equipment, including a proprietary passenger safety restraint product for the school bus industry named the "Safe-T-Bar".
Majestics' current subsidiaries are well positioned for rapid growth given the current economic and political landscape. The passing of two landmark California school bond measures this past November was a tremendous affirmation of the breadth and future growth of the modular classroom industry. In total, $10.7 billion was appropriated to upgrade and build new classrooms in both the California University and Public School Systems. The preferred choice for many school systems has been, and continues to be, the re-locatable modular classroom.
Over the coming year the majority of operating revenues are expected to be derived from both the sale and the financing of modular structures. For the period from April 15, 1998 through Sept. 30, 1998 Majestic Companies reported gross modular structure sales of $1,453,688. The company took new orders for the 30-day period ending Nov. 23, 1998 of $1,364,300. Sales have been increasing month over month since the passing of the California bond issues, and the Modesto facility is expected to be at full capacity by the end of the first quarter of 1999.
One of the Company's primary areas of expansion in 1999 will be the initialization and buildup of Majestic Financial Ltd. By leveraging Majestic Modular's sales and marketing team, this area is expected to become a significant profit center for the Company. Majestic Financial will carry both originated and purchased leases via acquisition of select modular fleets currently leased by California school systems. By capitalizing these assets, the Company's balance sheet would be strengthened, potentially allowing it to qualify for entry to either the NASDAQ (small-cap or National Market System) or the American Exchange (AMEX).
In order to accommodate the increased sales anticipated from in-house lease programs, the Company is contemplating the addition of a second manufacturing facility, which is being planned for the Riverside/Ontario, Calif., area. This facility will be an extension of the present facility located in Modesto, Calif., and would initially double present manufacturing capacity while taking advantage of scale efficiencies and increase overall profitability by reducing the segments fixed per unit overhead expense.
Regarding the Company's proprietary bus restraint product, the "Safe-T-Bar", the debate over whether or not to utilize seat belts or other pro-active restraints on the nation's 450,000 plus yellow school buses is reaching a level that predicts a probable quantum change in the very near future. The Safe-T-Bar is continuing to be rolled out as Majestic nears completion of the necessary FMVSS (Federal Motor Vehicle Safety Standards) compliance testing.
Testing is being conducted at KARCO Industries, a Department of Transportation (DOT) approved test facility in Adelanto, Calif. Both crash testing and a comprehensive video educational presentation is expected to be completed in the first quarter of 1999 and will coincide with an extensive marketing campaign. Many school systems have expressed a keen interest in purchasing the product once FMVSS standards have been satisfied. The Safe-T-Bar was enthusiastically received and given high marks at the NAPT (National Association of Pupil Transportation) conference held in Austin, Texas, on November 1st through the 5th.
Majestic is in the final stages of engaging Ernst & Young, a Big-5 firm as it's audit/tax partner.
The top management & advisory board of Majestic is comprised of individuals with extensive backgrounds in both merger and acquisition transactions. With the advent of Majestic's new public trading status, management is now stepping up it's current analysis and negotiation efforts regarding several strategic acquisitions. In addition to the growth of it's core business units, a large part of Majestic's overall business strategy going forward is the successful addition, streamlining, and integration of established and profitable private companies into the Majestic family of businesses.
Some of the statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward looking statement.
Source: The Majestic Companies Ltd.