Fidelity Holdings Enters Into $20 Million Equity Financing Agreement

25 June 1999

Fidelity Holdings Enters Into $20 Million Equity Financing Agreement; Closes On First $6 Million Tranche

    KEW GARDENS, N.Y.--June 24, 1999--Fidelity Holdings, Inc. today announced that the Company entered into a $20 million equity financing agreement provided by institutional investors. The financing consists of three tranches, the first $6 million of which has been funded, with the final two tranches dependent upon certain performance criteria. Specific terms of the transaction were not disclosed.
    A portion of the funds will be utilized to pay down substantially all of the debt incurred in a previously announced (January 1999) floating convertible debenture, as provided for in that Agreement. Additionally, this equity infusion will provide the requisite funds to continue Major Automotive's aggressive regional acquisition strategy, which has been key to the Company's strong performance, demonstrated in Fidelity's fiscal 1998 results, as well as continue to mature the Technology Division as the Company explores various options for the division's future.
    "The Company is pleased to have closed this transaction which allows Fidelity to concurrently retire debt and presents the Technology Division including IG2, Inc. the means to explore new possibilities and opportunities. With our newly approved CLEC (Competitive Local Exchange Carrier) licenses, we continue to reach our targets and goals," stated Doron Cohen, President.
    Bruce Bendell, Chairman, concluded, "This is an important financing for the Company which provides access to funds to greater enhance Major Automotive's market penetration. The Company is one step closer to achieving its long-term financing and strategic objectives. Finally, the three tranches are advantageous to Fidelity in that they provide the Company the opportunity to take advantage of favorable market conditions while allowing flexibility, if objectives are met, in the timing of additional tranches and avoiding significant dilution that would affect our shareholders."
    Fidelity Holdings has been a diversified holding company that utilizes information and technology to target industries experiencing consolidation and/or deregulation. The Company has operated two divisions - Automotive and Technology. The Automotive Division operates through Major Automotive Group, a leading consolidator of automotive dealerships in the New York Metropolitan area. The Technology Division operates under Computer Business Sciences and IG2, Inc. subsidiaries, and its plastics subsidiary.
    Fidelity Holdings, Inc. is presently exploring the divestiture of its non-automotive activities by way of sale, merger, consolidation or other opportunities. Accordingly, all such non-automotive activities have been classified as discontinued operations in the financial statements.
    The information contained in this press release, including any "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 contained herein, should be reviewed in conjunction with the Company's annual report on Form 10-KSB and other publicly available information regarding the Company, copies of which are available from the Company upon request. Such publicly available information sets forth many risks and uncertainties related to the Company's business and such statements, including risks and uncertainties related to that are unpredictable and outside of the influence and/or control of the Company.