Fidelity Holdings Redeems Outstanding Adjustable Warrants; Action Taken to Eliminate Potential Dilution to Shareholders
20 September 2000
Fidelity Holdings Redeems Outstanding Adjustable Warrants; Action Taken to Eliminate Potential Dilution to Shareholders
KEW GARDENS, N.Y.--Sept. 20, 2000--Fidelity Holdings, Inc. (Nasdaq NM: FDHG) today announced that the Company has redeemed all outstanding adjustable warrants held by institutional investors of previously announced private transactions.The Company previously received an aggregate of $7 million from the funding of this tranche. Pursuant to the terms of a financing agreement, the Company has the option of paying an aggregate of $6 million by November 8, 2000 or approximately $4,449,000 by November 8, 2000, plus approximately $1,968,000 over the ensuing seventeen months. Of these amounts, an aggregate of $2.5 million has already been paid. The redemption eliminates potential significant future dilution to Fidelity shareholders of approximately 4.3 million shares, more than 15%. Fidelity is redeeming the adjustable warrants, which would have been convertible into Fidelity common shares, through a combination of cash and 393,588 shares of common stock. No further adjustable warrants are outstanding.
Bruce Bendell, Chairman and Chief Executive Officer of Fidelity Holdings, stated, "Together with our announced stock buyback plan, this action was taken with the best interests of our shareholders in mind. By repurchasing these warrants, we eliminate potential dilution because the Company would have had to issue a significant number of shares to the institutional investor. We believe utilizing the cash to redeem the warrants is a prudent use of our capital."
Fidelity Holdings is a diversified holding company that utilizes information and technology to target industries experiencing consolidation and/or deregulation. The Company operates 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 and ranked number one nationwide in used car sales dollars as a percentage of overall sales. The Technology Division operates primarily through its IG2, Inc. subsidiary, with its subsidiaries Info Systems, CarsTV and Internet Connections. For additional information, visit our website at www.fdhg.com.
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.