HOUSTON, April 17, 2009 (GLOBE NEWSWIRE) -- Hammonds Industries, Inc. (OTCBB:HMDI) announced today that the Board of Directors has accepted an offer from FabCorp, Inc., a Houston-based manufacturing company and sold the Hammonds subsidiary companies pursuant to an asset purchase agreement. The Board of Directors and consenting shareholders owning in excess of 60% of HMDI common stock consented to the asset purchase transaction.
The Board of Directors reached its decision to sell its operating subsidiaries after reviewing HMDI's business operations and financial condition, including the existing credit conditions confronting the national economy. HMDI's management had been seeking equity or debt financing for the past year in order to support continuing liquidity requirements. Though substantial efforts have been made to arrange such financing, including the engagement of investment banking consultants, those efforts were unsuccessful and, as a result, the Board of Directors determined that HMDI had no other available options.
A newly formed Texas company, named Hammonds Technologies, LLC., a wholly owned subsidiary of FabCorp, Inc., has acquired the operating subsidiaries of HMDI, leaving the public company to seek other opportunities including potential business combinations and mergers with operating companies and will operate under a new name.
The transaction closed and funding occurred on April 16th, relieving HMDI and guarantors of its bank debt obligations of approximately $2.7 million and the obligations of the subsidiary companies, which were assumed by Hammonds Technologies, LLC.
HMDI intends to file with the SEC a Current Report on Form 8-K disclosing the transaction and an Information Statement on Schedule 14C disclosing the material terms of the transaction, detailed reasons for the determination to sell its assets and other disclosure required by the federal securities laws and the rules and regulations of the SEC. HMDI expects to file its Annual Report on Form 10-K for 2008 within the time frame required in order to continue to be quoted on the OTC and remain as a current reporting company. HMDI plans to file its Quarterly Report on Form 10-Q for the first quarter of 2009 in a timely manner.
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