BROOKLYN, N.Y., Nov. 11, 2004 (PRIMEZONE) -- Gavella Corporation (OTCBB:GVLA) announced today that on November 9, 2004, it signed an agreement with Direct Capital Investments, Ltd. ("DCI") pursuant to which DCI purchased 90% of the issued share capital of Gavella. DCI is an Israeli company traded on the Tel Aviv Stock Exchange. The purchase price for the shares was $900,000, consisting of an assignment of a promissory note originally made payable to DCI from a New York limited liability company in the principal amount of $770,000 and $130,000. At the closing, $50,000 was paid in cash and the balance is due by Gavella on or before November 30, 2004, to Bartram Holdings, Inc., a 20% subsidiary of Gavella.
As of the closing, Gavella had no assets other than the $770,000 note from DCI and its interest in Bartram, and the $80,000 note due to Bartram. The $770,000 note, which is due and payable on June 15, 2005, provides for quarterly interest payments at 12% annual rate. The note is secured by a pledge on 35% of the membership interest of another New York limited liability company which owns a building located at 231 Norman Avenue, Brooklyn, NY. Gavella also received the right to purchase the membership interest of the debtor at any time for the outstanding amount of the note. The primary asset of Bartram is an 80% indirect interest in the Spring Village Apartment Complex.
At closing, Gavella's current Board of Directors, consisting of Harry J. Santoro and Stephen Robinson, appointed Adam T. Ofek as the President, Chief Financial Officer and a director and David Yerushalmi as Chairman, Chief Executive Officer and a director. Messrs. Santoro and Robinson will resign on or before November 22, 2004 and two additional designees appointed by DCI will become directors of Gavella at such time.
As previously disclosed by Gavella, the company will be filing an amendment to its Certificate of Incorporation increasing its authorized share capital, authorizing blank check preferred and effectuating a 1:2 reverse stock split. The company will also change its name to "DCI USA, Inc.", and intends to explore additional opportunities in real estate, technology, manufacturing, retail and other sectors.
Gavella's newly appointed Chairman, David Yerushalmi, said, "We believe that there currently exists numerous opportunities available to increase stockholder value. The acquisition of control of the company is the first step in establishing a platform starting with the stable features of real estate to be combined with high tech and other growth opportunities."
Certain statements made in this press release are "forward looking statements." Without limiting the generality of the foregoing, such information can be identified by the use of forward-looking terminology such as "anticipate," "will," "would," "expect," "hope," "intend," "plans to" or "believes," or other variations thereon, or comparable terminology. Actual results, performance or developments may differ materially from those expressed or implied by such forward-looking statements as a result of market uncertainties or industry factors. We believe that the following factors, among others, could affect our future performance and cause our actual results to differ materially from those expressed in or implied by forward-looking statements made by us or on our behalf: (a) changes in interest rates; (b) the rental rate and demand for apartment rental units; (c) fluctuations in the costs to operate our business; (d) uninsurable risks; (e) general economic conditions; (f) management and operation of a U.S. public company and other risks described in periodic reports we file with the Securities and Exchange Commission including without limitation Form 10-KSB. Gavella Corp. disclaims any obligation or responsibility to update any such forward-looking statements.