HINGHAM, Mass., Feb. 22, 2006 (PRIMEZONE) -- Evercel Inc. (Pink Sheets:EVRC) today announced that it has agreed to acquire and merge with Sontek Industries Inc., which is primarily engaged in the seafood processing and distribution business and also distributes a proprietary disposable medical device used for critical care patients. Terms of the merger provide for Sontek shareholders to receive shares of Evercel equal to slightly less than one-half the common and preferred shares outstanding after the merger.
In 2005 Sontek had revenues of $5,739,530 and pretax profits of $128,000 from its operations. At December 31, 2005 it had cash of $1,031,527, no debt, and net shareholders equity of $2,747,766. None of the preceding financial information has been audited as yet.
Garry Prime, CEO of Evercel, commented: "This merger is critical for Evercel and will give us the ability to continue as an operating business. Evercel, Inc. will be able to capitalize on our assets: our Zipcar investment, NiZn technology, tax loss carryforward, and other investments. In addition, we intend to grow through further strategic transactions."
Sontek Industries is approximately 45% owned by Mr. Garry Prime (CEO of Evercel) and Mr. James Gerson (Chairman of Evercel). The independent director of Evercel, Mr. John Gutfreund, has received an opinion from Burnham Securities Inc. that the transaction is fair to Evercel shareholders from a financial point of view. The merger is subject to customary conditions as well as a vote of Sontek shareholders. (The Sontek shareholder vote for this proposed transaction is currently scheduled for March 29, 2006). Messrs. Prime and Gerson have agreed to vote their shares in the same proportion as that of the disinterested Sontek shareholders.
Evercel also announced the resignation of Dr. Chao Huang from the Board of Evercel. Dr. Huang was instrumental in the development of our battery technology and the development of our facility in Xiamen, China. More than one year ago he accepted a full-time position at another company but had generously agreed to continue to help Evercel, as available. The Board of Evercel thanks Dr. Huang for his many accomplishments and years of dedicated service.