TARPON SPRINGS, Fla., Dec. 11, 2006 (PRIME NEWSWIRE) -- Solomon Technologies, Inc. (OTCBB:SOLM) announced today that it has signed a financing term sheet for a credit facility to be used exclusively for acquisitions for both its Motive Power and Power Electronics divisions. The term sheet contemplates a facility of up to $10 million on a standby basis secured by the acquired assets and guaranteed by Solomon. The arrangement contemplates that Solomon will use the facility to strike more quickly at unique smaller acquisition opportunities that are consistent with its growth plans. The credit facility has a one year term that is renewable at the option of the lender.
The standby credit facility would carry an interest rate of 13% per annum plus quarterly monitoring fees of 1% of the amounts outstanding under the credit facility and investment fees of 4% of the amounts outstanding under the facility. Solomon would also pay a commitment fee of 2% of the full amount of the facility upon execution of definitive documents. The investment fees and the commitment fees are payable in common stock of Solomon. Any lending under the facility is conditioned on the approval of the proposed acquisition by the lender's investment committee and is subject to the lender's normal due diligence. The facility is subject to normal documentation requirements. The facility may be drawn on at Solomon's sole discretion. While no assurance can be given as to when the facility will be put in place, Solomon anticipates that the required documentation will be completed early in the first quarter of 2007. The lender, JMC Venture Partners, LLC, is an affiliate of Michael D'Amelio, one of Solomon's directors.
Solomon President Peter W. DeVecchis, Jr., said, "The consummation of this new financing facility will be a major benefit to our growth plans in 2007. With our strategy comprising both organic and acquisition growth at both divisions we believe this standby financing will provide us with considerable leverage in quickly bringing new acquisition targets into Solomon while at the same time allowing us to focus on expanding our opportunities. This is a significant step in getting us to our interim revenue goal of $25 million."
Information about Solomon Technologies, Inc.: Solomon Technologies, Inc., through its Motive Power and Power Electronics divisions, develops, licenses, manufactures and sells precision electric power drive systems, including those utilizing its patented Electric Wheel, Electric Transaxle and hybrid and regenerative technologies as well as direct current power supplies and power supply systems requiring high levels of reliability and ruggedness for defense, aerospace, marine, commercial, automotive, hybrid and all electric vehicle applications.
FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding Solomon Technologies, Inc. in this release that are not historical in nature, particularly those that utilize the terminology such as "may," "will," "should," "likely," "expects," "anticipates," "estimates," "believes," or "plans," or comparable terminology, are forward-looking statements based on current expectations about future events, which management has derived from the information currently available to it. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Important factors known to management that could cause forward-looking statements to turn out to be incorrect are identified and discussed from time to time in the company's filings with the Securities and Exchange Commission. The forward-looking statements contained in this release speak only as of the date hereof, and the company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.