Here to Serve Holding Corp. to Acquire DCE Construction, Inc., dba Mesa Garage Doors, in Transformative Share Exchange Agreement
Press Release | 10/26/2023
ANAHEIM, CA / ACCESSWIRE / October 26, 2023 / Here To Serve Holding Corp. (OTC PINK:HTSC) (the "Company" or "HTSC"), is pleased to announce that it has entered into a definitive Share Exchange and Reorganization Agreement for the acquisition of DCE Construction, Inc., doing business as Mesa Garage Doors ("MESA"), a Southern California-based leader in home improvement solutions focused on the sale, service and installation of garage doors, entry door and custom gates. Subject to satisfaction of certain closing conditions, the acquisition is expected to close in November 2023.The agreement marks a significant milestone for both companies as they prepare to embark on a new chapter.
Below are some key highlights of the transaction:
1. Share Acquisition: At closing, HTSC will acquire all outstanding shares of MESA in exchange for the issuance of 1.4 billion restricted shares of HTSC common stock to the shareholders of MESA in a tax-free reorganization.
2. Preferred Stock Acquisition: At closing, MESA's shareholders will also purchase all Series A and Series C Preferred Stock of HTSC, all of which are held by an affiliate of HTSC.
3. At closing, HTSC's current officers will resign, and Dwight Esnard (CEO of MESA) and Michael Layman (CFO of MESA) will be appointed as HTSC's new CEO and CFO, respectively.
4. At closing, HTSC's current directors will also resign, and MESA's directors, Dwight Esnard and Michael Layman will be appointed as the sole members of HTSC's board.
5. Ownership Equalization: At closing, Paul Riss, CEO of HTSC, will receive an additional 43,200,000 shares of HTSC common stock as consideration for the cancellation of certain debt owed to Mr. Riss, maintaining a 4% total ownership stake in HTSC post-closing. Pursuant to the agreement, dependent upon the value of HTSC's common stock one year from the closing date, Mr. Riss may also be entitled to receive certain additional shares of HTSC common stock.
6. Spin-out of Legacy Business: In connection with, and as promptly as possible after closing of the MESA acquisition, it is anticipated that HTSC's legacy business and subsidiaries will be spun-out into a separate public entity to the holders of HTSC's common stock as of a record date prior to closing of the acquisition. The Company has filed the necessary Issuer Company-Related Action Notification with FINRA in connection with the spin-out, seeking a record date of November 2, 2023. Details regarding the anticipated spin-out will follow in a separate disclosure.
7. After closing of the MESA acquisition, the Company will promptly file an Issuer Company-Related Action Notification with FINRA to complete a name and ticker symbol change to better align HTSC's name with its new business.
Until the MESA acquisition closes, HTSC and MESA will remain separate, independent companies and will operate as such.
Executive Commentary:
Paul Riss, outgoing CEO of HTSC, stated, "This strategic transaction with MESA fortifies our market position and sets the stage for significant growth. I am confident that Dwight Esnard, our incoming CEO, will steer the Company to unprecedented success."
Financial Valuation and Outlook:
MESA obtained an independent valuation as of July 31, 2023 showing that the company has an enterprise value of approximately $41 million. MESA generated unaudited gross revenue of approximately $20.3 million for the year ended December 31, 2022, and is on track to achieve revenue of approximately $23.5 million for the year ended December 31, 2023. By 2025, MESA projects a revenue target of $30 million, with a 10% year-over-year growth rate anticipated for 2026.
MESA Operational Enhancements:
Technological upgrades and workforce training have improved closing ratios, while a high-impact marketing campaign has boosted average sales and appointment success rates. MESA has plans to horizontally diversify into other home improvement areas in addition to garage door installation/repairs, as well as grow through an aggressive M&A campaign of strategically aligned businesses throughout the US.
Financial Audits and Transparency:
MESA is currently undergoing a two-year audit by a PCAOB-registered audit firm that is expected to be complete in the near term. HTSC has had a PCAOB audit for the past two years. The Company plans to register as a reporting company with the Securities and Exchange Commission after the audit work is completed.
Closing Remarks:
Dwight Esnard, incoming CEO, commented, "This agreement marks a pivotal moment for MESA as we transition into a public company. We are committed to delivering significant value to our stakeholders and believe we are poised for a period of dynamic growth and innovation."
