ETMO (.0006) Extreme Motorsports of California, Inc. Completes Acquisition of Southern Offroad Vehicle Services
Wednesday, June 27 2007 2:00 PM, EST Market Wire "US Press Releases "
BAKERSFIELD, CA -- (MARKETWIRE) -- 06/27/07 -- Extreme Motorsports of California, Inc. (PINKSHEETS: ETMO) ("Extreme" or the "Company"), has completed the acquisition of Southern Offroad Vehicle Services, LLC ("SOVS"), a company dedicated to providing financing for customers purchasing off-road vehicles. Through this acquisition, Extreme will not only be able to offer its customers direct financing of sandcar purchases, but will also be the first sandcar manufacturer to offer leasing options, much like any traditional car dealer.
As previously announced, in exchange for all of the capital stock of SOVS, Extreme has paid $10,000 in cash and 15 million shares of Extreme common stock. Of the 15 million share of common stock, 10 million will be restricted shares of common stock and 5 million will be free-trading shares.
In the past, Extreme required customer down-payments at contract signing and final payment upon acceptance of the final vehicle, which required Extreme to finance the 12-month or more build-out process through the operating cash flow of the company. Now, Extreme will be able to achieve both greater throughput and profit margins by shifting its financing costs to the customer. SOVS has currently secured $14 million in financing for future customers of Extreme, both for direct purchases and for leased vehicles. This will provide Extreme with immediate funding for the build-out of custom sandcars for private customers and "spec" vehicles for its dealers.
"The acquisition of SOVS provides Extreme with the capability to deliver direct financing to our customers at rates comparable to dealers of standard over-the-road vehicles," commented Alan McCaa, President and CEO of Extreme Motorsports. "Through this acquisition, we provide what no other sandcar manufacturer in the world is able to claim: in-house financing to all customers. This not only ensures consistent operating cash flows to Extreme, but incentivizes buyers who might otherwise defer a purchase to a later date to complete a purchase immediately through consumer financing."
About Extreme Motorsports of California, Inc.
Extreme Motorsports of California, Inc. , operating under the trade name "Xtreme Motorsports," is a manufacturer of custom and production-line sandrails, desert and dual sport racecars. Founded in 1983, Extreme's sandcars have been sold to customers in England , the United Arab Emirates , Australia , South America and the US. For more information, visit the corporate web site www.xmssandcars.com.
Forward-Looking Statements
Certain statements in this release, and other written or oral statements made by the Company, including the use of the words "expect," "anticipate," "estimate," "project," "forecast," "outlook," "target," "objective," "plan," "goal," "pursue," "on track," and similar expressions, are "forward-looking statements" and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of the company to be different from those expressed or implied. The Company assumes no obligation and does not intend to update these forward-looking statements and takes no obligation to update or correct information prepared by third parties that are not paid for by the Company.
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