Scrip Advantage Announces Reorganization
FRESNO, Calif., Dec. 28 /PRNewswire/ -- Scrip Advantage, Inc., a
publicly-traded Nevada corporation, today announced that its Board of
Directors and that of its wholly-owned California subsidiary, Scrip Advantage,
Inc., have determined to reorganize the company by filing with the United
States Bankruptcy Court, Central District of California, to become a "debtor
in possession" under the United States Bankruptcy Code. The move is intended
to protect the companies from the potential claims of creditors and others
while attempting to raise financing and salvage the business for the benefit
of all of its creditors and, to the extent possible, its shareholders.
In anticipation of its reorganization, the company is taking steps to
merge the operating subsidiary into the parent company, in order to create
greater administrative efficiencies and reduce franchise tax obligations.
John Coyle, the companies' former President and Chief Executive Officer
was terminated from those positions effective December 15, 2005, and was
succeeded by his brother, Robert Coyle, whom it is intended will continue to
run the company once in Chapter 11. John Coyle has also resigned from the
Boards of Directors of both the Nevada and California corporations, and it was
accepted by the remaining members of these Boards.
The vacancy caused by John Coyle's resignation was filled by an outside
director, Jeffrey Hensley, of Fresno, California, who has extensive experience
working with both for profit and not for profit corporations, and as a turn
around consultant for numerous companies, by virtue of his experiences
operating his own consulting services company, Hensley Associates, which he
has owned since 1986. Emory Wishon, Chairman of the Board of Directors of
Scrip Advantage, commented, "We are extremely happy to have Jeff Hensley join
our Board. His particular expertise in advising turn-around companies,
together with his long history of working with non-profit organizations, which
are the mainstay of our business and revenue models, make him uniquely
qualified to help us through this difficult period." Mr. Hensley graduated
from Saint Mary's College, Moraga, CA in 1970 with a Bachelor degree.
In order to ready itself for the planned filing in Bankruptcy Court, the
company has engaged the Fresno-based law firm of Walter & Associates, which
specializes in advising insolvent corporations. It has also engaged the
services of Westwood Capital, LLC as its exclusive financial advisor with
respect to the restructuring, reorganization and/or recapitalization of the
company. Westwood Capital is a New York-based investment banking firm.
Westwood Capital will be assisting the company in identifying "DIP" financing,
assuming that the Court will grant the company's application for debtor in
possession status.
Scrip Advantage currently plans to make its Chapter 11 filing in early
January 2006. As soon as it has completed that filing, it will be providing
further details by subsequent press release.
About Scrip Advantage, Inc.
Scrip Advantage, Inc ("SAI") is a California corporation headquartered in
Fresno, California. SAI is a specialized marketing company. Its primary
business is the sale of gift certificates ("Scrip") at a discount to face
value to non-profit organizations, primarily parochial schools and sports
leagues, for their fundraising efforts.
SAI's customers have comprised up to almost 4,000 non-profit
organizations -- churches, schools, sport leagues and community-based
organizations. SAI launched in February 1999 and exhibited a compound annual
growth rate of 90% from June 2000 through 2004 when its annualized revenue
approached $200 million.
Any statements made in this press release which are not historical facts
contain certain forward-looking statements, as such term is defined in the
Private Litigation Reform Act of 1995, concerning potential developments
affecting the business, prospects, financial condition and other aspects of
the company to which this release pertains. The actual results of the
specific items described in this release, and the company's operations
generally, may differ materially from what is projected in such forward-
looking statements. Although such statements are based upon the best
judgments of management of the company as of the date of this release,
significant deviations in magnitude, timing and other factors may result from
business risks and uncertainties including, without limitation, the company's
dependence on third parties, general market and economic conditions, technical
factors, the availability of outside capital, receipt of revenues and other
factors, many of which are beyond the control of the company. The company
disclaims any obligation to update information contained in any forward-
looking statement.
These forward looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievement expressed or
implied by such forward looking statements. In some cases, you can identify
forward looking statements by terminology such as "may," "will," "should,"
"could," "intend," "expects," "plan," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue" or the negative of such terms or other
comparable terminology. Although we believe that the expectations reflected in
the forward looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance, or achievements. Moreover, neither
we nor any other person assumes responsibility for the accuracy and
completeness of such statements.
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