BLUFFDALE, Utah, April 20 /PRNewswire-FirstCall/ -- Aero Performance Products, Inc. (BULLETIN BOARD: AERP) , today announced that on April 15, 2009, the company sold a majority of its interest in TTR-HP, Inc., which does business as Aero Exhaust, Inc., to Flo-Co, LLC. The sale was undertaken, in large part, to eliminate a significant majority of Aero Performance Product's liabilities as reflected in its consolidated financial results and to therefore allow Aero to move forward with its planned acquisition of Jones Exhaust Systems, Inc., one of the most respected specialty exhaust manufacturers in the United States.
Details of the TTR-HP transaction are included in a Current Report on Form 8-K filed today with the Securities and Exchange Commission. The 8-K can be found by clicking the "View SEC Filings" link on the company website, http://www.aeroperformanceproducts.com/.
As a result of the transaction, Aero is no longer the majority owner of TTR-HP and is no longer required to consolidate the financial operations and position of TTR-HP on its financial statements. The impact of this change is an immediate reduction in the company's liabilities of $3,154,247. The total liabilities of Aero after concluding the sale are $531,173.00.
Aero Performance Products also, under a previous license agreement with TTR-HP, retains the right to use the "Aero" name, patents, and trademarks. However, TTR-HP will continue to manufacture and distribute the Aero Exhaust products to its customers.
In an effort to offset the liabilities of TTR for the purchaser, Aero Performance Products issued Flo-Co 100,000 shares of its Series A Preferred Stock, each share of which receives warrants to purchase common shares of Aero. Aero also received a warrant from Flo-Co. to repurchase the warrants and has an option to purchase ten million shares of TTR-HP for $750,000.
"From the time that current management was appointed to lead the public company, Aero Performance Products was positioned to execute a roll-up strategy, and the sale of our majority interest in TTR-HP has been undertaken to assist in the furtherance of this strategy," said Bryan Hunsaker, CEO of Aero Performance Products. "The Aero Exhaust business accounted for the vast majority of the company's liabilities as reported in the latest consolidated financial information filed by the company. These liabilities were hindering the company's ability to successfully achieve its business goals, particularly the execution of its roll-up strategy, which includes the planned acquisition of Jones Exhaust Systems, Inc.
"One of the Company's primary objectives is to increase shareholder value, and while the TTR-HP company may have provided an emotional connection for many of our shareholders, its liabilities have been a tremendous impediment to our ability to move forward with our overall game plan. When the TTR-HP stock purchase commenced, it was anticipated that the market would accept the liabilities along with the assets and allow the company time to pay down the liabilities and execute on its rollup strategy. Unfortunately, due to the significant downturn in the overall economy and the unavailability of market resources, the liabilities have become more toxic. After several months of internal review, it was concluded that the most prudent route for increased shareholder value was to eliminate the TTR liabilities and move forward with the Aero Performance business plan of strategic acquisitions. While this was a difficult decision in many respects, management believes that this action makes the most sense from a financial standpoint and is clearly in the best interest of Aero Performance Products shareholders.
"We still strongly believe in Jones Exhaust, as well as its future potential as part of Aero Performance Products, and believe this will be a positive venture for the company and its shareholders. Jones Exhaust has a solid revenue base, and we believe that this acquisition will allow Aero to achieve a fair market valuation, without the toxic liabilities associate with TTR-HP. Our primary focus will continue to be the close of the Jones Exhaust acquisition and moving that company forward as an Aero subsidiary. We will also continue to evaluate additional acquisition opportunities that are presented to the company.
"The agreement to sell our majority interest in TTR-HP also includes the repurchase provision so that in the future, if TTR-HP can be cleaned up and management convinced of the value, Aero Performance Products may exercise its rights to reacquire majority control of TTR-HP," Mr. Hunsaker added.
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About Aero Performance Products, Inc.
Aero Performance Products, Inc. (http://www.aeroperformanceproducts.com/) is a holding company that has entered into a definitive agreement to acquire Jones Exhaust Systems, Inc., one of the most respected specialty exhaust manufacturers in the United States.
Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including the lack of funding, inability to complete required SEC filings, and others set forth in the Company's report on Form 10-K for fiscal year 2008 filed with the Securities and Exchange Commission.
CONTACT: A. Beyer 951-677-8073 investors@aeroperformanceproducts.com
Aero Performance Products, Inc.
CONTACT: A. Beyer of Aero Performance Products, Inc., +1-951-677-8073,
investors@aeroperformanceproducts.com
Web Site: http://www.aeroperformanceproducts.com/
