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Gales Industries Incorporated (OTCBB: GLDS), today announced that
it has raised $8,023,000 in gross proceeds from institutional and
accredited investors through a private placement of 802,300 shares of
its Series B Convertible Preferred Stock. The Offering, originally
intended to raise a maximum of $7,000,000, was oversubscribed,
primarily as a result of stronger than anticipated demand from
institutional investors. Net proceeds from the private placement will
be used by the Company for acquisitions and general working capital
requirements. Approximately $4.9 million in gross proceeds from the
private placement was received at a first closing announced in April.
Taglich Brothers Inc., a registered broker-dealer based in New
York, acted as exclusive placement agent in connection with this
private placement. The principals of Taglich Brothers participated in
the group of institutional and accredited investors that invested in
the Offering.
"We are very encouraged by the growing interest in our Company. We
view the results of this offering as another expression of the
financial community's increasing appreciation for our business model,"
said Peter D. Rettaliata, Gales' President and Chief Executive
Officer. "We commend Taglich Brothers for their ability to execute and
bring to us an impressive group of supportive investors. These new
stakeholders - as well as our existing shareholders and management
team -- support our initiatives to capitalize on the extraordinary
opportunity for aggressive growth offered by the global commercial and
military aerospace industry. With this financing in place, we are now
better positioned to move into our next phase of consolidation and
internally generated growth."
A portion of the proceeds from the private placement has been
allocated toward the previously announced acquisition of Sigma Metals,
Inc., a strategic metals distributor based in Deer Park, Long Island,
NY. Now a wholly-owned subsidiary, Sigma operates as a new platform
company for Gales. Sigma had trailing 12-month revenues of
approximately $18 million. With the addition of Sigma Metals, Gales
Industries now has combined trailing revenues in excess of $50
million.
The Series B Convertible Preferred Stock will receive dividends
payable quarterly at the rate of 7.0% per annum. Dividends can be paid
in cash or Series B Preferred Stock at the election of the Company.
The holders of the Series B Preferred Stock shall be entitled to vote,
on all matters in which holders of Common Stock are entitled to vote,
participating with the Common Stockholders as a single class.
The Series B Convertible Preferred Stock has not been and will not
be registered under the Securities Act of 1933, and may not be offered
or sold in the United States without registration or applicable
exemption from registration requirements. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
these securities, nor shall there be any sale of these securities in
any state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction. Any offer will be
made only by means of a prospectus, including a prospectus supplement,
forming a part of the effective registration statement. Copies of the
prospectus can be obtained at the SEC's website at www.sec.gov or from
the Company.
ABOUT TAGLICH BROTHERS
Taglich Brothers, Inc. is a full-service broker dealer focused
exclusively on microcap companies. The Company defines the microcap
segment of the equity market as companies with less than $250 million
in market capitalization. Taglich Brothers currently offers
institutional and retail brokerage services, investment banking and
comprehensive research coverage to the investment community.
ABOUT GALES INDUSTRIES INCORPORATED
Gales Industries Incorporated (OTCBB: GLDS) is a holding company
established to engage in the consolidation of manufacturers,
engineering integrators and related service providers to the
aerospace/defense and commercial aviation industries. The Company is
focused on flight safety and other critical componentry. The Company's
first acquisition was of Air Industries Machining Corp., a leading
aerospace/defense manufacturer and engineering integrator based in Bay
Shore, Long Island, NY. Consolidation opportunities include companies
operating within highly synergistic disciplines of manufacturing,
technical services and strategic products distribution. The Company's
strategy and attendant tactical plan is to execute its consolidation
principally amongst Tier III, IV and V aerospace/defense
subcontractors. Gales offers a tailored exit strategy or management
continuity strategy in exchange for qualified acquisitions, and
targets technically superior middle market organizations with revenues
of up to $100 million annually. Information on the Company and its
products may be found online at www.airindmc.com.
Certain matters discussed in this press release are
'forward-looking statements' intended to qualify for the safe harbors
from liability established by the Private Securities Litigation Reform
Act of 1995. In particular, the Company's statements regarding trends
in the marketplace, firm backlog, projected backlog, potential future
results and acquisitions, are examples of such forward-looking
statements. The forward-looking statements include risks and
uncertainties, including, but not limited to, the timing of projects
due to the variability in size, scope and duration of projects,
estimates, projections and forecasts made by management with respect
to the Company's critical accounting policies, firm backlog, projected
backlog, regulatory delays, government funding and budgets, matters
pertaining to potential and pending acquisitions subject to and after
closings, and other factors, including results of financial audits and
general economic conditions, not within the Company's control. Certain
of the Company's forward looking statements, with the projected
backlog in particular, are formulated based on management's extensive
industry experience and understanding and assessment of industry
trends, customer requirements, and related government spending.
Projected backlog may be subject to variability and may increase or
decrease at any time based on a variety of factors, including but not
limited to modifications of previously released orders, acceleration
of orders under general purchase agreements, etc. The factors
discussed herein and expressed from time to time in the Company's
filings with the Securities and Exchange Commission could cause actual
results and developments to be materially different from those
expressed in or implied by such statements. The forward-looking
statements are made only as of the date of this press release and the
Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.
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