CNE Group, Inc. Acquires SRC Technologies, Inc. and Econo-Comm, Inc. and Effects a Private Financing
NEW YORK--(BUSINESS WIRE)--April 23, 2003--CNE Group, Inc., (AMEX/PCX: CNE) today announced certain significant inter-related transactions.
First, pursuant to the terms of Section 251(g) of the Delaware General Corporation Law, CareerEngine Network, Inc. ("CareerEngine") has become a wholly-owned subsidiary of CNE Group, Inc. (the "Company"). All former stockholders of CareerEngine are now the stockholders of the Company, which is the entity that is now publicly traded on the American and Pacific Stock Exchanges under the symbol "CNE." This restructuring transaction allows the Company to enter into business transactions such as the acquisitions and financing referred to herein, by limiting its exposure from the liabilities of CareerEngine.
Second, the Company acquired 100% of the outstanding common stock of SRC Technologies, Inc., and Econo-Comm, Inc., both privately held, for cash, its common stock, warrants, and preferred stock. In connection with these acquisitions, the Company purchased certain intellectual property rights from various parties for its subordinated notes and preferred stock. SRC Technologies has three wholly-owned subsidiaries, Connectivity, Inc., U.S. Commlink, Ltd. and Denbridge Digital, Ltd.
Finally, in a private financing transaction the Company issued its notes in the aggregate principal amount of $750,000 and warrants to purchase an aggregate of 3,124,350 shares of the Company's Common Stock at $0.50 per share.
All of the foregoing transactions have been approved by the written consent of the holders of a majority of the Company's common stock.
Commenting on the transactions, CNE Group's Chairman, George W. Benoit, said, "We are pleased that we were able to add these attractive companies and their management under the CNE Group umbrella. We believe that the sophisticated applications and equipment these companies provide in intelligent traffic systems and homeland security should offer an excellent opportunity to enhance shareholder value. We also believe that we have charted an exciting additional course with these acquisitions and we intend to continue to aggressively seek strategic and technical partners in support of potential growth opportunities. Our market strategy will also address the inter-operability of safety and security communication infrastructures as they relate to private and public sector initiatives."
Anthony S. Conigliaro, Chief Financial Officer of CNE Group added, "This transaction has addressed numerous financial issues. The Company's future operations and prospects for growth should benefit from the acquisitions. In addition, its financial position has been enhanced by the private financing and corporate restructuring. We also believe these transactions, when viewed in their entirety, satisfactorily address the issue relating to the Company's American Stock Exchange listing. Finally, we anticipate that the Company should experience positive cash flow from operations over the next 12 months, although the expenses relating to the completion of these transactions will negatively affect our cash flow results in our first six months."
The Company's Board of Directors are George W. Benoit, Chairman, Joseph G. Anastasi, Charles W. Currie, David W. Dube, Michael J. Gutowski, Lawrence M. Reid and Carol Gutowski. Officers of the Company are Mr. Benoit, Chief Executive Officer; Mr. Gutowski, President and Chief Operating Officer; Mr. Reid, Executive Vice President; and Anthony S. Conigliaro, Chief Financial Officer.
About CNE Group, Inc.
CNE Group, Inc. is a holding company whose primary operating subsidiary is SRC Technologies, Inc. SRC, also a holding company, is the parent of Connectivity, Inc., Econo-Comm, Inc. (d/b/a Mobile Communications) and U.S. Commlink, Ltd. Connectivity, U.S. Commlink and Mobile Communications - the "SRC group of companies" - market, manufacture, repair and maintain remote radio and cellular-based emergency response products to a variety of federal, state and local government institutions, and other vertical markets throughout the United States. SRC has intellectual property rights to certain key elements of these products - specifically, certain communication, data entry and telemetry devices.
The Company also generates revenue from its CareerEngine division that is engaged in the business of e-recruiting.
The Company and CareerEngine are located at 200 West 57th Street, New York, NY 10019 (212- 977-2200). SRC, Connectivity and Mobile Communications are located at 3733 NW 16th Street, Lauderhill, FL 33311 (954-587-1414). U.S. Commlink. is located at 6244 Preston Avenue, Livermore, CA 94550 (925-960-0097).
Certain statements in this press release constitute "forward-looking statements" relating to CNE Group, Inc. and its subsidiaries (the "Company") within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding future events, our financial performance and operating results, our business strategy and our financing plans are forward-looking statements. In some cases you can identify forward-looking statements by terminology, such as "may," "will," "would," "should," "could," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those contemplated by the statements. In evaluating these statements, you should specifically consider various factors that may cause our actual results to differ materially from any forward-looking statements.
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