Exhibit No. 99
Xxxx Xxxxxx
(000) 000-0000, Ext. 315
ROOM PLUS, INC. SECURES $1.5 MILLION LOAN
Paterson, NJ - August 3, 1998 - ROOM PLUS, INC. (NASDAQ:PLUS) Room Plus, Inc.
and Xxxxx Xxxxxxx, Chairman and Chief Executive Officer and 50% shareholder of
Nationwide Warehouse & Storage, Inc. ("Nationwide"), have entered into
agreements pursuant to which Xx. Xxxxxxx loaned Room Plus the sum of $1.5
million for a two-year term at an annual interest rate of 12% and received
Warrants to purchase two million shares of Room Plus Common Stock at an exercise
price of $2.00 per share. In addition, the Room Plus Board of Directors has
elected Xx. Xxxxxxx to its Board and appointed him Chairman as contemplated by
the Loan Agreement. Nationwide is a national chain of retail furniture stores.
In the year ended December 31, 1997, Nationwide had sales of approximately
$131,000,000. At this time, Nationwide operates 84 stores in the U.S. and
Canada. Room Plus had sales of approximately $17,000,000 in 1997 and currently
operates 16 showrooms.
In addition, Room Plus and Nationwide entered into an agreement granting
Nationwide the right to merge with Room Plus if Nationwide's Board of Directors
and shareholders so elect within five business days of the issuance of Room
Plus' financial statements for the year ending December 31, 1998. Such a merger
is also subject to approval by the Room Plus shareholders and other conditions.
Room Plus intends to solicit proxies seeking such approval in accordance with
applicable SEC requirements. Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxx and
Xxxxx Xxxxx, directors of Room Plus, who currently own in the aggregate
1,471,267 shares of Room Plus Common Stock, exclusive of warrants and options,
have agreed to vote their shares in favor of the Merger, which has been approved
by the Room Plus Board of Directors. Under the merger, Nationwide's shareholders
would own 90% of the outstanding shares of the merged company and Room Plus'
shareholders would own 10% of the outstanding shares of the merged company,
based on an assumed 6,885,000 Room Plus shares. Room Plus currently has
4,385,000 common shares outstanding and 7,136,250 warrants and options
outstanding.
Xxxx Xxxxxx, CEO of Room Plus stated, "This is an excellent opportunity for Room
Plus. Xx. Xxxxxxx'x experience with a national company can provide Room Plus
with expertise in many areas, especially in growth and distribution. Our current
plan is for Room Plus to continue to operate and expand its chain of youth and
children's furniture stores in our existing markets." Xx Xxxxxx further stated,
"Our December 31, 1997 financial statements noted that there was substantial
doubt about our ability to continue as a going concern. The $1.5 million loan
from Xx. Xxxxxxx coupled with marked improvement in our operations will
eliminate this 'going concern' issue."
Xx. Xxxxxxx stated, "I am excited about assisting Room Plus as they seek to
expand their market share of the youth and juvenile furniture market, which
represents the fastest growing segment of the furniture industry. Room Plus'
reputation in the metropolitan New York City market and greater
Philadelphia area, one of the largest markets in the US, will provide them the
opportunity to grow rapidly and expand to other parts of the country. I look
forward to the success of Room Plus and will explore additional potential
mergers and alliances in the future."
ROOM PLUS, INC. has specialized for the past 18 years in the design and
production and retailing of modular, mica-laminated furniture for residential
uses. With its 16 retail showrooms and its 78,000 square foot manufacturing
facility, ROOM PLUS, INC. is the largest and leading vertically integrated
mica-laminated furniture company in New York, New Jersey and Pennsylvania.
Forward looking statements made herein are based on current expectations of the
Company that involves a number of risks and uncertainties and such forward
looking statements should not be considered guarantees of future performance.
These statements are made under the "Safe Harbor Provisions" of the Private
Securities Litigation Reform Act of 1995. The factors that could cause actual
results to differ materially from the forward looking statements include the
impact of competitive products and pricing, product demand and market acceptance
risks, the presence of competitors with greater financial resources than the
company and inability to arrange additional debt or equity financing. For
further information concerning risk factors, please see ROOM PLUS, INC. Form
10-KSB filed with the Securities and Exchange Commission April 3, 1998 and ROOM
PLUS, INC. Form 10-QSB filed with the Securities and Exchange Commission May 15,
1998.
