FirstFitness to Merge with Medical Alarm Concepts and Introduce New Products
The combined operation is expected to produce over $12 million in revenues this year and to yield both positive earnings and cash flow. Since the announcement of the proposed merger, revenues at FirstFitness have been accelerating due to increased interest in the weight loss category and enhancements to its marketing efforts. The companies have set February 28, 2012 as the proposed closing date for the merger.
Nigel Branson, President and CEO of FirstFitness commented, "We are very excited to be moving forward with this merger. Being part of a public company will allow us the flexibility to further expand our already extensive network of distributors. We plan some bold actions for the first few months of this year. This weekend our management team will be meeting with our top-level distributors to introduce a revolutionary weight loss supplement that combines both appetite suppression and fat burning capabilities into a single, natural, herbal-based tablet. Product development has been completed, packaging and marketing materials have been produced and we are ready to move this product into the market. Our initial customer trials have been very encouraging and we are expecting the product to be extremely well-received by our distributors allowing them to meaningfully enhance their business opportunities and revenue generation."
This weekend, FirstFitness will also unveil to its key distributors the new 90-Day Ultimate Body Weight Loss and Fitness Challenge that will attract significantly more retail sales opportunities to their distribution businesses. Also to be unveiled this weekend will be the most lucrative network marketing compensation program in the Country that will allow the Company's important distribution partners increased opportunities to boost up front income while still producing even more residual income.
Mr. Branson continued, "We are expecting the combination of the introduction of this revolutionary new appetite suppression product and the start of the 90-Day Ultimate Body Weight Loss and Fitness Challenge, combined with the implementation of this new and innovative distribution compensation plan to significantly accelerate our revenue growth resulting in one of our strongest years ever. We could not be more positive about our future."
Under the terms of the proposed merger agreement, FirstFitness Nutrition, Inc. and Medical Alarm Concepts, Inc. will operate as separate subsidiaries of Medical Alarm Concepts Holding, Inc. Current shareholders of FirstFitness Nutrition are expected to hold approximately 50% of the common and preferred shares of newly combined entity. Medical Alarm Concepts, Inc. is expected to retire a significant portion of its convertible notes and outstanding warrants prior to the consummation of the merger. This is expected to result in a reversal of derivative liability charges yielding a large, non-cash net income gain. As part of this process, an investor has agreed to cancel, without exercise, 15.5 million in the money warrants. Additional warrant surrenders are expected in the future, all of which will reduce shareholder dilution and more adequately allow the Company to reflect its true financial position during future periods.
Ronald Adams, President of Medical Alarm Concepts commented, "Over the short term, investors will see many positive changes as we restructure our balance sheet. We have very successfully negotiated with key investors, the retirement of a large portion of our convertible debt, and the cancellation, without exercise, of a very significant portion of the currently outstanding money warrants. We believe the cancellation of the 15.5 million warrants we are announcing today is merely a small sample of what is expected to be cancelled, without exercise, over the coming weeks, as we work to finalize our audit and SEC financial reporting to remaining a fully reporting organization. We want to thank all of our share and stakeholders as we move this merger forward in order to create substantial value for our investors and our network marketers.
"These warrant cancellations, the retirement of large portions of our convertible notes payable, and past debt retirements at FirstFitness Nutrition should send a clear message to our investors that we plan to construct a strong combined balance sheet and significantly limit shareholder dilution while building a strong and growing revenue stream in some of the fastest growing areas of the American economy," added Adams.
