DALLAS, Aug. 3, 2001 (PRIMEZONE) -- Fresh America Corp. (Pink Sheets:FRES), a major North America fresh produce distribution company, today announced significant progress towards the completion of a $5 million private equity transaction with the North Texas Opportunity Fund LP ("NTOF"). As previously announced, the Company entered into an agreement in principle with respect to this transaction on May 29, 2001 and received two-month extensions from its senior and subordinated lenders to facilitate this transaction. The Company received further one-month extensions from its senior and subordinate lenders to allow for the anticipated closing with NTOF.
NTOF is a private equity fund started in 2000. Utilizing the venture capital model for nurturing and growing promising companies, NTOF seeks to make equity investments in North Texas companies that are either located in or willing to expand operations to underserved areas in North Texas or minority or women-owned or managed companies located anywhere in the North Texas region. NTOF seeks investment opportunities in companies that have quality management, defensible market positions, predictable exposure to risks and attractive growth prospects either internally through core revenue growth or externally through strategic acquisitions. Candidates generally have established a solid franchise through product leadership, superior customer service, low cost structure, brand name or other competitive advantages.
NTOF has substantially completed its due diligence and is currently anticipating that the transaction will close within the next few weeks. The proposed transaction would result in NTOF acquiring preferred stock and warrants convertible into approximately 50% of the Company's fully-diluted common stock and the exchange of the Company's existing subordinated debt and preferred stock for preferred stock and warrants convertible into an additional 27% of the Company's fully diluted common stock. The remaining equity in the company will be for employee stock options and existing shareholders.
Colon Washburn, President and CEO commented, "Throughout the due diligence process, we have been pleased with the similarities in vision that NTOF and Fresh America management have for the Company. We have also been encouraged with the support we have received from our lenders and believe the addition of NTOF as a strategic partner and the conversion of subordinated debt to equity will significantly enhance the Company's balance sheet and strengthen our position going forward. "
Arthur Hollingsworth, co-founder and partner of NTOF, stated, "We have been very impressed with the management and employees of Fresh America and their dedication to the highest standards of quality, food safety, customer service and innovation. We look forward to a timely completion of the transaction".
The Company also announced that in June of 2001, it further reduced the balance under its senior credit facility from $6.2 million to $5.4 million due to the sale of an idle real estate property. Mr. Washburn further stated, "The Company appreciates the support our suppliers have shown during this reorganization. Throughout the process we have continued to make progress on the pay-down of our revolving line of credit and timely satisfy our obligations to suppliers. We look forward to further enhancing both supplier and customer relationships as the Company completes this final phase of our financing restructure and begins to proceed in our strategic initiatives with our financing and operational issues behind us."
The agreement in principle is subject to negotiation and execution of definitive agreements, board approval, senior and subordinated lender consents, and certain other conditions. There can be no assurance that the Company will be able to negotiate a satisfactory definitive agreement or complete the contemplated transaction with NTOF or further extend its senior credit or subordinated debt facilities past the current extension periods. There can also be no assurance that an alternative source of funding will be found, if the contemplated transaction is not completed.
About Fresh America
Fresh America is an integrated food distribution management company that operates facilities located in Dallas and Houston, Texas; Scranton and Wilkes-Barre, Pennsylvania; Richmond, Indiana; Atlanta, Georgia; Chicago, Illinois; and Los Angeles, California. The Company's common stock is now traded on the Pink Sheets under the Symbol "FRES."
Forward-looking Statements
This announcement may contain forward-looking statements that are subject to significant risks and uncertainties. Although Fresh America believes that the expectations reflected in its forward-looking statements are reasonable, Fresh America can give no assurance that such expectations or any of their forward-looking statements will prove to be correct, and future results may differ from those discussed in this press release. Important information regarding the factors that may affect Fresh America's future performance is included in the public reports that Fresh America files with the Securities Exchange Commission. Fresh America disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future event, change in expectations, conditions or circumstances, or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by Fresh America or any other person that the events or circumstances described in such statement are material.