CALVERTON, N.Y., Aug. 3, 2005 (PRIMEZONE) -- AdZone Research, Inc. (OTCBB:ADZR) today issued the company's latest operational report to shareholders. The full text of Chairman and CEO Charles Cardona's comments follows:
August 2, 2005 Dear Fellow Shareholders:
It's Tuesday afternoon, and we're sitting in Washington's Union Station, waiting for the Amtrak back to New York. General Weaver, Dan Wasserman, technology director Reidar Sjoen and myself have just come from an extensive meeting to which we were summoned by some of the most senior national security experts, for whom our NetGet technology was never more visible than today. The mutual objective is to finalize a NetGet deployment as rapidly as possible.
While it's only been two weeks since my last report to you, today's significant developments, as well as an announcement on Monday of $30 million in funding for acquisitions to grow our company, merit further comment.
While we had initially indicated a funding commitment in the $10 million range, that in the end became three times that amount because both the company and our investors felt that targeted strategic acquisitions merited a much larger war chest. Moreover, the company is in continuing discussions with other funding sources for other varieties of investment that will perhaps eclipse the $30 million reported so far.
All these targeted acquisitions have a common goal: to immediately improve our top and bottom line results. The important reality of the $30 million line is that its existence will enable us to close on negotiations that have already commenced, as well as to initiate takeover efforts, based on the fact that these funds will be available to us.
That should enable AdZone, in both instances, to strike the best possible deals, not just in the acquisition price, but also in terms of management earn out formulas as well as the acceptance of restricted AdZone stock as part of the package. We can also plan acquisitions with timelines that hopefully result in the smallest possible dilution.
There are other financing initiatives that would negate dilution currently being explored, but the next news of them will come when the deals are done.
In our quest to grow our business relative to the universe in which we currently operate, we also are now looking at our business model as one whose overarching mission is data mining, and the revenues that can flow from that larger perspective. In our merger and acquisition analysis, our consultants and we constantly focus on these considerations:
-- Reviewing and determining the strengths and risks of the
companies targeted at three levels: financial, operational
and external or marketplace.
-- The values other strategic buyers would assess and acquire
the businesses if they had the opportunity.
-- The value AdZone Research shareholders would ascribe to the
businesses if acquired.
Some of our acquisition targets are companies with revenues of less than $10 million annually. Several have tens of millions of dollars in annual sales. Clearly, we are not backing into long term success; we are going after it with a passion.
As those companies join ours, the potential for ever larger financing looms, as does the potential return for shareholders.
While we pursue defense-related contracts, and companies to acquire, we also continue to find ways to deploy our technology in complimentary areas such as anti-piracy, cyber-security and sexual-predator tracking. In the latter case, we expect to report in the near future our first contract in this arena, which has potential applications in thousands of police departments nationwide.
AdZone also soon will be announcing the retaining of additional consultants, especially in the area of mergers and acquisitions, as well as new product development.
We believe all these efforts are setting the stage for a higher level of valuation, and long-term benefits -- both now and in the future.
Sincerely, Charles A. Cardona Chairman and CEO
For additional information, please visit the company's Web site at http://www.adzoneresearch.com.
Certain statements contained herein are "forward-looking" statements (as such term is defined in the Private Securities Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.