HOLT, Mich., Oct. 7, 2003 (PRIMEZONE) -- Proquest Capital Corporation, a Nevada corporation (Pink Sheets:PROQ), announced that it has completed an Exchange Agreement and Plan of Reorganization pursuant to which it has acquired certain operating assets (the "Hot 'N Now Business") and assumed certain liabilities of Hot N' Now, LLC, a Delaware limited liability company, in a tax-free exchange. Proquest will operate the company-owned restaurants (described below) and will sell franchises for the Hot 'N Now restaurant concept to franchisees. Proquest will soon change its corporate name to HOT BRANDS, INC.
Upon closing of the acquisition, the former Proquest management members resigned and the current officers and directors took office: William E. "Bill" Curtis is Chairman of the Board and Chief Executive Officer; Thomas VanAlstine is a Director and President; and Paul E. Marcus is the third director. Proquest has assembled a competent staff to direct the business and expand it rapidly through acquisitions.
More Information About the Hot 'Now Business
Originally founded in 1983, the Hot 'N Now restaurant concept uses a limited menu and drive-through-only facility with a focus on the highest quality product, rapid service and fair prices. The goal is to serve a drive-through customer within 30 seconds of reaching the window. Units are relatively small, averaging 700 square feet. The absence of seating areas, playgrounds and parking lots allows for low overhead, which, in turn, allows for lower prices. Per-person checks average approximately $6.00. The limited menu includes hamburgers, cheeseburgers, double hamburgers and cheeseburgers, olive burgers and now mushroom burgers, French fries, and soft drinks. The Hot 'N Now Business includes 44 restaurant units in three Midwestern states (Michigan, Wisconsin and Indiana), of which 23 are company owned and 21 are franchised. The estimated system wide sales for 2003 will be $20 million.
The newly acquired Hot 'N Now Business is in a highly competitive segment of the restaurant industry: quick service restaurants. Competitors include McDonald's, Burger King, Wendy's, Checkers Drive In, Rally's and many others, both regional and national chains. The Hot 'N Now units compete on quality, service and price, and its hamburgers are served fresh, hot and fast at price points below those of its competitors. The rapidly growing Hot 'N Now Business currently has over 450 employees, all of which either work for the corporate office or at the operations of the corporate-owned locations. In addition, the franchise locations employ over 300 additional personnel. Each location has approximately 15 employees, including three Managers-in-training and one salaried General Manager.
Proquest intends to launch an aggressive effort to acquire other restaurant assets that are synergistic with the Hot 'N Now Business. Any such acquisition may be structured as a merger, stock exchange or cash purchase. Proquest will favor companies with strong operating revenues that lend themselves to the establishment of a franchise program or similar means of rapid establishment of a distribution network.
Except for the historical information presented, the above statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 or regulations thereunder. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. These risks include the economic health of the restaurant and fast-food industries, demand for competitive pricing pressures, and the availability of necessary financing. These statements speak only as of above date, and Proquest disclaims any intent or obligation to update them.
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