MOSCOW, May 21, 2007 (PRIME NEWSWIRE) -- NUCON-RF, Inc. (Pink Sheets:NNRF) today announced that it has entered into a Letter of Intent to acquire ROAR in an all stock transaction. The purchase price will be mutually agreed upon once the ongoing due diligence investigation is completed to the satisfaction of the board of directors of NNRF.
The audited financial statements of ROAR reflect revenues of US$6.544 million in 2006 and have been prepared in accordance with generally accepted accounting principles in the United States. ROAR is projecting a significant increase in revenue in 2008 provided sufficient funds are made available to expand current operations and make several key acquisitions which are currently under consideration.
NNRF has retained 2K Audit and Consulting in Moscow to undertake a comprehensive due diligence review of ROAR's operations. 2K Audit is a noted Russian audit and consulting firm that employs 285 financial professionals and has been engaged by NNRF to assist in the due diligence review of other target companies in Russia, including two prospective NNRF acquisitions, JSC Electroprivod and Velkont.
ROAR is one of the leading companies in Russia and the Commonwealth of Independent States ("CIS") in the production and distribution of oxy-fuel equipment. ROAR specializes in the production of high quality, low cost equipment used in all facets of the cutting and welding industry. The product line includes gas welding, gas cutting, gas heating, electric arc-welding and related products. ROAR currently produces 33% of the oxy-fuel equipment in the CIS.
Russia has approximately 135,000 miles of pipeline. According to OSS Rosneft, more than 93% of this pipeline is more than 10 years old and more than 68% of this amount is in excess of 25 years old. As a leading oil and gas exporter, Russia needs these pipelines to be constantly maintained and replaced as required and this maintenance replacement program heavily involves the use of cutting and welding equipment.
A key component of ROAR's business is the development of a proprietary technology utilizing hydrogen, in lieu of traditional fuels and gases, to power cutting and welding torches as well as regulating equipment. Hydrogen is a highly efficient and environmentally safe fuel. Utilizing electrolysis, one of the most common technologies of producing hydrogen, ROAR has developed a proprietary, portable, compact unit that uses a hydrogen-oxygen mix of a pressure under 0.5 kg/sq.cm to create energy (fuel). This proprietary development eliminates the costly, dangerous, difficult to handle fuel tanks currently used in the cutting and welding industry. The green proprietary production process creates a waste material of completely pure water and simultaneously powers cutting and welding torches and regulating equipment without the use of fossil fuels. This proven and environmentally safe proprietary technology has applications in the medical, transportation and heating sectors, and management of ROAR has stated that there are present applications in heavy engineering, power engineering and industrial and civil construction.
Mr. Peter Goerke, Executive Vice President and Secretary of NNRF and head of all merger and acquisition activities inside the Russian Federation, stated, "The revolutionary products of ROAR are not yet known outside of Russia and the CIS despite having been under development since 1992. These products represent a significant opportunity for NNRF to enter the world market for environmentally safe applications of hydrogen-oxygen based energy. We believe that the proprietary products of ROAR that are developed and producing substantial revenues have the potential to serve as the catalyst for additional future product lines that will provide NNRF a substantial revenue base and proprietary products for the energy sector, including nuclear power plants."
NNRF and ROAR believe that centralization, internal standardization and unification through acquisition by ROAR of up to four additional identified Russian companies in the next twelve months may reduce the current production costs of ROAR by 20-25% and could result in control of up to 80% of the Russian and CIS market. NNRF and ROAR further believe that ROAR's products make it possible to change the existing business model of companies in the global market of cutting-welding equipment. The traditional petroleum based fuel sources currently used by these companies are made less competitive by the hydrogen producing electrolysers of ROAR. Further, ROAR's products are believed to less expensive both in initial cost and in operations than any other competing products in Russia, as well as operationally and environmentally safer than all current competition in Russia.
ABOUT NNRF:
NNRF is a U.S. corporation with executive and operations offices in Moscow, Berlin and Washington. NNRF offers design and manufacturing of specialized products for nuclear reactors and nuclear waste management; proprietary nuclear shielding, decommissioning and decontamination technologies; and engineering/design services for a range of environmental challenges. NNRF owns manufacturing facilities and provides both equipment and services for nuclear power plants and compliance, shielding, transport and interim and final storage requirements for government agencies and nuclear service companies. NNRF also owns or licenses proprietary leading edge technologies which provide NNRF with a market edge in manufacturing, design, engineering and services capabilities. NNRF's management team has extensive industry and government service including extensive in-house expertise in all aspects of radiological protection and radiological waste management. NNRF has entered into strategic alliance agreements with government agencies of the Russian Federation. Access through NNRF's strategic alliances to key processing and disposal facilities in the Russian Federation enables it to complete a broad range of projects efficiently and cost effectively. NNRF believes that this access provides vertically integrated services that distinguish it from competitors. NNRF manufactures nuclear power plant equipment in Russia and has multi-year sales contracts for a significant portion of current production with ROSATOM, the owner and operator of all Russian nuclear reactors. NNRF also provides products, services and proprietary technology based solutions through its strategic alliances to multilateral and bilateral funded projects located in Northwestern Russia known as the Northern Dimension Environmental Partnership (NDEP). This area contains the largest repository of spent nuclear fuel and radioactive waste in the world. The projects involve the decommissioning and disposal of nuclear powered naval vessels of the former Soviet Union. The projects are funded by G-8 member countries. NNRF currently is expanding its marketing to include the European Union, China, India and North America in 2007-08 through strategic marketing partnerships with multinational energy service companies. NNRF is currently engaged in the due diligence phase of potential further acquisitions in 2007-2008 which are intended to substantially increase its current asset and revenue base.
SAFE HARBOR STATEMENT:
Statements in this press release that are not historical facts are forward-looking statements, including statements regarding announcements of financial results, business potential and other prospective presentations by NNRF. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, our ability to obtain additional financing that will allow us to continue our current and future operations and whether demand for our products in domestic and international markets will continue to expand. NNRF undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in NNRF's expectations with regard to these forward-looking statements or the occurrence of unanticipated events.