BOCA RATON, Fla., May 22, 2013 /PRNewswire/ --Novation Holdings (OTCQB: NOHO) today announced that it has entered into an agreement to acquire substantially all of the operating assets of StarPoint U.S.A., Inc. (StarPoint), a Delaware corporation, through its wholly-owned subsidiary, StarPoint Acquisition Corp. (SAC), a Florida corporation formed for the acquisition. The ownership of SAC then will be transferred to Crown City Pictures, Inc. (OTC Pink: CCPI), a controlled subsidiary of NOHO. CCPI is a publicly-traded company with its common shares listed on the Pink Sheets.
The acquisition of the assets of StarPoint will be completed in exchange for a total of 48,333,333 shares of common stock of CCPI to be issued to StarPoint, and a convertible promissory note from SAC guaranteed by CCPI for $1,000,000 due in one year, with the holder (StarPoint) having the option to convert all or part of the note into stock at a fixed conversion price of $0.03 per share. The note will be secured by the operating assets of StarPoint acquired in the transaction. The total agreed acquisition price for the StarPoint assets is $2,450,000.
StarPoint is a U.S. based vehicle distribution company that has a proven track record and that is not exclusive to any specific vehicle brand, which allows it to distribute a number of different brands / models in the U.S. market. As part of its ongoing business, StarPoint has been the exclusive distributor of Daewoo vehicles and Genuine Daewoo Parts to the U.S. market since 1998. A total of 188,000 Daewoo brand vehicles (Leganza, Nubira and Lanos models) were distributed from 1998 through 2002. Today, StarPoint continues to provide both Warranty Administration and Genuine Daewoo Parts to approximately 80,000 remaining Daewoo owners in the US. That business will be acquired by SAC, which will then change its corporate name to StarPoint USA, Inc., while the old StarPoint also will change its corporate name, to eliminate any confusion.
StarPoint plans to maximize sales and market share through the near term use and further development of an existing and robust independent retail dealership network. The company will offer unique vehicles of exceptional value at very competitive prices with sales to dealers being supported by a seasoned, market savvy management team that is capable of implementing a marketing strategy designed to introduce new models / brands and establish it as a leader in the alternative fuel vehicle ("AFV") market niche. "An important aspect of our business strategy is marketing a portfolio of different AFV models that meet the needs of a wide variety of end users including both fleet operators and retail customers," advises Ben Rainwater, President & CEO of StarPoint USA. "All-electric vehicles will be one offering, but our main focus initially will be to offer vehicles powered by Compressed Natural Gas (CNG) either as fully dedicated CNG or as Bi-Fuel (gasoline and CNG) capable models," continued Rainwater.
StarPoint has positioned itself to capitalize on the growing need for less dependence on foreign oil and environmentally friendly "green" vehicle alternatives for the U.S. market. In June of 2012, the Company secured an exclusive vehicle distribution agreement with a U.S. based alternative fuel vehicle manufacturer for the entire U.S. market, including Puerto Rico, that will involve the distribution of CNG Bi-Fuel and all electric vehicles. "The company is currently in discussions with several other vehicle manufacturers regarding the distribution of their alternative fuel models, as well, which will further broaden the scope of our AFV portfolio," added Rainwater.
The AFV market is a growth segment that stands to increase market share significantly by 2035 according to projections by the U.S. Energy Information Administration (EIA), which includes a mix of flex-fuel, mild hybrid, hybrid gasoline/diesel, electric, plug-in hybrid electric, gaseous, electric and fuel cell. Certainly, these AFVs will play a significant role in meeting more stringent Green House Gas ("GHG") emissions and fuel economy standards, as well as offering fuel savings in the face of higher gasoline prices.
Under the terms of the acquisition agreement, Mr. Rainwater will also become a member of the Board of Directors of CCPI and will assume the role of CEO of CCPI. The acquisition of the operating assets and business is expected to close immediately.
FORWARD LOOKING STATEMENT
Certain statements contained herein and subsequent oral statements made by and on behalf of Novation Holdings, Inc. may contain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are identified by words such as "intends", "anticipates", "believes", "expects", and "hopes" and includes, without limitation, statements regarding Novation Holdings, Inc.'s plan of business operations, product research and development activities, anticipated revenues and expenses and potential contractual arrangements and obligations. Also, our management may make forward-looking statements orally to investors, analysts, the media and others. Any statements made in this news release about an action, event or development, are forward-looking statements. Such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. These risks and others are included from time to time in documents we file with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on our future results. Accordingly, you should not place undue reliance on these forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that its forward-looking statements will prove to be correct. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The Company undertakes no obligation to update or correct its own forward-looking statements, except as required by law or those prepared by third parties that are not paid by the Company. The Company's SEC filings are available at http://www.sec.gov.
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