LAS VEGAS/HONG KONG — January 14, 2019 — 12 ReTech Corp. announced today that it has signed a definitive Exchange of Equity Agreement to acquire Salt Lake City-based Red Wire Group LLC (Red Wire) in a stock for stock transaction. Closing is scheduled to occur before the end of this month.
Red Wire is a profitable and efficient contract cut-and-sew manufacturer generating significant revenue and is located less than 100 yards from the company’s Emotion Fashion Group (EFG) facility. Red Wire Group has maxed out its own existing facilities capacity and can benefit from the excess capacity that EFG currently possesses.
Angelo Ponzetta, 12 ReTech’s CEO, stated: “We believe that Red Wire is very synergistic to our current EFG operation. In addition to the revenue and profits that Red Wire brings to the group we add efficiency and expertise to continue to drive down our production costs that began with our relocation of EFG from Los Angeles to Salt Lake City. This extra capacity and efficiency will allow Red Wire to take on many more jobs that should catapult its revenue from its current $650,000 to three to four times that annually, while increasing our margins.”
Hub Blanchett, president of EFG, stated, “Being acquired by 12 ReTech was just the catalyst for future acquisitions. I am thrilled to team up with Red Wire. Their production team is outstanding and will allow our team to focus on revenue growth and delivery fulfillment.”.
Ponzetta continued: “We have been working on this acquisition throughout the holiday season and while we executed non-binding Letters of Intent we decided to wait until the signing of the Exchange Agreement to announce this news as our past experience with acquisitions has taught us that Murphy’s law typically applies at the signed Letter of Intent stage”.
Greg Haehl, managing member of Red Wire, commented: “I am excited to become part of 12 ReTech team. Being a technology expert myself, I have seen what they are doing to help retailers improve themselves. The technology that is available at 12 ReTech is very exciting and I plan to lend my own expertise to their efforts. At the same time, Red Wire’s capabilities will help EFG’s own manufacturing floor operations and their extra capacity will allow us to substantially grow our own business.” He continued, “I have seen first-hand the commitment and assistance the whole 12 ReTech Team brings to every acquisition and this strongly influenced our decision to be acquired.”
Ponzetta added, “We have been informed that due to our current stock price OTC Markets intends to shortly remove us from their QB group. They have indicated that once our stock reaches and maintains the mandatory $0.01 threshold price for 10 days it’s a simple matter to regain the QB status. Historically, the QB designation hasn’t yet really benefitted our investors but the reporting requirements which we maintain as a QB stock will continue to be maintained. We are optimistic that with the important acquisitions we are closing, the investing public will view our Company more favorably and our stock should respond accordingly, allowing us to be re-certified as a QB stock.
“The target date for the completion of this acquisition is on or about January 23, 2019. The closing of this transaction is still subject to completion of due diligence and a few other details. Red Wire acquisition coupled with EFG acquisition provides us with a strong operating base for additional acquisitions we hope to announce soon.
Posted January 14, 2019
Source: 12 ReTech Corp.