Carver Corporation Operational Changes and Additional Financing.WOODINVILLE, Wash.--(BUSINESS WIRE)--July 7, 1998--Carver Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CAVR CAVR Canadian Administrators of Volunteer Resources CAVR Canadian Agreement on Vehicle Registration CAVR Center for Audio-Visual Research CAVR Completeness, Accuracy, Validity and Restricted access (financial accounting) ) announced today that it has received an extension on its NASDAQ National Market listing until July 23, 1998. The Board of Directors, which has assumed operational control of the Company as of June 1, 1998, will present its new business plan to the NASDAQ review board at that time. The Board of Directors has taken several preemptive pre·emp·tive or pre-emp·tive adj. 1. Of, relating to, or characteristic of preemption. 2. Having or granted by the right of preemption. 3. a. measures to effect a turn-around in the Company's operations including a reduction of fixed overhead from approximately $350,000 per month to approximately $160,000, reduction of staff from 84 to 26, and the reduction of the Company's balance due under its line of credit from $1,500,000 to $400,000. "We are taking every step that is necessary to make this Company cash flow positive in the short term. Enough is enough and positive change is long overdue. There is no question that the Carver brand equity is very high in the marketplace and can be made to work very profitably under the right management," stated Raj Bhatia, the Company's new Chairman and interim CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . On June 12, the Company received a $250,000 infusion of capital from Oscar Capital Management, a New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. based hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" . This is in addition to a $375,000 infusion of capital from the Renwick Special Situations Fund, L.P., which took place three weeks earlier. The Renwick Special Situations Fund, a Delaware limited partnership managed by James R. McCullough, also a Company director, has now invested a total of $2,375,000 in the Company. Bhatia stated that: "Internet and direct marketing sales have exceeded expectations. Sales on the Internet and through telephone orders have occurred in all product categories with no advertising expense and with high gross margins. The Internet, in particular, has generated revenues well in excess of our expectations. We are launching a new marketing program aimed at providing profit and distribution incentives to our independent dealer base which will incorporate the benefits of e-commerce." Carver products were made available for direct purchase over the Internet during the first week in May at www.carver.com. The Board of Directors is continuing negotiations with several interested parties to fill the position of permanent Chief Executive Officer. "We are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. an entrepreneur who is willing to be very aggressive in the turn-around and growth phase and will put their own capital at risk in the Company. We expect to make a selection very soon," stated Bhatia. Statements made in this news release concerning future events, including the Company's ability to obtain additional operating capital Noun 1. operating capital - capital available for the operations of a firm (e.g. manufacturing or transportation) as distinct from financial transactions and long-term improvements capital, working capital - assets available for use in the production of further assets , are forward-looking statements and are subject to a number of risks and uncertainties that might cause actual results or achievements to differ materially from those expressed or implied by such statements. These uncertainties include changes in economic conditions and market demand, timely development, production release and market acceptance of new products, activities by competitors, retention of key personnel, reliance on key suppliers, level of sales by dealers and other channels of distribution, and the risks and uncertainties identified from time to time in the Company's filings with the Securities and Exchange Commission, and other communications. For almost 20 years, Carver Corporation has been one of the most recognized brands in consumer audio. The Company designs, develops, manufactures and markets hi-fidelity audio and home theater An audio/video entertainment center that has a large-screen TV and hi-fi system with three speakers in the front (left, right and center) and left and right speakers in the rear. Starting in the early 1990s, video inputs were added to stereo receivers and preamplifiers. products to the mid- to high-end audio High-end audio is a term used to describe equipment that is purported by the manufacturers to be the best, regardless of the price. Definition of 'high-end' High-end audio entertainment systems market. The Company's audio products are carried in a broad range of audio outlets nationwide. See www.carver.com.
CONTACT: Carver Corporation
Raj K. Bhatia, 425/482-3400
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