Kelly's Clarifies Impact of Assets Acquisition on Shareholders.Business Editors SALT LAKE CITY--(BUSINESS WIRE)--Feb. 15, 2002 Kelly's Coffee Group Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : KLYS KLYS Konstnärliga och Litterära Yrkesutövares Samarbetsnämnd (Swedish Joint Committee for Artistic and Literary Professionals) ) Friday sought to clarify, for the benefit of its shareholders, the immediate impact of the agreement with Axia Group Inc. (OTCBB: AXIA), to acquire essentially all the assets and liabilities of AXIA in exchange for 255.1 million shares of Kelly's. The 255.1 million shares of Kelly's issued, effectively transfers to AXIA approximately 82 percent of the total shares issued and outstanding in Kelly's. Kelly's now owns as part of that agreement, assets with a gross valuation in excess of $10 million and net valuation of $5 million. Prior to this agreement, Kelly's had no substantial value, outside of market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. based on shareholder speculation. Richard Surber, seeking to maximize the value of the transaction for the shareholders of Kelly's, issued that number of shares designed to preserve the maximum tax loss carry forward allowed by law. The result being, that as Kelly's operations Kel·ly's operation n. 1. The surgical correction of retroversion of the uterus by plication of the uterosacral ligaments. 2. The surgical correction of stress-related urinary incontinence by placing sutures beneath the bladder neck. now become profitable due to the transaction, more revenue will be retained to build the company that will in turn enhance shareholder value. Kelly's was a "shell" corporation, now it owns assets sufficient in value to qualify for a 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 small-cap listing. Another important part of this transaction to consider is the immediate effect, the issuance of 255.1 million new shares will have on Kelly's shareholders. Since the new shares are restricted and issued to an affiliate, based on the 82 percent control position, U.S. securities laws would prohibit the sale of these shares for at least 12 months into the public float. Further, Kelly's agreement with AXIA requires that the 255.1 million shares be restricted for a period of not less than 24 months under a lock up agreement. Finally, since AXIA is likely to remain an affiliate of Kelly's for the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future, even after 24 months, AXIA will only be able to sell Kelly's shares subject to Rule 144(e) of the Securities Act of 1933 as amended, known in the market place as the "dribble out rule" no more than 1 percent. The conclusion being that the agreement with AXIA will have no immediate effect on Kelly's public float. The number of shares in the public float has not increased as result of this acquisition. Shareholders should recognize that the acquisition of AXIA's assets does not stop Kelly's from seeking other business acquisition opportunities. Actually, the opposite is more likely the case. Kelly's management has committed to building a solid business based on real estate and its extensive portfolio of securities. The "shell" corporations acquired from AXIA are but one indication of Kelly's intention to move forward with its shareholders to create greater value. The net effect being that the Axia asset acquisition brings to Kelly's will enable management to pursue additional growth strategies not available to shell corporations. Surber has commented that, "The shareholders of Kelly's wanted a NASDAQ-qualified business without a reverse of shares issued and outstanding. The acquisition of AXIA's assets fulfilled that objective with the added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
Kelly's is a holding company, which before this transaction, had no operations and no significant assets. Investors are strongly encouraged not to make any investment that they cannot afford to lose. Kelly's strongly encourages the public to read the above information in conjunction with its Form 10KSB KSB Kogod School of Business (American University) KSB Kelley School of Business (Indiana University) KSB Kantonsschule Am Brühl St. for Dec. 31, 2000, and 10QSB QSB Fading QSB Qualified Small Business (IRS category) QSB Queen Street Backpackers (Auckland, New Zealand) QSB Quality System Basics QSB Qualified Supplemental Benefit QSB Quantum Singleton Bound for Sept. 30, 2001, AXIA Group Inc.'s Form 10KSB for Dec. 31, 2000, and 10QSB for Sept. 30, 2001, Wichita Development Corp.'s Form 10KSB for Dec. 31, 2000, 10QSB for Sept. 30, 2001, and 8K/A K/A Knowledge and Abilities dated Dec. 4, 2001, and Golden Opportunity Development Corp.'s Form 10KSB for Dec. 31, 2000, and 10QSB for Sept. 30, 2001, and 8K dated Jan. 14, 2002, Torchmail Communications Inc.'s Form 10KSB for March 31, 2000, and 10QSB for Sept. 30, 2002, and Downtown Developments Post Effective Amendment to its SB2 filed Feb. 1, 2002. All these disclosures can be viewed at www.sec.gov. We further advise our readers to visit the AXIA Group Inc. Web site at www.axiagroupinc.com. A number of statements contained in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, notwithstanding the fact that such Act may not be available to Kelly's. These forward-looking statements involve a number of risks and uncertainties, including the timely development, and market acceptance of products and technologies, competitive market conditions, successful integration of acquisitions and the ability to secure sufficient financing to complete the transaction. The actual results that Kelly's may achieve could differ materially from any forward-looking statements due to such risks and uncertainties. |
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