Exhibit 99.1
OLYMPIC CASCADE FINANCIAL CORPORATION
AND
FIRST MONTAUK FINANCIAL CORP.
AGREE TO MERGE
New York, New York, and Red Bank, New Jersey, February 10, 2005--Olympic Cascade
Financial Corporation (OTCBB: OLYD) and First Montauk Financial Corp. (OTCBB:
FMFK) announced today they have signed a definitive merger agreement.
Under the terms of the agreement, Olympic Cascade will issue shares of its
common stock for all of the outstanding common stock in First Montauk.
Currently, Olympic Cascade has 4,995,878 shares of common stock outstanding and
2,078,465 of common stock issuable upon conversion of its Series A Preferred
stock, compared to First Montauk that has 14,698,509 shares of common stock
outstanding and 2,588,977 issuable upon conversion of its outstanding Series A
and Series B Preferred stock. For each share of First Montauk common stock
owned, a shareholder will receive 0.5055 shares in Olympic Cascade.
Additionally, Olympic Cascade will issue equivalent shares of newly created
preferred stock to the holders of First Montauk's Series A and Series B
Preferred shares, giving effect to the 0.5055 exchange ratio. Assuming the
merger is completed, Olympic Cascade will have approximately 15,800,000 shares
of common stock outstanding, assuming conversion of its outstanding preferred
shares (and excluding other outstanding options, warrants and debentures).
Additionally, any outstanding debentures of First Montauk will be assumed by
Olympic Cascade.
"The combination of our two firms provides us with the critical mass necessary
to thrive in the volatile securities markets. Combined, we will have over 750
registered representatives in over 30 states. Together, our total revenues for
the trailing 12 months were approximately $120 million, making us one of the 25
largest independent contractor based brokerage firms in the United States.
Additionally, we believe that this combination may significantly improve our
profitability and improve the value to our collective shareholders," stated Mark
Goldwasser, President and Chief Executive Officer of Olympic Cascade.
"Both of our firms have made significant advances in the past year toward
sustained profitability and improved service to our brokers and their clients.
We share many common attributes and pride ourselves on meeting and exceeding the
service expectations of our outstanding brokers. We believe the union of our two
firms will create a more cost effective and comprehensive platform upon which to
grow in the future," stated Victor K. Kurylak, President and Chief Executive
Officer of First Montauk.
In connection with the merger, Olympic Cascade and First Montauk have executed
letters of intent with St. Cloud Capital LLC, a Los Angeles based investment
firm, to provide approximately $4.0 million of capital to Olympic Cascade and
First Montauk. "We believe that the merger of these two firms represents a step
in the right direction for building a premier brokerage firm. We believe that
management has developed a sound strategy and is positioned to capitalize on the
rapidly growing independent contractor segment of the brokerage industry,"
stated Marshall Geller, a Senior Managing Director of St. Cloud Capital. The
investment by St. Cloud Capital is subject to execution of definitive
agreements, due diligence investigation and customary closing conditions.
However, as a result of the foregoing uncertainties, there can be no assurances
that the transaction will be completed.
Mr. Goldwasser and Mr. Kurylak will comprise the Office of the Chief Executive
Officer. It is anticipated that Mr. Geller will become non-executive chairman of
a seven person board of directors. The terms of the merger agreement provide
that each of First Montauk and Olympic Cascade will designate three persons on
Olympic Cascade's Board of Directors. Mr. Herbert Kurinsky, the current Chairman
of First Montauk, Mr. William Kurinsky, the current Vice-Chairman of First
Montauk, Mr. Victor K. Kurylak, and One Clark LLC, an affiliate of Mr.
Goldwasser, have agreed to vote their respective shares in favor of the merger.
The definitive merger agreement is subject to, among other conditions, approval
by Olympic Cascade and First Montauk shareholders, regulatory approvals, the
financing by St. Cloud and other customary closing conditions. The parties
expect to file a joint proxy registration statement with the SEC in April and
the parties expect to close the transaction by the end of the second calendar
quarter of 2005. However, as a result of the foregoing uncertainties, there can
be no assurances that the transaction will be completed. McColl Garella, LLC and
Capitalink, L.C. rendered fairness opinions to Olympic Cascade and First
Montauk, respectively.
About Olympic Cascade
Olympic Cascade Financial Corporation is a holding company for National
Securities Corporation. National, based in Seattle, Washington, conducts a full
service national brokerage and investment banking business.
About First Montauk
First Montauk Financial Corporation is the parent company of First Montauk
Securities Corp. First Montauk, headquartered in Red Bank, New Jersey conducts a
full service national brokerage, investment banking and insurance business.
# # #
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, statements about the benefits of the business combination
transaction involving Olympic Cascade and First Montauk, including future
financial and operating results, the combined company's plans, objectives,
expectations and intentions and other statements that are not historical facts.
Such statements are based upon the current beliefs and expectations of Olympic
Cascade's and First Montauk's management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward-looking statements.
The following factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: the ability to obtain
governmental and/or self regulatory approvals of the transaction on the proposed
terms and schedule; the failure of Olympic Cascade and First Montauk
stockholders to approve the transaction; the possibility that the closing of the
transaction is delayed and the potential adverse effect of such delay on each of
Olympic Cascade's and First Montauk's business; the risk that the businesses
will not be integrated successfully; the risk that the cost savings and any
other synergies from the transaction may not be fully realized or may take
longer to realize than expected; disruption from the transaction making it more
difficult to maintain relationships with customers and employees; fluctuations
in the capital markets which may impact on each of Olympic Cascade's and First
Montauk's business; the risk that certain key employees may choose to leave
Olympic Cascade or First Montauk in connection with the transaction. Additional
factors that could cause Olympic Cascade's and First Montauk's results to differ
materially from those described in the forward-looking statements can be found
in the 2004 Annual Report on Forms 10-K of Olympic Cascade and 2003 Annual
Report on Form 10-K of First Montauk filed with the SEC and available at the
SEC's Internet site (http://www.sec.gov).
STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Stockholders will be able to obtain a free copy of the
joint proxy statement/prospectus, as well as other filings containing
information about Olympic Cascade and First Montauk, without charge, at the
SEC's Internet site (http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the filings with the SEC that will be incorporated by
reference in the joint proxy statement/prospectus can also be obtained, without
charge, by directing a request to Olympic Cascade Financial Corporation, 120
Broadway, 27th floor, New York, NY 10271 Attention: Office of the Secretary, or
to First Montauk Financial Corp., Parkway 109 Office Center, 328 Newman Springs
Road, Red Bank, NJ 07701. Attention: Office of the Secretary.
The respective directors and executive officers of Olympic Cascade and First
Montauk and other persons may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information regarding Olympic
Cascade's directors and executive officers is available in its proxy statement
filed with the SEC by Olympic Cascade on January 27, 2005, and information
regarding First Montauk's directors and executive officers is available in its
proxy statement filed with the SEC by First Montauk on May 24, 2004 and other
SEC filings. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with the SEC when
they become available.
Contact:
First Montauk Financial Corp. Olympic Cascade Financial Corporation
Mindy A. Horowitz Robert H. Daskal
Acting Chief Financial Officer Acting Chief Financial Officer
732.842.4700, ext. 4229 312.751.8833