WORLDWIDE PETROMOLY PLANS MOVE INTO RADIO BROADCASTING;
ANNOUNCES MERGER WITH SMALL TOWN RADIO, INC.
March 26, 2001 - Houston, Texas - Worldwide PetroMoly, Inc. (OTCBB: MOLY) (the
Company) today announced that it plans to merge with Small Town Radio, Inc.
(STRI), a recently formed enterprise, which intends to acquire and operate a
number of radio stations, primarily in smaller, non-rated marketplaces. The
transaction, which was approved by the Board of Directors of the Company today,
is subject to certain conditions, including the receipt of appropriate
financing, a fairness opinion and other standard closing conditions for an
acquisition of this size and nature, is expected to close within thirty (30)
days. Although the parties intend to continue in good faith to complete the
merger, certain of the conditions are outside of the parties' control, and no
assurance can be given that all of the conditions will be met or waived and that
the merger will actually close. "We are very excited about the prospects of
Small Town Radio, Inc. and believe the transaction will benefit all of our
shareholders," said Mr. Lance J. Rosmarin, President of the Company, "While we
had hoped to build our presence in the lubricant market, strong competition for
shelf space and increasing needs for capital have created obstacles to our
future growth, which we have been unable to overcome. Unfortunately, we have
continued to sustain losses as a result of our inability to generate sufficient
revenues from operations and have been unsuccessful in obtaining outside
financing for our lubricant business. This has necessitated the Board of
Directors to evaluate other strategic alternatives."
When asked about the new business strategy, he responded, "Consolidation in the
radio industry, coupled with new digital broadcasting technologies, make the
radio industry an attractive, exciting area -- and one with prospects for
significant growth. The business plan for Small Town Radio is exciting and, we
believe, holds great promise. It is our goal that, with this change in
direction, the prospects for increasing our shareholder value will be enhanced.
We are comfortable with this decision to change our strategic direction and
expect to have representatives on the Board of Directors going forward." When
asked about the composition of the new Board of Directors, Mr. Rosmarin replied,
"We are anticipating a Board of Directors with five members, two of whom will be
from the current Board of Directors of the Company." Additional information
relating to the operations of Small Town Radio will be released in the coming
days and weeks.
The holders of Small Town Radio common and preferred stock will own
approximately 75% of the outstanding shares of the Company upon completion of
the merger, and are obligated under the merger agreement to provide not less
than $4 million in cash at closing. The transaction involves the merger of
Small Town Radio, Inc., a private company, with a wholly owned subsidiary of the
Company. The merger contemplates the issuance of 112,467,860 new shares of
common stock, which shall be exchanged for all Small Town Radio common stock.
Additionally, in conjunction with the financing being obtained by Small Town
Radio for use in executing its business plan, up to 33,333,333 shares of
preferred stock, convertible on a one-to-one basis into Company common stock,
will be issued; and, also in association with the financing, a warrant for
1,000,000 shares of Company common stock will be issued.
Subsequent to the completion of the merger, the Company intends to undertake
several steps to position itself for its new business. These steps involve a
series of transactions including the full settlement of approximately $1.5
million owed under an unsecured lending arrangement to Mr. Gilbert Gertner, who
is currently the Chairman of the Board of Directors and the largest individual
shareholder of the Company at this time. In achieving this settlement, the
Company intends to transfer all of the stock of Worldwide PetroMoly Corporation
("WPC"), the operating subsidiary of the Company, along with all liabilities of
the Company immediately prior to the merger (including Mr. Gertner's
indebtedness), to Mr. Gertner, and to issue to him additional shares of common
stock. In conjunction with the transfer of WPC, and for the benefit of the
Company's shareholders, Mr. Gertner has agreed to pay the Company a percentage
of any profits generated by the sale of WPC's assets, in the event of a sale, or
a percentage of the net profits from its continuing business operations, should
there be any, for a period of eighteen months following the completion of the
merger.
Upon completion of the merger and the subsequent transactions, Mr. Gertner will
be the beneficial owner of approximately 13.3% of the fully diluted shares
outstanding of the Company. Other actions the Company expects to undertake
include a reverse split of its capital stock, which would reduce the aggregate
number of shares outstanding. It also anticipates changing the name of the
company to "Small Town Radio, Inc.". To accomplish these changes the Company
expects to call shareholders' meeting within 45 days of completion of the
merger.
The Company has been in the business of manufacturing, marketing and
distributing lubricants for use in engines. Small Town Radio, Inc., is a
development stage enterprise based in Atlanta, Georgia, which intends to
acquire, integrate and operate a number of radio stations, primarily in smaller,
non-rated markets in the Southeast.
This news release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act
of 1934. Words such as "intends," "expects," "anticipates," "estimates" and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Although the company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove correct.
There are a number of important factors that could cause actual results to
differ materially from those expressed in any forward-looking statement made by
us. These factors include the long-term market demand for lubricant additives
and related products; the direct marketing effectiveness of automotive products;
competition; the failure of the merger to close; the inability of STRI to
acquire radio stations at an attractive price; the inability of STRI to obtain
financing for the acquisition of radio stations; the reliability and
availability of new technology in the radio station industry; financial,
operational and other business problems associated with the acquisition of a
number of radio stations in a short period of time; general and
industry-specific economic conditions. The Company has no obligation to update
or revise these forward-looking statements to reflect the occurrence of future
events or circumstances.
CONTACT: For Worldwide PetroMoly, Inc. - Lance Rosmarin, 713-892-5823;
For Small Town Radio, Inc., Robin Vail, CFO, 678-455-6193.