SOURCE: Great American Group, Inc.

Great American Group, Inc.

May 04, 2010 08:00 ET

Great American Group®* Announces Amendments on $52.4 Million of Promissory Notes

WOODLAND HILLS, CA--(Marketwire - May 4, 2010) -  Great American Group, Inc. (OTCBB: GAMR) ("Great American Group" or the "Company"), a leading provider of asset disposition, valuation and appraisal services, today announced it has entered into amendments on $52.4 million of its $55.6 million of 12% promissory notes payable July 31, 2014 (the "Notes"), to the former Great American Members and Phantom Equityholders. The Company entered into the amendments in order to obtain improved terms and greater capital flexibility.

"The amendments of the promissory notes to a more favorable interest rate and terms represent a strong sign of support from our founding shareholders," said Andrew Gumaer, Chief Executive Officer of Great American Group. "The extension of the maturity date of the notes, combined with the significant reduction in interest and scheduled amortization payable, should provide the Company with increased liquidity to support our long-term growth."

Under the amended agreements, holders of the Notes with an aggregate remaining principal balance of $47 million have agreed to reduce the interest rate on these to 3.75% from 12% per year. The interest rate reduction will be made effective retroactive to February 1, 2010. The noteholders have also agreed to extend the stated final maturity on the notes by four years, from July 31, 2014, to July 31, 2018, and eliminate the scheduled annual amortization on these Notes. The Notes were originally scheduled to amortize over five years beginning July 31, 2010, and ending July 31, 2014. These Notes will have the right to be prepaid annually based upon 50% of available cash flow, as defined in the amended notes, subject to the Company's maintenance of a minimum adjusted cash balance of $20 million.

Additionally, under the amended agreements, holders of an aggregate principal balance of $5.4 million of the Notes have agreed to reduce the interest rate on these Notes to 3.75% from 12% per year. The interest rate reduction will be made effective retroactive to February 1, 2010. These notes will continue to amortize equally over five years beginning July 31, 2010, and ending July 31, 2014. The remaining $3.2 million of Notes will continue to pay interest at 12% per year and amortize equally over five years from July 31, 2010, to July 31, 2014.

The Company will be filing a Report on Form 8-K with additional information regarding the terms of the amended notes.

About Great American Group, Inc.

Great American Group, Inc. is a leading provider of asset disposition solutions and valuation and appraisal services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group has offices in Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York and San Francisco. For more information, please visit www.greatamerican.com.

*Great American Group and the Eagle Design are trademarks registered in the US Patent and Trademark Office and are exclusive property of Great American Group, Inc.

Forward-Looking Statements
This press release may contain forward-looking statements by Great American Group that are not based on historical fact, including, without limitation, statements containing the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions and statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include those risks described from time to time in Great American Group's filings with the SEC, including, without limitation, the risks described in Great American Group's proxy statement/prospectus dated July 17, 2009 and filed with the SEC on July 20, 2009, and its Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and Great American Group undertakes no duty to update this information.

GAMR-F

Contact Information

  • Investor Contacts:

    Great American Group
    Phillip Ahn
    SVP, Strategy & Corporate Development
    818-884-3737

    Addo Communications
    Andrew Blazier
    310-829-5400
    Email Contact

    or

    Press Contact:
    Great American Group
    Laura Wayman
    847-444-1400 ext. 312
    Email Contact