Contact Information: Contact Information: Fell Herdeg 1-800.228.7839 x 119 Facsimile: 203-846-1776 Web Site: www.musicforlittlepeople.com, www.soundprints.com
Trudy Corporation Announces a Definitive Purchase Agreement for Acquisition by MMAC, LLC of Substantially All the Assets of Trudy Corporation
| Source: Trudy Corporation
NORWALK, CT--(Marketwire - December 18, 2009) - Trudy Corporation (PINKSHEETS : TRDY ) announced
today that it had entered into a definitive Asset Purchase Agreement
whereby Trudy would sell substantially all of its assets to MMAC, LLC,
which also would assume certain liabilities of Trudy. Trudy Corporation is
a publisher of children's educational story and novelty books, audiobooks
and plush toys, doing business as Soundprints, Studio Mouse and Music for
Little People.com and located in Norwalk, Connecticut.
Under the terms of the agreement, MMAC will assume substantially all of the
secured and unsecured liabilities of Trudy with the exception of $2.7MM of
personal debt owed to the principal shareholder and Chairman of Trudy,
William W. Burnham. In consideration of the sale of substantially all of
its assets, at Closing, Trudy will receive a note from MMAC to Trudy in the
principal amount of $225,000 and an equity interest in MMAC, not to exceed
33%, determined in accordance with the net asset value of Trudy at Closing.
In addition, loans from an affiliate of MMAC to Trudy, estimated to be
$600,000 at Closing, will be assumed by MMAC at Closing. Substantially
simultaneously with the Closing, Trudy will transfer the note and the
equity interest in MMAC to William W. Burnham in consideration of the
cancellation by Mr. Burnham of the personal debt owed by Trudy to Mr.
Burnham, with the exception of up to $50,000 of debt owed to Mr. Burnham
which will remain outstanding and which will be repaid to Mr. Burnham one
year following the closing if and to the extent Trudy has not spent the
$50,000 of cash it will retain at the closing for general corporate
purposes.
Holders of Trudy's common stock will not receive any payment or
distribution with respect to their shares pursuant to the sale of
substantially all the assets to MMAC.
MMAC will also enter into a new four year lease with Noreast Management,
LLC, a company that is 91% owned by Mr. Burnham, for Trudy's current
headquarters on substantially the same terms as the current lease with
Trudy.
Ashley Andersen Zantop, CEO and President of Trudy, Fell Herdeg, CFO, and
William W. Burnham, Director of Corporate Development, will be retained as
employees by MMAC on substantially the same terms as their current
employment with Trudy. Mr. Burnham and Ms. Andersen Zantop will join the
Board of Directors of MMAC.
Trudy's senior management intends to recommend to its Board of Directors
that, after Closing, Trudy dissolve or enter into a transaction whereby the
Trudy corporate shell may be sold. There is no assurance that a sale of the
shell can be arranged.
The Asset Purchase Agreement and the transactions contemplated thereby have
been approved by an Independent Committee of outside Directors of Trudy, by
the Board of Directors of Trudy and by written consent of holders of a
majority of the issued and outstanding shares of Common Stock of Trudy. The
transaction is, however, subject to compliance with U.S. securities laws,
including the preparation and filing with the Securities and Exchange
Commission of an Information Statement which will be mailed to all of
Trudy's shareholders for their information, as well as other closing
conditions. A closing is expected in February 2010.
About Trudy Corporation
Founded in 1947 as a stuffed toy manufacturer, Trudy Corporation today is a
prominent publisher of educational story books, read along audiobooks and
plush toy manipulatives under licenses with the Smithsonian Institution,
American Veterinary Medical Association and the African Wildlife
Foundation. It also holds "edutainment" novelty book and audiobook licenses
with Disney Publishing Worldwide, Inc, and Sesame Workshop. The Company's
Soundprints products may be found in school libraries, museums, zoos and
aquaria flagged by their many Teacher's Choice, Parents Choice and Benjamin
Franklin Awards. Studio Mouse is the leading publisher of book and audio
novelty books distributed in warehouse clubs and the mass market. Over 35%
of Studio Mouse and Soundprints products are sold internationally in 35
countries. The Company holds a Disney license in the Spanish language for
Spain. Believing that educational manipulatives and an audio component to
books are critical to developing reading skills and fostering literacy in
schools and home, the Company bought MusicForLittlePeople.Com and the
companion direct mail catalog in 2008 to build the Company's direct to
consumer and library business.
This press 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. These forward-looking statements are based largely
on the expectations or forecasts of future events, can be affected by
inaccurate assumptions, and are subject to various business risks and known
and unknown uncertainties, a number of which are beyond the control of
management. Therefore, actual results could differ materially from the
forward-looking statements contained in this press release. Additional
information respecting factors that could materially affect the Company and
its operations are contained in its annual report on Form 10-KSB for the
year ended March 31, 2009 and Form 10-Q for the three months ended June 30,
2009, as filed with the Securities and Exchange Commission.