Falken Industries Ltd
OTC Bulletin Board : FLKI

Falken Industries Ltd

November 18, 2010 09:15 ET

Falken Industries Ltd OTC: FLKI Retains Europe's Capprocon for Business Valuation Due Diligence

Due Diligence Advances for Equitable Consideration of Norex Proposal

TRENTON, NEW JERSEY--(Marketwire - Nov. 18, 2010) -  Falken's (OTCBB:FLKI) Board Advisory Committee agreed today to retain Capprocon, a European consulting firm specialized in business valuations and due diligence efforts. The report will be used in preparation for its recommendation to the Board and Shareholders relating to an unexpected offer from Norex International for a control stock position in FLKI at $ 1,50 per share which the Committee believed "close but insufficient."

In order to best ensure shareholder interest, the due diligence will be conducted and the analysis made independently of the current status of Falken's complex purchasing and manufacturing business and will include financial, operation, legal, human resources issues, environment, licensing, assets ownership, accounting policies used to highlight critical areas that may require special attention by existing shareholders.

Manuel Garcia, Communications Officer for FLKI said: "It is an utmost important step prior to management's decision on the matter to avoid unpleasant business surprises in allowing control to pass to Norex, no matter how friendly the relationship." Norex is an important supplier and manufacturer of Falken's global product conceptions.

The due diligence is independent of that being conducted by Norex International and which is scheduled to be completed by the end of the 1Q 2011. The Committee's approach will include common valuation methods such as discounting future cash flows, capitalizing earnings, and notably a market approach using financial statistics of other comparable companies, market multiples, comparable transaction and so-called Rule of Thumb approaches. The diligence will also identify fixed, financial, intellectual and other assets net of aggregate liabilities to abstract a value of shareholders' equity to which redundant assets will be added to the value of the going concern valuation.

Preliminary estimates by the Committee suggest a valuation of $ 1,80- $2,00 per share for a control position, dilution issues considered, provoking the need for an independent analysis before deciding on the sufficiency of the Norex proposal at $ 1,50 per share.

About Falken Industries Ltd:

Falken Industries Ltd OTC: FLKI is a diversified industrial conglomerate that operates in Chemicals, Wet Wipe and Biodegradable Technology. Falken Industries Ltd is the concept behind more than 160 products distributed through a network of global platforms and the recipient of trade awards for innovations, biodegradability and environmental and health quality standards. 

SAFE HARBOR STATEMENT: This news release contains "forward-looking statements" made pursuant to the safe harbor provisions of the 1995 Private Securities Litigation Reform Act. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." Such statements are subject to risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that our products may not achieve customer acceptance or perform as intended, that we may be unable to obtain necessary financing to continue operations and development, and other risks. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements.

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