SOURCE: GREM USA

March 25, 2008 15:04 ET

GREM USA Provides Update on $10M Sales Agreement; in Negotiations to Offer GREM-Branded Guitar Pickups

FORT WAYNE, IN--(Marketwire - March 25, 2008) - GREM USA (OTCBB: GRMU) ("GREM," "The Company"), an emerging leader in the design and manufacturing of custom hand-crafted and mass produced electric guitars, today provided an update regarding the previously announced $10M sales agreement currently being negotiated between GREM and a major US musical instrument retailer ("Retailer").

The Company and the Retailer have had continued and productive discussions over the last several weeks and GREM management expects that a definitive agreement will be reached and finalized in the near term. Outstanding areas of negotiation are primarily related to the quantity of guitars GREM could provide the Retailer relative to the maximum quantity of guitars GREM could produce over a specific period altogether. While GREM management does not envision a completed agreement carrying any exclusivity rights, it has been of prime importance to balance the larger revenue potential of a nationally-recognized retailer with the intrinsic marketing value achieved through distribution to a network of smaller stores. The Company believes its current proposal offers a substantial commitment of GREM guitars to the Retailer while affording the Company flexibility to continue expanding its brand-awareness through other sales channels. If the agreement is finalized within discussed timeframes, the Company would anticipate shipment of GREM guitars under the agreement within the next 6-8 weeks. The Company expects to finance the costs associated with production under a Purchase Order Financing plan, whereby the Company would receive a loan against the Retailer's purchase order. This method of financing would eliminate any shareholder dilution as a result of the Company fulfilling this agreement.

The Company also announced that it has begun negotiations with a manufacturer of guitar pickups that would enable the Company to self-brand these pickups and concurrently receive a cost savings of up to 70% against vendors the Company has previously been using. In turn, the reduced pickup costs would significantly improve Company margins on future guitar sales, reduce expenses, and provide the Company additional control over production and delivery. If agreed as initially discussed, the Company would have the ability to expand its product offerings beyond entire guitars and to higher-margin component sales. The Company will provide relevant updates on the progress of this negotiation in a future release.

The Company affirms that as of the open of business on March 25, 2008, there continued to be approximately 238,000,000 common shares outstanding. Despite the volatility in the Company common stock, the number of outstanding shares has not changed since last disclosed in the March 19, 2008 press release. Further, the Company expects the share structure to remain consistent for at least the next several weeks, which management believes to be a reasonable foreseeable future.

The Company also would like note that in the March 19, 2008 press release it was erroneously reported that Bill Leverty was the 'former' Firehouse guitarist, when in fact Bill Leverty is a founding and current member of the band. Firehouse has nearly two-dozen confirmed 2008 tour dates currently scheduled throughout the United States, Japan, and the UK. Shareholders and music lovers alike are encouraged to visit the band's website at http://www.firehousemusic.com to view specific dates and locations.

About GREM USA

GREM USA is a publicly traded company focusing on design and manufacturing of custom hand crafted and mass-produced electric guitars. For more information, visit our website at http://gremusa.com/.

This press release contains certain "forward-looking" statements as defined in the United States Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Statements which are not historical facts, are forward-looking public statements concerning its expected future operations, performance and other developments. Such forward-looking statements are necessarily estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties. There can be no assurance that other factors will not affect the accuracy of such forward-looking statements. It is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by the Company. They include, but are not limited to the Company's ability to consummate and complete operations, the Company's access to future capital, government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other factors that may be identified from time to time in the Company's public announcements. The Company undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

This press release is provided for information purposes only and is not intended to constitute an offer to sell or a solicitation of any offer to buy securities.

Contact Information

  • Contact:
    GREM USA
    Edward Miers
    260-456-2354