SOURCE: HERC Products Incorporated

July 28, 2006 11:39 ET

HERC Products Incorporated Provides Summary of Major Activities Since Delisting

PORTSMOUTH, VA -- (MARKET WIRE) -- July 28, 2006 -- HERC Products Incorporated (PINKSHEETS: HERC) today provided a summary of events since delisting as a reporting company in keeping with its strategy of cost controls, new revenue streams and recapitalization.

Unaudited Results

HERC finished 2004 and 2005 with losses of approximately $1,330,000 and $20,000 respectively. The improvement in results from 2004 to 2005 is the result of cost cutting of internal operations, the cost cutting associated with delisting of the Company's stock and improvement in gross profit margins as the result of developing new lines of business.

Unaudited Partial Results Through June 2006 and Accounting Changes

HERC has revenue through June 30, 2006 of approximately $2,800,000. This revenue represents an increase of more than 30% over the same period in 2005. HERC has also implemented a new accounting software program approved by the Defense Department as a result of new staff and financing arrangements. The Company expects the new system on line before the end of the 2006 third quarter.

New Debt Financing

The factoring agreement with Marquette Capital, where interest exceeded 27%, was replaced with a new facility with Perryville & Broadway Holdings (Perryville). The facility has provided $491,544. The interest rate is 18% and is convertible to Herc Common Stock at prices between $0.03 and $0.10. Warrants were included to purchase up to 5,640,000 shares of Herc Common Stock at prices between $0.03 and $0.10. $40,000 was converted to 1,333,333 shares in January of 2006.

Stock Sales and Other Debt

HERC has sold Common Stock in the Company to individuals associated with one another as former employees of BAE-Marine Engineering Services. These individuals are now associated with or employed by HERC in the development of current lines of business and new lines of business. $380,000 was used to purchase Common Stock at a price $0.013 per share resulting in 29,230,769 new shares being issued.

An expanded credit line agreement is under review, to be serviced by Perryville. The credit line will consolidate the prior Perryville financing and additional new monies for a line of credit financing package on behalf of the Company, as may be required, totaling up to $1.2 million.

Navy Approvals

Herc had its chemical cleaning formula approved by Naval Sea Systems Command (NAVSEA) for use by ships personnel, contractors and Ship Repair Facilities.

A NAVSEA approval was received for testing of a new technology to preserve pipes, plenums and tanks. An application for the new product was conducted on the USS Ogden in October of 2005. Additional test applications are pending.

Herc received notice that its patent for the cleaning of Counter Measure Washdown Systems has been issued.

Acquisitions and Licenses

Herc agreed to terms to purchase all of the assets of Sperco Incorporated of Oldsmar, Florida. Terms for the purchase include an earn-out based on a percentage of revenue that does not exceed more than 50% of the profit each year over 2 years. Sperco is a contracting company that provides water and wastewater construction and rehabilitation to municipalities in Florida.

Herc also established licenses of the Company's patents in Jacksonville, Florida, Yuma, Arizona and Latin America.

New Offices and Location Changes

Herc has opened new offices in Pascagoula, Mississippi to service the Gulf Coast and Yulee, Florida to service the Atlantic Coast marine business. The Company also expanded the San Diego office based on the hiring of the tank department manager from Continental Maritime of San Diego/Northrop Grumman (CMSD/NG). CMSD/NG made the decision to close their tank-cleaning department during 2006. Herc, having had a teaming agreement with CMSD/NG to support that department, is working to obtain the personnel from that department throughout the remainder of the year and assume as much of the revenue as possible.

The Company expects to provide greater detail and additional information in a letter to shareholders that will be posted on the Company's website at www.hercprod.com and mailed or emailed to those shareholders that have provided their information to the Company in the near future. The Company is updating its website and will soon utilize that space to keep shareholders informed of current events of the Company.

This press release contains forward-looking information. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made. Such statements are subject to certain risks and uncertainties, which are disclosed in the Company's previously filed SEC reports.

HERC Products Incorporated provides pipe cleaning, environmental tank cleaning and other corrosion control services utilizing its proprietary and patented chemistry and processes. HERC's patented chemistry and processes are currently used in cleaning marine, fire protection, potable water, chemical feed line, wastewater treatment and other systems.

Contact Information

  • CONTACTS:
    S. Steven Carl
    Chief Executive Officer
    Email Contact
    757-393-0002